 1 Assessing Prospective Estimates of the Costs of Clean Air Act Compliance: Are Costs Overestimated?

Cynthia J. Manson and James E. Neumann Industrial Economics, Incorporated Cambridge, MA June 29, 2001 INTRODUCTION Estimates of the cost of regulatory compliance are an important element in regulatory decision making within EPA's clean air program. Although recently the U. S. Supreme Court reaffirmed that the Clean Air Act's National Ambient Air Quality Standards ( NAAQS) should be set without regard to costs, the Court also recognized that the Clean Air Act calls on states and EPA to consider costs in implementing those standards. In addition, analysis of the cost of major regulatory actions is required by several Executive Orders. The EPA Office of Air and Radiation relies on cost estimates to design economically efficient strategies to implement all aspects of the Clean Air Act and its 1990 Amendments, including federally mandated stationary and mobile source controls that support NAAQS compliance; controls on hazardous air pollutants; measures to reduce emissions of stratospheric ozone depleting substances; and requirements to limit acid rain precursor emissions.

Cost estimates are often a critical factor in the choice of a regulatory option. The process of estimating future compliance costs, however, is demanding and involves uncertainties. To accurately estimate costs, analysts must, at a minimum: estimate the size and character of the existing and projected future population of affected emission sources; determine the potential suite of pollutant control technologies or process changes that can meet a range of future standards; assess the control efficiency and individual cost of relevant pollutant control technologies ( both now and in the future), with attention to source by source variability in capital requirements and maintenance costs; and apply this information to generate an aggregate cost estimate for the regulation. The better analyses also acknowledge that technological diffusion and innovation can play a factor in future cost estimates, though projecting future technologies and their costs is very difficult.

In this paper, we argue that there are three key factors inherent in the process of estimating regulatory costs that suggest direct compliance cost projections may more often be overestimated than underestimated. These include:

$ Learning by doing  As with many other products, the costs of producing pollution control equipment and the costs of operating modified production systems may fall over time or as markets expand because of economies of scale or other realized efficiencies in production. 1 The estimates were presented in a September 21, 1990 letter reply by the then Chairman of the CEA, Michael J. Boskin, to a request for cost estimates for various bills from John D. Dingell, then Chairman of the House Committee on Energy and Commerce ( sometimes referred to as " The Boskin Letter"). We present the estimate for the Senate Compromise bill, which most closely approximates the CAAA as passed. The estimates were developed when the amendments were in conference.

2 $ Innovations and technological change  The presence of a new regulatory requirement can spur a faster rate of technological diffusion and innovation, as incentives to comply in the most cost effective manner take hold, and innovation that occurs independent of the regulation can also decrease costs. Regulatory analyses that assume constant technology miss both effects.

$ Cost reducing features of regulatory design  Flexible regulatory design provides more opportunities for cost saving, and may include: designs that take advantage of market efficiencies, such as emission trading; designs that are responsive to technological limitations by tailoring delayed implementation periods; and processes that involve significant stakeholder involvement to build in provisions that achieve the same environmental goals at lower cost. These features tend to reinforce and perpetuate the effects of learning by doing and innovations and technological change, and also provide flexibility to respond to unanticipated changes that can decrease compliance costs relative to projected costs.

One of the better studied examples of the difficulty in predicting compliance costs ex ante is the Clean Air Act Title IV program for SO 2 emissions trading; this example illustrates the impact of each of the three factors listed above. Prior to the passage of the Clean Air Act Amendments of 1990, the President's Council of Economic Advisors estimated that the annual costs for this program would reach $ 4.2 billion by 2005.1 By 1997, it was clear that the costs of compliance were much lower than expected. In November of 1997, EPA's Report to Congress, Benefits and Costs of the Clean Air Act: 1990 2010, estimated annual compliance costs for this program of $ 2.3 and $ 2.0 billion for years 2000 and 2010, respectively. The reasons behind this dramatic reduction in cost estimates included the following:

$ Learning by doing  The installed costs for sulfur scrubbers proved to be more costeffective than anticipated, due in part to better removal efficiencies than anticipated.

$ Innovations  Some plants found that, as a result of minor modifications in their processes, they could achieve dramatically greater abilities to burn low sulfur cost than anticipated at lower cost. 2 Winston Harrington, Robert D. Morgenstern, and Peter Nelson, " On the Accuracy of Regulatory Cost Estimates," Resources for the Future Discussion Paper 99 18, January 1999.

3 See Harrington et al. ( 1999), page 23.

4 Some of these factors also affect the specification of benefits. Without further information on the case specific marginal benefit and cost curves, it is difficult to assess the overall effect of such mis estimations on benefit/ cost ratios. In this paper, we focus on factors that affect only costs.

3 $ Cost reducing features of regulatory design  The sulfur emissions trading program provided a continuing incentive to reduce costs, which rewarded reductions achieved through learning by doing. In addition, the trading program also provided incentives to take maximum advantage of two unanticipated developments: ( 1) The discovery of larger reserves of low sulfur coal in the Powder River Basin area of Wyoming and Montana; and ( 2) A drop in costs for rail transportation of coal that resulted from deregulation of railroad rates.

While the sulfur emissions trading program is one of the richest examples of these factors at work, it is certainly not the only example. In the pages that follow, we provide additional examples to illustrate the potential impact of each of these three factors.

This paper draws on a wide range of existing literature that comments on the accuracy of prospective regulatory cost estimates, and draws heavily on a recent survey by Harrington, Morgenstern, and Nelson ( 1999). 2 These authors evaluate the accuracy of EPA and OSHA estimates of 25 ex ante regulatory costs relative to ex post studies of actual costs. They conclude:

" Our review of over two dozen ex ante ex post comparisons indicates that ex ante estimates of total costs have tended to exceed actuals. We find this to be true of 12 of the 25 rules in our data set, while for only 6 were the ex ante estimates too low. Since the overestimates occur more frequently in the larger rules, the dollar weighted predominance of overestimates would be even higher." 3 In discussing EPA cost estimates, the Harrington et al. ( 1999) paper identifies several reasons for cost overestimation errors, including the difficulty of predicting technological innovation; uncounted cost reductions achieved during the regulatory review and public comment periods; reliance on maximum costs rather than means ( i. e., a built in conservative bias); and inaccuracies in estimating the size of the affected universe. 4 Other authors have commented on the accuracy of regulatory cost estimates. Hahn ( 1998) and Jaffe et al. ( 1995) conclude costs are consistently underestimated because of a failure to characterize the negative effects of direct compliance expenditures on investment, productivity, and 5 It can also be argued that there is a counterbalancing effect of gains in health on labor and overall productivity associated with cleaner air; this effect is also rarely acknowledged and quantified on the benefits side of the equation.

6 See, for example, the following citations from our bibliography: Kolstad ( 2000), Kemp ( 1997), Hahn ( 1998), Hodges ( undated).

7 Note that we also exclude discussion of important sources of uncertainty that may limit analysts' ability to characterize the affected universe or the compliance scenario; while those factors may affect total cost estimates, they also affect the implied environmental benefit received from incurring the cost, because emissions estimates may also be affected.

4 market structure, although Hahn ( 1998) acknowledges that these effects are very difficult to reliably quantify. 5 In addition, some authors have suggested that strategic incentives are an important influence on cost estimates. 6 The implication of strategic biases is that industry estimates are inflated to discourage additional regulation, and regulators' estimates are deflated to encourage regulation. While it would be naive to fail to acknowledge that strategic influences exist, it is not our purpose to evaluate these claims. Rather, we hope to identify areas for objective analysis and potential adjustment factors to correct apparent biases.

In this paper, we focus on those factors that affect the accuracy of initial estimates of direct compliance cost ( e. g., for specific capital expenditures, operating or maintenance costs, or overall compliance costs) to achieve a given environmental goal ( e. g., a stated emission reduction or overall cap). Direct compliance costs as we consider them do not include social costs, secondary impacts, or other real effects of regulation; accurate estimation of those impacts, however, often relies critically on initial estimates of direct costs. 7 Our conclusion is that systematic errors in cost estimation such as those arising from the four factors outlined above ought to be studied further and, where possible, the effects of these four factors should be quantitatively addressed. The presence of these factors does not always imply that costs are overestimated; however, further research could clarify the conditions under which costs might be overestimated or underestimated, as well as the potential magnitude of the errors.

In the sections that follow, we discuss each of these factors in more detail, explain the general theory supporting the hypothesis that costs are more likely to be overestimated than underestimated, and provide specific historical examples to support the argument. Finally, we summarize our conclusions and identify areas for further empirical research. 8 For a discussion on the quantitative estimate of learning curve impacts in manufacturing, see Horngren, C., G. Foster, and S. Datar, Chapter 10: " Determining How Costs Behave" in Cost Accounting: A Managerial Emphasis, Prentice Hall, 1994. See also Viscusi, W. Kip et al. Economics of Regulation and Antitrust. ( Cambridge: MIT Press) 2000. Viscusi describes an equation using cumulative past output as a measure of experience ( i. e. learning curve) to illustrate how a cost function changes with a learning curve effect.

9 See, for example, Kemp, R. Environmental Policy and Technical Change: A Comparison of the Technological Impact of Policy Instruments ( Cheltenham, U. K. and Brookfield, U. S.; Edward Elgar) 1997.

10 Kemp notes that markets for pollution control devices are often dependent on clear regulatory signals for stability in certain cases; this observation would tend to strengthen the argument that regulatory activity and increased production may often be linked.

5 FACTOR 1: " LEARNING BY DOING"

One source of cost overestimates by both industry and government is the failure to predict decreases in the costs of production over time as a result of the " learning curve effect" and of increases in economies of scale. Both of these concepts are well known in classical economic theory, and numerous empirical studies and modeling efforts have been developed that attempt to predict the extent to which they affect prices.

The concept of " learning by doing" ( or the learning curve effect), predicts that the production costs decrease with repetition, as cumulative experience increases ( e. g., as a result of employee training or modifications to production and distribution processes). Operations management literature and practice regularly addresses the learning curve effect in cost projections, both as it occurs during the introduction of new products or production systems and as part of continuing system efficiency estimates. 8 The learning curve impact can affect regulatory cost estimates in two ways: first, the cost of producing ( and purchasing) pollution control equipment will likely decrease over time; and second, upgraded production systems at polluting facilities can be expected to become more efficient.

A separate but related force affecting cost forecasting is the impact of changes in economies of scale. The cost implications of economies of scale are well documented and can be expected if regulations create demand for certain products or technologies. However, it is difficult to isolate and predict the impact on costs that would result from a regulation. 9 Even when demand for these technologies can be predicted to increase substantially, it is difficult to predict the extent to which polluting companies will enjoy cost reductions associated with increased production. Market characteristics such as the existence of patents, the competitive position and market power of technology producers, and the development of alternative technologies also influence the extent to which producers can reduce costs and pass on cost reductions to regulated facilities. 10 11 Skip Laitner, of EPA's Office of Air Programs, has also completed a number of publications on the impact of the learning curve in agency cost estimations. Time constraints did not allow us to collect and use these sources, but they may provide additional theoretical detail and empirical examples that would support the above discussion.

12 Another example relevant to a discussion of learning curve impacts and economies of scale relates to stationary source NOx Control. A 1991 study by the Electric Power Research Institute ( EPRI) estimated costs of installing selective catalytic reduction ( SCR) at $ 96$ 105 per kilowatt for dry bottom coal fired boilers, and $ 125$ 140 for coal fired cyclone boilers ( 1989 dollars). A 1994 installation of a cyclone boiler at a plant in New Hampshire cost $ 70 per kilowatt ( 1995 dollars), and a 1996 engineering estimate suggested that the total costs were $ 55 to $ 84 per kilowatt for implementing six systems on dry bottom boilers. Further research is necessary to verify the estimates provided and to determine to what extent the reported differences are the result of the learning curve effect or economies of scale. See: attachment to Testimony of the Institute of Clean Air Companies, Inc. before the Subcommittee on Manufacturing and Competitiveness on EPA's Revised NAAQS for Particulate Matter and Ozone, September 24, 1997.

13 Note also that a January 23, 1995 EPA fact sheet " Existing Medical Waste Incinerators C Proposed Subpart Cc Emission Guidelines" identifies annual costs of $ 351 million per year for a universe of 5,000 facilities, implying an annual compliance cost of $ 70,000 per unit. This figure is likely to include both annualized capital costs and annually occurring compliance related costs.

6 Both the learning curve and changes in economies of scale are often associated with the broader phenomenon of technological innovation, in part because they are often most dramatic when products and technologies are relatively new. 11 However, we consider them separately from innovation ( which is discussed below) because the influence is not specifically restricted to the development of new technologies and products. Moreover, while broadly defined innovation may occur in response to a wide range of regulatory programs, significant learning curve and scale economy impacts are most likely to be associated with regulations that anticipate ( or require) the use of specific identified technologies. Below we provide examples of air related technology cost estimates that failed to account for decreasing costs. 12 Medical Waste Incinerator Continuous Emission Monitoring Systems The Institute of Clean Air Companies ( ICAC) produced a study in 1997 responding to EPA's proposed maximum achievable control technology ( MACT) standards for medical waste incinerators ( MWIs). 13 ICAC's study forecasts the costs of continuous emissions monitoring systems ( CEMS) for carbon monoxide and oxygen emissions from MWIs. CO and O 2 emissions are indicators of incinerator efficiency; inefficient incineration can result in release of partially combusted materials, including air toxics, if temperatures are too low. 14 " Testing and Monitoring Options and Costs for MWIs", Memorandum from Thomas Holloway of MRI to Rick Copland, Dated May 20, 1996; cited in Testimony of the Institute of Clean Air Companies, Inc. before the Subcommittee on Manufacturing and Competitiveness on EPA's Revised NAAQS for Particulate Matter and Ozone, September 24, 1997.

15 Air Emissions Monitoring for Safe and Efficient Medical Waste Incinerator Operation, ICAC, September 1997.

7 A 1996 study by EPA estimated that the cost of purchasing a CO/ O 2/ opacity monitoring system would be $ 160,000; annual operating costs were estimated at $ 96,000.14 The ICAC study uses 1997 current vendor quotes to compare to Agency cost model results for actual installation costs for existing CEMS with current market quotes for the same processes. Examples include:

° A CO/ O 2 / opacity monitoring system that cost $ 141,000 in 1994 would cost $ 131,000 in 1997 because of technical advances such as the use of a combined CO/ O 2 analyzer. The document further notes that recent actual bids for installation, start up, certification, and other services are also lower than 1994 estimates.

° A second CO/ O 2/ opacity monitoring system sold in 1991 cost $ 139,745; including equipment, installation, training and certification testing; by 1996 costs for a more complex set of two colocated systems was estimated at roughly $ 180,000; or just under $ 90,000 per system.

In explaining the change in CEMS capital costs, ICAC identifies both technical innovation and " increased competition" as factors. In addition, the discussion notes that the technologies are easier to install and maintain, indicating a learning curve in installation. 15 Low Emission Vehicle ( LEV) Technology In 1998 Tom Cackette of California Air Resources Board ( CARB) presented a case study comparing projections by CARB and by auto industry consultants of the incremental costs for new or revised emission control devices meeting the Low Emission Vehicles ( LEV) standards for the state of California. The comparison is as follows: 8 Exhibit 1 COMPARISON OF COST ESTIMATES FOR LEV EMISSION CONTROL DEVICES Engine Type 1994 Industry Estimate 1994$/( 1998$) a 1994 CARB Estimate 1994$/( 1998$) a 1998 Actual Retail Cost 1998$ b Average Fleet Estimate $ 788 ($ 867) c $ 114 ($ 125) $ 83 4 Cylinder Honda Civic  $ 85 ($ 94) $ 75 6 Cylinder Toyota Camry  $ 137 ($ 151) $ 79 Ford V8  $ 140 ($ 154) $ 152 Source: EPA Center on Airborne Organics 1998 Summery Symposium Report: Summary of Tom Cackette presentation. Available at http:// web. mit. edu/ afs/ athena. mit. edu/ org/ a/ airquality/ www/ rep1998. html. Notes: a For the purposes of comparison with 1998 actual retail costs, we have included in italics adjusted estimate of 1994 CARB and industry estimate reflecting inflation according to the Consumer Price Index from 1994 to 1998. Source: Council of Economic Advisors Report of the President Table B 63 ( January 2001). b Note that retail cost may reflect some absorption of costs by manufacturers to ensure competitive product pricing, but this effect is unlikely to explain the entire discrepancies across estimates. c The summary of Mr. Cackette's work provided only a general industry cost estimate; industry estimates may have included more detailed estimates for specific engines.

The results in Exhibit 1 indicate that CARB's estimates were generally accurate or conservative ( note that CARB's 1994 estimate of $ 140 is equivalent to $ 154 in 1998), and the industry estimate was very high. Cackette attributes the overestimate to several factors, including: projected use of more expensive equipment, overestimates of warranty and component costs, and an assumption that redesign of models for catalysts would require unscheduled production delays. In fact, " sheet metal changes" to relocate catalysts were achieved during normal model revisions. While it is unclear what part of the total estimate is attributable to component costs and sheet metal changes, it is likely that the learning curve effect influenced both elements, and economies of scale may also have reduced component costs as demand for technology increased.

SO2 Emissions Trading Program  Scrubber Technology Prices " Scrubbers" ( i. e., Flue Gas Desulfurization ( FGD) technology) are an essential tool in the effort to reduce sulfur dioxide ( SO 2) emissions as part of Title IV " acid rain" program. The cost of scrubber technology has been widely debated and documented, and shows consistent downward trends over time. Multiple analyses of scrubbers identify market shifts that reflect both learning curve and scale economy impacts. Several examples are: 16 See Smith, J. and S. Dalton, " FGD Markets & Business in an Age of Retail Wheeling" presented at EPA/ EPRI/ DOE SO 2 Symposium, 1995, cited in Testimony of the Institute of Clean Air Companies, Inc. before the Subcommittee on Manufacturing and Competitiveness on EPA's Revised NAAQS for Particulate Matter and Ozone, September 24, 1997.

17 Institute of Clean Air Companies, Scrubber Myths & Realities, White Paper, May 1995.

18 Burtraw, Dallas. " Cost Savings Sans Allowance Trades? Evaluating the SO2 Emission Trading Program to Date", Resources for the Future, February 1996.

9 Testimony in 1997 by ICAC noted that overall scrubber purchase and installation was less than predicted. In 1989, the utility industry estimated FGD retrofit costs as $ 382 per kilowatt at an " average sized coal fired boiler." However, as of 1997 the average FGD retrofit cost had been $ 227 per kilowatt and was still declining. 16 A separate 1995 white paper by ICAC identified some of the specific causes of the disparity: 17 ° Alterations to the scrubbers, including larger absorber modules and the recognition that spare absorbers were unnecessary decreased capital costs by over 30%.

° Other cost savings resulted from elimination of flue gas reheat, incorporation of additives in the process design, simplification of design, by product management, higher velocity absorbers, alternative duct work designs, and reduced reagent preparation costs.

° Market pressures such as vendor competition and diversity of FGD systems had lowered costs.

These observations were supported by a 1996 study by Dallas Burtraw which noted the GAO had found that prices for scrubbers had decreased by over 50 percent since 1989, and that the elimination of the spare absorber modules was specifically important. In addition, the paper noted that reduced maintenance costs and increased utilization rates had contributed to lower compliance costs. 18 While some of the cost decreases are the result of innovative alterations to the scrubber units, the general technology has not been replaced; cost savings were attributable in part to more gradual adjustments in production and installation as the technology became more common.

FACTOR 2: INNOVATIONS AND TECHNOLOGICAL CHANGE Economists generally agree that technological innovation is a key force in decreasing the costs of compliance with regulations over time, and that failure of government and industry to account for 19 Logic dictates that innovations which increase costs will generally not be implemented; as a result, innovation tends to reduce costs.

20 Certain regulatory assessment efforts have attempted to address technological change. For example, for EPA's retrospective assessment of the Clean Air Act, Benefits and Costs of the Clean Air Act; 1970 to 1990, the Agency estimated the total social costs of the regulatory program using the Jorgenson/ Wilcoxen model. This model incorporates an internal function that considers the impact of innovation on production and demand for capital. However, the general equilibrium impacts of a single rulemaking are likely to be too subtle in most cases to be measured with large scale models, and are not generally included in compliance cost analyses.

21 For one well known discussion of the positive link between regulation and innovation, see Michael Porter and Claas Var der Linde, " Green and Competitive," Harvard Business Review, Sep Oct. 1995, p. 120.

22 Kemp, R. Environmental Policy and Technical Change: A Comparison of the Technological Impact of Policy Instruments ( Cheltenham, U. K. and Brookfield, U. S.; Edward Elgar) 1997.

10 innovation is often an important element of compliance cost overestimates. 19 Harrington et al. ( 1999) identify the failure to account for innovation as a chief reason for the inaccuracies of cost predictions. As Harrington notes, however, regulatory cost estimates by both industry and government have historically avoided making ex ante predictions about technological change that would occur either as a result of the proposed regulation, or as a logical extension of the learning curve effect and other general economic realities. 20 Technological change is notoriously difficult to predict using neo classical economic theory because by definition it alters the economics of production. Even more sensitive is any attempt to reflect a causal relationship between regulation and innovation in cost estimates. While there is theoretical and empirical support for the notion that regulatory challenges may encourage innovation in many cases ( i. e., by requiring new levels of performance or creating incentives for reduction of certain outputs), regulations which require specific technologies may in fact limit innovation once implementation is achieved ( though cost reductions through learning curve effects would still be relevant). 21 Finally, the economic implications of innovation frequently include secondary impacts such as productivity ( i. e., if innovation includes a significant production process alteration), and it can be difficult to isolate the narrower compliance cost implications of shifts in technology. However, in some cases regulations can be designed to provide continuing incentives to innovate; in these instances there can be a clear positive correlation between regulatory activities and the pace of innovation.

In Environmental Policy and Technical Change, René Kemp makes an important distinction between the first two stages of technological change ( e. g., invention and innovation) and the diffusion of technologies. 22 Diffusion of technology is the phase which determines the ultimate economic impact of the innovation, and may be more easily linked to regulatory requirements, since it is in part 23 Two other examples not cited below involved regulation of emissions from coke oven batteries and benzene from chemical production plants. Coke is used in the blast furnace process for producing steel. The strict limits on coke oven emissions promulgated in the early 1990' s encouraged a trend that was already occurring in the steel production industry toward the use of mini mills ( i. e., using scrap steel as input rather than iron ore and coke). We are not aware of any ex post cost estimates to compare to ex ante cost estimates, but recent efforts re visit the coke oven regulations in order to set residual risk limits under Title III may provide an opportunity to revisit this case. Relevant to benzene emissions reductions, in the 1970s ex ante estimates by industry for control of benzene emissions were $ 350,000; however, chemical production plants " virtually eliminated" control costs by developing a process substituting other chemicals for benzene. See Keith Mason, " The Economic Impact" EPA Journal, January/ February 1991, 45 7.

24 Note that forecast costs varied with compounds, and that RAND actually underestimated costs for CFC 113, though the costs for CFCs 11 and  12 were overestimated. The reason for the underestimate, Hammitt suggests, may be that reductions in CFC 113 consumption have relied more on substituting other solvents and blends and more efficient production instead of through substitution with new compounds: source: Hammitt, J., " Are the Costs of Proposed Environmental Regulations Overestimated? Evidence from the CFC Phaseout," Environmental and Resource Economics, 16: 281 301, 2000.

11 a function of demand. To the extent that innovations represent incremental changes, Kemp notes that a number of models are available to describe and support predictions of both innovation and diffusion under certain market circumstances; however, he notes that for " radical" technology changes ( e. g., the change in power sources from physical to fossil fuel in 1900) prediction of impacts is extremely difficult.

Kemp outlines three general categories of innovation linked to the adoption of environmentally preferable technologies: production process changes by polluters ( e. g., end of pipe treatment and process integrated systems such as CFC recycling); product changes ( e. g., product reformulation to eliminate CFCs and product substitution) and new technology systems ( e. g., new energy production systems). The following are examples of technological innovations in the first two of these categories that have had significant impacts on initial cost estimates. 23 CFC Phaseout As the U. S. developed and implemented the phaseout of CFCs in the late 1980s, a series of cost estimates by RAND and by EPA illustrate the impact of rapid technological advances in the development of suitable substitutes. As EPA developed a rule limiting the U. S. consumption of CFCs, a report by RAND in 1986 predicted marginal control costs associated with control of CFCs 11,  12 and  113. RAND forecast that the phaseout would create immediate price increases to six to eight dollars per kilogram of CFCs ( compared to the 1986 price of less than two dollars per kilogram). RAND also predicted that the total decrease in consumption from baseline would be less than 20 percent, even in the face of cost increases above 200 percent. 24 In contrast, the actual price 25 See Hammitt, J. " Are the Costs of Proposed Environmental Regulations Overestimated? Evidence from the CFC Phaseout" Environmental and Resource Economics, 16: 281 301, 2000. Note also the $ 30 million " golden carrot" incentive from industry/ NRDC to Whirlpool for efficient refrigerator, and EPA cooperation with military to meet Montreal Protocol; source: Ozone Protection in the United States: Elements of Success, WRI, 1996.

26 For comparison, all dollar figures in this paragraph are in 1997 dollars. Source: Congressional Testimony of P. N. Gammelgard, Vice President, American Petroleum Institute, March 18, 1975; 1998 estimates from Environmental Protection Agency, " EPA Staff Paper on Gasoline Sulfur Issues" May 1, 1998. Both quoted in Industrial Economics, Incorporated, " Clean Air Act Cost and Benefit Research," unpublished memorandum to Keith Mason, August 10, 1998.

12 per pound of CFCs only reached RAND's predicted range in 1990, when reductions of 40 to 60 percent of 1986 consumption had been achieved. Moreover, manufacturers were able to meet the accelerated timetables that EPA developed throughout the early 1990s, subsequent to Montreal Protocol amendments. Timetables included a 1990 goal of 50 percent CFC reduction by 1998, a 1992 goal of elimination by 2000, and the final 1993 goal of elimination by 1996.

The impact of innovation, however, is most apparent in the intermediate estimates during the development of the CFC phaseout. In 1988, less than two years after RAND's 1986 estimate that CFC prices would spike to over six dollars per kilogram, EPA provided an estimate of $ 3.55 per kilogram. This estimate reflected the options that had begun to emerge in the 16 months since the RAND study; during that 16 month period a concentrated research effort by government and industry was underway to identify CFC substitutes. The continuing development of economic substitutes resulted in a surprising reduction in total cost estimates by 1993, even as the schedule for implementation of CFC ban was accelerated. The identification of HCF 134a as an effective substitute was responsible for a large part of the cost reductions; process changes reducing need for solvent have also helped. 25 Other rapid innovations included the development of CFC recycling.

Fuel Desulfurization In 1975, the American Petroleum Institute ( API) estimated its cost of converting facilities to produce low sulfur ( 100 ppm) gasoline at $ 11.8 billion in 1997 dollars. 26 In 1998, an EPA/ DOE study estimated that the total actual cost of the same reduction was $ 2.4 to $ 3.9 billion ( based on 1975 production levels). API also re examined the retrofit costs in 1998, and produced an estimate of $ 4.0 billion overall. The discrepancy between the 1975 estimate and the 1998 estimates is due in part to the fact that the 1975 estimates were based only on currently available sulfur removal technologies, and did not take into account technological innovation. On the other hand, EPA and later API estimates incorporate the emergence of sulfur removal technologies that could achieve levels of 40 ppm at a cost of only 1 2 cents per gallon.

Similarly, initial industry cost estimates of lowering sulfur levels in diesel fuel were overestimated as a result of failing to account for innovation. In Congressional testimony in 1987, 27 Sources: Congressional Testimony of James B. Hermiller, Vice President of Refining, Standard Oil Company; June 17, 1987; U. S. Environmental Protection Agency, Regulation of Fuels and Fuel Additives: Fuel Quality Regulations for Highway Diesel Fuel Sold in 1993 and Later Calendar Years, 1990; and Department of Energy Web Site information obtained on August 7, 1998; both quoted in Industrial Economics, Incorporated, " Clean Air Act Cost and Benefit Research," unpublished memorandum to Keith Mason, August 10, 1998.

28 Harrington, Winston, " Predicting the costs of environmental regulations: how accurate are regulators' estimates?" Environment, Sept. 1999.

29 See Burtraw ( 1996).

13 Standard Oil Company cited 1986 API estimates that reducing diesel fuel sulfur levels to 0.05 weight percent would increase costs to refiners and translate into an 8.0 cent per gallon increase to consumers ( Standard Oil also testified that reducing diesel fuel sulfur levels would not contribute to reduction of acidic deposition). In contrast, a 1986 EPA study that predicted innovation related cost savings estimated costs to be only 1.2 cents per gallon. Additional studies included a 1989 EPA estimate of between 1.8 to 2.3 cents per gallon, and in 1989 Frontier Refining, a small refiner, estimated its costs to produce low sulfur fuel ( assuming a complete switch to low sulfur) at four cents per gallon. 27 SO2 Emissions Trading Program When original cost estimates were first made, blending coals was thought to be impractical. Innovations arose through experiments and minor modifications that allowed low sulfur coal to be blended with high sulfur coal up to a 40/ 60 mixture, much higher than original estimates of a 5/ 95 mixture. 28 This allowed many utilities to effectively use cheaper low sulfur coal for cost savings.

With the low transportation costs due to railroad deregulation and the ability to utilize a larger area of the Powder River Basin, in 1998 western low sulfur coal cost only $ 12 per ton in comparison to the national average coal prices of $ 22. Powder River Basin coal prices were even lower at $ 5 per ton. Fuel switching and fuel blending were thus critical in reducing compliance costs, and to date, they have been the most popular compliance option for utilities. 29 Other innovations are expected to reduce system costs by another 30 percent. For example, manufacturers of scrubber technologies are making use of higher gas velocity absorbers and advanced nozzle arrangements. Also, technological improvements in scrubbing resulted in more reliable removal than anticipated ( 95 percent removal rather than 85 percent predicted removal). 14 FACTOR 3: REGULATORY DESIGN The design of flexible regulatory requirements that are responsive to the particular circumstances of compliance can provide strong incentives for cost reduction, the effect of which may be difficult to anticipate or conservatively underestimated. The efficiency enhancing qualities of an emissions trading scheme may be well understood for a static scenario of plant level marginal emission reduction costs; the initial efficiencies of a trading program may therefore be accurately reflected in the first estimates of compliance costs, provided there is good information on marginal costs. A trading program, however, is also flexible enough to accommodate changes over time in the distribution of marginal costs for additional pollutant emission reductions. Trading systems, if properly designed, provide continuing incentives for additional cost saving technological innovations and opportunistic responses to unanticipated events. Examples of unanticipated events that may affect compliance options include discovery of natural resource supplies that reduce prices of raw materials; changes in markets ( e. g., due to unrelated regulatory actions, international actions such as OPEC supply decisions, and/ or consumer preferences); and events such as weather patterns that alter resource use patterns.

Programs such as these also provide compliance alternatives ( i. e., incentives to achieve pollution prevention goals that bring a facility below regulatory requirement cut offs and therefore reduce compliance costs). In addition, some U. S. programs make effective use of technology phasein schedules that provide lead time for research and development, where warranted, and for diffusion of newer technologies before compliance deadlines trigger capital " lock in". As Kemp ( 1997) points out, however, these lead in periods, if they are too long, can also serve to diffuse incentives for rapid technological change. Kemp nonetheless agrees that lead in periods can contribute to lower overall costs, because they prevent commitment to a potentially long lived but more expensive technology that would otherwise have been replaced by newer, less expensive innovations.

In addition, many CAA rules include an iterative process of developing cost estimates that involves key stakeholders, including industry. Through the process of commenting on and adjusting both rule provisions and cost estimates during the rule making process, the rule can achieve the same environmental goals at lower cost. Many cost saving refinements occur between rule proposal and promulgation; these refinements can result in cost savings for industry and in considerable changes to both industry and government estimates to achieve a specific environmental goal.

The cost reducing effects of some of the previous examples cited, as well as in other instances , were facilitated by elements of regulatory design, as noted below.

$ Sulfur emissions trading: Trading programs provide continuing incentives to reduce costs. In this case, the program rewarded reductions achieved through learning by doing, through induced innovation, and through a confluence of good fortune in low sulfur coal markets. The " good fortune" resulted from the combination of two unpredictable events: the evolution of markets and mining systems that made it realistic to recover large amounts of low sulfur coal in the Powder River Basin in Wyoming and Montana, and the contemporaneous reduction in transport costs as a 30 Schmalensee, Richard et al. " An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, Summer 1998, 12( 3): 53 68.

31 Coal transportation prices in the east were 20 26 mills per ton mile. Competition in rail for Western coal led to prices of only 10 14 mills per ton mile; furthermore, innovations and improvements in railroads occurred following deregulation, improving the level of service in the transport of coal 15 result of railroad deregulation under the Staggers Act of 1980. After railroad deregulation, transport rates decreased by 35 percent and utilities were surprised by the low transportation costs that allowed them to effectively switch to low sulfur coal from the Powder River Basin in Wyoming and Montana. 30 Because transportation costs are 50 percent of the purchase cost of low sulfur coal cost, this reduction was significant, and gave an cost advantage to western coal. 31 Coupled with the innovation of fuel switching and fuel blending, and a separate, fortunate shift in demand toward regions closer to low sulfur coal in the West, utilities were able to greatly reduce their compliance costs.

$ Phaseout of leaded gasoline. EPA's 1985 leaded gasoline phaseout rule involved a number of sophisticated cost benefit analyses in the early 1980s; the Agency's 1985 Final Regulatory Impact Analysis for the lead phaseout rule projected annual costs to refineries of $ 608 million in 1986, falling to $ 441 million by 1992. The RIA also predicted that costs to refiners could be offset by between $ 173 and $ 226 million due to the banking provision of the rule which allowed refineries making reductions ahead of schedule additional flexibility in meeting longer term targets. Refiners took good advantage of these banking provisions, and the predicted effect was largely realized.

$ LEV technology. Delayed implementation periods in the California LEV program facilitated reductions in installed cost for LEV technology that were achieved from " learning by doing"  see Exhibit 1 of this paper, for example. It is plausible to conclude that compliance costs with immediate implementation very well might have been closer to the 1994 projections than the 1998 realized costs.

SUMMARY AND DIRECTIONS FOR FURTHER RESEARCH The preceding discussion elaborates on three factors that we find are likely to contribute to an overall tendency to overestimate costs in ex ante regulatory cost projections for Clean Air Act rules. A key remaining question is whether these factors can be quantitatively accounted for in future cost estimation processes. Exhibit 2 below summarizes our conclusions from the preceding sections and recommendations for research to quantify these effects. 16 Exhibit 2 SUMMARY OF EFFECT OF KEY FACTORS ON COST ESTIMATES Influencing Factor Supporting Theory Best Examples Potential for Quantifying Effect " Learning by Doing" Incentives exist to minimize costs; firms respond by growing more efficient and/ or taking advantage of economies of scale.  Large capital expenditures  Goods and services in newly expanded or created markets High. Quantification is most promising for items similar to those where historical data are available.

Innovation and Technological Change Firms and third parties respond to new requirements by reevaluating production methods and conducting research. Innovations that increase costs are not adopted.  Processes or products at the edge of profitability  Cross industry innovations Low. Difficult to predict innovation; exceptions in those cases where some other baseline trend may exist, and presence of regulation accelerates research and innovation.

Regulatory Design Increased flexibility in regulatory design provides facilitates cost saving opportunities, including incentive to take advantage of multiple effects.  Emissions trading schemes  Delayed implementation to facilitate innovation Mixed. Gains from emissions trading and delayed implementation are often quantified, but impacts of unanticipated events are random and unpredictable.

Prospects for quantifying these effects vary widely depending on case specific factors, but a few general conclusions can be derived. First, the potential for quantifying the effects of learning by doing can be high. For investments in relatively high cost capital, for example, there is often a thirdparty vendor market that is willing to share detailed historical cost information ( e. g., scrubbers, continuous emissions monitors, etc.); incentives for regulated firms to share such data may not be as apparent. Once data are obtained, they can be used to estimate quantitatively the effect of process and product efficiencies over time. In the broader perspective, it is standard practice in the private sector to take account of learning efficiencies in projecting costs for internal improvements, based on historical data on learning curves. Generalizing from the existing set of well defined cases outlined above to the development of new goods and services requires careful attention to the details of the case at hand, however.

Second, the potential for predicting, and therefore quantifying, innovation and technological change is likely to be low. While some additional effort to innovate can be linked to the imposition of a new requirement, the outcome of that effort is uncertain. Nonetheless, there are some cases 17 where a new regulation may simply accelerate the pace of technological change along a wellestablished path. For example, efforts in the last 1980' s and early 1990' s to control hazardous air pollutant emissions from ovens used to produce coke, a necessary input to steel produced in blast furnaces, worked in concert with other existing trends in steel production that suggested mini mill technology might be poised to replace some aging blast furnace steel production. In cases such as that one, reasonable efforts can be made to bracket the effect of future technology diffusion, if not predict the innovation itself.

Third, methods exist to evaluate the first order cost reductions associated with regulatory design, but there is no way to anticipate the effects of good fortune and innovation that sometimes characterize the benefits of a flexible regulatory design. The first order effects include such factors as allowing plants with high costs of compliance to purchase reductions from firms with lower costs of compliance  what is needed to quantify these effects in an ex ante position is knowledge of plantspecific marginal cost curves. Flexible regulatory design also provides continuous incentives to innovate and take advantage of unanticipated events; as stated above, innovation and unrelated events are difficult or impossible to predict. Nonetheless, more use of sensitivity tests of key factors in cost estimates could be used to better characterize the potential impact of surprises.

Overall, it appears that additional effort devoted to data collection and study of the systematic effects of learning by doing could improve the accuracy of cost estimates. Strategic incentives and competitive dynamics within industries ( i. e., firms with competitive advantages in compliance are unlikely to want to share it publicly) present barriers to an exhaustive quantitative analysis of this effect. Nonetheless, the examples presented here, along with the over thirty years of experience with Clean Air Act compliance, suggest that the database for quantifying these effects ought to be significantly enhanced. 18 REFERENCES Boskin, M.. September 21, 1990. Letter reply by the then Chairman of the CEA, Michael J. Boskin, to a request for cost estimates for various bills from John D. Dingell, then Chairman of the House Committee on Energy and Commerce.

Burtraw, D., February, 1996. " Cost Savings Sans Allowance Trades? Evaluating the SO2 Emission Trading Program to Date," Resources for the Future.

Cook, E., editor, 1996. Ozone Protection in the United States: Elements of Success, World Resources Institute.

Hahn, R., 1998. " Government Analysis of the Benefits and Costs of Regulation" Journal of Economic Perspectives, 12 ( 4) 201 210.

Hammitt, J., 2000. " Are the Costs of Proposed Environmental Regulations Overestimated? Evidence from the CFC Phaseout," Environmental and Resource Economics, 16: 281 301.

Harrington W., R. Morgenstern, and P. Nelson, 1999. " On the Accuracy of Regulatory Cost Estimates. White Paper, Resources for the Future.

Harrington, W., 1999. " Predicting the costs of environmental regulations: how accurate are regulators' estimates?" Environment, September.

Hodges, H., undated. " Falling Prices: Cost of Complying with Environmental Regulations Almost Always Less than Advertised," Briefing Paper, Economic Policy.

Holloway, T., May 20, 1996. " Testing and Monitoring Options and Costs for MWIs," Memorandum to Rick Copland, cited in Testimony of the Institute of Clean Air Companies, Inc. before the Subcommittee on Manufacturing and Competitiveness on EPA's Revised NAAQS for Particulate Matter and Ozone, September 24, 1997.

Horngren, C., G. Foster, and S. Datar, 1994. " Determining How Costs Behave" in Cost Accounting: A Managerial Emphasis, Prentice Hall.

Illinois House Special Committee On Gas Pricing, February 1, 2001. Final Report.

Industrial Economics, Incorporated, August 10, 1998. " Clean Air Act Cost and Benefit Research," unpublished memorandum to Keith Mason, U. S. Environmental Protection Agency.

Institute of Clean Air Companies, September 24, 1997. Testimony before the Subcommittee on Manufacturing and Competitiveness on EPA's Revised NAAQS for Particulate Matter and Ozone. 19 Institute of Clean Air Companies, September 1997. Air Emissions Monitoring for Safe and Efficient Medical Waste Incinerator Operation.

Institute of Clean Air Companies, May 1995. Scrubber Myths & Realities, White Paper.

Jaffe, Adam B., Steven R. Peterson, Paul R. Portney, and Robert N. Stavins. 1995. " Environmental Regulation and the Competitiveness of U. S. Manufacturing: What Does the Evidence Tell Us?" Journal of Economic Literature, 33 ( March 1995): 132 163.

Kemp, R., 1997. Environmental Policy and Technical Change: A Comparison of the Technological Impact of Policy Instruments. Cheltenham, U. K. and Brookfield, U. S.; Edward Elgar.

Kolstad, C. 2000. Environmental Economics. New York: Oxford University Press.

Mason, K., January/ February 1991. " The Economic Impact" EPA Journal, 45 7.

Morgenstern, R., 1997. Economic Analyses at EPA, Washington, D. C.: Resources for the Future.

Porter, M. and C Var der Linde, 1995. " Green and Competitive," Harvard Business Review, September/ October.

Schmalensee, R. et al. 1998. " An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, 12( 3): 53 68.

Smith, J. and S. Dalton, 1995. " FGD Markets & Business in an Age of Retail Wheeling" presented at EPA/ EPRI/ DOE SO 2 Symposium.

Summary Symposium Report, 1998. Tom Cackette; California Air Resources Board ( CARB) Case Study Presentation to EPA Center on Airborne Organics. Available at http:// web. mit. edu/ afs/ athena. mit. edu/ org/ a/ airquality/ www/ rep1998. html.

U. S. Environmental Protection Agency, January 23, 1995. " Existing Medical Waste Incinerators C Proposed Subpart Cc Emission Guidelines."

U. S. Environmental Protection Agency, 1997. Benefits and Costs of the Clean Air Act: 1990 2010, Report to Congress.

Valdmanis, R., March 23, 2001, " Looser Green Rules Won't Stop U. S. Gasoline Spike," Reuters.

Viscusi, W. Kip et al. 2000. Economics of Regulation and Antitrust. Cambridge: MIT Press.


[Federal Register: October 26, 2006 (Volume 71, Number 207)]
[Notices]
[Page 62630-62631]
[DOCID:fr26oc06-73]

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Filings and Information Services, Washington, DC
20549.

Extension:
    Rule 38a-1; SEC File No. 270-522; OMB Control No. 3235-0586.

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.) the Securities and Exchange Commission
(``Commission'') has submitted to the Office of Management and Budget
(``OMB'') a request for extension of the previously approved collection
of information discussed below.
    Rule 38a-1 (17 CFR 270.38a-1) under the Investment Company Act of
1940 (15 U.S.C. 80a) (``Investment Company Act'') is intended to
protect investors by fostering better fund compliance with securities
laws. The rule requires every registered investment company and
business development company (``fund'') to: (i) Adopt and implement
written policies and procedures reasonably designed to prevent
violations of the federal securities laws, (ii) obtain the fund board
of director's approval of those policies and procedures, (iii) annually
review the adequacy of those policies and procedures and the policies
and procedures of each investment adviser, principal underwriter,
administrator, and transfer agent of the fund and the effectiveness of
their implementation, (iv) designate a chief compliance officer to
administer the fund's policies and procedures and prepare an annual
report to the board that addresses certain specified items relating to
the policies and procedures, and (v) maintain for five years the
compliance policies and procedures and the chief compliance officer's
annual report to the board.
    The rule contains certain information collection requirements that
are designed to ensure that funds establish and maintain comprehensive,
written internal compliance programs. The information collections also
assist the Commission's examination staff in assessing the adequacy of
funds' compliance programs.
    While Rule 38a-1 requires each fund to maintain written policies
and procedures, most funds are located within a fund complex. The
experience of the Commission's examination and oversight staff suggests
that each fund in a complex is able to draw extensively from the fund
complex's ``master'' compliance program to assemble appropriate
compliance policies and procedures. Many fund complexes already have
written policies and procedures documenting their compliance programs.
Further, a fund needing to develop or revise policies and procedures on
one or more topics in order to achieve a comprehensive compliance
program can draw on a number or outlines and model programs available
from a variety of industry representatives, commentators, and
organizations.
    There are approximately 4966 funds subject to Rule 38a-1. Among
these funds, 149 were newly registered in the past year. These 149
funds, therefore, were required to adopt and document the policies and
procedures that make up their compliance program. Commission staff
estimates that the average annual hour burden for a fund to adopt and
document these policies and procedures is 69 hours. Thus, we estimate
that the aggregate annual burden hours associated with the adoption and
documentation requirement is 10,281 hours.
    The remaining 4817 funds would have adopted Rule 38a-1 compliance
policies and procedures in previous years, and are required to conduct
an annual review of the adequacy of their existing policies and
procedures and the policies and procedures of each investment adviser,
principal underwriter, administrator, and transfer agent of the fund,
and the effectiveness of their implementation. In addition, each fund
chief compliance officer is required to prepare an annual report that
addresses the operation of the policies and procedures of the fund and
the policies and procedures of each investment adviser, principal
underwriter, administrator, and transfer agent of the fund, any
material changes made to those policies and procedures since the date
of the last report, any material changes to the policies and procedures
recommended as a result of the annual review, and certain compliance
matters that occurred since the date of the last report. The staff
estimates that each fund spends 60 hours per year, on average,
conducting the annual review and preparing the annual report to the
board of directors. Thus, we estimate that the annual aggregate burden
hours associated with the annual review and annual report requirement
is 289,020 hours.
    Finally, the staff estimates that each fund spends 8 hours
annually, on average, maintaining the records required by proposed Rule
38a-1. Thus, the annual aggregate burden hours associated with the
recordkeeping requirement is 39,728 hours.
    In total, the staff estimates that the aggregate annual information
collection burden of Rule 38a-1 is 339,029 hours. The estimate of
burden hours is made solely for the purposes of the Paperwork Reduction
Act. The estimate is not derived from a comprehensive or even a
representative survey or study of the costs of Commission rules.
Complying with this collection of information requirement is mandatory.
Responses will not be kept confidential. An agency may not conduct or
sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid control number.
    General comments regarding the above information should be directed
to the following persons: (i) Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Office of Management and Budget, Room 10102, New Executive Office
Building, Washington, DC 20503 or by email to:
<EMAIL_ADDRESS>and (ii) R. Corey Booth, Director/Chief

Information Officer, Securities and Exchange Commission, C/O Shirley
Martinson, 6432 General Green Way, Alexandria,

Virginia 22312, or by email to<EMAIL_ADDRESS>Comments must be
submitted to OMB within 30 days of this notice.

    Dated: October 19, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-17927 Filed 10-25-06; 8:45 am]

BILLING CODE 8011-01-P


[Federal Register Volume 77, Number 63 (Monday, April 2, 2012)]
[Notices]
[Pages 19661-19662]
[FR Doc No: 2012-7816]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OW-2011-0943; FRL-9655-1]

Draft National Water Program 2012 Strategy: Response to Climate
Change

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of availability and request for comments.

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

SUMMARY: The Environmental Protection Agency is publishing for public
comment a draft long-range strategy that describes how the agency will
address climate change challenges to its mission of protecting human
health and the environment. Climate change alters the hydrological
background in which EPA's programs function. Depending upon the
regional, local and even temporal nature of effects, climate change
will pose challenges to various aspects of water resource management,
including how to: address risks to drinking water, wastewater and storm
water infrastructure; protect quality of surface water, ground water
and drinking water; build resilience of watersheds, wetlands, and
coastal and ocean waters; and work with tribal communities to
understand the implications of climate change to their economy and
culture.

DATES: Comments must be received on or before May 17, 2012.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OW-
2011-0943, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov--
Follow the on-line instructions for submitting comments.
     Email<EMAIL_ADDRESS>Include EPA-HQ-OW-2011-0943 in
the subject line of the message.
     Mail: Send your comments to: Water Docket, Environmental
Protection Agency, Mail Code 2822T, 1200 Pennsylvania Avenue NW.,
Washington, DC 20460, Attention: Docket ID No. EPA-HQ-OW-2011-0943.
     Hand Delivery/Courier: Deliver your comments to EPA Docket
Center, EPA West, Room 3334, 1301 Constitution Avenue NW., Washington,
DC 20460, Attention Docket ID No. EPA-HQ-OW-2011-0943. Such deliveries
are accepted only during normal hours of operation, which are 8:30 a.m.
to 4:30 p.m., Monday through Friday, excluding legal holidays. Special
arrangements should be made for deliveries of boxed information. The
telephone number for the Water Docket is<PHONE_NUMBER>.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OW-2011-
0943. EPA's policy is that all comments received will be included in
the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through http://www.regulations.gov {or email{time} . The http://www.regulations.gov
Web site is an ``anonymous access'' system, which

means EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send an email comment
directly to EPA without going through http://www.regulations.gov your
email address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., CBI or other information
whose disclosure is restricted by statute. Certain other material, such
as copyrighted material, will be publicly available only in hard copy.
Publicly available docket materials are available either electronically
in http://www.regulations.gov or in hard copy at the Water Docket, EPA
Docket Center, EPA West, Room 3334, 1301 Constitution Ave. NW.,
Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding legal holidays. The telephone
number for the Public Reading Room is<PHONE_NUMBER>, and the telephone
number for the Water Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Ms. Elana Goldstein, Office of Water
(4101M), Environmental Protection Agency, Ariel Rios Building, Mail
Code 4101M, 1200 Pennsylvania Avenue NW., Washington, DC 20460;
telephone number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>For more information, visit: http://epa.gov/water/climatechange.

SUPPLEMENTARY INFORMATION:

What should I consider as I prepare my comments for EPA?

    To remain effective and continue fulfilling its mission, the EPA
will need to adapt to already observed and projected changes. To that
end, the Agency will continue to collaborate with partners at the
federal, state, tribal, and local levels to develop the requisite
information, tools and strategies. The Draft National Water Program
2012 Strategy: Response to Climate Change (Draft 2012 Strategy)
addresses the challenges climate change poses and lays out a long term
vision for the sustainable management of water resources for future
generations in light of climate change. The Draft 2012 Strategy is
intended to be a roadmap to guide future programmatic planning, and
inform decision makers during the Agency's annual planning process. It
describes the array of actions that should be taken in the coming years
to build a climate resilient national water program.
    The following questions are intended to solicit input and insight
for particular areas of the Draft 2012 Strategy. In addition to these
questions, reviewers are encouraged to consider their own questions
pertinent to their interests.
     Which Clean Water Act and Safe Drinking Water Act program
areas do you think are most vulnerable to climate change? Which
strategic actions should be prioritized? Are there strategies that are
missing or need revision?
     Are there important partnerships that have not been
identified?
     Are there examples of methods for measuring and tracking
progress and outcomes of adaptation activities? Is the approach
described adequate?
     Are there research priorities that were not listed?
     Please supply any additional references addressing the
economics of climate change adaptation (e.g., assessing the costs and
benefits of climate change adaption projects).
     How can we improve our representation of tribal climate
change and water interests? Are there examples of incorporating
traditional ecological knowledge involving water resources into climate
adaptation science and strategies?
    Tips for Preparing Your Comments. When submitting comments,
remember to:
     Identify the rulemaking by docket number and other
identifying information (subject heading, Federal Register date and
page number).
     Follow directions--The agency may ask you to respond to
specific questions or organize comments by referencing a Code of
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives
and substitute language for your requested changes.
     Describe any assumptions and provide any technical
information and/or data that you used.
     If you estimate potential costs or burdens, explain how
you arrived at your estimate in sufficient detail to allow for it to be
reproduced.
     Provide specific examples to illustrate your concerns, and
suggest alternatives.
     Explain your views as clearly as possible, avoiding the
use of profanity or personal threats.
     Make sure to submit your comments by the comment period
deadline identified.

    Dated: March 28, 2012.
Nancy K. Stoner,
Acting Assistant Administrator for Water.
[FR Doc. 2012-7816 Filed 3-30-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 81, Number 224 (Monday, November 21, 2016)]
[Notices]
[Pages 83243-83244]
[FR Doc No: 2016-27941]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Food and Drug Administration

[Docket No. FDA-2016-D-2241]

Substantiation for Structure/Function Claims Made in Infant
Formula Labels and Labeling: Draft Guidance for Industry; Reopening of
the Comment Period

AGENCY: Food and Drug Administration, HHS.

ACTION: Notice of availability; reopening of the comment period.

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

SUMMARY: The Food and Drug Administration (FDA or we) is reopening the
comment period for the notice, published in the Federal Register of
September 9, 2016 (81 FR 62509), announcing the availability of the
draft guidance for industry entitled ``Substantiation for Structure/
Function Claims Made in Infant Formula Labels and Labeling.'' We are
reopening the comment period in response to a request

for an extension to allow interested persons additional time to submit
comments.

DATES: Submit either electronic or written comments by February 21,
2017.

ADDRESSES: You may submit comments as follows:

Electronic Submissions

    Submit electronic comments in the following way:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. Comments submitted
electronically, including attachments, to http://www.regulations.gov
will be posted to the docket unchanged. Because your comment will be
made public, you are solely responsible for ensuring that your comment
does not include any confidential information that you or a third party
may not wish to be posted, such as medical information, your or anyone
else's Social Security number, or confidential business information,
such as a manufacturing process. Please note that if you include your
name, contact information, or other information that identifies you in
the body of your comments, that information will be posted on http://www.regulations.gov.
     If you want to submit a comment with confidential
information that you do not wish to be made available to the public,
submit the comment as a written/paper submission and in the manner
detailed (see ``Written/Paper Submissions'' and ``Instructions'').

Written/Paper Submissions

    Submit written/paper submissions as follows:
     Mail/Hand delivery/Courier (for written/paper
submissions): Division of Dockets Management (HFA-305), Food and Drug
Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.
     For written/paper comments submitted to the Division of
Dockets Management, FDA will post your comment, as well as any
attachments, except for information submitted, marked and identified,
as confidential, if submitted as detailed in ``Instructions.''
    Instructions: All submissions received must include the Docket No.
FDA-2016-D-2241 for ``Substantiation for Structure/Function Claims Made
in Infant Formula Labels and Labeling.'' Received comments will be
placed in the docket and, except for those submitted as ``Confidential
Submissions,'' publicly viewable at http://www.regulations.gov or at
the Division of Dockets Management between 9 a.m. and 4 p.m., Monday
through Friday.
     Confidential Submissions--To submit a comment with
confidential information that you do not wish to be made publicly
available, submit your comments only as a written/paper submission. You
should submit two copies total. One copy will include the information
you claim to be confidential with a heading or cover note that states
``THIS DOCUMENT CONTAINS CONFIDENTIAL INFORMATION.'' We will review
this copy, including the claimed confidential information, in our
consideration of comments. The second copy, which will have the claimed
confidential information redacted/blacked out, will be available for
public viewing and posted on http://www.regulations.gov. Submit both
copies to the Division of Dockets Management. If you do not wish your
name and contact information to be made publicly available, you can
provide this information on the cover sheet and not in the body of your
comments and you must identify this information as ``confidential.''
Any information marked as ``confidential'' will not be disclosed except
in accordance with 21 CFR 10.20 and other applicable disclosure law.
For more information about FDA's posting of comments to public dockets,
see 80 FR 56469, September 18, 2015, or access the information at:
http://www.fda.gov/regulatoryinformation/dockets/default.htm.
    Docket: For access to the docket to read background documents or
the electronic and written/paper comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in
the heading of this document, into the ``Search'' box and follow the
prompts and/or go to the Division of Dockets Management, 5630 Fishers
Lane, Rm. 1061, Rockville, MD 20852.

FOR FURTHER INFORMATION CONTACT: Gillian Robert-Baldo, Center for Food
Safety and Applied Nutrition (HFS-850), Food and Drug Administration,
5001 Campus Dr., College Park, MD 20740,<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION: In the Federal Register of September 9, 2016
(81 FR 62509), we published a notice announcing the availability of a
draft guidance entitled, ``Substantiation for Structure/Function Claims
Made in Infant Formula Labels and Labeling.'' Although you can comment
on any guidance at any time, to ensure that we consider comments on
this draft guidance before we begin work on the final version,
interested persons were originally given until November 8, 2016, to
comment on the draft guidance.
    Following publication of the September 9, 2016, notice of
availability, we received a request for a 90-day extension of the
comment period. The request expressed concern that the current 60-day
comment period does not allow sufficient time to develop a thoughtful
and comprehensive response to the draft guidance. We have considered
the request and are reopening the comment period for an additional 90
days, until February 21, 2017. We believe that this reopening allows
adequate time for interested persons to submit comments without
significantly delaying finalizing the guidance.

    Dated: November 15, 2016.
Leslie Kux,
Associate Commissioner for Policy.
[FR Doc. 2016-27941 Filed 11-18-16; 8:45 am]
 BILLING CODE 4164-01-P


[Federal Register Volume 81, Number 6 (Monday, January 11, 2016)]
[Notices]
[Page 1185]
[FR Doc No: 2016-338]

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

ENVIRONMENTAL PROTECTION AGENCY

[FRL 9941-18-Region 2]

Proposed CERCLA Section 122(g)(4) Administrative Settlement
Agreement and Order on Consent for the Mercury Refining Superfund Site,
Towns of Guilderland and Colonie, Albany County, New York

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; request for public comment.

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

SUMMARY: In accordance with Section 122(i) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended (``CERCLA''), 42 U.S.C. 9622(i), notice is hereby given by the
U.S. Environmental Protection Agency (``EPA''), Region 2, of a proposed
de minimis administrative settlement agreement and order on consent
pursuant to Section 122(g)(4) of CERCLA, 42 U.S.C. 9622(g)(4). The
settlement agreement also includes settlement of claims under the
Federal Priority Statute, 31 U.S.C. 3713 (``FPS''), and the Federal
Debt Collection Procedures Act, 28 U.S.C. 3301, et seq. (``FDCPA'')
under the authority of the Attorney General of the United States to
compromise and settle claims of the United States. The settlement is
between EPA, Yates Foil USA, Inc., and Craig Yates pertaining to the
Mercury Refining Superfund Site (``Site'') located in the Towns of
Guilderland and Colonie, Albany County, New York. The settlement
requires Yates Foil USA, Inc. and Craig Yates to pay $275,000 to the
EPA Hazardous Substance Superfund in reimbursement of response costs
incurred by the EPA at the Site. The settlement includes a covenant not
to sue pursuant to Sections 106 and 107 of CERCLA, 42 U.S.C. 9606 and
9607, relating to the Site, the FPS, 31 U.S.C. 3713, and the FDCPA, 28
U.S.C. 3301 et seq., subject to standard reservations, and protection
from contribution actions or claims as provided by Sections 113(f)(2)
and 122(g)(5) of CERCLA, 42 U.S.C. 9613(f)(2) and 9622(g)(5). For
thirty (30) days following the date of publication of this notice, EPA
will receive written comments relating to the settlement. EPA will
consider all comments received and may modify or withdraw its consent
to the settlement if comments received disclose facts or considerations
that indicate that the proposed settlement is inappropriate, improper,
or inadequate. EPA's response to any comments received will be
available for public inspection at EPA Region II, 290 Broadway, New
York, New York 10007-1866.

DATES: Comments must be submitted on or before February 10, 2016.

ADDRESSES: The proposed settlement is available for public inspection
at EPA Region 2 offices at 290 Broadway, New York, New York 10007-1866.
Comments should be sent to the individual identified below and should
reference the Mercury Refining Superfund Site, Index No. CERCLA-02-
2015-2020. To request a copy of the proposed settlement agreement,
please contact the individual identified below.

FOR FURTHER INFORMATION CONTACT: Sharon E. Kivowitz, Assistant Regional
Counsel, New York/Caribbean Superfund Branch, Office of Regional
Counsel, U.S. Environmental Protection Agency, 17th Floor, 290
Broadway, New York, New York 10007-1866. Telephone:<PHONE_NUMBER>. E-
Mail<EMAIL_ADDRESS>
    Dated: December 30, 2015.
Walter Mugdan,
Director, Emergency and Remedial Response Division, EPA, Region 2.
[FR Doc. 2016-338 Filed 1-8-16; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 77, Number 85 (Wednesday, May 2, 2012)]
[Notices]
[Page 26004]
[FR Doc No: 2012-10318]

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

ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OPP-2010-0968; FRL-9345-7]

Issuance of an Experimental Use Permit

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.

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

SUMMARY: EPA has granted an experimental use permit (EUP) to the
pesticide applicant, Valent USA Corporation. An EUP permits use of a
pesticide for experimental or research purposes only in accordance with
the limitations in the permit.

FOR FURTHER INFORMATION CONTACT: Autumn Metzger, Registration Division
(7505P), Office of Pesticide Programs, Environmental Protection Agency,
1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; telephone
number:<PHONE_NUMBER>; email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

I. General Information

A. Does this action apply to me?

    This action is directed to the public in general. Although this
action may be of particular interest to those persons who conduct or
sponsor research on pesticides, the Agency has not attempted to
describe all the specific entities that may be affected by this action.
If you have any questions regarding the information in this action,
consult the person listed under FOR FURTHER INFORMATION CONTACT.

B. How can I get copies of this document and other related information?

    EPA has established a docket for this action under docket
identification (ID) number EPA-HQ-OPP-2010-0968. Publicly available
docket materials are available either in the electronic docket at
http://www.regulations.gov, or, if only available in hard copy, at the
Office of Pesticide Programs (OPP) Regulatory Public Docket in Rm. S-
4400, One Potomac Yard (South Bldg.), 2777 S. Crystal Dr., Arlington,
VA. The hours of operation of this Docket Facility are from 8:30 a.m.
to 4 p.m., Monday through Friday, excluding legal holidays. The Docket
Facility telephone number is<PHONE_NUMBER>.

II. EUP

    EPA has issued the following EUP:
    59639-EUP-16. Issuance. Valent USA Corporation, P.O. Box 8025,
Walnut Creek, CA 94596. This EUP allows the use of 2,500 pounds of the
insecticide etoxazole on up to 20,000 acres of field corn, pop corn or
corn grown for seed to evaluate the control of mites over larger scale
and commercial plots. The program is authorized only in the State of
California. The EUP is effective from March 15, 2012 to March 14, 2013.

    Authority:  7 U.S.C. 136c.

List of Subjects

    Environmental protection, Agricultural commodities, Experimental
use permits, Pesticides and pest.

    Dated: April 18, 2012.
Lois Rossi,
Director, Registration Division, Office of Pesticide Programs.
[FR Doc. 2012-10318 Filed 5-1-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 83, Number 94 (Tuesday, May 15, 2018)]
[Notices]
[Page 22474]
[FR Doc No: 2018-10295]

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

DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Project No. 1889-000]

FirstLight Hydro Generating Company; Notice of Authorization for
Continued Project Operation

    On April 29, 2016, FirstLight Hydro Generating Company, licensee
for the Turners Falls Hydroelectric Project, filed an Application for a
New License pursuant to the Federal Power Act (FPA) and the
Commission's regulations thereunder. The Turners Falls Hydroelectric
Project is located on the Connecticut River in Franklin County,
Massachusetts; Windham County, Vermont; and Cheshire County, New
Hampshire.
    The license for Project No.1889 was issued for a period ending
April 30, 2018. Section 15(a)(1) of the FPA, 16 U.S.C. 808(a)(1),
requires the Commission, at the expiration of a license term, to issue
from year-to-year an annual license to the then licensee under the
terms and conditions of the prior license until a new license is
issued, or the project is otherwise disposed of as provided in section
15 or any other applicable section of the FPA. If the project's prior
license waived the applicability of section 15 of the FPA, then, based
on section 9(b) of the Administrative Procedure Act, 5 U.S.C. 558(c),
and as set forth at 18 CFR 16.21(a), if the licensee of such project
has filed an application for a subsequent license, the licensee may
continue to operate the project in accordance with the terms and
conditions of the license after the minor or minor part license
expires, until the Commission acts on its application. If the licensee
of such a project has not filed an application for a subsequent
license, then it may be required, pursuant to 18 CFR 16.21(b), to
continue project operations until the Commission issues someone else a
license for the project or otherwise orders disposition of the project.
    If the project is subject to section 15 of the FPA, notice is
hereby given that an annual license for Project No. 1889 is issued to
the licensee for a period effective May 1, 2018 through April 30, 2019
or until the issuance of a new license for the project or other
disposition under the FPA, whichever comes first. If issuance of a new
license (or other disposition) does not take place on or before April
30, 2019, notice is hereby given that, pursuant to 18 CFR 16.18(c), an
annual license under section 15(a)(1) of the FPA is renewed
automatically without further order or notice by the Commission, unless
the Commission orders otherwise.
    If the project is not subject to section 15 of the FPA, notice is
hereby given that the licensee, FirstLight Hydro Generating Company, is
authorized to continue operation of the Turners Falls Hydroelectric
Project, until such time as the Commission acts on its application for
a subsequent license.

    Dated: May 9, 2018.
Nathaniel J. Davis, Sr.,
Deputy Secretary.
[FR Doc. 2018-10295 Filed 5-14-18; 8:45 am]
 BILLING CODE 6717-01-P