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OAQPS Economic Analysis Resource Document

2.1 OAQPS's Regulatory Authority

    The purpose of the CAA is to establish, implement, and maintain standards for the nation’s air quality.  Since its inception the CAA has been amended several times, most recently in 1990.  Pursuant to the 1990 Amendments, the CAA vests EPA with the authority to undertake the following actions:
  • set national ambient air quality standards (NAAQS) for six “criteria” pollutants
  • establish national emissions standards for 188 listed hazardous air pollutants (NESHAP)
  • establish new source performance standards (NSPS), imposing technology-based requirements on new or modified major sources of pollutants
  • establish emission standards for mobile sources
  • impose requirements to address specific air pollution problems, such as acid rain and depletion of stratospheric ozone
  • establish nonattainment areas for regions that have failed to meet the NAAQS standards for one or more of the criteria pollutants
  • require each State to submit a plan for the implementing and enforcing national standards, thus referred to as State Implementation Plans (SIP).  Also required within each SIP are measures to ensure against significant deterioration of air quality in areas that meet NAAQS standards.
    In addition to possessing the legal authority to regulate, OAQPS is also required to examine efforts to deregulate or reverse previous rulemakings if they are found to be unwarranted by the underlying statutory authority.  The move to consider deregulation follows from the Office of the Vice President’s National Performance Review, often referred to as the “Reinventing Government” initiative.
    EPA’s regulations are designed to directly change the behavior of those entities whose activities result in the generation and release of air pollutants.  These regulations are typically in the form of administrative controls (so-called “command and control” policies) that prescribe certain emitter behaviors (e.g., require the installation of stack gas scrubbers) or that set standards on the allowable releases of pollutants and allow polluters to determine how to achieve the standard.  However, they may also take the form of market-type instruments (e.g., emission charges or transferrable rights) that are designed to induce certain behavioral responses by changing emitters’ consequences of a given action.  Finally, and less frequently, EPA’s actions may be simply informational, designed to inform entities about the benefits or costs of their current or alternative behaviors (e.g., pollution prevention).
    EPA’s emission guidelines are developed to provide state and other governmental entities with guidance regarding the methods that may be used to achieve air quality objectives.  In a sense, therefore, guidelines are an example of an informational policy.  The information, in turn, may be used by the states and other authorities to develop administrative, market-type, or information policies of their own to address their air pollution problems and their responsibilities under the CAA.  Changes in the behavior of emitters in response to federal or state level regulations will create economic impacts as resources are reallocated toward more environmental protection and as emissions are reduced.


1 A regulation is generally determined to be significant if it is expected to result in a substantial impact on the economy.  The definition of a significant regulatory action is discussed in detail in Section 2.1.2 of this section.

2 Regulatory

 2.0 Intro

 2.1 OAQPS's Regulatory

 2.2 Statutory and Admin-
   istrative Requirements
   for Economic Analysis
   of Regulations

 2.3 Summary

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