This is a preliminary document prepared by a subgroup of members of the Base Programs Analyses and Policies Work Group as part of the Federal Advisory Committee Act (FACA) Subcommittee process. It is not an EPA document. This document has not been reviewed by the work group and is subject to further work group discussion. Interested people should forward their comments to a member of the Base Programs Analyses and Policies Work Group.

Safe Harbors/Early Incentives

Date:	January 23, 1997

Contact:	Vince Brisini, Pennsylvania Electric Company, representing the Base Programs

Analyses and Policies Work Group @ (814) 533-8111 (-8085 fax)

Status Line:	Draft #1; Has not been reviewed by the work group.

Introduction

This paper presents options for safe harbors and other positive incentives to motivate states, local governments, and emission sources to accelerate planning and implementation under the new/revised ozone and particulate matter (PM) national ambient air quality standards (NAAQS) and regional haze rule. These incentives are designed to encourage states/tribes to submit and implement their state/tribal implementation plans (SIP/TIP) early and sources to voluntarily reduce emissions in nonattainment areas and areas at risk early (See 10/20/96 version of the Treatment of Areas in Which Air Quality Trends Indicate the Risk of Becoming an Area of Violation (AOV) paper.). An additional goal is to promote early actions to support integration of the ozone, PM-fine, and regional haze timelines.

Related Issue Papers

The National and Regional Strategies work group is preparing a thought piece on early reductions within the context of a market-trading program. The "Early Reductions" document deals particularly with issues related to emissions banking. A number of other options to encourage early emission reductions are discussed in this issue paper.

The 11/15/96 version of the Economic Incentives and Disincentives as an Adjunct to Sanctions presents potential positive incentives to encourage states toward early compliance with planning requirements. Specifically it proposes reduced offset ratios, increasing offset pool, increased use of flexible attainment areas, and relief from NOX RACT, New Source Review, or transportation conformity.

The Reasonable Further Progress issue paper being developed discusses early actions toward reasonable further progress requirements.

Background

Incentives generally involve tradeoffs. States or tribes, for instance, may reduce their future administrative burden by initiating their planning process and implementing programs early. Sources that commit to additional early emission reductions may be exempted from future reduction requirements. These measures would result in greater and earlier progress toward protecting human health and the environment.

A safe harbor is one type of incentive in which sources choosing to institute more stringent controls early are "protected" from additional control requirements for a specified length of time. The early reduction program under the hazardous air pollutant (HAP) provisions is an example of a safe harbor. The program is designed to encourage early reductions from hazardous air pollutant (HAP) emission sources. Existing sources may be granted a 6-year extension of the typical 3-year compliance deadline for Maximum Achievable Control Technology (MACT) standards if they can demonstrate a reduction of 90 percent (95 percent for particulate HAPs) or more of HAP emissions prior to the proposal of the technology-based standard. Sources achieving the reduction after the standard's proposal but before January 1, 1994, may also qualify for the compliance extension if it makes an enforceable commitment to achieve the reduction before proposal of the standard. The early reductions must be based on actual and verifiable emissions in a base year no earlier than 1987, and sources must undergo review for a health-based emission limit at the same time as the other sources in the source category.

The early reduction program has the potential for substantially reducing emissions well before the compliance date for MACT standards. Sources which participate in the program obtain more time to develop strategies for compliance with MACT standards and the flexibility to choose the means by which they reduce their HAP emissions. The early reduction option gives them an opportunity to design cost-effective emission reduction approaches for their facilities and reduce the cost of compliance over the long-term. Public and environmental exposure to HAP are reduced earlier than if sources delay control of emissions until they are subject to MACT standards. This early reduction results not only in lower annual emissions but also in lower overall emissions from the source over the long-term.

To be added: how effective has this program been? How many sources have been exempted from MACT standards, and what is the quantity of early reductions?

Issues

A. States

1. How can states be encouraged to plan and implement early?

B. Other planning bodies (RAMP, AOI-level, etc.)

1. How can RAMPs or AOI-level institutions be encouraged to plan early?

C. Sources

1. What are some safe harbors/incentives to encourage sources to reduce emissions	early?

- stationary sources

- area sources

- mobile sources

2. What are the minimum requirements to qualify for these safe harbors/incentives?

3. What if all existing sources qualify for these safe harbors/incentives but additional	controls are needed to attain the NAAQS?