The PAGE (Policy Analysis of the Greenhouse Effect) model was
developed by Chris Hope in 1991 for use by European decision-makers
in assessing the marginal impact of carbon emissions (Hope 2006,
Hope 2008). The FUND (Climate Framework for Uncertainty,
Negotiation, and Distribution) model, developed by Richard Tol in
the early 1990s, originally to study international capital transfers
in climate policy, is now widely used to study climate impacts
(e.g., Tol 2002a, Tol 2002b, Anthoff et al. 2009, Tol 2009).
    \467\ Newell, R., and W. Pizer. 2003. Discounting the distant
future: How much do uncertain rates increase valuations? Journal of
Environmental Economics and Management 46: 52-71.
---------------------------------------------------------------------------

    These interim values represent the first sustained interagency
effort within the U.S. Government to develop an SCC for use in
regulatory analysis. The results of this preliminary effort were
presented in several proposed and final rules and were offered for
public comment in connection with proposed rules. In particular, EPA
and NHTSA used the interim SCC estimates in the joint proposal leading
to this final rule.
iii. Approach and Key Assumptions
    Since the release of the interim values, interagency group has
reconvened on a regular basis to generate improved SCC estimates, which
EPA and NHTSA used in this final rule. Specifically, the group has
considered public comments and further explored the technical
literature in relevant fields. The general approach to estimating SCC
values was to run the three integrated assessment models (FUND, DICE,
and PAGE) using the following inputs agreed upon by the interagency
group:
     A Roe and Baker distribution for the climate sensitivity
parameter bounded between 0 and 10 with a median of 3 [deg]C and a
cumulative probability between 2 and 4.5 [deg]C of two-thirds.\468\
---------------------------------------------------------------------------

    \468\ Roe, G., and M. Baker. 2007. ``Why is climate sensitivity
so unpredictable?'' Science 318:629-632.

---------------------------------------------------------------------------

     Five sets of GDP, population and carbon emissions
trajectories based on the recent Stanford Energy Modeling Forum, EMF-
22.
     Constant annual discount rates of 2.5, 3, and 5 percent.

The SCC TSD presents a summary of the results and details, the modeling
exercise and the choices and assumptions that underlie the resulting
estimates of the SCC. The complete model results are available in the
docket for this final rule [EPA-HQ-OAR-2009-0472].
    It is important to recognize that a number of key uncertainties
remain, and that current SCC estimates should be treated as provisional
and revisable since they will evolve with improved scientific and
economic understanding. The interagency group also recognizes that the
existing models are imperfect and incomplete. The National Academy of
Science (2009) points out that there is tension between the goal of
producing quantified estimates of the economic damages from an
incremental ton of carbon and the limits of existing efforts to model
these effects. The SCC TSD highlights a number of concerns and problems
that should be addressed by the research community, including research
programs housed in many of the agencies participating in the
interagency process to estimate the SCC.
    The U.S. Government will periodically review and reconsider
estimates of the SCC used for cost-benefit analyses to reflect
increasing knowledge of the science and economics of climate impacts,
as well as improvements in modeling. In this context, statements
recognizing the limitations of the analysis and calling for further
research take on exceptional significance. The interagency group offers
the new SCC values with all due humility about the uncertainties
embedded in them and with a sincere promise to continue work to improve
them.
iv. Use of New SCC Estimates To Calculate GHG Benefits for This Final
Rule
    The table below summarizes the total GHG benefits for the lifetime
of the rule, which are calculated by using the four new SCC values.
Specifically, EPA calculated the total monetized benefits in each year
by multiplying the marginal benefits estimates per metric ton of
CO2 (the SCC) by the reductions in CO2 for that
year.

                  Table III.H.6-2--Monetized CO2 Benefits of Vehicle Program, CO2 Emissions a b
                                                 [Million 2007$]
----------------------------------------------------------------------------------------------------------------
                                                                             Benefits
                                   CO2 emissions ---------------------------------------------------------------
                                     reduction                                                         95th
              Year                   (Million      Avg SCC at 5%   Avg SCC at 3%    Avg SCC at    percentile SCC
                                   metric tons)     ($5-$16) c      ($21-$45) c   2.5% ($35-$65)    at 3% ($65-
                                                                                c            $136) c
----------------------------------------------------------------------------------------------------------------
2020............................             139            $900          $3,700          $5,800         $11,000
2030............................             273           2,700           8,900          14,000          27,000
2040............................             360           4,600          14,000          21,000          43,000
2050............................             459           7,200          21,000          30,000          62,000
----------------------------------------------------------------------------------------------------------------
\a\ Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
\b\ Numbers may not compute exactly from Tables III.H.6-1 and III.H.6-2 due to rounding.
\c\ As noted above, SCC increases over time; tables lists ranges for years 2010 through 2050. See Table III.H.6-
  1 for the SCC estimates corresponding to the years in this table.

b. Summary of the Response to Comments
    EPA and NHTSA received extensive public comments about the
scientific, economic, and ethical issues involved in estimating the
SCC, including the proposed rule's estimates of the value of emissions
reductions from new cars and trucks.\469\ In particular, the comments
addressed the methodology used to derive the interim SCC estimates,
limitations of integrated assessment models, discount rate selection,
treatment of uncertainty and catastrophic impacts, use of global and
domestic SCC, and the presentation and use of SCC estimates. The rest
of this preamble section briefly summarizes EPA's response to the
comments; the Response to Comments document provides the complete
responses to all comments received.
---------------------------------------------------------------------------

    \469\ EPA estimated GHG benefits in the proposed rule using a
set of interim SCC values developed by an interagency group, in
which EPA and NHTSA participated. As discussed in the SCC TSD, the
interagency group selected the interim estimates from the existing
literature and agreed to use those interim estimates in regulatory
analyses until it could develop a more comprehensive
characterization of the SCC.
---------------------------------------------------------------------------

    EPA received extensive comments about the methodology and discount
rates used to derive the interim SCC estimates. While one commenter
from the auto industry noted that the interim methodology was
acceptable given available data, many commenters (representing academic
and environmental organizations) expressed concerns that the filters
were too narrow, stated that model-weighting averaging was
inappropriate, and recommended that EPA use lower discount rates. These
commenters also discussed alternative approaches to select discount
rates and generally recommended that EPA use lower rates to give more
weight to climate damages experienced by future generations.
    For the final rule, EPA conducted new analyses of SCC. EPA did not
continue with its interim approach to derive estimates from the
existing literature and instead conducted new model runs that produced
a vast amount of SCC data at three separate certainty-equivalent
discount rates (2.5, 3, and 5 percent). As discussed further in the SCC
TSD, this modeling exercise resulted in a fuller distribution of SCC
estimates and better accounted for uncertainty through a Monte Carlo
analysis. Comments on specific issues are addressed in the Response to
Comments document.
    EPA received comments on the limitations of the integrated
assessment models concluding that the selection of models and reliance
on the model authors' datasets contributed to the downward bias of the
interim SCC estimates. In this final rule, EPA relied on the default
values in each model for the remaining parameter; research gaps

and practical constraints required EPA to limit its modification of the
models to socioeconomic and emissions scenarios, climate sensitivity,
and discount rate. While EPA recognizes that the models' translations
of physical impacts to economic values are incomplete, approximate, and
highly uncertain, it regards them as the best currently available
representations. EPA also considered, for each model, the treatment of
uncertainty, catastrophic impacts, and omitted impacts, and as
discussed in the SCC TSD and the Response to Comments document, used
best available information and techniques to quantify such impacts as
feasible and supplemented the SCC with qualitative assessments.
Comments on specific issues are addressed in the Response to Comments
document.
    Six commenters, representing academia and environmental
organizations, supported the proposed rule's preference for global SCC
estimates while several industry groups stated that under the Clean Air
Act, EPA is prohibited from using global estimates. EPA agrees that a
global measure of GHG mitigation benefits is both appropriate and
lawful for EPA to consider in evaluating the benefits of GHG emissions
standards adopted under section 202(a). Global climate change
represents a problem that the United States cannot solve alone without
global action, and for a variety of reasons there is a value to the
U.S. from domestic emissions reductions that reduce the harm occurring
globally. This is not exercise of regulatory authority over conduct
occurring overseas, but instead is a reasonable exercise of discretion
in how to place a monetary value on a reduction in domestic emissions.
See the Response to Comments document for a complete discussion of this
issue.
    Finally, EPA received various comments regarding the presentation
of the SCC methodology and resulting estimates. EPA has responded to
these concerns by presenting a detailed discussion about the
methodology, including key model assumptions, as well as uncertainties
and research gaps associated with the SCC estimates and the
implications for the SCC estimates. Among these key assumptions and
uncertainties are issues involving discount rates, climate sensitivity
and socioeconomic scenario assumptions, incomplete treatment of
potential catastrophic impacts, incomplete treatment of non-
catastrophic impacts, uncertainty in extrapolation of damages to high
temperatures, incomplete treatment of adaptation and technological
change, and assumptions about risk aversion to high-impact outcomes
(see SCC TSD).
7. Non-Greenhouse Gas Health and Environmental Impacts
    This section presents EPA's analysis of the non-GHG health and
environmental impacts that can be expected to occur as a result of the
light-duty vehicle GHG rule. GHG emissions are predominantly the
byproduct of fossil fuel combustion processes that also produce
criteria and hazardous air pollutants. The vehicles that are subject to
the standards are also significant sources of mobile source air
pollution such as direct PM, NOX, VOCs and air toxics. The
standards will affect exhaust emissions of these pollutants from
vehicles. They will also affect emissions from upstream sources related
to changes in fuel consumption. Changes in ambient ozone,
PM2.5, and air toxics that will result from the standards
are expected to affect human health in the form of premature deaths and
other serious human health effects, as well as other important public
health and welfare effects.
    As many commenters noted, it is important to quantify the health
and environmental impacts associated with the final rule because a
failure to adequately consider these ancillary co-pollutant impacts
could lead to an incorrect assessment of their net costs and benefits.
Moreover, co-pollutant impacts tend to accrue in the near term, while
any effects from reduced climate change mostly accrue over a timeframe
of several decades or longer.
    This section is split into two sub-sections: The first presents the
PM- and ozone-related health and environmental impacts associated with
the final rule in calendar year (CY) 2030; the second presents the PM-
related benefits-per-ton values used to monetize the PM-related co-
benefits associated with the model year (MY) analysis of the final
rule.\470\
---------------------------------------------------------------------------

    \470\ EPA typically analyzes rule impacts (emissions, air
quality, costs and benefits) in the year in which they occur; for
this analysis, we selected 2030 as a representative future year. We
refer to this analysis as the ``Calendar Year'' (CY) analysis. EPA
also conducted a separate analysis of the impacts over the model
year lifetimes of the 2012 through 2016 model year vehicles. We
refer to this analysis as the ``Model Year'' (MY) analysis. In
contrast to the CY analysis, the MY lifetime analysis shows the
lifetime impacts of the program on each of these MY fleets over the
course of its lifetime.
---------------------------------------------------------------------------

a. Quantified and Monetized Non-GHG Human Health Benefits of the 2030
Calendar Year (CY) Analysis
    This analysis reflects the impact of the final light-duty GHG rule
in 2030 compared to a future-year reference scenario without the rule
in place. Overall, we estimate that the final rule will lead to a net
decrease in PM2.5-related health impacts (see Section
III.G.5 of this preamble for more information about the air quality
modeling results). While the PM-related air quality impacts are
relatively small, the decrease in population-weighted national average
PM2.5 exposure results in a net decrease in adverse PM-
related human health impacts (the decrease in national population-
weighted annual average PM2.5 is 0.0036 [mu]g/
m3).
    The air quality modeling (discussed in Section III.G.5) projects
very small increases in ozone concentrations in many areas, but these
are driven by the ethanol production volumes mandated by the recently
finalized RFS2 rule and are not due to the standards finalized in this
rule. While the ozone-related impacts are very small, the increase in
population-weighted national average ozone exposure results in a small
increase in ozone-related health impacts (population-weighted maximum
8-hour average ozone increases by 0.0104 ppb).
    We base our analysis of the final rule's impact on human health in
2030 on peer-reviewed studies of air quality and human health
effects.471 472 These methods are described in more detail
in the RIA that accompanies this action. Our benefits methods are also
consistent with recent rulemaking analyses such as the proposed
Portland Cement National Emissions Standards for Hazardous Air
Pollutants (NESHAP) RIA,\473\ the final NO2 NAAQS,\474\ and
the final Category 3 Marine Engine rule.\475\ To model the

ozone and PM air quality impacts of the final rule, we used the
Community Multiscale Air Quality (CMAQ) model (see Section III.G.5).
The modeled ambient air quality data serves as an input to the
Environmental Benefits Mapping and Analysis Program (BenMAP).\476\
BenMAP is a computer program developed by the U.S. EPA that integrates
a number of the modeling elements used in previous analyses (e.g.,
interpolation functions, population projections, health impact
functions, valuation functions, analysis and pooling methods) to
translate modeled air concentration estimates into health effects
incidence estimates and monetized benefits estimates.
---------------------------------------------------------------------------

    \471\ U.S. Environmental Protection Agency. (2006). Final
Regulatory Impact Analysis (RIA) for the National Ambient Air
Quality Standards for Particulate Matter. Prepared by: Office of Air
and Radiation. Retrieved March 26, 2009 at http://www.epa.gov/ttn/
ecas/ria.html. EPA-HQ-OAR-2009-0472-0240.
    \472\ U.S. Environmental Protection Agency. (2008). Final Ozone
NAAQS Regulatory Impact Analysis. Prepared by: Office of Air and
Radiation, Office of Air Quality Planning and Standards. Retrieved
March 26, 2009 at http://www.epa.gov/ttn/ecas/ria.html. EPA-HQ-OAR-
2009-0472-0238.
    \473\ U.S. Environmental Protection Agency (U.S. EPA). 2009.
Regulatory Impact Analysis: National Emission Standards for
Hazardous Air Pollutants from the Portland Cement Manufacturing
Industry. Office of Air Quality Planning and Standards, Research
Triangle Park, NC. April. Available on the Internet at http://
www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf.
Accessed March 15, 2010. EPA-HQ-OAR-2009-0472-0241.
    \474\ U.S. Environmental Protection Agency (U.S. EPA). 2010.
Final NO2 NAAQS Regulatory Impact Analysis (RIA). Office
of Air Quality Planning and Standards, Research Triangle Park, NC.
April. Available on the Internet at http://www.epa.gov/ttn/ecas/
regdata/RIAs/FinalNO2RIAfulldocument.pdf. Accessed March 15, 2010.
EPA-HQ-OAR-2009-0472-0237.
    \475\ U.S. Environmental Protection Agency. 2009. Regulatory
Impact Analysis: Control of Emissions of Air Pollution from Category
3 Marine Diesel Engines. EPA-420-R-09-019, December 2009. Prepared
by Office of Air and Radiation. http://www.epa.gov/otaq/regs/
nonroad/marine/ci/420r09019.pdf. Accessed February 9, 2010. EPA-HQ-
OAR-2009-0472-0283.
    \476\ Information on BenMAP, including downloads of the
software, can be found at http://www.epa.gov/ttn/ecas/
benmodels.html.
---------------------------------------------------------------------------

    The range of total monetized ozone- and PM-related health impacts
is presented in Table III.H.7-1. We present total benefits based on the
PM- and ozone-related premature mortality function used. The benefits
ranges therefore reflect the addition of each estimate of ozone-related
premature mortality (each with its own row in Table III.H.7-1) to
estimates of PM-related premature mortality. These estimates represent
EPA's preferred approach to characterizing a best estimate of benefits.
As is the nature of Regulatory Impact Analyses (RIAs), the assumptions
and methods used to estimate air quality benefits evolve to reflect the
Agency's most current interpretation of the scientific and economic
literature.

                Table III.H.7-1--Estimated 2030 Monetized PM- and Ozone-Related Health Benefits a
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
   2030 Total Ozone and PM Benefits--PM Mortality Derived from American Cancer Society Analysis and Six-Cities
                                                  Analysis \a\
----------------------------------------------------------------------------------------------------------------
Premature Ozone Mortality Function     Reference                Total Benefits           Total Benefits
                                                                 (Millions, 2007$, 3%    (Millions, 2007$, 7%
                                                                 Discount Rate) b c d     Discount Rate) b c d
----------------------------------------------------------------------------------------------------------------
Multi-city analyses..................  Bell et al., 2004......  Total: $510-$1,300.....  Total: $460-$1,200
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$40............  Ozone: -$40
                                       Huang et al., 2005.....  Total: $490-$1,300.....  Total: $440-$1,200
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$64............  Ozone: -$64
                                       Schwartz, 2005.........  Total: $490-$1,300.....  Total: $440-$1,200
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$60............  Ozone: -$60
Meta-analyses........................  Bell et al., 2005......  Total: $430-$1,200.....  Total: $380-$1,100
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$120...........  Ozone: -$120
                                       Ito et al., 2005.......  Total: $380-$1,200.....  Total: $330-$1,000
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$170...........  Ozone: -$170
                                       Levy et al., 2005......  Total: $380-$1,200.....  Total: $330-$1,000
                                                                PM: $550-$1,300........  PM: $500-$1,200
                                                                Ozone: -$170...........  Ozone: -$170
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Total includes premature mortality-related and morbidity-related ozone and PM2.5 benefits. Range was
  developed by adding the estimate from the ozone premature mortality function to the estimate of PM2.5-related
  premature mortality derived from either the ACS study (Pope et al., 2002) \477\ or the Six-Cities study (Laden
  et al., 2006).\478\
\b\ Note that total benefits presented here do not include a number of unquantified benefits categories. A
  detailed listing of unquantified health and welfare effects is provided in Table III.H.7-2.
\c\ Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPA's Guidelines for
  Preparing Economic Analyses and OMB Circular A-4. Results are rounded to two significant digits for ease of
  presentation and computation.
\d\ Negatives indicate a disbenefit, or an increase in health effect incidence.

    The benefits in Table III.H.7-1 include all of the human health
impacts we are able to quantify and monetize at this time. However, the
full complement of human health and welfare effects associated with PM
and ozone remain unquantified because of current limitations in methods
or available data. We have not quantified a number of known or
suspected health effects linked with ozone and PM for which appropriate
health impact functions are not available or which do not provide
easily interpretable outcomes (e.g., changes in heart rate
variability). Additionally, we are unable to quantify a number of known
welfare effects, including reduced acid and particulate deposition
damage to cultural monuments and other materials, and environmental
benefits due to reductions of impacts of eutrophication in coastal
areas. These are listed in Table III.H.7-2. As a result, the health
benefits quantified in this section are likely underestimates of the
total benefits attributable to the final rule.
---------------------------------------------------------------------------

    \477\ Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. Calle, D.
Krewski, K. Ito, and G.D. Thurston (2002). ``Lung Cancer,
Cardiopulmonary Mortality, and Long-term Exposure to Fine
Particulate Air Pollution.'' Journal of the American Medical
Association 287:1132-1141. EPA-HQ-OAR-2009-0472-0263.
    \478\ Laden, F., J. Schwartz, F.E. Speizer, and D.W. Dockery
(2006). Reduction in Fine Particulate Air Pollution and Mortality.
American Journal of Respiratory and Critical Care Medicine. 173:667-
672. EPA-HQ-OAR-2009-0472-1661.

    Table III.H.7-2--Unquantified and Non-Monetized Potential Effects
------------------------------------------------------------------------
                               Effects not included in analysis--changes
      Pollutant/effects                           in:
------------------------------------------------------------------------
Ozone Health \a\.............  Chronic respiratory damage \b\.
                               Premature aging of the lungs \b\.
                               Non-asthma respiratory emergency room
                                visits.
                               Exposure to UVb (+/-) \e\.
Ozone Welfare................  Yields for
                               --commercial forests.
                               --some fruits and vegetables.
                               --non-commercial crops.
                               Damage to urban ornamental plants.
                               Impacts on recreational demand from
                                damaged forest aesthetics.
                               Ecosystem functions.
                               Exposure to UVb (+/-) \e\.
PM Health \c\................  Premature mortality--short term exposures
                                \d\.
                               Low birth weight.
                               Pulmonary function.
                               Chronic respiratory diseases other than
                                chronic bronchitis.
                               Non-asthma respiratory emergency room
                                visits.
                               Exposure to UVb (+/-) \e\.
PM Welfare...................  Residential and recreational visibility
                                in non-Class I areas.
                               Soiling and materials damage.
                               Damage to ecosystem functions.
                               Exposure to UVb (+/-) \e\.
Nitrogen and Sulfate           Commercial forests due to acidic sulfate
 Deposition Welfare.            and nitrate deposition.
                               Commercial freshwater fishing due to
                                acidic deposition.
                               Recreation in terrestrial ecosystems due
                                to acidic deposition.
                               Existence values for currently healthy
                                ecosystems.
                               Commercial fishing, agriculture, and
                                forests due to nitrogen deposition.
                               Recreation in estuarine ecosystems due to
                                nitrogen deposition.
                               Ecosystem functions.
                               Passive fertilization.
CO Health....................  Behavioral effects.
HC/Toxics Health \f\.........  Cancer (benzene, 1,3-butadiene,
                                formaldehyde, acetaldehyde).
                               Anemia (benzene).
                               Disruption of production of blood
                                components (benzene).
                               Reduction in the number of blood
                                platelets (benzene).
                               Excessive bone marrow formation
                                (benzene).
                               Depression of lymphocyte counts
                                (benzene).
                               Reproductive and developmental effects
                                (1,3-butadiene).
                               Irritation of eyes and mucus membranes
                                (formaldehyde).
                               Respiratory irritation (formaldehyde).
                               Asthma attacks in asthmatics
                                (formaldehyde).
                               Asthma-like symptoms in non-asthmatics
                                (formaldehyde).
                               Irritation of the eyes, skin, and
                                respiratory tract (acetaldehyde).
                               Upper respiratory tract irritation and
                                congestion (acrolein).
HC/Toxics Welfare............  Direct toxic effects to animals.
                               Bioaccumulation in the food chain.
                               Damage to ecosystem function.
                               Odor.
------------------------------------------------------------------------
Notes:
\a\ The public health impact of biological responses such as increased
  airway responsiveness to stimuli, inflammation in the lung, acute
  inflammation and respiratory cell damage, and increased susceptibility
  to respiratory infection are likely partially represented by our
  quantified endpoints.
\b\ The public health impact of effects such as chronic respiratory
  damage and premature aging of the lungs may be partially represented
  by quantified endpoints such as hospital admissions or premature
  mortality, but a number of other related health impacts, such as
  doctor visits and decreased athletic performance, remain unquantified.
\c\ In addition to primary economic endpoints, there are a number of
  biological responses that have been associated with PM health effects
  including morphological changes and altered host defense mechanisms.
  The public health impact of these biological responses may be partly
  represented by our quantified endpoints.
\d\ While some of the effects of short-term exposures are likely to be
  captured in the estimates, there may be premature mortality due to
  short-term exposure to PM not captured in the cohort studies used in
  this analysis. However, the PM mortality results derived from the
  expert elicitation do take into account premature mortality effects of
  short term exposures.
\e\ May result in benefits or disbenefits.
\f\ Many of the key hydrocarbons related to this rule are also hazardous
  air pollutants listed in the CAA.

    While there will be impacts associated with air toxic pollutant
emission changes that result from the final rule, we do not attempt to
monetize those impacts. This is primarily because currently available
tools and methods to assess air toxics risk from mobile sources at the
national scale are not adequate for extrapolation to incidence
estimations or benefits assessment. The best suite of tools and methods
currently available for assessment at the national scale are those used
in the National-Scale Air Toxics Assessment (NATA). The EPA Science
Advisory Board specifically commented in their review of the 1996 NATA
that these tools were not yet

ready for use in a national-scale benefits analysis, because they did
not consider the full distribution of exposure and risk, or address
sub-chronic health effects.\479\ While EPA has since improved the
tools, there remain critical limitations for estimating incidence and
assessing benefits of reducing mobile source air toxics. EPA continues
to work to address these limitations; however, we did not have the
methods and tools available for national-scale application in time for
the analysis of the final rule.\480\
---------------------------------------------------------------------------

    \479\ Science Advisory Board. 2001. NATA--Evaluating the
National-Scale Air Toxics Assessment for 1996--an SAB Advisory.
http://www.epa.gov/ttn/atw/sab/sabrev.html. EPA-HQ-OAR-2009-0472-
0244.
    \480\ In April 2009, EPA hosted a workshop on estimating the
benefits or reducing hazardous air pollutants. This workshop built
upon the work accomplished in the June 2000 Science Advisory Board/
EPA Workshop on the Benefits of Reductions in Exposure to Hazardous
Air Pollutants, which generated thoughtful discussion on approaches
to estimating human health benefits from reductions in air toxics
exposure, but no consensus was reached on methods that could be
implemented in the near term for a broad selection of air toxics.
Please visit http://epa.gov/air/toxicair/2009workshop.html. for more
information about the workshop and its associated materials.
---------------------------------------------------------------------------

    EPA is also unaware of specific information identifying any effects
on listed endangered species from the small fluctuations in pollutant
concentrations associated with this rule (see Section III.G.5).
Furthermore, our current modeling tools are not designed to trace
fluctuations in ambient concentration levels to potential impacts on
particular endangered species.
i. Quantified Human Health Impacts
    Tables III.H.7-3 and III.H.7-4 present the annual PM2.5
and ozone health impacts in the 48 contiguous U.S. states associated
with the final rule for 2030. For each endpoint presented in Tables
III.H.7-3 and III.H.7-4, we provide both the mean estimate and the 90%
confidence interval.
    Using EPA's preferred estimates, based on the American Cancer
Society (ACS) and Six-Cities studies and no threshold assumption in the
model of mortality, we estimate that the final rule will result in
between 60 and 150 cases of avoided PM2.5-related premature
deaths annually in 2030. As a sensitivity analysis, when the range of
expert opinion is used, we estimate between 22 and 200 fewer premature
mortalities in 2030 (see Table 7.7 in the RIA that accompanies this
rule). For ozone-related premature mortality in 2030, we estimate a
range of between 4 to 18 additional premature mortalities related to
the ethanol production volumes mandated by the recently finalized RFS2
rule \481\ (and reflected in the air quality modeling for this rule),
but are not due to the final standards themselves.
---------------------------------------------------------------------------

    \481\ EPA 2010, Renewable Fuel Standard Program (RFS2)
Regulatory Impact Analysis. EPA-420-R-10-006. February 2010. Docket
EPA-HQ-OAR-2009-0472-11332. EPA-HQ-OAR-2009-0472-11332. See also 75
FR 14670, March 26, 2010.

        Table III.H.7-3--Estimated PM2.5-Related Health Impacts a
------------------------------------------------------------------------
                                                2030 Annual reduction in
                Health effect                      incidence  (5th%-
                                                       95th%ile)
------------------------------------------------------------------------
Premature Mortality--Derived from
 epidemiology literature: \b\
    Adult, age 30+, ACS Cohort Study (Pope et  60 (23-96)
     al., 2002).
    Adult, age 25+, Six-Cities Study (Laden    150 (83-220)
     et al., 2006).
    Infant, age <1 year (Woodruff et al.,      0 (0-1)
     1997).
Chronic bronchitis (adult, age 26 and over)..  42 (8-77)
Non-fatal myocardial infarction (adult, age    100 (38-170)
 18 and over).
Hospital admissions--respiratory (all ages)    13 (7-20)
 \c\.
Hospital admissions--cardiovascular (adults,   32 (23-38)
 age >18) \d\.
Emergency room visits for asthma (age 18       42 (25-59)
 years and younger).
Acute bronchitis (children, age 8-12)........  95 (0-190)
Lower respiratory symptoms (children, age 7-   1,100 (540-1,700)
 14).
Upper respiratory symptoms (asthmatic          850 (270-1,400)
 children, age 9-18).
Asthma exacerbation (asthmatic children, age   1,000 (120-2,900)
 6-18).
Work loss days...............................  7,600 (6,600-8,500)
Minor restricted activity days (adults age 18- 45,000 (38,000-52,000)
 65).
------------------------------------------------------------------------
Notes:

\a\ Incidence is rounded to two significant digits. Estimates represent
  incidence within the 48 contiguous United States.
\b\ PM-related adult mortality based upon the American Cancer Society
  (ACS) Cohort Study (Pope et al., 2002) and the Six-Cities Study (Laden
  et al., 2006). Note that these are two alternative estimates of adult
  mortality and should not be summed. PM-related infant mortality based
  upon a study by Woodruff, Grillo, and Schoendorf (1997).\482\
\c\ Respiratory hospital admissions for PM include admissions for
  chronic obstructive pulmonary disease (COPD), pneumonia and asthma.
\d\ Cardiovascular hospital admissions for PM include total
  cardiovascular and subcategories for ischemic heart disease,
  dysrhythmias, and heart failure.

---------------------------------------------------------------------------

    \482\ Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 1997.
``The Relationship Between Selected Causes of Postneonatal Infant
Mortality and Particulate Air Pollution in the United States.''
Environmental Health Perspectives 105(6):608-612. EPA-HQ-OAR-2009-
0472-0382.

        Table III.H.7-4--Estimated Ozone-Related Health Impacts a
------------------------------------------------------------------------
                                                2030 Annual reduction in
                Health effect                      incidence  (5th%-
                                                       95th%ile)
------------------------------------------------------------------------
Premature Mortality, All ages \b\
Multi-City Analyses:
    Bell et al. (2004)--Non-accidental.......  -4 (-8-0)
    Huang et al. (2005)--Cardiopulmonary.....  -7 (-14-1)

    Schwartz (2005)--Non-accidental..........  -6 (-13-1)
Meta-analyses:
    Bell et al. (2005)--All cause............  -13 (-24--2)
    Ito et al. (2005)--Non-accidental........  -18 (-30--6)
    Levy et al. (2005)--All cause............  -18 (-28--9)
Hospital admissions--respiratory causes        -38 (-86--6)
 (adult, 65 and older) \c\.
Hospital admissions--respiratory causes        -6 (-13-1)
 (children, under 2).
Emergency room visit for asthma (all ages)...  -16 (-51-8)
Minor restricted activity days (adults, age    -18,000 (-40,000-3,700)
 18-65).
School absence days..........................  -7,700 (-16,000-1,200)
------------------------------------------------------------------------
Notes:

\a\ Negatives indicate a disbenefit, or an increase in health effect
  incidence. Incidence is rounded to two significant digits. Estimates
  represent incidence within the 48 contiguous U.S.
\b\ Estimates of ozone-related premature mortality are based upon
  incidence estimates derived from several alternative studies: Bell et
  al. (2004); Huang et al. (2005); Schwartz (2005); Bell et al. (2005);
  Ito et al. (2005); Levy et al. (2005). The estimates of ozone-related
  premature mortality should therefore not be summed.
\c\ Respiratory hospital admissions for ozone include admissions for all
  respiratory causes and subcategories for COPD and pneumonia.

ii. Monetized Benefits
    Table III.H.7-5 presents the estimated monetary value of changes in
the incidence of ozone and PM2.5-related health effects. All
monetized estimates are stated in 2007$. These estimates account for
growth in real gross domestic product (GDP) per capita between the
present and 2030. Our estimate of total monetized benefits in 2030 for
the final rule, using the ACS and Six-Cities PM mortality studies and
the range of ozone mortality assumptions, is between $380 and $1,300
million, assuming a 3 percent discount rate, or between $330 and $1,200
million, assuming a 7 percent discount rate. As the results indicate,
total benefits are driven primarily by the reduction in
PM2.5-related premature fatalities each year.

         Table III.H.7-5--Estimated Monetary Value of Changes in Incidence of Health and Welfare Effects
                                           [In Millions of 2007$] a b
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                     PM2.5-related health effect                                         2030
                                                                      (5th and 95th%ile)
----------------------------------------------------------------------------------------------------------------
Premature Mortality--Derived from      Adult, age 30+ --ACS study
 Epidemiology Studies c d.              (Pope et al., 2002)
                                       3% discount rate.............  $510 ($70-$1,300)
                                       7% discount rate.............  $460 ($63-$1,200)
                                       Adult, age 25+ --Six-Cities
                                        study (Laden et al., 2006)
                                       3% discount rate.............  $1,300 ($190-$3,300)
                                       7% discount rate.............  $1,200 ($180-$3,000)
                                       Infant Mortality, <1 year--    $1.8 ($0-$7.0)
                                        (Woodruff et al. 1997).
----------------------------------------------------------------------------------------------------------------
Chronic bronchitis (adults, 26 and over)............................  $22 ($1.9-$77)
Non-fatal acute myocardial infarctions
    3% discount rate................................................  $14 ($3.9-$35)
    7% discount rate................................................  $14 ($3.6-$35)
Hospital admissions for respiratory causes..........................  $0.20 ($0.01-$0.29)
Hospital admissions for cardiovascular causes.......................  $0.91 ($0.58-$1.3)
Emergency room visits for asthma....................................  $0.016 ($0.009-$0.024)
Acute bronchitis (children, age 8-12)...............................  $0.007 ($0-$0.018)
Lower respiratory symptoms (children, 7-14).........................  $0.022 ($0.009-$0.043)
Upper respiratory symptoms (asthma, 9-11)...........................  $0.027 ($0.008-$0.061)
Asthma exacerbations................................................  $0.058 ($0.006-$0.17)
Work loss days......................................................  $1.2 ($1.0-$1.3)
Minor restricted-activity days (MRADs)..............................  $2.9 ($1.7-$4.2)
----------------------------------------------------------------------------------------------------------------
Ozone-related Health Effect
----------------------------------------------------------------------------------------------------------------
Premature Mortality, All ages--        Bell et al., 2004............  -$38 (-$110-$4.2)
 Derived from Multi-city analyses.
                                       Huang et al., 2005...........  -$62 (-$180-$4.7)
                                       Schwartz, 2005...............  -$58 (-$170-$8.8)
Premature Mortality, All ages--        Bell et al., 2005............  -$120 (-$330--$7.9)
 Derived from Meta-analyses.
                                       Ito et al., 2005.............  -$170 (-$430--$19)
                                       Levy et al., 2005............  -$170 (-$410--$21)
----------------------------------------------------------------------------------------------------------------
Hospital admissions--respiratory causes (adult, 65 and older).......  -$0.92 (-$2.1-$0.27)

                     PM2.5-related health effect                                         2030
                                                                      (5th and 95th%ile)
----------------------------------------------------------------------------------------------------------------
Hospital admissions--respiratory causes (children, under 2).........  -$.21 (-$.45-$0.031)
Emergency room visit for asthma (all ages)..........................  -$0.006 (-$0.018-$0.003)
Minor restricted activity days (adults, age 18-65)..................  -$1.2 (-$2.7-$0.25)
School absence days.................................................  -$0.71 (-$1.4-$0.11)
----------------------------------------------------------------------------------------------------------------
Notes:
\a\ Negatives indicate a disbenefit, or an increase in health effect incidence. Monetary benefits are rounded to
  two significant digits for ease of presentation and computation. PM and ozone benefits are nationwide.
\b\ Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year
  (2030).
\c\ Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the
  use of 3 percent and 7 percent discount rates consistent with EPA and OMB guidelines for preparing economic
  analyses.

iii. What are the limitations of the benefits analysis?
    Every benefit-cost analysis examining the potential effects of a
change in environmental protection requirements is limited to some
extent by data gaps, limitations in model capabilities (such as
geographic coverage), and uncertainties in the underlying scientific
and economic studies used to configure the benefit and cost models.
Limitations of the scientific literature often result in the inability
to estimate quantitative changes in health and environmental effects,
such as potential increases in premature mortality associated with
increased exposure to carbon monoxide. Deficiencies in the economics
literature often result in the inability to assign economic values even
to those health and environmental outcomes which can be quantified.
These general uncertainties in the underlying scientific and economics
literature, which can lead to valuations that are higher or lower, are
discussed in detail in the RIA and its supporting references. Key
uncertainties that have a bearing on the results of the benefit-cost
analysis of the final rule include the following:
     The exclusion of potentially significant and unquantified
benefit categories (such as health, odor, and ecological impacts of air
toxics, ozone, and PM);
     Errors in measurement and projection for variables such as
population growth;
     Uncertainties in the estimation of future year emissions
inventories and air quality;
     Uncertainty in the estimated relationships of health and
welfare effects to changes in pollutant concentrations including the
shape of the C-R function, the size of the effect estimates, and the
relative toxicity of the many components of the PM mixture;
     Uncertainties in exposure estimation; and
     Uncertainties associated with the effect of potential
future actions to limit emissions.
    As Table III.H.7-5 indicates, total benefits are driven primarily
by the reduction in PM2.5-related premature mortalities each
year. Some key assumptions underlying the premature mortality estimates
include the following, which may also contribute to uncertainty:
     Inhalation of fine particles is causally associated with
premature death at concentrations near those experienced by most
Americans on a daily basis. Although biological mechanisms for this
effect have not yet been completely established, the weight of the
available epidemiological, toxicological, and experimental evidence
supports an assumption of causality. The impacts of including a
probabilistic representation of causality were explored in the expert
elicitation-based results of the PM NAAQS RIA.
     All fine particles, regardless of their chemical
composition, are equally potent in causing premature mortality. This is
an important assumption, because PM produced via transported precursors
emitted from engines may differ significantly from PM precursors
released from electric generating units and other industrial sources.
However, no clear scientific grounds exist for supporting differential
effects estimates by particle type.
     The C-R function for fine particles is approximately
linear within the range of ambient concentrations under consideration.
Thus, the estimates include health benefits from reducing fine
particles in areas with varied concentrations of PM, including both
regions that may be in attainment with PM2.5 standards and
those that are at risk of not meeting the standards.
     There is uncertainty in the magnitude of the association
between ozone and premature mortality. The range of ozone impacts
associated with the final rule is estimated based on the risk of
several sources of ozone-related mortality effect estimates. In a
recent report on the estimation of ozone-related premature mortality
published by the National Research Council, a panel of experts and
reviewers concluded that short-term exposure to ambient ozone is likely
to contribute to premature deaths and that ozone-related mortality
should be included in estimates of the health benefits of reducing
ozone exposure.\483\ EPA has requested advice from the National Academy
of Sciences on how best to quantify uncertainty in the relationship
between ozone exposure and premature mortality in the context of
quantifying benefits.
---------------------------------------------------------------------------

    \483\ National Research Council (NRC), 2008. Estimating
Mortality Risk Reduction and Economic Benefits from Controlling
Ozone Air Pollution. The National Academies Press: Washington, DC.
EPA-HQ-OAR-2009-0472-0322.
---------------------------------------------------------------------------

    Acknowledging omissions and uncertainties, we present a best
estimate of the total benefits based on our interpretation of the best
available scientific literature and methods supported by EPA's
technical peer review panel, the Science Advisory Board's Health
Effects Subcommittee (SAB-HES). The National Academies of Science (NRC,
2002) has also reviewed EPA's methodology for analyzing the health
benefits of measures taken to reduce air pollution. EPA addressed many
of these comments in the analysis of the final PM
NAAQS.484 485 This

analysis incorporates this most recent work to the extent possible.
---------------------------------------------------------------------------

    \484\ National Research Council (NRC). 2002. Estimating the
Public Health Benefits of Proposed Air Pollution Regulations. The
National Academies Press: Washington, DC.
    \485\ U.S. Environmental Protection Agency. October 2006. Final
Regulatory Impact Analysis (RIA) for the National Ambient Air
Quality Standards for Particulate Matter. Prepared by: Office of Air
and Radiation. Available at http://www.epa.gov/ttn/ecas/ria.html.
EPA-HQ-OAR-2009-0472-0240.
---------------------------------------------------------------------------

b. PM-Related Monetized Benefits of the Model Year (MY) Analysis
    As described in Section III.G, the final standards will reduce
emissions of several criteria and toxic pollutants and precursors. In
the MY analysis, EPA estimates the economic value of the human health
benefits associated with reducing PM2.5 exposure. Due to
analytical limitations, this analysis does not estimate benefits
related to other criteria pollutants (such as ozone, NO2 or
SO2) or toxics pollutants, nor does it monetize all of the
potential health and welfare effects associated with PM2.5.
    The MY analysis uses a ``benefit-per-ton'' method to estimate a
selected suite of PM2.5-related health benefits described
below. These PM2.5 benefit-per-ton estimates provide the
total monetized human health benefits (the sum of premature mortality
and premature morbidity) of reducing one ton of directly emitted
PM2.5, or its precursors (such as NOX,
SOX, and VOCs), from a specified source. Ideally, the human
health benefits associated with the MY analysis would be estimated
based on changes in ambient PM2.5 as determined by full-
scale air quality modeling. However, this modeling was not possible in
the timeframe for the final rule.
    The dollar-per-ton estimates used in this analysis are provided in
Table III.H.7-6. In the summary of costs and benefits, Section III.H.10
of this preamble, EPA presents the monetized value of PM-related
improvements associated with the rule.

  Table III.H.7-6--Benefits-per-Ton Values (2007$) Derived Using the ACS Cohort Study for PM-Related Premature
                                         Mortality (Pope et al., 2002) a
----------------------------------------------------------------------------------------------------------------
                                         All sources \d\        Stationary (non-EGU)         Mobile sources
                                   --------------------------          sources         -------------------------
             Year \c\                                        --------------------------
                                        SOX          VOC                      Direct        NOX         Direct
                                                                  NOX         PM2.5                     PM2.5
----------------------------------------------------------------------------------------------------------------
                                  Estimated Using a 3 Percent Discount Rate \b\
----------------------------------------------------------------------------------------------------------------
2015..............................      $28,000       $1,200       $4,700     $220,000       $4,900     $270,000
2020..............................       31,000        1,300        5,100      240,000        5,300      290,000
2030..............................       36,000        1,500        6,100      280,000        6,400      350,000
2040..............................       43,000        1,800        7,200      330,000        7,600      420,000
----------------------------------------------------------------------------------------------------------------
                                  Estimated Using a 7 Percent Discount Rate \b\
----------------------------------------------------------------------------------------------------------------
2015..............................       26,000        1,100        4,200      200,000        4,400      240,000
2020..............................       28,000        1,200        4,600      220,000        4,800      270,000
2030..............................       33,000        1,400        5,500      250,000        5,800      320,000
2040..............................       39,000        1,600        6,600      300,000        6,900      380,000
----------------------------------------------------------------------------------------------------------------
\a\ The benefit-per-ton estimates presented in this table are based on an estimate of premature mortality
  derived from the ACS study (Pope et al., 2002). If the benefit-per-ton estimates were based on the Six-Cities
  study (Laden et al., 2006), the values would be approximately 145% (nearly two-and-a-half times) larger.
\b\ The benefit-per-ton estimates presented in this table assume either a 3 percent or 7 percent discount rate
  in the valuation of premature mortality to account for a twenty-year segmented cessation lag.
\c\ Benefit-per-ton values were estimated for the years 2015, 2020, and 2030. For 2040, EPA and NHTSA
  extrapolated exponentially based on the growth between 2020 and 2030.
\d\ Note that the benefit-per-ton value for SOX is based on the value for Stationary (Non-EGU) sources; no SOX
  value was estimated for mobile sources. The benefit-per-ton value for VOCs was estimated across all sources.

    The benefit per-ton technique has been used in previous analyses,
including EPA's recent Ozone National Ambient Air Quality Standards
(NAAQS) RIA,\486\ the proposed Portland Cement National Emissions
Standards for Hazardous Air Pollutants (NESHAP) RIA,\487\ and the final
NO2 NAAQS (U.S. EPA, 2009b).\488\ Table III.H.7-7 shows the
quantified and unquantified PM2.5-related co-benefits
captured in those benefit-per-ton estimates.
---------------------------------------------------------------------------

    \486\ U.S. Environmental Protection Agency (U.S. EPA). 2008.
Regulatory Impact Analysis, 2008 National Ambient Air Quality
Standards for Ground-level Ozone, Chapter 6. Office of Air Quality
Planning and Standards, Research Triangle Park, NC. March. Available
at http://www.epa.gov/ttn/ecas/regdata/RIAs/6-ozoneriachapter6.pdf.
Accessed March 15, 2010. EPA-HQ-OAR-2009-0472-0108.
    \487\ U.S. Environmental Protection Agency (U.S. EPA). 2009.
Regulatory Impact Analysis: National Emission Standards for
Hazardous Air Pollutants from the Portland Cement Manufacturing
Industry. Office of Air Quality Planning and Standards, Research
Triangle Park, NC. April. Available on the Internet at http://
www.epa.gov/ttn/ecas/regdata/RIAs/portlandcementria_4-20-09.pdf.
Accessed March 15, 2010. EPA-HQ-OAR-2009-0472-0241.
    \488\ U.S. Environmental Protection Agency (U.S. EPA). 2010.
Final NO2 NAAQS Regulatory Impact Analysis (RIA). Office of Air
Quality Planning and Standards, Research Triangle Park, NC. April.
Available on the Internet at http://www.epa.gov/ttn/ecas/regdata/
RIAs/FinalNO2RIAfulldocument.pdf. Accessed March 15, 2010. EPA-HQ-
OAR-2009-0472-0237.

       Table III.H.7-7--Human Health and Welfare Effects of PM2.5
------------------------------------------------------------------------
                              Quantified and
    Pollutant/effect       monetized in primary    Unquantified effects
                                estimates               changes in
------------------------------------------------------------------------
PM2.5..................  Adult premature          Subchronic bronchitis
                          mortality                cases.
                         Bronchitis: chronic and  Low birth weight.
                          acute
                         Hospital admissions:     Pulmonary function.
                          respiratory and
                          cardiovascular.
                         Emergency room visits    Chronic respiratory
                          for asthma               diseases other than
                                                   chronic bronchitis.
                         Nonfatal heart attacks   Non-asthma respiratory
                          (myocardial              emergency room
                          infarction).             visits.
                         Lower and upper          Visibility.
                          respiratory illness

                         Minor restricted-        Household soiling.
                          activity days
                         Work loss days
                         Asthma exacerbations
                          (asthmatic population)
                         Infant mortality
------------------------------------------------------------------------

    Consistent with the NO2 NAAQS,\489\ the benefits
estimates utilize the concentration-response functions as reported in
the epidemiology literature. To calculate the total monetized impacts
associated with quantified health impacts, EPA applies values derived
from a number of sources. For premature mortality, EPA applies a value
of a statistical life (VSL) derived from the mortality valuation
literature. For certain health impacts, such as chronic bronchitis and
a number of respiratory-related ailments, EPA applies willingness-to-
pay estimates derived from the valuation literature. For the remaining
health impacts, EPA applies values derived from current cost-of-illness
and/or wage estimates.
---------------------------------------------------------------------------

    \489\ Although we summarize the main issues in this chapter, we
encourage interested readers to see the benefits chapter of the
final NO2 NAAQS for a more detailed description of recent
changes to the PM benefits presentation and preference for the no-
threshold model.
---------------------------------------------------------------------------

    Readers interested in reviewing the complete methodology for
creating the benefit-per-ton estimates used in this analysis can
consult the Technical Support Document (TSD) \490\ accompanying the
recent final ozone NAAQS RIA. Readers can also refer to Fann et al.
(2009) \491\ for a detailed description of the benefit-per-ton
methodology.\492\ A more detailed description of the benefit-per-ton
estimates is also provided in the Joint TSD that accompanies this
rulemaking.
---------------------------------------------------------------------------

    \490\ U.S. Environmental Protection Agency (U.S. EPA). 2008b.
Technical Support Document: Calculating Benefit per-Ton estimates,
Ozone NAAQS Docket EPA-HQ-OAR-2007-0225-0284. Office of Air
Quality Planning and Standards, Research Triangle Park, NC. March.
Available on the Internet at http://www.regulations.gov. EPA-HQ-OAR-
2009-0472-0228.
    \491\ Fann, N. et al. (2009). The influence of location, source,
and emission type in estimates of the human health benefits of
reducing a ton of air pollution. Air Qual Atmos Health. Published
online: 09 June, 2009. EPA-HQ-OAR-2009-0472-0229.
    \492\ The values included in this report are different from
those presented in the article cited above. Benefits methods change
to reflect new information and evaluation of the science. Since
publication of the June 2009 article, EPA has made two significant
changes to its benefits methods: (1) We no longer assume that a
threshold exists in PM-related models of health impacts; and (2) We
have revised the Value of a Statistical Life to equal $6.3 million
(year 2000$), up from an estimate of $5.5 million (year 2000$) used
in the June 2009 report. Please refer to the following Web site for
updates to the dollar-per-ton estimates: http://www.epa.gov/air/
benmap/bpt.html. EPA-HQ-OAR-2009-0472-0227.
---------------------------------------------------------------------------

    As described in the documentation for the benefit per-ton estimates
cited above, national per-ton estimates were developed for selected
pollutant/source category combinations. The per-ton values calculated
therefore apply only to tons reduced from those specific pollutant/
source combinations (e.g., NO2 emitted from mobile sources;
direct PM emitted from stationary sources). Our estimate of
PM2.5 benefits is therefore based on the total direct
PM2.5 and PM-related precursor emissions controlled by
sector and multiplied by each per-ton value.
    The benefit-per-ton estimates are subject to a number of
assumptions and uncertainties.
     Dollar-per-ton estimates do not reflect local variability
in population density, meteorology, exposure, baseline health incidence
rates, or other local factors that might lead to an overestimate or
underestimate of the actual benefits of controlling fine particulates.
In Section III.G, we describe the full-scale air quality modeling
conducted for the 2030 calendar year analysis in an effort to capture
this variability.
     There are several health benefits categories that EPA was
unable to quantify in the MY analysis due to limitations associated
with using benefits-per-ton estimates, several of which could be
substantial. Because NOX and VOC emissions are also
precursors to ozone, changes in NOX and VOC would also
impact ozone formation and the health effects associated with ozone
exposure. Benefits-per-ton estimates do not exist for ozone, however,
due to issues associated with the complexity of the atmospheric air
chemistry and nonlinearities associated with ozone formation. The PM-
related benefits-per-ton estimates also do not include any human
welfare or ecological benefits. Please refer to Chapter 7 of the RIA
that accompanies this rule for a description of the quantification and
monetization of health impacts for the CY analysis and a description of
the unquantified co-pollutant benefits associated with this rulemaking.
     The benefit-per-ton estimates used in this analysis
incorporate projections of key variables, including atmospheric
conditions, source level emissions, population, health baselines and
incomes, technology. These projections introduce some uncertainties to
the benefit per ton estimates.
     As described above, using the benefit-per-ton value
derived from the ACS study (Pope et al., 2002) alone provides an
incomplete characterization of PM2.5 benefits. When placed
in the context of the Expert Elicitation results, this estimate falls
toward the lower end of the distribution. By contrast, the estimated
PM2.5 benefits using the coefficient reported by Laden in
that author's reanalysis of the Harvard Six-Cities cohort fall toward
the upper end of the Expert Elicitation distribution results.
    As mentioned above, emissions changes and benefits-per-ton
estimates alone are not a good indication of local or regional air
quality and health impacts, as there may be localized impacts
associated with this rulemaking. Additionally, the atmospheric
chemistry related to ambient concentrations of PM2.5, ozone
and air toxics is very complex. Full-scale photochemical modeling is
therefore necessary to provide the needed spatial and temporal detail
to more completely and accurately estimate the changes in ambient
levels of these pollutants and their associated health and welfare
impacts. Timing and resource constraints precluded EPA from conducting
full-scale photochemical air quality modeling for the MY analysis. We
have, however, conducted national-scale air quality modeling for the CY
analysis to analyze the impacts of the standards on PM2.5,
ozone, and selected air toxics.
8. Energy Security Impacts
    This rule to reduce GHG emissions in light-duty vehicles results in
improved fuel efficiency which, in turn, helps to reduce U.S. petroleum
imports. A reduction of U.S. petroleum imports reduces both financial
and strategic risks caused by potential sudden disruptions in the
supply of imported petroleum to the U.S. This reduction in

risk is a measure of improved U.S. energy security. This section
summarizes our estimate of the monetary value of the energy security
benefits of the GHG vehicle standards against the reference case by
estimating the impact of the expanded use of lower-GHG vehicle
technologies on U.S. oil imports and avoided U.S. oil import
expenditures. Additional discussion of this issue can be found in
Chapter 5.1 of EPA's RIA and Section 4.2.8 of the TSD.
a. Implications of Reduced Petroleum Use on U.S. Imports
    In 2008, U.S. petroleum import expenditures represented 21 percent
of total U.S. imports of all goods and services.\493\ In 2008, the U.S.
imported 66 percent of the petroleum it consumed, and the
transportation sector accounted for 70 percent of total U.S. petroleum
consumption. This compares to approximately 37 percent of petroleum
from imports and 55 percent of consumption from petroleum in the
transportation sector in 1975.\494\ It is clear that petroleum imports
have a significant impact on the U.S. economy. Requiring lower-GHG
vehicle technology in the U.S. is expected to lower U.S. petroleum
imports.
---------------------------------------------------------------------------

    \493\ Source: U.S. Bureau of Economic Analysis, U.S.
International Transactions Accounts Data, as shown on June 24, 2009.
    \494\ Source: U.S. Department of Energy, Annual Energy Review
2008, Report No. DOE/EIA-0384(2008), Tables 5.1 and 5.13c, June 26,
2009.
---------------------------------------------------------------------------

b. Energy Security Implications
    In order to understand the energy security implications of reducing
U.S. petroleum imports, EPA worked with Oak Ridge National Laboratory
(ORNL), which has developed approaches for evaluating the economic
costs and energy security implications of oil use. The energy security
estimates provided below are based upon a methodology developed in a
peer-reviewed study entitled ``The Energy Security Benefits of Reduced
Oil Use, 2006-2015,'' completed in March 2008. This study is included
as part of the docket for this rulemaking.495 496
---------------------------------------------------------------------------

    \495\ Leiby, Paul N. ``Estimating the Energy Security Benefits
of Reduced U.S. Oil Imports'' Oak Ridge National Laboratory, ORNL/
TM-2007/028, Final Report, 2008. (Docket EPA-HQ-OAR-2009-0472).
    \496\ The ORNL study ``The Energy Security Benefits of Reduced
Oil Use, 2006-2015,'' completed in March 2008, is an update version
of the approach used for estimating the energy security benefits of
U.S. oil import reductions developed in an ORNL 1997 Report by
Leiby, Paul N., Donald W. Jones, T. Randall Curlee, and Russell Lee,
entitled ``Oil Imports: An Assessment of Benefits and Costs.''
(Docket EPA-HQ-OAR-2009-0472).
---------------------------------------------------------------------------

    When conducting this analysis, ORNL considered the economic cost of
importing petroleum into the U.S. The economic cost of importing
petroleum into the U.S. is defined to include two components in
addition to the purchase price of petroleum itself. These are: (1) The
higher costs for oil imports resulting from the effect of increasing
U.S. import demand on the world oil price and on OPEC market power
(i.e., the ``demand'' or ``monopsony'' costs); and (2) the risk of
reductions in U.S. economic output and disruption of the U.S. economy
caused by sudden disruptions in the supply of imported petroleum to the
U.S. (i.e., macroeconomic disruption/adjustment costs). Maintaining a
U.S. military presence to help secure stable oil supply from
potentially vulnerable regions of the world was not included in this
analysis because its attribution to particular missions or activities
is hard to quantify.
    One commenter on this rule felt that the magnitude of the economic
disruption portion of the energy security benefit may be too high. This
commenter cites a recent paper written by Stephen P.A. Brown and
Hillard G. Huntington, entitled ``Estimating U.S. Oil Security
Premiums'' (September 2009) as the basis for their comment. The Agency
reviewed this paper and found that it conducted a somewhat different
analysis than the one conducted by ORNL in support of this rule. The
Brown and Huntington paper focuses on policies and the energy security
implications of increasing U.S. demand for oil (or at least holding
U.S. oil consumption constant), while the ORNL analysis examines the
energy security implications of decreasing U.S. oil consumption and oil
imports. These asymmetrical analyses would be expected to yield
somewhat different energy security results.
    However, even given the different scenarios considered, the Brown
and Huntington estimates are roughly similar to the ORNL estimates. For
example, for an increase in U.S. consumption that leads to an increase
in U.S. imports of oil, Brown and Huntington estimate a 2015 disruption
premium of $4.87 per barrel, with an uncertainty range from $1.03 to
$14.10 per barrel. The corresponding 2015 estimate for ORNL as the
result of a reduction in U.S. oil imports is $6.70 per barrel, with an
uncertainty range of $3.11 to $10.67 per barrel. Given that the two
studies analyze different scenarios, since the Brown and Huntington
disruption premiums are well within the uncertainty range of the ORNL
study, and given that the ORNL scenario matches the specific oil market
impacts anticipated from the rule while the Brown and Huntington paper
does not, the Agency has concluded that the ORNL disruption security
premium estimates are more applicable for analyzing this final rule.
    In the energy security literature, the macroeconomic disruption
component of the energy security premium traditionally has included
both (1) increased payments for petroleum imports associated with a
rapid increase in world oil prices, and (2) the GDP losses and
adjustment costs that result from projected future oil price shocks.
One commenter suggested that the increased payments associated with
rapid increases in petroleum prices (i.e., price increases in a
disrupted market) represent transfers from U.S. oil consumers to
petroleum suppliers rather than real economic costs, and therefore,
should not be counted as a benefit.
    This approach would represent a significant departure from how the
macroeconomic disruption costs associated with oil price shocks have
been quantified in the broader energy security literature, and the
Agencies believe it should be analyzed in more detail before being
applied in a regulatory context. In addition, the Agencies also believe
that there are compelling reasons to treat higher oil import costs
during oil supply disruptions differently than simple wealth transfers
that reflect the exercise of market power by petroleum sellers or
consumers. According to the OMB definition of a transfer: ``Benefit and
cost estimates should reflect real resource use. Transfer payments are
monetary payments from one group to another that do not affect total
resources available to society. * * * The net reduction in the total
surplus (consumer plus producer) is a real cost to society, but the
transfer from buyers to sellers resulting from a higher price is not a
real cost since the net reduction automatically accounts for the
transfer from buyers to sellers.'' \497\ In other words, pure transfers
do not lead to changes in the allocation or consumption of economic
resources, whereas changes in the resource allocation or use produce
real economic costs or benefits.
---------------------------------------------------------------------------

    \497\ OMB Circular A-4, September 17, 2003. See http://
www.whitehouse.gov/omb/assets/omb/circulars/a004/a-4.pdf.
---------------------------------------------------------------------------

    While price increases during oil price disruptions can result in
large transfers of wealth, they also result in a combination of real
resource shortages, costly short-run shifts in energy supply,
behavioral and demand adjustments by energy users, and other response
costs. Unlike pure transfers, the root cause of

the disruption price increase is a real resource supply reduction due,
for example, to disaster or war. Regions where supplies are disrupted
(i.e., the U.S.) suffer very high costs. Businesses' and households'
emergency responses to supply disruptions and rapid price increases are
likely to consume some real economic resources, in addition to causing
financial losses to the U.S. economy that are matched by offsetting
gains elsewhere in the global economy.
    While households and businesses can reduce their petroleum
consumption, invest in fuel switching technologies, or use futures
markets to insulate themselves in advance against the potential costs
of rapid increases in oil prices, when deciding how extensively to do
so, they are unlikely to account for the effect of their petroleum
consumption on the magnitude of costs that supply interruptions and
accompanying price shocks impose on others. As a consequence, the U.S.
economy as a whole will not make sufficient use of these mechanisms to
insulate itself from the real costs of rapid increases in energy prices
and outlays that usually accompany oil supply interruptions.\498\
Therefore, the ORNL estimate of macroeconomic disruption and adjustment
costs that the Agencies use to value energy security benefits includes
the increased oil import costs stemming from oil price shocks that are
unanticipated and not internalized by advance actions of U.S. consumers
of petroleum products. The Agencies believe that, as the ORNL analysis
argues, the uninternalized oil import costs that occur during oil
supply interruptions represents a real cost associated with U.S.
petroleum consumption and imports, and that reducing its value by
lowering domestic petroleum consumption and imports thus represents a
real economic benefit from lower fuel consumption.
---------------------------------------------------------------------------

    \498\ For a more complete discussion of the reasons why the oil
import cost component of the macroeconomic disruption and adjustment
costs includes some real costs and does not represent a pure
transfer, see Paul N. Leiby, Estimating the Energy Security Benefits
of Reduced U.S. Oil Imports: Final Report, ORNL-TM-2007-028, Oak
Ridge National Laboratory, March 14, 2008, pp. 21-25.
---------------------------------------------------------------------------

    For this rule, ORNL estimated the energy security premium by
incorporating the oil price forecast of the Energy Information
Administration's 2009 Annual Energy Outlook (AEO) to its model. The
Agency considered, but rejected the option, of further updating this
analysis using the oil price estimates provided by the AEO 2010. Given
the broad uncertainty bands around oil price forecasts and the
relatively modest change in oil price forecasts between the AEO 2009
and AEO 2010, the Agency felt that updating to AEO 2010 oil prices
would not significantly change the results of this energy security
analysis. Finally, the EPA used its OMEGA model in conjunction with
ORNL's energy security premium estimates to develop the total energy
security benefits for a number of different years; please refer to
Table III.H.8-1 for this information for years 2015, 2020, 2030 and
2040,\499\ as well as a breakdown of the components of the energy
security premium for each of these years. The components of the energy
security premium and their values are discussed in detail in the Joint
TSD Chapter 4.
---------------------------------------------------------------------------

    \499\ AEO 2009 forecasts energy market trends and values only to
2030. The energy security premium estimates post-2030 were assumed
to be the 2030 estimate.
---------------------------------------------------------------------------

    Because the price of oil is determined globally, supply and demand
shocks anywhere in the world will have an adverse impact on the United
States (and on all other oil consuming countries). The total economic
costs of those shocks to the U.S. will depend on both U.S. petroleum
consumption and imports of petroleum and refined products. The analysis
relied upon to estimate energy security benefits from reducing U.S.
petroleum consumption estimates the value of energy security using the
estimated oil import premium, and is thus consistent with how much of
the energy security literature reports energy security impacts. Since
this rule is expected to have little impact on the U.S. supply of crude
petroleum, a reduction in U.S. fuel consumption is expected to be
reflected predominantly in reduced imports of petroleum and refined
fuel. The estimated energy security premium associated with a reduction
in U.S. petroleum consumption that leads to a reduction in imports
would likely be somewhat larger, due to diminished sensitivity of the
U.S. economy to oil supply shocks that would accompany the reduction in
oil consumption.
    In addition, while the estimates of energy security externalities
used in this analysis depend on a combination of U.S. petroleum
consumption and imports, they have been expressed as per barrel of
petroleum imported into the U.S. The Agencies' analyses apply these
estimates to the reduction in U.S. imports of crude petroleum and
refined products that is projected to result from the rule in order to
determine the benefits that are likely to result from fuel savings and
the consequent reduction in imports. Thus, the estimates of energy
security externalities have been used in this analysis in a way that is
completely consistent with how they are defined and measured in the
ORNL analysis.

              Table III.H.8-1--Energy Security Premium in 2015, 2020, 2030 and 2040 (2007$/Barrel)
----------------------------------------------------------------------------------------------------------------
                                                                     Macroeconomic
             Year (range)                     Monopsony          disruption/adjustment       Total mid-point
                                                                         costs
----------------------------------------------------------------------------------------------------------------
2015.................................  $11.79 ($4.26-$21.37)..  $6.70 ($3.11-$10.67)...  $18.49 ($9.80-$28.08)
2020.................................  $12.31 ($4.46-$22.53)..  $7.62 ($3.77-$12.46)...  $19.94 ($10.58-$30.47)
2030.................................  $10.57 ($3.84-18.94)...  $8.12 ($3.90-$13.04)...  $18.69 ($10.52-$27.89)
2040.................................  $10.57 ($3.84-$18.94)..  $8.12 ($3.90-$13.04)...  $18.69 ($10.52-$27.89)
----------------------------------------------------------------------------------------------------------------

    The literature on the energy security for the last two decades has
routinely combined the monopsony and the macroeconomic disruption
components when calculating the total value of the energy security
premium. However, in the context of using a global value for the Social
Cost of Carbon (SCC) the question arises: How should the energy
security premium be used when some benefits from the rule, such as the
benefits of reducing greenhouse gas emissions, are calculated using a
global value? Monopsony benefits represent avoided payments by the U.S.
to oil producers in foreign countries that result from a decrease in
the world oil price as the U.S. decreases its consumption of imported
oil. Although there is clearly a benefit to the U.S. when considered
from the domestic perspective, the decrease in price due to decreased
demand in the U.S. also represents a loss of income to oil-

producing countries. Given the redistributive nature of this effect, do
the negative effects on other countries ``net out'' the positive
impacts to the U.S.? If this is the case, then the monopsony portion of
the energy security premium should be excluded from the net benefits
calculation for the rule. OMB's Circular A-4 gives guidance in this
regard. Domestic pecuniary benefits (or transfers between buyers and
sellers) generally should not be included because they do not represent
real resource costs, though A-4 notes that transfers to the U.S. from
other countries may be counted as benefits as long as the analysis is
conducted from a U.S. perspective.
    Energy security is broadly defined as protecting the U.S. economy
against circumstances that threaten significant short- and long-term
increases in energy costs. Energy security is inherently a domestic
benefit. Accordingly, it is possible to argue that the use of the
domestic monopsony benefit may not necessarily be in conflict with the
use of the global SCC, because the global SCC represents the benefits
against which the costs of our (i.e., the U.S.'s) domestic mitigation
efforts should be judged. In the final analysis, the Agency has
determined that using only the macroeconomic disruption component of
the energy security benefit is the appropriate metric for this rule.
    At proposal, the Agency took the position that since a global
perspective was being taken with the use of the global SCC, that the
monopsony benefits ``net out'' and were a transfer. Two commenters felt
that the monopsony effect should be excluded from net benefits
calculations for the rule since it is a ``pecuniary'' externality or
does not represent an efficiency gain. One of the commenters suggested
that EPA instead conduct a distributional analysis of the monopsony
impacts of the final rule. The Agency disagrees that all pecuniary
externalities should necessarily be excluded from net benefits
calculations as a general rule. In this case considered here, the oil
market is non-competitive, and if the social decision-making unit of
interest is the U.S., there is an argument for accounting for the
monopsony premium to assess the excess transfer of wealth caused by the
exercise of cartel power outside of the U.S.
    However, for the final rule, the Agency continues to take a global
perspective with respect to climate change by using the global SCC.
Therefore, the Agency did not count monopsony benefits since they ``net
out'' with losses to other countries outside the U.S. Since a global
perspective has been taken, a distributional analysis was not
undertaken for this final rule, since the losses to the losers (oil
producers that export oil to the U.S.) would equal the gains to the
winners (U.S. consumers of imported oil). As a result, the Agency has
included only the macroeconomic disruption portion of the energy
security benefits to monetize the total energy security benefits of
this rule. Hence, the total annual energy security benefits are derived
from the estimated reductions in U.S. imports of finished petroleum
products and crude oil using only the macroeconomic disruption/
adjustment portion of the energy security premium. These values are
shown in Table III.H.8-2.\500\ The reduced oil estimates were derived
from the OMEGA model, as explained in Section III.F of this preamble.
EPA used the same assumption that NHTSA used in its Corporate Average
Fuel Economy and CAFE Reform for MY 2008-2011 Light Trucks rule, which
assumed that each gallon of fuel saved reduces total U.S. imports of
crude oil or refined products by 0.95 gallons.\501\
---------------------------------------------------------------------------

    \500\ Estimated reductions in U.S. imports of finished petroleum
products and crude oil are 95% of 89 million barrels (MMB) in 2015,
300 MMB in 2020, 590 MMB in 2030, and 778 MMB in 2040.
    \501\ Preliminary Regulatory Impacts Analysis, April 2008. Based
on a detailed analysis of differences in fuel consumption, petroleum
imports, and imports of refined petroleum products among the
Reference Case, High Economic Growth, and Low Economic Growth
Scenarios presented in the Energy Information Administration's
Annual Energy Outlook 2007, NHTSA estimated that approximately 50
percent of the reduction in fuel consumption is likely to be
reflected in reduced U.S. imports of refined fuel, while the
remaining 50 percent would be expected to be reflected in reduced
domestic fuel refining. Of this latter figure, 90 percent is
anticipated to reduce U.S. imports of crude petroleum for use as a
refinery feedstock, while the remaining 10 percent is expected to
reduce U.S. domestic production of crude petroleum. Thus on balance,
each gallon of fuel saved is anticipated to reduce total U.S.
imports of crude petroleum or refined fuel by 0.95 gallons.

  Table III.H.8-2--Total Annual Energy Security Benefits Using Only the
  Macroeconomic Disruption/Adjustment Component of the Energy Security
                  Premium in 2015, 2020, 2030 and 2040
                           [Billions of 2007$]
------------------------------------------------------------------------
                          Year                               Benefits
------------------------------------------------------------------------
2015....................................................           $0.57
2020....................................................           $2.17
2030....................................................           $4.55
2040....................................................           $6.00
------------------------------------------------------------------------

9. Other Impacts
    There are other impacts associated with the CO2
emissions standards and associated reduced fuel consumption that vary
with miles driven. Lower fuel consumption would, presumably, result in
fewer trips to the filling station to refuel and, thus, time saved. The
rebound effect, discussed in detail in Section III.H.4.c, produces
additional benefits to vehicle owners in the form of consumer surplus
from the increase in vehicle-miles driven, but may also increase the
societal costs associated with traffic congestion, motor vehicle
crashes, and noise. These effects are likely to be relatively small in
comparison to the value of fuel saved as a result of the standards, but
they are nevertheless important to include. Table III.H.9-1 summarizes
the other economic impacts. Please refer to Preamble Section II.F and
the Joint TSD that accompanies this rule for more information about
these impacts and how EPA and NHTSA use them in their analyses.
    Note that for the estimated value of less frequent refueling
events, EPA's estimate is subject to a number of uncertainties which we
discuss in detail in Chapter 4.1.11 of the Joint TSD, and the actual
value could be higher or lower than the value presented here.
Specifically, the analysis makes three assumptions: (a) That
manufacturers will not adjust fuel tank capacities downward (from the
current average of 19.3 gallons) when they improve the fuel economy of
their vehicle models. (b) that the average fuel purchase (55 percent of
fuel tank capacity) is the typical fuel purchase. (c) that 100 percent
of all refueling is demand-based; i.e., that every gallon of fuel which
is saved would reduce the need to return to the refueling station. A
new research project is being planned by DOT which will include a
detailed study of refueling events, and which is expected to improve
upon these assumptions. These assumptions and the new DOT research
project are discussed in detail in Joint TSD Chapter 4.2.10.

                Table III.H.9-1--Other Impacts Associated With the Light-Duty Vehicle GHG Program
                                           [Millions of 2007 dollars]
----------------------------------------------------------------------------------------------------------------
                                        2020         2030         2040         2050       NPV, 3%      NPV, 7%
----------------------------------------------------------------------------------------------------------------
Value of Less Frequent Refueling..       $2,400       $4,800       $6,300       $8,000      $87,900      $40,100
Value of Increased Driving \a\....        4,200        8,800       13,000       18,400      171,500       75,500
Accidents, Noise, Congestion......       -2,300       -4,600       -6,100       -7,800      -84,800      -38,600
----------------------------------------------------------------------------------------------------------------
\a\ Calculated using post-tax fuel prices.

10. Summary of Costs and Benefits
    In this section, EPA presents a summary of costs, benefits, and net
benefits of the rule. Table III.H.10-1 shows the estimated annual
societal costs of the vehicle program for the indicated calendar years.
The table also shows the net present values of those costs for the
calendar years 2012-2050 using both a 3 percent and a 7 percent
discount rate. In this table, fuel savings are calculated using pre-tax
fuel prices.
    Consumers are expected to receive the fuel savings presented here.
The cost estimates for the fuel-saving technology are based on designs
that will hold all vehicle attributes constant except fuel economy and
technology cost. This analysis also assumes that consumers will not
change the vehicles that they purchase. Automakers may redesign
vehicles as part of their compliance strategies. The redesigns should
be expected to make the vehicles more attractive to consumers, because
the ability to hold all other attributes constant means that the only
reason to change them is to make them more marketable to consumers. In
addition, consumers may choose to purchase different vehicles than they
would in the absence of this rule. These changes may affect the net
benefits that consumers receive from their vehicles. If consumers can
buy the same vehicle as before, except with increased price and fuel
economy, then the increase in vehicle price is the maximum loss in
welfare to the consumer, because compensating the increase in price
would leave her able to buy her previous vehicle with no change. If she
decides to purchase a different vehicle, or not to purchase a vehicle,
she would do so only if she were better off than buying her original
choice. Because of the unsettled state of the modeling of consumer
choices (discussed in Section III.H.1 and in RIA Section 8.1.2), this
analysis does not measure these effects. If the technology costs are
not sufficient to maintain other vehicle attributes, then it is
possible that automakers would be required to make less marketable
vehicles in order to comply with the rule; as a result, there may be an
additional loss in consumer welfare due to the rule. While EPA received
comments expressing concern over the possibility of these losses, there
were no specific losses identified.

                Table III.H.10-1--Estimated Societal Costs of the Light-Duty Vehicle GHG Program
                                           [Millions of 2007 dollars]
----------------------------------------------------------------------------------------------------------------
           Social costs                 2020         2030         2040         2050       NPV, 3%      NPV, 7%
----------------------------------------------------------------------------------------------------------------
Vehicle Compliance Costs..........      $15,600      $15,800      $17,400      $19,000     $345,900     $191,900
Fuel Savings \a\..................      -35,700      -79,800     -119,300     -171,200   -1,545,600     -672,600
Quantified Annual Costs...........      -20,100      -64,000     -101,900     -152,200   -1,199,700     -480,700
----------------------------------------------------------------------------------------------------------------
\a\ Calculated using pre-tax fuel prices.

    Table III.H.10-2 presents estimated annual societal benefits for
the indicated calendar years. The table also shows the net present
values of those benefits for the calendar years 2012-2050 using both a
3 percent and a 7 percent discount rate. The table shows the benefits
of reduced CO2 emissions--and consequently the annual
quantified benefits (i.e., total benefits)--for each of four SCC values
considered by EPA. As discussed in the RIA Section 7.5, the IPCC Fourth
Assessment Report (2007) concluded that that the benefit estimates from
CO2 reductions are ``very likely'' underestimates. One of
the primary reasons is that models used to calculate SCC values do not
include information about impacts that have not been quantified.
    In addition, these monetized GHG benefits exclude the value of
reductions in non-CO2 GHG emissions (HFC, CH4,
N2O) expected under this final rule. Although EPA has not
monetized the benefits of reductions in non-CO2 GHGs, the
value of these reductions should not be interpreted as zero. Rather,
the reductions in non-CO2 GHGs will contribute to this
rule's climate benefits, as explained in Section III.F. The SCC TSD
notes the difference between the social cost of non-CO2
emissions and SCC and specifies a goal to develop methods to value non-
CO2 emissions in future analyses.

        Table III.H.10-2--Estimated Societal Benefits Associated With the Light-Duty Vehicle GHG Program
                                           [Millions of 2007 dollars]
----------------------------------------------------------------------------------------------------------------
      Benefits category           2020          2030          2040          2050       NPV, 3% \a\   NPV, 7% \a\
----------------------------------------------------------------------------------------------------------------
Reduced CO2 Emissions at
 each assumed SCC value b c
    Avg SCC at 5%...........          $900        $2,700        $4,600        $7,200       $34,500       $34,500
    Avg SCC at 3%...........         3,700         8,900        14,000        21,000       176,700       176,700
    Avg SCC at 2.5%.........         5,800        14,000        21,000        30,000       299,600       299,600
    95th percentile SCC at          11,000        27,000        43,000        62,000       538,500       538,500
     3%.....................
Criteria Pollutant Benefits              B   1,200-1,300   1,200-1,300   1,200-1,300        21,000        14,000
 d e f g....................
Energy Security Impacts              2,200         4,500         6,000         7,600        81,900        36,900
 (price shock)..............

Reduced Refueling...........         2,400         4,800         6,300         8,000        87,900        40,100
Value of Increased Driving h         4,200         8,800        13,000        18,400       171,500        75,500
Accidents, Noise, Congestion        -2,300        -4,600        -6,100        -7,800       -84,800       -38,600
Quantified Annual Benefits
 at each assumed SCC value b
 c
    Avg SCC at 5%...........         7,400        17,500        25,100        34,700       312,000       162,400
    Avg SCC at 3%...........        10,200        23,700        34,500        48,500       454,200       304,600
    Avg SCC at 2.5%.........        12,300        28,800        41,500        57,500       577,100       427,500
    95th percentile SCC at          17,500        41,800        63,500        89,500       816,000       666,400
     3%.....................
----------------------------------------------------------------------------------------------------------------
\a\ Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
\b\ Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
\c\ Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC
  estimates range as follows: for Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at
  2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates.
\d\ Note that ``B'' indicates unquantified criteria pollutant benefits in the year 2020. For the final rule, we
  only modeled the rule's PM2.5- and ozone-related impacts in the calendar year 2030. For the purposes of
  estimating a stream of future-year criteria pollutant benefits, we assume that the benefits out to 2050 are
  equal to, and no less than, those modeled in 2030 as reflected by the stream of estimated future emission
  reductions. The NPV of criteria pollutant-related benefits should therefore be considered a conservative
  estimate of the potential benefits associated with the final rule.
\e\ The benefits presented in this table include an estimate of PM-related premature mortality derived from
  Laden et al., 2006, and the ozone-related premature mortality estimate derived from Bell et al., 2004. If the
  benefit estimates were based on the ACS study of PM-related premature mortality (Pope et al., 2002) and the
  Levy et al., 2005 study of ozone-related premature mortality, the values would be as much as 70% smaller.
\f\ The calendar year benefits presented in this table assume either a 3% discount rate in the valuation of PM-
  related premature mortality ($1,300 million) or a 7% discount rate ($1,200 million) to account for a twenty-
  year segmented cessation lag. Note that the benefits estimated using a 3% discount rate were used to calculate
  the NPV using a 3% discount rate and the benefits estimated using a 7% discount rate were used to calculate
  the NPV using a 7% discount rate. For benefits totals presented at each calendar year, we used the mid-point
  of the criteria pollutant benefits range ($1,250).
\g\ Note that the co-pollutant impacts presented here do not include the full complement of endpoints that, if
  quantified and monetized, would change the total monetized estimate of impacts. The full complement of human
  health and welfare effects associated with PM and ozone remain unquantified because of current limitations in
  methods or available data. We have not quantified a number of known or suspected health effects linked with
  ozone and PM for which appropriate health impact functions are not available or which do not provide easily
  interpretable outcomes (e.g., changes in heart rate variability). Additionally, we are unable to quantify a
  number of known welfare effects, including reduced acid and particulate deposition damage to cultural
  monuments and other materials, and environmental benefits due to reductions of impacts of eutrophication in
  coastal areas.
\h\ Calculated using pre-tax fuel prices.

    Table III.H.10-3 presents estimated annual net benefits for the
indicated calendar years. The table also shows the net present values
of those net benefits for the calendar years 2012-2050 using both a 3
percent and a 7 percent discount rate. The table includes the benefits
of reduced CO2 emissions (and consequently the annual net
benefits) for each of four SCC values considered by EPA. As noted
above, the benefit estimates from CO2 reductions are ``very
likely,'' according to the IPCC Fourth Assessment Report,
underestimates because, in part, models used to calculate SCC values do
not include information about impacts that have not been quantified.

        Table III.H.10-3--Quantified Net Benefits Associated with the Light-Duty Vehicle GHG Program \a\
                                           [Millions of 2007 dollars]
----------------------------------------------------------------------------------------------------------------
                                  2020          2030          2040          2050        NPV, 3% b     NPV, 7% b
----------------------------------------------------------------------------------------------------------------
Quantified Annual Costs.....      -$20,100      -$64,000     -$101,900     -$152,200   -$1,199,700     -$480,700
----------------------------------------------------------------------------------------------------------------
                            Quantified Annual Benefits at each assumed SCC value c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............         7,400        17,500        25,100        34,700       312,000       162,400
Avg SCC at 3%...............        10,200        23,700        34,500        48,500       454,200       304,600
Avg SCC at 2.5%.............        12,300        28,800        41,500        57,500       577,100       427,500
95th percentile SCC at 3%...        17,500        41,800        63,500        89,500       816,000       666,400
----------------------------------------------------------------------------------------------------------------
                              Quantified Net Benefits at each assumed SCC value c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        27,500        81,500       127,000       186,900     1,511,700       643,100
Avg SCC at 3%...............        30,300        87,700       136,400       200,700     1,653,900       785,300
Avg SCC at 2.5%.............        32,400        92,800       143,400       209,700     1,776,800       908,200

95th percentile SCC at 3%...        37,600       105,800       165,400       241,700     2,015,700     1,147,100
----------------------------------------------------------------------------------------------------------------
a Fuel impacts were calculated using pre-tax fuel prices.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC
  estimates range as follows: For Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at
  2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates.

    EPA also conducted a separate analysis of the total benefits over
the model year lifetimes of the 2012 through 2016 model year vehicles.
In contrast to the calendar year analysis presented in Table III.H.10-1
through Table III.H.10-3, the model year lifetime analysis shows the
lifetime impacts of the program on each of these MY fleets over the
course of its lifetime. Full details of the inputs to this analysis can
be found in RIA Chapter 5. The societal benefits of the full life of
each of the five model years from 2012 through 2016 are shown in Tables
III.H.10-4 and III.H.10-5 at both a 3 percent and a 7 percent discount
rate, respectively. The net benefits are shown in Tables III.H.10-6 and
III.H.10-7 for both a 3 percent and a 7 percent discount rate. Note
that the quantified annual benefits shown in Table III.H.10-4 and Table
III.H.10-5 include fuel savings as a positive benefit. As such, the
quantified annual costs as shown in Table III.H.10-6 and Table
III.H.10-7 do not include fuel savings since those are included as
benefits. Also note that each of the Tables III.H.10-4 through Table
III.H.10-7 include the benefits of reduced CO2 emissions--
and consequently the total benefits--for each of four SCC values
considered by EPA. As noted above, the benefit estimates from
CO2 reductions are ``very likely,'' according to the IPCC
Fourth Assessment Report, underestimates because, in part, models used
to calculate SCC values do not include information about impacts that
have not been quantified.

  Table III.H.10-4--Estimated Societal Benefits Associated with the Lifetimes of 2012-2016 Model Year Vehicles
                                  [Millions of 2007 dollars; 3% discount rate]
----------------------------------------------------------------------------------------------------------------
 Monetized values (millions)     2012MY        2013MY        2014MY        2015MY        2016MY          Sum
----------------------------------------------------------------------------------------------------------------
Cost of Noise, Accident,           -$1,100       -$1,600       -$2,100       -$2,900       -$3,900      -$11,600
 Congestion ($).............
Pretax Fuel Savings ($).....        16,100        23,900        32,200        46,000        63,500       181,800
Energy Security (price                 900         1,400         1,800         2,500         3,500        10,100
 shock) ($) a...............
Value of Reduced Refueling           1,100         1,600         2,100         3,000         4,000        11,900
 time ($)...................
Value of Additional Driving          2,400         3,400         4,400         6,000         7,900        24,000
 ($)........................
Value of PM2.5-related                 700           900         1,300         1,800         2,400         7,000
 Health Impacts ($) b c d...
----------------------------------------------------------------------------------------------------------------
                              Reduced CO2 Emissions at each assumed SCC value e f g
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............           400           500           700         1,000         1,300         3,800
Avg SCC at 3%...............         1,700         2,400         3,100         4,400         5,900        17,000
Avg SCC at 2.5%.............         2,700         3,900         5,200         7,200         9,700        29,000
95th percentile SCC at 3%...         5,100         7,300         9,600        13,000        18,000        53,000
----------------------------------------------------------------------------------------------------------------
                                 Total Benefits at each assumed SCC value e f g
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        20,500        30,100        40,400        57,400        78,700       227,000
Avg SCC at 3%...............        21,800        32,000        42,800        60,800        83,300       240,200
Avg SCC at 2.5%.............        22,800        33,500        44,900        63,600        87,100       252,200
95th percentile SCC at 3%...        25,200        36,900        49,300        69,400        95,400       276,200
----------------------------------------------------------------------------------------------------------------
a Note that, due to a calculation error in the proposal, the energy security impacts for the model year analysis
  were roughly half what they should have been.
b Note that the co-pollutant impacts associated with the standards presented here do not include the full
  complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-
  related impacts. Instead, the co-pollutant benefits are based on benefit-per-ton values that reflect only
  human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
  benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality
  modeling. However, EPA was unable to conduct a full-scale air quality modeling analysis associated with the
  vehicle model year lifetimes for the final rule.
c The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table are based on an
  estimate of premature mortality derived from the ACS study (Pope et al., 2002). If the benefit-per-ton
  estimates were based on the Six Cities study (Laden et al., 2006), the values would be approximately 145%
  (nearly two-and-a-half times) larger.

d The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount
  rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. If a 7%
  discount rate had been used, the values would be approximately 9% lower.
e Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
f Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
g Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC
  estimates range as follows: For Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at
  2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates.

  Table III.H.10-5--Estimated Societal Benefits Associated with the Lifetimes of 2012-2016 Model Year Vehicles
                                  [Millions of 2007 dollars; 7% discount rate]
----------------------------------------------------------------------------------------------------------------
 Monetized values (millions)     2012MY        2013MY        2014MY        2015MY        2016MY          Sum
----------------------------------------------------------------------------------------------------------------
Cost of Noise, Accident,             -$900       -$1,200       -$1,600       -$2,300       -$3,100       -$9,200
 Congestion ($).............
Pretax Fuel Savings ($).....        12,500        18,600        25,100        36,000        49,600       141,900
Energy Security (price                 800         1,100         1,400         2,000         2,700         8,000
 shock) ($) a...............
Value of Reduced Refueling             900         1,300         1,700         2,400         3,200         9,400
 time ($)...................
Value of Additional Driving          1,900         2,700         3,500         4,700         6,200        19,000
 ($)........................
Value of PM2.5-related                 500           800         1,000         1,400         1,900         5,600
 Health Impacts ($) b c d...
----------------------------------------------------------------------------------------------------------------
                              Reduced CO2 Emissions at each assumed SCC value e f g
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............           400           500           700         1,000         1,300         3,800
Avg SCC at 3%...............         1,700         2,400         3,100         4,400         5,900        17,000
Avg SCC at 2.5%.............         2,700         3,900         5,200         7,200         9,700        29,000
95th percentile SCC at 3%...         5,100         7,300         9,600        13,000        18,000        53,000
----------------------------------------------------------------------------------------------------------------
                                 Total Benefits at each assumed SCC value e f g
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        16,100        23,800        31,800        45,200        61,800       178,500
Avg SCC at 3%...............        17,400        25,700        34,200        48,600        66,400       191,700
Avg SCC at 2.5%.............        18,400        27,200        36,300        51,400        70,200       203,700
95th percentile SCC at 3%...        20,800        30,600        40,700        57,200        78,500       227,700
----------------------------------------------------------------------------------------------------------------
a Note that, due to a calculation error in the proposal, the energy security impacts for the model year analysis
  were roughly half what they should have been.
b Note that the co-pollutant impacts associated with the standards presented here do not include the full
  complement of endpoints that, if quantified and monetized, would change the total monetized estimate of rule-
  related impacts. Instead, the co-pollutant benefits are based on benefit-per-ton values that reflect only
  human health impacts associated with reductions in PM2.5 exposure. Ideally, human health and environmental
  benefits would be based on changes in ambient PM2.5 and ozone as determined by full-scale air quality
  modeling. However, EPA was unable to conduct a full-scale air quality modeling analysis associated with the
  vehicle model year lifetimes for the final rule.
c The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table are based on an
  estimate of premature mortality derived from the ACS study (Pope et al., 2002). If the benefit-per-ton
  estimates were based on the Six Cities study (Laden et al., 2006), the values would be approximately 145%
  (nearly two-and-a-half times) larger.
d The PM2.5-related benefits (derived from benefit-per-ton values) presented in this table assume a 3% discount
  rate in the valuation of premature mortality to account for a twenty-year segmented cessation lag. If a 7%
  discount rate had been used, the values would be approximately 9% lower.
e Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
f Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
g Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC
  estimates range as follows: For Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at
  2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates.

    Table III.H.10-6--Quantified Net Benefits Associated with the Lifetimes of 2012-2016 Model Year Vehicles
                                  [Millions of 2007 dollars; 3% discount rate]
----------------------------------------------------------------------------------------------------------------
 Monetized Values (millions)     2012MY        2013MY        2014MY        2015MY        2016MY          Sum
----------------------------------------------------------------------------------------------------------------
Quantified Annual Costs             $4,900        $8,000       $10,300       $12,700       $15,600       $51,500
 (excluding fuel savings) a.
----------------------------------------------------------------------------------------------------------------
                           Quantified Annual Benefits at each assumed SCC value b c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        20,500        30,100        40,400        57,400        78,700       227,000
Avg SCC at 3%...............        21,800        32,000        42,800        60,800        83,300       240,200

Avg SCC at 2.5%.............        22,800        33,500        44,900        63,600        87,100       252,200
95th percentile SCC at 3%...        25,200        36,900        49,300        69,400        95,400       276,200
----------------------------------------------------------------------------------------------------------------
                             Quantified Net Benefits at each assumed SCC value b c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        15,600        22,100        30,100        44,700        63,100       175,500
Avg SCC at 3%...............        16,900        24,000        32,500        48,100        67,700       188,700
Avg SCC at 2.5%.............        17,900        25,500        34,600        50,900        71,500       200,700
95th percentile SCC at 3%...        20,300        28,900        39,000        56,700        79,800       224,700
----------------------------------------------------------------------------------------------------------------
a Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. Since
  those costs are assumed to occur in the given model year (i.e., not over a several year time span), the
  discount rate does not affect the costs.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference
  between the social cost of non-CO2 emissions and CO2 emissions, and specifies a goal to develop methods to
  value non-CO2 emissions in future analyses.
d Section III.H.6 notes that SCC increases over time. Corresponding to the years in this table, the SCC
  estimates range as follows: For Average SCC at 5%: $5-$16; for Average SCC at 3%: $21-$45; for Average SCC at
  2.5%: $36-$65; and for 95th percentile SCC at 3%: $65-$136. Section III.H.6 also presents these SCC estimates.

    Table III.H.10-7--Quantified Net Benefits Associated With the Lifetimes of 2012-2016 Model Year Vehicles
                                  [Millions of 2007 dollars; 7% discount rate]
----------------------------------------------------------------------------------------------------------------
 Monetized values (millions)     2012MY        2013MY        2014MY        2015MY        2016MY          Sum
----------------------------------------------------------------------------------------------------------------
Quantified Annual Costs             $4,900        $8,000       $10,300       $12,700       $15,600       $51,500
 (excluding fuel savings)
 \a\........................
----------------------------------------------------------------------------------------------------------------
                           Quantified Annual Benefits at each assumed SCC value b c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        16,100        23,800        31,800        45,200        61,800       178,500
Avg SCC at 3%...............        17,400        25,700        34,200        48,600        66,400       191,700
Avg SCC at 2.5%.............        18,400        27,200        36,300        51,400        70,200       203,700
95th percentile SCC at 3%...        20,800        30,600        40,700        57,200        78,500       227,700
----------------------------------------------------------------------------------------------------------------
                             Quantified Net Benefits at each assumed SCC value b c d
----------------------------------------------------------------------------------------------------------------
Avg SCC at 5%...............        11,200        15,800        21,500        32,500        46,200       127,000
Avg SCC at 3%...............        12,500        17,700        23,900        35,900        50,800       140,200
Avg SCC at 2.5%.............        13,500        19,200        26,000        38,700        54,600       152,200
95th percentile SCC at 3%...        15,900        22,600        30,400        44,500        62,900       176,200
----------------------------------------------------------------------------------------------------------------
a Quantified annual costs as shown here are the increased costs for new vehicles in each given model year. Since
  those costs are assumed to occur in the given model year (i.e., not over a several year time span), the
  discount rate does not affect the costs.
b Note that net present value of reduced GHG emissions is calculated differently than other benefits. The same
  discount rate used to discount the value of damages from future emissions (SCC at 5, 3, 2.5 percent) is used
  to calculate net present value of SCC for internal consistency. Refer to the SCC TSD for more detail.
c Monetized GHG benefits exclude the value of reductions in non-CO2 GHG emissions (HFC, CH4 and N2O) expected
  under this final rule. Although EPA has not monetized the benefits of reductions in these non-CO2 emissions,
  the value of these reductions should not be interpreted as zero. Rather, the reductions in non-CO2 GHGs will
  contribute to this rule's climate benefits, as explained in Section III.F.2. The SCC TSD notes the difference