Reference no: EM13914612

In 1997, the EPA proposed an increase in the national air quality standards for particulate mat- ter (PM). Because the change was considered a major rule, the agency was required to conduct an RIA and assess the potential costs and benefits of the proposed standard. The completed RIA can be accessed at www.epa.gov/ttn/oarpg/ naaqsfin/ria.html. As part of this RIA, benefit and cost data for the existing standard were given and are replicated here:

Annual Control Cost

a. Examine the control cost estimates, and provide a plausible explanation of why there are incremental costs differences across regions for meeting the PM standard.

b. Economically, can you justify the PM standard? Explain.

c. List some of the limitations associated with benefit-cost analysis. Which of these are appli- cable to this particular economic analysis? Explain.

Control Region                               ($1990 millions)

Midwest/Northeast                                      380

Southeast                                                         2

South Central                                              230

Rocky Mountain                                          210

Northwest                                                    140

West                                                             130

National                                                    1,100