CONSAD Research Corporation

Environmental Analysis

National and Regional Economic Analysis

ASSESSMENT OF THE ECONOMIC IMPACTS OF REVISED NATIONAL AMBIENT AIR QUALITY STANDARDS FOR PARTICULATE MATTER

Air Quality Standards Coalition

On June 12,1996, the U.S. Environmental Protection Agency (EPA) published an Advanced Notice of Proposed Rulemaking to revise the National Ambient Air Quality Standards (NAAQS) for Particulate Matter (PM). In this study, CONSAD developed estimates of the economic impacts of the proposed standards on businesses and individuals in metropolitan areas and nonmetropolitan counties that will be unable to attain the proposed concentrations of ambient PM.

The study involved eight tasks. First, estimates of ambient concentrations of PM_2.5 (PM with aerodynamic diameters of 2.5 microns or less) in expected nonattainment areas were developed on the basis of existing measurements of PM₁₀ (PM with aerodynamic diameters of 10 microns or less) for 1993-1995. Next, projections of future ambient PM_2.5 concentrations were derived, taking into account expected industrial and population growth and the scheduled implementation of emission controls mandated by existing EPA regulations. Third, estimates of the proportions of the ambient PM_2.5 concentration that were attributable to emissions from specific source categories were developed for each expected nonattainment area. Fourth, control techniques that were available for application to specific source categories were identified and characterized in terms of their control efficiencies and costs. Next, based on data from existing EPA inventories of emission sources, the maximum reductions in emissions of PM_2.5 and its precursors that would be achievable by applying the identified control techniques to known emission sources in individual expected nonattainment areas were estimated. Sixth, based on those estimates, estimated State Implementation Plans (SIPs) were developed for the areas that were projected to be nonattainment areas in 2000. The estimated costs of implementing the SIP in each area were also calculated. Seventh, the estimated costs of compliance were used as inputs into a macroeconomic interindustry model to estimate the total economic impacts of complying with the proposed NAAQS for PM_2.5. Finally, based on the aggregate national estimates, the impacts of the proposed standards on economic activity in the projected nonattainment areas were estimated.

The study found that implementation of the proposed NAAQS for PM_2.5 would have substantial direct and indirect economic consequences for businesses and individuals across the United States. Those adverse economic impacts would be experienced predominantly in the projected nonattainment areas. The impacts would include increased business operating costs, reduced employment and worker compensation, decreased industrial output, and increased municipal expenditures for road cleaning and air quality monitoring.