UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

Office of Air Quality Planning and Standards

Air Quality Strategies and Standards Division

Research Triangle Park, NC 27711

FAX TRANSMITTAL

DATE:	April 5, 1996	NUMBER OF PAGES = 5

TO:	COORDINATION GROUP, FACA SUBCOMMITTEE on

Ozone/PM/Regional Haze Implementation Programs

FR:	RICH DAMBERG, TEAM LEADER

(919) 541-5592, Fax (919) 541-7690

NAME	TELEPHONE #	FAX #

Mr. Patrick Raher	(202) 637-5682	(202) 637-5910

Dr. Thomas Godar	(203) 548-4055	(203) 548-5124

Mr. David Hawkins	(202) 783-7800	(202) 783-5917

Ms. Mary Gade	(217) 782-3397	(217) 782-9039

Mr. Robert Shinn	(609) 292-2885	(609) 292-7695

Ms. Beverly Hartsock	(512) 239-5818	(512) 239-4808

Mr. S. William Becker	(202) 624-7864	(202) 624-7863

Mr. James Souby	(303) 623-9378	(303) 534-7309

Mr. Shawn Kendall	(602) 234-8308	(602) 234-4814

Ms. Helen Petrauskas	(313) 323-2157	(313) 323-7230

Mr. F. Bradford Smith	(410) 368-7090	(410) 368-6721

Mr. Charles Goodman	(205) 870-6325	(205) 877-7938

Mr. Richard Hayslip	(602) 236-6699	(602) 236-3407

Ms. Georgia Callahan	(914) 838-7645	(914) 838-7115

Mr. Karl Schultz	(302) 773-4394	(302) 773-4494

Mr. John Taunton	(713) 656-2401	(713) 656-6594

Mr. John Christiano	(303) 969-2070	(303) 969-2822

WG Co-Chairs

Mr. Jerry Golden	(423) 751-6779	(423) 751-7545

Mr. Harvey Jeffries (room 120)	(919) 966-7312	(919) 966-7911

Mr. Don Theiler/Bob Lopez	(608) 266-0603	(608) 267-0560

Mr. Ron White	(202) 785-3355	(202) 452-1805

____________________________________________________________________________________________

MESSAGE This is the second set of materials for the Coordination Group meeting next Wednesday, 4/10/96. Included are: 1) a proposed framework for economic support in the FACA process (ADD these pages to the previous package as pages 16-17); and 2) a revised version of the table of contents for the future report summarizing the Subcommittee's recommendations (these REPLACE pages 11-12 of the first package). Once again, the meeting is next Wednesday, April 10, 1:00 - 2:30 EST. Call-in number is 202-260-7280, 4065#. See you then.

[If you have trouble receiving this fax, please call Barbara Miles at 919-541-5531, fax 919-541-7690.]

PROPOSED FRAMEWORK FOR ECONOMICS ANALYTICAL SUPPORT FOR THE FACA SUBCOMMITTEE FOR OZONE, PM AND REGIONAL HAZE IMPLEMENTATION

EPA will work in partnership with the FACA Subcommittee and Work Groups (WGs) to utilize its resources and those of the FACA Subcommittee and WG members to develop appropriate benefit, cost and impact analyses to assist the FACA process in the examination of integrated implementation strategies or options. It is expected that these results will be incorporated into the FACA committee discussions to assist in the development of cost effective and flexible alternatives. Both quantitative and qualitative analyses will be used (and, if feasible, developed) according to the needs of the FACA Work Groups and FACA process schedule. Some of the issues which may merit economic analytical approach have been identified through the FACA WGs. Examples of possible analyses may include, but are not limited to:

1. Control strategy sequencing and integration: Extent to which one sequence of control strategies is more cost-effective than another; extent to which mobile source controls required by an ozone control strategy dovetail/duplicate similar controls for PM precursors; manner in which add-on controls, such as thermal incinerators, control both particulate and gaseous VOC.

2. Episodic/seasonal controls: At present, seasonal and episodic controls are not permitted in SIP development. However, episodic and seasonal control strategies may merit consideration under an integrated implementation scenario. For example, unpaved road dust and agricultural tilling operations are more of a PM problem during the summer months. From both cost and economic perspectives, the full range of emissions control and prevention measures need to be examined.

3. Monitoring: Examples of monitoring impacts include: siting of monitors, which also impact control strategies indirectly; placement of multiple monitors in a study area (county, MSA, etc.) which would determine the design value(s) used as the foundation for a control strategy; costs to upgrade or replace a standard PM high-vol with a dichotomous sampler that measures both PM-10 and PM-fine concentrations. These costs need to be considered as impacts for the States/locals/others who have to pay for, operate, and maintain them, as well as process, and write reports from, the data they generate.

4. Who pays, Who benefits: Creating/recreating nonattainment areas may result in lowering cost numbers by creating larger nonattainment areas, but may also have equity implications.

5. Emissions Trading: Market-based emissions trading programs and other economic incentive programs provide a promising way to achieve pollutant reductions at a lower overall cost to the economy. Since the late 1970's EPA has been writing emissions trading policies that govern intra-plant and interplant emissions averaging and offset programs. These policies have generally focused on the mechanisms for contemporaneous trading of criteria pollutants, and the minimum elements of criteria pollutant trading programs. New ideas for both trading mechanisms and trading programs have emerged in recent years. Issues that need to be evaluated include: trading volume, transaction costs, identifying trading areas, effects of intertemporal trading, and environmental justice concerns.

In addition to supporting development and analyses of FACA recommendations, these analyses may be used to support the development of the required economic analyses of the implementation strategy.

Proposal:

Economic analyses for FACA support will be provided by EPA economists and other economists to be identified and nominated by the FACA Coordination Group and WGs. The WGs shall identify economists presently on their rosters or those that could serve as ad hoc members. The amount and complexity of the analyses will be dependent upon the resources and time available to all parties involved in the FACA process. Existing relevant analyses from EPA, the Ozone Transport Assessment Group (OTAG), the Ozone Transport Commission (OTC), the Grand Canyon Visibility Commission (GCVC) and other sources available through the WG members will be utilized as much as possible. Analyses will be coordinated/conducted at the direction of the existing WGs and WG co-chairs. At present, EPA has a core group of economists working on the FACA integrated implementation project: one full time economist (John Chamberlin); a coordinator of economic analysis for FACA (Rosalina Rodríguez); and a number of other economists that will supplement effort as appropriate with respect to their areas of expertise.

EPA economic analysis coordinator: Rosalina Rodríguez

Phone 919-541-5298

Fax 919-541-0839

E-mail rodriguez.rosalina.@epamail.epa.gov

4/3/96 DRAFT

FACA SUBCOMMITTEE ON OZONE, PARTICULATE MATTER, AND REGIONAL HAZE

IMPLEMENTATION PROGRAMS

PHASE I FINDINGS AND RECOMMENDATIONS

TABLE OF CONTENTS

I.	Executive Summary

- Coordination Group would provide discussion of issues addressed and synthesis of recommendations presented to Subcommittee.

II.	Overview of Subcommittee and Work Groups

- Membership

- Functions and responsibilities of each group

III.	Process for Development and Communication of Recommendations

IV.	Scientific Support for Development of Implementation Strategies

a.	Discussion of Conceptual Framework

- Chacterization of the current state of ozone, PM, and regional haze problems

- Description of physical and chemical processes involved, including transport

- Tools needed to characterize and predict ozone, fine particle, and regional haze conditions: modeling, emission inventories, monitoring, etc

- Need to use current tools based on best available science

- Discussion of the programs and approaches that alter the current state

- Define areas of scientific knowledge needing further improvement

- Identify references to key sources of information

V.	Recommendations on Implementation Strategies

Phase I Issues

(For each major issue, subissues will be addressed in individual issue papers. Final issue papers will be incorporated into this section.)

a.	Designation of Areas for New NAAQS and Regional Haze Program

(1) Example:	Designation of Attainment Achievment Areas for New NAAQS

(2) Example:	Incentives for Ambient Monitoring

(etc.)

b.	Mechanisms to Address Regional Strategies

c.	Integration of NAAQS and Regional Haze Implementation Programs

d.	Regional Haze Program Definition

e.	New Source Review

f.	Attainment Dates