be more formally elicited, through Delphi approaches, other types of formal expert elicitation protocols, and other processes that could take qualitative insights from area experts and translate them into useful information for quantitative analysis. If such information is not collected in a formal way on a representative population, it cannot be used as a basis for answering the questions in the committee’s charge.
The committee finds that developing an econometric structural or behavioral model of firm-level investment decisions is not feasible for evaluating the effects of the NSR rule changes. To incorporate all effects of the NSR rule changes appropriately, data would be required on investment projects that were carried out, that were considered but never carried out, and that were modified to avoid NSR. Because these last two effects are unobservable, they could be incorporated only by collecting anecdotal information. That approach is not favored by the committee and could not be used in any case for quantitative analyses.
One analytic approach considered by the committee was to analyze NSR permit data, which could be used to determine how NSR permitting activity changed as a result of the rule changes. However, as discussed in Chapter 3, current databases are inadequate for such an analysis. In addition, these data would capture only projects that were actually done, omitting investments that may have been forgone to avoid NSR. If the databases also included minor-construction permit information at the state level for investment projects that no longer needed NSR permits, such analyses might plausibly capture the major effects of the rule changes. However, given the current state of the data, a reduced-form econometric analysis would be needed to capture effects associated with NSR on investment decisions and emissions.
Data on investment activity (such as those contained in the Longitudinal Research Database of the Census Bureau) could theoretically be used to evaluate the rule changes with econometric methods, especially given different dates of implementation of the rule changes among states. Such analyses would not be possible for several years for a number of reasons: the data become available only after a 3-year lag, many states will not be affected by the rule changes until 2006 or later, and investment decisions can take years to be carried out. In addition, although the diversity in the timing of implementation of the NSR rule changes across states facilitates this reduced-form analysis, interpretation is complicated by the geographic clustering of some industry sectors and attainment-nonattainment status. Also, the NSR permit review process could differ across states in speed and predictability, with slow or uncertain permit approval in some states serving as a major discouragement to investment activity. The importance of delaying the investment process could be especially important for facilities other than the electricity-generating sector, whose firms are attempting to