David McNew/Getty ImagesThe downtown skyline is enveloped in smog shortly before sunset in Los Angeles, California.

http://usnews.nbcnews.com/_news/2013/03/29/17518351-epa-proposes-tighter-fuel-emissions-standards-could-push-price-of-gas-higher?lite

“Tier 3”: program to address air pollution from passenger cars and trucks

• Changes:– more stringent vehicle emissions standards – reduce the sulfur content of gasoline by 2/3

• help state and local agencies in their efforts to attain and maintain health-based National Ambient Air Quality Standards (NAAQS).

• Tables/info: EPA Final Rulemaking, 3/3/14.

Economics & politics

EPA had similar proposal ready in December 2011.

White House decided to wait until after the 2012 elections to submit it for review.(NYTimes, 3/3/14)

Industry funded BCA

epa.gov

epa.gov

epa.gov

Tier 3 is projected to lead to reductions in a host of air pollutants:

Beneficial impacts on health

• sulfur blocks pollution-control equipment in vehicle engines increases tailpipe emissions linked to lung disease, asthma, emphysema, chronic bronchitis, aggravated heart disease and premature births and deaths (NYT, 3/3/14)

• by 2030, annually prevent – 660-1,500 PM-related premature

deaths,

– 110-500 ozone-related premature deaths,

– 81,000 work days lost,

– approximately 1.1 million minor restricted-activity days.

Maryland Dept. of the Env.

One example of the new standards for light duty (LD)

vehicles (v) and trucks (t)

NMOG: Non-Methane Organic Gases, precursors to ozone

Note: ratcheting.

Evaporative Emission Standards

• Gasoline in fuel lines and tank can slowly evaporate over time.

• New standard: covered vehicles will be required to have essentially zero fuel vapor emissions in use (evaporative emissions standards, test procedures, and fuel/evaporative system leak standard)

 • These new standards are harmonized with California’s

zero evaporative emissions standards

(Note: California as policy lab)

Increasing standards, increasing MC• Sulfur in American gasoline:

– Decade ago: 300 ppm (parts per million) – Subsequent rule changes required refiners to cut the sulfur content by

90 percent currently 30 ppm.– New rule (2014) reduce by 2/3 to 10 ppm.

Upi.com

NY Times, 3/3/ 2014

• Charles Drevna, president of the American Fuel and Petrochemical Manufacturers (lobbyist)– removing the first 90 percent of sulfur

molecules from gasoline relatively easy. – last 10 percent is harder: “They’re tough

little buggers that don’t want to come out. It’s like getting the last little bit of red wine stain out of a white blouse.”

Costs: vehicle tech & fuel

VSL: valuing reductions in premature mortality

• VSL = $6.3M, $8.3M, $10.2M ….what’s going on?• Should we be concerned that EPA didn’t allow VSL to continue to grow 2024-2030?

Benefits: health

• Sensitivity to discounting assumptions. (What’s being discounted?)• Should we be concerned that EPA didn’t quantify all of the benefits?

$6.7B - $19B fromEPA infographic

Annual net benefits by 2030

infographic