Scoring

Regulatory Scoring

Agency:

Homeland Security

Rule title:

Standards for Living Organisms in Ships' Ballast Water Discharged in U.S. Waters

RIN

1625-AA32 RIA Yes

Stage Publication Date

Proposed 8/29/2009

Rule summary:

This rulemaking would propose to add a performance standard to 33 CFR part 151, subpart D, for all ballast

water management methods being used as alternatives to mid-ocean ballast water exchange. It supports the

Coast Guard's strategic goals of marine safety and protection of natural resources. This project is significant

due to high interest from Congress and several federal and state agencies, as well as costs imposed on

industry.

Topic 1: Openness Score Comments

A. How easily were the RIA, the proposed rule, and any supplementary

materials found online? 4 1A

B. How verifiable are the data used in the analysis? 3 1B

C. How verifiable are the models and assumptions used in the analysis? 4 1C

D. Was the Regulatory Impact Analysis comprehensible to an informed

layperson? 4 1D



Total 1 (Sum of A, B, C, and D) 15



Topic 2: Analysis Score Comments

A. How well does the analysis identify the desired outcomes and demonstrate

that the regulation will achieve them? 4 2A



B. How well does the analysis identify and demonstrate the existence of a

market failure or other systemic problem the regulation is supposed to solve? 4 2B

C. How well does the analysis assess the effectiveness of alternative

approaches? 4 2C

D. How well does the analysis assess costs and benefits? 3 2D



Total 2 15



Topic 3: Use Score Comments

A. Does the proposed rule or the RIA present evidence that the agency used

the Regulatory Impact Analysis? 3 3A

B. Did the agency maximize net benefits or explain why it chose another

alternative? 2 3B

C. Does the proposed rule establish measures and goals that can be used to

track the regulation’s results in the future? 2 3C



D. Did the agency indicate what data it will use to assess the regulation’s

performance in the future and establish provisions for doing so? 3 3D



Total 3 10



Total Score 40

Openness (Accessible, Verifiable, Peer-reviewed, and Comprehensible)

Category Score Com. No. Comment

1625–AA32 can be found on

regulations.gov using the RIN and a

keyword search. It is difficult to find on the

Department of Homeland Security's

A. How easily were the RIA , website, but they direct the searcher to

regulations.gov. Click on U.S. Coast

the proposed rule, and any Guard and follow the link to regulations.

supplementary materials At the bottom of the page, the site lists

found online? 4 1A regulations.gov.

Data on ships are from Coast Guard

databases which are named, but not

linked. Manufacturers of treatment

systems supplied cost information; raw

data are not provided and high/low

estimates are simply sourced to the

Herbert Engineering Corp. An appendix

provides some data and more

B. How verifiable are the explanation of sources, but they are rarely

data used in the analysis? 3 1B linked.



The RIA includes an extensive list of

references, most of which are either peer-

reviewed scholarly articles or government

C. How verifiable are the reports. Complete bibliographical

models and assumptions references are provided, but links are

used in the analysis? 4 1C only occasionally provided.

The RIA is generally well-written and

clear. Assumptions and theories of

D. Was the regulatory impact causation are explained well for non-

analysis comprehensible to specialists. The actual presentation of

an informed layperson? 4 1D benefit/cost results is a bit confusing.

Analysis (Outcomes, Costs, Systemic Problem, and Alternatives)

Category Score Com. No. Comment



A. Identify the desired

outcomes: 4

Reduce environmental harms associated with

introduction of invasive species. This general

concept is linked to citizens' quality of life via a

discussion of effects on water-dependent

infrastructure, subsistence, recreation, tourism,

commercial fishing, and sport fishing. "The

standard’s main goal is the prevention of future NIS

invasions. Prevention of future NIS invasions will

also prevent the negative impacts of such

invasions, including loss of biodiversity, damage to

Does the analysis clearly

water-dependent infrastructure, and impacts on

identify ultimate outcomes commercial fishing, recreational fishing, water-

that affect citizens’ quality of dependent tourism, public health, and subsistence

life? 5 2A-1 populations" (section 5.3).

Costs of controlling invasive species, damage to

tourism, damage to infrastructure, and damage to

Does the analysis identify fishing are monetized based on prior studies.

how these outcomes are to Effects on ecology, public health and subsistence

be measured? 4 2A-2 populations are not.





Setting standards for concentrations of organisms

in discharged ballast water will reduce the

incidence of invasive species introduction by

reducing the number of organisms introduced:

"The BWDS in Alternatives 2 through 5 are

intended to decrease the probability of NIS

establishment by reducing the number of individual

organisms that are introduced via BWD . . . A

Does the analysis provide a mathematical model was developed based on the

premise that a decrease in the number of living

coherent and testable theory

organisms initially introduced through ballast water

showing how the regulation discharges into a waterway reduces the probability

will produce the desired that a population becomes successfully

outcomes? 5 2A-3 established" (section 5.7).

The RIA cites several examples of significant,

costly invasive species introduced via ballast water

Does the analysis present discharge. It also cites research finding that

credible empirical support for discharging a larger number of organisims

the theory? 4 2A-4 increases the risk of an infestation.

It acknowledges a range of possible costs from

invasions and a range of effectiveness rates for the

chosen alternative. A table lists effects of possible

uncertainties on the benefits estimates, but the

analysis calculates ranges to reflect only two of the

uncertainties. "As discussed earlier, no

comprehensive estimate is available on the costs

from past invasions. Most studies focus on one

species and often only consider certain types of

costs or costs in certain regions, resulting in a wide

variability of estimates. For this reason, we do not

try to develop a composite cost estimate for all

invasions, but instead select a low and high

estimate for fish, aquatic plants and invertebrates

Does the analysis

based on representative species. We then

adequately assess calculate a mid-point for the range and calculate

uncertainty about the costs for future invasions using all three values"

outcomes? 4 2A-5 (section 5.6).

B. Assess evidence of

market failure or other

systemic problem: 4



The analysis states that risk of harms from

discharge of untreated ballast water is not borne by

the vessel owner and hence is an externality. This

is not elaborated to any great extent. "Vessels that

release untreated ballast water increase risks to

aquatic life and possibly human health and cause

other environmental and economic harm without

accounting for the consequences of these actions

on other parties . . . who do not directly participate

in the business transactions of the business

entities. These costs are not borne by the

responsible entities and are therefore external to

the business decisions of the responsible entity.

The goal of environmental legislation and

implementing regulations, including the proposed

BWDS, is to correct these environmental

externalities by requiring vessels to treat their

ballast water releases in order to reduce the

Does the analysis identify a environmental harm that results from the

market failure or other introduction of some non-indigenous invasive

systemic problem? 5 2B-1 species" (section 1.1).

Does the analysis outline a

coherent and testable theory The analysis simply asserts that costs of ballast

water discharge are an externality because they

that explains why the

are not considered by the business owner. The

problem (associated with the analysis notes that interconnectedness of

outcome above) is systemic waterways may make it difficult for states to

rather than anecdotal? 3 2B-2 contain the problem.



The section on benefits cites a large number of

studies on the costs of invasive species. The

analysis cites studies showing that vessels account

for a large portion of invasive species and ballast

water accounts for a minority but still significant

Does the analysis present percentage of invasions. This helps demonstrate

credible empirical support for that vessels are a source of the problem, though it

the theory? 3 2B-3 does not directly show why this is an externality.



It acknowledges a range of possible costs from

invasions, but there is no discussion of uncertainty

about existence of the problem. "Reporting on the

costs in NIS invasions is almost an industry in

Does the analysis itself. Despite the difficulty of obtaining economic

estimates of the costs of aquatic introductions . . .

adequately assess

such figures are widely published. The importance

uncertainty about the of these estimates is that they establish the scale

existence or size of the of the costs in comparison with the costs of

problem? 4 2B-4 meeting a BWDS" (section 5.2).

C. Assess effectiveness of

alternative approaches: 4



Does the analysis enumerate

other alternatives to address No action plus several alternative standards of

the problem? 4 2C-1 varying stringency.



Is the range of alternatives

considered narrow (e.g.,

some exemptions to a

It considers no action, three alternative discharge

regulation) or broad (e.g.,

standards that differ by orders of magnitude, and

performance-based sterilization. "No action" means ships would have to

regulation vs. command and continue current practice of exchanging ballast

control, market mechanisms, water outside U.S. waters or retain ballast water.

nonbinding guidance, All alternatives except no action are essentially

standards of varying stringency, but a wide range.

information disclosure,

The regulation is a performance standard; the

addressing any government Coast Guard does not mandate any particular

failures that caused the technology for meeting it, and in fact discusses

original problem)? 4 2C-2 multiple technologies.

The analysis estimates how alternatives would

reduce the percentage of successful invasions, but

does not carry this through to estimate the number

of invasions or monetized costs avoided for each

alternative. "The alternatives differ in the degree to

which they would prevent introduction of individual

Does the analysis evaluate

organisms in different size classes and hence, the

how alternative approaches degree to which they increase extinction probability

would affect the amount of of NIS" (section 5.7; see section D for further

the outcome achieved? 3 2C-3 explanation).

The cost baseline includes projections of additions

Does the analysis and retirements from the fleet. The benefit baseline

adequately address the starts with projected invasions based on

baseline? That is, what the extrapolation of historical trend from 1790–2000.

There is no consideration of any changes that

state of the world is likely to

might naturally occur that could create deviation

be in the absence of federal from this trend; the baseline simply assumes

intervention not just now but problem will continue in the absence of a new

in the future? 3 2C-4 regulation.

D. Costs and benefits: 3





The analysis considers compliance costs

associated with installing equipment. It suggests

some ships may comply by continuing to exchange

ballast water, which suggests costs might be lower.

Social opportunity costs are not calculated. Costs

are clearly calculated for option 2, the chosen

alternative, but only rough estimates are

considered for the other alternatives (section

3.5–Meeting Stricter Standards); "The costs

associated with the higher standards of

Alternatives 3 and 4 (one-tenth and one-hundredth

of Alternative 2, respectively) are more speculative.

Capital and operational costs could certainly

Does the analysis identify

increase. We estimate the costs for Alternative 3

and quantify incremental would be double those for Alternative 2, and that

costs of all alternatives the costs for Alternative 4 would be quadruple

considered? 3 2D-1 those for Alternative 2" (executive summary).



Does the analysis identify all The analysis quantifies compliance costs

expenditures likely to arise associated with installing equipment. This does not

as a result of the regulation? 4 2D-2 include enforcement costs.



The analysis concludes that the effect on

Does the analysis identify

consumers will be small because the cost is a

how the regulation would small percentage of shipping costs, measured by

likely affect the prices of charter rates. The percentages are calculated, but

goods and services? 4 2D-3 pass-through to consumers is not.

Does the analysis examine

costs that stem from

Overall social costs are not considered. There is a

changes in human behavior brief mention of a few relevant issues in section

as consumers and producers 5.8, which considers whether some of the benefits

respond to the regulation? 1 2D-4 might actually be transfers.



If costs are uncertain, does

the analysis present a range Several sources of cost uncertainty are discussed

of estimates and/or perform and a range of costs is calculated. Low, high, and

a sensitivity analysis? 4 2D-6 middle estimates are presented.



The analysis compares costs and benefits of the

chosen alternative, but not for the other

alternatives. This could have been done using the

data in the RIA. There is one broad reference to

possible net benefits of other alternatives: "The

range of potential benefits for Alternatives 3 and 4

(Table 5.12) are in general less than two to three

times higher than Alternative 2, possibly indicating

that the cost to benefit comparisons would be less

favorable for these Alternatives. However, the

range of uncertainty in both the cost and

Does the analysis identify effectiveness assessments for these standards

the alternative that makes it difficult to conclusively draw comparisons"

maximizes net benefits? 3 2D-7 (section 6.1).



The analysis does not calculate cost-effectiveness,

but this could have been done. The rough cost

Does the analysis identify figures for several alternatives, combined with the

the cost-effectiveness of effectiveness estimates from the environmental

each alternative considered? 1 2D-8 impact statement, provide a starting point.

Costs are calculated for individual types of ships

and for small businesses. The analysis asserts that

Does the analysis identify all

the effect on consumers will not be noticeable

parties who would bear costs because the cost is a small percentage of total

and assess the incidence of shipping costs and shipping costs are a small

costs? 4 2D-9 percentage of the retail price.



Section 5.1, "Resources at Risk," lists various

Does the analysis identify all

costs associated with invasive species, and these

parties who would receive specific costs usually imply specific parties who

benefits and assess the bear costs of invasions and therefore receive

incidence of benefits? 2 2D-10 benefits from the regulation.

Use

Category Score Com. No. Comment

The environmental analysis calculates that the

proposed Phase I standard would be more

effective than ballast water exchange. The

chosen alternative was apparently picked

because it is practicable and will reduce

A. Does the rule or the RIA

invasions. Cost factors do not appear to have

present evidence that the affected this decision, though the regulatory

agency used the regulatory analysis suggests that costs and benefits roughly

impact analysis? 3 3A balance.



The analysis compares costs and benefits only

for the chosen alternative. It appears net benefits

could have been calculated for at least some of

the other alternatives, but the Coast Guard chose

not to do so. The agency chose the least

stringent alternative (other than no action). This

B. Did the agency maximize appears to be because the practicability of

net benefits or explain why it technology to meet the stricter standards is

chose another alternative? 2 3B uncertain, but this is not completely clear.



The Coast Guard will reconsider whether the

Phase II standard is practicable by 2015. After

Phase II is implemented, the Coast Guard will

review the standard every three years to ensure it

is preventing invasions to the maximum extent

practicable. The Coast Guard will conduct

research on the relationship between the size

C. Does the proposed rule and frequency or inroduction of new species and

the probablility of successful establishment.

establish measures and

These are all good things to do and highly

goals that can be used to relevant to future decisions, but none of them

track the regulation's results constitutes setting goals or measures for the

in the future? 2 3C results of this regulation.

D. Did the agency indicate The regulatory analysis section of the preamble

what data it will use to explicitly solicits data and comments that would

help the Coast Guard assess the costs of

assess the regulation's

implementing the more stringent, Phase II

performance in the future regulations. Ships also log data on ballast water;

and establish provisions for however, there's no plan to really track the results

doing so? 3 3D of the regulation.

Rule Title RIN Agency Pub Date RIA separate? Total (F+G+J) Openness Analysis

Living Organisms in Ships' Ballast Water Discharged in U.S. Waters

Homeland

Standards for1625-AA32 Security 8/29/2009 Yes 40 15 15

Quality (F+G) Use 1A 1B 1C 1D 2A 2A1 2A2

30 10 4 3 4 4 4 5 4

2A3 2A4 2A5 2B 2B1 2B2 2B3 2B4 2C

5 4 4 4 5 3 3 4 4

2C1 2C2 2C3 2C4 2D 2D-1 2D-2 2D-3 2D-4

4 4 3 3 3 3 4 4 1

2D-6 2D-7 2D-8 2D-9 2D-10 3A 3B 3C 3D

4 3 1 4 2 3 2 2 3