Regulatory Scoring
Agency:
Environmental Protection Agency
Rule title:
Portland Cement NESHAP
RIN
2060-AO15 RIA Yes
Stage Publication Date
Proposed 5/26/2009
Rule summary:
EPA is proposing amendments to the current National Emission Standards for Hazardous Air Pollutants
(NESHAP) from the Portland Cement Manufacturing Industry. These proposed amendments would add or
revise, as applicable, emission limits for mercury, total hydrocarbons (THC), and particulate matter (PM) from
kilns and in-line kiln/raw mills located at a major or an area source, and hydrochloric acid (HCl) from kilns and
in-line kiln/raw mills located at major sources. These proposed amendments also would remove the following
rate for cement kiln
four provisions in the current regulation: the operating limit for the average hourly recycleComments
Openness Score
1. How easily were the RIA, the proposed rule, and any supplementary
materials found online? 4 1A
2. How verifiable are the data used in the analysis? 5 1B
3. How verifiable are the models and assumptions used in the analysis? 4 1C
4. Was the Regulatory Impact Analysis comprehensible to an informed
layperson? 4 1D
Total Openness (Sum of 1-4) 17
Analysis Score Comments
5. How well does the analysis identify the desired outcomes and demonstrate
that the regulation will achieve them? 4 2A
6. How well does the analysis identify and demonstrate the existence of a
market failure or other systemic problem the regulation is supposed to solve? 0 2B
7. How well does the analysis assess the effectiveness of alternative
approaches? 3 2C
8. How well does the analysis assess costs and benefits? 4 2D
Total Analysis (Sum of 5-8) 11
Use Score Comments
9. Does the proposed rule or the RIA present evidence that the agency used
the Regulatory Impact Analysis? 2 3A
10. Did the agency maximize net benefits or explain why it chose another
alternative? 3 3B
11. Does the proposed rule establish measures and goals that can be used
to track the regulation’s results in the future? 1 3C
12. Did the agency indicate what data it will use to assess the regulation’s
performance in the future and establish provisions for doing so? 1 3D
Total Use (Sum of 9-12) 7
Total Score 35
Rule Title RIN Openness
Agency Pub Date RIA separate? Total (G+H+J) Analysis
2060-AO15Environmental Protection Agency
Portland Cement NESHAP 5/26/2009 Yes 35 17 11
Quality (G+H) Use 1 2 3 45 5A 5B
28 7 4 5 4 4 4 5 5
5C 5D 5E 6 6A 6B 6C 6D 7
4 4 4 0 1 0 0 0 3
7A 7B 7C 7D 8 8A 8B 8C 8D
4 3 2 3 4 5 5 5 5
8E 8F 8G 8H 8I 9 10 11 12
2 2 3 4 2 2 3 1 1
Openness (Accessible, Data and Models Verifiable, and Comprehensible)
Crirerion Score Com. No. Comment
2060-AO15 can be found on
regulations.gov using the RIN and a
keyword search. To find the RIA on
regulations.gov, search by keyword
(the title). On the EPA website, the
proposed regulation can be found by
clicking on Laws and Regulations. The
regulation is not on the EPA website,
1. How easily were the RIA , but directs the reader to
regulations.gov, explains how to
the proposed rule, and any search for a specific regulation, and
supplementary materials provides information about ongoing
found online? 4 1 regulatory activities.
2. How verifiable are the data Data sources are cited, with links
used in the analysis? 5 2 provided in the list of references.
Oligopoly assumption appears to be
justified by two arguments (neither
very strong): a general claim that firms
in oligopoly have market power, and
the fact that EPA has made this
assumption before. This assumption
matters because it increases the
estimate of social costs of the
regulation. Checking its veracity would
require going back through cited prior
RIAs to find out if there is any explicit
study of pricing in the industry that
justifies the assumption. Sources for
assumptions used in benefits
calculations are given, so the reader
can form his/her own opinion by
consulting those sources. It appears
3. How verifiable are the that the epidemiological studies and
models and assumptions the EPA's process for estimating
used in the analysis? 4 3 benefis were both peer-reviewed.
The separate RIA is very readable,
with a good summary. The
background section is helpful but a bit
long; it could probably be pared back
to just the information needed to
understand the analysis. The main
body of the text presents results, with
4. Was the analysis calculations left to the appendices. A
comprehensible to an few spots require specialized
informed layperson? 4 4 knowledge to follow fully.
Analysis (Outcomes, Systemic Problem, Alternatives, Benefit-Cost)
Criterion Score Com. No. Comment
5. How well does the
analysis identify the desired
outcomes and demonstrate
that the regulation will
achieve them? 4
Does the analysis clearly
identify ultimate outcomes
that affect citizens’ quality of Improved human health due to reduction in
life? 5 5A emissions of harmful pollutants.
Emissions reductions are calculated, but the
Does the analysis identify economic value of benefits is calculated using
how these outcomes are to reductions in particulates, not direct reduction in
be measured? 5 5B the regulated pollutants.
Does the analysis provide a Regulations require installation of equipment to
reduce emissions, and equipment reduces
coherent and testable theory
particulate emissions. Only the health outcomes for
showing how the regulation Americans are counted; if increased imports lead
will produce the desired to increased emissions in other countries, that is
outcomes? 4 5C not considered.
Benefits are driven by reduced exposure to
particulates, not directly by reductions in the
affected pollutants. The analysis considers two
epidemiological studies plus expert opinions on the
Does the analysis present health benefits of reducing exposure to
credible empirical support for particulates. This is also consistent with past EPA
the theory? 4 5D practice.
Does the analysis
The RIA lists sources of uncertainties about
adequately assess benefits. It presents a range of estimates based on
uncertainty about the the two epidemiological studies plus a sensitivity
outcomes? 4 5E analysis.
6. How well does the
analysis identify and
demonstrate the existence of
a market failure or other
systemic problem the
regulation is supposed to
solve? 0
The need to reduce emissions is simply taken as
given. Externality is mentioned but not really
explained. The analysis does repeatedly mention
Does the analysis identify a oligopoly structure of cement industry, but since the
market failure or other regualtion is for emissions the market structure
systemic problem? 1 6A cannot be said to be the reason for the regulation.
Does the analysis outline a
coherent and testable theory
that explains why the
problem (associated with the
outcome above) is systemic
rather than anecdotal? 0 6B No relevant discussion.
Does the analysis present
credible empirical support for
the theory? 0 6C No relevant discussion.
Does the analysis
adequately assess
uncertainty about the
existence or size of the
problem? 0 6D No relevant discussion.
7. How well does the
analysis assess the
effectiveness of alternative
approaches? 3
Does the analysis enumerate
other alternatives to address
the problem? 4 7A It considers multiple ways of setting standards.
Is the range of alternatives
considered narrow (e.g.,
some exemptions to a
regulation) or broad (e.g.,
performance-based
regulation vs. command and
control, market mechanisms, The preamble considers and rejects different
nonbinding guidance, standards for different subcategories of kilns. It
also considers defining the standard in terms of
information disclosure,
control efficiency (percent of mercury removed)
addressing any government instead of total emissions allowed. It also considers
failures that caused the standards in excess of the floor. All of these are
original problem)? 3 7B variations on performance standards.
The impact of alternatives on human health is not
evaluated. Rejection of subcategories is based on
concern that allowing subcategories would
increase emissions. For one type of category,
based on mercury content of limestone, the
statistics seem to show that kilns achieve widely
varying levels of emissions even controlling for
mercury content of limestone. Similarly, rejection of
a percentage reduction standard is based on the
likelihood that this will lead to larger emissions.
Does the analysis evaluate
However, these emissions differences are not
how alternative approaches estimated or quantified. Emissions effects of a
would affect the amount of standard above the floor are calculated for a
the outcome achieved? 2 7C "typical" kiln.
Baseline includes current production plus kilns that
are likely to come online in the near future. Does
Does the analysis not consider what types of kilns might shut down,
adequately address the or how the industry might change its practices,
baseline? That is, what the even if the regulation is not adopted. The report
acknowledged that emissions have improved due
state of the world is likely to
to voluntary adoption of new technology, but the
be in the absence of federal report does not seem to take further adoption of
intervention not just now but new technology into account when addressing the
in the future? 3 7D baseline.
8. How well does the
analysis assess costs and
benefits? 4
Does the analysis identify
and quantify incremental
costs of all alternatives It includes compliance costs estimates with
considered? 5 8A engineering analysis.
Does the analysis identify all
expenditures likely to arise It considers compliance costs, but no other
as a result of the regulation? 5 8B possible expenditures.
Does the analysis identify
how the regulation would
likely affect the prices of It calculates change in the price of Portland cement
goods and services? 5 8C caused by the regulations.
Does the analysis examine
costs that stem from
changes in human behavior
as consumers and producers It uses standard microeconomic analysis to
respond to the regulation? 5 8D calculate lost consumer and producer surplus.
If costs are uncertain, does
Engineering vs. social cost estimates implicitly
the analysis present a range account for some uncertainty about industry pricing
of estimates and/or perform behavior, but otherwise costs are assumed to be
a sensitivity analysis? 2 8E certain.
The RIA calculates net benefits only of the
Does the analysis identify approach chosen. The preamble to the rule
the alternative that estimates compliance costs associated with stricter
maximizes net benefits? 2 8F standards.
Does the analysis identify The RIA does not, but in the preamble, the cost-
the cost-effectiveness of effectivenes of more stringent standards is
each alternative considered? 3 8G calculated.
Does the analysis identify all
parties who would bear costs
and assess the incidence of Costs are broken down by size of entity, for
costs? 4 8H individual markets, and in some cases kilns.
Does the analysis identify all
There is no discussion on incidence of benefits,
parties who would receive though there is a table showing what kinds of
benefits and assess the mortality and morbidity are reduced and by how
incidence of benefits? 2 8I much.
Use
Criterion Score Com. No. Comment
Rejection of different rules for sub-categories of
kilns is based on concern that allowing
subcategories would increase emissions. For one
type of category, based on mercury content of
limestone, the statistics seem to show that kilns
achieve widely varying levels of emissions even
controlling for mercury content of limestone. This
9. Does the proposed rule or
is good analysis, but it is not in the RIA! The RIA
the RIA present evidence itself simply shows that the chosen option's
that the agency used the benefits exceed the costs regardless of
analysis? 2 9 uncertainty about benefits.
Standards above the floor are rejected on the
grounds that high costs per amount of pollutant
10. Did the agency maximize removed were not "justified." But this conclusion
net benefits or explain why it does not come from the RIA. The decision shows
chose another alternative? 3 10 some sensitivity to net benefits, though.
11. Does the proposed rule
establish measures and
Since the rule's benefits derive from reductions in
goals that can be used to particulates, EPA could set goals for measured
track the regulation's results particulate reduction near the kilns. This has not
in the future? 1 11 been done.
12. Did the agency indicate
what data it will use to
assess the regulation's
performance in the future The EPA could monitor to see if the regulation
and establish provisions for reduces particulate exposure in areas around the
doing so? 1 12 kilns.