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Ex ante and ex post cost estimates of the Cluster Rule and MACT II Rule

  • Cynthia Morgan , Carl Pasurka EMAIL logo and Ron Shadbegian
Published/Copyright: November 5, 2014
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Abstract

This paper compares EPA’s ex ante cost analysis of the Cluster Rule, EPA’s first integrated, multi-media regulation, and MACT II Rule to an ex post cost assessment. The goal of this assessment is to determine if actual costs diverged from ex ante costs and, if so, what factors caused this divergence. We find the EPA ex ante costs overestimated the ex post capital costs for the Cluster Rule by 30 to 100%. Contributing factors appear to be use of cleaner technology, flexible compliance options, site-specific rules, shutdowns and consolidations. Ex ante estimates for the MACT II Rule are found to be overestimated by 25% for capital costs and 200 or more percent for annual costs. The primary reason for the overestimate is the use of the bubble compliance strategy that required fewer paper mills to install pollution abatement equipment than anticipated by EPA.


Corresponding author: Carl Pasurka, US EPA, National Center for Environmental Economics, Washington, DC 20460, USA, e-mail:

Glossary – List of Acronyms
APCD

Air Pollution Control Devices

BAT

Best Available Technology

ClO2

Chlorine Dioxide

ELG

Effluent Limitation Guidelines

HAP

Hazardous Air Pollutants

MACT

Maximum Achievable Control Technology

NCASI

National Council for Air and Stream Improvement

NESHAP

National Emission Standards for Hazardous Air Pollutants

O2 delig

Oxygen Delignification

PACE Survey

Pollution Abatement Costs and Expenditures Survey

PM

Particulate Matter

PSES

Pretreatment Standards for Existing Sources

Acknowledgment

We thank two anonymous referees for helpful comments on an earlier version of this article. We also wish to thank BECA, especially Tony Johnson, for assisting with the acquisition of data on water pollution abatement technologies.

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Article note

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of the U.S. Environmental Protection Agency.


Published Online: 2014-11-5
Published in Print: 2014-6-1

©2014 by De Gruyter

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