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Air Quality Initiative
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Improving Air Quality Management
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The West has been blessed with an abundance of scenic and natural resources. People from all over the world are drawn to enjoy the sweeping panoramas and unique landscape which have influenced the culture and development of the western states. The people of the West feel strongly about the need to preserve the most precious of all natural resources, the air we breathe, so that future generations can continue to enjoy the health and recreational benefits which accompany clean air.
The western states have been leaders in the battle to improve air quality and preserve scenic vistas. Statistics demonstrate that air quality has improved dramatically in the last 25 years. Many areas which were considered to have unhealthful air just a few short years ago have all but eliminated days when poor air quality occurs.
The western states have also been leaders in evaluating the policies and programs used to manage air quality in the West. In the winter of 1995, the Western Governors initiated the Air Quality Initiative project. The project was designed to increase the effectiveness and efficiency of environmental programs and to improve the working relationships among state, federal, tribal, and local governments.
The Air Quality Initiative is especially significant in light of a changing regulatory environment across the nation, characterized by budget constraints at all levels of government, increased emphasis on state and regional management of environmental problems, and the need for innovative and more cost-effective approaches to achieving environmental goals. Clearly, if the West is to remain a leader in providing environmental quality, it is necessary to embrace cheaper, faster, and smarter ways of doing business.
In June, 1996, the Western Governors passed a resolution outlining important policy issues to be considered within the Air Quality Initiative project. The major issues for the Governors fall into four categories:
1. Use economic incentive-based programs to supplement and eventually replace traditional control programs. The Western Governors believe that incentive-based regulatory approaches can achieve similar air quality results with lower overall economic impact. These alternatives should be implemented as soon as they can be demonstrated effective.
2. Create more flexibility and establish a regional orientation. The Western Governors believe that the development of comprehensive solutions to regional and local air pollution problems can best occur when there is administrative flexibility which recognizes the unique geography, climate, and population distribution in the West.
3. Define the roles of the players in the air quality management process more clearly. The Western Governors clearly see the Environmental Protection Agency as having the primary responsibility for establishing air quality standards and goals and providing the appropriate oversight when it comes to meeting those goals. However, how the EPA defines its oversight role and how the requirements for meeting air quality standards and goals are established are major issues that needed to be addressed.
4. Shift to performance-based approaches to meeting air quality standards and goals. The Western Governors support a shift on the part of EPA away from prescriptive oversight and toward increased technical assistance to states. The Western Governors believe performance in achieving air quality goals and standards should be based on assessing emissions reductions and the resultant environmental outcomes.
Based on two studies entitled "Feasibility of Implementing Regional Incentive-Based Alternatives to Command and Control Air Quality Management" and "Strategy Evaluation for Mobile Source Regional Air Quality Management", and a consensus report of the Air Quality Initiative Steering Committee entitled "Improving the State Implementation Plan Process" done during the last year, a series of recommendations have been proposed to start redefining the air quality management process in the West. These recommendations represent the beginning of a new, fuller partnership with affected stakeholders. The partnership will add better and more economical tools for improving the environment.
This Action Report details the recommendations to the Western Governors and outlines plans for ensuring how these recommendations can be used to achieve the primary air quality goal -- clean air -- as quickly, cheaply, and efficiently as we can get it.
Additional information on the analysis and recommendations presented in this Action Report are provided in background papers which are available from the WGA.
ISSUE 1
USE OF INCENTIVE BASED PROGRAMS
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The Western Governors believe that incentive-based programs can be used to supplement and eventually replace existing control programs. Replacement would occur when the incentive-based programs are demonstrated to achieve air quality goals and standards as quickly and effectively as the traditional programs. Further, any new program should also be applicable to a wide range of source categories, including stationary point sources, area sources, and automobiles and should be able to accommodate economic growth. In order to test this tenet, a study was undertaken to answer two key questions:
* Do incentive based programs have advantages over traditional programs for solving air quality problems?
* Are there major obstacles which would prevent implementation of incentive based programs?
The study found that there are incentive-based programs presently in place which achieve emissions reductions with more certainty to sources and regulators, more quickly, and at a lower cost than traditional, non-incentive based programs. The study also determined that there do not appear to be major legal or institutional barriers preventing the use of such programs to supplement, augment, or replace existing air quality management approaches.
A major area of investigation concerned identifying viable, incentive-based options for the West. Three general trading concepts were found to have merit.
* A Cap and Trade program in which the emissions reductions necessary to meet the targets established to meet air quality goals shows the most promise. Such a program allows sources to determine the best way of achieving emissions targets while ensuring compliance with air quality goals.
* A program called Super New Source Review focusing on ensuring that emissions from new air pollution sources do not undermine air quality goals by creating a requirement for all new sources to offset any emissions increases.
* An Emissions Trade for Fees program which combines elements of the Cap and Trade program with the addition of emissions fees.
RECOMMENDED ACTIONS
With the identification of these incentive-based options, two actions are recommended to further make the future implementation of such programs possible:
* The Governors should direct the WGA to develop operating assumptions and a program design for each of the trading program options, or any hybrid of the options.
* Using the operating assumptions and program design, analyze the anticipated effectiveness of the options in achieving air quality standards and goals. The Monitor Company has designed and built a software model that simulates a market for emissions in eleven western states. This model would be used to help analyze the options.
With completion of the program design and analysis, the effectiveness of incentive-based programs will be adequately demonstrated. It is believed that with this demonstration it will be possible to achieve a broad-based consensus that such programs should quickly become a part of the repertoire used to meet air quality goals.
ISSUE 2
MOBILE SOURCE REGIONAL AIR QUALITY MANAGEMENT
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It is well known that mobile sources of air pollution, primarily cars and trucks, are major contributors to several pollutants which are of concern in the West. States have relied upon improvements in vehicle technology to substantially reduce tailpipe emissions in the last 25 years. However, growth in vehicles and vehicle use indicates additional controls will be required if Western air quality is to be maintained.
Therefore, inclusion of mobile sources in any regional pollution control strategy must be considered. This is especially significant if incentive-based programs are established as a prominent component of pollution reduction efforts.
The large scale extension of incentive-based programs to mobile sources has not been pursued in the past due to a variety of technological and administrative factors. However, as stationary sources get cleaner and consideration of regional haze and fine particulate becomes more important, it is necessary to contemplate options for including transportation emissions reductions in any regional air quality program.
The recent Western Governors' study examined the feasibility of including mobile sources in a market or incentive-based program and considered the mechanisms that might be used to accomplish this. While incentive-based approaches to addressing either travel demand or traffic congestion problems have not been tested in any significant way, they appear to hold considerable promise for meeting emissions objectives.
It is recommended that mobile sources should be integrated into any incentive-based program. Options which allow for the generation and sale of mobile source emissions credits, or which establish emissions caps can be analyzed in greater detail.
RECOMMENDED ACTIONS
* Based on the mobile sources trading options identified in the background report Strategy Evaluation for Mobile Source Regional Air Quality Management, the Governors should direct the WGA to develop a list of operating assumptions and a program design for each of the options, or any hybrid of the options.
* The Governors should direct the WGA to analyze inclusion of mobile sources in an incentive-based program by simulating application of such a program in a pilot area.
ISSUE 3
PRESCRIPTIVE REQUIREMENTS V. PERFORMANCE MEASURES
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In the past, so-called prescriptive approaches to meeting air quality goals and standards have been emphasized. The term "prescriptive" refers to the oversight agency to either dictating what specific program must be implemented to reduce air pollution or dictating the operating parameters of a program being used, or both.
While prescriptive approaches have resulted in cleaner air and an even playing field, they have also been barriers to both innovation and the efficient use of resources. The use of prescriptive approaches implies decreased flexibility for meeting environmental goals.
The Western Governors study includes a number of findings, including the following:
* While the Environmental Protection Agency should promulgate national air quality standards and control strategies for national sources such as ships or airplanes, EPA must recognize the expertise in the states and grant flexibility in achieving state air quality goals.
* EPA should reduce resources applied to prescriptive oversight and increase resources for technical assistance to the states and the development of programs to improve air quality.
* Where merited, EPA should take advantage of their discretionary authority before designating nonattainment areas. A designation should be based on air quality data, planning and other considerations. EPA should encourage alternative processes for areas that are able to meet air quality goals through means other than a nonattainment designation and in a shorter time frame than if the area were redesignated.
* Administrative and technical requirements and control strategies that do not lead to significant air quality benefits in a region should not be imposed.
RECOMMENDED ACTIONS
* The Governors should direct the WGA to analyze the appropriateness of granting flexibility to states to choose alternatives to prescriptive programs for achieving air quality goals and standards in nonattainment areas. Such analysis should compare flexible and prescriptive approaches for cost-effectiveness.
* The Governors should direct the WGA to report on states' technical assistance needs and how they can be met.
* The Governors should direct the WGA to report on ways areas which have recently violated standards can meet air quality goals other than through a nonattainment designation.
ISSUE 4
TIMELINESS OF GUIDANCE AND TECHNICAL TOOLS
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The basic tool used to describe air quality problems and propose how states will achieve air quality goals and standards is the State Implementation Plan (SIP). State Implementation Plan development includes several highly complex technical activities such as data reduction, design day selection, inventory development, control strategy evaluation, and air quality modeling.
National guidance on many of these activities does not always address circumstances and issues which states face due to the specific characteristics of the area not meeting air quality standards or technical limitations of available tools. Additionally, such guidance is not always issued in a timely manner.
States have found themselves in the position of having to meet strict federal deadlines for submitting plans and solving air quality problems without the benefit of the critical guidance and technical tools.
Another important issue for states has been the length of time required to prepare plans and receive federal approval of those plans. The excessive length of the plan (SIP) development and approval processes and the lack of timely rules, guidance, and technical tools have led to delays in plan preparation, uncertainties, and inefficient use of resources.
The Western Governors working group concluded that:
* The EPA should ensure that SIP guidance is published in a timely way. EPA should balance the need for timely guidance with other factors, including the degree of specificity needed, regional considerations, and stakeholder involvement.
* As part of its role to provide technical assistance, EPA should publish timely guidance on technical issues such as emissions factors and modeling.
* Because emissions reductions from national programs are a crucial element of achieving air quality goals, EPA should promulgate timely national control strategies.
RECOMMENDED ACTIONS
* The Western Governors should direct the WGA to work with the affected stakeholders to identify problems with guidance and technical tools and monitor and report on EPA's corrective actions.
ISSUE 5
STAKEHOLDER PARTICIPATION AND PARTNERSHIP
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Early involvement by all interested parties is critical to the success of any air quality plan. Lack of early participation and communication has led to uncertainty and unnecessary conflict in the SIP development and rulemaking processes.
For many years rulemaking and air quality plan development have had inconsistent stakeholder involvement. This has led to a number of perceived issues, including:
* The rule-making process does not utilize the considerable expertise available within state and local agencies and the private sector.
* Resulting rules have been developed with insufficient regional information, making some of them ill-fitting to the needs of western states.
* The current practice of providing "one size fits all" guidance documents for technical support activities fails to account for any individual or unique needs of states or local areas.
* Failure to involve stakeholders during federal rule development can lead to contention as state statutes to implement federal rules are considered by legislatures. It can also lead to differences in the interpretation of rules.
Another stakeholder issue has been the need to have a pro-active partnership between the EPA and the states during the SIP development process. It is critical for EPA to provide opinions during plan development to ensure that the submitted product will meet EPA criteria and thus accelerate plan approval.
Finally, there must be a process established to allow for expedited review and approval of state submittals to EPA based on complexity and the prior participation of the EPA.
RECOMMENDED ACTIONS
* The Western Governors should direct the WGA work with affected parties to develop a model protocol agreement covering the major administrative and technical elements of the planning process.
* The Western Governors should direct the WGA work with affected parties to identify the conditions under which plan reviews can be expedited.
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WGA LEAD GOVERNORS FOR AIR QUALITY
Governor Fife Symington, AZ
Governor Michael O. Leavitt, UT
AIR QUALITY INITIATIVE STEERING COMMITTEE PARTICIPANTS
Dennis Arfman
Colorado Association of Commerce and Industry
Steven Arnold
Colorado Air Pollution Control Division
William Auberle
Northern Arizona University
Lee Barkow
Bureau of Land Management
Prem Bhardwaja
Salt River Project
Steve Body
EPA Region X
Brenda Carter
Columbia River Inter-tribal Fish Commission
Mike Connolly
Campo EPA
Henry Eyring
Monitor Company
Edward Z. Fox
Arizona Public Service Company
Joe Francis
Nebraska Dept of Environmental Quality
Patty Fuller-Pratt
Western Sugar
Dan Johnson
Washington Dept of Ecology
David Kelly
Navajo EPA
Mike Kenny
California Air Resources Board
Donna Lamb
USDA Forest Service
Doug Larson
Western Interstate Energy Board
Annette Liebe
Oregon Dept of Environmental Quality
Steven Lipman
EPA Office of Air & Radiation
Virgil Masayesva
Northern Arizona University
C.V. Mathai
Arizona Public Service Company
Ruth McCormick
Western Regional Council
Dave Mills
PacifiCorp
Neil Moyer
Texaco
Lyle Nelson
Southern California Edison
Robert Palzer
Sierra Club
David Pampu
Denver Regional Council of Governments
Jerry Pardilla
National Tribal Environmental Council
Reuben Plantico
Attorney
Cathy Reheis
Western States Petroleum Association
Terry Ross
Center for Energy and Economic Development
Milton Russon
PacifiCorp
Steven Sarada
U.S. Army
Dick Serdoz
Nevada Dept of Environmental Protection
Greg Schaefer
Arco Coal
Claire Schary
EPA Region X
Jim Schoning
California Air Resources Board
Chris Shaver
Environmental Defense Fund
David Steele
West Associates
Larry Svoboda
EPA Region VIII
Ursula Trueman
Utah Dept of Environmental Quality
Herb Williams
Texas Natural Resource Conservation Commission
Nancy Wrona
Arizona Dept of Environmental Quality
Dave Wunker
New Mexico Air Quality Board
Amy Zimpfer
EPA Region IX
WGA PROJECT STAFF
Richard Halvey
AQI CONTRACTOR ASSISTANCE
Kleinfelder, Inc.
Parker, Colorado
WESTERN GOVERNORS' ASSOCIATION
1996-1997 BOARD OF DIRECTORS
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Governor Edward T. Schafer, North Dakota, Chairman
Governor Tony Knowles, Alaska, Vice Chairman
Governor Tauese Sunia, American Samoa
Governor Fife Symington, Arizona
Governor Pete Wilson, California
Governor Roy Romer, Colorado
Governor Carl T.C. Gutierrez, Guam
Governor Benjamin J. Cayetano, Hawaii
Governor Phil Batt, Idaho
Governor Bill Graves, Kansas
Governor Marc Racicot, Montana
Governor Benjamin Nelson, Nebraska
Governor Robert J. Miller, Nevada
Governor Gary E. Johnson, New Mexico
Governor Froilan C. Tenorio, Northern Mariana Islands
Governor John Kitzhaber, Oregon
Governor William J. Janklow, South Dakota
Governor George W. Bush, Texas
Governor Michael O. Leavitt, Utah
Governor Gary Locke, Washington
Governor Jim Geringer, Wyoming
James M. Souby
Executive Director
Western Governors' Association
600 17th Street
Suite 1705, South Tower
Denver, CO 80202-5452
(303) 623-9378
(303) 534-7309