The South Coast Air Quality Management District (SCAQMD)
Letter from Felicia Marcus to Barry Wallerstein
Barry R. Wallerstein,
D. Env.
Acting Executive Officer
South Coast Air Quality Management District
21865 East Copley Drive
Diamond Bar, CA 91765-4182
Dear Dr. Wallerstein:
I am responding
to your January 22nd request that EPA approve SCAQMD Rules 2501 and
2503 under Project XL. I know the District has devoted considerable
time and energy to develop these rules and the overall Air Quality Investment
Program (AQIP). EPA continues to support economic incentive programs
(EIPs) and to value SCAQMD's leadership in this area. We believe EIPs
in the South Coast should be expanded beyond NOx/SOx RECLAIM to encourage
development of low-cost emission reductions. The issues we have raised
with AQIP in the State Implementation Plan (SIP) context, however, reflect
our concern that EIPs must be developed carefully to avoid the potential
for abuse or inadvertent environmental harm.
Our primary obstacles to approving AQIP
into the SIP have focussed on emission quantification protocols, enforceability
and environmental justice. EPA is currently updating and clarifying
national policy on each of these issues. We recently initiated a broad
review of the EIP rules in 40 CFR 51.493 which could result in revisions
to policy on protocols and enforceability. I encourage the District
to continue working to resolve these issues with my staff and with the
EPA offices responsible for revising the EIP rules and developing the
Clean Air Investment Fund (CAIF) guidance. Further, the general issue
of environmental justice and emissions trading is being discussed with
the National Environmental Justice Advisory Council (NEJAC), partly
in the context of the Civil Rights Act complaint regarding SCAQMD's
Rule 1610. This discussion will move forward over the coming months
and will likely influence EPA's national EIP policies regarding environmental
justice. Regardless of the ultimate outcome of these policy deliberations,
I believe that our agencies could agree on modifications to AQIP and
SCAQMD's other trading programs that would allow SIP approval.
Our concerns with AQIP in the SIP context
are also concerns under Project XL. For example, the SIP enforceability
and protocol issues need to be resolved to meet XL's environmental results
criteria. The SIP enforceability and protocol requirements were established
to assure emission reductions and environmental protection. Issues in
these areas coupled with AQIP's reliance on car scrappage credits raise
concern that the program may not achieve the superior environmental
performance required by XL, and could result in inadvertent environmental
harm. Lastly, Project XL requires more extensive stakeholder involvement
than the SIP process. Thus, to pursue the proposal as an XL project,
SCAQMD must develop a stakeholder involvement plan that provides for
extensive public participation in the project development process and
explicit support from environmental groups.
In conclusion, the current version of AQIP
presents potential problems meeting at least three of the XL criteria
and therefore would require modifications before being accepted as an
XL project. After identifying these problems, we did not complete a
comprehensive review of the XL proposal.
Please contact Dave Howekamp at (415) 744-1219
to let us know whether you are willing to consider changes to the AQIP
rules and whether you would rather pursue EPA approval of this program
under Project XL or through the normal SIP process. We believe that
it will be easier and quicker to approve AQIP as a SIP revision than
as an XL project. As a result, I encourage you to continue working with
my staff to find practical and mutually agreeable solutions to our remaining
SIP issues. However, if you choose to pursue the proposal under Project
XL, we would value the opportunity for our staffs to work together to
develop an innovative XL project which could provide data and experience
in achieving better and more cost-effective public health and environmental
protections, and therefore lead to the redesign of current approaches
to environmental and public health protection. The choice is up to you.
The next step in the XL process would be for EPA to complete its technical
review of your proposal and provide you with a letter detailing EPA's
concerns. At that time, EPA would request revisions to SCAQMD's proposal
that would assuage EPA's concerns.
Yours,
Felicia Marcus
Regional Administrator
cc: Lucille Van Ommering, CARB
bc: Charles Fox, Office of Reinvention
(1801)
Rob Brenner, Office of Air & Radiation
(6103)
Nancy Mayer, OAQPS (MD-15)
-
Sally Seymour, OSPEI (SPE-1)
Dave Howekamp, AD (Air-1)
Allan Zabel, ORC (ORC- 2)
Andy Steckel, AD (Air-4)
Lily Wong, AD (Air-4)