Text of
Printed Hearing
The Committee on Energy and Commerce
W.J. "Billy" Tauzin, Chairman
Accomplishments of the Clean Air Act, as amended by the Clean Air Act Amendments of 1990
Subcommittee on Energy and Air Quality
May 1, 2002
10:00 AM
2123 Rayburn House Office Building
<DOC>
[107th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:79470.wais]
ACCOMPLISHMENTS OF THE CLEAN AIR ACT, AS AMENDED BY THE CLEAN AIR ACT
AMENDMENTS OF 1990
=======================================================================
HEARING
before the
SUBCOMMITTEE ON ENERGY AND AIR QUALITY
of the
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
MAY 1, 2002
__________
Serial No. 107-106
__________
Printed for the use of the Committee on Energy and Commerce
Available via the World Wide Web: http://www.access.gpo.gov/congress/
house
__________
U. S. GOVERNMENT PRINTING OFFICE
79-470 WASHINGTON : 2002
___________________________________________________________________________
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COMMITTEE ON ENERGY AND COMMERCE
W.J. ``BILLY'' TAUZIN, Louisiana, Chairman
MICHAEL BILIRAKIS, Florida JOHN D. DINGELL, Michigan
JOE BARTON, Texas HENRY A. WAXMAN, California
FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia SHERROD BROWN, Ohio
RICHARD BURR, North Carolina BART GORDON, Tennessee
ED WHITFIELD, Kentucky PETER DEUTSCH, Florida
GREG GANSKE, Iowa BOBBY L. RUSH, Illinois
CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California
BARBARA CUBIN, Wyoming BART STUPAK, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
HEATHER WILSON, New Mexico TOM SAWYER, Ohio
JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland
CHARLES ``CHIP'' PICKERING, GENE GREEN, Texas
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri DIANA DeGETTE, Colorado
TOM DAVIS, Virginia THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
ROBERT L. EHRLICH, Jr., Maryland LOIS CAPPS, California
STEVE BUYER, Indiana MICHAEL F. DOYLE, Pennsylvania
GEORGE RADANOVICH, California CHRISTOPHER JOHN, Louisiana
CHARLES F. BASS, New Hampshire JANE HARMAN, California
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska
ERNIE FLETCHER, Kentucky
David V. Marventano, Staff Director
James D. Barnette, General Counsel
Reid P.F. Stuntz, Minority Staff Director and Chief Counsel
______
Subcommittee on Energy and Air Quality
JOE BARTON, Texas, Chairman
CHRISTOPHER COX, California RICK BOUCHER, Virginia
Vice Chairman RALPH M. HALL, Texas
RICHARD BURR, North Carolina TOM SAWYER, Ohio
ED WHITFIELD, Kentucky ALBERT R. WYNN, Maryland
GREG GANSKE, Iowa MICHAEL F. DOYLE, Pennsylvania
CHARLIE NORWOOD, Georgia CHRISTOPHER JOHN, Louisiana
JOHN SHIMKUS, Illinois HENRY A. WAXMAN, California
HEATHER WILSON, New Mexico EDWARD J. MARKEY, Massachusetts
JOHN SHADEGG, Arizona BART GORDON, Tennessee
CHARLES ``CHIP'' PICKERING, BOBBY L. RUSH, Illinois
Mississippi KAREN McCARTHY, Missouri
VITO FOSSELLA, New York TED STRICKLAND, Ohio
ROY BLUNT, Missouri THOMAS M. BARRETT, Wisconsin
ED BRYANT, Tennessee BILL LUTHER, Minnesota
STEVE BUYER, Indiana JOHN D. DINGELL, Michigan
GEORGE RADANOVICH, California (Ex Officio)
MARY BONO, California
GREG WALDEN, Oregon
W.J. ``BILLY'' TAUZIN, Louisiana
(Ex Officio)
(ii)
C O N T E N T S
__________
Page
Testimony of:
Driesen, David M., Associate Professor, Syracuse University
College of Law............................................. 97
Goffman, Joseph, Attorney, Global and Regional Air Program,
Environmental Defense...................................... 65
Goldstein, Bernard D., Dean, School of Public Health,
University of Pittsburgh................................... 61
Holmstead, Jeffery, Assistant Administrator for Air and
Radiation, Environmental Protection Agency................. 17
Krupnick, Alan, Senior Fellow and Director, Quality for the
Environment Division, Resources for the Future............. 84
Lents, James, Environmental Policy, Atmospheric Processes and
Modeling Laboratory, University of California at Riverside. 76
Material submitted for the record:
Holmstead, Jeffery, Assistant Administrator for Air and
Radiation, Environmental Protection Agency, responses for
the record................................................. 103
(iii)
ACCOMPLISHMENTS OF THE CLEAN AIR ACT, AS AMENDED BY THE CLEAN AIR ACT
AMENDMENTS OF 1990
----------
WESDNESDAY, MAY 1, 2002
House of Representatives,
Committee on Energy and Commerce,
Subcommittee on Energy and Air Quality,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2123, Rayburn House Office Building, Hon. Joe Barton
(chairman) presiding.
Members present: Representatives Barton, Burr, Whitfield,
Ganske, Shimkus, Pickering, Bryant, Buyer, Radanovich, Tauzin
(ex officio), Boucher, Hall, Sawyer, Wynn, Doyle, Waxman,
Markey, McCarthy, Barrett, Luther, and Dingell (ex officio).
Staff present: Bob Meyers, majority counsel; Joseph Stanko,
majority counsel; Andy Black, policy coordinator; Hollyn Kidd,
legislative clerk; and Michael L. Goo, minority counsel.
Mr. Barton. The subcommittee will come to order. The Chair
has been informed that Congressman Boucher is on his way. So we
are going to begin. The Chair would recognize himself for an
opening statement.
Today we begin the Energy and Air Quality Subcommittee's
examination of the Clean Air Act issues with a look at the
accomplishments of that important environmental legislation.
I participated in the 1990 amendments, had several
amendments added to the bill, and voted for the final package.
Today I am chairman of the subcommittee with jurisdiction over
the Clean Air Act. I also spent, several years ago, 4 years as
chairman of the Oversight and Investigations Subcommittee of
this Energy and Commerce Committee. During my tenure as
chairman of Oversight and Investigations, we held many hearings
on the Clean Air Act--I believe the number was 19--and how it
was being implemented at the time. Those hearings clearly
showed that the Clean Air Act was working to improve air
quality.
That is why I am very surprised when I see recent public
opinion polls that show that over 60 percent of Americans think
that the Nation's air quality is getting worse, not better.
Nothing could be further from the truth. The air quality in our
nation is considerably cleaner today than it was in 1990.
Nationally, the year 2000 average air quality levels were
the best in the last 20 years for all six criteria of
pollutants, lead, nitrogen dioxide, sulfur dioxide, particulate
matter, carbon monoxide, and ozone. In fact, according to the
most recent EPA figures, between 1970 and 2000, total emissions
of the six criteria for air pollutants decreased 29 percent.
During that same time, gross domestic product increased 150
percent, energy consumption increased 45 percent, vehicle miles
traveled increased 143 percent, and the United States
population increased 36 percent. This is quite an achievement.
Since 1990, an unprecedented number of cities have met the
national ambient air quality standards. More than two-thirds of
the areas designated as nonattainment following the 1990
amendments are now in attainment and have air quality that meet
or surpass the data that is required for them to meet those
standards.
These include: Forty-one of the 43 carbon monoxide areas
are now in attainment; 69 of the 85 coarse particulate matter
areas are now in attainment; and 71 of the 101 1 hour ozone
areas are now in attainment.
As one of the authors of some of the 1990 air quality
amendments, I am pleased to see that we achieved the results
that we have. I want to congratulate the numerous committee
members on both sides of the aisle who participated in the 1990
reauthorization.
I hope that our panel of experts today can help inform the
60 percent of the Americans who think that air quality has
decreased just what the facts are.
This is just the first in a series of hearings in what
should be a bipartisan examination of the Clean air Act. After
we finish looking at where we have come, we can next turn to
where we should go. It is my hope that this discussion can be
calm, cooperative, and constructive. Just as in H.R. 4, the
energy bill that we passed in this committee last August and in
other legislation, it is my intent to work with members on both
sides of the aisle on a fair review process.
Neither Chairman Tauzin of the full committee nor I have
made any firm decision about what this subcommittee will
legislate on, on this issue in this Congress. If it is the will
of the subcommittee members to roll up our sleeves and work
together, legislating remains an option, although time is
drawing short. At a minimum, I want to build a fact-based
record which can be used at the appropriate time to draft
legislation to improve the Clean Air Act Amendments of 1990.
With that, I would recognize my distinguished ranking
member, Mr. Boucher, for an opening statement.
Mr. Boucher. Thank you very much, Mr. Chairman. I want to
commend you for scheduling the hearing this morning for the
purpose of examining the benefits that have been realized
through application of the Clean Air Act and the amendments to
that act in 1990.
As the chairman indicated, this is the first in a series of
hearings that the subcommittee will conduct on matters relating
to air quality across the nation. In 1990 major changes and
additions were made to the Clean Air Act. These amendments
included the creation of the acid rain program and significant
changes to the control of criteria pollutants.
Since enactment of the Clean Air Act and the 1990
amendments, the Nation has made significant progress in
reducing pollutant emissions and in improving air quality, at
the same time that the Nation's economy and energy use
generally have expanded.
From 1970 to 1999, the gross domestic product of the United
States increased by 158 percent. During this same period of
time, electricity use increased by 148 percent. Despite the
increases in energy consumption, our Nation's air today is much
cleaner than it was in 1970.
During the past 30 years, sensible environmental
regulations, primarily the environmental standards enacted by
the Clean Air Act and the 1990 amendments, along with new
technology and voluntary actions by the Nation's industry have
led to a significant reduction in emissions. Sulfur dioxide
emissions have declined by 39 percent. Particulate matter
levels have fallen by 75 percent. Airborne lead levels are down
by 98 percent, and volatile organic compound levels have
decreased by 42 percent.
During the past 3 decades, coal use has increased by 195
percent, while the total emissions per ton of coal consumed
have decreased by almost 70 percent. Particulate matter levels
from coal based utilities decreased 84 percent between 1970 and
1998. Our Nation's air has been getting cleaner while coal use
by electric utilities has steadily increased. These
improvements in air quality have been largely due to the
success of the Clean Air Act and the amendments adopted in
1990.
The witnesses testifying before the subcommittee today
bring a large amount of knowledge to our discussion of the
Nation's air quality needs, of the development of the Clean Air
Act and subsequent amendments, and the Act's implementation,
and I look forward to hearing from each of them regarding the
progress we have made in improving air quality over the last 30
years.
I particularly look forward to hearing about the successes
of the market based cap and trade strategy under the Title IV
acid rain program and to the overall reduction that has
occurred in criteria and hazardous air pollutants.
Mr. Chairman, I commend you for beginning this
subcommittee's inquiry into the successes of the Clean Air Act
with today's hearings, and I look forward to the subsequent
hearings and to working with you as we begin to consider
changes that could usefully be made in the Nation's clean air
laws. Thank you, Mr. Chairman.
Mr. Barton. I thank the gentleman from Virginia. I would
recognize the gentleman from Illinois, the vice chairman, for a
3-minute opening statement.
Mr. Shimkus. Thank you, Mr. Chairman. I am delighted to be
here this morning, and thank you for holding this hearing.
What we will hear today is how successful the Clean Air Act
has been. We will hear how the Act cut thousands of tons of
pollution. We will hear that this has been a net positive for
our country. Others will say it has not done enough and that we
need to do more.
I wanted to bring a copy of a recent St. Louis Post
Dispatch where on the same front page it had on the top of the
fold ``Individual from EPA quits because of business
influence.'' Then on the bottom of the page, it had ``Primcorp
refinery closes because of high sulfur rules'' and a picture of
workers leaving to be unemployed in the future. That is true
for all of central and southern Illinois.
The net has been anything but positive of the Clean Air
Act. In an area of the country where unemployment rates
generally held around 10 percent, the Clean Air Act caused the
loss of over 5,000 mining jobs alone, not to mention the other
jobs that were lost as a result of the slow downturn in the
mining industry.
Congress has just now begun to realize that we can burn
coal using clean coal technologies that will result in less
pollution. Utilizing these technologies will be a win-win for
all in American, especially in southern Illinois. But if we are
really concerned about clean air and want to take steps here in
Congress to improve clean air, we have the opportunity to do so
next week.
This committee passed by a large bipartisan vote
legislation to move forward on sending nuclear waste to Yucca
Mountain. This legislation will be on the floor next week and,
if signed into law, will keep the nuclear energy as an
important part of our Nation's energy portfolio, and a
diversified energy portfolio is a key to energy independence
and energy stability.
Nuclear energy is the cleanest form of energy we have. For
example, nuclear generated electricity in Illinois, which gets
almost half of our electricity from nuclear power, avoided the
emissions of 26.65 million metric tons of carbon, 488,000 tons
of sulfur dioxide, and 226,000 tons of nitrogen oxide in 2000
alone.
If other States were to get only 25 percent of their
electricity from nuclear power, we would have met all the goals
of the Clean Air Act sooner. It seems odd to me that those who
claim to be most concerned about the quality of our air are
those that are most opposed to nuclear power.
Congress will also have the opportunity soon to pass an
historic energy bill that will increase domestic production of
energy sources and also provide for a cleaner environment. The
Senate version of the energy bill amends the Clean Air Act by
creating a renewable fuel standard for gasoline that will
result in the use of 5 billion gallons of renewable fuel.
Despite what renewable energy critics may say, this single
provision will result in over 5 billion less gallons of
imported oil being burned, thereby reducing the amount of
carbon and sulfur in our air.
The Clean Air Act has done some good, and yet there is
still more we can do, but we must take into account the effect
Federal environmental regulations have on jobs. I have said the
same thing with regard to trade. I have stood up for workers in
my district, if I felt trade laws unfairly hurt them, and I
consider myself a free trader. I will stand up for workers in
my district who are unfairly hurt because of strict
environmental regulations. To be honest, southern Illinois
cannot handle another Clean Air Act like the one currently in
place.
Thank you, Mr. Chairman. I yield back no time.
Mr. Barton. We thank the gentleman. We recognize the
distinguished gentleman from California, Mr. Waxman, for a 3
minute opening statement.
Mr. Waxman. Mr. Chairman, 20 years ago this week the Energy
and Commerce Committee met in this room to debate amendments to
the Clean Air Act. In reflecting about that time, I realize
that only five members from 1982 are still on the committee,
John Dingell, Billy Tauzin, Ed Markey, Ralph Hall, and myself.
A lot has changed in the world, in Congress, and on this
committee. This room certainly did not have the fancy
technology we have today, and Chairman Tauzin was a junior
Democrat then. But no matter how long you follow congress,
there are some things that do not change.
Twenty years ago industry was fighting to relax the Clean
Air Act and, just like they are today, industry lobbyists
argued that relaxing clean air rules was key to jobs and
economic growth. At the time, we were debating legislation
promoted by President Reagan that would have weakened, some say
even gutted, the Clean Air Act, because it would have doubled
the pollution allowed from cars and trucks and relaxed
requirements for nearly all industrial sources of air
pollution.
We defeated those efforts, and guess what happened. None of
the dire predictions from industry about economic catastrophe
came true. Since then, our gross domestic product has doubled.
Our population increased by a third, and vehicles miles
traveled have doubled, while air pollution in the United States
has decreased by 30 percent.
Twelve years ago, we were debating the Clean Air Act
amendments of 1990 in this room. Only nine members of the
committee who participated in that debate are still here. Once
again, the arguments were familiar. Ford Motor Company
testified that ``We just do not have the technology to comply
with the first tier of new tailpipe standards in the 1990
amendments, not even with technology on the horizon.''
Mobil Corporation opposed the new Clean Air Act
requirements for reformulated gasoline, writing that ``The
technology to meet these standards simply does not exist
today'' and predicting major supply disruptions.
The chemical industry said that achieving the required
phaseout of CFCs and other ozone depleting chemicals would
cause severe economic and social disruption and the Air
Conditioning and Refrigeration Institute testified that it was
certain that we would see shutdowns of refrigeration equipment
in supermarkets; we would see shutdowns of chiller machines
which cool our large office buildings, our hotels, our
hospitals. But once again, industry was spectacularly wrong.
Once the 1990 law was enacted, industry showed it could
meet the new standards ahead of time and at costs far below
industry's previous estimates. Now industry is repeating itself
again. Led by Haley Barbour, a lobbyist for Southern Company
and the former head of the Republican party, industry is
claiming that we need to relax the Clean Air Act to maintain
economic growth.
Industry is also making a surreal argument that could only
be heard here in Washington, DC. They claim that we must weaken
the Clean Air Act in order to reduce air pollution.
Mr. Barton. Approximately how much longer?
Mr. Waxman. I only have another paragraph. And as in 1982,
the administration is once again taking its cues from industry.
While industry lobbyists are asked what they would do if they
were Il Duce, environmental groups, the States and the public
are shut out of the process.
Three months after taking office, the President abandoned
his campaign pledge to reduce CO<INF>2</INF> emissions, while
others in his administration launched a plan to undermine new
source review, one of the most fundamental clean air
protections in our law.
As we begin our debate today on these assaults on the Clean
Air Act, I urge my colleagues to remember what happened in this
room 10 and 20 years ago. Twice before, we stood up to industry
claims and fought to provide clean air to all Americans. We
were right, and industry was consistently wrong. Now is the
time to stand up and fight again. Thank you very much, Mr.
Chairman.
Mr. Barton. I thank the gentleman from California. The
gentleman from Kentucky, Mr. Whitfield, is recognized for a 3-
minute opening statement.
Mr. Whitfield. Mr. Chairman, thank you very much, and as we
embark on these hearings on the Clean Air Act and, hopefully,
for reauthorization next year, I think it is important that we
try to look at facts surrounding the Clean Air Act. It is one
of those issues that it is politically charged, and a lot of
times very loose statements are made without a basis in fact.
I would also recommend to those people interested in this
issue two books: One, Greg Easterbrook who is an environmental
reporter for the New York Times wrote a book a few years ago,
``A Moment on the Earth'' in which he goes into great detail
about some of the myths relating to carbon dioxide and global
warming and so forth. Then another book written by a scientist,
Bjorn Lamborg, from one of the Scandinavian countries who was
one of the strongest environmentalist activists, and he is a
professor. He wrote a book called ``The Skeptical
Environmentalist,'' and the New York Times wrote a detailed
analysis of this book.
The thing that he stresses in this book is that it is very
important that we approach these issues with an open mind in
order to avoid big and costly mistakes. I would just like to
emphasize once again that this is one of those issues where it
is very easy to make all sorts of statements.
Even the models being used to project global warming by the
Environmental Panel on Climate Change, and others, recognize
that those models are not really accurate and that it is going
to be many years before they are truly accurate. But I would
recommend that those people interested in this issue read these
two books, because I do think they give a more balanced
approach to what you normally read on these issues, because
generally you read publications totally biased the other way.
So I look forward to these hearings, Mr. Chairman. I look
forward to our panels today as we embark on this important
work.
Mr. Barton. I thank the distinguished gentleman from
Kentucky. I would recognize the gentleman from Ohio, Mr.
Sawyer, for a 3-minute opening statement.
Mr. Sawyer. Thank you, Mr. Chairman, and thank you for
holding this hearing. As a consequence of the 1970 Clean Air
Act and the 1990 amendments, this country has made enormous
progress in improving the quality of air, and I am sure we will
hear about that today.
Sometimes it is difficult to measure the benefits of the
work that we do in Congress, but the Clean Air Act is a clear
example of the public good that can come from legislation.
Overall levels of pollution have dropped some 29 percent since
the Act. Cars in the 2004 model year will be 99 percent cleaner
than those produced in 1970.
Far from crippling the performance of American cars,
electronic engine management systems have multiplied
performance, multiplied efficiency in the use of fuel, and
multiplied our capacity to achieve a cleaner environment. Quite
simply, we benefit from the Clean Air Act with every breath we
take.
The Clean Air Act demonstrates that this country can
achieve the ambitious environmental objectives that it sets for
itself. That is why I am disappointed in the direction that we
appear to be heading today. The President wants to reduce the
ratio of greenhouse gas emissions to economic growth over the
next 10 years by 17.5 percent.
That sounds impressive, but what it really means is that
the U.S. would still increase the overall amount of greenhouse
gases at the same rate that we are today. The President's 17.5
percent target is the same as the 17.4 percent reduction that
the U.S. experienced form 1990 to 2000. The plan almost
guarantees that we will have much higher emissions of
greenhouse gases in 10 years, and we will have done little to
address the serious problem of global warming.
We have the technology to develop practical proposals to
reduce greenhouse emissions, and we should develop the
political will to do it. It would be a legacy to rival that of
the original Clean Air Act that we are celebrating. Given that
the U.S. emits almost a quarter of the world's greenhouse
gases, we cannot afford to be indifferent to global warming.
Ultimately, it would be far cheaper to include greenhouse gas
controls as a part of a multi-pollutant bill than to leave
carbon dioxide controls until later.
Despite its many achievements, the Clean Air Act can be
improved, and I am glad that the President's plan recognizes
the benefits of a cap and trade program. The acid rain cap and
trade program contained in the 1990 amendments has been
remarkably successful. If they are designed correctly, these
kinds of programs offer great promise to improve our air
quality, even more than existing programs.
Astonishingly, the administration has yet to produce
detailed evidence to back up its claim that the Clear Skies
Initiative will increase air quality and improve public health.
I have a sign on the wall of my office that says ``Without
data, you are just another opinion.'' At this point, we are
largely without data. I hope that the witnesses today can begin
to fill in the gaps left while we await the administration's
explanations.
Thank you, Mr. Chairman. I yield back.
Mr. Barton. Thank the gentleman from Ohio. I would
recognize the gentleman from Iowa, Mr. Ganske, for a 3-minute
opening statement.
Mr. Ganske. Thank you, Mr. Chairman. A few year ago, I was
on a surgical mission to Lima, Peru, and I experienced the
worst air pollution that I have ever seen in my life. During
traffic hours, you could barely see four blocks.
I am told that part of the reason is that the cars and
buses in California that can no longer meet clean air standards
are put on ships and shipped down the coast and end up in
cities in South America. Lima, Peru is one of them.
Contrast that with Cedar Rapids, Iowa, where you can follow
a city bus. The entire city fleet of buses in Cedar Rapids,
Iowa, runs on soy diesel fuel, and the black clouds of smoke
which are a standard part of bus transit in most cities are no
longer there. You don't see choking and coughing from the
motorists that are following those buses or the pedestrians on
the sidewalk.
Mr. Chairman, renewable energy, be it from wind turbines,
solar panels, or hydroelectric dams, is very kind to our air
quality. I would be remiss if I did not take this opportunity
again to champion the benefits of renewable sources of energy
as part of a comprehensive energy portfolio for our nation.
I also know that our current economy does not run on
windmills alone, and I look forward to examination of the
achievements and challenges facing the Clean Air Act for the
future.
I want to again thank all the witnesses for joining us here
today and offering their insights, Mr. Chairman. I yield back.
Mr. Barton. I thank the gentleman from Iowa. We would
recognize the distinguished ranking member of the full
committee, Mr. Dingell, for a 5-minute opening statement, if he
wishes to give an opening statement.
Mr. Dingell. Mr. Chairman, I thank you, and I thank you for
holding this hearing.
Mr. Chairman, I can think of few matters on which this
committee has expended more time and more effort and undergone
more misery than we did on the Clean Air Act. It is appropriate
to examine whether the fruits of this long period of hard work
have been borne out in reality. For that reason, this hearing
is important.
I think you will find that the very hard work we did in
1970, 1977, and 1990 has resulted in, and will continue to
result in, great strides toward cleaner air, while at the same
time providing for economic progress.
The record of this committee with regard to that is a
remarkable one of having created balanced legislation, jobs
opportunity, a good economy, and also the cleanest air in the
industrial world. The record, I think, speaks for itself.
Mr. Chairman, the Clean Air Act has always been in the
forefront of environmental laws. It touches the lives of all of
our citizens and calls for steep sacrifices from virtually
every sector of this economy. The consensus we forged in 1970
and again in 1990 reflects the delicate balance between many
competing concerns and interests. It is no way easy to achieve,
and anyone who believes that the change in this area will come
easily should reflect back carefully on the long hours that we
spent in this very room prior to final passage of the 1990
amendments.
I am pleased to hear success stories relative to the Clean
Air Act. I am pleased the legislation we passed into law has
resulted in cleaner air for all Americans, and that in a time
of increasing prosperity.
Since 1990, emissions of sulfur dioxide have fallen by 24
percent. Emissions of lead have fallen by 50 percent. Emissions
of volatile organic compounds have fallen by 16 percent, and
the emissions of carbon monoxide have fallen by 41 percent.
This is a record of which we can be proud, especially in a time
of great economic and population growth.
The automobile industry, in particular, has made much
progress. Cars today are 96 percent cleaner than the
uncontrolled vehicles from 30 years ago, and for some
pollutants, more than 99 percent cleaner. Today's cars emit
fewer pollutants traveling at 55 miles an hour than a 1970 car
emitted engine off, sitting in a driveway, and with
implementation of Tier II standards required by the 1990 Act,
emissions from cars and light trucks will be reduced by another
80 percent from today's clean vehicles.
Before we decide to amend the Act, we should be certain
that change is needed, and we should be absolutely certain that
the air will be cleaner than when we began, and we should be
sure that the ruinous alteration of our industrial base will
not accompany such change.
I cannot support any other result. I think we should know
beyond question the solutions that we will undertake will
result in a better, simpler policy than already exists under
the Clean Air Act, and we should be sure that they will result
in forward, not backward, movement toward the cleaner and
healthier air that the Nation wants.
To undo these provisions without knowing the ultimate
outcome is to risk simultaneously the welfare of our citizens
and the strength of our economy.
Despite the distinguished panel of witnesses that will
shortly appear, we all know of numerous success stories that
will not be heard today. The record on this issue will be thus
necessarily incomplete, and before we begin to claim that we
have examined the question of what has been accomplished since
1990, we should hear from many others on many other topics that
these witnesses are not necessarily going to be able to address
today.
The clean air amendments of 1990 nearly doubled the size of
the existing Act, and they included three new complete titles
addressing important topics, such as acid rain, permitting, and
stratospheric ozone. Two out of the three of these titles will
necessarily remain relatively unexamined in this proceeding, as
will many other 1990 provisions, including those relating to
fuels and mobile sources from which important success stories
can easily be gleaned by any discerning onlooker.
Moreover, no administrative law experts will appear to tell
us how our laws have fared in courts. No witness will appear on
behalf of State and local authorities. We will not hear from
the automobile industry nor from the petroleum industry, nor
from the electrical utility industry.
They and many others each have a story to tell. Each have
accomplishments. Each have problems. Each have concerns. Each
have worries, and each have many positive aspects. Each has a
story of substantial accomplishment under the Clean Air Act. We
need to give them all a chance to tell it in appropriate future
hearings.
There is much to examine and much to learn as we review the
Clean Air Act accomplishments that have occurred over the past
decade. I look forward to the testimony of witnesses today and
those to come.
I do thank you, Mr. Chairman.
Mr. Barton. Thank you, the gentleman from Michigan. The
Chair would like to welcome back to the committee the
distinguished former member from California and of this
committee, the Honorable Carlos Morehead. We are glad to have
him back. You can tell, he has not been a member the last
several years. He came in on the minority side. He doesn't
realize that, as a Republican, he can now come in over on the
majority side. Mr. Hall and Mr. Boucher say he switched. But we
do welcome you, Carlos. We are glad to have you back.
We would now like to welcome Mr. Buyer for a 3-minute
opening statement. He passes.
We would go to Mr. Markey of Massachusetts for a 3-minute
opening statement.
Mr. Markey. Thank you, Mr. Chairman, very much. It is so
good to see Carlos back here again, and I have very many
memories, happy memories of recognizing him on this side of the
aisle.
It is a coincidence today, I know, that this hearing is
being held on Asthma Awareness Day, and the same day that the
American Lung Association reports that 142 million Americans
are breathing unhealthy amounts of ozone.
Mr. Barton. Would the gentleman yield?
Mr. Markey. I would be glad to.
Mr. Barton. We will start your clock again. I want the
record to show that Congressman Joe Barton is the original
sponsor of Asthma Awareness Day on the Hill, along with Mr.
Kennedy when he finally got into the Congress. You know, I am
such an evil guy, but I am the original sponsor of the Asthma
Awareness Day up here on the Hill.
Mr. Markey. Start that clock again. I am going to start it
all over again. Thank you.
No one is more aware than you are, Mr. Chairman, of the
necessity of clean air than the almost 25 million asthmatic
Americans. Over the past two decades, the number of people with
asthma has doubled, and the number of asthma deaths has
tripled. In 2000 alone, asthma cost our country $12.7 billion,
double the amount in 1990. Eight million children have asthma
in the United States. Now over the last couple of months, there
is the first scientifically demonstrated link between ozone and
the development of asthma in children. However, isn't the only
concern.
Another recent study involving 500,000 adults in 156 cities
nationwide has linked air pollution with an increased chance of
developing lung cancer or cardiopulmonary disease. It is as if
the people living in the most polluted cities are constantly
exposed to secondhand smoke.
The Centers for Disease Control estimates that outdoor
pollution contributes to 50,000 to 120,000 premature deaths and
$40-$50 billion worth of health care costs.
Now I know the Bush Administration is an anti-technology
administration, and they absolutely do not believe in America's
ability to improve its technology. They don't think we can make
automobiles more efficient, and they lobby against that. They
don't believe that we can make refrigerators or air
conditioners more efficient, and they lobby against that. They
say it would be too hard for our country to make progress in
those areas.
They say it is too hard to make progress in making
utilities burn fuel, fossil fuels, and they know that our
country can't make the progress on those technologies, and they
don't want to burden our country any longer. We have made all
the technological progress that we can, they say. But I believe
they are wrong.
I think they continue to live in the past. Because of the
anti-technology bias of the Bush Administration, I am afraid
that our country is looking more to its past than it is to its
future, and that is a shame.
A good example is the New Source Review of pollutants. That
is when you take an old plant, completely redesign it, like
taking old grandma's house, putting on two new wings, putting
in a swimming pool, a tennis court, and still wanting to all it
the old house. Who does that for a house? They say, come over
to my new house. But the utility industry, after putting on the
two new wings and the swimming pool, says it's still an old
utility. No, don't put us under any new regulations.
In fact, NSR really should stand for ``New Source of
Respiratory Illness.'' That is what NSR is in this modern world
with all of the new information which we have. Teddy Roosevelt
is now being cited by President Bush in his Clear Skies
proposal. It makes you wonder what he is thinking, because like
the 8 million children suffering from asthma, Teddy Roosevelt--
--
Mr. Barton. Can you sum it up in the next 45 seconds?
Mr. Markey. Teddy Roosevelt had asthma, and his parents
used to take him out into the country where he, in fact,
developed his love of the environment and clean air. If Teddy
Roosevelt were alive today, he would not be supporting the
Clean Skies proposal, because he knows that President Bush's
Clean Skies proposal means dirtier lungs for 8 million
children, and more in our country who already have asthma.
If it was going to be an updated slogan from Roosevelt for
this administration, it would have to be altered to say ``Speak
softly, and carry a big inhaler'' because that is the message
that they are sending to 25 million people, including 8 million
children who suffer from asthma in our country.
If we continue to allow this to happen, then we are just
going to have those Midwestern utilities blowing smoke into the
lungs of millions of people, and it is just wrong, and I hope
that today's hearing begins to illuminate the real problem that
this administration has in dealing with the role that
technology can play in making our country healthier. Thank you,
Mr. Chairman.
Mr. Barton. I thank the gentleman from Massachusetts. We
recognize the gentleman from Pennsylvania, Mr. Doyle, for a 3-
minute opening statement.
Mr. Doyle. Mr. Chairman, I want to thank you for holding
this hearing today so that we can begin to examine this
important subject. While we tackle many vital issues here in
the committee, there are few as meaningful to all Americans as
the air we all breathe; and while it is certainly as important
as any issue we will examine, it is perhaps predictable that it
is one of the most complex.
At least one fact seems inarguable. Since the Clean Air Act
was established, our air has become significantly cleaner. This
seems to be true, regardless of some media reports or
conventional witness to the contrary, and I hope that we will
today hear some detailed testimony attesting to this fact.
Obviously, this is extremely good news and points out what
an important landmark piece of legislation the Clean Air Act
was, back when it was first enacted, and how vital it remains
today. I think all of us can agree that cleaner air is a
laudable goal for many reasons.
It improves everyone's health, both in the short term and
the long term. By improving the public's health, we also reduce
the cost of health care and health insurance in both the public
and private arenas. Clean air also increases our ability to
enjoy our natural resources. So, clearly, for the benefit of
public health and environment, there is a vested public
interest in maintaining and actually improving the quality of
our air.
In my district, and in the areas surrounding it through
western Pennsylvania, we have struggled with the issues
surrounding clean air and the implementation of efforts to
achieve it for many years. As someone who has spent his entire
life in Pittsburgh, I know that the people there value clean
air as much as anyone, and the Clean Air Act has helped us to
make great progress in improving our air quality.
Our area was one that labored to create an effective State
implementation plan that has now been in place for many years.
It has not always been an easy process, by any means, but it
was a necessary process that has achieved significant results
as we have moved from a moderate nonattainment status to
attainment status.
Now, Mr. Chairman, I think we find ourselves at something
of a crossroads, not just in Pittsburgh but throughout the
Nation, as there are many important questions that need to be
answered with regard to the future of our mutual efforts to
maintain and increase air quality.
Part of the reason for this has been that it has always
been difficult to find effective means for quantifying the
progress that has been made. It can also be difficult to
adequately demonstrate the problem spots that exist and the
actual sources of those problems.
For these reasons and others, there has been substantial
controversy in recent years surrounding EPA's effort to
promulgate new standards related to clean air, such as those
dealing with ozone and particulate matter. I have always been
one of those that feels strongly that we should proceed when
the science behind the decisions have been effectively
demonstrated and adequately verified, and I truly hope that any
endeavors we undertake will meet those standards.
As we know, the President has recently begun to outline his
Clean Skies initiative, and this is one of the ideas that
deserves careful examination. I trust that the administration
will work with members of this committee and others as they
strive to detail the finer points of the rather broad framework
that has so far been articulated.
In addition, there is an ongoing review being conducted by
EPA with regard to New Source Review requirements and their
implementation. It is crucial that we determine whether the New
Source Review requirements have proven effective, whether they
are being enforced in a consistent manner, and how they will
affect our Nation's efforts to stabilize our energy supply in
the long term.
Mr. Barton. The gentleman's time----
Mr. Doyle. Mr. Chairman, thank you for holding this hearing
today, and I yield back the balance of my time.
Mr. Barton. We thank the gentleman. The Chair would now
recognize the distinguished gentleman from Rockwall, Texas, Mr.
Hall, for a 3-minute opening statement.
Mr. Hall. Mr. Chairman, thank you very much. Of course,
today's hearing marks the, I guess, first official act of this
committee to reauthorize the Clean Air Act. If the past is any
indicator of the future, then this is going to be a long and an
arduous endeavor.
Estimates on how long it took to reauthorize the Act the
last time which resulted in the 1990 amendments--I'm not sure,
but I have heard my friend, John Dingell, say it took 13 years,
and I wouldn't attempt to quarrel with the dean of the House,
who was then and is now intimately involved in this Act.
I know, as we approached it then, there is only four or
five of us, I think, on this committee that were on it at that
time, but that was my first year in Congress, and I must say, I
was smarter then than I have ever been since. It has gradually
gone the other way, but the problems are the same.
I well remember that Mr. Waxman, who was, and still is, a
leading member and a very intelligent member and represents his
people well--We had problems with Mr. Waxman and Mr. Dingell
getting together on a lot of these things. You know, on the
tailpipe emissions, for example, we were just logged there and
deadlocked and couldn't turn and go either way.
I think we asked these two fine men to go in a room
adjacent here and not to come out until they had an answer to
the tailpipe emissions. Mr. Dingell had the automobile makers
and workers in his district, and Mr. Waxman had the freeways.
It just turned out that I had the stationary problems called
stripper wells. You can guess which one came out the worst out
of that meeting.
Stripper wells were under attack, and I was running from
what they called ``R to R'' then. That is from Reagan to
Rostenkowski, to see which one would give me the best deal, and
about four or five of us from Texas were working with both of
them.
Mr. Chairman, from the standpoint of humor, as I walked
into the White House, Mr. Reagan asked me what would it take to
get you to vote with my set of rules on clean air, and I said,
well, I've got a brother that always wanted to be a Federal
judge. He said, well, that should be no problem. He turned to
Jim Baker and the Vice President, George Bush then, and said
can you get Ralph's brother confirmed? I said, well, wait just
a minute, Mr. President, he is not a lawyer.
After that, Reagan and I were friends. He would see me in a
crowd and come over to shake hands with me and say how is your
brother. He couldn't think of my name 9 times out of 10, but he
knew I had a brother that wasn't a lawyer, and he liked that.
But it got to be who could offer me, for my vote on that time,
the most exception for stripper wells.
That is not what a lot of you guys hope they are, the type
wells you think, but they are small wells by the smallest of
all independents that find the energy and then sell it to the
majors. But that was very, very important to me.
I know that some of the statistics that these men must
remember, and Carlos Morehead remembers that one of the
statistics that they argued for passing the Act as it was
introduced, and it was a very punishing Act to a lot of
industrial thrust at that time----
Mr. Barton. The gentleman is going to have to tell this
story quickly.
Mr. Hall. I will try to be quick with it. One of the
statistics was that--I don't know who furnished this statistic,
but it always amused me, because they said they had made a
national survey, and 82 percent of the people liked clean air.
That meant 18 percent didn't care if it stayed dirty. I thought
it was a pretty lousy statistic myself.
Mr. Barton. Those were people in bars in east Texas.
Mr. Hall. I guess so. Didn't know the difference. But in
spite of the chairman interrupting me, I want to compliment him
on recognizing that this is important for members to be brought
up to date, and that long ago we did work together here. There
was a lot of give and take. I think we passed the best Act we
could pass under the circumstances, but we need to be mindful
of the effects of polluted air on human health.
I don't support punishing people with asthma, and I don't
think----
Mr. Barton. You are going to get me in trouble. I have
stopped Mr. Markey and Mr. Waxman.
Mr. Hall. And I don't think the President of the United
States supports anybody punishing those who have asthma. I
think we should support measures to reduce them. However, we
need to be mindful of the cost of achieving these reductions
and be certain whatever emission reduction regime we implement
is the most cost effective available and supported by credible
science.
I think there is a line you can hew there and respect both
sides. Mr. Chairman, with that, if I can't have another 15
minutes, I will yield back the balance of my time.
Mr. Barton. We do have a committee rule, though, that all
members that were on the committee in 1982 have to stay on the
committee until we reauthorize this Act, no matter how long it
takes. So that means Mr. Dingell and Mr. Waxman, Mr. Markey and
Mr. Tauzin are going to be around, unless you work with us to
help reauthorize it very quickly.
Mr. Hall. We are all three willing to stay here 13 years. I
know I am.
Mr. Barton. The Chair would recognize the full committee
chairman, Mr. Tauzin, for a 5-minute opening statement.
Chairman Tauzin. Thank you, Mr. Chairman. I do hope you are
all around here for another reauthorization 13 years from now.
Let me first commend you for leading off the Clean Air
hearings with an examination of the accomplishments of the
existing Clean Air Act and its provisions. I was, obviously, as
you pointed out, around in 1990 when we went through an
incredible markup process that lasted not only days and weeks
and months, but I remember it ended about 4 o'clock in the
morning in this very room when we finally came to agreement.
We should all be proud, I think, of what was accomplished
in 1990 and thereafter, both Democrats and Republicans, because
I think our work helped improve the lives of many Americans,
and we will hear about that today.
Regardless of whatever anybody thinks about new or revised
Clean Air Act programs or proposals, I think we can all agree
that what was done in 1990 has advanced the cause of cleaner
air for all Americans very dramatically, and I think the
biggest decision that helped us do that was the decision to cap
and trade, literally to count on the industry that know best
how to run their own systems to figure out how best to achieve
the results we wanted, as long as they achieved them and to
trade the benefits of their successful programs where it made
sense to do so, and to take economic benefit, if you will, from
their successes in cleaning the air.
The results have been rather dramatic. I want to mention a
couple of them. The acid rain program, for example, is now in
its eighth year. The first phase of that program saw annual
SO<INF>2</INF> emissions drop by nearly 5 million tons from the
1980 levels. Those reductions were an average of 25 percent
below the required emission levels, resulting in a much earlier
achievement of human health and environmental benefits that we
sought in the program.
The 2001 SO<INF>2</INF> emissions were more than 6.7
million tons below the 1980 levels, and they were achieved at a
much lower cost than anybody thought. The early estimates were
that it would cost about $5.7 billion per year. We have got the
numbers now. It ends up being about a $1 billion to $1.5
billion per year full implementation cost.
Clearly, again the cap and trade system works. It was the
combination of the best in our program, saying that you got to
achieve good results and, nevertheless, the best in the private
sector saying figure out how best to do it; just get there, and
get there sooner, if you can, because it is in your economic
benefit to do it.
Again, Mr. Chairman, I want to thank you for starting the
hearings at this good look at the accomplishments of the Act,
because I fully believe that if we understand what went right
from the 1990 Act, we can figure out how to make it even
better. Thank you, Mr. Chairman.
[The prepared statement of Hon. W.J. ``Billy'' Tauzin
follows:]
Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee
on Energy and Commerce
Let me commend you Chairman Barton for leading off your clean air
hearings with this examination of the accomplishments of the Clean Air
Act.
Under the Clean Air Act, our nation's air has been getting cleaner,
significantly cleaner in many instances--and that is something the
Members who participated in the 1990 Amendments, whether Republican or
Democrat--should all be equally proud of. Our work has helped to
improve the lives of so many Americans, particularly children, as we'll
hear today.
Regardless of one's view about new or revised Clean Air Act
programs, we all can agree that existing programs have cleaned the air
and provided us with implementation information critical to the debate
going forward.
Consider, for example, EPA's Acid Rain program. This has been a
resounding success, at a much lower cost than first expected. The
centerpiece of the program is an innovative, market-based ``cap-and-
trade'' approach to achieve a nearly 50% reduction in SO2 emissions
from 1980 levels.
The results of the program have been dramatic--and unprecedented.
Compliance with the Acid Rain Program began in 1995 and is now in its
eighth year. From 1995-1999, the first phase of the Acid Rain Program,
annual SO2 emissions dropped by nearly 5 million tons from 1980 levels.
These significant reductions were an average of 25% below required
emission levels, resulting in earlier achievement of the human health
and environmental benefits we sought with the program. In 2001, the SO2
emissions were more than 6.7 million tons below 1980 levels.
These emissions reductions have been achieved at a much lower cost
than anyone expected. In 1990, EPA projected the full cost of the Acid
Rain program would be about $5.7 billion per year. Recent estimates of
annualized cost of compliance are in the range of $1 to 1.5 billion per
year at full implementation. Clearly, emission cap-and-trade programs
can achieve cost effective environmental results.
Again, I commend you Chairman Barton for beginning these Clean Air
hearings. I know that through such considered examination as we will
see today, this Subcommittee's work on this vital issue will add to its
history of bipartisan accomplishments, such as the recent H.R. 4 energy
bill.
Thank you, and I look forward to hearing from our witness panels.
Mr. Barton. I thank the gentleman from Louisiana. We would
recognize the gentleman from Maryland, Mr. Wynn, for a 3-minute
opening statement.
Mr. Wynn. Thank you, Mr. Chairman. I will submit.
Mr. Barton. Are any of the members present which have not
had an opportunity to give an opening statement? Seeing none,
the Chair would ask unanimous consent that all members not
present have the requisite number of days to put their opening
statement in the record in its entirety at the appropriate
point in the record. Hearing no objection, so ordered.
[The prepared statement of Hon. Bill Luther follows:]
Prepared Statement of Hon. Bill Luther, a Representative in Congress
from the State of Minnesota
Thank you Mr. Chairman for holding this hearing today. The Clean
Air Act has stood the test of time over the past 30 years and has
proven to be one of the most successful and far reaching environmental
programs ever enacted by Congress. I believe we should be looking for
ways to improve and strengthen public health protections under this
historic legislation. I am therefore deeply troubled by reports that
the Administration is proposing to eliminate many pollution-control
provisions that have been so effective in protecting American families
from deadly pollutants linked to lung cancer and heart disease.
The White House proposal calls for an ``emissions-trading'' plan
that, if enacted, would result in the first backward step in the
federal government's 30 plus year battle against air pollution. By
shifting the focus to total emissions across the nation, the approach
avoids individual power plants that are largely responsible for the
most serious local pollution problems. Any rational approach to
combating air pollution must be able to identify the specific
facilities that have contributed to significant declines in regional
air quality.
Also, of particular concern to me are reports that the
Administration is considering easing standards under the New Source
Review Program. This Clean Air Act provision requires power plants to
install the most-up-to-date pollution control equipment when they
upgrade or expand existing coal-fired facilities. Any relaxation of NSR
standards, especially for facilities already ``grandfathered'' under
the Clean Air Act, would almost certainly result in a decline in
national air quality.
As this debate continues, I would like to recall the elder
President Bush's statement before signing the Clean Air Act Amendments
of 1990. He stated, ``Every American expects and deserves to breathe
clean air. And as, president, it is my mission to guarantee it for this
generation and for the generations to come.'' I think the former
President had it right then and I would urge this committee to proceed
extremely cautiously when considering any efforts that would result in
weakening this historic legislation that has been so effective in
protecting families from harmful pollutants. Thank you.
Mr. Barton. I would now like to welcome our first witness.
We have the Honorable Jeffery Holmstead, who is the Assistant
Administrator for Air and Radiation at the Environmental
Protection Agency.
You are welcome to the subcommittee. Your statement is in
the record in its entirety. We would ask that you elaborate on
it in 7 minutes.
STATEMENT OF JEFFERY HOLMSTEAD, ASSISTANT ADMINISTRATOR FOR AIR
AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY
Mr. Holmstead. Thank you, Mr. Chairman, and thank you for
inviting me to be here this morning. I have to say, I have
enjoyed this very much. I would be happy to give some of my
time to Mr. Hall. I would have been happy to listen to him.
Mr. Barton. Don't humor him.
Mr. Holmstead. I was told that the focus of this morning's
hearing would be on the progress that we have made under the
Clean Air Act, and that is what I am here to talk about. I
couldn't resist, though, just one plug about the Clear Skies
Act, and I look forward very much to having the opportunity to
talk with you more about that.
I was distressed that Mr. Markey is probably not as well
educated by us as he could be, because I know there has been
some media reports and a lot of ``to-ing and fro-ing'' about
what that would accomplish, and I think it is fair for all of
us to talk about whether that is too stringent or not stringent
enough, but the idea that it somehow undercuts the Clean Air
Act and fails to protect people is not really credible.
I would invite Mr. Markey or anyone else to talk to any of
the hundreds of people in my office who worked on that or the
people around the country who implement the Clean Air Act. The
one thing we can say with some certainty is it would get
substantially greater reductions in air pollution much sooner,
much faster, than we will be able to accomplish under the
current Clean Air Act.
So with that, I will move along to other thing, but I look
forward to telling you more about what we are trying to
accomplish with our proposal, and we look forward to working
with you on that.
Many of you have already noted the impressive progress we
have made and, in fact, you stole some of my statistics. But if
I can just show one slide, if we can figure out how to use your
new high tech system here. This really tells the story that
many of you have tried to tell this morning. All of these lines
going up show U.S. growth since 1970, population by more than a
third, energy use by about 45 percent, vehicle miles traveled
by 145 percent, and the Gross Domestic Product by 160 percent.
This growth is really quite dramatic.
While we were experiencing this growth, emissions of the 6
primary pollutants regulated under the Clean Air Act were
dropping by nearly 30 percent from 1970 to 2000, and we can say
categorically that air quality has improved substantially
throughout the country.
This success was made possible by American ingenuity,
spurred in large part by legislation that has continued to
recognize the importance of healthy air, most recently in 1990
when many of the members in this room worked with others to
enact the Clean Air Act amendments of 1990 which gave us
important new tools for addressing the major air pollution
problems facing the country.
The 1990 amendments grew out of a proposal by President
George Herbert Walker Bush that was passed with overwhelming
bipartisan support in both the House and the Senate. As many of
you have mentioned, some of you were quite involved in that Act
and in setting goals for reducing air pollution, goals that we
are still striving to meet today.
The current Clean Air Act is, by far, the most
comprehensive piece of regulatory legislation that we have in
this country, rivaled only by the Internal Revenue Code. It
created literally hundreds of State and Federal programs that
help us to take aim at air pollution on many fronts.
These programs, as you know, include first and foremost,
the national ambient air quality standards to protect public
health and the environment from six key pollutants. It also
includes national emissions standards for motor vehicles,
technology and performance based standards for industry
emissions of toxic air pollutants, specialized programs, as
many of you have mentioned, to reduce environmental damage such
as regional haze and acid rain, and programs as well designed
to protect the stratospheric ozone layer.
As we have worked with these programs at the agency over
the years, we have learned that it takes a variety of tools to
successfully improve air quality, tools ranging from
performance standards for motor vehicles to market based
programs like the acid rain trading program, and to
nonregulatory, voluntary programs that have helped us get
substantial reductions in emissions and in energy use.
Our successes are remarkable and, in fact, it would take me
hours to go through them all. I promise not to do that, but I
do want to highlight just a few. One of our most important
accomplishments is helping States to meet the national ambient
air quality standards. Although the Clean Air Act gives States
the primary responsibility for meeting these health based
standards, most can't do it without EPA's help.
EPA assists States both by providing guidance and by
issuing the types of regulation that States cannot, such as
national motor vehicle emission limits. Under the 1990
amendments, States have made tremendous progress toward
cleaning the air in their dirtiest cities. For example, as
several of you have mentioned, of the 43 areas designated in
1990 as nonattainment for carbon monoxide, 41 of those 43 have
clean air today.
A second important accomplishment and one that has played a
key role in our States' clean air success is our progress in
reducing motor vehicle pollution. Again, as Mr. Sawyer said,
since the 1970's EPA has issued increasingly stringent tailpipe
emissions for cars, and by the 2004 model year cars that are
sold in that year will be 98 percent cleaner than cars built
when the Clean Air Act was passed.
Starting that same model year, 2004, SUVs, minivans and
pick-up trucks will have to begin meeting the same stringent
emission standards as cars. In addition, in 2007, diesel engine
manufacturers must install devices similar to catalytic
converters for the first time, and we are also requiring sulfur
reductions in fuels.
Combined, these rules will take tremendous steps toward
protecting public health, avoiding more than 600,000 asthma
attacks every year and nearly 13,000 premature deaths.
The 1990 amendments also called on EPA to make major
reductions in the primary pollutants that cause acid rain,
including sulfur dioxide or SO<INF>2</INF>. We have done that,
using a program that has become an environmental showpiece, the
acid rain trading program. Under this market based cap and
trade program, SO<INF>2</INF> emissions avoided have monetary
value, which creates a powerful incentive for emission
reduction.
In the program's first 5 years, as Mr. Tauzin mentioned,
SO<INF>2</INF> emissions dropped an average of 25 percent
further than required by law. As a result, rainfall in the
eastern United States is as much as 25 percent less acidic.
Some sensitive lakes and streams in New England are showing
signs of recovery.
Now again, just a side note, a minor plug for the Clear
Skies Act: With the additional reductions in SO<INF>2</INF> and
mercury, we would resolve the acid rain problem in the
northeast. Our scientists are telling us that the reductions
are sufficient enough that the lakes and streams and forests in
the northeastern United States would return back to their
natural state.
Now I would like to show this other graph that highlights
something that Mr. Tauzin mentioned, the kind of efficiency
that we get out of a cap and trade program. Compliance with
this program is effectively 100 percent. Unlike any other
program, we don't have armies of lawyers and inspectors. Each
of these plants has a continuous emissions monitor. We know
exactly what their emissions are, and we see every year that
they are in compliance.
We have not brought a single enforcement action, because of
the way it works. It also, as this graph shows, has turned out
to be much less expensive than anyone predicted. Estimates in
1990 ranged from $5.5 billion to $7 billion a year. You will
see that a few years later GAO did a study suggesting they were
more in the neighborhood of $2 billion to $3 billion, based on
industry data as well as our own estimates, that it is
somewhere between $1 billion and $1.5 billion.
Now one other thing I would like to point out that people
don't focus on because it is not nearly as controversial, and
that is the success that we have achieved through nonregulatory
programs. Let me just show you that even President Bush has
gotten involved, posing for a poster encouraging parents to
help strike out asthma by pledging to keep their homes smoke
free.
The potential environmental and financial benefits of
voluntary programs like these is enormous. Take the EnergyStar
program, for example. One statistic that I like to use is that
Americans spend right now about $1 billion a year just to power
televisions and VCRs, but if all of our TVs and VCRs were
EnergyStar products, meeting this voluntary standard that we
have set would save about half of that total, about $500
million a year.
In the Environmental Protection Agency, we will continue to
use our entire suite of tools, and we will look for new ones as
we face future air quality challenges. One of the most
important challenges on the immediate horizon, and perhaps the
most important public health challenge that we deal with in the
Air Office, is reducing fine particle emissions.
Last month we cleared the last legal hurdle to implementing
new standards for fine particles, often known as
PM<INF>2.5</INF>. These are critical standards. The health
risks posed by fine particle pollution are the greatest of any
air pollutant we regulate today. Fine particles are linked to a
number of serious health problems, including chronic
bronchitis, heart attacks, and premature death in people with
heart and lung diseases.
Based on preliminary data, it appears that approximately
130 U.S. counties did not meet the fine particle standards, and
many of these areas will have difficulty meeting the standard
without significant regional pollution reductions.
We are just beginning to develop our implementation
strategy for PM<INF>2.5</INF>, a strategy that is likely to
include a nationwide rule to reduce emissions of SO<INF>2</INF>
and NO<INF>X</INF> from power plants, one of the largest
sources of these pollutants, and we anticipate that yet again
we will receive petitions from upwind States seeking additional
controls on downwind sources.
We believe the best approach, and the one that will help
the most areas meet these standards, is the President's Clear
Skies initiative, a market-based cap and trade program
patterned after the successful acid rain program. Clear Skies
will dramatically reduce power plant emissions of nitrogen
oxide, sulfur dioxides, and mercury, protecting public health,
improving visibility, and virtually eliminating acid rain.
Over the life of the Clean Air Act, EPA has learned a great
deal about how to pick the best tools for addressing our air
pollution challenges. Our experience tells us the Clear Skies
plan is the single most important step we can take to improve
air quality quickly and efficiently.
As I mentioned, I look forward to talking more about that
on some future occasion, and I would be delighted to answer any
questions that you may have.
[The prepared statement of Jeffery Holmstead follows:]
Prepared Statement of Jeffrey Holmstead, Assistant Administrator,
Office of Air and Radiation, U.S. Environmental Protection Agency
i. introduction
Mr. Chairman and Members of the Subcommittee, thank you for the
opportunity today to testify on our nation's successes under the Clean
Air Act and the work that remains to be done to achieve clean,
healthful air throughout America.
More than a dozen years ago, President George Herbert Walker Bush
proposed an Administration bill that became the foundation of the Clean
Air Act Amendments of 1990. The final legislation passed both the House
and Senate with overwhelming bipartisan support, and set challenging
goals for reducing air pollution that we are still striving to meet
today. The former president, in a Smithsonian exhibit on the
presidency, names the 1990 Amendments as one of the three
accomplishments of which he is most proud.
And indeed, the 1990 amendments have achieved impressive health and
environmental benefits. Since the legislation was enacted, this nation
has made great progress in reducing acid rain, meeting health-based air
quality standards, protecting the stratospheric ozone layer, and
cutting toxic air pollution. Yet we still face major challenges to
achieve healthful air, a cleaner environment, and clear skies for all
Americans.
In my statement today, I will describe the results we've achieved
through Clean Air Act programs enacted to protect public health and
environmental quality. I will discuss the tools used to achieve
results--what worked and why. One of the most important lessons from
the 1990 amendments is how powerful a tool cap-and-trade programs can
be for protecting health and the environment. Finally, I will talk
about remaining air quality challenges that we face today and our
future direction.
ii. progress toward clean air
Our progress on cleaning up the air demonstrates that strong
economic growth and a cleaner environment can go hand-in-hand. Since
the basic structure of today's Clean Air Act was enacted in 1970, we
have reduced emissions of six key air pollutants by 30 percent. At the
same time, the economy has grown substantially. The Gross Domestic
Product increased 160%; vehicle miles traveled increased 145%; energy
consumption increased 45%; and the U.S. population increased 35%. This
success story was made possible by American ingenuity spurred in large
part by legislation that recognized the importance of a clean
environment.
Our strong economy has helped us provide cleaner air, which has
provided important public health and environmental benefits that far
outweigh the costs. For example, lead levels in ambient air are 98%
lower than in 1970, greatly reducing the number of children with IQs
below 70 as a result of dirty air. The benefits from the programs in
the 1990 Amendments alone are impressive. A peer-reviewed EPA study
estimates that upon full implementation in 2010, the Clean Air Act
programs signed into law by former President Bush will avoid tens of
thousands of premature deaths, tens of thousands of cases of acute and
chronic bronchitis, tens of thousands of respiratory-related and
cardiovascular hospital admissions, and millions of lost work days,
among other benefits.
To appreciate how far we have come in reducing air pollution, it is
instructive to remember where we were before the 1990 amendments. Acid
rain essentially was unchecked, causing damage to aquatic life,
forests, buildings and monuments, as well as visibility degradation and
health risks from sulfate and nitrate particles. There was growing
concern about the increasing damage to the stratospheric ozone layer,
which, among other things, protects us from skin cancer and cataracts.
In 1990, photochemical smog, which can impair lung function, cause
chest pain and coughing, and worsen respiratory diseases and asthma,
exceeded healthy levels in 98 metropolitan areas. Many cities did not
meet the national air quality standards for the pollutant carbon
monoxide, which can aggravate angina (heart pain), and also for
particulate matter, which is linked to premature death, aggravation of
pre-existing respiratory ailments, and reductions in lung capacity. The
millions of tons of hazardous air pollutants emitted annually in the
United States were largely unregulated at the federal level. Many of
these pollutants have the potential to cause cancer or other serious
health effects such as nervous system damage.1Since then, the 1990
Amendments have enabled us to substantially reduce each of the major
air pollution problems that faced the United States:
<bullet> Annual sulfur dioxide emissions, which react to form acid rain
and contribute to fine particle formation, have been cut by
more than 6.7 million tons, and rainfall in the eastern U.S. is
as much as 25 percent less acidic.
<bullet> Production of the most harmful ozone-depleting chemicals has
ceased in the U.S. and--provided the U.S. and the world
community maintain the commitment to planned protection
efforts--the stratospheric ozone layer is projected to recover
by the mid 21st century.
<bullet> Ground-level ozone pollution, particulate matter, and carbon
monoxide pollution have all been reduced significantly,
producing dramatic decreases in the number of areas in
nonattainment.
<bullet> Rules issued since 1990 are expected to reduce toxic emissions
from industry by nearly 1.5 million tons a year--a dozen times
the reductions achieved in the previous 20 years. Other rules
for vehicles and fuels will reduce toxics by an additional
500,000 tons a year by 2020.
Reducing Acid Rain
The 1990 Amendments created the Acid Rain Program, calling for
major reductions in electric generating facilities' emissions of sulfur
dioxide (SO<INF>2</INF>) and nitrogen oxides (NO<INF>X</INF>), the
primary pollutants that cause acid rain. The Acid Rain Program has been
a resounding success, and at a much lower cost than first expected. The
centerpiece of the program is an innovative, market-based ``cap-and-
trade'' approach to achieve a nearly 50% reduction in SO<INF>2</INF>
emissions from 1980 levels.
The results of the program have been dramatic--and unprecedented.
Compliance with the Acid Rain Program began in 1995 and is now in its
eighth year. From 1995-1999, the first phase of the Acid Rain Program,
annual SO<INF>2</INF> emissions from the largest, highest-emitting
sources dropped by nearly 5 million tons from 1980 levels. These
significant reductions were an average of 25% below required emission
levels, resulting in earlier achievement of human health and
environmental benefits.
In 2001, the SO<INF>2</INF> emissions from power generation were
more than 6.7 million tons below 1980 levels. NO<INF>X</INF> emissions
have been reduced by 1.5 million tons from 1990 levels by a more
traditional rate-based program (about 3 million tons lower than
projected growth). Because the NO<INF>X</INF> component of the program
is rate-based, however, there is no guarantee that NO<INF>X</INF>
emissions will stay at these low levels; without a NO<INF>X</INF> cap,
emissions will increase as power generation increases.
Through the hard work of several federal agencies that maintain
interagency environmental monitoring networks (e.g., the National
Oceanic and Atmospheric Administration, United States Geological
Survey, U.S. Forest Service, National Park Service and EPA)--we know
that these emissions reductions are delivering impressive environmental
results. Due to the drop in SO<INF>2</INF> emissions, rainfall acidity
in the eastern United States has dramatically improved, measuring up to
25% less acidic. As a consequence, some sensitive lakes and stream in
New England are showing the first signs of recovery. Further, ambient
sulfate concentrations have been reduced, leading to improved air
quality and public health, with fewer respiratory illnesses such as
asthma and chronic bronchitis. Moreover, the air is clearer,
particularly in areas where some of our most scenic vistas are found,
such as the Shenandoah National Park.
These emissions reductions and environmental results have been
achieved at a much lower cost than anyone expected. In 1990, EPA
projected the full cost of implementation of the SO<INF>2</INF>
emission reductions would be about $5.7 billion per year (1997
dollars). In 1994, GAO projected the cost at $2.3 billion per year
(1997 dollars). Recent estimates of annualized cost of compliance are
in the range of $1 to 1.5 billion per year at full implementation.
The cost-effectiveness of the program is tied to the design
features of the innovative cap-and-trade approach. The Acid Rain
Program was designed to provide certainty that emissions reductions
would be achieved and sustained while at the same time allowing
unprecedented flexibility in how to achieve the needed emission
reductions. This stimulates the use of a variety of emission reduction
options, such as fuel switching, installation of control equipment, use
of efficiency measures and renewables, and trading among sources.
Because the market system places a monetary value on avoided emissions,
compliance has stimulated tremendous technological innovation,
including efficiency improvements in control technology.
When the Acid Rain Program was designed in the early 1990s, some
were concerned about the potential effect of emissions trading on local
air quality. Now, in the eighth year of the program, we know that
flexibility under the Acid Rain Program has not adversely affected
attainment of air quality standards. Independent analyses of the
program demonstrate that trading has not created ``hotspots,'' or
increases in localized pollution. In fact, the greatest SO<INF>2</INF>
emissions reductions were achieved in the highest SO<INF>2</INF>-
emitting states, acid deposition decreased and, consistent with
projections, the environmental benefits were delivered in the areas
where they were most critically needed.
The environmental integrity of the Acid Rain Program also can be
traced to design features of the approach. The program was developed
with unprecedented levels of accountability and transparency. Sources
must continuously monitor and report all emissions, ensuring accurate
and complete emissions information. All data are publicly available on
the internet, providing complete transparency and the public assurance
necessary for program legitimacy. Remarkably, sources have registered
nearly 100% compliance.
Because of the unprecedented success of the Acid Rain Program, it
has served as the model for numerous additional programs to reduce
emissions cost-effectively in this country and around the world,
including the President's recently proposed Clear Skies Initiative.
Meeting Health-Based Air Quality Standards
Overview
The air in our nation is considerably cleaner than in 1990. Under
the Act, EPA has set health-based national ambient air quality
standards (NAAQS) for six common pollutants. Nationally, the 2000
average air quality levels were the best in the last 20 years for all
six pollutants--lead, nitrogen dioxide, sulfur dioxide, particulate
matter, carbon monoxide and ozone.
Since 1990, an unprecedented number of cities have met the health-
based national ambient air quality standards. In fact, more than two-
thirds of the areas designated as nonattainment following the 1990
amendments now have air quality meeting those standards based on 1998-
2000 data, including:
<bullet> 41 of the 43 carbon monoxide areas
<bullet> 69 of the 85 coarse particulate matter (PM<INF>10</INF>) areas
<bullet> 71 of the 101 ozone areas (one-hour standard)
While air quality improved, the economy showed robust economic
growth, increasing 37 percent between 1990 and 2000.
In 1997, based on updated scientific information, EPA set a new
standard for fine particles and a revised, 8-hour standard for ozone
that is more stringent than the one-hour standard. We have made great
progress working with states to get monitoring systems in place for
fine particulate matter, or PM<INF>2.5</INF>. Many areas across the
eastern U.S. and in California appear to have pollution levels
exceeding the 1997 standards.
For the other common pollutants, only a few areas remain in
nonattainment. The remaining lead and sulfur dioxide nonattainment
areas in the country are the result of localized point sources for
which action on an individual basis is being taken. Since 1998, all
cities have met the air quality standard for nitrogen dioxide.
Ongoing work to combat ozone pollution
The Clean Air Act gives states the primary responsibility for
meeting national air quality standards by developing and implementing
state implementation plans (SIPs). EPA assists states by providing
guidance, setting national emissions limits for sources such as motor
vehicles, and requiring control of upwind sources that contribute to
downwind problems in other states.
During the past two years we have reached a major milestone in
cleaning up smog in many of our nation's largest cities. In the
Northeast, Midwest and South, states have completed plans for attaining
the 1-hour ozone standard in all of the metropolitan areas that have
pollution levels considered serious or severe under the Act. EPA has
fully approved all but one of these plans. The approved plans are for
New York City, Springfield, Mass., Greater Connecticut, Baltimore,
Philadelphia, Milwaukee, Chicago, Houston and the District of Columbia.
EPA has proposed approval of Atlanta's attainment plan. In the near
future, we expect to see additional control measures for New York City,
Baltimore, Philadelphia and Houston as the states fulfill commitments
in their attainment plans.
Houston's ozone attainment plan was developed by the Texas Natural
Resources Conservation Commission in partnership with the Mayor of
Houston, stakeholders and EPA's Region 6 office. Approved by EPA in
October 2001, the plan includes many ambitious and innovative measures.
These include a cap-and-trade program setting some of the nation's most
stringent limits on NO<INF>X</INF> emissions from industry, a fund to
accelerate use of cleaner off-road and on-road diesel engines, cleaner
diesel fuel, and voluntary measures to reduce transportation emissions.
The plan also contains an enforceable commitment to adopt newly
emerging strategies needed to cover an estimated shortfall in emissions
reductions needed for attainment by the end of 2007. Under a consent
decree, the state, in conjunction with industry and academia, is
conducting an accelerated review of ozone formation in Houston's skies
to consider whether adjustments in the SIP are needed.
Interstate transport of ozone and NO<INF>X</INF>, an ozone
precursor, is a major contributor to the ozone nonattainment problems
across the eastern United States. No state can solve this problem on
its own.
As a result, EPA has issued two complementary rules--the
NO<INF>X</INF> SIP Call and the Section 126 rule--in a combined
Federal/state action to reduce interstate ozone transport. The effect
of the two rules together is to require NO<INF>X</INF> reductions in 19
states and the District of Columbia. EPA anticipates that full
implementation of these rules will reduce total ozone-season
NO<INF>X</INF> emissions from power plants and large industrial sources
by approximately one million tons by the 2007 ozone season. This is
essential for many of the remaining ozone nonattainment areas to meet
the one-hour standard, and will greatly reduce the number of areas
exceeding the more-stringent 8-hour standard.
The NO<INF>X</INF> SIP Call, which sets emissions budgets for
states, and the Section 126 rule, which applies directly to power
plants and large industrial sources, both allow for implementation
through a market-based cap-and-trade program that allows facilities to
choose the most cost-effective means of reducing their pollution. All
of the states subject to the NO<INF>X</INF> SIP Call plan to use the
cap-and-trade approach.
EPA's reliance on existing CAA authorities for addressing ozone
transport is working, but three major lawsuits by some states and
corporations have delayed implementation. EPA issued the original
NO<INF>X</INF> SIP call rule in 1998. Both the SIP Call and the
subsequent Section 126 Rule set a May 2003 compliance date. However,
one court ruling delayed the NO<INF>X</INF> SIP call compliance date
until May 31, 2004. A second court ruling stopped the compliance clock
for electricity generators subject to the Section 126 Rule while EPA
responded to concerns the court raised with heat input (fossil-fuel-
use) projections for electricity generators, which EPA used in
calculating emissions budgets for the two rules. As a result, the two
rules were no longer synchronized.
Administrator Whitman on April 23 signed a rule once again
harmonizing the compliance dates of the two rules at May 31, 2004. This
will facilitate withdrawal of the federal Section 126 program in states
that meet the requirements of the SIP Call Rule, and help to avoid
potential overlap of the two programs. The Administrator also signed a
notice that explains EPA's decision to retain the original heat input
projections. In a separate action, EPA recently issued a proposed
``phase II'' rule responding to other issues from court decisions on
the SIP call and Section 126 rules.
Cutting Transportation Emissions
In general, transportation sources contribute roughly half of the
overall pollution in our air. The contribution, however, can vary
significantly from pollutant to pollutant and from city to city. Note
that when I refer to transportation sources I mean all highway motor
vehicles as well as diverse types of off-road vehicles and engines.
They are major sources of four pollutants, contributing 56 percent of
the total U.S. emissions of NO<INF>X</INF>, 77 percent of CO, 47
percent of VOCs, and 25 percent of the PM.
Cleaner Vehicles
Cars being built today are well over 90 percent cleaner than cars
built in 1970. This is a result of a series of emission control
programs implemented by EPA through nationally applicable regulations.
Since the first tailpipe standards took effect in the 1970's, there
have been increasingly more stringent standards; most recently Tier 1
in the mid-90's; the National Low Emission Vehicle (NLEV) Program,
which is in effect today; and Tier 2 standards set to take effect
beginning with the 2004 model year. In the Tier 2 standards and most
other national vehicles and fuels rules issued since 1990, EPA has
provided compliance flexibility through emissions averaging and trading
systems.
Tier 2 will take a major step toward reconciling passenger vehicles
with clean air. For the first time it holds SUVs, minivans and pick-up
trucks to the same emission requirements as autos. Tier 2 is also fuel
neutral, which means that gasoline, diesel and alternative fueled
vehicles all must meet the same set of standards. Tier 2 is cost
effective and its benefits to public health are large--by 2020, over
two million tons of NO<INF>X</INF> emissions avoided per year, 4,000
premature deaths prevented annually and tens of thousands of
respiratory illnesses prevented.
Most large trucks and buses are powered by diesel engines. They can
emit high levels of NO<INF>X</INF> and PM. Although cars were regulated
first, diesel truck and bus manufacturers have had to comply with a
series of increasingly more stringent standards beginning in the late
1980's. This Administration has affirmed and is supporting a major new
program that has recently been established to protect public health and
the environment while ensuring that diesel trucks and buses remain a
viable and important part of the Nation's economy. Called the Clean
Diesel Program, it begins in 2007, when the makers of diesel engines
will for the first time install devices like catalytic converters on
new trucks and buses to meet the emission performance standards. The
environmental benefits of this program will be substantial. When these
cleaner vehicles have replaced the current fleet, 2.6 million tons of
NO<INF>X</INF> emissions will be avoided every year, 8,000 premature
deaths prevented annually, and 23,000 cases of bronchitis and 360,000
asthma attacks. These health benefits far outweigh the cost to produce
the cleaner engines and fuels.
The Clean Diesel Program will reduce emissions only from newly
produced engines. But there are millions of older diesel trucks, buses
and off-road equipment in use today, many of which spew noxious, black
soot from their exhaust pipes. EPA has therefore initiated, in
cooperation with manufacturers of diesel emission control systems, a
major new voluntary initiative to install cost effective emission
control equipment on older diesels. Through this innovative program,
the Diesel Retrofit Program, the Agency to date has obtained
commitments from businesses and municipalities that own fleets of
trucks or buses to retrofit 75,000 vehicles with devices that will
reduce exhaust emissions.
Of course, motorists share responsibility to maintain their
vehicles properly. Inspection and maintenance (I/M) programs, currently
operating in 56 metropolitan areas, are meant to identify polluting
vehicles and lead to their repair. Today many states are re-structuring
their I/M programs to efficiently incorporate the capabilities of so-
called ``onboard diagnostic (OBD) systems'' that use the vehicle's
onboard computer to speed the testing process, provide specific
information to the technician to help get repairs done correctly, and
maintain or improve the air quality benefits of an I/M program.
Cleaner Fuels
Let me now switch from cleaner vehicles to cleaner fuels. The first
effort to address an environmental problem linked to fuel was the
multi-year effort to phase down and eventually eliminate lead in
gasoline. That successful action was followed by other programs to
require oil refiners to produce cleaner gasoline. In the late 1980's
refiners began to reduce the evaporation rate of gasoline nationwide
during the summer months.
The 1990 amendments to the Clean Air Act established several new
clean fuel programs. Much of the nation's progress on carbon monoxide
can be attributed to the wintertime oxygenated fuels program, which
began in 1992 in 30 cities. The 1990 amendments also established the
reformulated gasoline (RFG) program, which was designed to serve
several goals, including improving air quality and extending the
gasoline supply through the use of oxygenates. Today, roughly 35
percent of this country's gasoline consumption is cleaner-burning RFG.
The emission reductions which can be attributed to the RFG program are
equivalent to taking 16 million cars off the road.
In two of the programs I mentioned earlier, Tier 2 and the 2007
Clean Diesel Program, EPA recognized the efficiencies of addressing
vehicles and fuels as a system when establishing an emissions control
program. Thus, in addition to setting strict exhaust emission standards
for the vehicles and engines, we also required that cleaner, low sulfur
gasoline and diesel fuel be available to enable those emission
standards to be achieved. Sulfur is similar to lead in that it degrades
the effectiveness of a catalytic converter. This lower sulfur gasoline
will reduce emissions from all gasoline-powered highway vehicles, not
just those meeting the tighter vehicle emissions standards. The Tier 2
and diesel regulations provide sufficient time for refiners to make the
necessary modifications to their facilities before the low sulfur fuel
is required. EPA has included a number of provisions that provide
additional flexibility to refiners, particularly small refiners.
Off-Road Engines
As emissions from highway vehicles are reduced, the potential for
reductions from other sources must be evaluated. Therefore, in 1990
Congress gave EPA new authority to set emission limits for off-road
engines and equipment. As a result, EPA has adopted emission control
programs for the following off-road equipment: locomotives, marine
vessels, outboard recreational boats, and small gasoline engines used
in lawn and garden equipment.
The next major category of mobile source emissions to be addressed
is large diesel engines used in construction, mining, airport and
agricultural equipment. Even though modest emission requirements are in
place for this equipment, EPA currently estimates that by 2020 the
category will contribute over 10 percent of the total NO<INF>X</INF>
emissions inventory in a typical metropolitan area and 8 percent of the
PM emissions. One of the major issues that needs to be considered is
the potential need to lower the sulfur levels in off-road diesel fuel
to enable new exhaust control technology to be utilized on future
engines. As we found with highway vehicles, this approach of
comprehensively looking at the engines and fuel as a system is
appropriate here as well. EPA currently is working on a draft proposed
rulemaking.
Protecting the Stratospheric Ozone Layer
EPA's Stratospheric Ozone Protection Program has played a landmark
role in addressing one of the most pressing environmental issues of our
time--the depletion of the ozone layer. We can say with certainty and
pride that our effort in the United States to protect the ozone layer
is on track toward unqualified success. With the successful worldwide
phaseout of ozone depleting substances, EPA estimates that 6.3 million
U.S. lives will have been saved from fatal cases of skin cancer between
1990 and 2165, and that up to 300 million cases on non-fatal skin
cancer and approximately 30 million incidences of cataracts will have
been avoided.
To date, international cooperation to implement the Montreal
Protocol on Substances that Deplete the Ozone Layer has led to global
reductions in the production and use of ozone depleting substances
(ODS), the results of which we can already see. Developed country
production of CFCs, methyl chloroform, and carbon tetrachloride
essentially ended, except for limited exemptions permitted under the
Montreal Protocol, thus avoiding emissions of 400,000 metric tons of
ODS. Developing countries as a whole are ahead of schedule in reducing
their production, use, and emissions of ODS.
If the world community stays the course, we can expect to see the
ozone layer recover in approximately 50 years. The prospect of
identifying and solving a global environmental problem of this
magnitude, within the span of a single lifetime, is nothing short of
amazing. Let me tell you about the success we have had here and abroad.
Here at home, the U.S. is doing its part to ensure the recovery of
the ozone layer. Working closely with industry, EPA has used a
combination of regulatory, market based (i.e., a cap-and-trade system
among manufacturers), and voluntary approaches to phase out the most
harmful ozone depleting substances (ODSs). And we're doing so more
efficiently than either EPA or industry originally anticipated. The ODS
phaseout for Class I substances was implemented 4-6 years faster,
included 13 more chemicals, and cost 30 percent less than was predicted
at the time the 1990 Clean Air Act Amendments were enacted.
The U.S. has not only ``taken care of business'' at home but has
also played a key leadership role internationally. Through the
Multilateral Fund set up under Presidents Reagan and Bush, the U.S. has
led the effort toward long term agreements to dismantle more than two-
thirds of developing country CFC production capacity and eliminate
virtually all of developing country halon production capacity. Sales of
US technologies, such as recycling, air conditioning, and refrigeration
equipment and about $80 million per year of sales of alternatives to
ozone depleting substances have played an important role in this
worldwide progress. While the final closing of related facilities
depends on continued funding, we are confident that through continued
U.S. involvement and investment in this area we will be able to fulfill
our international obligations and keep recovery of the ozone layer
within our sights.
With continued worldwide vigilance, full recovery of the ozone
layer is predicted to occur in 50 years. In the near term, however,
exposure to UV radiation and the subsequent health effects of increased
incidences of skin cancer and cataracts continues to be a very real
problem. One American dies every hour from skin cancer and a mere one
to two blistering sunburns can double one's chances of developing
melanoma later on in life. With this knowledge, EPA created the SunWise
Schools Program to teach children and their caregivers about sun
safety. EPA expects to reach children in 17,000 U.S. schools by 2005.
We are proud of these achievements, but the job is not yet done. We
have important work ahead of us such as the upcoming domestic phase
outs of chemicals like methyl bromide (MBr) and hydrochloroflurocarbons
(HCFC) while ensuring that sufficient amounts are available for
critical and essential uses. The budget includes $10 million in EPA
funding to help replenish the multilateral fund. Without a mechanism
for facilitating developing country commitments to phaseout ozone
depleting substances, we jeopardize recovery of the ozone layer,
investments already made by U.S. industry in alternative technologies,
and indeed the lives and health of Americans.
Reducing Risks from Air Toxics
Toxic air pollutants are pollutants known or suspected to present a
threat of adverse human health effects such as cancer or birth defects,
or adverse environmental effects. In order to control emissions of
these pollutants, EPA since 1990 has issued 53 pollution standards
affecting 89 industrial categories such as chemical plants, dry
cleaners, coke ovens, and petroleum refineries. When fully implemented,
these standards will eliminate nearly 1.5 million tons of air toxics
and 2.5 million tons of particulate matter and smog-causing volatile
organic compounds.
By contrast, in the preceding twenty years only seven hazardous air
pollutant standards, eliminating 125,000 tons of toxics, had been put
in place. Congress directed EPA to issue technology- and performance-
based standards on a source category basis to ensure that major sources
of air toxics are well controlled. In essence these standards create a
level playing field by requiring all major sources to achieve the level
of control already being achieved by the better performing sources in
each category.
The result is that we are reducing the large quantities of toxic
air pollutants released into our air, in the aggregate and around
industrial sources in populated areas. We will achieve additional
reductions as we complete standards for more categories of major
pollution sources. This approach is achieving substantial reductions in
air toxics, but we recognize that it is not perfect; a drawback is that
it focuses on the quantity of emissions while toxic pollutants vary
substantially in the risk they pose. Congress gave EPA greater
flexibility to target the greatest risks in the second phase of the air
toxics program outlined in the 1990 amendments.
We are now in the early stages of implementing this second phase of
the air toxics program, targeting particular problems such as elevated
risks in urban areas, deposition of air toxics into the Great Lakes,
and residual risks from already controlled sources. The underlying goal
of this program is to improve air quality at the local, regional, and
national levels while minimizing cost and reducing unnecessary burden
on states and the regulated community. Achievement of this goal would
ultimately result in reduced public risk from exposure to air toxics or
other environmental threats.
Virtually all of the transportation-related control programs I
discussed earlier reduce toxic emissions as well as emissions of NAAQS
pollutants or their precursors. For example, compared to 1990 levels,
the programs we have in place today for highway vehicles, including
Tier 2 and the 2007 diesel rule, will reduce emissions of four gaseous
toxic pollutants by about 350,000 tons by 2020, a 75 percent reduction.
Diesel particulate matter (PM) from highway vehicles will be reduced by
220,000 tons over the same time frame, for a 94% reduction.
Improving Visibility in our National Parks and Wilderness Areas
Having lived a good portion of my life within sight of the Front
Range, within an hour of Rocky Mountain National Park, I have a
personal appreciation for the importance of protecting the beautiful
vistas of our great land from visibility degradation.
Haze, created by fine particles and other pollutants, often
degrades visibility across broad regions and obscures views in our best
known and most treasured natural areas such as the Grand Canyon,
Yosemite, Yellowstone, Mount Rainier, Shenandoah, the Great Smokies,
Acadia, and the Everglades. Despite improvements in recent years in
some areas, visibility remains significantly impaired. In eastern
parks, average visual range has decreased from 90 miles (natural
conditions) to 15-25 miles, and on some days, visibility is less than
10 miles. In the West, visual range has decreased from 140 miles to 35-
90 miles. Visibility for the worst days in the West is similar to days
with the best visibility in the East.
In July 1999, EPA published a long awaited regional haze rule that
calls for long-term protection of and improvement in visibility in 156
national parks and wilderness areas across the country. Because haze is
a regional problem, EPA has encouraged states and tribes to work
together in multi-state planning organizations to develop potential
regional strategies for the future. Five of these regional planning
organizations are now operational. EPA will be working closely with
these organizations to provide guidance during this process, just as it
did with the many states and tribes involved in the Grand Canyon
Visibility Transport Commission.
Over the next several years, states are required to establish goals
for improving visibility in each of these 156 areas and adopt emission
reduction strategies for the period extending to 2018. States have
flexibility to set these goals based upon certain factors, but as part
of the process, they must consider the rate of progress needed to reach
natural visibility conditions in 60 years. To assist in evaluating
regional strategies and tracking progress over time, we have continued
to work with the states and federal land managers to expand our
visibility and fine particle monitoring network to 110 of these areas.
One of these regional planning organizations is the Western Regional
Air Partnership, or WRAP. The regional haze rule specifically takes
into account the WRAP's efforts to develop and carry out a strategy for
improving visibility in 16 scenic areas in the western United States.
Currently, EPA is proposing to approve, and to incorporate into the
regional haze rule, an element of this strategy that addresses
stationary sources of sulfur dioxide. The WRAP's innovative approach
establishes regional sulfur dioxide emissions targets, gives Western
sources the opportunity to meet these targets through voluntary
measures, and provides for an enforceable backstop emissions trading
program that will ensure that the targets are met if the voluntary
measures do not succeed.
EPA is moving forward to issue process guidelines for states to
follow in implementing the Act's requirement for ``best available
retrofit technology,'' or BART, at certain older facilities that have
been grandfathered from new source requirements under the Act. These
older facilities emit large amounts, in the millions of tons, of
visibility-impairing pollutants. For many, cost-effective control
measures are available. EPA proposed these BART guidelines in July 2001
and we are looking to finalize them later this year. These guidelines
will help States identify facilities subject to BART, and available
methods for reducing their emissions.
iii. tools for success
This history of clean-air success in concert with strong economic
growth has been achieved through extensive stakeholder consultation,
partnership with states, and use of a combination of tools that fit the
range of air quality problems we face. Among these tools are national
health-based standards, emissions limits, information, trading and
economic incentives, voluntary programs, and hybrid approaches.
Most of these tools and approaches were regarded as innovative in
1990 when the Clean Air Act Amendments were passed, but today these are
part of EPA's normal way of doing business. Today we are continuing to
learn from experience and to improve air quality through regulatory and
non-regulatory strategies. Three areas of emphasis include stakeholder
consultation, market-based approaches and non-regulatory approaches.
Regulatory Tools
Increased Stakeholder Consultation
Perhaps the most visible of the new approaches adopted following
the 1990 amendments is the early and continuing use of consultation as
we develop regulations. Since then, the Agency has dramatically
expanded its interaction with stakeholders. Consensus is not always
attainable, of course. But the time and effort we put into
communication and consensus-building pays off in better rules, and
often in smoother implementation.
One of the first examples of stakeholder involvement was the Acid
Rain Advisory Committee, an intensive seven-month effort with
stakeholders immediately after the 1990 Amendments that helped shape
the rules for the successful acid rain program. This positive
experience led to establishment of the Clean Air Act Advisory
Committee, a standing group of several dozen experts from industry, the
environmental community, states, academia and elsewhere. We seek the
advisory committee's insights frequently.
EPA also establishes stakeholder advisory committees to advise us
on specific air program issues as they develop. One example is a
diverse stakeholder committee currently reviewing questions concerning
our recently issued rule to reduce levels of sulfur in diesel fuel.
In addition to these formal processes, we have also engaged
stakeholders in substantive, early discussions on many significant
rulemakings long before they reach the proposal stage--for example, in
developing rules to control emissions from heavy-duty trucks and buses.
The National Low Emission Vehicle Program is another example of what
can be achieved through consensus building with stakeholders when
incentives for agreement exist.
Trading and Market-based Regulatory Programs
The second major reason for clean-air success over the years has
been EPA's pioneering use of innovative, market-based regulatory
approaches. EPA is proud of our increasing reliance on market-based
tools, particularly cap and trade programs, to cut compliance costs,
promote technology innovation and achieve early and extra environmental
benefits.
Perhaps the most important lesson from implementing the 1990
amendments is how powerful a tool cap and trade programs can be for
protecting health and the environment. When the acid rain legislation
was under development, the proposal for a cap-and-trade approach was
new, untested, and met with much skepticism. Many questioned whether it
would deliver the promised environmental protection, whether the
trading system would operate as advertised, and whether costs would be
reasonable. Today, it is clear that the answer is a resounding ``yes.''
The acid rain trading program, because it was properly designed,
has demonstrated many advantages relative to a command-and-control
approach. The acid rain cap and trade program achieved reductions at
two-thirds the estimated cost of achieving the same reductions without
trading. The cap and automatic penalties for noncompliance ensure that
the environmental goal is achieved and maintained. Trading and banking
have allowed companies flexibility to choose compliance options and
minimize costs. In 1990 EPA estimated that the price of an
SO<INF>2</INF> allowance (representing one ton of reduction) would be
$625 in 2000 (in 2000 dollars) and some in the utility industry
speculated that the price could be much greater, in the range of
$1,500. In fact, the actual price of SO<INF>2</INF> allowances in 2000
was $150. The cap-and-trade system has created financial incentives for
electricity generators to look for new and low-cost ways to reduce
emissions, and to do so earlier than required by law. As mentioned
above, reductions in the early years averaged 25 percent below the
required cap, resulting in early health and environmental benefits. The
program has high accountability and transparency; electricity
generators must have continuous emissions monitors to prove they have
sufficient allowances to match their actual emissions. The cap-and-
trade system also has other advantages: The acid rain program enjoys
nearly 100 percent compliance and only takes 75 EPA employees to run,
and avoids lengthy permit reviews.
As I have mentioned, EPA is using this now-proven approach to
address other significant problems such as regional ozone transport,
and believes this approach should be the cornerstone of an integrated
multi-pollutant approach toward future reductions in power plant
emissions.
Beyond these flagship programs, EPA also continues to apply market
principles more generally to find innovative ways to achieve more
environmental protection at less cost. We have had great success with
the emission trading program to protect stratospheric ozone, and we
have provided averaging, banking, and trading opportunities in many
national air rules for such industries as vehicle manufacturers and
fuel refiners. Emissions averaging is also incorporated in national air
toxics emissions standards for refineries, chemical plants, aluminum
production, wood furniture and other sectors that use paints and
coatings. We also have used other methods, including multiple
compliance options, to help provide flexibility in air toxics rules.
In addition to providing flexibility in national rules through
trading and other means, EPA is working with states to promote other
flexible approaches to help achieve national air quality standards for
smog, particulates and other criteria pollutants. These approaches--
including broader use of trading programs and voluntary measures in
State Implementation Plans--are becoming valuable alternatives in many
areas where conventional approaches are reaching the limits of what can
be achieved.
Improvements in Analytical Tools
Since 1990 we also have seen improvements in analytical tools that
enhance our ability to analyze the benefits, costs and cost
effectiveness of potential strategies to reduce air pollution. These
tools help inform our policy and regulatory decisions.
These improvements have been achieved through dramatic increases in
the quality and comprehensiveness of data used as inputs to our
analyses and the speed and accuracy of the modeling systems used to
analyze those data. Specific examples of these improved data sets and
modeling tools include a new integrated criteria pollutant and
hazardous air pollutant emissions inventory system called the National
Emission Inventory (NEI); a significantly expanded fine particle
monitoring network; a new, third-generation air quality modeling system
called Models-3 which incorporates the new Community Multiscale Air
Quality (CMAQ) model capable of integrated assessment of changes in
tropospheric ozone, acid deposition, particulate matter, and visibility
across the coterminous 48-states; and an integrated health effects and
economic valuation modeling system called the Criteria Air Pollutant
Modeling System (CAPMS).
EPA analyses have also benefitted greatly from major strides in the
public health and economic literatures related to estimating the
effects of air quality improvements. Important examples include the
Health Effects Institute (HEI) re-analysis of key PM mortality
epidemiological studies and the development of dozens of new studies
estimating the economic value of reductions in risk of premature
mortality. All of these represent just a few examples of the many
improvements in relevant literature, information systems, and
analytical technologies achieved by EPA and our partners since 1990.
Non-Regulatory Tools
One important lesson we've learned over the last 12 years is how
much environmental protection we can accomplish without regulating.
We've had great success by giving people the information they need,
working with them, and helping them work with each other to address
pollution problems in their communities and businesses. EPA has a
number of information-based or voluntary programs authorized by the
Clean Air Act or funded through Clean Air Act grants.
EPA has developed several partnership programs with industry that
were either explicitly laid out in the President's National Energy
Policy, or are otherwise consistent with the policy direction therein.
These include several new Energy Star efforts, Climate Leaders, the
Combined Heat and Power Partnership, the Green Power Partnership, and
Commuter Choice Leadership Initiative. Other voluntary partnerships
with nonprofit organizations have fueled effective public outreach
programs such as Tools for Schools, the Smoke Free Homes Pledge, and
the ``Fish Out of Water'' asthma ad campaign.
Energy Star and Related Partnerships
In many cases, EPA has found that voluntary, information-based
approaches are most effective when carried out in partnership with
industries. Perhaps the most impressive example of this is the Energy
Star program, which offers businesses and consumers energy-efficient
solutions that save money while protecting the environment for future
generations. The Energy Star program establishes national definitions
for efficient products, homes and buildings that qualify to use the
widely recognized Energy Star logo. It has succeeded in creating a
national platform for efforts by manufacturers, governments and other
partners to increase energy efficiency. In 2001 alone, the Energy Star
program reduced energy consumption by 80 billion kilowatt hours, offset
more than 10,000 megawatts of peak power, prevented 140,000 tons of
nitrogen oxides emissions, and reduced greenhouse gas emissions by more
than 16 million metric tons of carbon equivalent--the same as
eliminating the emissions of 10 million cars. American businesses and
consumers, with the help of Energy Star, are saving about $5 billion a
year on their energy bills.
Building on our experience with Energy Star, we are now developing
a series of additional partnership programs to provide significant
energy savings and reduce emissions of NO<INF>X</INF>, VOCs, and
greenhouse gases. The first of these is the Climate Leaders program, a
government-business partnership that helps companies effectively manage
their greenhouse gas emissions by providing them with new management
tools and recognizing them for their success. In this program,
companies pledge to achieve company-wide emission reductions in
greenhouse gases over the next 5 to 10 years, and report on their
progress. Two other partnership programs, built around energy
production, are the Green Power Partnership and the Combined Heat and
Power Partnership. These new voluntary programs are designed to reduce
the environmental impact of electricity generation by promoting
renewable energy and energy-efficient technology through technical
assistance and public recognition.
Asthma Education
EPA has also taken a voluntary, information-based approach in
helping to combat asthma, a disease which has grown to epidemic
proportions in the United States, and one which is often triggered by
indoor air pollution. While scientists do not fully understand what has
caused the rise in asthma, outdoor air pollution and environmental
contaminants commonly found indoors are known to trigger asthma attacks
and in some cases, can even lead to the development of new cases of
asthma. In response to this epidemic, EPA has joined with other Federal
agencies including the Department of Health and Human Services and non-
profit health organizations, to step up the national fight against
asthma. With pro-bono help from the Advertising Council, in 2001 we
launched a multimedia public-service advertising campaign to raise
public awareness of the need to reduce exposure to indoor environmental
triggers as part of a comprehensive asthma management plan. In the
first six months of the campaign, we utilized over $30 million worth of
donated media exposure in the form of TV, radio, and print advertising.
EPA's program also is supporting other direct asthma education
initiatives in schools, day-care centers, primary health care clinics
and managed care organizations to promote comprehensive asthma
management including preventing exposures to indoor environmental
triggers.
Indoor Air: Tools for Schools
Beyond its asthma efforts, EPA also has applied voluntary,
information-based approaches to indoor air quality problems more
broadly. One especially important site where poor indoor air quality
often causes health problems (including asthma) is the schoolroom. To
help educators and the public make their schools more healthful for
children and faculty, EPA has developed an Indoor Air Quality ``Tools
for Schools'' (TfS) Kit to prevent or correct common indoor air quality
problems. More than 9,000 schools across the US have voluntarily
adopted the operation and maintenance practices in the TfS, and we are
gaining momentum: the Chancellor of the New York City School System
(1,200 schools serving 1.1 million children) has declared that all
schools in NYC will implement TfS by the 2005-2006 school year. Several
states have incorporated the key concepts into requirements for all
their schools. EPA is placing special emphasis on promoting
implementation of this voluntary guidance in states with large student
populations. Texas, Florida, New York and California account for 32% of
the students in the US.
Environmental Tobacco Smoke
Another serious indoor air problem is secondhand tobacco smoke,
which causes hundreds of thousands of excess lower respiratory tract
infections in young children each year, increases their risk of middle
ear infections often requiring hospitalization, and worsens the
condition of a million children with asthma. EPA is using a voluntary
approach to address this serious issue through a sustained campaign to
educate and motivate parents to protect their children by making their
homes smoke-free. The initiative includes an award-winning national
television, print, and radio media campaign which has resulted in over
$15 million of donated air time.
AIRNow Program
In addition to these indoor-focused programs, EPA has also used
voluntary, information-based approaches to help address outdoor air
quality problems. To help citizens understand and make decisions about
their own personal exposure to high ozone levels, EPA has developed the
AIRNow program which includes a web site to provide the public with
easy access to air quality information, both local and national.
Through the web site and national media, AIRNow provides daily air
quality forecasts as well as real-time air quality for over 100 cities
across the United States. AIRNow is one of the first environmental
programs to deliver real-time data to the public in an easily
understandable, color-coded, graphical format, similar to the color-
coded warning program for homeland security. The animated air quality
map and air quality forecasts give the public information they can use
to make daily decisions about the air quality in their area. AIRNow
also goes beyond the Internet to reach the broader public, with USA
Today featuring AIRNow air quality forecasts and TV stations
incorporating it into weather forecasts on national programs like the
Weather Channel as well as local programs. Over the next several
months, the program will be expanded to address particulate matter.
Commuter Choice
A new business-government partnership, called the Commuter Choice
Leadership Initiative, focuses on reducing vehicle emissions and
improving the way people get to and from work. EPA and DOT assist
participating employers by offering technical assistance, public
recognition, training, Web-based tools, and forums for information
exchange. To participate, employers make a series of commitments,
including ensuring a minimum level of employee participation and
offering a series of commuter benefits. In return for offering these
benefits, employers can reap the important benefits of helping to
attract and retain employees, reduce the demand for limited or
expensive parking, and exhibit leadership and corporate citizenship.
Almost 300 companies, employing over 750,000 people, have joined the
program since it was launched last year.
Community-Based Programs
Some of EPA's most innovative work comes by working with people in
their communities at the local level. For example, the Ozone Flex
program, started last year in Texas, offers increased regulatory
flexibility to encourage state, local and tribal governments to make
voluntary, early reductions of air emissions that form ground-level
ozone. Another community-based program, the Cool Cities initiative,
shows local governments how to reduce the polluting effects of heat
buildup in cities, and offers them regulatory credit for doing so. This
program began in Houston, Texas, and we hope that other cities will
follow Houston's lead and also join the Cool Cities program.
Another important new initiative is the Cleveland Air Toxics
project, which is setting the stage for a new way to solve the problem
of urban air pollution. We have assembled a group of community leaders
who are building a sustainable, results-focused project that is a model
for the entire nation. And the Cleveland pilot, for the first time,
integrates our work across stationary, mobile, and indoor pollution
sources. The approach bridges organizational barriers here at EPA and
allows the community to address the issues they believe have the most
impact on their lives.
iv. today's challenges
Reducing Fine Particles and Smog
Two of the greatest air quality challenges facing us today are
reducing levels of fine particles and ground-level ozone (smog) to meet
the more health protective air quality standards EPA issued in 1997
based on an exhaustive review of new scientific evidence on effects of
these pollutants. Fine particles and 8-hour ozone levels appear to be
of concern in many areas of California and across broad regions of the
eastern United States.
On March 26, after years of litigation and a favorable Supreme
Court decision, the U.S. Court of Appeals for the D.C. Circuit rejected
all remaining legal challenges to both standards. The Administration
vigorously defended the standards before the court.
As Administrator Whitman said last month, the court decision ``is a
significant victory in EPA's ongoing efforts to protect the health of
millions of Americans from the dangers of air pollution. EPA now has a
clear path to move forward to ensure that all Americans can breathe
cleaner air.'' Now EPA will work in partnership with state, tribal and
local governments to implement those standards.
We believe that fine particles pose the greatest public health
risks of any regulated air pollutant. Fine particles are associated
with tens of thousands of premature deaths per year in people with
heart and lung diseases. Fine particles aggravate heart and lung
disease, leading to increased hospitalizations, emergency room and
doctor visits, use of medication, and many days of missed school and
work. Fine particles have also been associated with respiratory
symptoms such as coughing and wheezing and chronic bronchitis, as well
as heart beat irregularities and heart attacks. And fine particles are
a year-round problem.
Ozone smog also is a significant health concern, particularly for
children and people with asthma and other respiratory diseases who are
active outdoors in the summertime. Ozone can cause increased transient
respiratory symptoms, such as coughing and pain when breathing deeply,
as well as transient reductions in lung function and inflammation of
the lung. Ozone has also been associated with increased
hospitalizations and emergency room visits for respiratory causes.
Repeated exposure over time may permanently damage lung tissue.
We are determined to move expeditiously to achieve the health
benefits of the standards. However, there is some preliminary work that
must be completed before we can designate areas under the new
standards, which starts the clock on many implementation requirements.
Before the PM<INF>2.5</INF> nonattainment areas can be designated,
three years of data are needed to determine whether an area is not
attaining the standard. We will have 3 years of quality-assured data
beginning in the summer of 2002. It is difficult to project a precise
schedule for designating PM<INF>2.5</INF> nonattainment areas, but I
have asked my staff to determine how we can move forward expeditiously
in light of the public health threat posed by fine particles. The
Transportation Equity Act of 1998 requires states and EPA complete the
process within two years after three years of monitoring data are
available, or no later than December 31, 2005. Based on a preliminary
two-year data set from 250 counties, more than 130 areas are expected
to violate the annual standard. About 100 of these areas also appear to
be not attaining the 8-hour ozone standard, and it will make sense for
states to consider both ozone and PM in devising attainment strategies.
As we work with the states on fine PM designations, we also will be
working with our governmental partners and stakeholders to develop an
implementation strategy. In the East, high PM<INF>2.5</INF> levels are
attributed to regionally high sulfate and nitrate concentrations
(primarily from power plants and motor vehicles) combined with local
urban emissions of other pollutants. President Bush's Clear Skies
Initiative to cut emissions from power generators through a cap-and-
trade program can substantially reduce the number of areas with
unhealthy levels of fine particles. Regional strategies and/or national
rules should be the first step toward addressing sulfates and nitrates,
particularly in the East. A number of already-adopted mobile source
programs, such as Tier II standards for cars and light trucks, reduced
sulfur in fuel, and standards for new heavy duty diesel engines, will
also help reduce local emissions. However, additional local strategies
will need to be developed for certain cities to address their
particular mix of emissions sources also contributing to the problem.
For example, a diesel engine retrofit program (e.g. for buses) appears
to be one obvious local action that cities can take to protect the
public from PM<INF>2.5</INF> health effects now.
8-Hour Ozone
We are actively working on several fronts to prepare the way for
implementation of the 8-hour ozone standard. Because the Supreme Court
ruled that EPA's original implementation strategy was unlawful, EPA is
working with state and stakeholders to develop a new approach that will
be adopted through rulemaking. The new approach will be proposed this
summer and finalized a year after its proposal. We also are working to
complete our response to the May 1999 remand from DC Circuit court
concerning UVB radiation, and anticipate a final rule this year. EPA
plans to designate areas for the 8-hour ozone standard no earlier than
the end of 2003.
There are over 300 counties measuring exceedances of the 8-hr ozone
standard. Existing EPA programs, including national motor vehicle
programs and the NO<INF>X</INF> SIP call, are projected to help many of
the new nonattainment areas meet the standard over the next few years.
States and localities also will need to do their part to reduce
emissions from local pollution sources.
Cost-effective strategies and technology advances
Under the Clean Air Act, both EPA and the States have
responsibilities for developing regulations requiring pollution sources
to reduce their emissions to help attain air quality standards. In both
cases, cost is a key consideration, helping determine which pollution
sources should reduce emissions, by how much, and on what timetable. As
mentioned above, EPA develops national emission standards for large
sources such as automobiles, powerplants, and factories. These
rulemakings consider costs in a number of ways, from broad economic-
impact studies to more specific analyses of impacts on states,
localities, and small businesses. Costs are also a central
consideration to states and localities as they design their state
implementation plans to achieve the additional reductions needed beyond
those provided by EPA's rules. EPA works closely with regulated
communities to obtain information on currently available and emerging
control technologies and their estimated costs. EPA uses this
information in developing its Federal rules, and it also makes such
information available to states, localities, and industries to assist
them in their planning.
A word should be said here about technological innovation and its
role in projecting future costs of pollution control. As is the case
for technology generally, air pollution control technology is
developing so rapidly that it is difficult to predict very far into the
future. We know based on experience that technological advances over
the longer term will provide substantial help in meeting clean-air
goals. But it is inherently difficult to estimate the amount of
emissions reductions and cost savings that will be available five, 10,
or 15 years from now through technological advances in numerous
industries--including advances that are entirely unforeseen today.
Our experience over the past 30 years, and the promise of cleaner
technologies emerging today, strongly suggest that technological
innovation will continue to produce new, cleaner processes and
performance improvements that reduce air pollution at reasonable cost.
The Clean Air Act itself has spurred such advances, as innovative
companies have responded to the challenges of the Act with great
success, producing breakthroughs such as alternatives to ozone-
depleting chemicals and new super-performing catalysts for automobile
emissions. We are continuing to promote such innovation through
emission-reduction strategies that set clear emissions goals and then
provide flexibility on the means of achieving them--for example,
through the kind of market-based approach in the President's Clear
Skies proposal.
Protecting Our Environment and Resources
The same emissions that form fine particles and ozone, causing
public health risks, also contribute to environmental and resource
damage. One example is visibility degradation, which I already have
discussed.
In addition, modeling results and recent studies of ecological
response to emissions reductions under the Acid Rain Program indicate
that Title IV is moving us in the right direction, but not far enough.
For example, scientists in the Shenandoah National Park discovered the
first observed disappearance of a fish population due to acidification.
Researchers in that region claim that reductions of sulfate deposition
of 70 percent or greater from 1991 levels are necessary to prevent
further acidification of Virginia brook trout streams.
A recent assessment of acid deposition and its effects in the
northeast by the Hubbard Brook Research Foundation reflects a similar
finding. Researchers found no significant improvement in lake and
stream water quality in the Adirondack and Catskill Mountains, even
following recent decreases in acid rain. The study concluded that full
implementation of the 1990 Amendments will not result in substantial
recovery in acid-sensitive ecosystems in the northeast. Instead, it
concluded that further reductions of SO<INF>2</INF> emissions from
power generation are necessary to achieve recovery of aquatic
ecosystems in this region.
Recent studies also demonstrate that nitrogen deposition is an
increasing concern in many regions of the country. For example, EPA's
recently released national coastal condition report found deteriorating
water quality in many areas of the eastern U.S. and Gulf Coasts, much
of it due to increasing nitrogen pollution. Other researchers have
found symptoms of ``nitrogen saturation'' in forest ecosystems in
diverse areas of the country, including the Front Range of the Colorado
Rockies, forests in southern California, and forests along the
Appalachian Mountain chain of the eastern U.S. As a result, forest
soils lose nutrients, forests are less productive, and streams and
lakes continue to get more acidic.
Taking into consideration the ongoing concern about acid
deposition, President Bush's Clear Skies Initiative would address these
problems by cutting emissions of SO<INF>2</INF> and NO<INF>X</INF> from
power generators through a cap-and-trade program.
Air Toxics Challenges
Two important air toxics challenges are elevated risks from the
multiple toxic pollutants emitted into urban airsheds, and health risks
from mercury, a persistent toxic substance that accumulates in the food
chain.
Urban Air Toxics Strategy
Air toxics can pose special threats in urban areas because of the
large number of people and the variety of sources of toxic air
pollutants. Individually, some of these sources may not emit large
amounts of toxic pollutants. However, all of these pollution sources
combined can potentially pose significant health threats. Under the
Clean Air Act, EPA is required to develop an Integrated Urban Air
Toxics Strategy that addresses air toxics in urban areas, looking
collectively at emissions from large and small industrial and
commercial operations, on-road and off-road vehicles, as well as indoor
air sources. We are also concerned about the impact of the toxic
emissions on minority and low income communities, which are often
located close to industrial and commercial urbanized areas.
We will also assist State, local, and tribal agencies in making
their own assessments and decisions on risk strategies by providing
them tools, guidance, and training, while continuing to develop
national standards. We are also exploring new approaches for
identifying flexible, less expensive methods for reducing emissions. In
addition, to better understand local risk, we will collect and analyze
data from on-going community projects to provide a centralized
information database. We will also continue to participate in projects
such as in Cleveland, Ohio. This integrated approach will allow EPA and
state, local, and tribal governments the ability to cooperatively
address specific risks and administer direct and cost efficient
controls in specific ``hot spots'' or target areas.
Mercury
Mercury is a potent toxin that causes permanent damage to the brain
and nervous system, particularly in developing fetuses, depending on
the level of ingestion. Most exposure comes through eating contaminated
fish. Currently 42 states have advisories warning people to limit or
avoid intake of recreationally caught fish due to mercury
contamination. Even so, almost 400,000 children are born each year to
mothers whose blood mercury levels exceed the reference dose
established by EPA, which builds in a margin of safety.
Recent actions to reduce mercury emissions from medical waste
incinerators and municipal waste combustors are significantly reducing
emissions of mercury. In fact, full implementation and compliance with
medical waste incinerator and municipal waste combustor regulations
will result in significant mercury emission reductions from these
important sources. Power generation is now the largest uncontrolled
source of mercury emissions, contributing approximately 35% of the
total anthropogenic mercury emissions in this country. President Bush's
Clear Skies Initiative would put a cap on mercury emissions from power
generators.
v. the future
Although the focus of this hearing is Clean Air Act successes, not
new legislation, I would like to take a brief moment to describe
President Bush's Clear Skies Initiative. The President believes Clear
Skies is the best way to address the most serious of the challenges I
have just described. The initiative builds on the tremendous success of
the Acid Rain Program, using its cap-and-trade model as its foundation.
The President's proposal sets mandatory caps on emissions from power
generators, and gives facilities the opportunity to comply through
trading, which provides compliance flexibility, cost savings, and
incentives for technology innovation.
Under the Clear Skies Initiative, all Americans will benefit from
cleaner air as emissions of the major pollutants from power generation
(SO<INF>2</INF>, NO<INF>X</INF> and mercury) are reduced by roughly 70
percent. The President's proposal will dramatically reduce the number
of areas with unhealthy levels of fine particles, and provide health
benefits to tens of millions of people. An integrated approach, Clear
Skies will reduce all the concerns associated with regulated pollutants
from power plants across the nation, including fine particles, ozone,
mercury contamination, acid rain, nitrogen deposition and visibility
impairment. As a result, we will see thousands fewer premature deaths,
millions fewer incidences of aggravated asthma and respiratory
symptoms, and reduced risk of childhood illness. Clear Skies is a clear
winner for the American people.
Thank you. I would be happy to answer any questions that you may
have.
Mr. Barton. Thank you, Mr. Holmstead.
We have a few housekeeping things. Then I have got a
question for you.
We are going to do a fair number of hearings on the Clean
Air Act, and the EPA is going to be asked to testify probably
at almost every one of those hearings. We like to have the
testimony so that the staffs on both sides can look at it. What
is our minimum requirement for testimony? Two days.
Your testimony got here last night at 9 o'clock. So the
minority got mad at us, because we were hiding the testimony,
when the fact is we didn't get it until 9 o'clock. So in the
future, if you would ask Governor Whitman, encourage her and
all the other folks like you that come up to represent your
agency to try to comply with us in getting us your testimony so
that those that agree with it can study it and ask you softball
questions, and those that disagree with it can ask you very
smart, tough, pointed questions; and between those two, we will
get a good hearing record. Could you try to help us out a
little bit on that?
Mr. Holmstead. I will do my best, and I can tell you, I
would have rather been doing something else at 9 o'clock last
night than trying to finish up that.
Mr. Barton. Well, I know it is a fairly tortuous thing to
get testimony cleared through the White House and OMB and all
that, but if you start the process sooner, it gets finished
sooner, and we get it on time, and it just helps us.
Mr. Holmstead. I will give you the name of Laurie Schmidt
here, so you can call her if the testimony is----
Mr. Barton. Is that the young lady there in the red blouse?
Mr. Holmstead. Thank you. We will do that. Yes.
Mr. Barton. All right. Now start the clock.
This subcommittee, as Mr. Dingell pointed out and Mr.
Waxman and Mr. Markey and Mr. Hall--they have worked with
various administrations throughout the years as we get into
these issues on the Clean Air Act.
A lot of the information that is required to make an
informed decision on legislation is technical in nature, and
the EPA staff has that information. Now I have talked to you on
the phone several times. I met you in person several times. I
have talked to Governor Whitman several times, and at every one
of the meetings I have asked that your staffs work with our
staffs on both sides of the aisle to get us the information so
that we can have an informed debate.
That has yet to happen. Now this Clear Skies initiative
that the Bush Administration is putting forward, I think, has a
lot of merit, but none of the staffers on the Hill have any
idea what the technical basis is for that. What can you do to
tell the subcommittee today that the EPA staffs are going to
work with our staffs and help provide information so that both
sides of the aisle can actually analyze what is going on and
try to come to some joint understandings?
Mr. Holmstead. I do understand that we have a lot of
detailed analysis that really only we can produce, and you as
well as members on the Senate have been asking for that, and I
again apologize that we have been slow in getting that up, and
I promise you that we will be remedying that beginning this
week.
I do want to just give you a sense of just how complex this
is in terms of the kind of information that I think you are
interested in, and I won't take up a lot of time. The computer
modeling runs that we do to analyze this are the kinds that--
there are actually two different runs, and we have to take the
output from one and use it in another. I am happy to talk with
your staff more about all of the technical details.
The bottom line is it actually takes several months to
complete and to QA these computer runs, and during the
development of the Clear Skies proposal we, obviously, did a
number of different runs that we are preparing now to turn over
to you, beginning this week.
Just so you know what we are sending up, which I think will
satisfy everyone who has been asking us for this information,
we have air quality modeling analysis, the kind of state-of-
the-art analysis that really only EPA can do, on four, and we
are working on a fifth. What we plan to give you, I hope by the
end of this week or by the beginning of the following week at
the latest, is all of those modeling runs.
There are some that are less stringent, there are some that
are more stringent than the Clear Skies proposal. Those were
really used to bound the----
Mr. Barton. We are going to get that information in the
next 2 weeks?
Mr. Holmstead. Yes, sir, and we will provide all of the air
quality modeling information as well as all of the--We have a
linear programming model that actually goes through and
predicts impacts on different facilities. That is extremely
comprehensive, and we also plan to give you, in addition to the
air quality modeling runs, the underlying modeling runs that
shows the various impacts on fuel supply, price, many other
things, and you will have all of that within 2 weeks.
Mr. Barton. In the charts that you put up earlier that you
showed the Gross Domestic Product going up and almost all the
other trend lines on emissions going down, is there one
underlying issue or one underlying technique that has most
caused the trend lines for air emissions to go down, which
means the air quality would go up? Is there some lesson that we
have learned from the 1990 amendments that we can apply to any
future reauthorizations in a general sense?
Mr. Holmstead. I think the single most important thing that
we collectively have learned, members of this committee, people
at EPA, people in the academic arena who have looked at these
issues, is the use of market based tools that actually create
incentives for companies to look for better and cheaper ways to
control pollution.
You know, 20 years ago, I think a lot of people thought
that the best way to do it was just tell people what kind of
technology to put on. We have learned, for instance, in the
acid rain--The acid rain program is probably the most visible
example, but we use it in many other cases--that if we set a
standard and then allow people the flexibility to meet that
standard in the most cost effective way, we tend to get
reductions faster and cheaper.
More importantly, if we actually give people a financial
incentive to overcomply, as was the case with the acid rain
program where, if they did more than they were required to,
they would create what we call allowances that have value, then
it spurs a lot of technological innovation. We have tried to
use those same sorts of programs, for instance, with our
automobile standards and even fuel standards where we allowed
that sort of banking and trading of allowances that have been
achieved through overcompliance.
So I think, if I had to mention one lesson, that would be
the most important thing that we have learned over the last--
and particularly over the last probably 10 or 15 years as we do
this.
Mr. Barton. My time has expired. I would recognize the
gentleman from Virginia for 5 minutes for questions.
Mr. Boucher. Well, thank you, Mr. Chairman, and Mr.
Holmstead, thank you for your testimony this morning.
Many of the statements that have been made here, both by
members and by you, have celebrated the successes that we have
achieved under the 1990 amendments and the underlying Clean Air
Act. The air is clearer today than it was 30 years ago. We have
had dramatic increases in the economy and large increases in
fossil fuel use, and yet we have cleaner air now than we did
three decades ago.
Given that reality, do you see any overwhelming reason why
we should open the Clean Air Act in some substantial way? Have
we not already, through the law, given EPA the tools that it
needs in order to conduct even further proceedings and through
those further proceedings assure a continuing increase in air
quality?
Mr. Holmstead. There is no question that the Clean Air Act
has been remarkably successful in cleaning up the air. We have
learned a lot over the last 30 years, and there are some things
that we, quite frankly, would do differently.
One of the things that I would mention specifically is, as
I think you all know, the basic theory underlying the Clean Air
Act is that EPA sets these national ambient air quality
standards, and then States have the primary responsibility and
the discretion to figure out the best way of coming into
attainment with those standards.
One of the things that we now know, and especially as we
look at the problem of ozone and fine particles, is that
oftentimes high levels of those particles don't come from
sources nearby, but can actually travel hundreds of miles from
several States away. The current mechanism that we have to deal
with that is something called Section 126 that is actually sort
of a cumbersome process whereby one State petitions EPA to
regulate a source in another State.
This is really what we are trying to accomplish with the
President's Clear Skies initiative. Rather than having this
cumbersome petitioning process which can take years and years
and years by the time you include the litigation, we would very
much like to convince you all and your colleagues in the Senate
that we can accomplish a great deal more a great deal faster
and at less cost using a cap and trade program.
So I know that there are some people who are reluctant to
fix something that has worked so well, but we do believe that
there are ways that the Clean Air Act can be improved.
Mr. Boucher. So Section 126 would be among the
recommendations that you will make to the Congress. When the
President announced his Clear Skies initiative, he said that it
was designed to replace existing clean air programs. Did he
mean that literally? Are you preparing comprehensive
legislative recommendations that will replace existing clean
air laws and, if so, can you at this point give us a summary of
what specific programs you would propose to replace beyond
Section 126?
Mr. Holmstead. Our goal all along in the Environmental
Protection Agency has been to create the most efficient and
most effective program that we can to achieve the environmental
benefits. Part of that, in our view, means replacing programs
that are really no longer necessary in light of the stringent
caps that we have on the utility sector.
Right now, depending on how you count them up, there are
between sort of 8 and 12 different regulatory programs that
will have an impact on the power sector over the next 15 years.
We believe that some of those are completely redundant and
actually could be counterproductive.
Let me just be clear that we are not talking about
replacing 126. That is an important tool that States have used
to identify upwind sources. Now we are looking at how that
might work in the context of Clear Skies and whether there
would be some unique role that 126 would play in dealing with
power plants, but it would still remain in place for every
other type of source, and probably in some respects for power
plants as well.
So I don't want to leave you with the impression that we
are talking about eliminating Section 126, because I think that
would be a mistake. We do believe that the NSR program would
actually be counterproductive with this sort of a cap and trade
system, and I know that there is a lot of controversy about
that. I would be happy to talk more about it.
I honestly can't figure out why, because right now the NSR
program gets us no additional reductions of SO<INF>2</INF>. It
may get us some modest reductions in NO<INF>X</INF> emissions,
but nothing compared to what we would get under the President's
proposal. Having that sort of a program that just adds delay to
the way that facilities would achieve these new caps, we think,
would be a mistake.
There is another rule that is coming up that we refer to as
the BART rule. It stands for best available retrofit
technology. That would really be entirely redundant in light of
the caps that the President has proposed. We are looking at
other things, and we hope within the next few weeks to work
with members of both sides of the aisle, both in the House and
in the Senate, to develop a more detailed legislative package
that deals with the interaction of Clear Skies.
Mr. Boucher. Mr. Holmstead, let me just ask you one
additional question, with your indulgence, Mr. Chairman. Do you
have a schedule for bringing up to Capitol Hill legislative
recommendations?
Mr. Holmstead. At this point, we do not.
Mr. Boucher. You do not? All right. Thank you, Mr. Chairman
Mr. Barton. I thank the gentleman from Virginia. We would
recognize the gentleman from Illinois for 5 minutes for
questions.
Mr. Shimkus. Thank you, Mr. Chairman. I work as an Army
Reservist to help train some future generals to deal with
Members of Congress in this type of setting, and it is a lot of
fun. What we kind of warn them about is be prepared for any
question, even though you might be here to discuss a certain
subject. So here is your chance to excel.
Mr. Holmstead. I appreciate the warning.
Mr. Shimkus. That is right. My concern deals with a lot of
issues that have brought up to me in my Congressional district,
and it deals with methyl bromide, which is a fumigant used to
control insects in weeds, pathogens in more than 100 crops and
forests. Of course, on January 1, 2003, the amount of methyl
bromide will be reduced by 70 percent.
Can you assure current users of the product that by January
1 effective and commercially viable alternatives will be
available to substitute for 70 percent of the use?
Mr. Holmstead. I think this is a good example of the sort
of thing that this committee has done in the past to actually
amend the Clean Air Act. Originally, when the Clean Air Act was
passed in 1990, methyl bromide would have been completely
phased out, 100 percent phased out by the year 2001.
Back in 1998 this committee, led by this committee
actually, that schedule was pushed back to be consistent with
the Montreal Protocol. So that was, I think, an important
change so that we wouldn't be disadvantaging our farmers
compared to farmers around the world.
The way that statute worked that amended the Clean Air Act
in 1998, there are actually three steps in the phasedown. So I
don't think it is quite right to look at this as a 70 percent
reduction in 2003. There was already a 25 percent reduction,
then a 50 percent reduction which I think went into place last
year or the year before, and then we go from 50 percent to 70
percent. So it is that additional increment.
We are certainly working very hard with our colleagues at
EPA who deal with agricultural issues, and also our colleagues
at the USDA who look at all these issues. My sense right now is
that, given the kind of creativity and innovation that we have
seen in the agricultural sector, that when this next phase goes
into place that there will be sufficient quantities of other
alternatives to allow farmers to continue to have the kind of
crop protection tools that they need.
I can't say that it is going to be painless, but we have
worked as hard as we can with our colleagues at EPA to get
other things approved. We have worked with our colleagues at
Agriculture, and I think at this point that we believe that
that will be achievable, given the kinds of things that we are
seeing that are coming on the market right now.
Mr. Shimkus. Well, I would follow up then, and ask for you
to work closely with the USDA, who has spent over $100 million
for research alternatives, and I am not sure they are as
optimistic as you might be of the ability to replace this. If
you can do that, if we are getting contradictory signals, then
that would be helpful for me to know. But I think there is a
big concern out there, because there has been reduction, but
the next phase could be at such great cost that it will be
economically unfeasible and cause great harm in central and
southern Illinois, for sure, and anyone. It is not just our
commodity products but also in the storage of grains. It is a
critically important ingredient.
So I just throw that out. If you work with me on that, it
would be helpful.
Mr. Holmstead. I would be delighted to do that, and we can
make sure that our staff is in contact with someone that you
would designate.
Mr. Shimkus. And I think from your opening testimony, from
what I hear, and now going back to the issue at hand, that this
cap and trade issue is something that is receiving great
optimism in the future.
Can you just briefly talk about the whole issue of ``hot
spots'' and how the cap and trade issue deals with the whole
debate on ``hot spots''?
Mr. Holmstead. Back in 1990 there was a fair amount of
concern about that issue, because trading would be allowed--
Some were concerned that we would create ``hot spots.'' Let me
just say two important things that I think everyone needs to be
aware of.
First of all, everyone would still be required to meet the
Federal standards for clean air. So the NAAQ standards remain
in place, and under any sort of a trading program every area of
the country is required to meet those. It is not as though this
trading program can overrule that. So essentially, people are
guaranteed that the existing mechanisms of the Clean Air Act
will protect against that.
In addition, what we can say--Again, this is one of these
areas where I have been a little bit annoyed. There was a
report that came out from one of the environmental groups that
picked out a couple of areas where they said emissions had
increased between 1995 and 2000.
Well, again, you can prove almost anything if you
manipulate the baseline years. Given that the acid rain trading
program actually started in 1990, if you look from 1990 to
today, everywhere in the country has cleaned up. There is no
part of the country that has air that is--Well, let me say that
in a slightly different way. There is nowhere in the country
where utility emissions are higher as a result of the cap and
trade program.
So it is true that some facilities may reduce more than
others, but facilities across the board reduce every where, and
especially when we are talking about the kinds of reductions
that the President has proposed. More than 70 percent, or
basically 70 percent of all three pollutants, there is simply
no possible way for there to be ``hot spots'' that would cause
levels of concern.
Mr. Barton. The gentleman's time has expired. The gentleman
from Michigan.
Mr. Dingell. Mr. Chairman, thank you. Mr. Holmstead,
welcome to the committee. I note that Administrator Whitman has
reaffirmed EPA's commitment to lower the level of sulfur diesel
fuel to 15 parts per million by mid-2006 as a part of the heavy
duty diesel engine rule. Removing sulfur from diesel fuel will
have substantial benefits to air quality, including reductions
in particulate matter, oxides and nitrogen, and SO<INF>2</INF>,
some of this on the order of 90 to 95 percent.
Clean burning diesel technology is accepted widely in
Europe. Forty-eight percent of the passenger vehicles sold
there last year, including 75 percent of luxury vehicles, will
have clean burning diesel engines that are made possible by
removal of sulfur from fuel. The fuel economy of these vehicles
is phenomenal.
Audi's A2 gets 78 miles per gallon. This is in a full size
vehicle. In Europe, the sulfur standards range from zero parts
per million in Sweden to 10 parts per million in the rest of
Europe. By 2010 diesel fuel must be sulfur free throughout
Europe.
Now is there any technical reason why EPA did not set the
standard to be consistent with the European standard, thereby
allowing widespread introduction of clean burning diesel and
clean burning diesel engines of extraordinary fuel efficiency?
Is there a technical reason why they didn't?
Mr. Holmstead. The issue, I think, that you are raising is
why the difference between our standard, which is 15 parts per
million----
Mr. Dingell. No. The question, sir--I have a special reason
for wanting the answer to the question in the particular form
in which I gave it to you. I will repeat. Is there any
technical reason why EPA did not set the standard to be
consistent with the European standard, thereby allowing
widespread introduction of clean burning diesel and clean
burning diesel engines? Yes or no?
Mr. Holmstead. I think there may be a technical reason, and
I would be happy to----
Mr. Dingell. Are you aware of it now?
Mr. Holmstead. Here is what I think the issue is.
Mr. Dingell. Is there any technical reason why we couldn't
do it?
Mr. Holmstead. I think there is, yes. I believe it has to
do with the way fuel is transported. In our country, given how
much we use pipelines to transport the fuel, even if you
eliminate sulfur entirely at the refinery, by the time it
actually gets to the place where you put it in the cars, it
tends to pick up--We are talking about parts per million levels
here, and my understanding is that actually, given the kinds
of--and again very small amounts of sulfur that can be
introduced in the transportation system. That is the issue.
Mr. Dingell. Sir, Europe has the same transportation
problems we do, do they not?
Mr. Holmstead. I am not sure of that, but I do want to
assure you of this, that we believe, and all of our technical
people strongly believe, that with 15 ppm diesel fuel that that
will facilitate the widespread use of clean, very fuel
efficient cars in this country. So we don't expect that the
small--Remember that right now much of the fuel is 5,000 or
3,000 ppm. So by going from that, from the 5,000 or 3,000 or
even 500 ppm down to 15, we will facilitate the use of that.
Mr. Dingell. You just said something there, and you said
that the levels that you have fixed it at are going to permit
us to go to clean burning diesels and clean burning fuel. I
want you to make that as a flat statement, not as a statement
in which you say ``I think'' and ``maybe,'' because I want this
record to reflect what EPA did, and I want you to give us a
good, hard answer and not a toad answer.
Now is this going to facilitate the use of clean burning
diesel engines like the A2, or is it not?
Mr. Holmstead. Yes, it will.
Mr. Dingell. It will?
Mr. Holmstead. Yes.
Mr. Dingell. And what will be the fuel efficiency of those
engines?
Mr. Holmstead. That will depend on many things. I honestly
don't know, but we do know that on average you will get better
fuel efficiency from diesel engines.
Mr. Dingell. Let me ask you this question. The standard is
an average. So if one refiner or one refiner run is at zero and
another refiner run is at 30, you are going to have somebody
getting runs which are going to be high in sulfur. This high
level of sulfur in the fuel is going to create significant
problems in terms of the operation of the catalyst, and the end
result is the catalysts are going to get skunked up, as they do
with lead.
The end result is you are going to have a lot of unworkable
catalysts. EPA is not going to allow the shift to an A2 or
something like that, simply because the fuel does not clear the
catalyst in proper fashion, reacts in a way inside the catalyst
that makes the catalyst not work. Isn't that so?
Mr. Holmstead. I don't think we--It is certainly true that
excessive sulfur levels can clog what is referred to as the
catalyst. We don't believe that that will happen with the fuel
standards that we have set, and I would be happy to provide
much more detailed technical information, but we have----
Mr. Dingell. I am going to send you a letter so that you
can give us a much more definitive response to these matters,
because I know you----
Mr. Holmstead. I have seen some of your letters before. We
will look forward to the opportunity.
Mr. Dingell. I know you want that assistance, and I know
you want to give us an answer which is helpful to the concerns
which I have expressed today. For that reason, Mr. Chairman,
noting my time is getting close to expiration, I would ask
unanimous consent that the record be kept open both for the
letter, which I will send to you, dear sir, and also to the
Department of Energy, asking certain questions.
Of course, I know you are going to make all effort to get
that letter response back so that our chairman will not be
distressed about the fact that you have----
Mr. Barton. You know, I would not want to be distressed,
and I am distressed when Mr. Dingell is distressed. So we want
to keep us both undistressed. I think that is fair to say.
The gentleman's time has expired, and we will have a second
round of questions for this witness if the panel wants to. I
want the members to know that.
The Chair would recognize the gentleman from Kentucky for 5
minutes for questions.
Mr. Whitfield. Thanks, Mr. chairman.
Mr. Barton. Will the gentleman suspend? The gentleman from
Michigan had a unanimous consent request. Would the gentleman
from Michigan--Could we have the gentleman from Michigan's
attention, please? Would you restate your unanimous consent
request? I know you asked.
Mr. Dingell. I asked to have the record kept open so that
the letter could be in this record, if you please.
Mr. Barton. Hearing no objection, so ordered.
Mr. Dingell. Thank you for your kindness, Mr. Chairman.
Mr. Barton. The gentleman from Kentucky is now recognized
for 5 minutes for questions.
Mr. Whitfield. Mr. Holmstead, the 1990 amendments relating
to Title III included a list of 189 substances to be regulated
by the Environmental Protection Agency. I was reading Dean
Goldstein's testimony, and he was talking about how the fact
that we have gone to this precautionary principle in changing
the burden of proof basically on listing an item, that that
presented real problems in determining the impact on health. He
specifically stated, ``Simply put, you cannot know what harm
has been averted if you regulate pollutants without sufficient
degree of what their harm is.''
Would you comment on the concern about this precautionary
principle?
Mr. Holmstead. I think Mr. Goldstein actually raises a
legitimate concern that we have also been looking at. The
theory behind Title III was that we would--It is a technology
based program. So that what we would do is look at the
technology that is currently being used in an industry sector.
There is sort of a complex formula for doing that, but then
making sure that that same technology is used in the rest of
the sector.
So the theory is this was just a program to make sure that
we are sort of leveling the playing field by requiring good
technology across the whole sector. One of the things that I
think we have learned over the last 10 years or 12 years is
that, because we are regulating individual compounds and so you
are only subject to regulation if you use or emit one of those
188, in at least some cases what that has encouraged companies
to do is to simply switch from a listed compound to an unlisted
compound.
We know relatively little about the relative toxicity of
those different things. So I think it is something of a
concern. On the whole, I think we are confident that, viewed as
a whole, the program has been successful in reducing hazardous
air pollution and reducing risk. Because it is not a risk based
program, we know relatively little about exactly what those
risks have been, and that is one of the things that we are
struggling with right now.
I will tell you that we are nearing the end of this
program. We are almost through with the Title III program and
are entering a phase now that we refer to as the residual risk
phase where we actually do look specifically at the risks.
Technically and scientifically, it is much more challenging,
but I think it is a more effective way than the technology
based standards have been, although I think, viewed as a whole,
they have been quite successful, but I think there are some
legitimate concerns that all of us have about those.
Mr. Whitfield. And the EPA cannot remove a compound from
the list unless there is proof that there is no harm. Is that
correct?
Mr. Holmstead. That is correct, yes.
Mr. Whitfield. Now methyl bromide, that is on the list. Is
that correct? That is one of the 189?
Mr. Holmstead. I believe that it is.
Mr. Whitfield. Now it is my understanding that on January
1, 2003, the amount of methyl bromide will be reduced by 70
percent. Can you ensure current users of the product that by
January 1, effective and commercial viable alternatives will be
available to substitute for that 70 percent?
Mr. Holmstead. Let me come back before I answer and just
correct something I just said. My staff reminded me that methyl
bromide is not actually one of the 188 substances listed under
Title III.
Mr. Shimkus [presiding]. If the gentleman would suspend, we
are looking through the legislation right now, and I think we
have methyl bromide. For the record, it is on the list, 74839.
Mr. Holmstead. Okay. So methyl bromide is on the list of
HAPs.
Mr. Shimkus. Right. So I just wanted to interject.
Mr. Holmstead. Let me amend my amendment. I think the real
issue you are getting at, as I understand your question, really
doesn't deal with the fact that it is listed as a hazardous air
pollutant. That only applies to major stationary sources. I
think the big concern that the agricultural community has had,
and they are not regulated under Title III, is under Title VI.
Methyl bromide is also listed as an ozone depleting substance
and, therefore, under the Montreal Protocol.
As I mentioned just a few minutes ago, Congress actually
went back in 1998 and made our regulatory structure here less
stringent to give U.S. businesses more time to phaseout of
methyl bromide. So under the original Act, methyl bromide would
have been phased out 100 percent with no exceptions by 2001. In
1998 Congress actually adjusted that and adopted the same
phaseout schedule that is required under the Montreal Protocol.
Now that Protocol, I think, required an initial reduction
of 25 percent, then 50 percent, then, as you say, 70 percent.
Mr. Whitfield. But I notice that developing nations have
until about the year 2015. Now the Department of Agriculture
has spent $100 million trying to come up with alternatives for
methyl bromide, and I know that all have Fast Track
registration process for any alternative. Are you aware of any
alternatives that they are seeking to register as a substitute
at this time?
Mr. Holmstead. Yes, actually. There are several. At this
point there is no single alternative that can substitute for
methyl bromide in all applications. Methyl bromide has been a
very effective and useful product, but there have been a number
of--In fact, right now moving through the process there are
alternatives that will really, I think, take the place of
methyl bromide in all of the major applications that I am aware
of.
Now this is something that we are looking at very closely,
and we will be happy to work with you more on it, but it is a
significant issue.
Mr. Whitfield. Mr. Chairman, I have some additional
questions that I would just submit, and would appreciate if you
all could get back with me.
Mr. Shimkus. There has already been a unanimous consent
request open, and they will comply, and I would--The extra time
was because of the brilliance of his last question. I wanted to
make sure that he had full opportunity to respond. I will now
turn to my colleague from California, Mr. Waxman, for 5
minutes.
Mr. Waxman. Thank you very much, Mr. Chairman. Mr.
Holmstead, the Bush Administration has increasingly been
criticized for withholding important information from the
Congress and the public, and I want to say that I was pleased
that Chairman Barton raised this issue with you with regard to
the Environmental Protection Agency, because it seems like your
office appears to be participating in these efforts to keep
Congress and the public in the dark.
Last September I requested certain data that EPA had in its
possession. That was over 7 months ago. I renewed that request
on March 7, almost 2 months ago, and most recently on April 18,
I and 17 colleagues on the Government Reform Committee had to
invoke our rights under the 7 member rule to seek this
information. Yet today EPA has neither produced the data,
indicated when the agency will provide it, nor provided any
reason for the delay, and that is completely unacceptable.
What, of course, we are asking for is technical data, not
State secrets, and all we are seeking is data that EPA has
modeled on the air quality effects and costs of requiring power
plants to meet various levels and timing of pollution limits.
This is data that is essential to us to evaluate the proposal
that may be presented to us from the President on clean air,
and I am pleased you said to Chairman Barton that you are going
to finally release the data generated by EPA.
Can you tell me today that EPA will fully comply with my
April 18 information request?
Mr. Holmstead. As I mentioned in response to the chairman,
we are turning over all of the air quality modeling which--I
don't have your request in front of me, but we are turning over
all of the air quality modeling data that we have developed
over the last number of months that is really relevant to the
issue of controlling emissions in the power sector.
Along with that, we are giving you the underlying, what we
call the IPM model runs, which are really the--It is a linear
programming model that we use to look at the effects of
different policies on power generators. So you will have all of
that data, and we will begin to provide that with you by the
end of the week. We should be able to collate it and get it all
to you, and I must warn you, it's quite extensive.
Mr. Waxman. Well, I accept the warning, and also I want to
advise you that we sent in several requests to you for
information, and we would want our requests complied with. It
is our way to be able to know the real facts about the
President's air pollution proposal, and some of these facts
have apparently been obtained by the New York Times. So
technical data ought to be available to the Members of the
Congress. So I hope you will look at that April 18 letter and
fully comply with it.
Under the Clinton Administration, EPA sued nine power
companies for violating the Clean Air Act by expanding their
facilities and increasing emissions, but failing to install
pollution controls. Those nine companies are responsible for
about a quarter of the total emissions of NO<INF>X</INF> and
SO<INF>2</INF> from the power sector, and according to a recent
report, these emissions contribute to roughly 5,000 to 10,000
premature deaths per year. They also cause other harm to health
and the environment.
Some people estimate that pursuing just the pending
enforcement actions could reduce emissions of NO<INF>X</INF>
and SO<INF>2</INF> by roughly 5 million tons per year. Power
companies are refusing to settle these lawsuits, because they
figure EPA will change the rules to let them off the hook
directly or to weaken the government's case.
In your former job, you represented industry fighting EPA
on air regulations. So you know that even a proposed rule can
be used in litigation to support industry's interpretation of
the law. Will you commit to complete the enforcement cases
before proposing any changes to the NSR rules?
Mr. Holmstead. First of all, just to clarify a
misperception that you may have left with some people, I never
represented anyone in the power industry, and certainly not
anyone who was the subject of any of these enforcement actions,
just lest anyone have that misperception. I also want to assure
you, as I know Government Whitman has, as well as Attorney
General Ashcroft, that we are pursuing all of those enforcement
cases.
As a legal matter, as you know, nothing that we could do in
terms of administrative reforms to the NSR program would have
any impact on those cases as a legal matter, because----
Mr. Waxman. Let me ask you this, because I see my yellow
light, and the time is going to be finished: The Attorney
Generals is concerned EPA is undermining these cases, but the
real concern a lot of us have is whether there is going to be a
change in any regulation without the opportunity for public
comment. Will you be able to assure us that before finalizing
any rule change, you will comply with the request that you
allow public comment?
Mr. Holmstead. We will certainly satisfy all of our
obligations under the Administrative Procedures Act to have
full public participation for all of the things that we are
considering, and again I must point out that most of the things
that we are considering as possible administrative changes are
things that were proposed by the Clinton Administration back in
1996.
Mr. Waxman. Will you accept public comment on your specific
proposal before it is finalized?
Mr. Holmstead. Where we need to do that under the
Administrative Procedures Act, yes, we will.
Mr. Waxman. How about where you need to do it for public
participation and good government and to make a better
regulation by hearing what the other side, other views, might
tell you?
Mr. Holmstead. Again just to be completely clear here,
there are a few proposals that we are considering that were
proposed in 1996 by the Clinton Administration. They were the
subject of extensive public comment, including a number of
public hearings. Since I have been at EPA, we have had numerous
public meetings about those very same issues, those very same
proposals.
Where there has already been a comprehensive public
process, including literally thousands of public comments, at
this point our current intention is to go ahead and finalize
some of those reforms. Now none of those reforms, just so you
know, really have any relevance to the power sector. They tend
to be things that I know your staff is aware of, things like
the plantwide applicability limit, some ideas for reforms that
have been around for many, many years.
The issues that seem to be of greatest concern to people
are things that we are planning to go through a new public
notice and comment process on. So we anticipate at this point
proposing a series of possible changes and taking full public
comment on those.
Mr. Waxman. Thank you very much.
Mr. Barton. The gentleman's time has expired. I think the
gentleman from Ohio is actually next, Mr. Hall. I think it is
Mr. Sawyer's turn, but if he wants to yield to you, I would be
happy to let him yield to you.
Mr. Sawyer. Thank you, Mr. Chairman. Just out of curiosity,
the 90 day review on New Source Review has been going on for 9
months. Can you give us a sense of when we are likely to see
the results of that work?
Mr. Holmstead. I hope it will be fairly soon.
Mr. Sawyer. I suspect we will keep asking those questions
as these hearings go on.
Can I ask you what we can expect? Will it include a
clarification of what we mean by routine maintenance or will it
simply remove the program altogether?
Mr. Holmstead. Well, we have no ability administratively to
remove the program. One of the things that we are looking at,
and one of the things that many, many people have asked us to
do, is to provide a more clearcut definition of routine
maintenance, repair, and replacement. That is one of the
reforms that at this point we are planning on doing.
Mr. Sawyer. Regulatory certainty would be of enormous
value.
Mr. Holmstead. Yes, I think that is a fair point, and that
is one of the things that we are planning to do.
Mr. Sawyer. Let me ask you another question. Under the 1990
amendments, how did the EPA select the total number of sulfur
dioxide emission allowances to distribute, and were the
allowances distributed equally among power plants? How did the
power plants obtain them, and how much trading actually took
place? A series of questions to let you talk about the whole
trading program.
Mr. Holmstead. The issue of allowances was debated
extensively, both in the House and in the Senate. In the end,
as I recall, Congress actually assigned allowances in the
legislation. I believe that the Title IV of the Clean Air Act
actually lists all of the then existing plants along with the
allowances that they were entitled to under that.
Mr. Sawyer. I couldn't remember.
Mr. Holmstead. Yes. I believe that is the case. One of the
big issues always tends to be, if you allocate based on
emissions, then you penalize people who are already cleaner. So
the way that I think we have dealt with that in other
circumstances is to do it based on heat input, which is sort of
a fairer way of doing it.
What I can tell you is, yes, a fair amount of trading has
gone on. As I mentioned before, the program has been just sort
of amazing for people, because there was this theory back in
1990. A lot of people were very concerned about it, but in
fact, the supporters, including Joe Goffman from Environmental
Defense, were correct, that when you actually give them an
economic reward for overcomplying, a lot of people figured out
how to do that and generated excess allowances that they could
sell to other people who were not able to be as efficient in
reducing those.
I actually would guess that Mr. Goffman can perhaps tell
you more about the number of trades that were made, but a full
market has actually been developed. You can go on the Chicago
Board of Trade and actually purchase SO<INF>2</INF> allowances,
if you would like to, and some people have done that.
Mr. Sawyer. Did Enron do that? No. Thank you very much, Mr.
Chairman. I yield back.
Mr. Barton. Probably Enron did, actually, yes. Mr. Markey
is recognized for 5 minutes for questions.
Mr. Markey. Thank you, Mr. Chairman, very much. The first
question: Have you submitted yet, Mr. Holmstead, legislative
language for your Clear Skies proposal?
Mr. Holmstead. No, we have not.
Mr. Markey. You have not. Have the States endorsed Clear
Skies?
Mr. Holmstead. I am not sure that, in terms of--Oh, I am
sorry. There are some. The Western Governors Association has
endorsed Clear Skies. I believe that I saw something from the
Southern Governors who have issued a statement saying that they
endorse a national cap and trade program at least as stringent
as Clear Skies.
Mr. Markey. Has the Sierra Club or the League of
Conservation Voters or Natural Resource Defense Council--have
they endorsed the plan?
Mr. Holmstead. Not that I am aware of. I do know that the
Adirondack Council, which is primarily concerned with the acid
rain issue, has endorsed the program, because they understand--
--
Mr. Markey. Which group is that?
Mr. Holmstead. The Adirondack Council. This is the group
that has been concerned primarily about acid rain deposition in
New England, and they have endorsed it because it actually goes
beyond legislation that Senator Moynihan introduced for a
number years, actually gets substantially greater reductions
than that bill. I think they now understand that this would
really solve the acid rain problem in the northeastern United
States.
Mr. Markey. Has any utility group endorsed it?
Mr. Holmstead. I am not sure. Not that I am aware of.
Mr. Markey. So the Edison Electric Institute has yet to
endorse it?
Mr. Holmstead. I have seen statements saying that they are
generally supportive of the idea of a multi-pollutant approach.
I think they are also interested in seeing some of the
additional details, in particular how allowances would be
distributed.
Mr. Markey. Well, my problem with the whole debate is that
there is no bill to read. There is no language to endorse.
There is no basis for us to have a discussion. I think that I
heard you say earlier to Mr. Boucher in answer to his question
that you think there are 8 to 12 regulatory proposals affecting
the utility industry that you considered to be
counterproductive or redundant and that, while you aren't going
to propose repealing Section 126 of the Act, you did seem to
suggest that you wanted to rewrite it, at least as it applies
to utility power plants.
Have you given us that language yet?
Mr. Holmstead. No, and let me just clarify. I didn't say
that we had identified 8 to 12 programs that would be
counterproductive and that would be replaced. I said I believe
there are 8 to 12 programs that would affect this sector over
the next 12 years or so. There are some of those that we do
think would be counterproductive, and I mentioned two of those
that we have identified.
Mr. Markey. Which are those?
Mr. Holmstead. It is the so called NSR program and the BART
program. So those are two things from the very beginning we
have said that we would replace by the President's bill.
Mr. Markey. You think the NSR program, the New Source of
respiratory illness program, is too stringent in protecting
against new respiratory?
Mr. Holmstead. No, no. It has nothing to do with whether
they are stringent or not. It just doesn't work very well. If
you look at the utility sector, there were emissions--The New
Source Review program has been in place since 1977. Emissions
from that sector continued to grow all the way through 1990. In
1990 emissions were over 18 million tons a year of
SO<INF>2</INF>, and those have now been cut almost--well, not
quite in half, but all of those reductions are because of the
cap and trade program. It has nothing to do with New Source
Review.
So we just believe that NSR is a program that hasn't worked
very well, and a much better way to get those reductions is
through a cap program similar to what we have achieved under
Title IV.
Mr. Markey. Well, let me understand this. In 1999 the
Clinton EPA filed lawsuits against the electric utilities in
violation of the New Source Review.
Mr. Holmstead. Right.
Mr. Markey. Now many of the utilities were faced with being
fined and forced to reduce emissions. The Bush Administration
responds to utility complaints by asking the Justice Department
to review the legality of the Clinton lawsuits.
Now when the Bush Department of Justice concludes that the
Clinton lawsuits against these polluting utilities is legal
under the Clean Air Act, then the Bush Administration announces
plans to amend the Clean Air Act. So it seems to me that the
Clinton Administration had put in place a tough program to
reduce the new sources of respiratory illnesses in the country,
these things that the American Lung Association and other
health associations are very concerned about, and then as the
utilities continue to drag their feet, hoping for relief, the
Bush Administration gets elected. They find out that what
Clinton was doing was legal in reducing the amount of
pollutants. So then they say we are going to amend the Clean
Air Act to take care of what the utilities want.
I think the problem is that the reason I can't read your
recommendations and be educated as to what you are going to
propose is that the utility industry wrote them, and that is
why the Edison----
Mr. Holmstead. Mr. Markey, just to assure you that that----
Mr. Markey. Let me just finish my point. The Edison
Electric Institute wrote the provisions, and we can't read them
here on this body, even as you testify, because we are not
going to be given access until all of the pieces are put in
place that you can roll back the protections that were put in
place in order to protect those 25 million Americans with
asthma.
Mr. Barton. The gentleman's time has expired. The Chair
wants to let all members know, the purpose of this hearing is
to look at what has actually happened or not happened in the
Clean Air Act. Now, obviously, all members, as we all do, are
free to ask questions about anything, and that is appropriate,
but we are hoping to focus before we look into future
legislation initiatives what has happened in the Clean Air Act
amendments that we passed in 1990.
I would point out that the purpose of this hearing is not
to review a Clear Skies initiative legislative proposal, which
has yet to be developed. So when it is developed, we will hold
a hearing on it, and perhaps at some point in time even go to
markup on that legislation or something similar to it.
Mr. Markey. Well, I appreciate that, Mr. Chairman, but I
think understanding the history of how we got to the point--
that is, what the Clinton Administration was trying to do--
helps us to understand why they are about to redraft the Clean
Air Act.
Mr. Holmstead. Nothing that we are doing under----
Mr. Barton. Again, the purpose of this hearing is simply to
look at what has worked and perhaps what hasn't worked under
the Clean Air Act as it is currently enacted. There will be
lots of opportunity, and the gentleman from Massachusetts will
be welcomed at hearings when we begin to be prospective, and he
knows that. He is a veteran of this committee and a smart guy,
and very knowledgeable on these subjects.
The Chair would recognize Mr. Hall for 5 minutes for
questions.
Mr. Hall. Mr. Chairman, thank you. My questions would be
basically on the effect of some of the things that have not
worked, and maybe to inquire as to how they could be corrected.
Mr. Shimkus hit on methyl bromide. That is of great import
to me for a lot of reasons, but for one reason, Marshall
Milling Company is in my district, is in Denton, Texas, and
they are affected by it. You gave some answers a few moments
ago that I think you alluded to the use of methyl bromide, as
to whether or not that was on the list, and then upon reading
to you that you were right in the first place, it was on the
list. You were thinking about the impact on the recovery of
ozone layer, and they are two different things.
Now what I want to ask you about is the impact on people
like Marshall Milling that have to store and process foods, and
they need methyl bromide to treat pests that could infect the
stored food. Now that is a goal that none of us can oppose, but
since the Act--and in 1998 actually, the Congress amended the
Clean Air Act to move the U.S. phaseout date from 2001 to 2005.
I think I am correct on that, and that is the phaseout date for
developing nations. It was at that time. However, at the same
time Congress included language, it made it clear that such
uses would be available.
I didn't really understand why the agency would go on to
the next meeting of the Montreal Protocol and negotiate
narrower language that attempted--it seems to me, that would
negate the Congressional statute. That is one thing that I am
concerned about.
My question is why did your agency agree to allow so called
developing nations that compete with us for the business, for
the sales and with our economy, to use methyl bromide until
2015, and yet you are going to phase these people out?
My last question is: They need a little more time to
phaseout. Even 2 years would help them. I don't see any real
opposition to that. Is that possible?
Mr. Holmstead. Let me try to answer all those questions. I
think that you raise some very legitimate issues. Just to
clarify, I think it is important for everyone to understand
that after what Congress did in 1998 which established this
phaseout schedule, the schedule in the United States is the
same as the schedule for all of the other countries in the
developed world.
So we are bound not only by the Clean Air Act but by the
Montreal Protocol. So in order to accomplish what you suggest,
which would be an additional 2 years, we would have to amend
the Clean Air Act, but we would also have to seek an amendment
of the Montreal Protocol or we would be out of compliance with
our international obligations.
So just to put it in context, it is not anything that EPA--
and I am not saying that we support that or don't support that.
Just as a practical matter, it is nothing that EPA can do
administratively. It would have to be both negotiated
internationally with all the other parties and then it would
have to adopted by Congress to give that additional 2 years.
Now we are doing a number of things to address the concerns
that have been raised, and I just want to assure you of that.
One of them, and I am not familiar with the specific company
that you mentioned, but it sounds like they would benefit from
something that we have done fairly recently, which is to have
an exclusion for containment and preshipment, people who are
storing food and grains.
So again, I don't know about that specific----
Mr. Hall. Is that a possibility?
Mr. Holmstead. We would have to find out for that specific
company whether they are covered or not, but that is a
possibility. I think we need to follow up and find out a little
bit more about what specific company this is.
The other thing that we are looking at, and we are spending
a lot of time with USDA right now, is developing a package--We
are allowed to seek what is called a critical use exemption,
and at this point we are working to put together a packet that
will explain to the other members of the international
community the specific circumstances we have here in this
country that make it necessary for us to have some critical use
exemptions to continue to allow us to use methyl bromide for a
longer period of time than they might.
So we are very much involved in that process. We have
regular meetings with USDA as well as members of the
agricultural community. So that is another thing that we are
committed to, and we hope that that, in combination with the
newer alternatives that are being approved right now, that are
in the approval process, will take care of the concerns that I
know a number of people in the agricultural community have
raised.
Mr. Hall. If our competitors are allowed to go to 2015,
surely we can afford two more years, and EPA's Registration
Division has a policy that any methyl bromide alternative might
be ``fast tracked,'' whatever that means. That would be
helpful. But if it would help in treating pests that can infest
stored food and processed food and didn't have any significant
impact on the recovery of the ozone layer as contemplated under
the Clean Air Act, there is not any real reason why you all
couldn't do that, if you can find the authority for it.
Mr. Holmstead. Right.
Mr. Hall. All right. I appreciate that. I yield back my
time. Thank you, Mr. Chairman.
Mr. Barton. The gentleman from North Carolina, Mr. Burr, is
recognized for 5 minutes.
Mr. Burr. Thank you, Mr. Chairman. I feel compelled to
follow up on Mr. Hall's line of questioning for some of it.
Heaven forbid that we tick off the international community
because something is beneficial to our farmers, but I hope you
heard the message that he said.
I would be very curious as to what USDA's suggestions to
you are relative to whether we should seek some type of
critical use provision.
Mr. Holmstead. We are definitely planning to seek----
Mr. Burr. It was their suggestion that we need more time?
Mr. Holmstead. Yes, and the way we can accomplish that is
through the critical use exemption process. Just so you know,
EPA as an agency is just is committed to that as USDA is.
Mr. Burr. I hope that, in fact, what you are saying is, in
fact, correct and that we will see that type of action.
I would be remiss, and I apologize for my tardiness in
getting here late--this may have already been covered, but let
me assure you, if the EPA testifies in front of this
subcommittee or full committee again and brings testimony in at
9 o'clock the night before, this is one member that will vote
that you not have the opportunity to testify.
That message was sent loud and clear to the last
administration. I would hope, with changes in the
administration, we would see changes in agencies, and it is
unfair to every member of this committee. It is unfair to the
American people that it would take you that long to clear your
testimony through whoever needed to clear it. This committee
should have ample opportunity to read your testimony, to ask
you questions that are valid to your testimony, and not have to
spend all night sitting up reading your testimony. Please pass
that message on to the Administrator, if you will.
Mr. Holmstead. I will be happy to.
Mr. Burr. Mr. Holmstead, public opinion shows that people
believe that air is getting dirtier, not cleaner, as EPA's
emission trends report constantly show. Why do you think that
that is the case?
Mr. Holmstead. I had better be careful, lest I be too
provocative, but I think that there may be some groups that
have an interest in creating that misperception, because
otherwise it makes it harder for them to attract support for
their groups. I don't want to mention anybody by name.
Mr. Burr. What challenges does that present to the EPA as
it relates to explaining the gains that you have made?
Mr. Holmstead. Well, we have a number of communications
challenges. I think all of us recognize that we are in a
political environment that is very difficult, and our mission
is to clean up the air and to do it in the most efficient and
cost effective way possible.
We have actually done some things to try to get out the
message that the air is cleaner, is actually much cleaner, and
we are getting many improvements. So from a communications
perspective, it has been a challenge, and that is one of the
reasons we appreciate the chance to be here today and to try to
help set the record straight, that notwithstanding this
misperception, the air is dramatically cleaner than it was 30
years ago, and it will continue to improve over time.
Mr. Burr. Several places in your testimony, you reference
to stakeholder involvement and public-private partnerships such
as the EnergyStar program and Commuter Choice program. Do you
believe that the agency's experiences in these areas justify
continued such efforts in the future?
Mr. Holmstead. Absolutely. One of the things that has been
surprising and gratifying to me in the year that I have been at
the Agency is to see the kinds of environmental benefits that
we get from these sorts of nonregulatory programs where we
work--and stakeholder is a word I don't particularly like. It
was coined, I don't know, some years ago--with people who have
a real interest in our issues from the industry sector, from
public groups, community groups.
If you look at something like the EnergyStar program, if
you look at all of the programs we have, for instance, focused
on asthma and improving indoor air in homes and in schools, we
get enormous benefits from those programs, and we do it through
nonregulatory programs. I think in many ways, that is an
opportunity that we are looking to expand, to continue to
achieve those sorts of benefits.
Mr. Burr. North Carolina is within the reach of an
agreement between the State and our generators of electricity
on an agreement that will have a substantial impact on cleaning
the air in our State. Does the EPA have any comment or
observations on this agreement that was reached outside of the
realm of the EPA and the Federal Government?
Mr. Holmstead. We support those sorts of programs, which I
think have been successful not only in North Carolina but in
other areas as well where, through this sort of a stakeholder
process, without legislation or regulation, industry and
governments and community groups have been able to come
together on approaches which will necessarily involve
significant expenditures of money, but people have been willing
to step up to the plate and do that, and we really applaud
those sorts of efforts.
Mr. Burr. Does the EPA envision that State regulators could
potentially play a larger role in the future with flexibility
to bring others to the table at reaching agreements that may
not be necessarily structured by the EPA, but do reach
agreements that clean up the air and clean up the water?
Mr. Holmstead. Absolutely. I think that the culture at EPA
has evolved over a number of years, and I wish I could take
credit for this, but I think it is not new with this
administration. I simply think that over time as the agency has
become aware of the successes of these programs, has developed
more confidence in State regulators and seeing the caliber of
people that we have in many States, as well as the honest
commitment of industry, I think that we have become
increasingly supportive, and we are firmly committed to those
sorts of programs and that sort of flexibility.
Mr. Burr. I thank you for being here. I thank the chair.
Mr. Barton. Thank the gentleman from North Carolina. Would
recognize the gentleman from Pennsylvania for 5 minutes of
questions.
Mr. Doyle. Thank you, Mr. Chairman. Administrator
Holmstead, thank you for your testimony today and for being
here.
I just have one question, because many of my questions have
already been answered. You made it very clear that EPA believes
that this market based cap and trade program such as is
utilized in the acid rain program is going to be, in your
opinion, the most effective way of addressing other pollutants.
Especially in my neck of the woods, in western Pennsylvania, we
have seen how we have involved State and local governments in
the SIPs, the State Implementation Plans, as we were trying to
achieve our emission reductions.
If this cap and trade approach is utilized on a wider
basis, what do you see as the involvement of State and local
governments in the process?
Mr. Holmstead. Well, let me start by saying this, and there
were some maps that we were able to release, I think, last
week. With the President's proposal, most areas of the country
that are out of attainment with either ozone or fine particles
will come into attainment with no further action by State and
local governments.
One of the reasons why we are so supportive of this sort of
a cap and trade system on a national basis is it really gets--
It saves enormous resources at the State and the local level,
because by getting this national and regional reduction in
pollutants, there is no longer a need to go through the SIP
process in many parts of the country.
I don't know specifically about your district. I would be
happy to look at that. But it may be that those sorts of
programs will continue to be effective to look at local
problems, to look at priorities within your community and
within your area, but they will no longer be necessary to
address the Federal standards, because that will be taken care
of by the cap and trade program for utilities.
Mr. Doyle. Thank you. Mr. Chairman, I yield back, in the
interest of time.
Mr. Barton. The gentleman yields back the balance of his
time. The Chair would recognize Mr. Barrett for 5 minutes for
questions.
Mr. Barrett. Thank you, Mr. Chairman, and thank you for
your testimony, Mr. Holmstead. I appreciate it.
May 1 is a big day in Wisconsin, because this is the day
when gasoline terminals all over the State have to transition
from winter to summer reformulated gas. This has been an issue
in Wisconsin the last several years as we have seen
unbelievable gas spikes as a result of this transition.
I am concerned, because I am worried that EPA, although it
certainly has indicated its interest in clean air, does not
seem to be at all sensitive to the issue of price spikes or
price stability that accompany this program. Earlier this year
I wrote a letter to Administrator Whitman back in March
proposing a government-industry partnership to prevent retail
gasoline price spikes in the midwest this summer.
I sent a similar letter to the president of the American
Petroleum Institute and to Energy Secretary Abraham. I was very
pleased to get a prompt response from the president of the
American Petroleum Institute, but I am disappointed that he is
the only one so far who seems to have any specific interest in
this problem.
As I noted to Ms. Whitman in my letter to her, the EPA's
recent initiatives on blendstock accounting may well help the
problem, but I don't think that these measures alone are enough
to have a quiet summer in Wisconsin as it pertains to this
issue.
I would like you to respond to my concern and to relay my
concerns to the Administrator, because simply saying, well,
price is not our issue leaves the people in the State of
Wisconsin befuddled and leaves them at a loss as to what to do.
I understand what the EPA's role is, but I can't fathom a
situation where, if prices go to $2, $3, $3.50 a gallon, that
there is no concern there from the EPA.
Mr. Holmstead. If I can just tell you the extent to which
we are concerned about this issue, I get every day an update on
wholesale and retail prices of reformulated gasoline, and there
are a number of people who watch this very carefully, because
we are extremely concerned about the price spikes that we have
seen over the last couple of years during this transition
period.
We engaged in a very comprehensive process. We met with
State officials. We also met numerous times with folks in the
industry to try to figure out if there was a better way for us
to have our regulatory program that meets the requirements of
the Clean Air Act, but also makes this transition program work
better.
We have adopted three reforms. We had proposed a fourth
reform, and then were convinced by the industry that it could
actually make things worse. It was not only the blendstock
accounting rules that you mentioned. We have granted additional
discretion in what we call the first tank turnover to alleviate
and to make that whole transition from winter to summer go more
quickly.
I am sorry that you haven't received a response yet. I will
check into that, but I can assure you that this is something
that we take very seriously, because we don't like the
perception or the misperception that our program is creating a
hardship on drivers in the midwest. That is not what we are
about. We have done everything we can to try to improve that,
and we are happy to sit down again and think more creatively
with State officials and with industry officials to see if
there is a better way for this program to work.
Mr. Barrett. If you could tell me the extent to which you
have worked with industry. I just want the prices not to go
through the ceiling. That is perception or misperception. I
just remember coming out of a stall in a men's room and having
a constituent waiting for me, because gas prices were so high
in the midwest and in Wisconsin, in particular.
To me, I need to know specifically what you are doing with
industry. I saw the testimony of the president of Marathon--I
think it was Marathon--yesterday before the Senate committee,
saying that there was no withholding of supply. I can't accept
the notion that, well, that is not our bailiwick. So I need to
know what you are doing to make sure that the supply is
adequate. The issue is adequate supply.
Mr. Holmstead. I want to be careful how I say this, because
I want to make sure that I am saying it precisely. We have
looked at this issue every year since before I got there. The
first thing that almost was on my plate when I arrived last
April was this very issue.
In our conversations with many of the industry groups, what
they tell us is that there are many other explanations for
these price spikes, and I can't go through them all. I am not a
refinery expert or a supply expert. They think that actually
very little, if any, of these price spikes have to do with EPA
regulations.
Now everyone likes to point their finger at us, and we have
tried to look at everything we can. I can tell you, we have had
numerous meetings with not only the trade associations, API and
NPRA, but we have also met with a number of the refineries that
supply those areas to talk about ways in which we can make our
program work better.
There are many other market forces at work that have little
or nothing to do with EPA, and those we can't control. But what
I can tell you is anything that we can do, we are doing, and
anybody that has any additional ideas, we are happy to sit down
and talk with them about that, because that is a very serious
issue.
Mr. Barton. The gentleman's time has expired.
Mr. Barrett. One second, if I may. Again, my request
specifically is to follow up with the Administrator and ask her
for a response. If you can let us know what you are doing, we
are in the dark. We don't know what you are doing.
Mr. Holmstead. I will make sure that we follow up on that
and get you a response.
Mr. Barrett. Thank you very much.
Mr. Barton. Before we recognize Mr. Radanovich, the Chair
has participated in the last 6 years in at least two, and I
think three, investigations of alleged price gouging, supply
withholdings. In every case, we found out that there are acts
of God and market forces that are predominantly, if not
totally, the cause of the increase in prices.
I mean, the fact is we have got a very tight refinery
situation in this country. World economy is coming back, and if
you get a little bit of discontinuity in the pipeline
somewhere, there is going to be some regional price spikes. I
mean, I don't know in this case, but that is the case--That is
what is happening in every other look-at we have had at these
issues.
Mr. Barrett. Mr. Chairman, if I could respond just for 10
seconds.
Mr. Barton. Sure.
Mr. Barrett. Certainly, acts of God--I am not messing with
the big guy or the big gal, but the refinery issue--There
certainly, I think, is a correlation in the size of the
refineries and the fact that we have fewer and fewer
refineries.
Yes, I understand your comment alleged this or that. The
reality in Wisconsin is people feel they are being gouged, and
it is Republicans. It is Democrats. It is Independents.
Everybody feels they are being gouged. So there is probably a
different perspective in Texas where some of this comes from,
but in Wisconsin----
Mr. Barton. Well, our people feel gouged. There is no
regional gouging implication.
Mr. Barrett. Come to Wisconsin.
Mr. Barton. I mean, they feel just as gouged in Texas. The
fact is, when gasoline goes above $1 or $1.25, everybody----
Mr. Barrett. I am talking $2. I'm talking $2.
Mr. Barton. Well, I would encourage them to vacation in
Texas this summer. You can still get it for $1.26.
Mr. Barrett. That is why there is all those rich people in
Texas and not that many rich people in Wisconsin.
Mr. Barton. The gentleman from California is recognized for
5 minutes.
Mr. Radanovich. Thank you very much, Mr. Chairman. Thank
you. I am going to bring up a subject that certainly has come
up, I understand, and that is methyl bromide. I need to way in.
I come from one of the top agriculture producing counties in
the Nation, Fresno, California. I am dismayed at the agencies--
No. 1, their insincerity. I think, on the 2001 deadline for
providing a suitable replacement when guarantees were made that
suitable replacements would be fast tracked for Federal
approval by the time that methyl bromide was phased out. And by
an appearance of the administration not to move the phaseout
period from 2001 to 2005, as was expressed by Congress.
Especially when, as I understand, during the Montreal Protocols
the negotiators' narrow language did not include the extension
of the phaseout period from 2001 to 2005 in their negotiations,
even when Congress had already spoken to that issue.
What is the intent of the administration? No. 1, are we
going to fast track some reasonable alternatives, those that
are acceptable to the farming community in the United States?
Are we also going to extend that deadline to 2005?
Mr. Holmstead. We already did that.
Mr. Radanovich. You took care of it?
Mr. Holmstead. Yes. That was effectively done by Congress
in 1998. The deadline for the phaseout of methyl bromide was
originally 2001. With the encouragement of then the Clinton
Administration, the Congress actually did move that back to
adjust our statute. So the phaseout date for methyl bromide is
2005.
Mr. Radanovich. Was that included in the Montreal
Protocols?
Mr. Holmstead. Yes. The situation before then was that in
the 1990 amendments Congress actually put the United States on
a more aggressive, more stringent schedule.
Mr. Radanovich. Right.
Mr. Holmstead. Then in 1998 Congress then adjusted that
schedule to push it back from 2001 to 2005. So that is the case
right now. I think the big concern--A legitimate concern that
people in the agricultural community have is that there is a
gradual phasedown. The first two phases have already occurred.
There was a 25 percent reduction a couple of years ago, and
then a 50 percent reduction.
In January of 2003, it goes from 50 percent to 70 percent,
and I think there is legitimate concern by people who have used
methyl bromide for many years--they know how it works--about
what they are going to do. We are working very closely not only
with the ag community but with our colleagues at USDA to make
sure that there are adequate alternatives.
Now we, obviously, don't do the R&D work to develop those,
but we have fast tracked them. I need to check with my
colleague in the Pesticide Office, but there is at least two
and maybe more alternatives that are under review right now
that we expect to have approval on very soon.
Mr. Radanovich. Would you call that under fast track?
Mr. Holmstead. Yes. Oh, yes. Those approvals--Let me just
assure you that we listen to the agricultural sector.
Mr. Radanovich. Good.
Mr. Holmstead. And those are being fast tracked right now
to get those done.
Mr. Radanovich. Thank you. I appreciate the clarification.
Thanks.
Mr. Barton. Does the gentleman yield back his time?
Mr. Radanovich. Yes.
Mr. Barton. The gentleman from Tennessee, Mr. Bryant, is
recognized for 5 minutes.
Mr. Bryant. Thank you, Mr. Chairman. I apologize. We have a
number of commitments, as the speaker understands, that keep us
from this hearing, but I wasn't sure I was going to be able to
get here and had submitted some questions, or will be in the
process--I didn't bring them with me--of submitting some
questions for the speaker to answer and just add as, I assume,
a late filed exhibit to your testimony.
I would like to ask, if I could, though, in just sort of a
follow-up to that: During the rulemaking process regarding
diesel fuel for over-the-road trucks, and particularly on
behalf of the marketers of that fuel, we ask that, and tried to
pass some guidance to the EPA on the phase-in period of that
new, cleaner burning diesel fuel.
Initially, we were able to get that passed, I think,
through the subcommittee, but in the full committee it was
rejected, and a number of very powerful groups were out there
working against us on that.
Quite simply, the whole issue to the marketers was the
expense involved in maintaining separate tanks during the
phase-in period, and they were willing to go ahead and move
forward quickly and go to the cleaner fuel immediately at the
initial starting point rather than have to incur the additional
cost and risk the complications of mixing up the fuels and
putting them in the wrong trucks or not being able to afford a
second tank and having to send customers down the road to their
competitor, things that just don't really work in the real
commercial world out there.
We weren't successful in doing this. It was thought that
the concept of maybe bringing in the cleaner fuel four or 5
years earlier might result in some cleaner air four or 5 years
earlier, and that many of the groups out there that like clean
air would support that. To the contrary, they were suspicious
of this and were afraid to support it in fear, perhaps
legitimately, that if you open it up in one spot that other
people would open up in other ways, and maybe just defeat the
whole program in the end.
It did not work, but one of the discussions we had in the
negotiations about that was that the EPA would consult with
those marketers. Even though we weren't going to be able to
eliminate the phase-in, they would consult with the marketers
over this and perhaps work out with them something that would
be more equitable in terms of the economics of it. That has not
occurred.
I have heard from the marketers, and they are not--They are
waiting. They are sitting there anxiously by the phone every
Friday night waiting for that call, so they could go out with
you and talk about this, but they are not getting the call. So
I would encourage you to go back and see if we couldn't move
that along, and perhaps open up some discussions with them. I
would appreciate that.
Let me also--Oh, I would ask also for unanimous consent,
Mr. Chairman, for my late filed questions to be answered and be
made part of this record.
Mr. Barton. Without objection, so ordered.
Mr. Bryant. I would yield.
Mr. Barton. The gentleman yields back the balance of his
time. Does the gentleman from Mississippi wish to ask
questions?
Mr. Pickering. Mr. Chairman, not at this moment, if I could
yield back to you.
Mr. Barton. Does any other member of the panel wish to ask
a follow-up question before we release the witness? Mr. Doyle,
Mr. Sawyer, Mr. Boucher, Mr. Whitfield? Mr. Whitfield, do you
have a second question or two for Mr. Holmstead? Okay.
We will release you. Thank you for your testimony. We will
have some written questions for you. I would ask that you be
expeditious in replying, and also some of the pending material
that you talked about in your opening statement and questions
to me and answers to myself and Mr. Waxman. We would appreciate
that. But we look forward to working with you.
One of your predecessors in the Clinton Administration,
Mary Nichols, got to be on a first name basis with most of the
subcommittee and the staff in our series of hearings, and we
look forward to getting to know you just as well.
Mr. Holmstead. Thank you very much.
Mr. Barton. Thank you, sir.
We would like to now call forward our second panel. We
would like to have Dr. Bernard Goldstein who is the Dean of the
School of Public Health from University of Pittsburgh come
forward; Dr. James Lents who is with the Environmental Policy,
Atmospheric Processes and Modeling Laboratory at the University
of California at Riverside; Mr. Joseph Goffman who is an
attorney for the Global and Regional Air Program for the
Environmental Defense Fund; Mr. Alan Krupnick who is a Senior
Fellow and Director, Quality for the Environment Division at
the Resources for the Future; Mr. David Driesen who is an
Associate Professor at the Syracuse University College of Law.
I think I got everybody.
Before we begin, Mr. Doyle of Pennsylvania wishes to make
one of his special introductions to a constituent. So the Chair
would recognize Mr. Doyle for an introduction.
Mr. Doyle. Mr. Chairman, thank you very much for allowing
me the opportunity to introduce Dr. Bernard Goldstein. Since I
joined the subcommittee at the beginning of last year, I have
had the pleasure of introducing a number of distinguished
individuals from Pennsylvania, including many from my hometown
of Pittsburgh, as they have come before this subcommittee.
Mr. Barton. I think you have introduced everybody from your
hometown.
Mr. Doyle. Well, today I am pleased that we are going to
hear from Dr. Bernard Goldstein. Dr. Goldstein currently serves
as the Dean of the University of Pittsburgh's graduate School
of Public Health. He comes to the University of Pittsburgh as
the next step in a distinguished career in academia and
government.
Most recently, Dr. Goldstein was the director of the
Environmental and Occupational Health Science Institute, which
is a joint program of Rutgers, the State University of New
Jersey, and the University of Medicine and Dentistry of New
Jersey Robert Wood Johnson Medical School.
In the early and mid-eighties he served as Assistant
Administrator for Research and Development for the EPA, and he
has also served as a member or chairman of a number of
committees that were part of NIH, EPA and the World Health
Organization. He is also the author of over 200 articles and
book chapters relating to his primary field of expertise in
environmental health sciences and public policy.
I am confident that Dr. Goldstein's testimony will prove
invaluable to us as we begin to examine the multitude of issues
surrounding the history and future of the Clean Air Act.
Welcome to the subcommittee, Dr. Goldstein, and thank you for
being here today. And, Mr. Chairman, thank you.
Mr. Barton. We thank you for the introduction, and we
welcome you, Dr. Goldstein. Before we allow each of you to
testify, we will stipulate that all of you have glowing
resumes, and we will put those in the record and stipulate
there is some Member of Congress that would love to come
introduce you just as well as Mr. Doyle did Dr. Goldstein.
I will say that, when I saw you, Dr. Goldstein, the First
Lady's Chief of Staff is a woman that used to work for me,
Andrea Ball, and her husband is Lonnie Ball. He is a water well
contractor, a drilling contractor, and heat pump equipment rep
in Austin, Texas, and you and he are twins. I actually thought
what is Lonnie Ball doing in this hearing room, when I saw you.
So at some point in time, we will try to get you invited to
one of the White House soirees, and you can meet Lonnie and
Andy, because you and Lonnie look unbelievably alike,
unbelievable, and he is a handsome man, just like you. So I
don't mean that in a negative way.
Each of your testimony is in the record in its entirety.
Mr. Barton. We are going to start with Dr. Goldstein. I
will give each of you 5 minutes to summarize your testimony
orally, and then we will have questions for this panel. So,
welcome, all of you, and we start with Dr. Goldstein.
STATEMENTS OF BERNARD D. GOLDSTEIN, DEAN, SCHOOL OF PUBLIC
HEALTH, UNIVERSITY OF PITTSBURGH; JOSEPH GOFFMAN, ATTORNEY,
GLOBAL AND REGIONAL AIR PROGRAM, ENVIRONMENTAL DEFENSE; JAMES
LENTS, ENVIRONMENTAL POLICY, ATMOSPHERIC PROCESSES AND MODELING
LABORATORY, UNIVERSITY OF CALIFORNIA AT RIVERSIDE; ALAN
KRUPNICK, SENIOR FELLOW AND DIRECTOR, QUALITY FOR THE
ENVIRONMENT DIVISION, RESOURCES FOR THE FUTURE; AND DAVID M.
DRIESEN, ASSOCIATE PROFESSOR, SYRACUSE UNIVERSITY COLLEGE OF
LAW
Mr. Goldstein. Thank you, Mr. Chairman. Just another
delightful reason to move to Pittsburgh.
Let me begin by stating that from a public health
viewpoint, the Clean Air Act has been highly successful. At
your invitation, I am limiting my remarks to the hazardous air
pollutant provisions. For this section, Section 112, it is
still unclear whether the public health benefits have kept pace
with the rest of the Clean Air Act.
I believe the question of benefits from Section 112
exemplifies an issue related to actions taken under the
precautionary principle. That is a principle that you will be
hearing much more about in your coming debates. One of the many
definitions, an early one from the Rio, is that, where there
are threats of serious or irreversible damage, scientific
uncertainty shall not be used to postpone cost effective
measures to prevent environmental degradation.
The precaution principle is evident, even though it wasn't
discussed at the time, in the hazardous air pollutant
amendments in 1990 in that the amendments came about largely
because of frustration with the slowness of the previous risk
based, science based approach.
It is evident in that the burden of proof was shifted away
from the requirement that EPA find an agent was harmful at
ambient levels and shifted to the requirement that 189
compounds should be controlled unless they were proven
harmless. Third, the maximum available control technology was
required, relegating the previous selective risk and science
based approach to secondary importance.
The claim that the new approach would be faster and cheaper
is difficult in retrospect to support, in view of the delays
and the cost in establishing the regulations. The complexities
of MACT regulations were simply not anticipated, but most
importantly, has it worked in terms of improving public health?
The good news is that we can certainly expect a decrease in
total tonnage of chemicals released into air. However, inherent
in the precautionary approach is that we really do not know to
what extent these chemicals will have had an impact on public
health. By requiring maximum available control technology, we
probably will reduce the emissions of known human cancer
causing chemicals such as benzine, which causes leukemia, but
these were already regulated under the previous risk based
approach.
For almost all of the newly regulated chemicals, there is
really no evidence that they produce harm at outdoor levels,
and in some cases, such as toluene, there is sufficient data to
suggest that there is really no reason for concern.
Certainly, reducing exposure to these compounds can be
justified on prudent public health grounds, but by definition
one cannot do a cost-benefit analysis when there is no evidence
on which to claim benefit, and this is in contrast to the NAAQS
pollutants for which there is a rich data base on which
documentation can occur.
Other problems related to the precautionary approach to
hazardous air pollutants includes the lack of an incentive to
improve control technology, once we have established maximum
available control technology. It is sort of establishing what
we call CATNIP. CATNIP is a technical term. It stands for the
cheapest available technology not involving prosecution.
How do you get better technology, once you are into MACT,
and that is a question which perhaps can be dealt with, but
right now it is difficult, considering the fact that we have
traditionally built our new control technology on advances on
basic science and technology. Why would one invest once the
MACT had been established?
There are other problems. We have the same level of control
for compounds that we know are problems, such as benzine, as we
do for toluene. That can be a potential problem. But perhaps
the most important long term public health problem is the
disincentive to invest in research to find out the truth about
the chemicals we are regulating.
EPA's budget in this area has plummeted, its research and
development budget, and we really need to do a lot more to
accomplish our public health goals by finding out exposure and
effect indicators that are far simply superior to simply
measuring pounds of pollutants. So I urge additional support to
this type of research.
The 1990 Clean Air Act HAP amendments also raise two public
health issues unrelated to the precautionary principle. On a
public health basis, purely looking at this from public health,
it is hard to justify an emphasis on outdoor air, when the
highest human exposure levels to most of these compounds occurs
indoors. EPA is approaching indoor air pollution, but certainly
not at a level commensurate to the expense, to the force that's
been put in the exposure to outdoor pollutants.
Second, the residual risk provisions of the Clean Air Act
are based solely on risk to the maximally exposed individual
rather than incorporating standard public health population
based approaches. One can get gross underestimates of the
actual public health impact. One can get such silliness as
regulating in a situation in which literally there will be one
adverse effect every 17.5 million years. That is a situation
which is about 10 times longer than people have been on the
planet.
Let me conclude by being sure that my critique of the
public health impact of the HAP provisions is not
misunderstood. The inability to prove a benefit is a common
problem in public health. We all agree that prevention is
valuable.
Sometimes we have to fall back on the well known 16 to 1
benefit cost ratio for primary prevention. That is based upon
an ounce of prevention is worth a pound of cure. We have
learned in public health that to extract that sixteenfold
benefit requires highly efficiency approaches focused on the
major threats, using the best available science. In that
regard, our approach to the 1990 hazardous air pollutant
amendments has some unfortunate shortcomings.
Thank you, Mr. Chairman.
[The prepared statement of Bernard D. Goldstein follows:]
Prepared Statement of Bernard D. Goldstein, Dean, Graduate School of
Public Health, University of Pittsburgh
introduction
Mr. Chairman, Members of the Committee. Thank you for inviting me
to give a public health viewpoint on the impact of the hazardous air
pollutant provisions of the 1990 Clean Air Act Amendments. With your
permission, I would like to submit written remarks for the record and
to summarize them in my oral testimony.
My name is Bernard Goldstein. I am a physician and an environmental
health scientist, and am currently Dean of the University of Pittsburgh
Graduate School of Public Health, one of the nation's largest schools
of public health. I have had more than thirty years of experience in
studying and commenting on the health effects of air pollutants,
including serving as Assistant Administrator for Research and
Development of the US Environmental Protection Agency under William
Ruckelshaus and Lee Thomas, and chairing the Congressionally mandated
Clean Air Scientific Advisory Committee.
issues related to the precautionary principle
In discussing the public health impact, I believe it helpful to
frame the 1990 HAP amendments in terms of the Precautionary Principle.
This is a relatively new term, embodying an evolving and as yet not
well-defined set of concepts that is increasing in prominence among
environmental and public health advocates. One definition, provided in
the 1989 Rio Declaration, is:
``Nations shall use the precautionary approach to protect the
environment. Where there are threats of serious or irreversible
damage, scientific uncertainty shall not be used to postpone
cost-effective measures to prevent environmental degradation''
The more recent formulations have tended to extend the
precautionary principle to public health. In some cases there has been
a weakening of the emphasis on cost effectiveness and on the extent of
adverse impact needed to invoke the precautionary principle.
You will hear much more about the Precautionary Principle, not the
least because it is being heavily advocated by the European Community,
perhaps as a rationale for trade barriers on US products. Although not
discussed as such at the time, the 1990 amendments to Section 112 of
the Clean Air Act governing the control of hazardous air pollutants
contain a classic use of the precautionary principle. First, the
amendments are derived from a sense of frustration with the slowness of
a risk based scientific approach--relatively few of HAPs had been
regulated. Second, the burden of proof is shifted as is evident from
Congress listing 189 pollutants and limiting EPA's role to one of
removal of a pollutant from the list based upon proof of no harm, which
replaced the previous dependence upon a finding of harm to be listed
for regulation. Third, there is a requirement of maximum available
control technology for pollutant control of all sources, relegating the
previous selective risk-based approach to secondary importance.
But has it worked? In 1990 advocates of this new approach claimed
it would be ``faster, better, cheaper''. It is hard to argue that it
has been faster or cheaper, given how long it has taken to write the
regulations and how much it has cost to do so, as well as the toll that
uncertainty always has on the market place. However, the key question
is whether the 1990 CAA HAP Amendments have improved public health.
Let me start with the positive. We do know that many tons of HAPs
have been or will be removed from the air. However, we know little
about how much of a health difference this has made. One of the guiding
concerns in the control of HAPs is that of human cancer. Almost all of
the pollutants that were known or reasonably anticipated to cause
cancer or to have other adverse effects at ambient air levels had been
regulated before the 1990 CAA amendments. These amendments have led to
more stringent contol on at least some of these pollutants through
requiring maximum available control technology. To the extent that
these controls can be quantified (e.g., reduction in the emissions of
benzene, a known cause of human leukemia), some estimate can be made of
the additional benefit of the MACT provision. However, this will not be
possible for almost all of the newly regulated pollutants on this list.
The reason there is so much uncertainty about health benefit for
almost all of the pollutants listed by name as HAPs in the 1990 CAA
Amendments is inherent in the precautionary principle. Simply put, you
can not know what harm has been averted if you regulate pollutants
without some degree of proof that they are harmful. As a corollary, the
congressional requirement in the Clean Air Act that EPA perform cost-
benefit analysis, which can be done for NAAQS pollutants, can not be
achieved for those HAPs for which there is no evidence of benefit,
despite the substantial cost in controlling these pollutants. And
almost all of the HAPs for which there is sufficient evidence of harm
to provide the basis for a benefit analysis were regulated under the
pre-1990 Section 112 rules.
If we really want to know the public health benefits of regulating
this broad list of agents, we must develop benefit indicators that go
beyond the simple measure of tons of pollutants. Using pollutant
weight, as does our HAP regulations, rather than pollutant effect, can
be problematic, particularly where there is a clear differential among
these pollutants in their potential for toxicity. Removing a ton of
toluene from air emissions is probably meaningless in terms of public
health, while removing a ton of benzene is very likely to be of direct
health benefit. The current approach to HAPs focuses the same attention
on both. Better indicators of the potential for adverse health effects
are needed if we are to develop cost-effective approaches to hazardous
air pollutants, particularly as for many of these pollutants the
outdoor exposures regulated by the CAA are relatively trivial compared
to indoor exposures.
Another area of concern about the precautionary principle is often
is antithetical to scientific research that gets to a true
understanding of cause and effect relationships. The central principles
of toxicology are that chemicals have very specific actions within the
human body and that they vary greatly in the dose that causes the
action. They are the basis for two of the components of risk
assessmen--hazard identification and dose response assessment. These
principles are no more complicated than saying that aspirin works for a
headache but not for constipation, and that a very tiny grain of
aspirin will have no effect while too much can kill. By treating all of
the 189 chemicals on the list as exactly the same in terms of
specificity of action and dose responsiveness, the CAA Amendments
simply ignore these toxicological principles. There is no question that
avoidance of any possible effect of any of these agents could be
preventive--there is also no question that this shotgun approach
inherent in the precautionary principle is less than a fully efficient
means of dealing with the potential public health consequences of HAPs.
There is work under way attempting to develop better indicators of
air pollutant health effects. In fact, EPA Administrator Whitman
provided major leadership in this area while governor of New Jersey and
now at EPA. I wish to particularly commend the research activities
supported by various government agencies including the National
Institute of Environmental Health Sciences, the CDC Center for
Environmental Health and by the EPA's Office of Research and
Development, and to encourage Congress to enhance support for these
approaches.
There is another problem inherent in the precautionary principle
approach to HAPs. This is a paradox built into the MACT approach. The
goal is to achieve the lowest possible levels of pollution control by
specifying the best available control technology today (actually
defined as the ``best performing 12% of existing sources''). But once
having done so, once having spent better than a decade writing the
regulations guiding the use of the specific technology, how do you get
better control technology? Pollution control technology is an applied
field, usually borrowing from advances in basic technology that are
then utilized to meet the demand for pollution control. But what demand
will be left after the regulations are completed? Thus a potential
negative of the MACT approach is that it leaves little likelihood that
there will be continued improvement in control technology.
One other aspect of the potential public health impact of a
precautionary principle approach is also difficult to quantify. This is
the extent to which the misplaced emphasis on unnecessary public health
actions limit the availability of resources for needed public health
activities. Our national public health infrastructure is under
tremendous pressure. We have taken for granted many of the advances in
public health. These advances have been sustained by a highly efficient
workforce that had been stretched to the limit even before September
11th. This workforce needs reinforcement, it needs to have a greater
level of support for its activities and our nation needs more focus on
how we will replace those already in the field. In making your
judgments as to where to place needed public health resources, I urge
you to give high priority to the workforce infrastructure.
issues not directly related to the precautionary principle
There are two issues concerning the HAP provisions of the 1990 CAA
Amendments that are directly related to public health but do not
clearly fall under the heading of the Precautionary Principle: the
relative lack of emphasis on the major public health threat of these
chemicals, that of indoor air pollution; and in calculating residual
risk, the inappropriate sole focus on the Maximally Exposed Individual
rather than also on the total population.
Public health principles for hazardous chemicals require us to
focus on the highest levels of exposure to the most toxic agents. In
general, for HAPs this is exposure in the home to HAP compounds that
were already regulated before 1990. Thus, there is a disconnect between
the major public health concern about these chemicals and the emphasis
that the CAA puts on their control.
Risk assessment remains a part of the regulation of HAPs in the
form of a residual risk estimation. Unfortunately, the risk assessment
approach specified is not in keeping with public health practice in
that the risk estimate is driven by the Maximally Exposed Individual
rather than the population at risk. This is both an inappropriate and
an inefficient way to protect public health. Population based
approaches should be the primary driver in risk based approaches with
risk to the Maximally Exposed Individual also being calculated to be
sure that no one individual is particularly at risk. Just one of the
many problems in using the MEI as opposed to the population based
approach is that we in essence assume that the MEI lives at the fence
line of the source 24 hours a day, 7 days a week, for 70 years. This
simplifying approach is true if we assume that someone is at that
location as part of a population based risk estimate, but it is a gross
and highly variable overestimate to assume that a single individual
gets that full 70 years.
Moreover, one can readily demonstrate the silliness of the reliance
on the MEI with a paper experiment. Assume that there is a plant at the
edge of a rural area such that only one family of four lives
immediately downwind and that it has a life time cancer risk of one in
one million due to these emissions. Assume further that this plant goes
on emitting the same level of pollutants ad infinitum, and this family
of four is replaced every 70 years by another family of four. The time
period during which one cancer case is expected to occur is 17.5
million years, or roughly one case during a period about ten times
longer than humans have existed on this planet. This needs to be
changed.
So as to be sure that my critique of the public health impact of
the HAP provisions is not misunderstood, let me emphasize that the
inability to prove a benefit is a common issue in public health. We all
agree that prevention is valuable, and that sometimes we have to fall
back on the well-known 16:1 cost benefit ratio for primary prevention.
This is based on an ounce of prevention is worth a pound of cure. We
have learned in public health that to extract that sixteen-fold benefit
requires highly efficient approaches focused on the major threats using
the best available science. In that regard, the 1990 HAP amendments
have unfortunate shortcomings.
Mr. Barton. Thank you.
We would now like to welcome Mr. Joseph Goffman, who is an
attorney for the Global and Regional Air Program for the
Environmental Defense Fund in New York. Your testimony is in
the record. We ask that you summarize it in 5 minutes. Welcome
to the subcommittee.
STATEMENT OF JOSEPH GOFFMAN
Mr. Goffman. Thank you, Mr. Chairman. I am very grateful to
you and the subcommittee for your invitation to testify today
about the Clean Air Act amendments of 1990, in particular,
Title IV, the provisions that established the national cap and
trade program for power plant SO<INF>2</INF> emissions as a key
precursor of acid rain.
President George Herbert Walker Bush first introduced the
cap and trade model when he introduced this proposal, and this
model has been enthusiastically embraced by both of his
successors as they have moved forward to address a variety of
pollution control challenges. It is a very interesting
coincidence that three different administrations have now
stepped forward to support this proposal.
I think that the results of the SO<INF>2</INF> program so
far explain perhaps that this is more than a coincidence.
First, the SO<INF>2</INF> program passes the ``greener, faster,
cheaper'' test that long has been the Holy Grail of just about
everybody in the environmental policy community. The
SO<INF>2</INF> program passes the ``keep it simple'' test,
defying critics' claim that only complex, intrusive
environmental laws and regulations can deal with pressing
environmental challenges.
The SO<INF>2</INF> program passes the ``right tool for the
job'' test in the case of acid rain and, by extension, the case
of other environmental problems that involve long range
transport of pollution. Indeed, the SO<INF>2</INF> program has
proven to be a perfect complement, not a replacement but a
complement, to the fundamental structure of the Clean Air Act
as embodied in the various authorities of Title I.
Cap and trade, in short, is a vitally important, even
indispensable tool in the toolbox of pollution problem solving.
Even so, the success of any air pollution program, including
one based on cap and trade, depends both on setting the
emissions reduction targets at levels low enough to solve the
environmental problem and on ensuring that the cap and trade
tool works in harmony with other tools in a fully complementary
fashion.
The virtue of cap and trade is not as an end in itself, but
is that it simply makes it easier to reach the right pollution
reduction levels, assuming those are established by law, and to
harmonize multiple pollution control programs and strategies.
I think that the single most important reason that cap and
trade has achieved the current level of credibility that it has
in the last 10 years is reflected in the fact that, in
formulating his initial proposal in 1989, President George
Herbert Walker Bush harvested part of the cost savings expected
to result from the acid rain emissions trading program to
create an environmental dividend.
That is, when he put forward his proposal, he explicitly
supported an emission reduction target of 10 million annual
tons of reductions, not just 8 million tons. That is, he went
to a target that was 25 percent more ambitious and more in line
with contemporary scientific understanding at the time of what
was needed to address acid rain than the targets proposed in
alternative legislation then pending in Congress.
His proposal also included for the first time an explicit
cap on emissions, again something that was made uniquely
possible by the flexibility built into the emissions trading
approach. This fundamental insight of the first President Bush
is the most important reason--I think it is the reason--that we
are still talking about cap and trade 13 years later. The
insight was that cap and trade programs can and must deliver
more environmental bang for the buck.
What that means is that, as you move forward to consider
other proposals, not the least of which is the current
President Bush's Clean Skies initiative, this historical fact
is going to be in the background of every proposal you
evaluate.
The Clean Skies proposal legislation pending in the Senate
seem, in both cases, to be based on a classic cap and trade
model, which means that the polluting sources will have a full
opportunity to take advantage of market based emissions trading
to yield significant cost savings.
In contrast with the first Bush Administration's decision
to share some of those cost savings, dividends, with the
environment, the current administration's ultimate reduction
goals seem to feel--in fact, they do fall noticeably short and
late of delivering on the promise of attaining the health based
standards for fine particles and ozone.
Nevertheless, thanks to the first President Bush's
fundamental decision, the public is going to be asking where is
the environmental and public health dividend that should be
yielded by the expected cost savings of the cap and trade
approach.
Mr. Barton. Could you summarize?
Mr. Goffman. Yes. The last three sentences.
The historical precedent set by the President's father of
yoking the cost savings of emissions trading with an
environmentally relevant reduction target presents the
permanent foil against which all future proposals are going to
be evaluated. The power of cap and trade programs inheres in
their ability to link synergistically through emissions trading
markets cost savings and superior environmental performance,
but that link, that synergy, cannot be achieved unless such
programs are based on emissions reduction targets that are
truly capable of addressing the needs of public health and the
environment.
In this case, we are probably talking about a 2 million ton
SO<INF>2</INF> cap and a 1.1 million to 1.25 million ton
NO<INF>X</INF> cap in the case of those two pollutants by the
end of this decade.
Thank you.
[The prepared statement of Joseph Goffman follows:]
Prepared Statement of Joseph Goffman, Senior Attorney, Environmental
Defense
introduction
My name is Joseph Goffman. I am a senior attorney with
Environmental Defense. I am most grateful to the Subcommittee for its
invitation to testify today and am most appreciative of the careful and
deliberate approach it is taking in reviewing the development of the
Clean Air Act.
The focus of my testimony today will be Title IV of the Clean Air
Act Amendments of 1990, in particular those provisions that established
the national cap and trade program for power plant sulfur dioxide
(SO<INF>2</INF>) emissions, a key precursor of acid deposition.
Some would find it a challenge if asked to name an important public
policy approach on which President George H.W. Bush, President Bill
Clinton and President George W. Bush all shared an identical position.
Students of environmental policy, however, would have no trouble. As
President, each of these leaders put forward in major presidential
addresses, and then pressed ahead with, high-profile environmental
proposals that were centered on a cap and trade system.
While cap and trade embodies certain principles that many see as
reflecting a distinctively American philosophy, the international
community has begun to embrace this approach in its effort to reduce
greenhouse gas emissions. Perhaps even more striking is the fact that
national and provincial environmental policy-makers in the Peoples
Republic of China are in the process of fashioning a regional
SO<INF>2</INF> emissions trading program modeled on the US cap and
trade approach.
Looming on the horizon in this country are a series of potentially
daunting new public health and environmental challenges posed by
current levels of air pollution. Despite the evident emissions
reduction success of the 1990 SO<INF>2</INF> program, acid rain
continues to plague sensitive ecosystems from the Rockies to the East,
and visibility-marring haze blights our national parks and monuments.
Tens of millions of Americans breathe air made unhealthful by ozone
smog and particulate matter--and, even in the wake of his rejection of
the Kyoto Protocol, President Bush pledged to continue to focus on the
issue of climate change, including consideration of more broad-based
policies within the next ten years.
As it turns out, electric power plants are a chief source of the
range of pollutants and gases directly implicated in all of these
problems. In February, when he put forward his Clear Skies Initiative
(CSI), President Bush ensured that both power plants and the cap and
trade model would be at the center of any future debate about how to
address this suite of air pollution challenges.
If that is the case, then it is vital for this subcommittee, as one
of the prime movers in such a debate, to evaluate the US experience, so
far, with the use of the cap and trade tool to curb power plant
pollution.
Fortunately, we are now 12 years on in what, during the '90's many
referred to as the world's largest public policy ``experiment'' with
market-based regulation. Thanks to its own work in 1990, this Committee
can examine the results and apply the lessons of the SO<INF>2</INF> cap
and trade program to its efforts going forward to combat air pollution.
Let me sum up my views on those results:
1. The SO<INF>2</INF> program passes the better-faster-cheaper test
that long has been the Holy Grail of just about everybody in
the environmental policy community.
2. The SO<INF>2</INF> program passes the ``keep-it-simple-stupid''
test.
3. The SO<INF>2</INF> program passes the right-tool-for-the job test;
indeed, it has proven to be the perfect complement--as opposed
to replacement--to the fundamental structure of the Clean Air
Act, as embodied by Title I of the Act.
4. Cap and trade is a vitally important tool in the toolbox of
pollution problem-solving. Even so the success of any air
pollution program, including one based on cap and trade,
depends both on setting the emissions reduction targets at low
enough levels to solve the problem and on ensuring that the cap
and trade tool works in harmony with other vital tools. The
virtue of cap and trade is simply that it makes it easier to
reach the right pollution reduction levels and to harmonize
multiple pollution control programs and strategies.
I. Faster, Cheaper and Greener: Performance Results
From 1995 to 1999, or the period known as ``Phase I,'' the acid
rain program yielded impressive environmental and economic results.
Phase I power plants reduced their SO<INF>2</INF> emissions far below
the level that was legally allowable under all of the provisions of the
program. Furthermore, in response to the economic dynamics created by
the ``cap and trade'' design of the program, these plants released
substantially less pollution relative to the more stringent level of
``base'' allowable emissions established by Congress. At the same time,
the SO<INF>2</INF> emissions trading market has done what markets do
best: drive down costs.
<bullet> While achieving 100% program compliance during Phase I, power
plants reduced SO<INF>2</INF> emissions 22% more than the
restricted number of ``base allocations'' initially allotted to
them by Congress, equal to 7.3 million tons of extra emissions
reductions.
<bullet> When factoring all types of emissions allowances included in
the program, including those for auction and performance
incentives, actual emissions were 30% lower than the amount
that was legally allowed, equal to 11.6 million tons of unused
allowances.
<bullet> The extra reductions in emissions were distributed across 22
of the 24 states whose power plants have participated in Phase
I, and many of the highest-emitting sources--such as those in
Ohio, Indiana, Georgia, Pennsylvania, West Virginia, and
Missouri--made the greatest number of cuts in emissions.
<bullet> The extra reductions, which represent a concrete economic
asset because of the banking and trading provisions of the
program, have occurred in the absence of any federal or state
action to restrict the saving or transfer of allowances.
<bullet> The cost of SO<INF>2</INF> reductions, as reflected indirectly
in the price of traded SO<INF>2</INF> emissions allowances, is
far below the cost predicted during the initial debates on the
program.
<bullet> Despite the rapid fall in SO<INF>2</INF> emissions over the
past five years, both electricity generation and the United
States economy experienced strong growth during the same
period. Thus the results of the program offer more evidence to
disprove the supposed link between economic growth and
emissions growth.
<bullet> Reductions in sulfate deposition have been observed in
geographic areas affected by atmospheric transport of sulfur.
The superior environmental and economic results of Phase I of the
SO<INF>2</INF> program are precisely what should have been expected of
a program that matched an explicit emissions limit with a market that
turned pollution reductions into marketable assets.
Year 2000, the first year of Phase II, continued these trends for
the most part. One significant feature of compliance in 2000 was that
some utilities drew from the ``bank'' of extra Phase I reductions to
offset emissions above their nominal target levels. Overall, however,
SO<INF>2</INF> emission in the highest-emitting regions continued to
fall.
II. Faster, Cheaper and Greener: Acid Rain Politics of '89-'90
The notion of using emissions trading as part of the implementation
of national SO<INF>2</INF> emissions reductions was formally unveiled
in June 1989 in a speech by President George Bush, when he introduced
his administration's overall proposals for amending the Clean Air Act.
At the time, emissions trading was highly controversial among both
environmental advocates and the public at large.
The controversy was sparked because the initial focus of the
ensuing debate revolved around emissions trading as a ``market
mechanism'' and as a method for reducing compliance costs. To many,
these were but shorthand for ``industry loophole.''
In 1989 and 1990, the issue of cost remained the pivotal point of
the political debate. In the end, however, the link between emissions
trading and cost savings played to the environment's advantage.
Initially, the Bush administration's economic analysts were leaning
toward supporting a reduction target of only 8 million tons. Moreover,
legislation introduced in early 1989 and in previous Congresses had
mandated an annual reduction in SO<INF>2</INF> emissions of only 8
million tons. It was the promise of cost savings through emissions
trading that persuaded the Bush administration to propose in its Clean
Air legislation that the SO<INF>2</INF> program stipulate an annual
reduction of 10 million tons.<SUP>1</SUP> President Bush's insight was
that the country could afford a greater level of environmental
protection, given that the use of emissions trading would yield the
lowest compliance costs possible. The shift from an 8-million-ton
annual reduction target to a 10-million-ton target was especially
important. The 10-million-ton target was much closer to the reduction
level first suggested by the National Academy of Sciences as that
required to curb acid deposition. With a Republican president sending a
10 million-ton bill to a Democrat-led Congress, the enactment of the
more stringent target was all but ensured. Thanks to the anticipated
cost savings of emissions trading, the final legislation required the
additional 2 million tons of annual SO<INF>2</INF> reductions.
---------------------------------------------------------------------------
\1\ Tom Wicker, ``Who'll Stop the Rain?'' New York Times, 16 June
1989, A27.
---------------------------------------------------------------------------
Perhaps even more important, the inclusion of emissions trading led
to another environmental victory. Throughout the 1980s, the
environmental community and some of its congressional champions had
sought to craft acid rain legislation that both reduced SO<INF>2</INF>
emissions and capped total emissions at the reduced levels. None of
these efforts succeeded. In legislation sent to Capitol Hill in July
1989, however, the Bush administration included the critical elements
of just such a cap, which was made possible only by the operational
flexibility offered to companies by emissions trading. In the ensuing
legislative process, the Senate Committee on Environmental and Public
Works (and subsequently the full Senate and the House of
Representatives) used the allowance allocation system to construct a
truly comprehensive emissions cap.
III. The Clear Skies Initiative: What Happened to Faster, Cheaper,
Greener?
Against this historical background, some of the criticism of the
President's Clean Skies Initiative may seem more understandable. The
CSI proposal seems to be structured in a way that will allow power
plants to take full advantage of the cost-savings opportunities
afforded by an emissions trading market. In contrast with the first
Bush administration's decision to share some of the cost-savings
dividend with the environment in the form of an additional 2 million
tons of reductions, the current administration's ultimate reduction
goals fall noticeably short--and late--of delivering on the promise of
attaining the health-based standards for ozone smog and fine particles.
Where, critics are asking, is the environmental and public health
dividend that should be yielded by the expected cost-savings?
This question is more than rhetorical, as the ``environmental
dividend'' is likely to mean the difference between success in
attaining the national ambient air quality standards (NAAQS) for ozone
and fine particles and failure. As in the case of the 10-million-ton
target for acid rain, the level and timing of reductions required under
any national cap and trade program for power plant SO<INF>2</INF> and
NO<INF>X</INF> emissions will have a direct bearing on the capacity of
metropolitan areas across the country to attain the health-based
standard for ozone and fine particles. To be sure, by itself a national
cap and trade program for power plant SO<INF>2</INF> and NO<INF>X</INF>
reductions will not ensure attainment of the fine particle and ozone
NAAQS in every area. At the same time, unless such a program achieves
the full measure of cost effective reductions from this sector, the
prospects of attaining the NAAQS will be extremely remote in many high-
population communities.
Recent press reports, such as that in last Sunday's New York Times
indicate, for example, that EPA analysis points to the necessity of
achieving SO<INF>2</INF> and NO<INF>X</INF> reduction levels and
timetables beyond those included in the CSI if the NAAQS are going to
be attained as required under current law. It is widely believed that
the EPA analysis referred to in the Times story demonstrated that an
SO<INF>2</INF> emissions cap in the 2.0 to 2.25 million ton range and a
NO<INF>X</INF> cap in the 1.25 million ton range were essential both to
addressing acid rain and to attaining the fine particle and ozone
NAAQS. In addition, current law appears to impose a deadline for
attaining the fine particle and ozone NAAQS in 2009-10 time period.
These targets and this timetable contrast unfavorably with those in
the President's CSI. In addition, the historical precedent ``set by the
President's father--of yoking the cost-savings of emissions trading
with an environmentally relevant reduction target presents yet another
unfavorable contrast as well. The power of cap and trade programs
inheres in their ability to link synergistically--through emissions
trading markets--cost-savings and superior environmental performance.
That synergistic link cannot be achieved unless such programs are based
on emissions reduction targets that are truly capable of addressing the
needs of public health and environmental protection. It would seem that
EPA's analytic focus on a 2--2.5 million ton SO<INF>2</INF> cap and a
1.25 million-ton NO<INF>X</INF> cap points to the target levels needed
for a successful multi-pollutant cap and trade program.
Keeping It Simple: A New Regulatory Paradigm
The SO<INF>2</INF> program is first and foremost an emissions
reduction program. What set the program apart from other Clean Air Act
programs is that the reduction was implemented as an annual
SO<INF>2</INF> emissions budget--literally a ``cap'' on total
SO<INF>2</INF> emissions from power plants--at levels substantially
lower than those of the 1980s. This approach was unprecedented, as
existing air pollution regulation at the time relied on specific
technical or operational requirements on sources, usually resulting in
a restriction on the rate of emissions discharge, not on total
discharges. Although such requirements were based on projections of
actual emissions reductions, fixed levels of total reductions were
never explicitly mandated. Consequently, as long as sources met their
operational requirements, they were not held responsible if the
projected levels of emissions reductions were not met.
Under the SO<INF>2</INF> program, however, the Environmental
Protection Agency (EPA) distributes to each power plant a fixed number
of emissions ``allowances,'' each of which gives the owner the
authorization to emit one ton of SO<INF>2</INF> at any time. A plant
may then sell the allowances to another plant (or to any interested
buyer, including environmental groups and speculators) provided that at
the end of the year it surrenders to the EPA enough allowances to cover
its emissions for that year. Allowances that are not used to cover
emissions in one year may be saved for use in later years, which is
known as ``banking.'' Because the number of emissions allowances the
EPA distributes every year is fixed, then, by definition, an allowance
remaining in excess of a plant's emissions represents an ``extra''
reduction that may be transferred to another plant to cover its
incremental emissions. No matter how many or how few allowances are
transferred total emissions always remain at or below the cap. The law
requires each power plant to install continuous emissions monitors and
to report the results on a quarterly basis to the EPA. The EPA is
required, in turn, to operate an emissions and allowance tracking
system, which has ensured the transparency and sound record-keeping
needed to make the program successful.
Phase I of the acid rain program mandated participation by the
largest emitters of SO<INF>2</INF>--specifically, 263 sources at mostly
coal-burning electricity plants (located primarily in eastern and
midwestern states). They were joined by additional sources that
voluntarily chose to participate in Phase I rather than wait until
Phase II, as allowed under certain provisions of the legislation. The
total program budget, or cap, for 1995 included 8.7 million tons worth
of allowances. By 1999, the budget gradually decreased to roughly 7
million tons as a result of the phase-out of provisions designed to
promote certain control options and investments.
Phase II, which began in January 2000, imposed more stringent
emissions limits on the units participating in Phase I. In addition,
Phase II also established caps on SO<INF>2</INF> emissions for
virtually every other power plant in the continental United States (any
with output capacity of greater than 25 megawatts) as well as all new
utility units, thus bringing the total universe of regulated units to
more than 2,000. The annual budget for these sources was set at 9.2
million tons. It will continue at that level until 2010 when the cap
drops to a permanent level of 8.95 million tons, a level roughly equal
to 50% of electric utility emissions in 1980.
In 1989, the rhetoric surrounding SO<INF>2</INF> emissions trading
emphasized ``market mechanisms,'' ``economic incentives,'' and ``cost-
savings.'' Less apparent, but equally significant, is that in the
process of establishing the SO<INF>2</INF> program, Congress ended up
creating a new paradigm for pollution policy. That paradigm managed to
overthrow the traditional discretionary powers of environmental
regulators even while making it more certain that the full measure of
promised emissions reductions would be delivered to the public and the
environment.
Between 1970, when the ``modern'' Clean Air Act was first adopted,
and 1990, programs to control air pollution were characterized by
requirements focusing on how sources of emissions operated. State and
federal regulators were empowered and called on to assess the cost,
feasibility, and effectiveness of various technologies, methods, and
processes for reducing emissions from the operations of various classes
of sources.
On the basis of those assessments, regulators would impose either
specific technology requirements or operational parameters such as
emissions rates. Compliance was defined in terms of meeting those
operational parameters, not in terms of meeting specified emissions
reduction targets. Often, plants were subject to detailed operating
permits, and enforcement resources went toward ensuring that plants
developed and submitted compliance plans and met the operational
milestones delineated in the plans, rather than focusing on actual
emissions performance. To a significant extent the approach worked.
According to many key indicators, air quality in the United States
improved substantially.
By 1990, however, the performance of the traditional approach was
often burdened by a broad range of flaws. In many cases, the full
increment of pollution reductions that had been promised, predicted, or
assumed when operational requirements were adopted had not been
achieved. Because compliance was defined simply in terms of
technologies or operating parameters, however, nobody, including the
polluters themselves, was legally accountable for the failure to
achieve the expected levels of total reductions. With fewer than the
expected and needed pollution reductions achieved, key ambient air-
quality standards were often not attained. Specifying technologies or
operating parameters was not enough to limit total emissions
discharges.
At the same time, the costs of these programs were high. The
regulatory community's resources often were inadequate for collecting
and processing the range of information needed to formulate operational
requirements for whole classes of sources. As a result, once the
requirements and implementing permits were put in place, the capacity
to absorb new information and respond to inevitable and ongoing
economic and other operational changes was virtually nonexistent.
Although the characteristics of sources varied, requirements tended to
be uniform and thus many sources were subject to expenses that could
have been avoided in more flexible systems. Simultaneously, sources
that could have adopted more effective or innovative control
technologies had no incentive to do so. At the same time, regulators,
mindful of the need to control costs, compromised the stringency of
requirements either in setting the standards or in negotiating
individual permits and ``variances'' to permits, all at the cost of
total emissions reductions achieved.
In contrast, the SO<INF>2</INF> program replaced the regulator with
the polluter itself as the pivotal actor in compliance, overthrew the
traditional paradigm, and replaced it with a new one. Under the
SO<INF>2</INF> program, the pollution sources are legally accountable
for achieving a specified level of emissions reductions and for little
else save continually monitoring and reporting their actual emissions.
The only job that regulators have to do is ensure that each source
meets its monitoring and reporting requirements and that its actual
annual emissions equal the number of allowances the source holds.
How power plants reduce their SO<INF>2</INF> emissions has been
left completely to the discretion of the plant operators themselves. As
a result, it is up to them to manage the continually changing economic,
technical, and other circumstances in which they are operating and to
integrate their basic business activities with their obligation to meet
their emissions cap. The burden and the opportunity of lowering costs
are placed squarely on the power plants operators. In place of
variances and other cost-relieving methods that entail compromise of
standards and forego actual emissions reductions, plant operators under
a cap and trade system must turn to emissions banking and trading for
cost control. Because of the built-in cap-based structure of the
program, cost savings through emissions trading in no way lessens the
amount of total emissions reductions or their environmental.benefit.
Today, the EPA proudly embraces the very coup that, at least as far as
SO<INF>2</INF> is concerned, stripped it of much of the scope of its
traditional regulatory power. Noting that the acid rain program
embodies the highest ratio of tons of pollution reduced to
administrative resources expended, the agency reports approvingly that
the program produced 100% compliance--all while giving regulators far
less authority to exert direct control over the methods of compliance.
V. Keeping it Simple: One Key to Economic Success
Critical to the character and success (and not just the mechanics)
of the program is the fact that the aggregate number of allowances
circulated every year is fixed, or capped. As a result of this design,
power companies must plan for economic growth and change while
operating against a limit on their total SO<INF>2</INF> emissions. This
cap and trade regime gives utilities a direct financial incentive to
reduce emissions below required levels. Extra reductions, in the form
of unused allowances, give companies flexibility to offset increases in
emissions in one location with reductions in another. In addition,
utilities can optimize control by reducing emissions when it is least
expensive to do so and then bank the surplus allowances for future use
or sale. Consequently, extra reductions give power plants the
flexibility needed to respond to economic demands and opportunities
while meeting their compliance obligations under the cap. Where extra
reductions are achieved, the environment benefits from less pollution
at an earlier time than required by law. Furthermore, through emissions
trading, power companies have both the incentive and the means to find
the lowest-cost ways of achieving compliance anywhere within the entire
electricity system and to reap financial rewards for developing those
means. Under this program, each power plant can choose between various
compliance alternatives, for example, using low-sulfur fuel, investing
in energy efficient technologies, chemically removing sulfur from
smokestack emissions, or acquiring allowances from other utilities that
can make reductions more cost-effectively. By including emissions
trading in the full suite of compliance options open to power plants,
the program enhances the ability of the interlocking emissions and
electricity markets to find the most efficient responses. The
SO<INF>2</INF> emissions trading market has been effective in reducing
costs because it has fostered implicit or ``latent'' emissions trading
as well as active trading. Put another way, emissions trading places
all compliance options in direct competition with each other. Of
course, any program that permits flexibility in compliance choices does
this. Because of emissions trading, however, that competition is
geometrically expanded in the SO<INF>2</INF> program. Different
compliance options do not compete with each other only at any one
facility. Because emissions trading allows a facility operator to
choose to apply a compliance option at its own site or, in effect, at
any other affected facility that can make surplus emissions allowances
or reductions available, the facility operator's range of choices are
much broader, the competition among them much more intense, and the
capacity of that competition to lower costs much, much greater.
As a result, the different compliance alternatives have been forced
to compete with one another even more vigorously. The expected result
has occurred: compliance costs have been driven steadily downward.
By fundamentally transferring the decision of how to comply to
power plant operators, the SO<INF>2</INF> program created a regulatory
environment in which the government in effect delivered the
environmental and economic results promised by, in effect, ``getting
out of the way'' of the market. To be sure, the program did not ``get
out of the way'' of power plant emissions. On the contrary, the mandate
to cut emissions is backed by the stiffest and closest-to-automatic
penalties in almost all of public law. The program ``got out of the
way'', however, of the underlying fuel and electricity market as it
responded to the electricity industry's very real emissions reduction
mandates.
In practice, this has meant that power plant operators could
capitalize on long-term economic trends in the fuel market in order to
maximize cost-savings. Analysts in both the government and academia
have observed, for example, that beginning in the 1980's modernizing
changes in mining operations and inter-regional rail transport have
made coal from the Powder River Basin an increasingly economical option
for power plants throughout parts of the Midwest and East. Earlier
proposals to curb acid rain would have imposed operational requirements
that likely would have stymied these coal market trends. The
flexibility inherent in establishing only an actual emissions target as
sources' sole legal requirement meant that these trends have continued
to develop as the fuel and electricity markets, not as legislators or
regulators, have dictated.
VI. The Right Tool for the Job
Congress chose to focus the design of the SO<INF>2</INF> program on
total cumulative emissions reductions and on unrestricted emissions
trading and banking because of the atmospheric characteristics of
SO<INF>2</INF> emissions. In the atmosphere SO<INF>2</INF> reacts with
other pollutants, including the various elements of ``smog,'' to form
acidic particles and droplets. These are what constitute acid
deposition. Various components of this ``soup'' of pollutants have been
traced traveling over long distances, after being mixed from widely
dispersed groups of sources.
In the United States, one common wind pattern moves air from the
midwestern region to the northeastern region of the country. These
winds mix and carry SO<INF>2</INF> and sulfate (a chemical derived from
SO<INF>2</INF>), as well as other pollutants involved in the formation
of acid deposition. Congress believed that existing scientific
understanding supported the conclusion that general wind patterns
prevailing over the eastern half of the United States capture the large
amount of SO<INF>2</INF> emissions in the Midwest and South. Once the
emissions are captured, they are dispersed widely over those parts of
the country as well as over the Mid-Atlantic and the Northeast, where
acid rain has had a severe local effect.
In view of this, Congress focused on reducing and capping the
overall level of SO<INF>2</INF> emissions instead of trying to control
local, source-by-source variables. Since it is the total accumulation
of acid deposition that principally determines its effect on the
environment, the reduction in total emissions of acid precursors
(rather than reductions from any one source) appeared to be most
critical. Consequently, Congress concluded that it was acceptable to
allow emissions trading to occur without restrictions. As long as
overall reductions were achieved, the emissions levels of individual
sources could be permitted to adjust to market forces through trading.
The program's provisions that permit sources to bank allowances for
future use also stemmed from the commitment of Congress to both the
environmental and the economic performance of the program. Through
banking, sources would enjoy much greater flexibility in operating
under their SO<INF>2</INF> emissions constraints. In fact, banking
could play a critical role in the formation of the overall
SO<INF>2</INF> emissions trading market. Equally important, the
opportunity to bank extra allowances could yield more and earlier
reductions than Congress otherwise could mandate.
At the time the program was proposed, a formal analysis of
alternative policy designs was undertaken by Environmental Defense. The
study strongly suggested that the very large quantity of SO<INF>2</INF>
emissions in the Midwest and parts of the South would allow those
regions and their sources to tap economies of scale in making
SO<INF>2</INF> reductions. Because of their large inventory of
emissions, power plants in those parts of the country would exploit
opportunities to make substantial reductions relatively easily and
inexpensively. The resulting lower marginal cost of an incremental ton
of reduction would make it economically attractive for those sources to
``over-control'' their emissions--so that they could either sell their
extra reductions to other sources or bank those reductions for use in
offsetting future emissions. Consequently, the likely economic dynamics
of an emissions trading and banking market favored making both
mandatory and extra reductions at the high-emitting sources.
The banking component of this dynamic was particularly important.
Even for those sources that were uncertain about the short-term
economic value of creating extra reductions for the purpose of selling
the unused allowances, the prospect of banking those extra reductions
was likely to be appealing. While the market demand for extra
reductions might not materialize in the short-term, sources knew that
they would have to operate against a permanent cap on their emissions.
The certainty of the cap and the expectation of economic growth over
time would mean that the opportunity to bank extra reductions for
future use all but guaranteed that those extra reductions would be
economically valuable. Furthermore, with Congress taking a phased
approach to control, both the banking provisions and the provisions
that allowed Phase II sources to ``substitute in'' offered the
opportunity to design system-wide control optimization.
At the same time, the common understanding of the adverse
ecological effects of acid deposition strongly suggested both that
reducing cumulative SO<INF>2</INF> emissions should be the goal of the
program, and that early reductions were of significant environmental
value. The earlier the reductions, the sooner the ecosystems affected
by acid deposition could begin to recover their acid-neutralizing
capacity. As a result, the economic dynamic created by an emissions cap
with banking favored the environmental benefit of early, extra
emissions reductions. Indeed, the cap and trade program for
SO<INF>2</INF> emissions has provided immediate and significant
reductions in those emissions beyond the legal mandate.
Finally, Congress' latitude in permitting unlimited emissions
banking and trading, albeit in the implementation of a large mandatory
cap and reduction requirement, was augmented by other existing
provisions of the Clean Air Act. Beginning with its enactment in 1970,
the Act has required the EPA and the states to regulate the release of
SO<INF>2</INF> from sources whose emissions had local effects on public
health. In fact, in the legislation establishing the SO<INF>2</INF> cap
and trade program, Congress explicitly barred sources subject to
SO<INF>2</INF> emissions limits under the local health-effects program
from using SO<INF>2</INF> emissions allowances to meet their local
limitations. As a result, plants subject to SO<INF>2</INF> emissions
limits imposed for purposes of protecting local air quality cannot
exceed these limits no matter how many SO<INF>2</INF> allowances they
hold.<SUP>2</SUP>
---------------------------------------------------------------------------
\2\ The legislation establishing the SO<INF>2</INF> program
explicitly preserved the existing Clean Air Act authorities of Congress
and the EPA to impose additional restrictions on SO<INF>2</INF>. In
addition to calls for Congress to require further reductions in annual
SO<INF>2</INF> emissions beyond those mandated for Phase II, the EPA
has issued new standards for fine particle emissions (these regulations
are currently in litigation). Depending on how the implementation
programs for these standards are designed, power plants may face either
one of, or a combination of, additional reductions in the
SO<INF>2</INF> emissions cap and/or additional source-specific
reduction requirements.
---------------------------------------------------------------------------
VII. The Right Tool for Other Jobs?
Although history lessons may be interesting, the most pressing
questions often involve looking forward. As Congress looks ahead to the
imperatives created by the new health-based standards for groundlevel
ozone smog and fine particles, by the persistence of acid rain in many
areas of the country, by the continued problem of haze in pristine
areas and national parks and by the mounting evidence of unwanted
human-induced climate change, it will need to decide whether and how to
use the cap and trade tool. The President's Clean Skies Initiative and
multi-pollutant power plant legislation long pending in the Senate
ensure that cap and trade will be at the center of any legislative
consideration of new air pollution reduction mandates.
In the view of Environmental Defense, cap and trade is a powerful
and versatile tool. Congress should make every effort to design new
legislation to reduce SO<INF>2</INF>, oxides of nitrogen
(NO<INF>X</INF>) and carbon dioxide (CO<INF>2</INF>) emissions from
power plants using the cap and trade model. The President and both his
predecessors were right to feature cap and trade in their respective
environmental policy initiatives.
At the same time, however powerful cap and trade may be, it can
only be used constructively if it is embedded in carefully and
precisely designed clean air programs and strategies. This issue has
already become quite acute in the current debate, as many, including
senior administration officials, have suggested that a national cap and
trade program for power plant emissions can replace existing
authorities under Title I of the Clean Air Act.
If Congress pursues the Clean Skies Initiative or any multi-
pollutant power plant cap and trade program it will need to confront
this issue seriously. I would like to suggest a construct for thinking
about this question.
First, as already noted in this testimony, the acid rain program
was established as a complete complement to, not as a replacement for,
existing Clean Air Act and state air pollution authorities. This
complete separation of the SO<INF>2</INF> program from Title I is
illustrative. As a precursor of acid rain, SO<INF>2</INF> emissions are
a threat to the extent that they are projected into the atmosphere in
great quantities and transported over long distances by prevailing
winds. As vehicles for exposing human lungs to particulate matter,
SO<INF>2</INF> emissions are largely of concern because of their impact
within the confines of local airsheds. Hence Congress' decision in 1990
to address SO<INF>2</INF> emissions simultaneously in two separate
programs. Again, the Clean Air Act makes clear that Title I authorities
take precedence over the SO<INF>2</INF> acid rain program.
In the context of multi-pollutant power plant legislation,
SO<INF>2</INF> and NO<INF>X</INF> emissions again would be regulated as
precursors of acid rain. They also would be regulated as precursors of
groundlevel ozone and fine particles. It is in this respect that these
pollutants should be subject both to new cap and trade requirements and
to existing Title I authorities. This is because even in the context of
the attainment of the national ambient air quality standards for ozone
and fine particles, power plant SO<INF>2</INF> and NO<INF>X</INF>
contribute to nonattainment both as pollutants transported in quantity
from an aggregation of remote sources and as pollutants injected into
local airsheds by local or nearby upwind sources, including power
plants in both instances.
A cap and trade program can guarantee aggregate reductions in power
plant SO<INF>2</INF> and NO<INF>X</INF> emissions but the reductions
are guaranteed only for that portion of the local emissions inventory
comprising the contributions of long-distance transport. Consequently,
reductions in SO<INF>2</INF> and NO<INF>X</INF> in the local airshed
will occur only in proportion to the amount of airshed SO<INF>2</INF>
and NO<INF>X</INF> attributable to reductions in long-range transport.
To the extent that airshed SO<INF>2</INF> and NO<INF>X</INF> continue
to be generated by local power plants or nearby upwind power plants
additional reductions at those sources may be needed to attain the
NAAQS. By itself a cap and trade program cannot ensure that all cost-
effective and/or necessary reductions from local, or critical nearby
upwind, sources will be achieved. Only programs and authorities
currently constituted under Title I can ensure those.
Thus, in some nonattainment areas, residual local emissions from
power plants may prove to be critical contributors to nonattainment. In
that case, the retention of Title I applicability to those emissions
will prove to be vital to attaining the NAAQS. If, however, those
authorities are removed or effectively disabled as the political price
exacted for multi-pollutant cap and trade legislation, then the entire
exercise will have proven to be self-defeating for the people living in
those areas forced to face continued exposure to unhealthful air.
VII. Something Missing: Carbon Dioxide (CO<INF>2</INF>)
In his February 14 speech presenting his Clean Skies Initiative and
climate strategy, President Bush said:
``If, however, by 2012 our progress is not sufficient and sound
science justifies further action, the United States will
respond with additional measures that may include broad-based
market programs as well as additional incentives and voluntary
measures designed to accelerate technology development and
deployment.''
Although the President's intent was just the opposite, this
statement would seem to reinforce the logic underlying the adoption of
multi-pollutant power plant legislation that included CO<INF>2</INF>,
as well as the three conventional pollutants. The President seems to
have set up a high-stakes wager.
In the coming decade and a half the power sector will be facing
either legislated reductions of SO<INF>2</INF>, NO<INF>X</INF> and
mercury emissions or reduction requirements driven under current law by
the MACT standard for mercury and by the demands of attaining the NAAQS
for ozone and fine particles. This means that virtually every
electricity sector company will be making substantial long-term capital
investments involving fuel and technology choices. The logic of a
multi-pollutant approach, legislated by Congress and implemented by a
cap and trade system, is that companies will be able to bring a higher
degree of economic efficiency, environmental efficacy and overall
rationality to those investment and operation decisions if they are
acting, with certainty, under a comprehensive emissions regime.
This logic applies in its fullest sense only if that regime
encompasses all four--not just three--of the pollutants or classes of
emissions likely to be subject to new reduction requirements at some
point during the current investment horizon. To ask companies to make
investments with certain knowledge of what their liabilities are for
SO<INF>2</INF>, NO<INF>X</INF> and mercury and with only speculation as
to their potential CO<INF>2</INF> obligations, is to make each company
place a bet on what the future of climate-related emissions control
regulation will be. If they bet wrong, and after having made
substantial SO<INF>2</INF>, NO<INF>X</INF> and mercury compliance
investments, are called on again to make separate investments in
limiting their CO<INF>2</INF> emissions, their overall costs are likely
to be much higher than if multi-pollutant legislation is truly
comprehensive and covers CO<INF>2</INF>.
The President's own explicit reference to potential climate policy
changes in the next ten years is a tip off as to how acute this
uncertainty is. After all, even discounting for the most compelling
arguments that critics offer against both the Kyoto Protocol and the
bona fides of those nations moving to ratify it, a great many members
of the international community--including the world's leading
scientists, national policy-makers and the executives of some of the
largest multinational energy and chemical companies--have already
concluded that the current state of the science justifies limiting
greenhouse gas emissions now. In this light, the potentially high-cost
bet that power companies will be forced to make either under current
law or under three-pollutant cap and trade legislation--that they will
not be facing CO<INF>2</INF> emissions obligations in the next 15-to-20
years--seems almost rigged against them. In contrast, incorporating a
CO<INF>2</INF> emissions limitation requirement implemented through a
fully flexible cap-and-trade model that allowed offsets from other
sectors, including agriculture and land use, offers electric companies
a far more cost effective path forward--instead of a dangerous, rigged
wager. Little wonder, then, that at least one major coal-burning
utility acting by itself and a separate coalition of utilities have
come forward to support four- rather than three-pollutant legislation.
Mr. Barton. Thank you, Mr. Goffman.
We now want to hear from Dr. James Lents, the Environmental
Policy, Atmospheric Processes and Modeling Laboratory at the
University of California at Riverside.
Your statement is in the record in its entirety. We would
ask that you summarize in 5 minutes. Welcome to the
subcommittee.
STATEMENT OF JAMES LENTS
Mr. Lents. Yes, sir. As stated, my name is James Lents, and
I am Director of the programs you alluded to at the University
of California, Riverside. But prior to my present position, I
served 8 years as Technical Director for the Chattanooga-
Hamilton County Air Pollution Control Program, 7 years as
Director of the Colorado Air Pollution Control Program, and 11
years as Executive Officer for the South Coast Air Quality
Management District in California.
Mr. Barton. You don't look that old. You started at two?
You were a child prodigy.
Mr. Lents. In each of these assignments, the Clean Air Act
played an important and critical role in supporting and even
engendering the air quality improvement that has occurred in
each location. News releases by the Mayor of Chattanooga, the
Governor of Colorado and the leaders in Southern California
illustrate the pride that each area has taken in the
significant air quality improvements that have been achieved.
In 1970, Chattanooga suffered some of the dirtiest air in
the Nation. This included particulate levels in the downtown
region that were among the highest in the Nation, NO2 levels
that serves as a laboratory for the early development of NO2
health standards, and violations of the carbon monoxide and
ozone standards.
Although Chattanooga had operated a smoke abatement program
since the 1930's, the rules had little effect. Air quality was
so poor that auto dealers and homeowners washed their cars
daily to avoid permanent paint damage, and high ambient NO2
levels even damaged women's nylon hose while they were being
worn.
A local health study demonstrated that children living in
areas that were at the lower end of the Chattanooga air
pollution spectrum had significantly above normal respiratory
problems. The effects on the minority communities that existed
in the worst part of the pollution were never documented.
In association with the 1990 Clean Air Act amendments,
Federal funding was withdrawn from Chattanooga, and a Federal
implementation plan was threatened to inspire serious actions
by local and State officials. These steps, along with the
establishment of nationally accepted health standards called
for in the 1970 amendments, inspired the local city and county
governments to revamp their air pollution control effort.
The Federal Government then provided funding that allowed
the city and county to hire a small staff of air pollution
control experts to oversee the cleanup effort. The region
implemented tough emission standards in the early 1970's, with
controls completed between 1973 and 1979. Particulate levels
dropped noticeably in the 1970's and early 1980's, and
Chattanooga came into compliance with existing standards in the
mid-1980's.
Following this achievement, Chattanooga transformed its
formerly grimy downtown area into a beautiful mall and
riverfront park. Chattanooga's economy has continued to grow,
becoming a poster child for what could be done to control air
pollution. The 1970 Clean Air Act was the seminal event that
stimulated these important changes.
I supplied a figure to show the change in particulate level
in Chattanooga between 1970 and 1990.
Denver, Colorado, experienced the worst carbon monoxide
levels in the United States in the 1970's, close to four times
the national health standard, with levels getting worse year by
year along with a burgeoning ``brown cloud'' problem and a
concern about ozone.
The 1970 and 1977 Clean Air Act amendments required
Colorado to produce a compliance plan by 1982 to demonstrate
how the carbon monoxide problem would be solved. The 1977 Clean
Air Act amendments also mandated a vehicle inspection and
maintenance program for the Denver area. More importantly,
however, the Federal law set a strict deadline to attain
healthy air, and included sanctions for not making a good faith
effort to meet cleanup requirements.
After a brief application of Federal sanctions to get
legislative action, Colorado adopted an I&M program in 1980,
and with the aid of automobile emission standards set forth by
the Clean Air Act, began its development of an attainment plan.
Local planning processes resulted in a conclusion that I&M and
the Federal automobile emission standards were inadequate to
meet ambient air quality levels by the 1987 deadline.
This conclusion resulted in the development of a pilot
episodic no-drive program and research into cleaner burning
fuels. While the no-drive program did not produce the desired
results, the cleaner burning gasoline did. The tightening
automobile emission standards, combined with the I&M program
and cleaner burning gasoline produced significant carbon
monoxide reductions before 1990 and attainment of the carbon
monoxide standard in the early 1990's. Again, I supplied a
chart, Figure 2, showing the results.
Los Angeles, which suffered severe photochemical smog by
the 1950's, is the birthplace of the understanding of the
source and cause of much of our urban air pollution. It
initiated the control of automobile emissions in the 1950's,
ahead of anyone else in the United States. However, by the
1970's, the air pollution problem in Los Angeles had become
generally worse, in spite of these local county air pollution
control efforts.
The advent of the 1970's and 1977 Clean Air Act amendments
accelerated the development of a region-wide air pollution
control agency called the South Coast air Quality Management
District, and the far reaching automobile standards in the
1970's Clean Air Act amendments set California on an aggressive
path toward cleaner air.
Inspired by the results of the Clean Air Act's automobile
emission standards, California, as the only State allowed to
set separate mobile source standards, took over the lead from
U.S. EPA in driving vehicle emission standards in the 1980's
and 1990's.
The citizen suit provisions in the Clean Air Act amendments
played an important role in fostering clean air in Los Angeles.
After the failure of the South Coast Air Quality Management
District to develop a suitable State implementation plan by
1982, environmental groups used the citizen suit sections of
the Clean Air Act to get a judicial ruling requiring the U.S.
EPA to develop a Federal implementation plan for the region.
This embarrassment to the local leadership, along with
subsequent State and Congressional hearings, resulted in a much
more activated South Coast air pollution control program,
advancing progress toward clean air and producing important
experience needed for the 1990 Clean Air Act amendments.
Mr. Barton. Could you summarize, Dr. Lents, please?
Mr. Lents. Sure. I'll jump over.
There is still a long way to go to achieve the goal of
healthy air in the United States. Chattanooga and much of the
eastern United States are likely in violation of the new
PM<INF>2.5</INF> and ozone standards. Acid deposition is
another significant problem that needs continued focus,
especially in the east.
Los Angeles, along with many other areas in California and
Texas, still suffers from ozone air pollution, and will violate
the new PM<INF>2.5</INF> standards. Western visibility is
significantly reduced.
A unifying theme surrounding these 21st Century issues is
the need to address the multi-jurisdictional, regional aspects
of smog. When the Clean Air Act was envisioned in 1963, 1970
and 1977, and to some degree in 1990, air pollution was seen as
primarily a local and State problem that simply needed a boost
from the Federal Government to reach attainment goals.
It is clear today that air pollution problems cross State
lines and international boundaries and, in some cases, are
global in nature. Future air quality improvement programs must
address these complex inter-jurisdictional issues.
I will conclude my testimony here, and I will be pleased to
answer questions.
Mr. Barton. Thank you, Doctor. It is obvious you have
probably testified before the Senate where they don't have a
time limit, because you know so much, you just get carried--not
carried away, but it is hard to squeeze as much as you know
into 5 minutes.
[The prepared statement of James Lents follows:]
Prepared Statement of James M. Lents, Director, Environmental Policy
and Atmospheric Research Laboratory, Center for Environmental Research
and Technology, University of California at Riverside
Good morning. My name is James M. Lents. I am Director of the
Environmental Policy and Atmospheric Research Laboratory for the Center
for Environmental Research and Technology at the University of
California, Riverside, Bourns College of Engineering. Prior to my
present position, I served 8 years, from 1971 to 1979, as Technical
Director for the Chattanooga-Hamilton County Air Pollution Control
Program, 7 years, from 1979 to 1986, as Director of the Colorado Air
Pollution Control Program, and 11 years, from 1986 to 1997, as
Executive Officer for the South Coast Air Quality Management District
in California.
My environmental career began at the adoption of the 1970 Clean Air
Act Amendments working in the Chattanooga, Tennessee, air pollution
control program. I continued to work in air pollution control programs
following the 1977 and 1990 Clean Air Act Amendments in Colorado and
California respectively. In each of these assignments, the Clean Air
Act played an important and critical role in supporting and even
engendering the air quality improvement that has occurred in each
location. News releases by the Mayor of Chattanooga in the early 1980s
and by the Governor of Colorado and the leaders in Southern California
more recently illustrate the pride that each of these areas has taken
in the significant air quality improvements that have been achieved.
In 1970, Chattanooga suffered some of the dirtiest air in the
nation. This included particulate levels in the downtown region that
were among the highest in the nation, NO<INF>2</INF> levels that served
as the laboratory for the early development of NO<INF>2</INF> health
standards, and violations of the Carbon Monoxide and Ozone standards.
Although Chattanooga had operated a smoke abatement program since the
1930s, the rules had little effect. Air quality was so poor that auto
dealers and homeowners washed their cars daily to avoid permanent paint
damage, and high ambient NO<INF>2</INF> levels even damaged women's
nylon hose while they were being worn. A local health study
demonstrated that children living in areas that were at the lower end
of the Chattanooga air pollution spectrum had significantly above
normal respiratory problems. The effects on the minority communities
that existed in the worst part of the pollution were never documented.
In association with the 1970 Clean Air Act Amendments, Federal
funding was withdrawn from Chattanooga and a Federal Implementation
Plan was threatened to inspire serious actions by local and state
officials. These steps, along with the establishment of nationally
accepted health standards called for in the 1970 Amendments, inspired
the local city and county governments to revamp their air pollution
control effort. The Federal government then provided funding that
allowed the city and county to hire a small staff of air pollution
control experts to oversee the cleanup effort. In the face of medical
testimony from local company doctors that air pollution in Chattanooga
was not a problem and threats by local manufacturers to close their
plants if air pollution rules were adopted, the region implemented
tough emission standards in the early 1970s. Controls on sources were
completed between 1973 and 1979. Particulate levels dropped noticeably
in the 1970s and early 1980s, and Chattanooga came into compliance with
existing standards in the mid-1980s. Following this achievement,
Chattanooga transformed its formerly grimy downtown area--where you
once could not see across the street--into a beautiful mall and
riverfront park. Chattanooga's economy has continued to grow, becoming
a poster child for what could be done to control air pollution. A
national article in Time magazine and an EPA film titled ``What One
City Did'' documented the efforts by Chattanooga to resolve its air
quality problems. Today, Chattanooga takes great pride in its much
cleaner air. The 1970 Clear Air Act was the seminal event that
stimulated these important changes. Figure 1 shows the change in
particulate levels in Chattanooga between 1970 and 1990.
Denver, Colorado, experienced the worst Carbon Monoxide levels in
the United States in the 1970s, close to 4 times the national health
standard, with levels getting worse year by year along with a
burgeoning ``Brown Cloud'' problem and concern about Ozone. The 1970
and 1977 Clean Air Act Amendments required Colorado to produce a
compliance plan, referred to as a State Implementation Plan in the
Clean Air Act, by 1982 to demonstrate how the Carbon Monoxide problem
would be solved. The 1977 Clean Air Act Amendments also mandated a
vehicle inspection and maintenance (I/M) program for the Denver area.
More importantly, however, the Federal law set a strict deadline to
attain healthy air and included sanctions for not making a good faith
effort to meet cleanup requirements. After a brief application of
Federal sanctions to get legislative action, Colorado adopted an I/M
program in 1980, and with the aid of automobile emission standards set
forth by the Clean Air Act began its development of an attainment plan.
The local planning process resulted in the conclusion that I/M and the
Federal automobile emission standards were inadequate to meet ambient-
air quality levels by the 1987 deadline. This conclusion resulted in
the development of a pilot episodic no-drive program and research into
cleaner-burning fuels. While the no-drive program did not produce the
desired results, the cleaner-burning gasoline did. The tightening
automobile emission standards as specified in the Clean Air Act
combined with the I/M program and cleaner-burning gasoline produced
significant Carbon Monoxide reductions before 1990 and attainment of
the Carbon Monoxide standard in the early 1990s. A synopsis of the
change in Carbon Monoxide levels between 1970 and 2000 is shown in
Figure 2.
Los Angeles, which suffered severe photochemical smog by the 1950s,
is the birthplace of the understanding of the source and causes of much
of our urban air pollution. It initiated the control of automobile
emissions in the 1950s, ahead of anyone else in the United States.
However, by the 1970s, the air pollution problem in Los Angeles had
become generally worse in spite of these local county air pollution
control efforts. The advent of the 1970 and 1977 Clean Air Act
Amendments accelerated the development of a region-wide air pollution
control agency called the South Coast Air Quality Management District,
and the far-reaching automobile standards in the 1970 Clean Air Act
Amendments set California on an aggressive path toward cleaner air.
Inspired by the results of the Clean Air Act's automobile emission
standards, California, as the only state allowed to set separate mobile
source standards, took over the lead from the U.S. EPA in driving
vehicle emission standards through the 1980s and 1990s.
The citizen suit provisions in the Clean Air Act Amendments played
an important role in fostering clean air in Los Angeles. After the
failure of the South Coast Air Quality Management District to develop a
suitable State Implementation Plan by 1982, environmental groups used
the citizen suit sections of the Clean Air Act to get a judicial ruling
requiring the U.S. EPA to develop a Federal Implementation Plan for the
region. This embarrassment to the local leadership along with
subsequent State and Congressional hearings resulted in a much more
activated South Coast air pollution control program, advancing progress
toward clean air and producing important experience needed for the 1990
Clean Air Act Amendments.
Once adopted, the 1990 Clean Air Act Amendments gave Los Angeles a
reasonable time frame to solve its problems. With this more realistic
deadline, the South Coast Air Quality Management District in
association with the California Air Resources Board and Southern
California Association of Governments produced the first State
Implementation Plan to ever be approved by the U.S. EPA for Southern
California. Implementation of this Plan has produced remarkable
results. In spite of some of the largest population and economic growth
in the nation, California has reduced the number of violation days of
air quality standards by 80% since the 1970s and has had no air
pollution alerts since 1999 for the first time in the history of air
monitoring there. Figure 3 illustrates the changes in Ozone levels in
Southern California since the 1977 Clean Air Act Amendments.
As I close my testimony, I want to note three important issues.
First, there was clearly a need for the Federal government to intervene
at times and to push states to develop adequate clean air programs;
however, the Clean Air Act would not have succeed as it has without a
close partnership between state and local air pollution control efforts
and the Federal government. Second, there has been difficulty in
achieving the flexibility for state programs and businesses that were
envisioned in the discussions surrounding the Clean Air Act Amendments.
This needs to be improved in the future. Third, the air pollution
problem is far from solved and will require even more complex actions
as we proceed into the 21st Century.
State and local programs established and now maintain almost all of
the nation's air monitoring stations, wrote and continue to adopt most
of the applicable stationary source regulations, and operate and
enforce most of the local compliance programs. No success would have
been achieved if these programs had not been effective. The California
automobile control program has provided much of the leadership for the
clean vehicles that are being produced today. The Colorado air
pollution control program combined with subsequent efforts in
California pointed the way toward the development of today's cleaner
burning gasoline and diesel fuel.
The processes employed by the U.S. EPA to enforce Federal
requirements in the Clean Air Act have not always enabled the level of
flexibility that could have been included in the process. Examples can
be cited concerning experiences with I/M programs, the specific design
of State Implementation Plans, and most notably the recent application
of the Title V Federal permitting program. Greater effort needs to be
made in future Clean Air Act implementation to find more flexible ways
of applying its requirements. Although not a panacea, an important
potential for the future can be a further move away from command and
control regulation toward more flexible market-based solutions. It
appears that Federal regulatory programs along with many state and
local programs are now recognizing the benefits of market-based
solutions in many key regulatory programs.
There is still a long way to go to achieve the goal of healthy air
in the United States. Chattanooga and much of the Eastern United States
are likely in violation of the new PM<INF>2.5</INF> and Ozone
standards. Acid deposition is another significant problem that needs
continued focus, especially in the East. Los Angeles along with many
other areas in California and Texas still suffers from Ozone air
pollution and will violate the new PM<INF>2.5</INF> standards. Western
visibility is significantly reduced in many locations, leaving Denver
and many other areas without the beautiful vistas that they once
enjoyed. A unifying theme surrounding these 21st Century issues is the
need to address the multi-jurisdictional, regional aspects of smog.
When the Clean Air Act was envisioned in 1963, 1970, and 1977, air
pollution was seen as primarily a local or state problem that simply
needed a boost from the Federal government to reach attainment goals.
It is clear today that air pollution problems cross state lines and
international boundaries and in some case are global in nature. Future
air quality improvement programs must address these complex inter-
jurisdictional issues.
Finally, the population of the earth will pass 10 billion during
this century. Available land for humans and ecosystems to operate has
dropped from about 17 acres per person in the 1950s to 8 acres per
person today. This decline will continue in this century to levels
possibly below 5 acres per person. This increasing human density along
with continued economic growth will further exacerbate air quality and
other environmental problems. It is imperative that Congress continues
to provide both national and international leadership towards cleaner
air.
This concludes my testimony. I will be pleased to answer questions
at the appropriate time.
[GRAPHIC] [TIFF OMITTED] T9470.001
[GRAPHIC] [TIFF OMITTED] T9470.002
[GRAPHIC] [TIFF OMITTED] T9470.003
Mr. Barton. We are now going to hear from another expert,
Mr. Alan Krupnick, who is a Senior Fellow and Director, Quality
for the Environment Division of the Resources for the Future,
and we welcome you, sir. Your testimony is in the record, and
ask that you attempt to summarize it in 5 minutes.
STATEMENT OF ALAN KRUPNICK
Mr. Krupnick. Sure. Well, I want to thank you for inviting
me here again. It has been about five or 7 years or something
since I was back, and this is my favorite topic and favorite
committee. So, thank you.
Mr. Barton. We like you, too.
Mr. Krupnick. I want to applaud you for starting hearings
again to look at reopening the Clean Air Act, and I think the
reasons are because the goal posts have now been--with criteria
pollutants have now been moved back. with the new ozone
standard, the new fine particulate standard, many new areas of
the country are going to be in violation of these standards,
and without certain initiatives that are being discussed, we
are going to face as a country a tough job in meeting these
standards. So it is appropriate that we reopen, look again at
our thinking, and care much more than we have in the past
perhaps about cost effectiveness.
In addition, and perhaps ironically to some, because of the
success of the cap and trade program, we really need to look at
the appropriateness of New Source Review, and I'll get to that
in a minute.
So what I did first is look at the performance of the Act
according to two metrics. One has to do with those lines, the
graph that Jeff Holmstead put up. I have more lines on my
graph, if anyone wants to look at it, but the message is, of
course, the same, that economic activity is going up, and
emissions are going generally down. But that doesn't say too
much about the costs of control and the cost effectiveness of
the controls.
So one way to look at that is by looking at the studies
that you all mandated EPA to do, the retrospective and
prospective cost-benefit analyses of the Clean Air Act and its
amendments. I have done--You probably all looked at them. I
have relooked at them recently.
Of course, they show that the benefits of this Act far
outweigh the costs, pretty much no matter how you slide it up,
as a general rule. Having said that, it is important to note
that most of those benefits come from reductions in
SO<INF>2</INF> that are related to mortality reductions, at
least the benefits that were quantified in these studies, and
perhaps the benefits from some of the other pollutants have not
been that large.
It is also important to know that the studies didn't
disaggregate the benefits by pollutant and by sector or even by
subsection of the Act. So when we look to those studies as a
guide for how to change things in the future, we come up pretty
short.
Mr. Barton. Keep going.
Mr. Krupnick. Okay. So I have looked at some other studies
in the literature and our own work as well as just economic
analyses to try to shed some more light on what worked and what
hasn't worked. Of course, as we have all said, the
SO<INF>2</INF> trading program is the bright, shining star of
the Clean Air Act, as far as I am concerned as an economist,
and it has really led the way to a change in the thinking about
policy instruments at EPA and indeed even around the world.
In addition to that, we haven't talked much today about
mobile sources, and I think that the fuel, particularly the
early fuel reformulations, Federal measures for them, and
Federal tailpipe standards did a cost effective job in reducing
these emissions. But recently things have gotten a bit
tattered.
The MTBE problem as an additive causing water pollution,
the ethanol as a substance being heavily subsidized and being
put into reformulated gas, and the problem of designer fuels in
gas spikes need to, I think, command the committee's attention.
Now less effective segments of the Act and its amendments
are a couple. One is the SIP process. This is really not that
well suited to address issues of long range pollution
transport.
In a committee I was on with James Seitz to look at the
future of Clean Air Act implementation, we talked about areas
of influence and areas of violation as a different paradigm
than the SIP process to think about controlling pollution, and
I encourage the committee to look at that.
Inspection and maintenance programs are not working very
well. That needs to be looked at. They don't target very well
the dirtiest vehicles, and the dirtiest vehicles don't get
cleaned up well. That needs to be looked at.
Then finally the New Source Review. As I started before, I
want to try to make this as clear as I can that the existence
of a cap on SO<INF>2</INF> means that, if new sources have to
do more with New Source Review than if there was no New Source
Review, all that means is that the price of allowances is going
to go down, and the costs of control are going to go way up.
But the SO<INF>2</INF> permits themselves, the SO<INF>2</INF>
emissions themselves, are going to stay constant, because of
the cap.
So there is no benefit to the environment, no clear benefit
to the environment from this cap and from the New Source
Review. So I would suggest that the administration's Blue Skies
initiative where we are reducing SO<INF>2</INF> caps and
perhaps eliminating New Source Review makes economic sense, and
it makes environmental sense. Thank you.
[The prepared statement of Alan Krupnick follows:]
Prepared Statement of Alan Krupnick, Senior Fellow and Director,
Resources for the Future
Thank you Chairman Barton and other members of the subcommittee for
the opportunity to testify on the performance of the Clean Air Act. I
am Alan J. Krupnick, senior fellow and director, at Resources for the
Future (RFF), a nonprofit, nonadvocacy research and educational
organization specializing in problems of natural resources and the
environment since 1952. The views I express today are my own, not those
of RFF.
The performance of the Clean Air Act (CAA) can be measured in two
general ways:
(1) by how much better off the American people are with the act than
without it, in other words, by the excess of the benefits of
the act compared to the costs; and
(2) by whether these benefits and costs are distributed throughout the
population in a way that we as a society find acceptable or
advantageous.
The former may be termed an efficiency measure; the latter is an
equity measure. I will offer some thoughts on the former only.
Economic Versus Environmental Performance Measures
There are several ways in which efficiency can be measured. One
revealing, but nonrigorous approach is simply to compare how well the
economy has performed since the Clean Air Act was implemented to the
performance of various indicators of emissions and air quality. If
economic activities are going up while pollution is going down, this is
an indicator that something in the act is going well. It is an
incomplete indicator, to be sure. For example, as the economy grows,
the composition of its output changes. If by accident this change
results in lower emissions, such changes should not be counted as a
benefit of the act.
The attached chart presents some of these comparisons. Measures of
general economic activity include gross domestic product, megawatt
hours of electricity generated, fuel used, and vehicle miles traveled.
These activities are compared to the U.S. Environmental Protection
Agency's (EPA) emissions and air quality trends data for each of the
criteria pollutants, except lead. Lead is an obvious, major success
story for the Clean Air Act as it is a highly toxic pollutant that was
largely removed from environmental concern through EPA's phase-out of
lead from gasoline, using authority conferred to the agency by the act.
Even the policy used to implement the phase-out was well conceived from
a cost-effectiveness perspective, as the lead phase-down rule was an
early version of tradable permit programs, which have turned out to be
so successful.
From Figure 1, with each trend line indexed to 1970, it is clear
that measures of general economic activity, as well as activities more
or less directly leading to emissions, are trending strongly upward
while emissions are either flat (NO<INF>X</INF> emissions) or falling.
The flat or downward trend in emissions is also mirrored in the air
quality data (not shown) where the number of nonattainment areas has
been falling, although not steadily.
Cost-Benefit Analyses of Performance <SUP>1</SUP>
---------------------------------------------------------------------------
\1\ Much of the discussion in this section is taken from Krupnick
and Morgenstern (2002).
---------------------------------------------------------------------------
A more rigorous approach to measuring the efficiency of the act is
to simply refer to the results of the Section 812 studies that Congress
required in the 1990 Clean Air Act Amendments (CAAA) EPA to do: The
Benefits and Costs of the Clean Air Act: 1970 to 1990 (EPA, 1997a) and
The Benefits and Costs of the Clean Air Act, 1990 to 2010 (EPA, 1999).
Because the first of these studies began after 1990, it is called the
retrospective study, while the latter, tracking the effects of the 1990
Amendments, is called the prospective study.
These studies are probably the most intensive and expensive cost-
benefit analyses ever done at the agency. Under the auspices of the
agency's Science Advisory Board, both studies were scrutinized
throughout the decade-long preparation by at least three expert
committees of outside economists, air quality modelers,
epidemiologists, and other health experts.
Although both the retrospective and the prospective studies involve
many controversial policy and technical issues, they clearly show that,
taken as whole, the nation has received high returns on its investment
in improved air quality over the past three decades. The estimates
indicate that, for the early years, benefits exceed costs by a factor
of 40 or more. Prospectively to the 1990 Amendments, benefits still
exceeded costs, although by a far smaller margin.
Table 1 presents the annualized (central) estimates for both
benefits and costs developed in the two studies. Each of the two
(aggregate) scenarios is evaluated by a sequence of economic,
emissions, air quality, physical effect, economic valuation, and
uncertainty models to measure the differences between the scenarios in
economic, human health and environmental outcomes. Both studies examine
the benefits and costs of reducing volatile organic compounds (VOCs),
nitrogen oxides (NO<INF>X</INF>), sulfur dioxide (S0<INF>2</INF>),
carbon monoxide (CO), coarse particulate matter (PM<INF>10</INF>), and
fine particulate matter (PM<INF>2.5</INF>).<SUP>2</SUP>
---------------------------------------------------------------------------
\2\ Although the incremental effects of the 1990 Amendments on
primary particulate matter (PM) emissions is relatively small, PM in
the atmosphere is comprised of both directly emitted primary particles
and particles that form in the atmosphere through secondary processes
as a result of emissions of SO<INF>2</INF>, NO<INF>X</INF>, and organic
compounds. These PM species, formed by the conversion of gaseous
pollutants emissions, are referred to collectively as ``secondary'' PM.
Because the Clean Air Act, especially the 1990 Amendments, achieve
substantial reductions in these gaseous precursor emissions, it has a
much larger effect on PM<INF>10</INF> and PM<INF>2.5</INF> than might
be apparent if only the changes in directly emitted particles are
considered. Also, the retrospective analysis assessed the effect of CAA
provisions governing lead in the environment. However, since the 1990
Amendments do not include new provisions for the control of lead, it is
not considered in the prospective analysis.
---------------------------------------------------------------------------
These results indicate that aggregate benefits of air pollution
control exceed costs by more than an order of magnitude for the period
1970-1990. Note that this conclusion is robust with respect to
alternative assumptions about age-adjusted mortality. Also note that
the costs were treated as if the were certain, when, in fact, there is
much uncertainty about such costs.
Table 1: Central Estimates of Total Annual Monetized Benefits and Costs
of Environmental Regulations
(Billions of 1996 dollars as of 1999)
------------------------------------------------------------------------
Benefits Costs
------------------------------------------------------------------------
EPA retrospective report, 1990............. $960 \1\ to $1450 $54
EPA prospective report, 2000............... $55 \1\ to $96 $20
------------------------------------------------------------------------
Source: OMB (2000)
\1\ Age-adjusted mortality estimate.
While benefits still exceed costs for the prospective study, the
ratio of benefits to costs is considerably lower than in the
retrospective analysis, suggesting that the ``truly low-hanging fruit''
may have been picked in the early years.<SUP>3</SUP>
---------------------------------------------------------------------------
\3\ In one of the scenarios presented in the prospective study (low
benefits) costs actually exceed benefits by $1 billion per year.
---------------------------------------------------------------------------
Table 2, taken directly from the prospective study, summarizes the
central estimates on a present value basis by title of the Clean Air
Act. For Titles I-V, present value estimates of benefits exceed those
of costs by a factor of four. About 90% of these benefits are
associated with avoided mortality. The remainder are associated with
avoided morbidity and with ecological and welfare benefits. On the cost
side, the prospective analysis finds that Title I accounts for almost
half of the total cost of the first five titles. Title II accounts for
another third, with the balance distributed among Titles III-V. Because
of the long-term nature of the benefits of Title VI (stratospheric
ozone), the results for this title are not fully integrated into the
overall findings. However, the present value benefits of this title
exceed costs by a factor of 20.
Overall, as the Agency has written in the prospective study, the
conclusion of the 812 analysis is clear:
``While alternative choices for data, models, modeling
assumptions, and valuation paradigms may yield results outside
the range projected in our primary analysis, we believe based
on the magnitude of the difference between the estimated
benefits and costs that it is unlikely that eliminating
uncertainties or adopting reasonable alternative assumptions
would change the fundamental conclusion of . . . [the] study:
the Clean Air Act(s') . . . total benefits to society exceed
its costs.'' (page v)
How much stock should we put in these overall results? The Science
Advisory Board's general endorsement is certainly good reason for
trusting the results. However, there were some important and
acknowledged shortcomings, including the lack of disaggregation of
benefits, difficulty in defining a baseline, difficulties in measuring
the willingness to pay for mortality risk reductions, omissions of
important benefit categories, and poorly estimated costs.
Not Enough Disaggregation. Both studies were conducted at a highly
aggregate, economy-wide level. The retrospective study did not estimate
either the benefits or the costs of individual regulations, pollutants,
or of any subcategories (for example, stationary versus mobile sources)
of the federal air pollution program. The prospective study estimated
costs but not benefits by title of the 1990 Amendments, but there were
no further disaggregations.
From a policy perspective, an analysis of total costs and total
benefits represents a very simple approach to a complex issue.
Arguably, few propose abandoning all federal air pollution control. The
more policy-relevant question concerns the costs and benefits of
individual regulations and, even more relevant, the costs and benefits
of marginal changes to individual regulations on individual pollutants.
The principle rationale offered by the agency for this highly aggregate
analysis is that while costs can be reliably attributed to individual
regulations or programs, the broad-scale methodology used for the
benefits analysis precludes reliable estimation of the benefits by
regulation or program, especially since some pollutants, such as
NO<INF>X</INF>, show up in multiple titles and affect multiple criteria
pollutants (NO<INF>2</INF>, ozone, and particulates).
Yet, others have analyzed disaggregated pollutants by title, taking
EPA's aggregate benefit estimate (and cost estimates by title) as given
(Smith and Ross, 1999), and for Title IV alone (Chestnut, 1995, Burtraw
et al, 1998), which applied only to the electricity generation sector.
In addition, EPA was able to develop separate benefit estimates for
their new ozone and fine particulate National Ambient Air Quality
Standards (NAAQS) (USEPA, 1997b). The findings from these studies are
presented in table 3. This table shows that some titles deliver more
net benefits than others and that the new fine particulate NAAQS is
likely to be a much better buy for society than the new 8-hour ambient
ozone standard.
Difficulty Defining the Baseline. The so-called baseline issue is
another knotty problem for judging the reliability of these studies. In
both studies the Agency analyzed air pollution programs by comparing
specific policy and baseline scenarios. The retrospective study
contrasted a scenario reflecting historical economic and environmental
conditions observed with the Clean Air Act in place to a hypothetical
scenario projecting the economic and environmental conditions which
would have existed on the assumption that the stringency and
effectiveness of air pollution control technologies were frozen at
their 1970 levels. In the prospective study, all rules promulgated or
expected to be promulgated pursuant to the 1990 Act were contrasted to
a scenario that essentially freezes federal, state, and local air
pollution controls at the levels of stringency and effectiveness
prevailing in 1990. Both studies hold constant the geographic
distributions of populations and economic activities across the
scenarios.<SUP>4</SUP>
---------------------------------------------------------------------------
\4\ Although the scenarios do reflect the basic trends in
population and economic growth across the country over the relevant
time periods, they do not allow for the possibility that people would
respond to pollution by moving away from the dirtiest areas.
---------------------------------------------------------------------------
The frozen technology assumption--an obvious simplification--is
central to the overall results. Arguably, in the absence of new federal
regulation, one would expect to see some air pollution abatement
activity, due to state or local regulation or, possibly, on a voluntary
basis. As Davies (1970) has reported, nonfederal air pollution efforts
date back to 1881 when the city of Chicago adopted an ordinance that
declared: ``the emission of dense smoke from the smokestack of any boat
or locomotive or from any chimney anywhere within the city shall be . .
. a public nuisance.'' Davies reports that other cities followed
Chicago's example. More recently, some states have imposed particularly
stringent controls, especially California. If one assumed that state
and local regulations would have been equivalent to federal
regulations, then a cost-benefit analysis of the Clean Air Act would be
a meaningless exercise: both benefits and costs would equal zero. For
both studies, EPA and the outside experts wrestled with the possibility
of developing more realistic baseline scenarios. In the end, they
decided that any attempt to predict how states' and localities'
regulations or voluntary efforts would have differed from the Clean Air
Act is too speculative.
Difficulty Measuring Values for Mortality Risk Reductions. The
monetized benefits reflect interpretations of the available science and
economic literature made by the Agency in consultation with its outside
experts. As a form of sensitivity analysis, a number of alternative
interpretations of the literature also were examined. The
quantitatively most important concern the valuation of premature
mortality. In both the retrospective and prospective analyses, the
Agency developed an alternative scenario based on the loss-of-life-
years approach to reflect the greater susceptibility of older
individuals to air pollution-induced mortality. In both studies, this
scenario yielded significantly lower benefits. The prospective study
also examined alternative assumptions about the incidence of mortality,
the incidence and valuation of chronic bronchitis, as well as certain
other effects. For Title VI, sensitivity analysis reflected potential
averting behaviors, such as remaining indoors or increasing use of
sunscreen or hats.
Since these studies were published, two distinct elements of the
health valuation literature have been expanded. The first is a more
systematic evaluation of the main body of the literature, which is
associated with using wage rate differentials reflecting differential
workplace risks. Mrozek and Taylor (2002) have performed a meta-
analysis of 38 labor market studies contributing 203 estimates of the
value of a statistical life (VSL). They find that EPA's best estimate
for VSL ($6 million of 1998 dollars) is three times too large (that is,
their best estimate is $2 million), owing to a number of factors. The
most important is a false attribution of wage rate differentials to
mortality rate differences, when in fact, much of this variation is due
to inter-industry differences in wage rates that occur for other
reasons.
The second is some new studies in the mortality risk valuation
literature (for example, Hammitt and Graham, 1999; Krupnick et al,
2002; Strand, 2001; Johannesson and Johansson, 1996) that are
specifically designed to reflect the mortality risks associated with
air pollution using survey techniques, rather than using estimates from
labor markets, a context and population far different than that
appropriate to air pollution. Much of this literature also suggests
that EPA's $6 million estimate for VSL is too high (a factor of three
to six too high would not be out of line) with the appropriate
adjustment being quite uncertain, as this literature needs to mature.
Additional context adjustments, say for the dread associated with
cancer or other diseases and deaths caused by air pollution, could
result in higher VSLs, however.
Omissions. Although both studies attempt broad coverage, there are
some notable omissions, largely because of data or modeling
limitations. Emissions of hazardous air pollutants are not extensively
considered in either study.<SUP>5</SUP> Estimates for Title VI of the
1990 Amendments regarding stratospheric ozone depletion are developed
in the prospective study but they are not fully integrated into the
main analysis.
---------------------------------------------------------------------------
\5\ Some pilot analyses of hazardous air pollutants were conducted
but it was determined that the poor quality of the available
information precluded comprehensive quantification of the effects.
---------------------------------------------------------------------------
Despite efforts to characterize the impacts of air pollution on
natural systems, the inability to quantify and/or monetize the damages
precluded the development of benefits estimates for ecosystem impacts
(except for a supplementary calculation for avoided costs of nitrate
reductions associated with NO<INF>X</INF> emissions). A similar story
applies to potential carcinogenic and certain other health effects
associated with criteria pollutants.
Poorly Estimated Costs. Costs are estimated as increases in
expenditures by different entities to meet the additional control
requirements of the 1990 Amendments, including operation and
maintenance expenditures plus amortized capital costs (that is,
depreciation plus interest costs associated with the existing capital
stock).<SUP>6</SUP> Changes in employment and prices as well as impacts
that might be experienced among customers of the firms that must incur
these costs were partially examined in the retrospective analysis but
omitted in the prospective study. In limiting consideration of these
so-called general equilibrium effects, the EPA reports effectively
preclude analysis of the tax interaction effect, which reflects the
economy-wide result of imposing additional costs in the context of
existing (distortionary) taxes.
---------------------------------------------------------------------------
\6\ Costs for meeting Title IV through the SO<INF>2</INF> trading
program were estimated by a model that allocates emissions reductions
cost effectively in a context of responding to market signals in the
electric power and tradable allowance markets.
---------------------------------------------------------------------------
This effect was extensively discussed by the expert review
committee of the prospective study, and is mentioned in the study, but
is not incorporated quantitatively. The tax interaction effect (Parry
and Oates, 2000) refers to the effect of increased control costs on the
deadweight loss associated with our existing system of labor and other
taxes. The slight rise in the cost of living slightly lowers real
wages, with aggregate losses being quite large because there are so
many people affected.<SUP>7</SUP> Costs may be significantly
underestimated on this account. At the same, the difficulties of
forecasting future technological changes (and EPA's current practice of
fixing technology) probably leads to an overestimate of costs
(Harrington, Morgenstern, and Nelson, 2000).
---------------------------------------------------------------------------
\7\ One committee member estimated that costs of implemented the
1990 Amendments could be 30% higher than shown in the report.
---------------------------------------------------------------------------
In summary, while significant challenges remain to estimate the
cost and benefit performance of the Clean Air Act and its Amendments,
there are as many reasons for expecting that net benefits will be
higher than estimated as lower than estimated, with the net effect
awaiting further research. Clearly, new benefits will be larger in some
elements of the act than in others, a discussion to which I now turn.
Performance of Specific Elements of the Clean Air Act
A final approach to examining performance of the Clean Air Act is
to consider some of the evidence on individual elements of the act.
This examination will be highly selective, mostly choosing topics about
which I have some expertise.
SO<INF>2</INF> Allowance Trading. The SO<INF>2</INF> Allowance
Trading Program in Title IV is an unmitigated net benefit and has lead
the way to a revolution in thinking about the use of market-based
instruments for pollution control. Research at RFF and elsewhere has
examined the workings of this program in great detail.
We find that the lion's share of benefits results from reduced risk
of premature mortality, especially through reduced exposure to
sulfates, and these expected benefits measure several times the
expected costs of the program (Burtraw et al, 1998). Although emission
trading in theory could have environmental impacts, ``the geographic
consequences are not consistent with the fears of the program's critics
. . . pollutant concentrations decrease and health benefits actually
increase in the East and Northeast due to trading . . . Deposition of
sulfur in the eastern regions also decreases.'' (Burtraw and Mansur,
1999). Meanwhile, ``allowance trading may achieve cost savings of $700-
$800 million per year compared to `enlightened' command-and-control . .
. (and) annual savings of almost $1.6 billion'' compared with a less
enlightened command-and-control alternative of forced scrubbing.
``Innovation accounts for a large portion of these cost savings . . .''
involving ``. . . organizational innovation at the firm, market and
regulatory level and process innovation by electricity generators and
upstream fuel suppliers.'' (Carlson et al, 2000). Although some of
these innovations were already in the works prior to the program, the
allowance trading program deserves significant credit for providing the
incentive and flexibility to accelerate and to fully realize exogenous
technical changes that were occurring in the industry.
Based on these good results, it is fair to say that EPA considers
trading programs at least equally with traditional command-and-control
methods when it considers new regulations. The best recent example is
the NO<INF>X</INF> trading program, designed to help states implement
the NO<INF>X</INF> SIP call. Other agencies and stakeholders also think
of trading as a cost-effective and politically palatable means of
reducing pollution, witness the enthusiasm in some quarters outside of
those inhabited by economists, for CO<INF>2</INF> trading, tradable
CAFE credits, and the like. The success of Title IV has made this
popularity and even ``faith'' possible.
Yet, the SO<INF>2</INF> trading program and other trading programs
could have been made better in hindsight, and could be made better in
the future. In particular, the level of the cap could be tied to an
economic index, such as allowance prices (Burtraw, 2002). As allowance
prices fall, the pace of reduction in emissions could be accelerated to
capture low-cost benefits for the environment and public health.
Conversely, if allowance prices rise to unanticipated or unjustified
levels, the pace of emission reductions could be slowed.
Federal Measures for Mobile Source Emissions Reductions. Another
success is the federal measures called for in Title II to reduce
emissions of hydrocarbons, CO<INF>2</INF> and NO<INF>X</INF> from
mobile sources. These measures, such as reformulated gasoline and
tailpipe emissions standards, are generally believed to have
contributed the dominant share of the emissions-reduction benefits from
mobile sources. Reformulated gasoline has the advantage of being
relatively low cost and of being applicable to the entire vehicle
stock, whereas the tailpipe standards affect only new vehicles.
Further, by making new cars more expensive relative to used cars, the
tailpipe standards may have contributed some to the dramatic increase
in the lifetime of used cars, whose emissions tend to be larger than
newer cars. Cost-effectiveness of gasoline reformulated to reduce VOC
emissions, for instance, has been estimated to be in the range of
$1,900 to $3,900 per ton (Harrington, Walls, and McConnell, 1995).
These estimates do not capture the environmental costs associated with
MTBE additives nor the subsidies associated with using ethanol. Thus,
only some reformulations come this cheaply.
More problematic has been the vehicle inspection and maintenance
programs required of some nonattainment areas by the act (Title II). A
detailed RFF study of Arizona's enhanced I/M program finds its cost-
effectiveness is about $5,500 per ton of NO<INF>X</INF> plus VOCs
(Harrington, McConnell, and Ando, 2000). Further, the recent NAS study
(2001) found that such programs have ``generally achieved less
emissions than originally projected'' (p. 2) and quoted estimates of
cost-effectiveness ranging from $4,400 to $9,000 per ton of
NO<INF>X</INF> plus VOCs. Providing effective and efficient means of
finding and repairing dirty vehicles should be a top priority for the
future. The near elimination of tailpipe emissions of new cars leaves
the maintenance of vehicles as they age the last potentially low-cost
area for on-road mobile source emissions reductions. One approach is to
rethink the allocation of responsibility for in-use emissions in a more
fundamental way, putting more of the emission liability on
manufacturers, through extended warranties, emission repair liability,
or expanded use of vehicle leasing. Such alternative assignments of
liability can perhaps reduce the cost of monitoring and enforcement of
I/M, reduce the incentives of motorists to avoid maintenance and
repair, and, by providing more flexibility about which vehicles to
repair, increase the efficiency of I/M as well.
More problematic still in terms of cost-effectiveness are the
various programs to mandate or otherwise promote the use of low-
emitting, alternate-fueled vehicles. As shown in a new report (NRC,
2002, appendix F), projected costs per ton of reductions from these
vehicles range from a low of $6,000 up to nearly $100,000 per ton of
VOCs plus NO<INF>X</INF> reductions. Of course, to meet the NAAQS may
require implementation of measures with large costs-per-ton reduction
and, specifically referring to alternate-fueled vehicles, these costs
are likely to come down significantly with technological change and
mass production. Nevertheless, what is important is whether cheaper
means for such reductions are left unimplemented and whether changes in
program design for the implemented programs could reduce costs, raise
effectiveness, or both.
Federal Measures for Point-Source Emissions Reductions. Aside from
SO<INF>2</INF> trading and the future trading program, the regulation
of point source emissions has been effected by the New Source Review
(NSR) program and nonattainment level permit activities related to the
SIP. While the NSR program has undoubtedly spurred new abatement and
low-polluting process technology, as was intended, these emissions
reductions have come at a high cost. As with mobile sources, tighter
standards applied to new sources relative to old sources create a bias
against capital turnover, leaving possibly dirtier capital in place for
far longer than it would have been with a more balanced treatment of
sources. Further, with cap-and-trade programs in place, such as those
for SO<INF>2</INF> nationally, RECLAIM in Los Angeles, and
NO<INF>X</INF> in the northeastern United States, NSR is simply
redundant. Forcing new sources to meet a tight technology-based
standard will only reduce the demand for allowances, lowering their
price below what they would otherwise be. While the individual new
sources will have lower emissions with NSR than without it, other
sources will have greater emissions, since total emissions are capped.
On net, exposures over time and space will be different, but not
clearly higher or lower.
The SIP Process. The SIP process has probably not worked very well.
This is not necessarily the fault of the Clean Air Act. At the time the
Act and its Amendments were passed, the magnitude of long-range
pollution transport was not known and was assumed to be small. Now we
understand that ozone and its precursors, as well as the finer
particulates and their precursors can travel many hundreds of miles (or
more) making the process of placing responsibility for attainment on
the shoulders of individual nonattainment areas (even with all the
federal measures in place) problematic. Figures 2 and 3 show some
recent results from a state-of-the-art air quality model (Mendoza-
Dominguez, and Russell, 2000; Yang, Wilkenson, and Russell, 1997) that
integrates ozone and aerosol chemistry into a highly spatially and
temporally disaggregated model of ozone and fine particulate
concentrations. These figures show how much population-weighted
particulate and ozone concentrations in a state can be cut by
reductions of SO<INF>2</INF> and NO<INF>X</INF> emissions,
respectively, in each of the states.<SUP>8</SUP> The figures clearly
show that several nearby states are substantially involved in other
states' pollution and that the local (own-state) share of
concentrations is only around 20 to 25%.
---------------------------------------------------------------------------
\8\ In our study area of the eastern U.S., NO<INF>X</INF> emission
reductions also reduce PM<INF>2.5</INF> concentrations, but only about
\1/10\th to \1/20\th as much as SO<INF>2</INF> on a ton for ton basis.
These estimates and those in Figures 2 and 3 are for an often-studied
meteorological episode in July 1995. These figures result from
simulating a 1,000 ton reduction of either SO<INF>2</INF> or
NO<INF>X</INF> emissions in each state and examining the reduction in
24-hour PM<INF>2.5</INF> and 8-hour ozone concentrations for a given
state. The height of the bars gives the concentration reduction that
results from this case. These very large reductions in NO<INF>X</INF>
cause at most a 12.7 ppb reduction in ozone concentrations, for
instance.
---------------------------------------------------------------------------
The lawsuits that have resulted to get long-range sources under
control are another indication of the problems with the SIP process. A
Federal Advisory Act Committee (USEPA, May 1998), which John Seitz at
OAQPS and I co-chaired, spent many hours trying to develop alternatives
to this process, recognizing that there were areas of violation and
areas of influence, that needed to form the basis for a new way of
reaching attainment.
The National Ambient Air Quality Standards. Of course, the
centerpiece of Clean Air legislation from 1970 onwards has been the
National Ambient Air Quality Standards. By meaning such standards to be
enforceable, Congress tagged them as the driving force in air quality
regulation. As such, it is perhaps unsurprising that they have come
under so much criticism, both on the basis of the criteria for setting
them and for the criteria that may not be used. In spite of the recent
Supreme Court ruling against the use of cost-benefit analysis and
economic efficiency as a criterion for standard setting, it still
remains the case that the criteria for setting standards in the absence
of a threshold are not defined, if not indefinable. Tighter and tighter
standards are not necessarily in the country's best interests.
Arguably, as EPA's Regulatory Impact Analysis for Ozone and Particulate
Matter shows, it might have been better to have a new ozone standard no
tighter than the current one and a fine particulate standard even
tighter than the new one.
References
Burtraw, Dallas. 2002. ``Three Pollutants and An Emission: A
Playbill for the Multipollutant Legislative Debate,'' Brookings Review,
Vol. 20, No. 2 (Spring), 14-17, 48.
Burtraw, D. and Erin Mansur, 1999. ``The Environmental Effects of
SO<INF>2</INF> Trading and Banking,'' Environmental Science and
Technology, Vol. 33, No. 20, (October 15), 3489-3494.
Burtraw, D., Alan J. Krupnick, Erin Mansur, David Austin and
Deirdre Farrell. 1998. ``The Costs and Benefits of Reducing Air
Pollutants Related to Acid Rain,'' Contemporary Economic Policy, vol.
16 (October), 379-400.
Carlson, C., Dallas Burtraw, Maureen Cropper and Karen Palmer,
2000., ``SO<INF>2</INF> Control by Electric Utilities: What are the
Gains from Trade?'' Journal of Political Economy, Vol. 108, No. 6,
1292-1326.
Chestnut, Lauraine. 1995. Human Health Benefits Assessment of the
Acid Rain Provisions of the 1990 Clean Air Act Amendments, final report
prepared by Hagler Bailly consulting, Inc. for the U.S. EPA, Acid Rain
Division.
Davies, J. Clarence, 1970. The Politics of Pollution (Pegasus
Press, New York).
Hammitt, J.K. and J.D. Graham. 1999. ``Willingness to Pay for
Health Protection: Inadequate Sensitivity to Probability?'' Journal of
Risk and Uncertainty, 18(1): 33-62.
Harrington, Winston and Virginia D. McConnell. 2000. ``Coase and
Car Repair: Who Should Be Responsible for Emissions of Vehicles in
Use?'' in Michael Kaplowitz and Michael Lawrence, Property Rights,
Economics and the Environment. JAI Press, Stamford CT.
Harrington, Winston, Richard Morgenstern and Peter Nelson, 2000.
``On the Accuracy of Regulatory Cost Estimates, Journal of Policy
Analysis and Management 19 (2) 297-322.
Harrington, W. V. McConnell, and A. Ando. 2000. ``Are Vehicle
Emissions Inspection programs Living Up to Expectations? Transportation
Research, Part D 5, 153-172.
Harrington, W., M. Walls, and V. McConnell. 1995. ``Use Market
Forces to Reduce Auto Pollution.'' Chemtech pp. 55-60 (May).
Krupnick, A.J., M. Cropper, A. Alberini, N. Simon, B. O'Brien, and
R. Goeree. 2002. ``Age, Health and the Willingness to Pay for Mortality
Risk Reductions: A Contingent Valuation Survey of Ontario Residents,''
Journal of Risk and Uncertainty 24(2) 161-175 (March).
Krupnick, A.J. and R. Morgenstern. 2002. ``The Future of Cost-
Benefit Analysis of the Clean Air Act,'' The Annual Review of Public
Health 23, 427-48.
Johannesson, M. and P-O Johansson. 1996. ``To Be or Not To Be: That
is the Question: An Empirical Study of the WTP for an Increased Life
Expectancy at an Advanced Age,'' Journal of Risk and Uncertainty 13
163-174.
Mendoza-Dominguez, A.; Russell, A.G.: (2000) ``Iterative Inverse
Modeling and Direct Sensitivity Analysis of a Photochemical Air Quality
Model,'' Environ. Sci.Technol. 34, 4974-4981.
Mrozek, Janusz R. and Laura O. Taylor. 2002. ``What Determines the
Value of a Life? A Meta-Analysis,'' Journal of Policy Analysis and
Management 21 (2) 253-70 (Spring).
National Research Council, Transportation Research Board. 2002. The
Congestion Mitigation and Air Quality Improvement Program: Assessing 10
Years of Experience (NAS Press, Washington, D.C.)
National Research Council. 2001. Evaluating Vehicle Emissions
Inspection and Maintenance Programs (NAS Press, Washington, D.C.).
Parry, I. and Oates, W. E. 2000. ``Policy Analysis in the Presence
of Distorting Taxes,'' Journal of Policy Analysis and Management 19 (4)
(Fall).
Smith, Anne and Martin Ross. 1999. Benefit-Cost Ratios of the CAAA
by CAAA Title: An Assessment Based on EPA's Prospective Study, for
General Motors Corporation by Charles Rivers Associates, CRA D2050-00
(November).
Strand, J. 2001. Public and private-good values of statistical
lives: Results from a combined choice experiment and contingent
valuation survey. University of Oslo Working Paper.
U.S. Environmental Protection Agency. 1997a. The Benefits and Costs
of the Clean Air Act: 1970 to 1990, Office of Air and Radiation/Office
of Policy, Washington, D.C.
US Environmental Protection Agency. 1997b. Regulatory Impact
Analysis for Ozone and Particulate National Ambient Air Quality
Standards, Washington, DC.
U.S. Environmental Protection Agency. 1998. Final Report on
Subcommittee Discussion, Subcommittee for Ozone, Particulate Matter and
Regional Haze Implementation Programs. (May).
U.S. Environmental Protection Agency, 1999. The Benefits and Costs
of the Clean Air Act, 1990 to 2010, Office of Air and Radiation/Office
of Policy, Washington, D.C.
Yang, Y-J, Wilkinson, J. and Russell, A. (1997) ``Fast, Direct
Sensitivity Analysis of Multidimensional Photochemical Models,'' Env.
Sci. & Technol., 31: 2859-2868.
Table 2: Summary of Quantified Primary Central Estimate Benefits and
Costs
(Estimates in million $1990s)
------------------------------------------------------------------------
Annual Estimates
Cost or Benefit Category ---------------------- Present
2000 2010 Value
------------------------------------------------------------------------
Costs:
Title................................. $8,600 $14,500 $85,000
Title II.............................. $7,400 $9,000 $65,000
Title III............................. $780 $840 $6,600
Title IV.............................. $2,300 $2,000 $18,000
Title V............................... $300 $300 $2,500
Total Costs, Title I-V................ $19,000 $27,000 $180,000
Title VI.............................. *$1,400 ......... *$27,000
Monetized Benefits:
Avoided Mortality..................... $63,000 $100,000 $610,000
Avoided Morbidity..................... $5,100 $7,900 $49,000
Ecological and Welfare Effects........ $3,000 $4,800 $29,000
Total Benefits, Title I-V............. $71,000 $110,000 $690,000
Stratospheric Ozone................... *$25,000 ......... *$530,000
------------------------------------------------------------------------
* Annual estimates for Title VI stratospheric ozone protection
provisions are annualized equivalents of the net present value of
costs from 1990 to 2075 (for costs) or 1990 to 2165 (for benefits).
The difference in time scales for costs and benefits reflects the
persistence of ozone-depleting substances in the atmosphere, the slow
processes of ozone formation and depletion, and the accumulation of
physical effects in response to elevated UV-b radiation levels.
Source: EPA, 1999. The Benefits and Costs of the Clean Air Act,
19902010.
Table 3. Summary of Cost-Benefit Studies of the 1990 Clean Air Act
Amendments for 2010
(estimates in million $1990).
------------------------------------------------------------------------
Study Benefits Costs
------------------------------------------------------------------------
Title IV
Burtraw et al (1998)\1\................... $25,000 $800
Chestnut (1995)........................... $35,277 NA
New NAAQS (EPA, 1997)\2\
Ozone (8-hr.), partial attainment......... $400-$2,100 $1,100
Ozone (8-hr.), full attainment............ $1,500-$8,500 $9,600
Fine Particulates, partial attainment..... $19,000-$104,000 $8,600
Fine Particulates, full attainment........ $20,000-$110,000 $37,000
Clean Air Act Amendments (Smith, 1999)\3\
Title I................................... $26,564 $14,500
Title II.................................. $14,968 $9,000
Title III................................. $1,925 $840
Title IV.................................. $69,297 $2,000
------------------------------------------------------------------------
\1\ While this estimate is specific to the eastern United States, these
benefits are expected to account for 98% of total U.S. benefits.
\2\ Partial attainment costs are incremental to partial attainment of
current standards, and reflect partial attainment of promulgated
standards. EPA estimates 17 potential residual nonattainment areas for
ozone, and 30 potential residual nonattainment counties for fine
particulates as of 2010. Full attainment costs, however, are
incremental to full attainment of current standards.
\3\ Total 1990 Amendments benefit estimate ($110 billion; see table 2
above, in bold) and cost estimates by title (see table 2, above) are
from EPA (1999).
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Mr. Barton. Thank you, sir.
Now we have a pending vote on the floor. If Mr. Driesen
will pretty stay within his 5 minute rule, we can give Mr.
Boucher a chance to ask a question, myself a chance to ask a
question, and then you folks can go have lunch, and we can
adjourn the hearing. So with that as an incentive, we want to
recognize Mr. David Driesen, who is an Associate Professor from
Syracuse University, and he is here to testify.
Your statement is in the record. We would ask that you
summarize it in 5 minutes.
STATEMENT OF DAVID M. DRIESEN
Mr. Driesen. Thank you, Mr. Chairman, members of the
subcommittee. I appreciate the opportunity to testify today on
the accomplishments of the Clean Air Act.
The 1990 amendments have improved public health,
ameliorated environmental impacts. We have reduced emissions of
almost all the pollutants the amendments target, often quite
substantially, and this represents a major achievement.
To my mind, the most stunning success story is actually the
phaseout of ozone depleting chemicals to protect the
stratosphere ozone level. That, if we continue along that path,
is probably going to solve the problem.
I agree that acid rain has also been a successful program,
and we have reduced criteria pollutants as well. But the new
scientific research indicates that ozone and soot are causing
more death, more asthma than we had thought and, as a result,
EPA has had to revise those standards.
Because you are going to be thinking about power plant
emissions, I think it is important to understand what the Act
is going to bring in the way of future power plant regulation.
First of all, the State's Attorney General and the Justice
Department are now enforcing previously under-enforced New
Source Review requirements, and these actions, if they
continue, will bring about substantial reductions in power
plant emissions.
Second, EPA is about to begin an emissions trading program
for nitrogen oxide in the northeast and midwest, which will
also bring about significant reductions beginning in 2003.
Finally, States in order to achieve the national ambient air
quality standards, the revised ones, are going to have to
regulate sulfur dioxide and nitrogen oxide from utilities.
With respect to hazardous air pollutants, we have achieved
very large reductions. The old program only succeeded in
listing eight pollutants. Congress listed 189 that States and
local agencies had associated with serious health effects like
cancer and birth defects, and in just over 10 year we got far
more reductions from far more pollutants than we ever saw, in a
much faster fashion than we ever saw before the 1990
amendments.
EPA has just begun work on a second phase which is designed
to eliminate residual risk. It will involve some risk
assessment.
EPA will be regulating power plant mercury emissions for
the first time in 2004 under the toxics program. I think that
is important background to evaluating the proposals on power
plant emissions.
The major challenge for the future, though, and the major
failure of the Clean Air Act, has been the failure to address
greenhouse gas emissions. In marked contrast to the rest of the
Act, these have risen some 14 percent since 1990, because we
have relied entirely upon voluntary efforts.
That is a serious problem, because scientists are telling
us that it is clear that the climate is warming, that we can
expect more heat waves which translates to worse summer smog
programs, making the States' job in achieving criteria of
pollutant standards more difficult. We can expect that there
may be floods, droughts and the spread of infectious diseases
if we don't address this problem, and every year we wait, it
gets more serious, because once we put this carbon into the
atmosphere, it stays there. So there is no going back. So that,
to my mind, is the most serious gap in the amendments.
So to conclude, the States and EPA have made significant
progress in protecting public health and the environment. They
are in the midst of implementing a number of programs that
promise to deepen and continue that progress, but we have a
major gap in not addressing carbon dioxide from utilities and
greenhouse gas emissions in general.
[The prepared statement of David M. Driesen follows:]
Prepared Statement of David M. Driesen, Associate Professor, Syracuse
University College of Law
The question of how well the 1990 Amendments have succeeded in
protecting public health and the environment from air pollution is very
important. Air pollution is associated with tens of thousands of annual
deaths, afflicts many millions more with asthma and lung disease, poses
risks of cancer and birth defects, and causes neurological damage. In
addition, air pollution destroys forests, acidifies lakes, and damages
crops. Finally, air pollution warms the climate. Climate change will
likely exacerbate summertime smog and therefore increase the frequency
and severity of asthma and heart attacks, while creating potential new
catastrophes--flooding of islands and coastal areas, destruction of
eco-systems, droughts, and the spread of tropical diseases.<SUP>1</SUP>
Unfortunately, greenhouses gases, once released, remain in the
atmosphere for decades, so delay in addressing this problem has
irreversible consequences.
---------------------------------------------------------------------------
\1\ See Intergovernmental Panel on Climate Change, Climate Change
2001: Synthesis Report (Cambridge University Press 2001).
---------------------------------------------------------------------------
I'm pleased to report that the 1990 Amendments have improved public
health and ameliorated environmental impacts. We have reduced emissions
of most of the pollutants the Amendments target, often quite
substantially. This represents a major achievement, for this progress
occurred in spite of increased population and in conjunction with high
economic growth. Furthermore, the 1990 Amendments require further
actions that will build on this progress.
Stratospheric Ozone Depletion
The most stunning success came from efforts to protect people from
skin cancer and cataracts by combating the depletion of the
stratospheric ozone layer, which shields us from ultraviolet rays. We
eliminated the production of many substances contributing to depletion
of the ozone layer high in the atmosphere, as did other countries
around the world. While a hole has opened up in the ozone layer,
scientists tell us that it probably will heal as a result of this
vigorous response. Because we have not proceeded as aggressively on
other issues, our success in other areas, while impressive, has been
somewhat more limited.
Acid Rain
The acid rain program, which combines very specific Congressional
decisions about limits with emissions trading confined to well-
monitored pollutants, has also proven enormously successful. It has
reduced sulfur dioxide at much lower cost than predicted. While acid
deposition has declined as a result, lakes and forests have been slow
to recover.<SUP>2</SUP> Further planned cuts in sulfur dioxide and
nitrogen oxides, the principal causes of acid rain, will aid recovery.
---------------------------------------------------------------------------
\2\ See Charles T. Driscoll et al., Acidic Deposition in the
Northeastern United States: Sources and Inputs, Ecosystem Effects, and
Management Strategies, 51 BioSciences 180 (2001); Charles T. Driscoll
et al., Acid Rain Revisited: Advances in Scientific Understanding Since
the Passage of the 1970 and 1990 Clean Air Act Amendments (Hubbard
Brook Research Foundations, 2001).
---------------------------------------------------------------------------
Smog and Soot: The Criteria Air Pollutants
The Clean Air Act relies upon a combination of state regulation and
federal vehicle controls to address problems caused by pervasive health
impairing criteria pollutants. These pollutants include soot (or
particulate), ground level (i.e. not stratospheric) ozone, and carbon
monoxide. Because of these efforts, levels of all of these pollutants
have declined between 1992 and 1999 by the levels indicated below:
Percentage Decline Criteria Pollutants: 1992-1999 \3\
------------------------------------------------------------------------
------------------------------------------------------------------------
Carbon Monoxide............................................ 2%
Particulate Matter: 10 Microns or Less..................... 13%
Particulate Matter 2.5 Microns or Less..................... 7%
Ozone...................................................... 4%
------------------------------------------------------------------------
\3\ EPA, National Air Quality and Emissions Trends Report, 1999 Appendix
A (2001).
As a result, only one area in the country violated the carbon
monoxide standard in 1999. A sizable number of the moderately polluted
areas have achieved the ozone and particulate standards in effect in
1990, but many metropolitan areas with large populations continue to
violate these standards. The 1990 Amendments anticipated that seriously
polluted areas would comply by 1999 (they haven't), but expected that
areas suffering severe or extreme ozone pollution probably would not
comply by 2002.
Unfortunately, new scientific research associates ozone and
particulate pollution with even more cases of death, asthma and lung
disease than were apparent in 1990. More than 100 million Americans
still do not have clean healthful air to breathe. Accordingly, EPA has
recently revised national ambient air quality standards for particulate
and ozone. Implementation of these standards will take some time, but
promises to improve this situation.
The national ambient air quality standards serve as goals for state
pollution control programs. They establish the maximum concentration of
pollutants EPA deems tolerable in the air that surrounds us. States
regulate emissions of pollution sources in order to bring about the
needed improvements in ambient air quality. Because state decisions
about which regulatory strategies to use affect cost, costs will vary
from state to state. And because local air quality varies, so do state
air quality control programs. This is not a one-sized fits all
approach, and it unfolds slowly.
Because utility nitrogen oxide and sulfur dioxide emissions
contribute enormously to violations of the new national ambient air
quality standards, states will have to control these emissions in order
to meet the new standards. These substantial reductions will contribute
not only to human health, but also to efforts to combat acid rain.
Quicker results will likely come from federal and state efforts to
enforce new source review requirements against power plants that have
evaded strict federal controls while renovating dirty old plants. The
1970 Amendments reflect a compromise, exempting existing stationary
sources (e.g. factories) from federal controls, while imposing controls
on new sources. Congress expected that as plant owners replaced or
modernized their facilities relatively stringent new source controls
would apply, which would improve air quality over time. It has
frequently been said that new source review has discouraged
modernization. The attorneys general of several states and the Justice
Department, however, have found that electric utilities have modernized
their facilities, but did not comply with new source review
requirements.
Furthermore, EPA has begun to administer an emissions trading
programs to reduce nitrogen oxide emissions in many northeastern and
midwestern states. This program focuses primarily upon electric
utilities and anticipates reductions beginning in 2003. Nitrogen oxide
has risen since 1990, probably because of increased driving, use of
diesel fuel, and increasing energy use, so we need additional controls.
This trading program, while directed toward compliance with the old
ozone standard, will also ameliorate acid rain and reduce particulate
pollution. The nitrogen oxide trading program, new source review
enforcement, and state regulation to comply with the revised national
ambient air quality standards should bring about substantial reductions
of utility nitrogen oxide and sulfur dioxide emissions, which should
greatly reduce death, illness, and ecosystem damage.
Hazardous Air Pollutants
We have also apparently achieved large reductions in emissions of
hazardous air pollution.<SUP>4</SUP> Prior to 1990, the federal program
in this area had been moribund, because it relied heavily upon risk
assessment. In twenty years, EPA succeeded in listing only eight
hazardous air pollutants for regulation. The 1990 Amendments tried a
broader approach. Congress listed 189 substances that state and local
government agencies had linked to cancer and other serious health
effects and directed EPA to regulate them in two phases.<SUP>5</SUP>
The first phase, a technology-based phase, is mostly complete. In just
over ten years, EPA stimulated much greater decreases in hazardous air
pollutants, and the risks of serious illness associated with them, than
it had achieved in the twenty years preceding the 1990 Amendments.
While EPA has not often met the numerous statutory deadlines governing
this massive program, it has experienced nothing like the enormous
delays that routinely riddled the pre-1990 implementation
process.<SUP>6</SUP> Moreover, the breadth of the new program offers
better protection, because people breathe in a mixture of carcinogens
and a broad approach is needed to protect them from the combined
effects of many different pollutants.
---------------------------------------------------------------------------
\4\ Id. The Toxics release inventory shows a decline of hazardous
air pollutants of 39% between 1992 and 1999. Much of this data is
imprecise, because of a lack of comprehensive monitoring. The
information respecting hazardous air pollutants represents reporting by
a small subset of toxic emitters (albeit ones with especially large
emissions) using estimation methods of the operators' choosing. See
EPA, Toxic Release Inventory 1999: Executive Summary, E-10-11 (2001).
TRI data may exclude some reductions required by EPA and include some
reductions made for other reasons (such as state standards).
\5\ 42 U.S.C. Sec. 7412(b)(2).
\6\ See e.g. Natural Resources Defense Council v. EPA, 705 F. Supp.
698, 703 (D.D.C. 1989) (discussing a ten year delay in promulgating a
benzene standard).
---------------------------------------------------------------------------
EPA has just begun work on a second phase, designed to eliminate
the residual risks of cancer, birth defects, and other serious illness
remaining after the first round cuts. This second phase requires
regulation to protect public health with an ample margin of safety,
employing a precautionary approach to public health.
While the 1990 Amendments generally required two rounds of cuts for
all sources of listed pollutants, it contained a temporary exemption
for mercury emissions from electric utilities. This provision required
a study and a discretionary decision about whether to regulate toxics
from electric utilities.<SUP>7</SUP> While EPA decided to regulate
mercury and other hazardous air pollutants from electric utilities, it
made that decision very late (2000) and has not yet completed the
regulation. Nevertheless, EPA has committed to regulating mercury from
electric utilities by the end of 2004, which should provide substantial
reductions protecting public health and the environment from mercury.
This commitment to a utility ``maximum achievable control technology''
(MACT) standard is extremely important, because mercury accumulates in
the environment and can cause many serious health problems in human
beings.
---------------------------------------------------------------------------
\7\ 42 U.S.C. Sec. 7412(n).
---------------------------------------------------------------------------
Challenges for the Future
While we have made progress, the air program still has gaps and
weaknesses. We have failed to effectively address greenhouse gas
emissions, which rose approximately 14.1% between 1990 and 2000, in
spite of voluntary efforts to address the problem.<SUP>8</SUP> The
greenhouse gas emissions rose because the Clean Air Act Amendments of
1990 did not address them.
---------------------------------------------------------------------------
\8\ U.S. EPA, Greenhouse Gas Emissions and Sinks: 1990-2000, E-2
(2002).
---------------------------------------------------------------------------
The overwhelming majority of this pollution comes from a single
class of activities--burning fossil fuels. We burn massive amounts of
coal in order to generate electricity. We refine gasoline and then burn
it in automobiles and other kinds of engines. Fossil fuel consumption
accounted for 82 percent of greenhouse gases in the 1990s, the gases
that contribute to climate change.<SUP>9</SUP> Carbon dioxide emissions
from fossil fuel combustion are almost evenly divided between
industrial uses, transportation, and residential and commercial
buildings, with electric utilities (which burn energy used for both
industry and buildings) contributing about 36% of the carbon
dioxide.<SUP>10</SUP>
---------------------------------------------------------------------------
\9\ See United States EPA, Inventory of U.S. Greenhouse Gas
Emissions and Sink: 1990-1999 at ES-3 n. 6 (2001). This figure refers
to gases weighted by global warming potential. Carbon dioxide from
fossil fuel combustion alone accounted for 80% of weighted emissions.
Id. at ES-3.
\10\ Id. at ES-15 (Industrial end-use sector 33 percent,
transportation, 31 percent, residential and commercial end uses 35%).
---------------------------------------------------------------------------
We have not implemented sufficiently demanding and comprehensive
standards to encourage significant changes in how we generate
electricity. Such changes would address climate and reduce growing
damage to public health and the environment.
We need to improve monitoring of hazardous air pollutants and
volatile organic compounds. All of the risk assessment in the world
will not clarify the health effects of hazardous air pollution, unless
we know much more about what people are breathing than we know now.
Quantitative assessment of poorly understood risks simply masks what we
do not know with seemingly precise, but quite unreliable, numbers.
Finally, the air program relies heavily upon state regulation. But
EPA has proven extremely reluctant to enforce state obligations. As a
result, the significant progress achieved through state programs has
amounted to something less than the 1990 Amendments envision. More
demanding and specific direct federal regulation of nationally
significant pollution sources like power plants would certainly help.
But Congressional support for state delivery of environmental benefits
to the public will remain essential.
conclusion
The states and EPA have made significant progress in protecting
public health and the environment. They are in the midst of
implementing a number of programs that promise to deepen and continue
this progress.
Mr. Barton. Thank you, Mr. Driesen for being brief. I
really sincerely appreciate that.
We are going to recognize Mr. Whitfield for one question,
and we are going to recognize Mr. Boucher for one question, and
then we will adjourn the hearing. We will have a series of
written questions for all of you. Mr. Whitfield. And we have 7
minutes and 21 seconds to get to the floor to vote.
Mr. Whitfield. Thanks, Mr. Chairman.
Mr. Krupnick, I notice in your testimony you talk quite a
bit about acid rain and also the need for further regulation of
CO<INF>2</INF> emissions. I have read in a number of
publications that methane, for example, has a lot of greenhouse
properties, by some estimates even 30 times the warming potency
of CO<INF>2</INF>.
Are you all advocating the regulation of methane emissions
as well?
Mr. Krupnick. Sorry. In my testimony, I didn't mention
CO<INF>2</INF> emissions. It is maybe Mr. Driesen.
Mr. Whitfield. Oh, I am sorry. Mr. Driesen, okay.
Mr. Driesen. Well, I think eventually Congress should come
to grips with the full range of greenhouse gases. While methane
is very potent, 80 percent of the emissions on a carbon
weighted basis are carbon dioxide. They are of the most
important. There is so much of it.
So I think there is a need to look at the issue in general.
I think carbon dioxide is the most high priority target, but we
probably will eventually need to do more about a bunch of
gases.
Mr. Whitfield. Now----
Mr. Barton. This will have to be your last question.
Mr. Whitfield. Okay. The National Acid Precipitation
Assessment Program, which was the world's longest, largest, and
most expensive and spanned almost a decade, involved 700
scientists and cost $500 million, and they did a survey of
various trees, Virginia pines, tulip poplars and white oaks,
and they exposed them to high concentrations of acid rain, and
they planted them in soils that were much less rich than normal
soils in forests.
Yet the results came back that, even with precipitations
almost 10 times as acidic as the average acid rain in the
eastern U.S., that all of those trees grew even as a normal
tree would grow, which left a clear--The conclusion was that
there is no case of forest decline in which acidic deposition
is known to be a predominant cause.
Mr. Driesen. Yes. I would disagree with that. I guess what
I could offer to add to the record on this is some work by
Charles Driscoll, Syracuse University and Hubbard Brook
Research Center on this. It shows that there have been
impairment of growth from acidification of soils.
So I think there is a pretty strong case that it has been a
problem for trees, and it has certainly been a problem for
lakes and streams. What we found is that we have had a
reduction in acid deposition, thanks to the 1990 amendments,
but the ecosystems have been slow to recover. That is a major
reason that we need more----
Mr. Barton. We are going to have to recognize Mr. Boucher
very quickly.
Mr. Boucher. Thank you very much, Mr. Chairman. I am going
to be very brief.
Mr. Goffman, I have one question of you. I know you were
very much involved in the preparation of the cap and trade
program for SO<INF>2</INF> as we wrote the amendments in 1990,
and you have a long experience in having helped originate that
program and also watched its implementation.
What happened that made it such a great success? We achieve
more in terms of benefits. We achieve more in terms of cost
than was originally anticipated. What was the element that made
it so successful, and do you think that we should consider
applying it to other kinds of pollutants; and if so, which
ones?
Mr. Goffman. What made it so successful, in my personal
view, is that we changed--made a significant legal change.
Sources became legally liable for controlling their actual
emissions, and for nothing else. We didn't use surrogates. We
used actual emissions.
We made a change, an economic change. We literally created
a market for extra reductions in pollution. It made sense to
make those investments economically.
I would suggest that, as a long range transport pollutant,
SO<INF>2</INF> should be further ratcheted down under a cap and
trade model. Same with oxides of nitrogen. Same with greenhouse
gases. I am puzzled, however, as to why anyone is proposing
that mercury be regulated in this way, because I think the
atmospheric characteristics of mercury are significantly
different.
Mr. Barton. We are going to conclude the hearing. My
question that I will submit in writing, and each of you can
answer, goes to what Mr. Krupnick was talking about, where we
haven't really identified the vehicles that are causing most of
the vehicular pollution.
I had an amendment to the Act that allowed the use of what
we now call the ``smog dog,'' but it hasn't been very widely
implemented. I will ask that there be some discussion on that.
Normally, we would ask a series of questions. I apologize,
but we have 2 minutes and 7 seconds to get to the floor for
three votes. So we are going to adjourn the hearing, but there
will be written questions to each of you. Thank all of you
gentlemen for attending.
This hearing is adjourned.
[Whereupon, at 1:13 p.m., the subcommittee was adjourned.]
[Additional material submitted for the record follows:]
Responses of the EPA to Questions of Hon. Henry A. Waxman
implementation of the naaqs
Question 10. States and localities have expressed concerns
regarding how they will attain the new NAAQS for 8-hour ozone and fine
particles. Several key sources of cost-effective emissions reductions
will require federal measures, which it is up to EPA to implement.
Critical federal measures include the following: (1) adoption of
rigorous PM and NO<INF>X</INF> emission standards for heavy-duty
nonroad diesel engines that are based on the technology advances in the
heavy-duty onroad diesel sector, and adoption of corresponding
requirements for low sulfur diesel fuel that will enable the new
technology; (2) issuance of a SIP call for SO<INF>2</INF>, which is
critical to lower harmful concentrations of fine particles; and (3)
issuance of a SIP call to ``annualize'' the summertime NO<INF>X</INF>
abatement program, which will lower harmful NO<INF>X</INF> emissions
year-round in a highly cost-effective way.
a. Does EPA intend to adopt federal measures to help states and
localities attain the new NAAQS?
b. Does EPA intend to adopt each of the measures described above?
c. If not, what measures does EPA intend to adopt?
Answer: EPA believes that federal measures are an extremely
important component of an overall strategy to help the states attain
the new 8-hour ozone and PM 2.5 standards. The most efficient way to
control mobile sources of emissions and major long range transport
sources of emissions is through national rules. Over the past 30 years
EPA has set increasingly more stringent standards for motor vehicles
that are used on our streets and highways. In addition, the 1990
amendments to the Clean Air Act gave EPA new authority to establish
emission limits for nonroad engines and equipment. As a result, EPA has
adopted national emission control programs for the following nonroad
equipment: locomotives, marine vessels, outboard recreational boats,
and small gasoline engines used in lawn and garden equipment. The
Agency is currently working on regulations that will dramatically
reduce emissions from large, nonroad diesel engines used in
construction, mining, airport and agricultural equipment.
EPA's preferred approach to control long range transport of
SO<INF>2</INF> and NO<INF>X</INF> is through legislative changes to
adopt our Clear Skies initiative. As an alternative, we plan to prepare
to implement an annual SIP call for SO<INF>2</INF> and NO<INF>X</INF>.
d. What is EPA's planned schedule for proposing and finalizing each
of the federal measures identified by the Agency? If additional
technical work is necessary prior to proposal of any measure, please
describe the nature, scope, and planned timing for such work, including
identifying any interim milestones that must be met for the measures to
be adopted in a timely manner.
Answer: i) Emission standards for large diesel engines used in
nonroad equipment: EPA is currently preparing draft regulations and
supporting analyses that would establish nationally-applicable
requirements for this category. One of the major issues that is being
considered is the potential need to lower the sulfur levels in nonroad
diesel fuel to enable new exhaust control technology to be utilized on
future engines. The Agency plans to submit draft proposed rulemaking
for interagency review by the end of this year. ii) SIP Call for
SO<INF>X</INF> and NO<INF>X</INF>: EPA is currently evaluating the
steps and timing necessary to develop and implement a SIP Call for
SO<INF>2</INF> and NO<INF>X</INF>. We have not yet developed a schedule
to finalize a SO<INF>2</INF>/NO<INF>X</INF> SIP Call.
e. In particular, how will EPA address the problem of interstate
transport of pollution, which states do not have authority to regulate
directly?
Answer: As previously discussed, we believe the best approach for
addressing interstate transport of pollution is through enactment of
Clear Skies legislation. However, because such legislation has not been
addressed in Congress yet, EPA is working in parallel to conduct
technical analyses to support a SIP Call for SO<INF>X</INF> and
NO<INF>X</INF>.
review of the clean diesel rule
Question 25: As you know, EPA's clean diesel rule was recently
upheld by the D.C. Circuit against all challenges from industry.
However, I am concerned that EPA may be considering reopening this
important rule. According to press reports, EPA has convened a Clean
Diesel Independent Review Panel. Reportedly, this panel will begin
meeting on May 23 and report its findings to EPA in September.
a. Please provide information on this review panel, including the
charge of the panel, the schedule for meetings, and its membership.
Answer: The Clean Diesel Independent Review Panel was created by a
charter issued under the Clean Air Act Advisory Committee, which was
originally established on November 19, 1990 in accordance with the
requirements of the Federal Advisory Committee Act (FACA).
The purpose of the panel is to provide independent advice to the
Agency on industries' progress in developing and demonstrating
technologies that will be used to reduce engine exhaust emissions and
to lower the sulfur level of highway diesel fuel in accordance with the
regulations establishing the Clean Diesel Program.
Specifically, the objectives of the panel's charter are to assess
the progress of:
i) manufacturers of diesel engines and emission control systems in
developing technology to reduce engine exhaust pollutants, and;
ii) the fuels industry in developing and demonstrating technologies to
effectively lower the sulfur level of highway diesel fuel.
The panel is composed of leading experts from the public health
community, petroleum refiners, fuel distributors and marketers, engine
manufacturers, emission control systems manufacturers, and state
governments. The panel will hold meetings, analyze issues, conduct
reviews, make necessary findings, and undertake other activities
necessary to meet its responsibilities. The panel has been requested to
produce a final report by the panel charter's expiration date of
September 30, 2002.
The first meeting of panel is scheduled for May 23, 2002, in
Alexandria, VA. Other information can be found on the panel's web site
(http://www.epa.gov/air/caaac/clean--diesel.html).
Future panel meeting dates are as follows: Thursday and Friday,
June 27 & 28; Tuesday and Wednesday, July 30 & 31; and Tuesday and
Wednesday, September 24 & 25.
Panel members are listed in the following table:
Federal Advisory Committee Act--Clean Air Act Advisory Committee
Clean Diesel Independent Review Panel
------------------------------------------------------------------------
Panel Chairman Designated Federal Official
------------------------------------------------------------------------
Mr. Daniel Greenbaum, President, Health Ms. Mary Manners, Chemical
Effects Institute. Engineer, U.S.
Environmental Protection
Agency
Ms. Josephine Cooper, President and CEO, ............................
Alliance of Automobile Manufacturers.
Mr. Pat Charbonneau, Vice President, Dr. John Wall, Vice
Engineering, Navistar International President, Research and
Transportation Corporation. Development, Cummins Engine
Company, Incorporated
Mr. Bruce Bertelsen, Executive Director, Dr. Timothy Johnson,
Manufacturers of Emission Controls Manager, Emerging
Association. Technology and Regulations,
Corning, Incorporated
Mr. Tom Bond, Director, Global Fuels Mr. Michael Leister,
Technology, BP. Manager, Fuels Technology,
Marathon Ashland Petroleum
LLC
Ms. Sally Allen, Vice President, Mr. Bob Neufeld, Vice
Administration & Governmental Affairs, President, Environment and
Gary-Williams Energy Corporation. Governmental Relations,
Wyoming Refining Company
Mr. James Kennedy, Manager, Project Sales Mr. Alan Wright, Vice
Distillate and Resid Technologies, UOP President, Pilot Travel
LLC. Centers LLC
Mr. Bill Becker, Executive Director, Mr. Tom Cackette, Assistant
STAPPA/ALAPCO. Executive Officer, State of
California Air Resources
Board
Mr. Paul Billings, American Lung Mr. Rich Kassel, Natural
Association. Resources Defense Council
Dr. Bob Sawyer, Professor of the Graduate Mr. Mike Walsh, Consultant
School, University of California at
Berkeley, Department of Mechanical
Engineering.
------------------------------------------------------------------------
b. Does EPA anticipate that the clean diesel rule could be modified
as a result of this panel's review?
Answer: The panel will submit a report of its findings to
Administrator Whitman in September of this year. The Agency will
thoroughly review these findings. In addition, EPA will conduct its own
annual review of progress toward implementation of the program
requirements. The Agency does not anticipate the need to modify the
regulations. The program provides adequate lead time before the
requirements take effect. The adequacy of the lead time was recently
affirmed by the court.
Question 26. According to a recent press report, the American
Petroleum Institute (API) is seeking to expand the scope of the Panel's
review and to change the composition of the Panel in order to seek
weakening changes to the regulations. Will EPA expand the scope of the
Panel's review as API has requested? Will EPA change the composition of
the Panel in response to API's request?
Answer: The Agency has consistently stated that the issues for
review would be limited to the review of progress in developing the
technologies needed to meet the program standards. The Charter provided
to the Independent Review Panel reflects that commitment. We believe
the composition of the panel is balanced and fairly represents all
major stakeholders.
implementation of title v
Question 27. The Inspector General of EPA recently issued a report
on the extensive delays in state issuance of permits under the Title V
program. The Inspector General found that eleven years after the
adoption of Title V, only 70% of the sources have permits as required.
The Inspector General also made a number of recommendations as to how
EPA should improve the Title V program.
a. What actions are you taking to respond to the Inspector
General's recommendations? Please describe how each of these actions
will further the objectives of the Title V program and indicate the
anticipated timing for each specific action identified.
Answer: EPA will reevaluate our role in overseeing the
implementation of the title V programs in States. Our regulations
authorize us to review State programs for compliance with the
requirements of part 70. Through our Fiscal Year 2003 annual program
guidance, we will ask all ten Regional Offices to commit to performing
multiple permit program evaluations each year, based on an evaluation
protocol. These evaluations will be tailored to the unique
circumstances of each State. The evaluations would investigate in
detail those areas of a State's program which the Regional offices
consider to be contributing to the State's permit issuance rates.
Regions would be expected to follow up with the States as necessary
after completing the evaluations. Areas of the permitting program that
we would expect to evaluate include lessons learned from issuing
permits, good practices concerning implementation, impediments to
prompt and thorough permit preparation and issuance, issues concerning
staffing and resources, issues concerning the ease of translating
Maximum Available Control Technology (MACT) standards into permit
terms, and the fee protocol, among other things. Target date for this
effort is to have the evaluation protocol developed by October 2002
with the evaluations beginning in FY 2003 and extending over the
following few years. This effort furthers the objectives of Title V by
working toward faster issuance of better permits.
EPA has a specific mandate to work with STAPPA and develop
implementation tools for certain MACT standards. The website http://
www.epa.gov/ttn/atw/eparules.html is devoted to information about many
of the MACT standards and associated implementation tools. Selecting
the hypertext link for any of about 40 rules in this section of the
website results in access to information explaining individual rules
and includes implementation details designed specifically for State
permit writers such as self-paced interactive training, fact sheets,
and even some State-developed training materials. Thus we feel we have
done our best in writing permit friendly MACTs. However, we will
continue to investigate why some permitting authorities still contend
that MACTs are not permit friendly. We will do this through the
evaluations described in the previous paragraph. This effort furthers
the objectives of Title V by working to improve the implementation of
air toxic regulatory terms and conditions as described in operating
permits.
EPA intends to continue including a requirement for the Regional
Offices of EPA to input Permit Program Data Elements in AIRS as a part
of the annual Air Program Guidance prepared for the Regional Offices.
As necessary, changes will be made to that annual requirement to gain
additional insights into measures of progress in permit issuance. The
data elements which we routinely collect have proven over time to be
sufficient to manage permit issuance and to answer questions from EPA
management and the public concerning the status of State permitting
programs. These data are publicly accessible on our website and are
updated quarterly. This is an ongoing effort. This effort, while
addressing the Inspector General's recommendation, does little to
further the objectives of Title V, and merely provides up-to-date
information on the numbers of permits issued over time.
Pursuant to the November 2000 settlement agreement with the Sierra
Club, we gave citizens an opportunity to comment on State program
deficiencies. A number of comments were received on permit issuance.
The Agency decided that the most efficient way to deal with this issue
was to require State agencies to submit issuance schedules with
trackable milestones for those States that received such citizen
comments. These schedules were submitted with the understanding that
EPA could issue Notices of Deficiency (NOD's) if the milestones were
missed. It is still EPA's plan for the Regional Offices to proactively
manage those schedules, including tracking interim milestones, and
identifying reasons why milestones are missed. Based on those
schedules, it is our plan to issue NOD's for missed milestones and
schedules. We will include in the FY 2003 annual air program guidance a
requirement that the Regional Offices manage and report progress
against these schedules. Should NOD's be needed, they will likely occur
at the midway point or end date of the schedule. The target date for
completion of this work is December 2003. This effort furthers the
objectives of Title V by ensuring consistency in the implementation of
permitting programs across the country, and highlighting States that
are behind schedule in order to improve permit issuance.
<greek-d>
The
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, DC 20515
(202) 225-2927
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