[Federal Register Volume 79, Number 24 (Wednesday, February 5, 2014)]
[Pages 6899-6900]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-02471]



[EPA-HQ-OA-2014-0129; FRL-9906-20-OP]

Comment Request; Draft Supporting Materials for the Science 
Advisory Board Panel on the Role of Economy-Wide Modeling in U.S. EPA 
Analysis of Air Regulations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice.


SUMMARY: The Environmental Protection Agency (EPA) is evaluating the 
appropriate role for economy-wide modeling in informing the regulatory 
process. Toward that end, EPA is developing an ``analytic blueprint'' 
of materials on the technical merits and challenges of using economy-
wide models to evaluate the social costs, benefits and economic impacts 
associated with EPA's air regulations. In addition, EPA will be seeking 
advice from the Science Advisory Board (SAB) on economy-wide modeling 
and will present materials from the analytic blueprint to inform a 
discussion of charge questions to a new SAB panel with expertise in 
economy-wide modeling. In a forthcoming Federal Register Notice, EPA's 
Science Advisory Board Staff Office will be soliciting nominations for 
this panel to provide advice on the use of economy-wide models to 
evaluate the economic effects of air regulations. In today's Notice, 
EPA is soliciting public comment on both the draft charge questions and 
draft analytic blueprint of materials that could be presented to the 
SAB in order to inform how to appropriately discuss the issues with the 

DATES: Comments must be submitted on or before April 7, 2014.

ADDRESSES: Submit your comments, referencing Docket ID No. EPA-HQ-OA-
2014-0129 by one of the following methods:
     www.regulations.gov: Follow the on-line instructions for 
submitting comments.
     Email: oei.docket@epa.gov.
     Fax: (202) 566-9744.
     Mail: Office of Environmental Information, Environmental 
Protection Agency, Mailcode: 28221T, 1200 Pennsylvania Ave. NW., 
Washington, DC 20460.
     Hand Delivery:
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OA-2014-
0129. EPA's policy is that all comments received will be included in 
the public docket without change and may be made available online at 
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 www.regulations.gov. The 
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 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.
    Docket: All documents in the docket are listed in the 
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 www.regulations.gov or in hard copy at the OEI Docket, EPA/DC, 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 (202) 566-1744, and the telephone number for the OEI 
Docket is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: Nathalie Simon, National Center for 
Environmental Economics, Office of Policy, (1809T), Environmental 
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460; 
telephone number: 202-566-2347; fax number: 202-566-2363; email 
address: simon.nathalie@epa.gov.

SUPPLEMENTARY INFORMATION: Environmental regulations vary widely by 
pollutant, sectoral and geographic scope, regulatory design, types of 
benefits and costs, among others. The size and complexity of the U.S. 
economy relative to the effects of a particular regulation also raises 
questions about which modeling tool is most appropriate in a given 
setting. Air regulations have been selected to limit the scope of this 
analytic exercise. For each major air regulation, the EPA considers 
these factors when gauging which analytic tools can be applied in a 
practical and analytically defensible way to estimate costs, benefits, 
and economic impacts within a particular regulatory context.
    Economy-wide models attempt to capture the interaction and feedback 
effects between different sectors of the economy. A common tool to 
capture economy-wide effects is a computable general equilibrium (CGE) 
model. According the EPA's Guidelines for Conducting Economic Analyses 
(EPA 240-R-10-001) ``CGE models simulate the workings of a market 
economy and can include representations of the distortions caused by 
taxes and regulations. . . . They are used to calculate a set of price 
and quantity variables that will return the simulated economy to 
equilibrium after the imposition of a regulation. The social cost of 
the regulation can then be estimated by comparing the value of 
variables in the pre-regulation, `baseline' equilibrium with those in 
the post-regulation, simulated equilibrium.''
    However, for nearly all benefit-cost analyses conducted by EPA in 
support of air regulations, the costs are estimated using engineering 
or detailed partial equilibrium sector models which are compared to 
benefits that are likewise estimated through partial equilibrium 
models. EPA has evaluated, and will continue to evaluate, the 
appropriate role for economy-wide modeling in informing the regulatory 
process. While the Advisory Council on Clean Air Compliance Analysis 
review of the Second Prospective Study of the Clean Air Act Amendments 
(EPA-COUNCIL-11-001) stated that inclusion of benefits in the economy-
wide model that was specifically adapted for use in

[[Page 6900]]

that study ``represent[ed] a significant step forward in benefit-cost 
analysis,'' EPA recognizes that serious technical challenges remain 
when attempting to evaluate the benefits and costs of potential 
regulatory actions using economy-wide models. The question also remains 
of the value added of using economy-wide models to evaluate the 
economic impacts (e.g., energy price and labor market impacts) of air 
regulations relative to other modeling approaches.
    EPA is looking for early feedback from the public on the draft 
charge questions and draft analytic blueprint that outlines the 
materials EPA could supply to the SAB to inform their deliberations on 
the technical merits and challenges of using economy-wide models to 
estimate the economic effects of air regulations and potential paths 
forward for improvements that could address such challenges. EPA is 
soliciting comments and information to help it: (i) Evaluate whether 
the Agency has identified the most relevant technical materials in the 
analytic blueprint to help inform the SAB panel in its deliberations; 
and (ii) assess whether the Agency has identified the most relevant 
charge questions to the SAB regarding the technical merits and 
challenges of using economy-wide models to evaluate the social costs, 
benefits, and economic impacts in the context of air regulations.
    EPA will consider the comments received and amend the charge 
questions and draft blueprint as appropriate. The revised package will 
then be presented to the Science Advisory Board for consideration and 
    EPA's Science Advisory Board Staff Office will issue a separate 
Federal Register Notice to solicit nominations for experts to serve on 
the SAB panel. (Information on the SAB, including the process for 
forming review panels, is available at http://www.epa.gov/sab).

    Dated: January 29, 2014.
Joel Beauvais,
Associate Administrator, Office of Policy.
[FR Doc. 2014-02471 Filed 2-4-14; 8:45 am]