SCENARIOS OF REGULATORY BACKDROPS AND NSR RULES

As discussed in Chapter 2, NSR is not the only Clean Air Act program that affects air emissions by industry. For instance, in the case of sulfur dioxide (SO2) emissions by electric power generators, the Title IV emissions trading system and state implementation plans (SIPs) both impose their own constraints. The incremental effect of NSR rule changes on a particular facility and industry will depend at least in part on how tight these other regulations are. Future developments in those regulations are a major uncertainty in assessing the impact of NSR.1

Another uncertainty is what the effect of the old NSR rules would be if left in place. It is unknown whether the courts would ultimately sanction a stringent interpretation of those NSR rules. Conflicting federal district court decisions, summarized in Chapter 2, mean that the ability of the EPA to use the old NSR rules to force substantial investments in pollution control, at least on the power industry, is unknown at the time of this writing.

It is not possible to state with any confidence what would happen with other regulations or with NSR interpretation if the old rules were to remain in place. Because the net impacts of the changes made to the NSR rules of 2002 and 2003 can depend strongly on the scenario, it is important to assess those impacts under each possibility. Furthermore,

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Continuing with the SO2 example, we point out in Chapter 5 that a reduction in the national SO2 emissions cap for power generators would cause total national emissions to decrease and emissions allowances to have a relatively high price. When allowances have value, power plants that reduce emissions in response to NSR will sell those allowances, if they are permitted to so, to other power plants. In that scenario, the incremental effect of NSR enforcement would then be reduced. Then the health impacts that may result will depend on how those national emissions are rearranged in time and space, perhaps improving or perhaps worsening. On the other hand, if stringent interpretation of the old NSR rules would result in surrenders of allowances in some cases, as has occurred (see Chapter 2), then the national cap (e.g., the present Title IV cap of 8.95 million tons/year) is effectively tightened, and national emissions would fall as a result of NSR enforcement. Whether those surrenders would remain in effect should the Title IV cap be reduced further by Congressional or U.S. Environmental Protection Agency (EPA) action is relevant to an assessment of emissions and health impacts of the new NSR rules. Also, stringent NSR interpretation that yields significant amounts of scrubber installation or coal plant retirements could cause total emissions to fall below the cap.



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