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The South Coast Air Quality Management District (SCAQMD)

Letter from Jon Kessler to James Lents

James M. Lents, Ph.D.
Executive Officer
South Coast Air Quality Management District
21865 East Copley Drive
Diamond Bar, CA 91765

Dear Doctor Lents,

I was pleased to receive on behalf of David Gardiner your proposal for participation in the Project XL regulatory reinvention program. Per your request, we are working to expedite the review of SCAQMD's proposal. Although that review has not been completed, I am taking the unusual step of writing you at this juncture in the hope that our preliminary thoughts on your XL proposal will inform regional debate about the future of the employer trip reduction program to which the proposal is addressed.

In short, I believe that your proposal offers an excellent test of the underlying thesis of Project XL that a marriage of greater flexibility to the regulated community with greater accountability for a performance-based bottom line can produce superior environmental results.

Each XL project involves EPA granting flexibility from current requirements to a regulated entity or group of entities. In exchange, the regulated entities commit to achieve environmental results better that what would have been attained through full compliance with those requirements. The SCAQMD's proposal involves adoption of an "emissions equivalency" approach to Rule 1501, the employer trip reduction program required in the South Coast by the federal Clean Air Act Amendments of 1990. Under the proposal, employers would have the option to continue with their current programs or to adopt alternative strategies, not otherwise required, that achieve equivalent reductions in air emissions. The proposal is reflected in Rule 1501.1, recently enacted by the SCAQMD.
I have contacted the relevant Project XL review officials from within EPA, both headquarters and Region IX, and have received information from the California Air Resources Board as to their initial disposition with respect to the SCAQMD proposal. All believe that your proposal exemplifies the idea behind Project XL, that greater flexibility and greater accountability for performance can produce cleaner, cheaper and smarter results.

I believe that the proposal would ensure a net benefit to the environment in several ways. First, the proposal would replace a hazy "good faith effort" requirement with a performance-based standard. Employers who go the emissions equivalency route are making an enforceable commitment to achieve the same result as 100% attainment of the trip reduction targets, whereas the current program requires only a good faith effort that typically falls well short of those targets. Second, the proposal guarantees faster attainment of environmental results. The current program allows multiple years of good faith effort. Employers who opt for emissions equivalency commit to achieve that result in one year. Third, the proposal creates an incentive for the kind of public and private sector innovation in mobile source controls needed if our national clean air goals are ever to be attained. To achieve emissions equivalency, employers might implement travel reduction strategies, both work and non-work related, as well as new technologies such as remote sensing and repair of heavy emitting vehicles.

I want to stress that this letter does not represent a formal acceptance of SCAQMD's proposal into Project XL. Such a conclusion would not be possible in the short time since receipt of your proposal. For example, we want to be sure before we select a proposal that EPA's internal resources are engaged to provide evaluation and oversight of the project. We hope not only to implement the XL projects successfully but to learn something about a new and better way of doing the business of environmental protection. However, we are working to expedite the formal review and hope to reach a decision within the next few weeks on the SCAQMD proposal. In the mean time, I hope that this letter demonstrates the seriousness of EPA's commitment in Project XL to do what it takes to make cleaner, cheaper and smarter results a reality.

If you have further questions about the process or about Project XL in general, please feel free to call me anytime at (202) 260-3761.

Jon Kessler

Director, Project XL

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