California State Nonroad Engine Pollution Control Standards; Off-Road Compression Ignition Engines-In-Use Fleets; Notice of Decision

Federal RegisterSep 20, 2013

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2008-0691; FRL-9901-18-OAR]

California State Nonroad Engine Pollution Control Standards; Off-Road Compression Ignition Engines—In-Use Fleets; Notice of Decision

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Notice of decision.

SUMMARY:

The Environmental Protection Agency (EPA) is granting the California Air Resources Board's (CARB's) request for authorization of California regulations applicable to in-use fleets that operate off-road (nonroad or NR), diesel-fueled (compression-ignition or CI) vehicles with engines 25 horsepower and greater. The regulations require such fleets to meet fleet average emissions standards for oxides of nitrogen (NO

) and particulate matter (PM), or, alternatively, to comply with best available control technology (BACT) requirements for the vehicles in those fleets. This decision is issued under the authority of the Clean Air Act (CAA or Act).

DATES:

Petitions for review must be filed by November 19, 2013.

ADDRESSES:

EPA has established a docket for this action under Docket ID EPA-HQ-OAR-2008-0691. All documents relied upon in making this decision, including those submitted to EPA by CARB, are contained in the public docket. Publicly available docket materials are available either electronically through

www.regulations.gov

or in hard copy at the Air and Radiation Docket in the EPA Headquarters Library, EPA West Building, Room 3334, located at 1301 Constitution Avenue NW., Washington, DC. The Public Reading Room is open to the public on all federal government working days from 8:30 a.m. to 4:30 p.m.; generally, it is open Monday through Friday, excluding holidays. The telephone number for the Reading Room is (202) 566-1744. The Air and Radiation Docket and Information Center's Web site is

http://www.epa.gov/oar/docket.html.

The electronic mail (email) address for the Air and Radiation Docket is:

a-and-r-Docket@epa.gov,

the telephone number is (202) 566-1742, and the fax number is (202) 566-9744. An electronic version of the public docket is available through the federal government's electronic public docket and comment system. You may access EPA dockets at

http://www.regulations.gov.

After opening the

www.regulations.gov

Web site, enter EPA-HQ-OAR-2008-0691 in the “Enter Keyword or ID” fill-in box to view documents in the record. Although a part of the official docket, the public docket does not include Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.

EPA's Office of Transportation and Air Quality (OTAQ) maintains a Web page that contains general information on its review of California waiver requests. Included on that page are links to prior waiver

Federal Register

notices, some of which are cited in today's notice; the page can be accessed at

http://www.epa.gov/otaq/cafr.htm.

FOR FURTHER INFORMATION CONTACT:

David Dickinson, Attorney-Advisor, Compliance Division, Office of Transportation and Air Quality, U.S. Environmental Protection Agency, 1200 Pennsylvania Avenue (6405J) NW., Washington, DC 20460. Telephone: (202) 343-9256. Email:

Dickinson.David@epa.gov.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary

II. Background

A. California's Nonroad CI In-Use Fleet Requirements

B. Clean Air Act Nonroad Engine and Vehicle Authorizations

C. Deference to California

D. Burden and Standard of Proof

E. EPA's Administrative Process in Consideration of California's Nonroad CI In-Use Fleet Requirements

III. Discussion

A. California Protectiveness Determination

1. Based on EPA's Traditional Analysis, is California's Protectiveness Determination Arbitrary and Capricious?

2. Is CARB's Protectiveness Determination Arbitrary and Capricious Based on Other Effects of California's Fleet Requirements?

3. Section 209 (e)(2)(A)(i) Conclusion

B. Does California Need its Standards to Meet Compelling and Extraordinary Conditions?

1. Should EPA Review This Criterion Based on the Need for California's Nonroad Program or the Need for the Fleet Requirements?

a. Comment from Pacific Legal Foundation

b. EPA Response

2. Does California Need its Nonroad Program to Meet Compelling and Extraordinary Conditions?

3. In the Alternative, does California Need its Nonroad Fleet Requirements to Meet Compelling and Extraordinary Conditions?

a. California Air Quality Today and Moving Forward

b. PM Health Effects

c. Additional PM Comments

4. Section 209(e)(2)(A)(ii) Conclusion

C. Consistency with Section 209 of the Clean Air Act

1. Consistency with Section 209(a)

2. Consistency with Section 209(e)(1)

3. Consistency with Section 209(b)(1)(C)

a. Technological Feasibility

b. Consistency of Certification Procedures

D. Additional Issues Raised in Comment

1. Request for a Public Hearing In California

2. Request for EPA to Reopen the Comment Period

3. Claims Outside the Scope of the Clean Air Act

4. Constitutional Claims

E. Authorization Determination for California's Fleet Requirements

IV. Decision

V. Statutory and Executive Order Review

I. Executive Summary

Today, the Environmental Protection Agency (EPA) is granting a California Air Resources Board (CARB) request for authorization of regulations designed to reduce PM and NO

emissions from in-use nonroad diesel engines. The California In-Use Off-Road Diesel-Fueled Fleets Regulation (Fleet Requirements) applies to fleets with NR CI vehicles or equipment greater than 25 horsepower. The regulation takes effect beginning as early as 2014, depending on fleet size. It requires fleet operators to meet a progressively more stringent combined PM and NO

standard, or to reduce emissions through technology upgrades such as retrofit or replacement. Today's decision pertains to CARB's request of March 1, 2012, for authorization of the Fleet Requirements as amended in 2010.

The legal framework for this decision stems from the provisions first adopted by Congress in 1967, and later modified in 1977, with respect to state emission requirements for motor vehicles and motor vehicle engines; and from similar language adopted by Congress in 1990 with respect to preemption of state emission requirements for certain nonroad vehicles and equipment. Section 209(e)(2) of the Act, 42 U.S.C. 7543(e)(2), specifies that EPA must authorize California to adopt and enforce covered nonroad standards if California determines that its standards are, in the aggregate, at least as protective of the public health and welfare as applicable Federal standards,

unless

EPA makes one of three findings specified under the Clean Air Act: (1) That California's protectiveness finding is arbitrary and capricious; (2) that California does not need such California standards to meet compelling and extraordinary conditions; or (3) that California standards and accompanying enforcement procedures are not consistent with this section. As explained below, EPA interprets the

statutory language “consistent with this section” to mean consistent with section 209 (e.g. section 209(a), section 209(e)(1), and section 209(b)(1)(C)) of the Act. EPA's role upon receiving an authorization request is to determine whether it is appropriate to make any of these three specified findings. Opponents of authorization bear the burden of proving that at least one of the three bases for denial of authorization has been satisfied. If the Agency cannot make at least one of the three findings, then it must grant the requested authorization. EPA has evaluated CARB's request with regard to each of these three authorization criteria, in light of the evidence in the public record, and is granting CARB its authorization request as required under the Clean Air Act.

This Notice of Decision provides a full discussion of EPA's evaluation of each of the three criteria, including EPA's evaluation of the record and its determination that those opposing the authorization have not met their burden of proof with regard to any of the three criteria in section 209(e)(2)(A).

II. Background

A. California's Nonroad CI In-Use Fleet Requirements

CARB initially approved the Fleet Requirements on July 26, 2007. CARB subsequently amended the regulation after the Board conducted hearings in December 2008, January 2009, July 2009, and most recently in December 2010. As explained below, the December 2010 amendments significantly modified the regulation's compliance dates and in-use performance requirements.

The Fleet Requirements establish statewide in-use performance standards applicable to any person, business, or government agency that owns and operates in-use nonroad diesel vehicles in California with a maximum power of 25 horsepower (hp) or greater. The regulation applies to engines that are used to provide motive power, and in some cases auxiliary power, to nonroad vehicles, which are defined as vehicles that (1) cannot be registered and driven safely on-road, and (2) are not implements of husbandry or recreational off-highway vehicles.

The Fleet Requirements phase in according to fleet size as defined by total fleet horsepower. Requirements begin for large fleets (greater than 5,000 hp) in 2014; for medium fleets (2,500-5,000 hp) in 2017; and for small fleets, 2,500 hp or less, in 2019. The regulation establishes two general compliance pathways. Fleets may either (1) meet fleet average emission targets (based on the combined horsepower of the vehicles in the fleet) that become increasingly stringent over a ten-year period, or (2) satisfy best available control technology (BACT) requirements within a given compliance year. The BACT pathway requires fleets to retire, repower, designate for low use, and/or retrofit a certain percentage of the fleet's total horsepower each year. Fleets demonstrate compliance for a given year by taking a sufficient number of such actions in the prior year or by utilizing previously earned BACT credits associated with these actions. For large fleets, the annual BACT rates (demonstrated either through utilization of credits or through action taken during the previous calendar year) start out at 4.8 percent of the fleet's total horsepower in 2014 and increase to 8 percent for each year from 2015 through 2017, and to 10 percent for each year from 2018 through 2023. For medium fleets, the annual BACT rate is 8 percent in 2017, increasing to 10 percent for each year from 2018 through 2023. Small fleets have an annual BACT rate of 10 percent for each year from 2019 through 2028. After the final compliance year, all fleets must continue to either (1) meet the fleet average emission target rate for the final target year, or (2) satisfy the applicable final annual BACT compliance rate (e.g. 10 percent) each year until the fleet comes into compliance with the fleet average emission target. The Fleet Requirements also restrict fleets from adding older dirtier vehicles to their vehicle inventories.

The regulation EPA is authorizing in this decision reflects amendments that CARB adopted in 2010. Compared to the original Fleet Requirements, the 2010 amendments delay the original compliance schedule by four years. The 2010 amendments also simplified the annual requirements so that in each compliance year a fleet must only meet a single emissions target—a combined NO

plus PM standard—rather than separate targets for each of these two pollutants. The amendments reduced the annual BACT requirements from a 28 percent turnover and retrofit requirement in the prior version of the regulation, to a combined 4.8 percent to 10 percent requirement (as outlined above). Finally, the amendments removed mandatory retrofitting requirements so that retrofit is now a compliance option under the BACT pathway rather than a mandate. Additional information about the original and amended Fleet Requirements is provided below in the section discussing the consistency of the Fleet Requirements with section 202(a) of the Act.

B. Clean Air Act Nonroad Engine and Vehicle Authorizations

Section 209(e)(1) of the Act permanently preempts any state, or political subdivision thereof, from adopting or attempting to enforce any standard or other requirement relating to the control of emissions for certain

new

nonroad engines or vehicles.

For all other nonroad engines (including “non-new” engines), states generally are preempted from adopting and enforcing standards and other requirements relating to the control of emissions, except that section 209(e)(2)(A) of the Act requires EPA, after notice and opportunity for public hearing, to authorize California to adopt and enforce such regulations unless EPA makes one of three enumerated findings. Specifically, EPA must deny authorization if the Administrator finds that (1) California's protectiveness determination (that California standards will be, in the aggregate, as protective of public health and welfare as applicable federal standards) is arbitrary and capricious, (2) California does not need such standards to meet compelling and extraordinary conditions, or (3) the California standards and accompanying enforcement procedures are not consistent with section 209 of the Act. Other states with state air quality implementation plans may also adopt and enforce such regulations if the standards are identical to California's standards.

States are expressly preempted from adopting or attempting to enforce any standard or other requirement relating to the control of emissions from new nonroad engines which are used in construction equipment or vehicles or used in farm equipment or vehicles and which are smaller than 175 horsepower. Such express preemption under section 209(e)(1) of the Act also applies to new locomotives or new engines used in locomotives.

On July 20, 1994, EPA promulgated a rule interpreting the three criteria set forth in section 209(e)(2)(A) that EPA must consider before granting any California authorization request for nonroad engine or vehicle emission standards.

EPA revised these regulations in 1997.

As stated in the preamble to the 1994 rule, EPA historically has interpreted the consistency inquiry under the third criterion outlined above (set forth in section 209(e)(2)(A)(iii)) to require, at minimum, that California standards and enforcement procedures be consistent

with section 209(a), section 209(e)(1), and section 209(b)(1)(C) (as EPA has interpreted that subsection in the context of section 209(b) motor vehicle waivers) of the Act.

59 FR 36969 (July 20, 1994).

See

62 FR 67733 (December 30, 1997). The applicable regulations are now found in 40 CFR part 1074, subpart B, § 1074.105.

See

59 FR 36969 (July 20, 1994).

In order to be consistent with section 209(a), California's nonroad standards and enforcement procedures must not apply to new motor vehicles or new motor vehicle engines. To be consistent with section 209(e)(1), California's nonroad standards and enforcement procedures must not attempt to regulate engine categories that are permanently preempted from state regulation. To determine consistency with section 209(b)(1)(C), EPA typically reviews nonroad authorization requests under the same “consistency” criteria that are applied to motor vehicle waiver requests under section 209(b)(1)(C). That provision provides that the Administrator shall not grant California a motor vehicle waiver if she finds that California “standards and accompanying enforcement procedures are not consistent with section 202(a)” of the Act. Previous decisions granting waivers and authorizations have noted that state standards and enforcement procedures will be found to be inconsistent with section 202(a) if: (1) There is inadequate lead time to permit the development of the necessary technology, giving appropriate consideration to the cost of compliance within that time, or (2) the federal and state testing procedures impose inconsistent certification requirements.

In light of the similar language of sections 209(b) and 209(e)(2)(A), EPA has analyzed requests for California authorization of standards for nonroad vehicles or engines under section 209(e)(2)(A) using the same principles that it has historically applied in analyzing requests for waivers of preemption for new motor vehicle or new motor vehicle engine standards under section 209(b).

These principles include, among other things, that EPA should limit its inquiry to the three specific authorization criteria identified in section 209(e)(2)(A),

and that EPA will give substantial deference to the policy judgments California has made in adopting its regulations. In previous waiver decisions, EPA has stated that Congress intended EPA's review of California's decision-making be narrow. EPA has rejected arguments that are not specified in the statute as grounds for denying a waiver:

See Engine Manufacturers Association

EPA,

88 F.3d 1075 (D.C. Cir. 1996). “. . . EPA was within the bounds of permissible construction in analogizing § 209(e) on nonroad sources to § 209(a) on motor vehicles.”

See

EPA's Final 209(e) rulemaking at 59 FR 36969, 36983 (July 20, 1994).

The law makes clear that the waiver requests cannot be denied unless the specific findings designated in the statute can properly be made. The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its costs or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent to my decision under section 209, as long as the California requirement is consistent with section 202(a) and is more stringent than applicable Federal requirements in the sense that it may result in some further reduction in air pollution in California.

36 FR 17458 (Aug. 31, 1971). Note that the more stringent standard expressed here, in 1971, was superseded by the 1977 amendments to section 209, which established that California must determine that its standards are, in the aggregate, at least as protective of public health and welfare as applicable Federal standards. In the 1990 amendments to section 209, Congress established section 209(e) and similar language in section 209(e)(1)(i) pertaining to California's nonroad emission standards which California must determine to be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.

This principle of narrow EPA review has been upheld by the U.S. Court of Appeals for the District of Columbia Circuit.

Thus, EPA's consideration of all the evidence submitted concerning an authorization decision is circumscribed by its relevance to those questions that may be considered under section 209(e)(2)(A).

See, e.g., Motor and Equip. Mfrs Assoc.

EPA,

627 F.2d 1095 (D.C. Cir. 1979) (“

MEMA I

”).

C. Deference to California

In previous waiver decisions, EPA has recognized that the intent of Congress in creating a limited review based on the section 209(b)(1) criteria was to ensure that the federal government did not second-guess state policy choices. As the agency explained in one prior waiver decision:

It is worth noting * * * I would feel constrained to approve a California approach to the problem which I might also feel unable to adopt at the federal level in my own capacity as a regulator. The whole approach of the Clean Air Act is to force the development of new types of emission control technology where that is needed by compelling the industry to “catch up” to some degree with newly promulgated standards. Such an approach * * * may be attended with costs, in the shape of reduced product offering, or price or fuel economy penalties, and by risks that a wider number of vehicle classes may not be able to complete their development work in time. Since a balancing of these risks and costs against the potential benefits from reduced emissions is a central policy decision for any regulatory agency under the statutory scheme outlined above, I believe I am required to give very substantial deference to California's judgments on this score.

40 FR 23102, 23103-23104 (May 28, 1975).

Similarly, EPA has stated that the text, structure, and history of the California waiver provision clearly indicate both a congressional intent and appropriate EPA practice of leaving the decision on “ambiguous and controversial matters of public policy” to California's judgment.

This interpretation is supported by relevant discussion in the House Committee Report for the 1977 amendments to the Clean Air Act.

Congress had the opportunity through the 1977 amendments to restrict the preexisting waiver provision, but elected instead to expand California's flexibility to adopt a complete program of motor vehicle emission controls. The report explains that the amendment is intended to ratify and strengthen the preexisting California waiver provision and to affirm the underlying intent of that provision, that is, to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.

Id. at

23104; 58 FR 4166 (January 13, 1993).

MEMA I,

627 F.2d at 1110 (

citing

H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-302 (1977)).

Id.

D. Burden and Standard of Proof

As the U.S. Court of Appeals for the D.C. Circuit has made clear in

MEMA I,

opponents of a waiver request by California bear the burden of showing that the statutory criteria for a denial of the request have been met:

[T]he language of the statute and its legislative history indicate that California's regulations, and California's determinations that they must comply with the statute, when presented to the Administrator are presumed to satisfy the waiver requirements and that the burden of proving otherwise is on whoever attacks them. California must present its regulations and findings at the hearing and thereafter the parties opposing the waiver request bear the burden of persuading the Administrator that the waiver request should be denied.

Id.

The Administrator's burden, on the other hand, is to make a reasonable evaluation of the information in the record in coming to the waiver decision. As the court in

MEMA I

stated: “here, too, if the Administrator ignores evidence demonstrating that the waiver should not be granted, or if he seeks to overcome that evidence with unsupported assumptions of his own, he runs the risk of having his waiver decision set aside as `arbitrary and

capricious.'”

Therefore, the Administrator's burden is to act “reasonably.”

Id.

at 1126.

Id.

at 1126.

With regard to the standard of proof, the court in

MEMA I

explained that the Administrator's role in a section 209 proceeding is to:

consider all evidence that passes the threshold test of materiality and * * * thereafter assess such material evidence against a standard of proof to determine whether the parties favoring a denial of the waiver have shown that the factual circumstances exist in which Congress intended a denial of the waiver.

Id.

at 1122.

In that decision, the court considered the standards of proof under section 209 for the two findings related to granting a waiver for an “accompanying enforcement procedure.” Those findings involve: (1) Whether the enforcement procedures impact California's prior protectiveness determination for the associated standards, and (2) whether the procedures are consistent with section 202(a). The principles set forth by the court, however, are similarly applicable to an EPA review of a request for a waiver of preemption for a standard. The court instructed that “the standard of proof must take account of the nature of the risk of error involved in any given decision, and it therefore varies with the finding involved. We need not decide how this standard operates in every waiver decision.”

Id.

With regard to the protectiveness finding, the court upheld the Administrator's position that, to deny a waiver, there must be “clear and compelling evidence” to show that proposed enforcement procedures undermine the protectiveness of California's standards.

The court noted that this standard of proof also accords with the congressional intent to provide California with the broadest possible discretion in setting regulations it finds protective of the public health and welfare.

Id.

With respect to the consistency finding, the court did not articulate a standard of proof applicable to all proceedings, but found that the opponents of the waiver were unable to meet their burden of proof even if the standard were a mere preponderance of the evidence. Although

MEMA I

did not explicitly consider the standards of proof under section 209 concerning a waiver request for “standards,” as compared to a waiver request for accompanying enforcement procedures, there is nothing in the opinion to suggest that the court's analysis would not apply with equal force to such determinations. EPA's past waiver decisions have consistently made clear that: “[E]ven in the two areas concededly reserved for Federal judgment by this legislation—the existence of `compelling and extraordinary' conditions and whether the standards are technologically feasible—Congress intended that the standards of EPA review of the State decision to be a narrow one.”

See, e.g.,

40 FR 21102-22103 (May 28, 1975).

E. EPA's Administrative Process in Consideration of California's Nonroad CI In-Use Fleet Requirements

EPA has conducted three separate public notice and comment periods associated with three successive versions of CARB's NR CI in-use Fleet Requirements.

On August 8, 2008, CARB requested that EPA authorize California to enforce its original In-Use Off-Road Diesel-Fueled Fleets regulation adopted at its July 26, 2007 public hearing.

CARB's original regulations required fleets that operate nonroad, diesel fueled equipment with engines 25 hp and greater to meet separate fleet average emission standards for NO

and PM, respectively. Alternatively, the regulations required the vehicles in those fleets to comply with BACT requirements. Based on this request, EPA noticed and conducted a public hearing on October 27, 2008, and provided an opportunity to submit written comment through December 19, 2008.

CARB amended the regulations between December 2008 and mid-2009. On February 11, 2010 CARB requested that EPA grant California authorization to enforce its In-Use Off- Road Diesel-Fueled Fleets regulation as amended.

Based on CARB's February 11, 2010 request, EPA noticed and conducted a public hearing on April 14, 2010, and provided an opportunity to submit written comment through May 18, 2010.

See

CARB Resolution 07-19) and subsequently modified after supplemental public comment by CARB's Executive Officer by the In-Use Regulation in Executive Order R-08-002 on April 4, 2008 (these regulations are codified at Title 13, California Code of Regulations sections 2449 through 2449.3).

See

73 FR 58585 (October 7, 2008) and 73 FR 67509 (November 14, 2008).

CARB's amendments included those of December 2008 (and formally adopted in California on October 19, 2009); January 2009 (and formally adopted in California on December 31, 2009); and, a certain subset of amendments adopted by the Board in July 2009 in response to California Assembly Bill 8 2X (and formally adopted on December 3, 2009). In CARB's February 11, 2010 request letter to EPA it also noted additional amendments adopted in July 2009 and not yet formally adopted by California's Office of Administrative Law. Once this last subset of amendments was formally adopted CARB planned to submit them to EPA for subsequent consideration.

See

75 FR 11880 (March 12, 2010).

CARB again amended its regulations in December 2010 and these amendments were formally adopted in California on December 14, 2011—resulting in the current version of the Fleet Requirements which are the subject of this authorization decision. On March 1, 2012, CARB submitted a request that EPA grant California authorization to enforce its Fleet Requirements as most recently amended (Authorization Request).

Based on CARB's Authorization Request, on August 21, 2012 EPA invited comment on whether (a) CARB's determination that its standards, in the aggregate, are at least as protective of public health and welfare as applicable federal standards is arbitrary and capricious, (b) California needs separate standards to meet compelling and extraordinary conditions, and (c) California's standards and accompanying enforcement procedures are consistent with section 209 of the Act.

The

Federal Register

notice stated that EPA would only consider testimony and comment submitted in response to the current request for comment because the CARB regulations were substantially amended in December 2010.

EPA conducted a hearing on the Authorization Request on September 20, 2012, in Washington, DC.

The written

comment period closed on October 22, 2012.

In addition, to provide further opportunity to submit direct verbal comment for affected parties who could not participate in the public hearing, EPA conducted an informal teleconference on October 19, 2012.

See

EPA-HQ-OAR-2008-0691-0270.

77 FR 50500 (August 21, 2012).

“Therefore, EPA will not be considering oral testimony or written comments based on the prior

Federal Register

notices, since CARB's December 2010 amendments are likely to affect many of these prior comments. To the extent any entity believes that its prior comments remain pertinent then EPA is requiring such comments be resubmitted or incorporated into new comments.”

Id.

at 50502. EPA did not receive any adverse comment or suggestions that it is inappropriate to exclude comments submitted prior to the August 12, 2012

Federal Register

notice. As noted by AGC, “While the Clean Air Act has not changed, and the questions that EPA must address are one and the same, the rule that CARB now seeks the authority to enforce is very different from the rule that CARB originally submitted to EPA.”

See

EPA's Hearing transcript at 84 (EPA-HQ-OAR-2008-0691-0298). CARB reincorporated by reference all of its prior submissions regarding the Fleet Requirements.

The written transcript of this hearing is at EPA-HQ-OAR-2008-0691-0298 (Hearing Transcript). EPA received testimony from CARB, the Pacific Legal Foundation (PLF), the American Road and Transportation Builders Association (ARTBA), the Manufacturers of Emission Controls Association (MECA), the Associated General Contractors of America (AGC), the Construction Industry Air Quality Association (CIAQC), and the California Construction Trucking Association (CCTA).

EPA received written comment from: Airlines for America (A4A)—EPA-HQ-OAR-2008-0691-0297; Manufacturers of Emission Controls Association (MECA) (Copy of oral testimony)—EPA-HQ-OAR-2008-0691-0300; Steve Milloy (Copy of oral testimony)—EPA-HQ-OAR-2008-0691-0301; Pacific Legal Foundation (PLF) (copy of oral testimony)—EPA-HQ-OAR-2008-0691-0302; Associated General Contractors of America (AGC) (Copy of oral testimony)—EPA-HQ-OAR-2008-0691-0303; PLF—EPA-HQ-OAR-2008-0691-0304; Altfillisch Contractors (ACI)—EPA-HQ-OAR-2008-0691-0305; Savala Equipment Company—EPA-HQ-OAR-2008-0691-0306; Dr. Matthew Malkan—EPA-HQ-OAR-2008-0691-0307; Dr. James Enstrom—EPA-HQ-OAR-2008-0691-0308; Dr. Phalen—EPA-HQ-OAR-2008-0691-0313; California Construction Trucking Association (CCTA)—EPA-HQ-OAR-2008-0691-0309; American Road & Transportation Builders Association (ARTBA)—EPA-HQ-OAR-2008-0691-0310; Bay Cities Paving and Grading (Bay Cities)—EPA-HQ-OAR-2008-0691-0311; Nick Silicz—EPA-HQ-OAR-2008-0691-0313; Granite Rock—EPA-HQ-OAR-2008-0691-0314; Delta Construction—EPA-HQ-OAR-2008-0691-0315; United Contractors—EPA-HQ-OAR-2008-0691-0316; Construction Industry Air Quality Coalition (CIAQC)—EPA-HQ-OAR-2008-0691-0317; California Air Resources Board—EPA-HQ-OAR-2008-0691-0318 (CARB Written Comments) and EPA-HQ-OAR-2008-0691-0319 (CARB Supplemental Comments); PLF Request to Reopen Comment Period, etc—EPA-HQ-OAR-2008-0691-0320.

EPA-HQ-OAR-2008-0691-0321. As discussed below, EPA believes that interested parties have adequate opportunity to present their views through both the public hearing and by submitting written comment.

III. Discussion

A. California's Protectiveness Determination

Section 209(e)(2)(A)(i) of the Act sets forth the first of the three criteria governing a request for authorization of relevant standards—providing that EPA cannot grant the request if the agency finds that California was arbitrary and capricious in its determination that California standards will be, in the aggregate, at least as protective of public health and welfare as applicable federal standards.

As explained above, EPA's authorization analysis is guided by precedent related to both section 209(e)(2) and to section 209(b), which contains similar, and in some cases identical, language.

See Engine Manufacturers Ass'n

EPA (EMA),

88 F.3d 1075, 1085-87 (D.C. Cir. 1996).

EPA maintains that the phrase “California standards” means California's entire group of standards (i.e. the overall program) that is applicable to nonroad engine emissions. As explained below, while evaluating California's protectiveness determination, EPA compares California's standards to applicable federal standards. That comparison is undertaken within the broader context of the California program applicable to nonroad vehicles and engines, for which EPA previously has granted authorization and which relies upon protectiveness determinations that EPA in its authorization decisions found not to be arbitrary and capricious.

In situations where there are no Federal standards directly comparable to the specific California standards under review, the analysis then occurs against the backdrop of previous waivers which determined that the California program was at least as protective of the federal program. In a prior EPA waiver pertaining to California's zero-emission vehicle program (ZEV) for which there are no comparable Federal standards, EPA also took into consideration California's existing low-emission vehicle program (LEV II) and greenhouse gas emission standards (GHG) applicable to light-duty vehicles. ((LEV II + ZEV) + GHG).

See

71 FR 78190 (December 28, 2006), Decision Document for Waiver of Federal Preemption for California Zero Emission Vehicle (ZEV) Standards (December 21, 2006).

As noted above, EPA is guided in its interpretation of the section 209(e)(2) authorization criteria by the similar language in section 209(b) pertaining to waivers of preemption for new motor vehicle standards. Therefore, the evaluation of the protectiveness of CARB's nonroad standards under section 209(e)(2)(A)(i) follows the instruction of section 209(b)(2), which states: “If each State standard is at least as stringent as the comparable applicable Federal standard, such State standard shall be deemed to be at least as protective of health and welfare as such Federal standards for purposes of [209(b)(1)].” EPA evaluates the stringency of California's standards relative to comparable EPA emission standards. To review California's protectiveness determination under section 209(e)(2)(A)(i), EPA conducts its own analysis comparing the newly adopted California standards to comparable applicable Federal standards. EPA traditionally makes a quantitative comparison of relevant numeric emission standards to determine whether the California standards are more or less protective than the Federal standards.

In situations where there are no Federal standards directly comparable to the specific California standards under review, the analysis then occurs against the backdrop of previous waivers which determined that the California program was at least as protective of the federal program ((LEV II + ZEV) + GHG). See 71 FR 78190 (December 28, 2006), Decision Document for Waiver of Federal Preemption for California Zero Emission Vehicle (ZEV) Standards (December 21, 2006).

As explained above in the section on burden and standard of proof, any finding that California's determination was arbitrary and capricious under section 209(b)(1)(A) must be based upon ”'clear and compelling evidence' to show that proposed [standards] undermine the protectiveness of California's standards.”

Accordingly, even if EPA's own analysis of comparable protectiveness, or one submitted by a commenter, might diverge from California's analysis, that alone would not provide a sufficient basis for EPA to make a section 209(b)(1)(A) finding that California's protectiveness finding is arbitrary and capricious.

MEMA I,

627 F.2d at 1122.

1. Based on EPA's Traditional Analysis, is California's Protectiveness Determination Arbitrary and Capricious?

In adopting the initial version of the Fleet Requirements, CARB approved Resolution 07-19, in which it declared:

Be it further resolved that the Board hereby determines, in accordance with CAA section 209(e)(2), that to the extent the regulations approved herein affect nonroad vehicles or nonroad engines as defined in CAA section 216(10) and (11), the emission standards and other requirements related to the control of emissions in the regulations approved herein are, in the aggregate, at least as protective of public health and welfare as applicable federal standards, California needs its nonroad emission standards to meet compelling and extraordinary conditions, and the standards and accompanying enforcement procedures approved herein are consistent with CAA section 209.

CARB Authorization Request at 17.

With the most recent Fleet Requirements amendments in 2010, the Board reaffirmed its protectiveness finding in Resolution 10-47.

CARB maintains that there is no basis for EPA to find the Board's determination (which applies solely to standards for

in-use

nonroad engines) is arbitrary and capricious since EPA's authority, under the CAA, is limited to

new

engines, vehicles, and equipment. As a result, EPA has not adopted any federal standards or requirements for in-use nonroad engines. CARB notes that there is no question that its Fleet Requirements are at least as protective of public health and welfare as

applicable federal standards, given the lack of any comparable EPA standards.

“BE IT FURTHER RESOLVED that the Board hereby determines, in accordance with CAA section 209(e)(2), that the proposed amendments as they affect nonroad vehicles or nonroad engines as defined in CAA section 216 (10) and (11), do not undermine the Board's previous determination that the regulation's emission standards, other emissions related requirements, and associated enforcement procedures are, in the aggregate, at least as protective of public health and welfare as applicable federal standards, are necessary as part of ARB's off-road emission program to meet compelling and extraordinary conditions existing in the state, and are consistent with CAA section 209.” CARB Resolution 10-47EPA-HQ-OAR-2008-0691-0283.

Authorization Request at 18, citing

Engine Manufacturers Association

EPA,

(D.C. Cir. 1996) 88 F.3d at 1075, 1089-1090.

As described above, EPA's traditional analysis has been to evaluate California's protectiveness determination by comparing the newly adopted California standards to applicable EPA emission standards for the same pollutants from the industry sector. CARB is correct that EPA's authority to adopt emission standards and other requirements related to the control of nonroad emissions is limited to new engines, vehicles, and equipment,

and that as a result EPA has not adopted any standards or requirements for in-use nonroad engines.

See

42 U.S.C. 7547 (Section 213 of Clean Air Act).

EPA already has determined that California was not arbitrary and capricious in its determination that California standards applicable to

new

nonroad CI engines are at least as protective as comparable Federal standards.

The in-use Fleet Requirements will achieve emission reductions in addition to those achieved by the previously authorized new nonroad engine standards, for which CARB made a protectiveness finding that EPA found not to be arbitrary and capricious. According to CARB, the Fleet Requirements are expected to result in a reduction of 0.5 tons/day of NO

in the South Coast and 0.3 tons/days in San Joaquin Valley in 2014, along with 3.2 tons/day and 1.9 tons/day in these respective areas in 2023.

As such, the Fleet Requirements achieve additional emission reductions beyond those attained under CARB emission standards applicable to new nonroad CI engines, which EPA has already determined to be as protective, in the aggregate, as applicable federal standards. Accordingly, there is no basis for determining that CARB's protectiveness finding with regard to the in-use Fleet Requirements is arbitrary and capricious.

75 FR 8056 (February 23, 2010).

CARB Written Comments at 10.

Further, as noted above, EPA is guided in its interpretation of 209(e)(2)(A)(i) by section 209(b)(2). Section 209(b)(2) states: “If each State standard is at least as stringent as the comparable applicable Federal standard, such State standard shall be deemed to be at least as protective of public health and welfare as such Federal standards for purposes of paragraph (1).” In this instance there is no comparable applicable Federal standard for in-use nonroad CI engines and thus there is no basis for determining the CARB's protectiveness finding is arbitrary and capricious through the application of section 209(b)(2).

Finally, EPA received no comments or evidence suggesting that CARB's protectiveness determination, under EPA's traditional analysis, is arbitrary and capricious. In particular, no commenter disputes that California standards, whether looking at the particular California standards being authorized in this proceeding or the entire suite of California standards for nonroad engines, are at least as stringent, in the aggregate, as applicable federal standards.

In light of the foregoing, EPA finds that CARB's Fleet Requirements achieve additional emission reductions beyond CARB's requirements applicable to new nonroad CI engines, and further finds that the opponents of authorization have not presented evidence to show that CARB's protectiveness determination is arbitrary and capricious. Accordingly, applying the traditional comparative analysis, we cannot find that CARB's protectiveness determination is arbitrary and capricious.

2. Is CARB's Protectiveness Determination Arbitrary and Capricious Based on Other Effects of California's Fleet Requirements?

Having addressed the protectiveness inquiry under EPA's traditional analysis, we turn now to the question whether we should use a different analytical approach and, if so, whether a different approach would yield a different outcome. EPA received one comment suggesting that EPA's analysis under section 209(e)(2)(A)(i) should be based on a broader inquiry into the effects of CARB's Fleet Requirements.

Relatedly, EPA received one other comment specifically questioning whether CARB's Fleet Requirements are as protective of applicable Federal requirements in light of the Fleet Requirements' alleged adverse impacts on needed transportation and infrastructure development across the country as well as in California.

The latter commenter suggested, for example, that CARB's rule “could” severely impact efforts at improving the nation's infrastructure because transportation projects by necessity involve moving construction equipment across state lines. The commenter stated that equipment associated with such national projects would necessarily have to meet CARB's Fleet Requirements, increasing costs, unless fleet operators were able to differentiate such equipment that would only be used for California projects.

The commenter argues that increased costs as a result of the Fleet Requirements could in turn prevent or delay needed construction of infrastructure such as roads, schools, housing and levees, and that such delay or prevention could adversely affect public health and safety impacts in California and in other states.

EPA received further comment suggesting that CARB is prioritizing one public health issue (air quality) over another (safe roads and infrastructure improvements) and thus California's protectiveness determination is “arbitrary and capricious.”

See

Delta Construction.

See

Hearing Transcript and written comment (ARTBA).

Id.

EPA also received a series of comments from general contracting companies and others that highlighted what they believe to be the adverse economic impacts of the Fleet Requirements. For example, several commenters stated that the regulation would have some combination of the following impacts: Significant layoffs, increased unemployment, and disadvantage to family-owned and other small businesses. Such impacts, the commenters argue, would have negative rather than the intended positive effects on public health.

One commenter asserted that the correlation between poor health and poverty or lack of employment is much stronger than the correlation between poor health and air pollution. The commenter claims that because of such economic and social impacts, regulations such as the Fleet Requirements will be harmful to California's citizens and that the health benefits from CARB's regulation are dubious if not counterproductive.

These comments, by and large, do not refer specifically to CARB's protectiveness determination or section 209(e)(2)(A)(i) and it is not clear whether commenters are referring to EPA's analysis under that section.

Id, see also

CCTA, Savala Equipment Rentals, Delta Construction.

See

Delta Construction. This comment is also addressed below under the second authorization criterion of whether California needs its standards to meet compelling and extraordinary conditions.

Finally, EPA received comment that does refer to CARB's protectiveness determination, suggesting it was arbitrary and capricious, but basing this claim on a variety of concerns that do not directly relate to CARB's actual protectiveness determination (e.g.

alleged flaws in CARB's emission modeling—including CARB's estimates of economic recovery scenarios—as well as concerns with the alleged impact of the Fleet Requirements on fleet operator assets leading to more unemployment and associated poor health, and concerns related to the health effects of PM

2.5

See

CCTA.

CARB's written comments note that the Board has repeatedly determined that its in-use off-road regulations are, in the aggregate, at least as protective of public health and welfare as applicable federal standards. In addition to the fact that EPA only has authority to adopt standards related to the control of emissions for

new

nonroad engines, CARB notes that EPA has previously stated that the phrase “state standards” as used in the protectiveness determination means the entire California set of standards (i.e. program) applicable to the relevant category of vehicles or engines. Further, CARB asserts that EPA has previously granted authorization to California's emission standards for new nonroad engines, and the in-use Fleet Requirements will yield emission reductions in addition to the new nonroad engine standards that were the subject of prior protectiveness findings, thus ensuring that the Fleet Requirements are of necessity more stringent than those covered by federal new engine emission standards alone.

See

CARB's Written Comments.

CARB responds to criticisms that it prioritized air quality health benefits and did not consider dis-benefits (e.g. increased costs for, and possible delay of, needed highway safety projects and improvements or other infrastructure) by stating that the latter set of concerns falls outside the scope of a section 209 protectiveness determination. CARB maintains that the plain language and intent of section 209(e)(2)(A)(i) is that review of California's protectiveness determination should be based exclusively on whether its “standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” Since this language is almost identical to the protectiveness criterion language in section 209(b)(1), CARB maintains that EPA should thus follow the directive of Congress in section 209(b)(2) that:

If each State standard is at least as stringent as the comparable applicable Federal standard, such State standard shall be deemed to be at least as protective of health and welfare as such Federal standards for purpose of paragraph (1).

CARB points to EPA's 2009 waiver of California's light-duty greenhouse gas standards (EPA's 2009 GHG Waiver) where EPA concluded that, in considering whether California's protectiveness determination is arbitrary and capricious under section 209(b)(1)(A), the agency “has always interpreted `applicable Federal Standards' as limiting EPA's inquiry to motor vehicle emission standards established by EPA under the Clean Air Act that apply to the same cars and the same air pollutants or group of pollutants as considered by California's aggregate protectiveness finding.”

CARB argues that same analysis should apply to nonroad authorizations. CARB maintains that if EPA were to require the Board to consider factors other than aggregate emission standards in making the Board's protectiveness determination, this would undermine the broad discretion that Congress intended to provide California in making policy decisions on how best to address California's severe air pollution.

See

EPA's greenhouse gas waiver decision issued in 2009 (2009 GHG Waiver Decision) at 74 FR 32743 (July 8, 2009).

Id.

at 4-5 (

citing MEMA I,

627 F.2d at 1122 [“(C)ongressional intent to provide California with the broadest discretion in setting regulations it finds protective of the public health and welfare.”]);

see also

40 FR 23102, 23104 (May 28, 1975).

[Congressional] sponsors of the (waiver) language eventually adopted referred repeatedly to their intent to make sure that no “Federal bureaucrat” would be able to tell the people of California what auto emission standards were good for them as long as they were stricter than the Federal standards.

40 FR 23101, 23102 (May 28, 1975).

In our view, the statutory language of section 209(e)(2)(A)(i)—both on its face and as read together with 209(b)(2)—reflects Congress's intention that EPA evaluate only the comparative stringency of the relevant California and EPA emission standards. As discussed above, the text, structure, and history of the California waiver provision clearly indicate a congressional intent that EPA leave the decision on “ambiguous and controversial matters of public policy” to California's judgment. That has been EPA's consistent practice under section 209. As the court stated in

MEMA I,

Congress's intent in amending the protectiveness determination language in 1977 was to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens. EPA therefore considers it inappropriate, in the context of reviewing CARB's protectiveness determination, to second-guess CARB's policy choices or to weigh competing health and welfare interests that are best left to California.

As explained below under the third authorization criterion—consistency with section 209 (including consistency with 202(a))—EPA interprets the “cost of compliance” in section 202(a) to refer to the direct economic costs of CARB's standards and the timing of a particular emission control regulation rather than to its social implications.

Similarly, EPA believes it appropriate to limit our examination for purposes of the protectiveness comparison to the specific effects the California and EPA emission standards have on emissions rather than performing an analysis of social impacts or other secondary implications. Policy decisions with regard to how various potential non-emissions impacts of an emission regulation can or should be weighed against one another is inherently and properly within the sphere of the state regulatory authority promulgating the regulation. Such decisions should not be made or reviewed by EPA, which Congress has given the limited role of reviewing the regulations based on the three specified and relatively narrow statutory criteria, consistent with Congress's intent to uphold California's broad regulatory discretion in this sphere.

See

S. Rep. No. 192, 89th Cong., 1st Sess. 5-8 (1965); H.R. Rep. No. 728, 90th Cong., 1st Sess. 23 (1967), U.S. Code Cong. & Admin. News 1967, p. 1938.

For all these reasons, EPA declines to depart from its traditional analysis of the protectiveness criterion under section 209(e)(2)(A)(i), as discussed above. Even if there were a valid basis for considering the types of non-air quality impacts alleged by the opponents of the Authorization Request, the opponents did not meet their burden to provide clear and convincing evidence that CARB's analysis of the effects of the Fleet Requirements is unreasonable. For EPA to make a section 209(e)(2)(A)(i) finding that California's protectiveness determination is arbitrary and capricious, it is not enough for authorization opponents to provide competing analysis or alternative policy considerations and arguments. To support a denial of authorization under this criterion, commenters must show that California's analysis, or the assumptions on which California relied to support its protectiveness determination, were

arbitrary and capricious.

In this instance, the opponents of the authorization have suggested that CARB's Fleet Requirements

could

make construction projects more expensive and this could lead to delays. But they have not introduced any actual evidence that such projects will be suspended due to the costs associated with the Fleet Requirements, and certainly not that the projected increase in costs, as estimated by CARB after the 2010 amendments, will be significant enough to delay or prevent such projects. Similarly, the opponents of the waiver have not introduced substantial evidence that the Fleet Requirements themselves—as opposed to a host of other factors, including the economic downturn, that have affected the economy over the last several years—will result in a loss in the number of employees or actual business. In the absence of any such evidence, EPA could not find California's protectiveness determination to be arbitrary and capricious even if these alleged impacts were an appropriate subject for analysis under section 209(e)(2)(A)(i).

Regarding the comment that CARB's regulation could adversely affect health and welfare in other states, EPA does not find the comment to be a basis for judging California's protectiveness determination to be arbitrary and capricious for two reasons. First, a change in emissions outside of California would not lead to a different conclusion regarding the relative protectiveness of the Fleet Requirements to federal requirements within California. Second, the commenters do not provide any substantive or factual evidence to show significant emissions impacts in other states. We would also note that other states may decide independently to adopt California's regulations.

In response to the comment that California's

regulations

are arbitrary and capricious, we note that EPA's sole review under section 209(e)(2)(A)(i) is whether California's

protectiveness determination

was arbitrary and capricious. Congress did not give EPA wide-ranging authority to examine the overall reasonableness of California's regulations. As discussed above, the policy decisions made by CARB in enacting its regulations are not reviewed generally by EPA, and, as Congress intended, EPA leaves such policy decisions to California.

3. Section 209(e)(2)(A)(i) Conclusion

In light of the foregoing, based on the record before us, EPA finds that opponents of the authorization have not shown that California was arbitrary and capricious in its determination that its standards are, in the aggregate, at least as protective of public health and welfare as applicable federal standards.

B. Does California need its standards to meet compelling and extraordinary conditions?

Section 209(e)(2)(A)(ii) instructs that EPA cannot grant an authorization if the Agency finds that California “does not need such California standards to meet compelling and extraordinary conditions . . ..” EPA's inquiry under this second criterion (found both in paragraphs 209(b)(1)(B) and 209(e)(2)(A)(ii)) has been to determine whether California needs its own mobile source pollution program (i.e. set of standards) for the relevant class or category of vehicles or engines to meet compelling and extraordinary conditions, and not whether the specific standards that are the subject of the authorization or waiver request are necessary to meet such conditions.

In a 2009 waiver action, for example, EPA examined the language of section 209(b)(1)(B) and reiterated its longstanding traditional interpretation that the better approach for analyzing the

need

for “such State standards” to meet “compelling and extraordinary conditions” is to review California's need for its program (i.e. set of standards) as a whole, for the class or category of vehicles being regulated, as opposed to its need for the individual standards that are the subject of a waiver or authorization request.

See

74 FR 32744, 32761 (July 8, 2009); 49 FR 18887, 18889-18890 (May 3, 1984).

See

EPA's 2009 GHG Waiver Decision wherein EPA rejected the suggested interpretation of section 209(b)(1)(B) as requiring a review of the specific need for California's new motor vehicle greenhouse gas emission standards as opposed to the traditional interpretation (need for the program as a whole) applied to local or regional air pollution problems.

As noted above, CARB first adopted its Fleet Requirements in 2007. CARB designed the 2007 regulation to address its determination that legacy fleets—and particularly nonroad CI vehicles—were responsible for significant PM and NO

emissions. CARB's Initial Statement of Reasons (ISOR) states, in part:

Off-road vehicles are a significant source of diesel particulate matter, as well as NO

emissions that lead to ozone and ambient PM. Statewide, they are responsible for nearly a quarter of the total PM emissions from mobile diesel sources and nearly a fifth of the total NO

emissions from mobile diesel sources. Although increasingly stringent new engine standards are reducing emissions from off-road diesel vehicles over time, because of their durability, most vehicles operate for several decades before being retired. Thus, in-use off-road diesel vehicles would continue to pose significant health risk for many years if this proposed regulation is not adopted. . . . without reductions from this large source category, the South Coast and San Joaquin Valley would be unable to attain the federal ambient air quality standards.

. . . [E]missions would trend naturally down as the fleet gradually turned over to newer, cleaner engines. However, these reductions are not sufficient for many areas of the state to meet clean air standards. Because of this, the proposed regulation accelerates this anticipated reduction in emissions.

See

STAFF REPORT: INITIAL STATEMENT OF REASONS FOR PROPOSED RULEMAKING (ISOR) at EPA-HQ-OAR-2008-0691-0002, attachment A at 7-10. EPA notes that while CARB has incorporated by reference its earlier submissions to EPA docket EPA-HQ-OAR-2008-0691 we recognize that CARB has modified its emission inventory modeling. Nevertheless, the NR CI legacy fleet in California continues to present California with serious air quality issues according to CARB.

The 2010 amendments affirmed CARB's longstanding position that California continues to need its own nonroad engine and vehicle program to address serious air pollution problems the state still confronts.

CARB's Authorization Request notes that California and particularly the South Coast and San Joaquin Valley air basins continue to experience some of the worst air quality in the nation and continue to be in non-attainment with national ambient air quality standards (NAAQS) for fine particulate matter (PM

2.5

) and ozone.

“The unique geographical and climatic conditions, and the tremendous growth in California's on- and off-road vehicle population, which moved Congress to authorize the State to establish on-road motor vehicle standards in 1970 and off-road engine standards in 1990, still exist today. . . . Nothing in these conditions has changed to warrant a change in this determination. Accordingly, there can be no doubt of the continuing existence of compelling and extraordinary conditions justifying California's need for its own mobile source emissions control program.”

See

CARB Resolution 10-47 at EPA-HQ-OAR-2008-0691-0283. Specifically, the Board stated, in part:

WHEREAS, in-use off-road diesel vehicles operating in the state, as a class, continue to be a significant source of air pollution emissions in California that contribute to continuing violations of the national ambient air quality standards (NAAQS) for both particulate matter (PM) less than 2.5 microns (PM

2.5

) and ozone, and to continuing localized health risk, including premature death, associated with exposure to PM

2.5

;

WHEREAS, Staff Report 2007 further discussed the results of ARB staff's evaluations of the non-cancer health effects of exposure to primary and secondary PM emissions from the vehicles subject to the initially proposed Off-Road regulation, and these evaluations indicated that exposure to these emissions can be associated with premature deaths and other non-cancer health impacts;

WHEREAS, the United States Environmental Protection Agency (U.S. EPA) in a recently published review of the PM-related health science literature, which is the first part of an ongoing review of the national ambient air quality standards for PM, concluded that long-term exposure to PM

2.5

is causally associated with premature mortality, and that premature deaths caused by PM

2.5

occur at levels as low as 5.8 micrograms per cubic meter, which is considerably lower than the current national standard of 15 micrograms per cubic meter;

WHEREAS, the U.S. EPA risk assessment methodology is the basis for ARB's estimate that 9,200 (7,300 to 11,000, 95 percent confidence interval) premature deaths occur annually in California and that reducing emissions to meet the Federal standard would result in 2,700 fewer premature deaths annually;

WHEREAS, the Board further finds based on its independent judgment and analysis of the entire record before it that:

In-use off-road diesel vehicles and engines that operate in the State—whether based in California or not—continue to be significant contributors of diesel PM and NO

emissions, which California must reduce to attain the ozone and PM

2.5

NAAQS and to reduce the health risks associated with such pollutants;

Even with the amendments and economic relief proposed, the proposed amended regulation would significantly reduce diesel PM and NO

emissions and associated cancer, premature mortality, and other adverse health effects statewide, such that emission reductions from the proposed amended regulation are expected to prevent 470 premature deaths from 2014 to 2029.

CARB Authorization Request at 18,

citing

7 FR 4052, 4054 (July 11, 2011).

CARB Authorization Request at 18,

citing

74 FR 32744, 32762 (July 8, 2009); 76 FR 77515, 77518 (December 13, 2011).

CARB's Authorization Request also notes the continuing importance and need to address the NAAQS for pollutants considered to be harmful to public health, including PM

2.5

and ozone.

For areas in California that exceed the NAAQS, CARB is responsible under CAA section 110 for developing a State Implementation Plan (SIP) that describes how the state will attain the standards by certain deadlines. The South Coast Air Basin and the San Joaquin Valley Air Basin are in nonattainment for both PM

2.5

and the 8-hour ozone standard. Significant reductions in NO

emissions are needed to attain the standards because NO

leads to formation in the atmosphere of both ozone and PM

2.5

. Diesel PM emissions reductions are also needed because diesel PM contributes to ambient concentrations of PM

2.5

. The South Coast and San Joaquin Valley air basins are both required to be in attainment with the PM

2.5

standard by 2014. The San Joaquin Valley and South Coast air basins are required to be in

attainment of the 8-hour ozone standard by 2023.

CARB notes: Ambient PM

2.5

is associated with premature mortality, aggravation of respiratory and cardiovascular disease, asthma exacerbation, chronic and acute bronchitis and reductions in lung function. Ozone is a powerful oxidant. Exposure to ozone can result in reduced lung function, increased respiratory symptoms, increased airway hyper-reactivity, and increased airway inflammation. Exposure to ozone is also associated with premature death, hospitalization for cardiopulmonary causes, and emergency room visits for asthma.

CARB Authorization Request at 3-4.

The SIP for the South Coast and San Joaquin air basins demonstrates attainment of the PM

2.5

standard by 2014, but only based on projected achievement of PM

2.5

emission reductions of nearly 15 percent in the South Coast Air Basin and 25 percent in the San Joaquin Valley Air Basin. CARB's Authorization Request states that NO

emissions must be reduced by approximately 50 percent to meet the PM

2.5

standard in the South Coast and the San Joaquin Valley air basins. Even greater NO

reductions, on the order of 75 to 88 percent, will be needed to achieve the 8-hour ozone standard by 2023. California's 2007 SIP included the initial version of the Fleet Requirements as a control measure. CARB's legal commitment to achieve the emission reductions specified in the SIP relies upon the emission reductions from the Fleet Requirements regulation in the South Coast and the San Joaquin Valley.

In its ISOR, CARB notes “Despite the major economic recession and revisions to the off-road regulation inventory, the in-use off-road diesel vehicle category remains an important source of emissions. In 2010, staff estimates the off-road vehicles subject to the off-road regulation are the fourth largest source of diesel PM in California (7 percent of total) and the sixth largest source of NO

from all sources (4 percent of total).”

Id.

EPA-HQ-OAR-2008-0691-0002 Attachment A, at 13.

1. Should EPA Review this Criterion Based on the Need for California's Nonroad Program or the Need for the Fleet Requirements?

In addressing whether California needs “such State standards to meet compelling and extraordinary conditions,” we must first address the question whether it is appropriate for EPA to evaluate this criterion based on California's need for its nonroad emission program as a whole, or whether we instead should evaluate only the particular standards being addressed in this authorization proceeding.

As noted above, CARB maintains that the relevant inquiry is whether California needs its own emission control program as opposed to the need for any given standard as necessary to meet compelling and extraordinary conditions. CARB notes that in prior decisions the Administrator has determined that:

“[C]ompelling and extraordinary conditions” does not refer to levels of pollution directly, but primarily to the factors that tend to produce them: Geographical and climatic conditions that, when combined with large numbers and high concentrations of automobiles create serious air pollution problems.

CARB Authorization Request at 18.

EPA has also consistently held that the phrase “the need for California emission standards” refers to the need for California's program (i.e. set of standards) applicable to the relevant category of vehicles or engines, and not the need for the particular standards that are the subject of an authorization request. In the instant proceeding, EPA received comments disputing this approach, which we discuss below.

a. Comment From Pacific Legal Foundation

EPA received comment from the Pacific Legal Foundation (PLF) challenging both California's and EPA's interpretation of the “compelling and extraordinary conditions” criterion in section 209(e)(2)(A)(ii). PLF asserts that based on both the plain language of the provision and its legislative history, the word “standards” should be read to refer only to particular standards, and not to the entire California program for the relevant category of engines or vehicles.

As explained below, EPA believes it important to examine the language of section 209(e)(2)(A)(ii) precisely as Congress set it forth. Therefore, to be clear, the phrase “the need for California emission standards” does not appear in this section. Rather, the language is “No such authorization shall be granted if the Administrator determines that—(ii) California does not need such California standards to meet compelling and extraordinary conditions.” EPA's interpretation of this section includes an examination of the significance of the word “such” before “California standards.”

PLF contends that California must apply for a waiver or authorization on a case-by-case basis

and that the Clean Air Act requires EPA not grant California any waiver or authorization unless California makes a showing that it has “compelling and extraordinary conditions” necessitating the particular standards for which a waiver or authorization is sought. PLF argues that CARB has put little evidence in the record about the need for the Fleet Requirements. Further, PLF asserts that “Congress intended the word `standard' in section 209 to mean quantitative level of emissions”

and that there is no indication in the text or legislative history that by using the term “standard” Congress really meant “program” or anything other than “standard.” PLF states that Congress could have used the term “program” rather than the term “standards” in the statute and delegated to EPA the responsibility to make case by case decisions on whether a particular standard was required or needed.

PLF at 1.

PLF cites

MEMA I

at 1112-1113.

In addition, PLF cites the legislative history of section 209 to support its position that standards need to be justified on an individual basis. Specifically, PLF cites the Senate Committee report for the 1967 legislation, which in discussing section 208 (the predecessor to what is now section 209) refers to California's “compelling and extraordinary circumstances” that are “sufficiently different from the nation as a whole to justify standards . . . [that] may,

from time to time,

need to be more stringent than national standards.”

PLF argues that this language indicates that Congress intended California to justify

specific

standards “from time to time,” and that it intended EPA to deny a waiver if California does not require or need particular standards. PLF claims that if Congress wanted to apply a need tests based on California's need for a program as a whole then it could have stated so.

S Rep No 90-403 at 33 (1967) (emphasis added).

PLF further contends that in 1977, when Congress amended section 209(b)—Congress continued to focus on “standards” but with two important additions. First, Congress amended the language relating to the protectiveness determination to clarify that California's standards need only be at least as protective as federal standards “in the aggregate”—making clear that California did not need to determine that each individual standard would be more protective or stringent than applicable federal standards. PLF asserts that this clarification, however, applied only to the protectiveness determination. Second, Congress tightened section 209(b)(1)(B) to provide that “

such waiver shall be granted if EPA finds that California . . . does not

need

such

standards

to meet compelling and extraordinary conditions . . ..” (emphasis added). PLF asserts that the preexisting 1967 language had provided that EPA “shall” grant a waiver unless it finds California did “not require” the underlying standards, whereas the 1977 amendments expressly

prohibited

EPA from granting a waiver where California did not “need” a particular emissions standard. Based on the foregoing, PLF argues that the 1977 amendments created two separate tests for “standards.” The “protectiveness” test (under the first waiver criterion), which

applies to the protectiveness of California's aggregate set of standards, and the “needs” test (under the second waiver criterion), which is based on a need for the particular standards for which a waiver is sought and focuses on whether there are compelling conditions in the state necessitating that particular standard.

PLF also maintains that EPA's traditional interpretation is contrary to plain meaning of the CAA. PLF asserts that the term “program” is not used in section 209 and that the phrase “such California standards” in 209(e)(2)(A)(ii) does not refer to the entire California mobile source emissions program. PLF states that the phrase “in the aggregate” appears only once in section 209 and only under the first waiver prong added in the 1977 amendments. “In the aggregate” is set off by commas, PLF argues, providing evidence that it pertains only to protectiveness under the first waiver criterion, and does not apply to the “needs” inquiry under the second waiver criterion. PLF maintains that the outcome of the protectiveness test depends on California making a determination, whereas the outcome of the needs tests depends on EPA making a finding. Further, PLF argues that the protectiveness test affirmatively mandates that EPA approve the waiver application if California makes the protectiveness determination, while the “needs test” expressly prohibits EPA from granting a waiver if EPA makes the requisite finding. Thus, PLF argues, the first prong is written to broaden the likelihood of issuing a waiver, whereas the second prong is written to narrow it.

PLF maintains that the two waiver prongs were intended to address entirely different issues. Congress gave EPA greater authority to approve waivers under the first prong, PLF asserts, but lesser authority to approve waivers under the independent needs test. PLF highlights that the sentence regarding “protectiveness” applies to both “standards and other requirements,” whereas the sentence establishing the needs test refers only to standards. This makes sense, according to PLF, because Congress intended EPA to look holistically at protectiveness and not at whether an individual standard was as protective. To ensure CARB did not abuse the privilege, PLF argues, Congress provided under the “needs” criterion that California could not adopt any standard that it did not need or that was not specifically designed to address California's “peculiar” conditions.

Finally, PLF maintains that EPA's traditional interpretation leads to absurd results. PLF states that EPA itself has acknowledged that conditions in California may improve, thereby eliminating the need for the authority to waive preemption of California standards.

Under EPA's traditional interpretation, PLF argues, EPA would be forced to deny a waiver request based on a finding that there is no longer a need for the California program. PLF argues that such a finding would put in jeopardy past waivers, as the positive (program-wide) “needs” finding underpinning those past waivers would no longer be valid. PLF further comments that a broad negative finding with regard to “needs” would eliminate CARB's ability to maintain its own mobile source emission standards program, separate from the federal program. In such circumstances, PLF argues, EPA would be substituting its policy judgment for that of Congress. If one interpretation leads to absurd results and another does not, PLF argues, then the former must be rejected.

See

74 FR 32744, 32762 (July 8, 2009).

b. EPA Response

EPA examined these same issues at length in the Agency's 2009 decision granting California's request for a waiver of preemption of its GHG standards for light duty vehicles.

Consistent with that examination, EPA continues to believe that the traditional approach to the compelling and extraordinary conditions criterion is appropriate. That is, EPA believes it is proper to review California's need for its emission program (i.e. set of standards) applicable to the relevant category of vehicles or engines as a whole, rather than to follow an interpretation that applies this criterion to specific standards that are the subject of an authorization request.

74 FR 32744, 32759-32762 (July 8, 2009).

EPA's traditional interpretation is the most straightforward reading of the text and legislative history of section 209(b) and section 209(e). First, EPA disagrees with PLF's assertions regarding the original language of the preemption provision promulgated in 1967. The critical language in section 208(b) of the 1967 legislation required that EPA`s predecessor department grant California a waiver of section 208(a) preemption unless it found that California “does not require standards more stringent than applicable Federal standards to meet compelling and extraordinary conditions . . ..” This language did not suggest a searching review of every California standard. Rather, it required a waiver of preemption unless the agency determined that California did not require more stringent “standards”—a term that is both general and plural—to meet compelling and extraordinary conditions. This language is fully consistent with a review of California's general need for more stringent standards and thus for its own program (i.e. its own set of standards).

PLF's emphasis on the word “standards,” as opposed to “program” in this section is inapposite. EPA's use of the word “program” in this context is simply meant to describe the

group of standards

applicable to the engines and vehicles in question under California's regulatory program, compared to those under the federal program. The “program” in this context is merely the standards being considered together. It is fully consistent with the language of the statute to review the need for the program (i.e. the set of relevant standards) as a whole, rather than the need for individual standards. PLF's reference to legislative history is consistent with EPA's view that the relevant issue in determining whether a waiver is justified is California's “circumstances” being “sufficiently different”, rather than the specific need for any particular standard.

PLF at 4.

Beginning prior to the 1977 amendments, EPA has consistently interpreted the “compelling and extraordinary conditions” criterion to apply to the full California program (i.e. set of standards).

When Congress re-evaluated this provision in 1977, it could have revised the criterion to make clear that California must show each standard is necessary. Instead, as discussed below, Congress went out of its way to indicate that California is to be given even more flexibility in designing its own motor vehicle program.

See

38 FR 30136 (November 1, 1973).

MEMA I,

627 F.2d at 1110.

PLF, moreover, does not take proper account of the critical statutory change Congress made in 1977, which allowed California to promulgate individual standards that are not as stringent as comparable federal standards, as long as the standards are “in the aggregate, at least as protective of public health and welfare as applicable federal standards.” This decision by Congress requires EPA to waive preemption of individual California standards that, in and of themselves, might not be considered needed to meet compelling and extraordinary circumstances, but are part of California's overall approach to reducing vehicle emissions to address air pollution problems.

Although PLF is correct that the 1977 amendments formally separated the “protectiveness” criterion from the “need” criterion, the latter continues to

refer back to the language regarding protectiveness, by using the term “

such

state standards.” In addition, contrary to PLF's comments, the creation of the “in the aggregate” test for protectiveness is supportive of the argument that EPA is not to look at the need for each individual standard. If EPA were required to look independently at the need for each individual standard, any individual standard that was less stringent than a federal standard might be considered unnecessary. This would obviate the rationale for looking at the protectiveness of California's standards “in the aggregate” under the first criterion—effectively requiring EPA to give back in the second criterion what Congress explicitly gave California in its revision to the first criterion. Finally, it bears emphasis that the 1977 amendments continued to require that EPA grant a waiver of preemption unless it makes one of the findings in section 209(b)(1), thus continuing to put the burden of proof on those opposing the waiver.

Id.

Congress, in 1990, added language in section 209(e)(2)(A) creating criteria for EPA authorization of California nonroad engine standards that are essentially identical to the criteria for EPA waiver of preemption of California's standards for new motor vehicles in section 209(b). In particular, Congress provided California with the discretion to create a broad emissions program (i.e. “California standards”) that needs only to be as stringent as applicable EPA standards, in the aggregate. Further, section 209(e)(2)(A)(ii) refers to whether “

such

California standards” are needed to meet compelling and extraordinary conditions, referring back to the general and plural term “California standards” in the protectiveness finding.

The language of section 209(e)(2)(A) regarding the “protectiveness” determination by California refers only to “California standards,” not to each California standard individually. Moreover, the use of the term “in the aggregate” makes clear that the set of standards to be reviewed is the aggregate set of standards applicable to the engines and vehicles being regulated. EPA is to determine whether California's determination is arbitrary and capricious under section 209(e)(2)(A)(i), and is to determine whether California does not need “such California standards” to meet compelling and extraordinary conditions. The natural reading of these provisions leads EPA, in addressing the “needs” criterion, to consider the same group of standards that California considered in making its protectiveness determination. While the words “in the aggregate” are not specifically applicable to section 209(e)(2)(A)(ii), this criterion does refer to the need for “such California standards,” rather than “each California standard” or otherwise indicate a standard-by-standard analysis. The text thus indicates that the proper analysis is to review the aggregate set of standards (i.e. the program) applicable to the regulated vehicles and engines.

To the extent the provision is ambiguous, EPA's interpretation is, at minimum, one that is reasonable and entitled to deference under

Chevron U.S.A. Inc.

Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984). It certainly is not “unambiguously precluded” by the language of the statute. See

Entergy Corp.

Riverkeeper, Inc.,

129 S.Ct. 1498 (2009) (“That view governs if it is a reasonable interpretation of the statute—not necessarily the only possible interpretation, nor even the interpretation deemed most reasonable by the courts.

Chevron U.S.A. Inc.

Natural Resources Defense Council, Inc.,

467 U.S. 837, 843-844 (1984).”) (“It seems to us, therefore, that the phrase “best available,” even with the added specification “for minimizing adverse environmental impact,” does not unambiguously preclude cost-benefit analysis.”).

Carrow

Merit Systems Protection Board,

564 F.3d 1359 (Fed. Cir. 2009) (“[W]e are obligated to give controlling effect to [agency's] interpretation if it is reasonable and is not contrary to the unambiguously expressed intent of Congress”, citing

Entergy Corp.

PLF's discussion of case law interpreting the term “standard” is inapposite. For example, although PLF points to both

MEMA I

and

EMA,

those decisions address an entirely different issue relevant to section 209—i.e., whether the regulation set by California is, in fact, a “standard,” as opposed to another type of provision, like an enforcement provision. These cases do not illuminate the issue of whether EPA reviews each standard individually under sections 209(b)(1)(B) and 209(e)(2)(A)(ii), or whether it reviews California's standards as a group (i.e. California's program for such engines) under those provisions.

EPA's 2009 decision waiving preemption of California's GHG standards for light duty vehicles considered the plain language and legislative history of section 209(b)(1)(B) and determined that for all pollutants, it was appropriate to review section 209(b)(1)(B) by reviewing the need for California's motor vehicle program, rather than individual standards. We incorporate that discussion into this decision by reference because, as explained above, the language of section 209(e)(2)(A)(ii) is substantively the same as that in section 209(b)(1)(B) on this issue.

The 2009 GHG waiver decision included the following discussion, which in particular addressed a 1984 decision waiving preemption for earlier California PM standards:

[I]n the legislative history of section 209, the phrase “compelling and extraordinary circumstances” refers to “certain general circumstances, unique to California, primarily responsible for causing its air pollution problem,” like the numerous thermal inversions caused by its local geography and wind patterns. The Administrator also noted that Congress recognized “the presence and growth of California's vehicle population, whose emissions were thought to be responsible for ninety percent of the air pollution in certain parts of California.” EPA reasoned that the term compelling and extraordinary conditions “do not refer to the levels of pollution directly.” Instead, the term refers primarily to the factors that tend to produce higher levels of pollution—“geographical and climatic conditions (like thermal inversions) that, when combined with large numbers and high concentrations of automobiles, create serious air pollution problems.”

The Administrator summarized that under this interpretation the question to be addressed in the second criterion is whether these “fundamental conditions” (i.e. the geographical and climate conditions and large motor vehicle population) that cause air pollution continued to exist, not whether the air pollution levels for PM were compelling and extraordinary, or the extent to which these specific PM standards will address the PM air pollution problem.

74 FR 32744, 32759 (July 8, 2009) (citations omitted).

The structure of section 209, as adopted in 1967 and as amended in 1977 and 1990, is notable in its focus on limiting the ability of EPA to deny a waiver or authorization. This limitation preserves discretion for California to construct its motor vehicle and nonroad programs as it deems appropriate to protect the health and welfare of its citizens. The legislative history indicates Congress quite intentionally restricted and limited EPA's review of California's standards, and that its express legislative intent was to “provide the broadest possible discretion [to California] in selecting the best means to protect the health of its citizens and the public welfare.”

The D.C. Circuit recognized that “[t]he history of the congressional consideration of the California waiver provision, from its original enactment up through 1977, indicates that Congress intended the State to continue and expand its pioneering efforts at adopting and enforcing motor vehicle emission standards different from and in large measure more advanced than the corresponding federal program. In short to act as a kind of laboratory for innovation. * * * For a court [to limit

California's authority] despite the absence of such an indication would only frustrate the congressional intent.”

105 H.R. Rep. No. 294, 95th Cong., 1st Sess. 301-302 (1977).

See MEMA,

627 F.2d at 1110-11.

MEMA,

627 F. 2d at 1111.

In this context, it is fully consistent with the expressed intention of Congress to interpret section 209(e)(2)(A)(ii) in a manner that allows California the policy discretion to set its emission program as it sees fit, subject to the limitation that its standards remain, in the aggregate, as protective of public health and welfare as applicable federal standards and that California continue to experience compelling and extraordinary conditions. Congress intended to provide California the broadest possible discretion to develop its nonroad emissions program. Neither the text nor the legislative history of section 209(b) or 209(e) indicates that Congress intended to limit this broad discretion by requiring EPA to determine, on a case-by-case basis, whether each specific standard is necessary or appropriate for California. EPA's longstanding interpretation, accordingly, is directly in line with the purpose of Congress.

This approach does not make section 209(b)(1)(B) or section 209(e)(2)(A)(ii) a nullity. EPA must still determine whether opponents of authorization have met their burden to establish that California does not need its nonroad program to meet the compelling and extraordinary conditions. As discussed below, EPA does not believe that burden has been met in this instance. We acknowledge, however, that conditions in California may one day improve such that it no longer has the need for a separate nonroad program to address certain air quality problems. The statute contemplates that such improvement is possible. PLF is incorrect in concluding that EPA's approach would lead to an absurd outcome. EPA would not deny an authorization request under section 209(e)(2)(A)(ii) unless it determined that the regulatory program was not needed because compelling and extraordinary conditions no longer exist in California. Furthermore, the basis for previously waived or authorized standards would remain valid unless EPA determined that the compelling and extraordinary conditions would not exist even without those standards in place. This is consistent with the intent of Congress to permit California to maintain separate emission standards when compelling and extraordinary conditions exist. Thus, there would be no absurd results regarding such standards.

Congress has directed EPA to exercise its technical judgment with regard to all three authorization criteria, but has not authorized EPA to substitute its policy judgment for California's judgment with regard to which of its specific standards are or are not needed to meet its compelling and extraordinary conditions. Those who oppose California regulations for reasons other than the three criteria that Congress specified in the statute have the ability to raise their legal, policy, and other concerns in the state administrative process, or through judicial review of the regulations themselves.

For these reasons, EPA believes that the better approach for analyzing the need for “such State standards” to meet “compelling and extraordinary conditions” is to review California's need for its program, as a whole, for the class or category of vehicles being regulated, as opposed to its need for the individual standards that are the subject of an authorization request.

2. Does California Need its Nonroad Program to Meet Compelling and Extraordinary Conditions?

Applying the traditional approach to application of the compelling and extraordinary circumstances criterion under section 209(e)(2)(A)(ii), EPA cannot deny the authorization of the Fleet Requirements on this basis.

CARB has repeatedly demonstrated the need for its nonroad program to address compelling and extraordinary conditions in California. As noted above, in its Authorization Request, CARB stated that the unique geographical and climatic conditions and the tremendous growth in California's onroad and nonroad vehicle population, giving rise to serious air quality problems and NAAQS nonattainment in California, still exist today and that nothing in these conditions has changed to warrant a change in this determination. As such CARB notes that there can be no doubt of the continuing existence of compelling and extraordinary conditions justifying California's need for its own mobile source emissions control program.

EPA received some comment from those that otherwise oppose the authorization but implicitly recognize the underlying compelling and extraordinary conditions in California. For example, the American Road and Transportation Builders Association (ARTBA) notes that it is “very supportive of both EPA and ARB's goal of reducing PM and NO

emissions,” but “does not believe ARB has considered fully some of the air quality improvements already occurring in California and the nation. These improvements in air quality undercut the need for a measure as severe as the ARB proposal.”

ARTBA notes that the air quality is significantly improving without the Fleet Requirements.

However, EPA received no evidence to suggest that California's air quality is improving to the point that it will attain the NAAQS for PM and ozone without the Fleet Requirements or that California continues to experience serious air quality concerns based on continuing compelling and extraordinary conditions, as EPA and CARB have outlined in this and previous actions. Based on the record, EPA is unable to identify any change in circumstances or any evidence to suggest that the conditions that Congress identified as giving rise to serious air quality problems in California no longer exist. As noted by CARB, there continue to be underlying compelling conditions in California giving rise to a significant number of California air basins that continue to be in nonattainment with NAAQS for PM

2.5

and ozone.

ARTBA at 2.

Id.

To the degree that commenters question the stringency of the Fleet Requirements or whether the emission reductions projected from this rule are needed, EPA received no comment that addressed the fundamental question of whether California continues to experience compelling and extraordinary conditions giving rise to the need of a nonroad emissions program. The design, or stringency of such an emission program, is irrelevant to EPA's review of section 209(e)(2)(A)(ii). Such review would be inconsistent with the express indication from Congress to provide California with the “broadest possible discretion” in selecting the best means to protect the health of its citizens and the public welfare. Accordingly, applying the traditional approach of reviewing the need for a separate California nonroad program to meet compelling and extraordinary conditions, EPA cannot deny the authorization based on this criterion.

3. In the alternative, does California need its nonroad Fleet Requirements to meet compelling and extraordinary conditions?

As discussed above, EPA is maintaining its interpretation of section 209(e)(2)(A)(ii) as requiring a review of whether compelling and extraordinary conditions give rise to a need for a California nonroad emission program. Nevertheless, because EPA received

comment urging an alternative interpretation (based on a review of whether the Fleet Requirements are per se needed to meet compelling and extraordinary conditions) and because we received other comments concerning the specific need for or benefits of the Fleet Requirements, EPA has also evaluated this criterion in the alternative by reviewing the Fleet Requirements separately.

Although EPA received a wide variety of comments questioning the “need” for CARB's Fleet Requirements, we did not receive any comments or explanation as to how an evaluation of “need” should be performed by EPA. As discussed below, in light of the lack of criteria by which to judge such need (including how to weigh or balance evidence and provide CARB with the requisite policy deference described above), the lack of any explanation of the relevant facts that EPA must or could consider, and the failure of commenters to satisfy their burden of proof to overcome CARB's stated need for its Fleet Requirements, even if EPA were to apply the alternative interpretation proposed by commenters, the agency would be unable to make an affirmative finding under section 209(e)(2)(A)(ii). Therefore, EPA is unable to deny CARB's request on this basis.

a. California's Air Quality Today and Moving Forward

The Agency received a number of comments suggesting that California's air quality is improving on its own. ARTBA notes that levels of PM

2.5

and NO

have declined significantly since 1980 and since 2001, while numerous economic indicators have increased. The Associated General Contractors of America (AGC) note the significant decline in emissions from off-road diesel equipment due to a decline in activity and other factors. The Construction Industry Air Quality Coalition (CIAQC) claims that emissions from the existing fleet are naturally declining and that additional regulation is not needed to reach the emission levels CARB attributes to implementation of the Fleet Requirements. The California Construction Trucking Association (CCTA) and CIAQC state that CARB's emission modeling was overstated and continues to be inaccurate because it presumes too optimistic a scenario of economic recovery and therefore more activity and emissions from nonroad fleets than there actually has been. We also received comments that the cost of CARB's regulation compared to the benefits supports a finding that such standards are not needed, and that the health benefits are either overstated or non-existent. In related comments, commenters stated that the Fleet Requirements are likely to do harm to the public health of Californians and that the economic impacts of the regulation are likely to lead to significant adverse health effects.

We also received comment from Altfillisch Contractors (ACI) suggesting that the California Environmental Quality Act (CEQA) renders the Fleet Requirements unnecessary.

These comments are addressed in the “protectiveness” or section 209(e)(2)(i) discussion above. As discussed in that section, the Agency believes it appropriate to limit our examination to the specific effects the California and EPA emission standards have on emissions rather than performing an analysis of social impacts or other secondary implications. The determination of how numerous possible impacts of emission regulation can or should be weighed in determining public policy is one inherently directed to the regulatory authority promulgating the regulation, not to an authority whose limited role is to review the regulations based on three narrow criteria and who has been directed by Congress to provide broad discretion in its review.

CARB explains in its comments that for areas that exceed the NAAQS, California is responsible under the CAA section 110 for developing a state implementation plan (SIP) that describes how the state will attain the standards by certain deadlines.

CARB notes that its Fleet Requirements are part of an integral strategy to attain the NAAQS in both the San Joaquin Valley Air Basin and South Coast Air Basin. CARB notes there is no question that areas of California continue to be in nonattainment for PM

2.5

, as well as for ozone, and that the Fleet Requirements and other regulations and incentives are needed to achieve attainment.

Additionally, CARB states that despite the economic recession and downward revisions to the in-use off-road emissions inventory, off-road diesel vehicles remain a significant source of emissions.

Thus, CARB states, there continues to be a strong need for further regulation of all emission source categories, including off-road vehicles. “As EPA has long-confirmed, questions of what sources to regulate and how to regulate them are policy questions that Congress has determined is best left to the State.”

CARB notes in its Authorization Request that two air basins in California—South Coast Air Basin and San Joaquin Valley Air Basin—are in nonattainment for both PM

2.5

and the 8-hour ozone standard. This nonattainment is based on the 2006 NAAQS for PM (71 FR 61144, October 17, 2006) and which EPA has subsequently made more stringent in 2012 (78 FR 3086, January 15, 2013). The nonattainment for ozone is based on EPA's 2008 NAAQS 8-hour ozone standard (73 FR 16436, March 27, 2008). CARB notes that significant emission reductions of NO

are needed because it leads to formation in the atmosphere of ozone and PM

2.5

, and that diesel PM emission reductions are also needed because diesel PM contributes to ambient concentrations of PM

2.5

California submitted a revision to its SIP (State Strategy) in 2007 for the South Coast and San Joaquin Valley Air Basins that demonstrates attainment of the PM

2.5

standard by 2014 (needed by 2015), but only after achieving significant reductions of PM

2.5

(and NO

). In addition, additional reductions of NO

emissions are needed to achieve the 8-hour ozone standard by 2023. EPA approved the Stated Strategy for both PM

2.5

and NO

for the South Coast and San Joaquin Air Basins on November 9, 2011 and March 1, 2012, respectively. CARB projects that the Fleet Regulations will achieve a 17 percent reduction in NO

emissions and a 21 percent reduction in PM

2.5

emissions in 2023 that would not occur without the regulation and that Fleet Requirements are an integral part of the SIP and are laid out in EPA’s proposed rulemaking to approve the State Strategy and that no “margin of safety” otherwise exists.

CARB notes in its Written Comments at 10-11 that the Fleet Requirements are part of the approved SIP for the South Coast and San Joaquin valley, both extreme nonattainment areas for ozone and nonattainment for PM

2.5

and that specific emission benefits from the Fleet Requirements are laid out in EPA's proposed rulemaking to approve the State Strategy.

CARB Written Comments at 12-13.

CARB also notes, and the EPA agrees, that the CEQA does not render the Fleet Requirements unnecessary. The purposes of the CEQA and the Fleet Requirements are different. The CEQA, which is applied in only a few air districts, is essentially designed to identify when projects will result in significant harm and to mitigate that harm (to make sure air quality does not worsen), whereas the Fleet Requirements are proactive measures applicable statewide as part of coordinated strategy designed to improve air quality throughout the state.

EPA believes that CARB's initial filings and additional submissions to the record, responding to arguments that the Fleet Requirements are not needed because of the economic downturn and because of CARB's overestimation of inventory and emissions, are reasonable. Mere assertions by commenters that CARB's most recent emission modeling is inaccurate do not meet the burden of proof to demonstrate otherwise. As noted above, CARB has submitted updated estimates of projected emission reductions expected from the Fleet Requirements, and there is no evidence in the record to demonstrate that CARB's projections are unreasonable. EPA further finds that the opponents have not met their burden of demonstrating that such considerations would render the Fleet Requirements unnecessary. In adopting the 2010 amendments, CARB acknowledged that past and future emissions from in-use nonroad CI vehicles were significantly lower than originally projected, and CARB states that the amendments for

which authorization is requested provide economic relief to fleets while still achieving the emission reductions necessary to attain federal ambient air quality standards (NAAQS). CARB indicates that despite the smaller inventory contribution from in-use nonroad CI engines than CARB projected in the initial rulemaking, emissions from these engines still represent a significant portion of the overall emissions inventory. The opponents provide no evidence to refute CARB's assertion that despite the economic recession and revised inventory, the in-use nonroad CI fleet remains a significant source of emissions.

Moreover, as CARB notes, there continues to be a strong need for emission reductions from all emission categories, including the in-use nonroad CI fleet, to meet the PM

2.5

and ozone NAAQS. As CARB notes, it is not for EPA to decide which types of sources to regulate and in what manner to do so.

Congress intended to leave such policy questions in the hands of the state. As discussed below, EPA finds that CARB has promulgated the Fleet Requirements, in part, to satisfy its PM

2.5

and 8-hour ozone NAAQS requirements and no evidence exists in the record to explicitly demonstrate why the emission reductions projected by CARB are not needed in order to meet California's NAAQS obligations.

Consistent with

MEMA I,

the Agency has evaluated costs in this authorization in the evaluation of the technological feasibility below. The Agency looks at the actual cost of compliance in the time provided by the regulation, not the regulation's cost-effectiveness. The appropriate cost-effectiveness for a regulation is a policy decision of California that is considered and made when California adopts the regulations, and EPA, historically, has deferred to these policy decisions. EPA has stated in this regard, “the law makes it clear that the waiver request cannot be denied unless the specific findings designated in the statute can be made. The issue of whether a proposed California requirement is likely to result in only marginal improvement in air quality not commensurate with its cost or is otherwise an arguably unwise exercise of regulatory power is not legally pertinent to my decision under section 209. Therefore, EPA declines to review CARB's Fleet Requirements for their cost-effectiveness or the cost-benefits of the regulation in the context of any of the authorization criteria set forth in section 209(e)(2).

Lastly, CARB restates its legal obligation to achieve PM emission reductions and the expected benefits associated with the Fleet Requirements:

ARB adopted the Off-Road regulation, in part, to meet California's legal obligations under federal law to achieve attainment with the NAAQS for PM

2.5

by 2014. The emission reductions in the regulation are critical to attaining federally mandated air quality standards. Primary diesel PM emissions are a significant contributor to overall PM

2.5

. In 2008, 20,600 tons of diesel PM were emitted in California. The present amendments to the Off-Road regulation have been adopted to accommodate the economic hardship of affected businesses while still meeting the legal requirements and protecting the public health of all Californians.

Id.

In order to properly evaluate whether California has a need for its Fleet Requirements under the alternative approach to section 209(e)(2)(A)(ii) described above, EPA believes it would be necessary only to examine whether the identified “compelling and extraordinary conditions” in California are giving rise to an air quality problem that CARB seeks to address with the Fleet Requirements. EPA has received no comment suggesting that EPA's historically recognized “conditions” in California (e.g. geographic and climatic conditions, number of vehicles operating in California, etc.) do not continue to give rise to elevated concentrations of particulate matter and NO

. In addition, EPA has received no comment rebutting CARB's statement that it is legally required to demonstrate compliance with the CAA's NAAQS requirements (for PM

2.5

and 8-hour ozone) and that CARB is currently committed to achieve such compliance in part through the promulgation of emission standards such as its Fleet Requirements. As noted by CARB, the Fleet Requirements were initially set in response to the NAAQS requirements for PM

2.5

and the 8-hour ozone set in 2006 and 2008, respectively. The state of California has a greater level of nonattainment under those NAAQS than other states. Since that time, EPA in 2012 has completed review of the PM NAAQS and has strengthened the primary annual standard for PM

2.5

, and California continues to set regulations in response to such requirements.

EPA believes that to the extent that a review of the need for the Fleet Requirements (as opposed to CARB's nonroad program) is required, that CARB has reasonably demonstrated such need due to its obligation to comply with federal law (including section 110 of the CAA); CARB needs its Fleet Requirements and a host of other regulatory measures in order to adequately meet its SIP obligations. Because EPA has received additional comment suggesting that the PM conditions in California are not a serious air quality issue the Agency addresses those comments below.

78 FR 3086 (January 15, 2013).

b. PM Health Effects

EPA received several comments that question the public health benefits associated with the Fleet Requirements. EPA received comment stating that PM

2.5

, and specifically PM

2.5

from diesel combustion, does not present a public health risk in general,

and that there is no measurable or detectable relationship between PM

2.5

and mortality.

Separately EPA also received comment that PM

2.5

from diesel combustion located in California does not present a public health risk.

EPA received only one comment suggesting that NO

and ozone do not pose a public health issue. This comment did not include any data or other evidence to support this assertion.

See

Milloy written testimony.

See

Milloy. EPA notes that Mr. Milloy, who submitted comment on behalf of the California Construction Trucking Association, separately brought litigation against EPA in which he signed a sworn declaration comparing exposure of human test subjects being voluntarily exposed to forms of particulate matter to Nazi death camp experimentation. Declaration of Steven J Milloy in Case 1:12-cv-01066-AJT-TCB pp. 2-3;

see also

the complaint in the same matter which states that such studies “ris[k] the lives and health of human study subjects” and that “Mr. Milloy is appalled by this inhumanity”(complaint para. 15). These sworn statements are diametrically at odds with Mr. Milloy's presentation and testimony here that exposure to particulate matter does not pose a public health concern. Needless to say, when a commenter publically espouses positions that are at a 180 degree remove from each other, the credibility of the assertions is greatly diminished. This lawsuit was dismissed as lacking any legal basis. Dr. Enstrom states in his comment “There is now overwhelming epidemiologic evidence that PM

2.5

and diesel PM are not related to total mortality in California. This evidence has most recently been summarized in my thirteen-page September 28, 2012 paper, “Particulate Matter is Not Killing Californians. This paper was presented on August 1, 2012 at the American Statistical Association Joint Statistical Meeting in San Diego. It is currently posted online and will be published later this year in the 2012 JMS Proceedings (

http://www.scientificintegrityinstitute.org/ASAS092812.pdf

).”

With regard to the suggestion that PM

2.5

from diesel combustion does not present a public health risk, EPA received comment stating that “the claimed toxic effects of diesel particulate matter are hundreds of times smaller than, for example, the increased risk of lung cancer caused by cigarette smoking. This commenter asserts that these possible effects are smaller than any previously discovered in medical history, the actual exposure levels are so difficult to estimate, and there are so many confounding health factors (smoking and lifestyle) that are impossible to control, that the entire scientific basis of the regulatory policy needs to be broadly re-assessed before allowing CARB any kind of waiver in PM

2.5

enforcement.”

See

Dr. Malken.

EPA also received comment questioning whether PM

2.5

from diesel exhaust is causing cancer, premature death, or other health effects in

California. For example, one commenter stated that “we don't know yet” and we “can't rule out” that exposure to diesel PM might statistically be related to zero premature deaths.

This commenter suggests that the toxic effects of diesel particulate matter are so small that the scientific basis for concerns about PM

2.5

impacts on health needs to be re-assessed before EPA authorizes California's regulation. This commenter maintains that science does not know yet if fine particulate matter is causing cancer and the premature death of a measurable number of Californians, and that other factors like smoking and lifestyle may confound any effects.

EPA also received comment suggesting that the scientific evidence on the health effects of particulate air pollution (specifically PM

2.5

) in California does not support its further control or regulation at this time. This commenter maintains that “[o]ur PM

2.5

is different in composition and is less toxic than that in many Eastern regions of the U.S.”

In addition, two commenters stated that strong epidemiologic evidence shows ambient PM

2.5

and diesel PM is not related to total mortality in California.

The commenters also note studies published in 2005 and 2011 for support.

One commenter notes the 2011 study for California-specific evidence regarding PM

2.5

and diesel PM and mortality and claims it demonstrates no current relationship between PM

2.5

and mortality in California and may show no scientific or public health justification for this regulation.

See

Dr. Malken. This commenter also suggests that the PM

2.5

from diesel exhaust in California might be inherently different than the PM studied in the eastern half of the United States.

Id.

at 2.

See

Dr. Phalen.

See

Delta and Dr. Enstrom. Delta also comments that the least healthy county in California has low diesel PM air concentrations, but high poverty and unemployment levels. Delta states that California is the fourth healthiest state as measured by premature death rates. EPA notes that Delta makes no attempt to connect these general views on health with the specific issue of whether emissions of PM

2.5

have any effect on health.

See

Dr. Enstrom and Dr. Malken. Dr. Malken claims that the CARB-funded Jerrett et al. (2011) study of the LA subset of ACS data was the only one which utilized data from particle monitors and “they found no significant correlation between PM

2.5

and `premature deaths.' ” This commenter also states that weighing all of the studies that CARB has considered is more a matter of subjective taste than a scientific process and that CARB has “cherry-picked” the few results that have supported their position.

Dr. Enstrom. This commenter maintains that EPA's June 2012 “Regulatory Impact Analysis related to the Proposed Revisions to the National Ambient Air Quality Standards for Particulate Matter” erroneously concluded that “most of the cohort studies conducted in California report central effect estimates similar to the (nation-wide) all-cause mortality risk estimate” but EPA's Table 5 B-10 was inaccurate or misleading, including the hazard ratio used from his 2005 paper. EPA notes that the proper place to contest the methodology and findings of the Agency in its NAAQS review process is in that federal context. This commenter also claims that “[a] glaring omission was the detailed evidence from the October 28, 2011 CARB-funded Report, “Spatiotemporal Analysis of Air Pollution and Mortality in California Based on the American Cancer Society Cohort: Final Report,” by Drs. Michael Jerrett, Richard T. Burnett, C. Arden Pope III, Daniel Krewski, Michael Thun, and nine others

http://www.scientificintegrityinstitute.org/JerrettCriticism102811.pdf

).” This commenter also claims that his September 28, 2012 paper summarizes the epidemiologic evidence that PM

2.5

and diesel PM are not related to total mortality in California.

Separately, the commenter also takes issue with EPA's Regulatory Impact Analysis for its proposed PM NAAQS rule (which has since been finalized), claiming the Regulatory Impact Analysis is misleading and contains omissions.

100

Id.

Lastly, we received comment from CCTA that references a paper titled “Mortality Among Members of a Truck Driver Trade Association” (Truck Driver study) suggesting that any research on exposure to diesel exhaust should necessarily include truck drivers. CCTA maintains that the study results indicate that those in closest proximity and duration of high levels of exposure to diesel exhaust don't seem to share the same deleterious effects to exposure claimed in other studies.

In response to claims that the Fleet Requirements are not needed because there is no causal connection existing between PM

2.5

exposure and premature mortality and other health effects, CARB states:

Staff carefully reviewed all peer-reviewed studies that have been performed in the United States on the relationship between long-term PM

2.5

exposure and mortality, as has the U.S. EPA in its recent review of the National Ambient Air Quality Standard for particulate matter. U.S. EPA's 2009 science assessment states “Collectively, the evidence is sufficient to conclude that the relationship between long-term PM

2.5

exposures and mortality is causal.” U.S. EPA and ARB have critically evaluated the methods used in each study so that we can place the most weight on the studies that have used the strongest methodologies . . .. ARB's conclusions about the relationship between long-term exposure to PM

2.5

and mortality are aligned with the findings of the U.S. EPA, the World Health Organization, Health Canada, and the British government. Those findings have been publicly peer reviewed by multiple independent bodies worldwide.

101

See

CARB Written Comments.

With respect to the questions about the health effects associated with exposure to diesel exhaust PM, CARB notes:

Staff agrees that ambient PM

2.5

arises from many different sources, including diesel exhaust, and there are no established methods for routinely measuring the concentration of PM

2.5

in ambient air from any specific source. Diesel PM is primarily less than 2.5 microns in diameter, and consequently falls into the PM

2.5

size category. As discussed above, exposure to PM in this size fraction is strongly associated with premature death. Also, the results of animal exposure studies suggest that diesel PM is at least as toxic as other species within this size range.

102

Id.

Further, with respect to questions about the specific health effects of diesel exhaust PM in California, CARB cites, in its responsive comments during the waiver proceeding, the large body of peer-reviewed scientific studies evaluated by CARB and EPA that have identified a broad range of health effects associated with PM

2.5

exposures.

103

CARB states that “[t]he national studies reviewed by the U.S. EPA for the NAAQS assessment apply to California. In fact, as part of the federal standards review process, U.S. EPA estimated the premature deaths associated with PM

2.5

in two California cities—Los Angeles and Fresno.”

104

CARB also cites EPA's Quantitative Health Risk Assessment, which estimates that, based on 2005 ambient mean levels of PM

2.5

, approximately 63,000 to 80,000 premature deaths each year are related to PM

2.5

exposures in the United States. CARB also conducted its own California-focused study, which estimated that in California, exposure to PM

2.5

results in approximately 9,200 deaths each year.

105

In further comments, CARB states that the pre-2010 studies cited by Drs. Enstrom and Malkan in their comments were reviewed by CARB, as well as by the EPA in the development of the PM Integrated Science Assessment (ISA).

103

Id.

at 12,

citing

attachments 1-3.

104

Id.

105

CARB Written Comments at 12,

citing

attachments 1 and 2 of its October 19, 2012 submissions to EPA, including the “Estimate of Premature Deaths Associated with Fine Particle Pollution (PM

2.5

) in California Using a U.S. Environmental Protection Agency Methodology,” August 31, 2010.

Separately, CARB also reviewed the 2011 Jerrett et al. study, referenced by commenters.

106 107

CARB notes that the

study found that “[c]ardiovascular disease (CVD) deaths, particularly those from ischemic heart disease (IHD), are consistently and robustly associated with fine particulate and traffic-related air pollution. The effects on CVD and IHD in California are virtually identical to those of the national . . . study.” The study also found that “[a]ll-cause mortality is significantly associated with PM

2.5

exposure, but the results are sensitive to statistical model specification and to the exposure model used to generate the estimates.”

108

106

CARB Supplemental Comments.

107

The Jerrett et al., 2011 report was not included in EPA's PM ISA because it was completed after the ISA was published. It was also not included in the Provisional Science Assessment because it was not a peer-reviewed publication at the time. However, the work conducted by Jerrett et al. was recently published and can now be found in the peer-reviewed literature [

http://www.atsjournals.org/doi/pdf/10.1164/rccm.201303-0609OC

]. EPA will

consider this study in the next round of NAAQS reviews that include PM. We note, however, that the inclusion or exclusion of one report such as Jerrett would not materially change the large body of scientific evidence indicating an effect of PM

2.5

exposure on human health.

108

CARB Supplemental Comments at 13,

citing

“Spatiotemporal Analysis of Air Pollution and Mortality in California Based on the American Cancer Society Cohort: Final Report,” Michael Jerrett, Ph.D., 2011, at 6-7.

CARB also included a copy of the 2011 Jerrett et al. study in its comments and indicated the study reached the following conclusion:

Taken together, the results from this investigation indicate consistent and robust effects of PM

2.5

—and other pollutants commonly found in the combustion-source mixture with PM

2.5

—on deaths from CVD and IHD. We also found significant associations between PM

2.5

and all causes of death, although these findings were sensitive to model specification. In Los Angeles, where the monitoring network is capable of detecting intra urban variations in PM

2.5

, we observed large effects on death from all causes, CVD, IHD, and respiratory disease. These results were consistent with past ACS [American Cancer Society cohort] analyses and with findings from other national or international studies reviewed in this report. Our strongest results were from a land use regression estimate of NO

, which is generally thought to represent traffic sources, where significant elevated effects were found on deaths from all causes, CVD, IHD, and lung cancer. We therefore concluded that combustion-source air pollution as significantly associated with premature death in this large cohort of Californians.

109

Id.

EPA will address in turn: (1) Suggestions that PM

2.5

does not present a public health risk in general; (2) suggestions that PM

2.5

from diesel combustion does not present a public health risk; and (3) suggestions that PM

2.5

from diesel combustion located in California does not present a public health risk.

EPA disagrees with the commenters regarding the evidence associated with PM exposure in the context of all three suggestions noted above.

Regarding the claim that there is no link between health effects, including mortality, and exposure to PM

2.5

, EPA disagrees with this comment and notes the large body of scientific literature that was thoroughly evaluated during the NAAQS review process is discussed in detail in EPA's Integrated Science Assessment (ISA) for Particulate Matter.

110

The ISA characterizes the weight of evidence for different health effects and makes causal determinations for both short-term (i.e., hours to days) and long-term (i.e., months to years) exposures to PM

2.5

, PM

10-2.5

, and ultrafine particles. Specifically in the ISA, the EPA carefully evaluated and integrated the scientific evidence from across epidemiological, toxicological and controlled human exposure studies to make inferences about causality. The PM ISA considered and assessed an extensive body of scientific information, all of which had undergone peer-review prior to being published.

111

110

U.S. EPA. (2009). Integrated Science Assessment for Particulate Matter (Final Report). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F. Docket entry EPA-HQ-OAR-2008-0691-0318-attachments 2.1 through 2.5

111

Id.

at 1-22.

See http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf

at II-9 to II-12 for discussion of EPA's application of its framework for causal determinations and recognition of the distinction between evaluating the relative scientific quality of individual study results and the evaluation of the pattern of results within the broader body of scientific evidence. This discussion also addresses allegations of cherry-picking studies and ignoring studies that reported no association with PM

2.5

Overall, the PM ISA provides a concise evaluation and integration of the policy-relevant science. This includes key science judgments upon which EPA based its Quantitative Health Risk Assessment for Particulate Matter (PM RA, U.S. EPA, 2010), and the Policy Assessment for the Review of Particulate Matter National Ambient Air Quality Standards (PM PA, U.S. EPA, 2011).

112

These documents informed EPA's 2012 rule completing review of the PM NAAQS.

113

112

See

EPA-HQ-OAR-2008-0691-0318-attachment 3 and

http://yosemite.epa.gov/sab/sabproduct.nsf/368203f97a15308a852574ba005bbd01/8bee96ad3228eabe8525760400702786!OpenDocument

113

EPA incorporates by reference our 2012 PM NAAQS review and associated rulemaking documents. EPA also notes that the reasoning and conclusions reached in the PM NAAQS review are not being revisited in the context of this authorization decision but are cited for the purposes of demonstrating the vast body of peer reviewed evidence and findings that is not contravened by the few studies submitted by commenters to the authorization docket. EPA also states that to the extent the comments take issue with the determinations made in the context of the PM NAAQS rulemaking, the proper place to bring challenges to those decisions would be in the context of that rule.

After a thorough evaluation and integration of the evidence across scientific disciplines, the PM ISA made causal determinations for the health effects associated with both short- and long-term exposures to PM

2.5

114

For short-term exposures, the PM ISA concludes that cardiovascular effects (e.g., emergency department (ED) visits and hospital admissions for ischemic heart disease (IHD) and congestive heart failure (CHF), changes in cardiovascular function, and myocardial ischemia), and premature mortality are causally associated with short-term exposure to PM

2.5

. It also concludes that respiratory effects (e.g., ED visits and hospital admissions for chronic obstructive pulmonary disease (COPD), respiratory infections, and asthma; and exacerbation of respiratory symptoms in asthmatic children) are likely to be causally associated with short-term exposure to PM

2.5

. For long-term exposures, the PM ISA concludes that there are causal associations between long-term exposure to PM

2.5

and cardiovascular effects, such as the development/progression of cardiovascular disease (CVD), and premature mortality, particularly from cardiovascular causes. It also concludes that long-term exposure to PM

2.5

is likely to be causally associated with respiratory effects, such as reduced lung function growth, increased respiratory symptoms, and asthma development. The ISA characterizes the evidence as suggestive of a causal relationship for associations between long-term PM

2.5

exposure and reproductive and developmental outcomes, such as low birth weight and infant mortality. It also characterizes the evidence as suggestive of a causal relationship between PM

2.5

and cancer incidence, mutagenicity, and genotoxicity.

115

EPA's evaluation of the

studies presented in the ISA, as well as the causal framework and determinations upon which the Assessment is based, have undergone extensive critical review by the EPA, CASAC, and the public during its development. The rigor of the review makes the ISA the most reliable source of scientific information on the subject of PM and health and welfare effects.

114

Id.

EPA also noted in this Response to Significant Comments document that “The EPA's evaluation of the scientific evidence and its application of the causal framework used in the current PM NAAQS review was the subject of exhaustive and detailed review by CASAC and the public. Prior to finalizing the ISA, two drafts were released for CASAC and public review to evaluate the scientific integrity of the documents. Evidence related to the substantive issues raised by CASAC and public commenters with regard to the content of the first and second draft ISAs were discussed at length during these public CASAC meetings and considered in developing the final ISA. CASAC supported the development of the EPA's causality framework and its use in the current PM NAAQS review and concluded: The five-level classification of strength of evidence for causal inference has been systematically applied; this approach has provided transparency and a clear statement of the level of confidence with regard to causation, and we recommend its continued use in future Integrated Science Assessments (Samet 2009f, p. 1).” (At II-9).

115

U.S. EPA. (2009). Integrated Science Assessment for Particulate Matter (Final Report) (ISA). U.S. Environmental Protection Agency, Washington, DC, EPA/600/R-08/139F. Section 2.3.5 and Table 2-6. EPA also notes that the ISA assessed

the body of scientific evidence regarding particles available through mid-2009, which included over two thousand new studies. The ISA received two rigorous rounds of peer review by the independent Clean Air Scientific Advisory Committee (CASAC) and two draft PM ISAs were made available for public review and comment.

Additionally, new health studies published since the completion of the ISA were discussed in EPA's Provisional Science Assessment (U.S. EPA, 2012), which was used to ensure-the Administrator was fully aware of the “new” science that developed since 2009 before making final decisions on whether to retain or revise the ambient PM standards. Overall, the new health studies were found not to materially change the conclusions of the 2009 ISA. As in prior NAAQS reviews, the EPA based its final decisions on the studies and related information included in the ISA, RA, and PA which had undergone CASAC and public review. To the extent that the commenters attempt to introduce new arguments or new studies that have not been peer-reviewed, including the 2011 Jerrett study, EPA believes the new science published after the ISA does not materially change the conclusions found within the ISA.

116

As noted above, EPA has recently concluded its PM NAAQS review. No comments submitted in the context of this authorization proceeding lead the Agency to reassess (for purposes of this authorization) the findings related to PM exposure and health effects. EPA notes that the study referenced by Mr. Milloy in his comments was never provided to EPA nor has EPA found it in the peer-reviewed literature. Therefore EPA has no basis to review the technical methods used or the summary results.

117

116

Id.

EPA is only reviewing the comments submitted to the EPA-HQ-OAR-008-0691 public docket for CARB's authorization request and EPA the responses to such comments are not intended to imply that EPA is engaged in a reexamination of the issues thoroughly examined in the recent PM NAAQS review.

117

EPA is only reviewing the comments submitted to the EPA-HQ-OAR-2008-0691 public docket for CARB's authorization request and EPA's responses to such comments are not intended to imply that EPA is engaged in a reexamination of the issues thoroughly examined in the recent PM NAAQS review.

With regard to suggestions that PM

2.5

from diesel combustion does not present a public health risk or assertions that PM

2.5

composition is determinative to risk, EPA believes that the available scientific evidence linking mortality and morbidity effects with long-and short-term exposures to fine particles continue to be largely indexed by PM

2.5

mass. In the PM NAAQS review completed in 2012, EPA concluded that it was appropriate to retain PM

2.5

as the indicator for fine particles due to the inability to differentiate those components or sources that are more closely related to specific health outcomes nor to exclude any component or group of components from the mix of fine particles included in the PM

2.5

indicator. As EPA previously stated in the ISA “overall, the results indicate that many constituents of PM can be linked with differing health effects and the evidence is not yet sufficient to allow differentiation of those constituents or sources that are more closely related to specific health outcomes.”

118

See

ISA at 2-26.

With regard to suggestions that EPA did not properly consider prior reports (including the 2005 Dr. Enstrom study), EPA notes the Enstrom study was included in summary figures depicting the totality of the evidence for long-term PM

2.5

exposure and mortality.

119

It is important to note that Dr. Enstrom based his comments solely on statistical significance. Another commenter also asserts that studies looking at associations between PM and premature mortality do not have statistically significant results.

120

EPA responded in the NAAQS rulemaking to the issue of relying on statistical significance and why it is not appropriate to only focus on it when evaluating a body of evidence.

121

Specifically, EPA stated:

119

EPA noted that an association was reported for long-term PM

2.5

exposure with all-cause deaths from 1973-1982. However, no significant associations were reported with deaths in later time periods when PM

2.5

levels had decreased in the most polluted counties (1983-2002). The PM

2.5

data were obtained from the EPA's Inhalation Particle Network (collected 1979-1983), and the locations represented a subset of data used in the 50-city ACS study (Pope et al., 1995, 045159). However, the use of average values for California counties as exposure surrogates likely leads to significant exposure error, as many California counties are large and quite topographically variable. ISA, at 7-85.

120

See

Dr.Malkan.

121

See

“Responses to Significant Comments on the 2012 Proposed Rule on the National Ambient Air Quality Standards for Particulate Matter (June 29, 2012; 77 FR 38890).

http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf

Statistical significance is an indicator of the precision of a study's results, which is influenced by a variety of factors including, but not limited to, the size of the study, exposure and measurement error, and statistical model specifications. Statistical significance is just one of the means of evaluating the validity of the relationships determined with epidemiological studies. The EPA can reasonably look to other indicia of reliability such as the consistency and coherence of a body of studies as well as other confirming data to justify reliance on the results of a body of epidemiological studies, even if individual studies may lack statistical significance.

American Trucking Association

EPA,

283 F. 3d 355, 371 (D.C. Cir. 2002). As a result, in developing an integrated assessment of the health effects evidence for PM, the EPA has emphasized the importance of examining the pattern of results across various studies and their coherence and consistency, and has not focused solely on statistical significance as a criterion of study reliability.

It has been clearly articulated throughout the epidemiological and causal inference literature that it is important not to focus on results of statistical tests to the exclusion of other information. For example, Rothman (1998) stated: “Many data analysts appear to remain oblivious to the qualitative nature of significance testing [and that] . . . statistical significance is itself only a dichotomous indicator. As it has only two values, significant or not significant.” As a result, Rothman recommended that P-values be omitted as long as point and interval estimates are available.

The concepts underlying the EPA's approach to evaluating statistical associations reported for the health effects on PM

2.5

have been discussed in numerous publications, including a report by the U.S. Surgeon General on the health consequences of smoking (Centers for Disease Control and Prevention, 2004). This report cautions against overreliance on statistical significance in evaluating the overall evidence for an exposure-response relationship: Hill made a point of commenting on the value, or lack thereof, of statistical testing in the determination of cause: “No formal tests of significance can answer those [causal] questions. Such tests can, and should, remind us of the effects the play of chance can create, and they will instruct us in the likely magnitude of those effects. Beyond that, they contribute nothing to the `proof' of our hypothesis” (Hill 1965, p. 299). Hill's warning was in some ways prescient, as the reliance on statistically significant testing as a substitute for judgment in a causal inference remains today (Savitz et al., 1994; Holman et al., 2001; Poole 2001). To understand the basis for this warning, it is critical to recognize the difference between inductive inferences about the truth of underlying hypotheses, and deductive statistical calculations that are relevant to those inferences, but that are not inductive statements themselves. The latter include p values, confidence intervals, and hypothesis tests (Greenland 1998; Goodman 1999). The dominant approach to statistical inference today, which employs those

statistical measures, obscures this important distinction between deductive and inductive inferences (Royall 1997), and has produced the mistaken view that inferences flow directly and inevitably from data. There is no mathematical formula that can transform data into a probabilistic statement about the truth of an association without introducing some formal quantification of external knowledge, such as in Bayesian approaches to inference (Goodman 1993; Howson and Urbach, 1993). Significance testing and the complementary estimation of confidence intervals remain useful for characterizing the role of chance in producing the association in hand (CDC, 2003, pp. 23 to 24).

Accordingly, the statistical significance of findings from an individual study has played an important role in the EPA's evaluation of the study's results and overall the EPA has placed greater emphasis on studies reporting statistically significant results in making determinations as to the elements of the standard. In particular, as noted in section III.E.4.b.i of the preamble to the final rule, the EPA identified long- and short-term exposure studies considered “key” multi-city studies for consideration for informing the decisions on the appropriate standard levels and included those studies observing effects for which the evidence supported a causal or likely causal association. Figure 4 in the preamble to the final rule (also Figure 4 in the proposal, 77 FR 38933) represents the subset of multi-city studies included in Figures 1 through 3 of the preamble to the final rule (also Figures 1 through 3 in the proposal, 77 FR 38929 to 38931) that provided evidence of positive and generally statistically significant effects associated in whole, or in part, with more recent air quality data, generally representing health effects associated with lower PM

2.5

concentrations than had previously been considered in the last review.

The EPA notes that many of these studies evaluated multiple health endpoints, and not all of the effects evaluated provided evidence of positive and statistically significant effects. For purposes of informing the Administrator's decision on the appropriate standard levels, the Agency considers the full body of scientific evidence and focuses on those aspects of the key studies that provided evidence of positive and generally statistically significant effects. However, in the broader evaluation of the evidence from many epidemiological studies, and subsequently during the process of forming causality determinations, the EPA has emphasized the pattern of results across epidemiological studies for drawing conclusions on the relationship between PM

2.5

and health outcomes, and whether the effects observed are coherent across the scientific disciplines. Thus, in making causality determinations, the EPA did not limit its focus or consideration to just studies that reported positive associations or where the results were statistically significant.

122

Id.

In addition, EPA has previously addressed the issue of what one commenter calls “confounding health factors.” In the case of short-term exposure studies, a confounder would need to vary on a day-to-day basis with both air pollution and with the specific health outcome being evaluated (e.g., mortality or hospital admissions or emergency department visits). The confounders that fit these criteria for short-term exposure studies are related to weather (e.g., temperature, dew point, relative humidity). The short-term exposure studies, specifically time-series studies, evaluated in the ISA all included weather covariates in their models to account for their potential confounding effects (U.S. EPA, 2009a, Chapter 6).

With regard to long-term exposure studies, a number of multilevel cohort studies (Naess et al. 2007; Jerrett et al. 2003; Jerrett et al. 2005) have evaluated individual-level and contextual, or ecologic-level variables as potential confounders. As reported in Jerrett et al. (2005), “Contextual effects occur when individual differences in health outcomes are associated with the grouped variables that represent the social, economic, and environmental settings where the individuals live, work, or spend time (e.g., poverty or crime rate in a neighborhood). These contextual effects often operate independently from (or interactively with) the individual-level variables such as smoking.” These studies found that the inclusion of contextual variables tended to attenuate the risk estimates for the association between long-term exposure to PM

2.5

and mortality, but that an independent effect of PM

2.5

on mortality remains. For example, Jerrett et al. (2005) found that for PM

2.5

(controlling for age, sex, and race), the relative risk was 1.24 (95% CI 1.11, 1.37) for a 10 µg/m3 exposure contrast. In a parsimonious model that controlled for 44 different individual covariates and ecological confounder variables that both reduced the pollution coefficient and had associations with mortality, the relative risk was 1.11 (95% CI 0.99, 1.25) for the same exposure contrast. The EPA believes that the results of these studies provide confidence that more recent reports with updated datasets are showing independent effects of PM

2.5

123

Id.

One commenter's assertion that the risk from PM is hundreds of times smaller than the increased risk of lung cancer caused by cigarette smoking, and difficult to estimate, has been previously addressed during the PM NAAQS review. The “Responses to Significant Comments on the 2012 Proposed Rule on the National Ambient Air Quality Standards for Particulate Matter” stated:

The comparison of smoking and ambient PM-related effect estimates was not considered relevant for the PM NAAQS review, and thus, was not considered in the ISA. This issue was not raised during the CASAC and public review of the drafts of the ISA. In order to address the comments submitted, the EPA conducted a provisional review of the “new” literature published since the close of the ISA including studies cited by commenters, and identified several relevant studies that compared and evaluated effect estimates determined for relationships between specific health outcomes and ambient particulate matter and active smoking (Pope et al. 2009; Pope et al. 2011). These authors analyzed data from the American Cancer Society cohort in order to evaluate the shape of the exposure-response relationship for PM

2.5

and both lung cancer mortality (Pope et al. 2011) and cardiovascular disease (CVD) mortality (Pope et al. 2009; Pope et al. 2011). In these studies, the authors evaluated three sources of exposure to PM

2.5

: active smoking, passive smoking, and ambient air pollution.

For lung cancer mortality, the authors observed “a monotonic, nearly linear exposure response relationship with fairly constant marginal increases in RR [relative risk] with increasing exposure” across the full range of observed exposures (Pope et al. 2011). When the authors evaluated CVD mortality, they observed “an exposure-response relationship that is substantially non-linear, that is, much steeper at the very low levels of exposure compared with higher levels of exposure” (Pope et al. 2011). In fact, the study authors noted that “For lung cancer mortality, the RRs steadily increase to nearly 40 at the highest increment of cigarette smoking (>42 cigarettes per day), whereas for CVD mortality, the RRs level off at approximately 2.0-2.5.”

Because of the much steeper exposure-response relationship for long-term exposure to PM

2.5

and CVD mortality at low PM

2.5

concentrations, which flattens out at higher PM

2.5

concentrations (i.e., those associated with passive and active cigarette smoking), it is biologically plausible that the risk estimates for CVD mortality due to exposure to ambient concentrations of PM

2.5

would be similar to risk estimates for CVD mortality due to active cigarette smoking. These results are consistent with the results observed in epidemiological studies of long-term exposure to PM

2.5

and mortality, and with the conclusions drawn in the ISA. For example, Dockery et al. (1993) found essentially the same risk estimates for CVD mortality associated with both ambient PM

2.5

concentrations and active cigarette smoking in an area with relatively high levels of ambient PM

2.5

concentration.

Additionally, there could be non-traditional confounders have not been accounted for in epidemiological studies of short- and long-term exposure to air pollution. These confounders include physical and psychological population stress factors. The EPA disagrees with these commenters because: (1) There is very limited evidence of stress affecting the air pollution-health effect relationship upon which to base the commenters assertion; (2) in order for stress to be a true confounder it would need to vary temporally (for short-term exposure studies) and spatially (for long-term exposure studies) with both air pollution concentrations and the health effect of interest, which has not been demonstrated;

and (3) rather than stress acting as a true confounder, more than likely stress is on the causal pathway to the health effects that have been observed to be associated with air pollution. The EPA acknowledges that stress may contribute bias to epidemiological studies; however, stress more than likely would influence the magnitude of individual effect estimates in a single-city or multi-city study and not the trends of positive associations observed across studies conducted in multiple locations.”

124

EPA's Response to Comments:

http://www.epa.gov/ttn/naaqs/standards/pm/data/20121214rtc.pdf at II 23-25.

With regard to the third set of PM

2.5

health effect comments noted above (suggestions that PM

2.5

from diesel combustion located in California does not present a public health risk), we note that the isolated studies noted by the commenters are either consistent with past peer-reviewed studies supportive of PM

2.5

-related health effects, or have been considered previously by EPA and were considered as part of the weight of evidence used to make conclusions in the ISA.

Some of the commenters asserted that the composition of PM in California is less toxic than the PM in other areas of the country. One commenter asserted that “[t]he scientific evidence on the health effect of particulate matter air pollution in CA does not support its further control or regulation at this time. Our PM

2.5

is different in composition and is less toxic than that in many Eastern regions of the U.S.”

125

Another commenter states that “[t]he composition of what CARB defines as PM

2.5

has changed over time, and is not the same as what has been studied in the Eastern half of the United States.”

126

EPA responded to questions about heterogeneity in risk estimates in the PM NAAQS Review and that response is included here. EPA finds that no new evidence has been submitted in the context of the authorization proceeding to change this conclusion.

125

See

Dr. Phalen comment.

126

See

Dr. Malkan comment.

EPA responded in the PM NAAQS review that with respect to understanding the nature and magnitude of PM

2.5

-related risks:

[T]he EPA agrees that epidemiological studies evaluating health effects associated with long- and short-term PM

2.5

exposures have reported heterogeneity in responses between cities and effect estimates across geographic regions of the U.S. (U.S. EPA, 2009a, sections 6.2.12.1, 6.3.8.1, 6.5.2, and 7.6.1; U.S. EPA, 2011a, p. 2-25). For example, when focusing on short-term PM

2.5

exposure, the ISA found that multi-city studies that examined associations with mortality and cardiovascular and respiratory hospital admissions and emergency department visits demonstrated greater cardiovascular effects in the eastern versus the western U.S. (Dominici, et al., 2006a; Bell et al., 2008; Franklin et al. (2007, 2008)). However, the rationale that heterogeneity in risk estimates presents a potential bias as posed by the commenters is simplistic and does not account for a number of factors that have been shown to influence city-specific risk estimates in epidemiologic studies. As discussed in the ISA, the EPA recognizes that there are compositional differences in PM

2.5

across the country and that the county-level air quality data used in epidemiological studies may resul

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