Monday, January 25, 2010

EPA Sets New NOx Standards

Back in December 2009, EPA proposed new national ambient air quality standards (NAAQS) for ozone, a precursor to urban smog. Today, the EPA finalized a new one-hour NAAQS for nitrogen oxides, which are emitted predominantly by power plants and motor vehicles. The rule limits concentration levels to100 parts per billion or less over any one hour period. This new rule supplements the pre-existing average annual concentration limit for nitrogen oxides of 0.053 parts per million. In addition, the new rule requires new monitoring of nitrogen oxide concentration levels near highways and other areas where concentration spikes are likely to occur.

According to this article in today's Washington Post, the annual standard actually is currently met by every Air Quality Control Region of the country. And nearly all are already meeting the new one-hour standard. Only Chicago is out of attainment, but is expected to come into attainment based on existing implementation plans.

The new one-hour limit is based on recent science showing that short-term (e.g., less than one-hour) exposure to higher concentration levels of nitrogen oxides (for instance, near highways) can aggravate respiratory ailments,  such as asthma, and impair lung function. Again, when setting NAAQS, EPA can only consider human health effects; it may not consider cost.

While the Clean Air Act bars EPA from considering costs in setting NAAQS, EPA is required to prepare them under both statutory law and Executive Order of the President. The Regulatory Impact Analysis (RIA) accompanying the rule compares costs and benefits using alternative 3% and 7% discount rates with costs and benefits running to 2020. Also, importantly, the RIA presumed the attainment of concentration levels of 50 ppb, which is far more stringent than the 100 ppb limit the final rule actually imposes. That said, and with due regard for uncertainties about some excluded costs and benefits, the RIA concludes that (a more stringent version of) the new rule would create net benefits ranging from -$120 million and +$270 million, with a central estimate above +$100 million.

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