Skip to main content Accessibility help
×
×
Home

Retrospective Evaluation of the Costs of Complying with Light-Duty Vehicle Surface Coating Requirements

  • Ann Wolverton (a1), Ann E. Ferris (a2) and Nathalie B. Simon (a3)

Abstract

This paper compares the U.S. Environmental Protection Agency’s (EPA) ex ante compliance cost estimates for the 2004 Automobile and Light-Duty Truck Surface Coating National Emission Standards for Hazardous Air Pollutants to ex post evidence on the actual costs of compliance based on ex post cost data gathered from a subset of the industry via pilot survey and follow-up interviews. Unlike many prior retrospective studies on the cost of regulatory compliance, we use this newly gathered information to identify the key drivers of any differences between the ex ante and ex post estimates. We find that the U.S. EPA overestimated the cost of compliance for the plants in our sample and that overestimation was driven primarily by differences in the method of compliance rather than differences in the per-unit cost associated with a given compliance approach. In particular, the U.S. EPA expected facilities to install pollution abatement control technologies in their paint shops to reduce emissions of hazardous air pollutants, but instead these plants complied by reformulating coatings.

Copyright

Corresponding author

Footnotes

Hide All

The views expressed in this paper are those of the authors and do not necessarily represent those of the U.S. Environmental Protection Agency (EPA).

Footnotes

References

Hide All
Akafush, Nelson K., Poozesh, Sadegh, Salaimeh, Ahmad, Patrick, Gabriela, Lawler, Kevin, and Saito, Kozo. 2016. “Evolution of the Automotive Body Coating Process: A Review.” Coatings, 6(2): 122.
Fraas, Art and Egorenkov, Alex. 2018. “Retrospective Analyses Are Hard: A Cautionary Tale from EPA’s Air Toxics Regulations.” Journal of Benefit-Cost Analysis, 9(2): 247284.
Freedonia Group. 1999. Automotive Coatings, Adhesives & Sealants in the United States to 2003 – Automotive Adhesives, Market Share and Competitive Strategies. OH: Cleveland.
Freedonia Group. 2008. Automotive Coatings, Adhesives & Sealants: U.S. Industry Study with Forecasts for 2012 & 2017. OH: Cleveland.
Gallaher, Michael P., Murray, Brian C., Nicholson, Rebecca L., and Ross, Martin T.. 2006. Redesign of the Pollution Abatement Costs and Expenditures (PACE) Survey: Findings and Recommendations from the Pretest and Follow-up Visits. Final Report.
Geffen, Charlette A. and Rothenberg, Sandra. 2000. “Suppliers and Environmental Innovation: The Automotive Paint Process.” International Journal of Operations and Production Management, 20(2): 166186.
Goodstein, Eban and Hodges, Hart. 1997. “Behind the Numbers: Polluted Data.” The American Prospect, Nov.–Dec.
Gordon, Ed. 2005. “The Decline of the ‘Big Three’ U.S. Auto Makers.” NPR News, May 4.
Hammitt, James K. 2000. “Are the Costs of Proposed Environmental Regulations Overestimated? Evidence from the CFC Phaseout.” Environmental and Resource Economics, 16(3): 281302.
Harrington, Winston, Morgenstern, Richard D., and Nelson, Peter. 2000. “On the Accuracy of Regulatory Cost Estimates.” Journal of Policy Analysis and Management, 19(2): 297322.
Hodges, Hart. 1997. Falling Prices: Cost of Complying with Environmental Regulations Almost Always Less than Advertised. Economic Policy Institute Briefing Paper #69.
ICIS. 2008. Indicative Chemical Prices: A-Z. https://www.icis.com/chemicals/channel-info-chemicals-a-z/. Accessed Aug. 9, 2017.
Kopits, Elizabeth, Cynthia Morgan, Al McGartland, Ron Shadbegian, Carl Pasurka, Simon, Nathalie B., Simpson, David, and Wolverton, Ann. 2014. “Retrospective Cost Analyses of EPA Regulations: A Case Study Approach.” Journal of Benefit Cost Analysis, 5(2): 173193.
Kropko, M. R. 2006. “Cities Face Life Without 16 Ford Plants.” USA Today, Dec. 10.
Meschievitz, Tom, Rahangdale, Yogen, and Pearson, Richard. 1995. “U.S. Council for Automotive Research (USCAR) Low-Emission Paint Consortium: A Unique Approach to Powder Painting Technology Development.” Metal Finishing, 93(10): 2631.
Morgenstern, Richard D.2015. The RFF Regulatory Performance Initiative: What Have We Learned? Resources for the Future Discussion Paper #15–47.
New York Times. 1993. Auto Makers in Paint Deal. Feb. 18.
Papasavva, Stella, Kia, Sheila, Claya, Joseph, and Gunther, Raymond. 2001. “Characterization of Automotive Paints: An Environmental Impact Analysis.” Progress in Organic Coatings, 43: 193206.
Putnam, Hayes and Bartlett, Inc. 1980. Comparisons of Estimated and Actual Pollution Capital Expenditures for Selected Industries. Report prepared for the U.S. EPA, Cambridge, MA.
Ross, Martin T., Gallaher, Michael P., Murray, Brian C., Throneburg, Wanda W., and Levinson, Arik. 2004. PACE Survey: Background, Applications, and Data Quality Issues. NCEE Working Paper #2004-09.
Taylor, Alex. 2007. “Behind Ford’s Scary $12.7 Billion Loss.” Fortune, Jan. 26.
U.S. EPA. 1995. Emission Factors & AP 42, Compilation of Air Pollutant Emission Factors. Volume I: Stationary Point and Area Sources Fifth Edition. Office of Air Quality Planning and Standards.
U.S. EPA. 2002. Supporting Documents for the Proposed National Emission Standards for Automobile and Light Duty Truck Surface Coating: 40 CFR 63, Subpart IIII. Oct.
U.S. EPA. 2004. Regulatory Impact Analysis for the Final Automobile and Light-Duty Truck Surface Coating NESHAP. Final Report. EPA-452/R-04-007.
U.S. EPA. 2010. Guidelines for Preparing Economic Analyses. Report 240-R-10-001.
U.S. EPA. 2014. Retrospective Study of the Costs of EPA Regulations: A Report of Four Case Studies. Report 240-F-14-001.
U.S. OMB (Office of Management and Budget). 2005. Validating Regulatory Analysis: 2005 Report to Congress on the Costs and Benefits of Federal Regulations and Unfunded Mandates on State, Local, and Tribal Entities. Washington, D.C.
White House. 2012. Executive Order 13610, Identifying and Reducing Regulatory Burdens. 81 FR 4213. May 10.
Wolverton, Ann, Ferris, Ann E., and Simon, Nathalie B.. 2017. Retrospective Evaluation of the Costs Associated with the 2004 Automobile and Light-Duty Truck Surface Coating NESHAP. NCEE Working Paper #2017-07.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Journal of Benefit-Cost Analysis
  • ISSN: 2194-5888
  • EISSN: 2152-2812
  • URL: /core/journals/journal-of-benefit-cost-analysis
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Keywords

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed