Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-23T14:34:30.006Z Has data issue: false hasContentIssue false
  • English
  • Français

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

Published online by Cambridge University Press:  17 April 2015

Cynthia Morgan ,
Carl Pasurka  and
Ron Shadbegian
Cynthia Morgan
Affiliation:
US EPA, National Center for Environmental Economics, Washington, DC 20460, USA
Ron Shadbegian
Affiliation:
US EPA, National Center for Environmental Economics, Washington, DC 20460, USA
Rights & Permissions [Opens in a new window]

Abstract:

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

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.

Keywords

chlorine substitutionCluster Ruleoxygen delignificationpulp and paperretrospective analysis
Type
Research Article
Information
Journal of Benefit-Cost Analysis , Volume 5 , Issue 2: Special Issue: Retrospective Analysis of the Costs of EPA Regulations , June 2014 , pp. 195 - 224
Copyright
Copyright © Society for Benefit-Cost Analysis 2014

References

Alliance for Environmental Technology. (2002). Trends in world bleached pulp production: 1990–2001. Available at: www.aet.org/reports/market/trends90-01.html.Google Scholar
Barton, D., Pinkerton, J., Kaufman, R., Jones, M., Forbes, D., & Johnson, G. (1995). Cluster rule would place unrealistic demand on engineering resources. Pulp & Paper, 69(13), 103–108.Google Scholar
Beca AMEC. (2013a). “Annual US pulp line MTPY” spreadsheet, Johnson, Tony, ed.Google Scholar
Beca AMEC. (2013b). “Pulp mill data – delig study” spreadsheet, Johnson, Tony, ed.Google Scholar
Bradfield, J., & Spence, K. (2011). Summary of clean condensate alternative technology review. Memorandum to Docket EPA-HQ-OAR-2007-0544-0129, October 20.Google Scholar
EPA asked to reward O2 delig users. (1996). Pulp & Paper, 70(6), 21.Google Scholar
Ferguson, K. (1995). Stuck in environmental limbo. Pulp & Paper, 69(8), 9.Google Scholar
Garner, J. (2001). Air emission control regulations pose new challenges for mills. Pulp & Paper, 75(10), 44–46.Google Scholar
Hanks, K., Holloway, T., & Gooden, C. (2013). Projections of the number of new, modified and reconstructed emissions units for the kraft pulp mill NSPS. Memorandum to Kelly Spence, U.S. EPA, from Katie Hanks, Tom Holloway, and Corey Gooden, RTI International, February 4.Google Scholar
Holloway, T. (2000). Revised nationwide costs, environmental impacts, and cost effectiveness of regulatory alternatives for kraft, soda, sulfite, and semichemical combustion sources. Memorandum to Project file from Thomas Holloway, Midwest Research Institute, EPA Docket A-94-67, Item IV-B-12, October 26.Google Scholar
Jensen, K. P. (1999). U.S. bleached pulp mills move towards compliance of phase 1 of cluster rule. Pulp & Paper, 73(9), 71–75.Google Scholar
Johnson, T. (1994). Chlorine dioxide usage – a status report on the look of the North American bleaching scene. TAPPI 1994 Pulping Conference Proceedings, Book 1, pp. 769–771.Google Scholar
Johnson, T. (1995). O2 delig system update. Pulp & Paper, 69(2), 41.Google Scholar
Maynard, L. J., & Shortle, J. S. (2001). Determinants of cleaner technology investments in the U.S. bleached kraft pulp industry. Land Economics, 71(4), 561–576.Google Scholar
Miller Freeman Publications, Inc. (1998). Pulp & paper North American fact book 1999. San Francisco, CA: Miller Freeman Publications, Inc.Google Scholar
Morgan, C., Pasurka, C., & Shadbegian, R. (2014). Cluster rule and MACT II rule. In Retrospective Study of the Costs of EPA Regulations: A Report of Four Case Studies (pp. 24–65). Washington, DC: National Center for Environmental Economics, Office of Policy. EPA 240-F-14-001.Google Scholar
National Council for Air and Stream Improvement, Inc. (1999). A survey of pulp and paper industry environmental protection expenditures – 1998, Special Report No. 99-05. Research Triangle Park: National Council for Air and Stream Improvement, Inc.Google Scholar
National Council for Air and Stream Improvement, Inc. (2002a). A survey of pulp and paper industry environmental protection expenditures – 1999, Special Report No. 02-01. Research Triangle Park: National Council for Air and Stream Improvement, Inc.Google Scholar
National Council for Air and Stream Improvement, Inc. (2002b). A survey of pulp and paper industry environmental protection expenditures – 2000, Special Report No. 02-02. Research Triangle Park: National Council for Air and Stream Improvement, Inc.Google Scholar
National Council for Air and Stream Improvement, Inc. (2002c). A survey of pulp and paper industry environmental protection expenditures – 2001, Special Report No. 02-07. Research Triangle Park: National Council for Air and Stream Improvement, Inc.Google Scholar
National Council for Air and Stream Improvement, Inc. (2003). A survey of pulp and paper industry environmental protection expenditures – 2002, Special Report No. 03-07. Research Triangle Park: National Council for Air and Stream Improvement, Inc.Google Scholar
Nicholson, R., Holloway, T., & Gooden, C. (2012). Final white paper. Memorandum to Anna Belova, Abt Associates, from Rebecca Nicholson, Tom Holloway, and Corey Gooden, RTI International, February 28.Google Scholar
Norberg-Bohm, V., & Rossi, M. (1998). The power of incrementalism: environmental regulation and technological change in pulp and paper bleaching in the US. Technology Analysis & Strategic Management, 10(2), 225–245.Google Scholar
Paperloop.com, Inc. (2000). Pulp & paper North American fact book 2000. San Francisco, CA: Paperloop.com, Inc.Google Scholar
Paperloop.com, Inc. (2002). Pulp & paper North American fact book 2001. San Francisco, CA: Paperloop.com, Inc.Google Scholar
Paperloop.com, Inc. (2003). Pulp & paper North American fact book 2002. San Francisco, CA: Paperloop.com, Inc.Google Scholar
Paper Task Force. (1995). Economics of kraft pulping and bleaching. Working Paper No. 7 (19 December), p. 5. Available at: http://c.environmentalpaper.org/documents/1628_WP7.pdf.Google Scholar
Parthasarathy, P., & Dowd, S. (2000). Impact of the cluster rule on the cost competitiveness of U.S. papermaking industry in the global market. TAPPI Journal, 83(9), 39–45. Available at http://www.tappi.org/Downloads/unsorted/UNTITLED---00Sep39pdf.aspx¯.Google Scholar
Pauksta, P. M. (1995). The cluster rule: what’s at stake for the industry? Tappi Journal, 78(9), 50–51.Google Scholar
Popp, D., & Hafner, T. (2008). Policy versus consumer pressure: innovation and diffusion of alternative bleaching technologies in the pulp industry. In Environmental Policy, Technological Innovation and Patents, OECD Studies on Environmental Innovation (pp. 107–138). Paris, France: OECD Publications.Google Scholar
Powell, M. R. (1997). Control of dioxins (and other organochlorines) from the pulp and paper industry under the clean water act and lead in soil at superfund mining sites: two case studies in EPA’s use of science. RFF Discussion Paper 97-08.Google Scholar
Snyder, L. D., Miller, N. H., & Stavins, R. N. (2003). The effects of environmental regulation on technology diffusion: the case of chlorine manufacturing. American Economic Review, 93(2), 431–435.Google Scholar
U.S. Bureau of the Census. (various issues). Pollution abatement costs and expenditures. Current Industrial Reports (MA200). Washington, DC: U.S. Government Printing Office.Google Scholar
U.S. Department of Commerce, Bureau of the Census. (2000). Selected air pollution control equipment, 1998. Current Industrial Reports (MA333J). Washington, DC: U.S. Government Printing Office.Google Scholar
U.S. Department of Agriculture, Forest Service, Southern Research Station. (2005). “U.S. wood-using mill locations – 2005,” Available at http://www.srs.fs.usda.gov/econ/data/mills/.Google Scholar
U.S. Environmental Protection Agency. (1990). U.S. EPA/paper industry cooperative dioxin study ‘the 104 mill study,’ summary report. Washington, DC: Office of Water Regulations and Standards.Google Scholar
U.S. Environmental Protection Agency. (1993a). Effluent limitations guidelines, pretreatment standards, and new source performance standards: pulp, paper, and paperboard category; national emission standards for hazardous air pollutants for source category: pulp and paper production. Federal Register, 58(241), 66078–66216.Google Scholar
U.S. Environmental Protection Agency. (1993b). Handbook on pollution prevention opportunities for the bleached kraft pulp and paper mills. Washington, DC: Office of Research and Development and the Office of Enforcement. EPA-600-R-93-098.Google Scholar
U.S. Environmental Protection Agency. (1993c). Regulatory impact assessment of proposed effluent guidelines and NESHAP for the pulp, paper, and paperboard industry. Washington, DC: Office of Water. EPA-821-R-93-020.Google Scholar
U.S. Environmental Protection Agency. (1997a). Economic analysis for the national emission standards for hazardous air pollutants for source category: pulp and paper production; effluent limitations guidelines, pretreatment standards, and new source performance standards: pulp, paper, and paperboard category-phase 1. Research Triangle Park, NC: Office of Air and Radiation, Office of Air Quality Planning and Standards, Innovative Strategies and Economics Group and Washington, DC: Office of Water, Office of Science and Technology, Engineering and Analysis Division.Google Scholar
U.S. Environmental Protection Agency. (1997b). Supplemental technical development document for effluent limitations guidelines and standards for the pulp, paper, and paperboard category: subpart B (bleached papergrade kraft and soda) and subpart E (papergrade sulfite). Washington, DC: Office of Water. EPA-821-R-97-011.Google Scholar
U.S. Environmental Protection Agency. (1998a). National emission standards for hazardous air pollutants for source category: pulp and paper production; effluent limitations guidelines, pretreatment standards, and new source performance standards: pulp, paper, and paperboard category. Federal Register, 63(72), 18504–18751.Google Scholar
U.S. Environmental Protection Agency. (1998b). Pulp and paper NESHAP: a plain English description. Research Triangle Park, NC: Office of Air Quality Planning and Standards, Group. EPA-456/R-98-008.Google Scholar
U.S. Environmental Protection Agency. (2001a). National emission standards for hazardous air pollutants for chemical recovery combustion sources at kraft, soda, sulfite, and stand-alone semichemical pulp mills. Federal Register, 66(9), 3180–3203.Google Scholar
U.S. Environmental Protection Agency. (2001b). Pulp and paper combustion sources for national emission standards for hazardous air pollutants (NESHAP): a plain English description. Research Triangle Park, NC: Office of Air Quality Planning and Standards. EPA-456/R-01-003.Google Scholar
U.S. Environmental Protection Agency. (2006). Final report: pulp, paper, and paperboard detailed study. Washington, DC: Office of Water, Engineering and Analysis Division. EPA-821-R-06-016.Google Scholar
U.S. Securities and Exchange Commission. (various years and firms). Form 10-K, annual report pursuant to section 13 or 15(d) of the securities exchange act of 1934. Available at: http://www.sec.gov/answers/form10k.htm.Google Scholar