Retrospective Evaluation of the Costs Associated with the 2004 Automobile and Light-Duty Truck Surface Coating NESHAP

Ann Wolverton, Ann Ferris and Nathalie Simon

No 201707, NCEE Working Paper Series from National Center for Environmental Economics, U.S. Environmental Protection Agency

Abstract: The extent to which ex-ante estimates of the costs of regulation differ from ex-post estimates is an empirical question of considerable interest to policymakers, regulated entities, and the public. This paper examines evidence on the actual costs of compliance with the 2004 Automobile and Light-Duty Truck Surface Coating NESHAP and then compares these estimates to the EPA’s ex-ante cost estimates to identify key drivers of any differences. This regulation is particularly interesting from a cost perspective because at the time of promulgation the EPA considered it to be economically significant (and it was therefore accompanied by an extensive cost analysis), under stood who was likely to be regulated under the NESHAP, and had identified several available technologies that could be used to reduce HAP emissions. Data on ex-post costs are gathered from a subset of the industry via survey and follow-up interview. We find that the EPA overestimated the cost of compliance for these plants and that overestimation was driven primarily by use of estimation methods that did not account for regulatory flexibilities such as the ability to utilize any effective HAPs control method. Thus, we find that differences between ex ante and ex post cost estimates for our sample of facilities are primarily driven by differences in the method of compliance rather than differences in the per-unit cost associated with a given compliance approach. In particular, the EPA expected facilities to install pollution abatement control technologies in their paint shops to reduce emissions of hazardous air pollutants, but instead these plants complied by reformulating their coatings.

Keywords: retrospective cost analysis; air regulation; benefit-cost analysis; transportation (search for similar items in EconPapers)
JEL-codes: Q52 Q53 Q55 Q58 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2017-12, Revised 2017-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.epa.gov/environmental-economics/workin ... -2004-automobile-and First version, 2017 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nev:wpaper:wp201707

Access Statistics for this paper

More papers in NCEE Working Paper Series from National Center for Environmental Economics, U.S. Environmental Protection Agency Contact information at EDIRC.
Bibliographic data for series maintained by Cynthia Morgan ().