US Air Quality ManagementJake Schmidt, Senior Policy Analyst

Center for Clean Air Policy*********

Improving Air Quality in the enlarged EUSeptember 2, 2004Brussels, Belgium

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Center for Clean Air Policy Non-profit environmental think tank founded in 1985 by

state governors to find market-based solution to acid rain Applying similar approaches to ozone, greenhouse gases,

and air toxics at variety of levels Leader in several US AQ efforts, EU GHG trading system

design, and international climate change negotiations Conducted a US Air Quality Dialogue to analyze and

discuss alternative designs for power sector air quality legislative programs

Partner in an EU project to assess and compare the effectiveness of air quality policies in the EU-15 w/ other countries

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Air Quality Limit Values and Emissions Limits

EPA establishes National Ambient Air Quality Standards (NAAQS)» Define air quality limit values for 6 pollutants» EPA required to review air quality criteria and NAAQS for each pollutant at

least every 5 years National SO2 emissions limits to address acid rain are established

in Title IV of the Clean Air Act (CAA) for major stationary sources» Nat’l loading limits in addition to SIP/non-attainment requirements

EPA considering new regional or nat’l emissions loadings for other source categories» Each state given aggregate target for source category in their state, then

cap-and-trade applied Several other requirements (e.g., vehicle engine and fuel

standards) established by EPA

Area Designation based on NAAQS

Unclassifiable

Below NAAQS

Above NAAQS

Insufficient Information

Developing Maintenance SIP

Attainment Nonattainment

Developing Attainment-Demonstration SIP

Emission-Control Strategies & Enforcement Measures

Air Quality Model Simulations

Emissions Inventory

Review Process

Inadequate Inadequate

Adequate

EPA State and Local Air Quality Agencies

LEGEND

Air Quality Control Regions (AQCRs)

Promulgation of SIPs

NRC, 2004

US Air Quality Management System

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“Nonattainment” Areas Air quality is measured compared to NAAQS based upon

ambient concentrations» Nationwide monitoring network

States propose and EPA approves areas (usually groups of counties) as “attainment” or “nonattainment”» For most pollutants areas are classified according to the severity

of their nonattainment– For ozone: marginal, moderate, serious, severe-15, severe-17, and

extreme Differing requirements and timelines established for ozone

nonattainment areas depending on severity of the problem» Others have a binary system

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State Implementation Plans (SIPs)

States develop nonattainment SIPs that outline their plan to meet the NAAQs; they include:» Emissions inventory (current and projected)» Air quality modeling» Emissions reductions needed to meet NAAQS» Control measures to achieve reductions

Submitted for EPA review and approval and become enforceable as a matter of federal and state law» Development process and review takes time

– SIPs to be submitted 3 yrs. from designation as nonattainment area– 2006 for 8-hour ozone; 2007 for PM2.5

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SIP Penalties 1990 CAA authorizes EPA to introduce sanctions

when nonattainment area fails to submit adequate plan or to demonstrate attainment by deadline.» “2 to 1” offsets—requires that newly constructed or expanded

major stationary sources reduce emissions elsewhere twice as much as projected for new project.

» Federal high fund sanction—funds for transportation projects within nonattainment area withheld.

» Others—”bump-up provision”, conformity, penalty fee EPA notifies state they have 18 months to rectify

problem—”sanction clock” starts, then 2 to 1 offset, followed by highway funds sanction (6 months later).

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Control Measures in SIPs SIPs contain the following emissions control

measures:» Federal—those national programs estimated to reduce

emissions in a given area» Local-mandatory—specific measures required in the CAA

for nonattainment areas» Local-additional—if above two insufficient, additional local

measures are highlighted» Multistate regional—measures introduced through

regional planning organizations or through other regional measures.

Many measures are nat’l and defined in the CAA States do controls for existing sources, new

sources are regulated through CAA standards

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B. For nonattainment areas1 Attainment-demonstration SIPs must be submitted within 3 years of an area being designated a nonattainment area. In addition to the items listed in part A, the SIP must

Provide a plan for the implementation of reasonably available control technologies (RACT) and attainment of primary NAAQS, for the offsetting of emissions of new or modified major stationary sources, and for the installation in major new stationary sources of technology capable of achieving the lowest achievable emission rate (LAER).

Include a comprehensive emissions inventory for all relevant pollutants. Implement a new-source review (NSR) before construction, and for all new or modified stationary sources,

implement a permit program that mandates use of control technologies that obtain the LAER and provides sufficient emission offsets from other sources in the area to ensure reasonable progress and attainment of NAAQS.

Provide for the implementation of contingency measures in the event that the area fails to make reasonable progress or meet its attainment deadline.

For a nonattainment area to be redesignated an attainment area, a revised SIP must be submitted and approved. This plan2 must

Provide for the maintenance of NAAQS compliance for at least 10 years after the redesignation. Include additional measures, if any, to ensure such maintenance.

C. For O3 nonattainment areas3 In addition to the items listed in parts A and B, SIPs for marginal and above O3 nonattainment areas must

Include a vehicle emission-control inspection and maintenance (I/M) program. Include a volatile organic compound (VOC) and nitrogen oxides (NOx) emissions inventory every 3 years for

the area. Implement an NSR for VOC sources that includes an offset ratio of emission reductions to new emissions of at

least 1.1:1. In addition, SIPs for moderate and above O3 nonattainment areas must

Provide a plan for VOC emission reductions as specified in the CAA. Provide a plan for comprehensive introduction of RACT for specified VOC sources. Implement a vapor recovery program requiring gasoline service stations to install special refueling equipment

to prevent the escape of VOCs. Implement an NSR for VOC sources that includes an offset ratio of emission reductions to new emissions of at

least 1.15:1. In addition, SIPs for serious and above O3 nonattainment areas must

Include an attainment demonstration using a photochemical grid model. Demonstrate that reasonable progress is being made through appropriate 3% per year reductions in VOC

emissions (or its O3-equivalent in NOx emissions) and submit triennial compliance demonstrations beginning in 1996 showing emission reductions are being met.

Implement an NSR for VOC sources that includes an offset ratio of emission reductions to new emissions of at least 1.2:1.

Implement a program of enhanced air quality monitoring. Provide for an enhanced vehicle I/M program.

1 CAA § 172. 2 CAA § 175(a) 3 CAA § 182.

Clean Air Act Requirements for Ozone SIPs (NRC, 2004)

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Controlling Regional Emissions

Regional transport a significant issue for several pollutants» The air crossing the border in several locations violates the ambient standards

States can file section 126 petitions» If EPA finds that sources makes a significant contribution to nonattainment

problems in the petitioning state, EPA authorized to establish federal emission limits for the offending sources.

As a result, several efforts have been introduced to control regional emissions contribution to air quality. For example,» Acid Rain Trading Program» Ozone Transport Region» NOx SIP Call» Proposed Clean Air Interstate Rule» Regional haze

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The 1990 Clean Air Act Amendments: Title IV

Establishes cap-and-trade system for SO2 Implemented in two phases: Phase 1 (1995)

included 263 large units; Phase 2 (2000) caps emissions at 8.12 million tonnes

Emissions banking allowed Basic allocation formula based on historic

heat input w/adjustments by plant category Continuous emissions monitors required Penalty for noncompliance – over $2,000 per

ton plus requirement to offset emissions» Ten times actual cost (indexed to inflation)

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Emissions Reductions of Title IV Acid Rain Trading Program Observations: 1) Program resulted in a continuous decline in

total SO2 emissions. 2) Participants used banking provisions.

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Ozone Transport Region Established to address regional emissions transport

within the Northeast States reached agreement (signed MOU) on a 3-phase

NOx budget program Second 2 phases (1999, 2003) established regional

emissions trading that consists of a progressively more stringent cap-and-trade program for the region during the May to September ozone season

Progressive flow control limits use of banked allowances to prevent significant increases in emissions over the emissions cap in the given season

Each state adopted the model rule States retain allocation authority

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OTR Results Overall, OTR achieved a 59% reduction in NOx

emissions from controlled sources in 2002 from 1990 levels.

Allowance prices in early years more volatile, higher than forecasts due to delays in implementing legislation, and delays in issuance of early reduction credits. Trading began in earnest just before first compliance period.

Once trading began, markets functioned well Studies show that state-based program was less

effective than Acid Rain Trading program because of differing trading rules, policies, etc.

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NOx SIP Call 8 Northeastern states filed section 126 petitions against power

generators and other sources of NOx in “upwind” states EPA formed the Ozone Transport Assessment Group (OTAG) OTAG analysis found that “upwind” sources were contributing

to “downwind” nonattainment problems » EPA considered section 126 petitions alongside the OTAG results when

it developed the “NOx SIP Call” Established ozone season NOx emissions caps for 19 states

and DC» Emissions reductions based on the cost-effective reduction level

States could opt into an emissions trading system

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Proposed Clean Air Interstate Rule

EPA recently proposed the Clean Air Interstate Rule to reduce interstate transport of fine particulate and ozone pollution

Would establish annual emissions caps in two phases (2010 and 2015) for NOx and SO2 in 28 states and DC» Reduce NOx emissions in the region to 1.4 million tonnes in

2010 and 1.2 million tonnes in 2015 (~65% below current levels)

» Reduce SO2 emissions in the region by 3.3 million tonnes in 2010 and an additional 1.8 million tonnes when the rule is fully implemented (~70% below current levels)

Likely to be finalized before the end of the year

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US Lessons Learned SIP process can be very “bureaucratic”

» Critics argue that the procedural inefficiency probably:– discourages innovation and experimentation at the state and local

levels,– overtaxes the limited financial and human resources, and– draws attention and resources away from ensuring progress toward the

goal of meeting the NAAQS (NRC, 2004). Control of emissions from many sectors can’t be efficiently

regulated at the local or state levels (NRC, 2004). Regional transport of emissions has become major basis of

policy development in US» Will likely play a large role in future efforts to address ozone, PM2.5,

and regional haze Emissions trading has been introduced in a variety of forms to

reflect the varying nature of the pollutant and air quality goals» e.g., OTC program has “flow control”, acid rain included nat’l

emissions target, and NOx SIP Call included subset of US

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US Next Steps National Academy of Sciences conducted review

of US system and made recommendations, including:» Expand use of federal control measures» Use market-based approaches whenever practical and

effective» Enhance the ability and responsibility of EPA to

address multistate and regional transport problems» Transform the SIP into an AQMP that incorporates all

relevant air quality issues and measures in a single plan (NRC, 2004).

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For more information: Center for Clean Air Policy

www.ccap.org National Academy of Sciences (NRC, 2004)

http://books.nap.edu/books/0309089328/html/index.html

Stan Kolar

Prague, Czech Republic

ccap.sk@iol.cz

Jake Schmidt750 First St., NE, Suite 940Washington, DC 20002jschmidt@ccap.org 1-202-408-9260

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National Ambient Air Quality Standards in Effect

as of December 2003 Primary Standards Secondary Standards Pollutant

Concentration Type of Average Concentration Type of Average 9 ppm (10 mg/m3) 8-houra None CO

35 ppm (40 mg/m3) 1-houra None NO2 0.053 ppm (100 µ g/m3) Annual arithmetic mean Same as primary

0.03 ppm Annual arithmetic mean 0.5 ppm (1300 µ g/m3) 3-houra SO2 0.14 ppm 24-houra 0.08 ppm 8-houre Same as primary O3 0.12 ppm 1-hourf Same as primary 15 µ g/m3 Annual arithmetic

meanb Same as primary PM2.5

65 µ g/m3 24-hourc 50 µ g/m3 Annual arithmetic

meand Same as primary PM10

150 µ g/m3 24-houra Pb 1.5 µ g/m3 quarterly avg. Same as primary

a Not to be exceeded more than once per year. b the 3-year average of the annual arithmetic mean PM2.5 concentrations from single or multiple community -oriented monitors. c the 3-year average of the 98th percentile of 24-hour concentrations at each population-oriented monitor within an area. d The expected annual arithmetic mean PM10 concentration at each monitor within an area. e The 3-year average of the fourth-highest daily maximum 8-hour average ozone concentrations measured at each monitor within an area over each year.

f (a) The standard is attained when the expected number of days per calendar year with maximum hourly average concentrations above 0.12 ppm is ? 1. (b) The 1-hour standard is applicable to all areas notwithstanding the promulgation of 8 -hour ozone standards under Sec. 50.10. On June 2, 2003, (68 FR 32802) EPA proposed several options for when the 1-hour standard would no longer apply to an area.

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