Evaluating County Policy Alternatives to Meet Air Quality Standards:
A Case Study

Prepared by:

L. Steven Smutko, Leon E. Danielson, and Dana L. Hoag,
Agricultural and Resource Economics,
Applied Resource Economics and Policy Group.

Under terms of the 1970 federal Clean Air Act, the U.S. Environmental Protection Agency (EPA) sets standards for various air pollutants. In 1990 amendments to the Clean Air Act set a timetable for attaining air quality standards. Ozone, a pollutant whic h develops from the interaction of sunlight and emissions from vehicles and industry, is one of the pollutants regulated by the Clean Air Act.

Air Quality Standards

In 1991, seven counties in North Carolina failed to meet the EPA standards for ozone. Gaston and Mecklenburg Counties were among these "non-attainment" areas. The amount of ozone pollution found in the air on hot, sunny days exceeded national ambient ai r quality standards. The EPA now classifies the Gaston-Mecklenburg Metropolitan Area as a "moderate" ozone nonattainment area. Under this classification, both counties have until 1996 to reduce emissions of volatile organic compounds (VOCs) important ingredients in the formation of ozone - to 85 percent of 1990 levels.

Emissions of VOCs can be reduced by regulating vehicle emissions, gasoline filling stations, industrial processes, and various other activities. The following actions to reduce ozone levels are required by federal and state law in nonattainment areas:

If target ozone levels are not reached by 1996, stricter regulatory measures will be imposed. More businesses and industries would be subject to regulatory requirements, stricter and more expensive vehicle emission inspections would be required, and great er VOC offsets would be required to allow industrial growth. Under extreme circumstances, transportation control measures such as roadway alterations and trip reduction ordinances would have to be carried out. Implementing such stringent additional requirements would be financially burd ensome for both the private and public sectors.

The Gaston County Policy Evaluation Process

In 1991, when Gaston County was classified as a non-attainment area, the Quality of Natural Resources Commission (QNRC )had been operating for three years. This broad-based citizens group recommends to the Board of County Commissioners policies, procedur es, regulations and changes in laws to protect the environment.

Faced with the need to achieve at least a 15- percent reduction in ozone levels within four years, the QNRC saw the need to respond quickly to ensure that an effective program was put into place. Its Air Quality, Education/Policy, and Executive Committees met regularly from May to October 1992 to identify and evaluate policy alternatives for reducing air pollution in Gaston County. Generally, the steps followed were:

  1. reach a consensus on the issues to be addressed;
  2. set goals and objectives;
  3. formulate program guidelines; and
  4. identify and evaluate policy alternatives.
Throughout the process, committee members sought information regarding the Clean Air Act, implementation of local air pollution programs, potential fee revenues generated by a local program, and other topics, from the North Carolina Cooperative Extension Service and the North Carolina Division of Environmental Management.

The QNRC Air Quality Committee investigated the program that the North Carolina Division of Environmental Management currently has in place to control air pollution emissions in the county. The committee also investigated Mecklenburg County's program, on e of three local programs in the state that administers state air quality statutes by reference in a local ordinance.

Defining the Problem

Reaching consensus on the air quality issues to be addressed was the first step in a process designed to guide QNRC members toward specific policy recommendations. Issue identification is a fundamental step: solutions cannot be reached if people cannot a gree on the problem.

The QNRC initially developed a list of nine issues related to air pollution control. It was the consensus of the group that the primary issue was to identify and evaluate alternatives for administering the provisions of the 1990 Clean Air Act Amendments i n Gaston County. All issues were restated as goals or guidelines to provide policy direction and emphasis.

Goals are broadly defined targets for policy action. Guidelines add further direction to the policy program by providing boundaries within which future policies will be centered. By defining policy goals and guidelines, committee members were able to rea ch agreement on the overall direction of the air quality program. Once the policy alternatives were identified, they could be evaluated in reference to these goals and guidelines.

Setting Priorities

Ranking the goals and guidelines provided another method for evaluating policy alternatives. A policy alternative that seems likely to achieve high priority goals and remain consistent with high priority guidelines should receive greater consideration for policy recommendation. The goals and guidelines and their rankings are listed in Table 1.

Table 1. Policy Alternatives in Relation to Air Quality Goals (G) and Guidelines (g)

Rank Goal or Guideline S L R
1 Improve air quality in Gaston County (G) - 0 0
2 Protect air quality while minimizing economic impact to the community (g) - + -
3 Increase public awareness through education on air quality issues (G) - + 0
4 Maintain local flexibility in implementing Clean Air Act regulations(g) - + 0
4 Speed up the permit application process (G) - + +
5 Minimize program costs in reducing air emissions (g) + - 0
5 Develop local expertise in interpreting and administering regulatory provisions (G) - + 0
6 Keep air pollution control permit fee revenues in the county (G) - + 0
7 Provide incentives to reduce emission levels (g) - + 0
8 Maintain local control of air pollution permitting (G) - + 0
9 Achieve a single-point interpretation of air pollution control regulations (G) - + 0
10 Provide incentives to stimulate growth while reducing emissions *
11 Exceed emission reduction requirements specified in the Clean Air Act (G) - + 0
11 Reduce exposure to civil liability (g) + - -
Alternative S = State Program
Alternative L = Local Program
Alternative R = Regional Program

Scale: Good=+ Fair=0 Poor=(-) Not Ranked=*

Reaching a consensus on the rankings was important since the potential to achieve goals and meet guidelines was one of the criteria used in evaluating policy alternatives.

The first attempt to rank issues provided no clear indication of their relative importance to the committee members. A second ranking was made after committee members spent several weeks becoming better informed about air pollution. Still, clear consensus was reached only on the top three priorities.

Rankings for the remaining 11 were rather evenly distributed, resulting in several equal rankings and making it difficult to discern priorities. In light of this, the policy alternatives identified through the next step were evaluated with respect to the top three goals and guidelines only.

Three Policy Alternatives

Air pollution control programs depend on a permit process. A facility that emits sufficient quantities of one or more regulated pollutants must obtain a permit to operate. This allows the permitting authority to monitor facility emissions against a set of maximum emission standards, enforce standards, and assess and collect fees.

When faced with a mandate to reduce air pollution levels, the QNRC discovered that counties have three choices:

Each of these policy alternatives was evaluated for its potential to meet the three top priority goals and guidelines (Table 1). The values of the three-point scale (+,- ,0) are relative. In other words, the alternatives were evaluated on how well each achieved a particular criterion in relation to the others. As shown in Table 1, it was felt that a Local program could better achieve the goals and guidelines than either of the other two alternatives, i.e., this alternative scored more pluses (+) than did the other two. The Regional program ranked second, and the State program ranked third.

Focusing on the top three issues and applying numeric values to the +, - ,0 scale and the goal/guideline rankings, a numeric goal-achievement score was calculated for each alternative. Using only the top three issues on which committee members had reached consensus, the following goal-achievement scores were calculated:

Figure 1. Goal Achievement

Alternative
State Program 0
Local Program 9
Regional Program 4
When considering potential to achieve the top three goals/guidelines, the local program alternative again ranked highest followed by the regional and state program alternatives in that order.

The policy alternatives were also evaluated based on their potential to meet several operational criteria. These rankings were determined by a vote of the committee members. Table 2 shows the other criteria that committee members felt were important in evaluating the alternatives.

Since these criteria were not ranked as were the goal/guideline criteria, a criteria-achievement score was not calculated. This does not imply that these criteria were considered of lesser importance.

In fact, committee members placed a high priority on the criterion, "Maintain local autonomy." This criterion refers to the ability of Gaston County policy makers to influence decisions regarding air quality control in the county. Committee members felt that a local program would provide the greatest amount of local autonomy.

With regard to the state alternative, the committee believed that state agency staff and decision makers would be indifferent to Gaston County and would treat Gaston County businesses and industries no differently than those in other locations. Local autonomy was considered to be weakest with the regional program alternative. Because statutory requirements set per capita representation on regional authorities, a Gaston-Mecklenburg regional authority of seven members would contain five members representing Mecklenburg County and two representing Gaston County.

A firm conviction of the committee members was that such a representational structure would leave Gaston County with little influence over local decisions regarding air pollution control.

Table 2. Policy Alternatives in Relation to External Criteria

External Criteria S L R
Maintain local autonomy 0 + -
Maintain single point of contact - + 0
Speed up permit process - + +
Improve response rate - + 0
Improve compliance through local familiarity - + 0
Negotiate new source trade-offs - + 0
S = State, L = Local, R = Regional Program
Scale: + Good, 0Fair, - Poor

Guided by the goal/guideline comparisons shown in Table 1, and the external criteria comparisons shown in Table 2, the committee members voted for their first, second and third choices among the policy alternatives. Voting results are shown in Table 3.

The first choice of the committee members was to recommend that the county adopt and implement a local air pollution control program. The second preference was to maintain the state pollution control program. No consensus was reached on the third preference. Even though the goal/guideline comparison indicated that the regional program alternative might have more potential to achieve the high priority goals and guidelines, the local autonomy criterion carried significant weight. As a result, the regional program was the least preferred alternative.

Table 3. Votes by Preference Alternative

Preference Choices 1st 2nd 3rd
State Program 2 9 6
Local Program 11 1 4
Regional Program 2 5 5

From Process to Policy

In the final stages of its decision-making process, the QNRC held a series of seminars and a community round-table discussion with business leaders and local officials to gain some feedback on the decision to recommend a local air pollution control program. Based on these discussions, and negotiations with state and federal authorities, a program was to be drafted and a final recommendation made. As of this time, the program details were still under debate.

By following a deliberate and well-defined process, the QNRC reached the decision to recommend that the county develop and administer a local air pollution control program. QNRC members identified the goals that any air pollution control program whether local, regional, or state should meet, specified program guidelines, and used those and other criteria to evaluate the policy alternatives available to them. A decision as important as that of embarking on a local air pollution control program is likely to be controversial. However, as the decision reaches the political arena, the QNRC will be better prepared to defend its choice of policy alternatives.

From Process to Policy

In the final stages of its decision-making process, the QNRC held a series of seminars and a community round-table discussion with business leaders and local officials to gain some feedback on the decision to recommend a local air pollution control program. Based on these discussions, and negotiations with state and federal authorities, a program was to be drafted and a final recommendation made. As of this time, the program details were still under debate.

By following a deliberate and well-defined process, the QNRC reached the decision to recommend that the county develop and administer a local air pollution control program. QNRC members identified the goals that any air pollution control program--whether local, regional, or state --should meet, specified program guidelines, and used those and other criteria to evaluate the policy alternatives available to them. A decision as important as that of embarking on a local air pollution control program is likely to be controversial. However, as the decision reaches the political arena, the QNRC will be better prepared to defend its choice of policy alternatives.

AREP-93-3-October 1993

bridgesj@unity.ncsu.edu

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