and (3) a set of measures that would achieve the goals of Titles I-V of the 1990 Clean Air Act Amendments (CAAA) in the prospective analysis of the Clean Air Act (EPA 1999b)—hereafter referred to as the prospective analysis. For each of the first two rules, only a single package of phased-in changes in capital equipment and fuel composition was evaluated. Alternative types of controls or different schedules for phasing in the controls were not considered. The prospective analysis estimated the benefits and costs of the first five titles of the 1990 CAAA combined and did not attempt to disaggregate benefits by title.

In the analysis of the particulate matter (PM) and ozone National Ambient Air Quality Standards (NAAQS) (EPA 1997), the agency considered three regulatory alternatives that were combinations of the following annual average and 24-hr standards for PM2.5: (1) 16 µg/m3 and 65µg/m3, (2) 15 µg/m3 and 65µg/m3, and (3) 15 µg/m3 and 50 µg/m3. Similarly, the maximum number of annual exceedences allowed under the proposed 1-hr ozone standard varied from 3 to 4 to 5. These options were compared, assuming partial attainment of each option.

In general, EPA’s approach does not satisfy Office of Management and Budget (OMB 1996, 2000) guidance on benefits analysis. The OMB guidelines include consideration of a range of levels for the standard and different time schedules for compliance, as well as a variety of qualitatively different market interventions, such as information measures, market-based approaches, performance-based standards, and different requirements for different segments of the regulated population. When a regulatory action represents a package of different provisions, such as the various titles of the 1990 CAAA, OMB suggests that the parts of the package be assessed separately to the extent feasible. Specifically, OMB (1996) makes the following statements:

If the proposed regulation is composed of a number of distinct provisions, it is important to evaluate the benefits and costs of the different provisions separately. The interaction effects between separate provisions (such that the existence of one provision affects the benefits or costs arising from another provision) may complicate the analysis but does not eliminate the need to examine provisions separately. In such a case, the desirability of a specific provision may be appraised by determining the net benefits of the proposed regulation with and without the provision in question. Where the

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