139 MacDougal Street, Third Floor, New York, New York 10012 • (212) 992-8932 • www.policyintegrity.org

 

March16,2017

VIAELECTRONICSUBMISSION

EnvironmentalProtectionAgency

Attn: ToniKrasnic,ChemicalControlDivision,OfficeofPollutionPreventionandToxics

Re: EPA‐HQ‐OPPT‐2016‐0163,RegulationofCertainUsesunderToxicSubstancesControlAct:Trichloroethylene

TheInstituteforPolicyIntegrity(“PolicyIntegrity”)atNewYorkUniversitySchoolofLaw1respectfullysubmitsthefollowingcommentstotheEnvironmentalProtectionAgency(“EPA”orthe“Agency”)regardingitsproposedrestrictionsonthemanufacture,processing,anddistributionoftrichloroethylene(“TCE”)foruseinaerosoldegreasingandinspotcleaningindrycleaningfacilities(the“Rule”).2

PolicyIntegrityisanon‐partisanthinktankdedicatedtoimprovingthequalityofgovernmentdecisionmakingthroughadvocacyandscholarshipinthefieldsofadministrativelaw,economics,andpublicpolicy.OurcommentsfocusontheEconomicAnalysisthatEPApreparedtosatisfyitsobligationsunderSection6(c)(2)oftherecentlyamendedToxicSubstancesControlAct,whichrequiresEPAtoassessthe“thereasonablyascertainableeconomicconsequences”ofregulationsissuedundertheAct,3aswellasExecutiveOrder12,866,whichrequiresexecutiveagenciestoestimatethecostsandbenefitsofsignificantregulatoryactions.4

EPA’sEconomicAnalysisdemonstratesthattheRuleisoverwhelminglycost‐benefitjustified,generatinganestimated$9.3to$25millioninannualizedbenefits,whileimposingonly$170thousandinannualizedcosts(usinga3%discountrateforbothcostsandbenefits).5Furthermore,thismonetizedbenefitsestimateencompassesonlyreductionsin

                                                            1ThisdocumentdoesnotpurporttopresentNewYorkUniversitySchoolofLaw’sviews,ifany.281Fed.Reg.91,592(Dec.16,2016).315U.S.C.§2605(c)(2).4Exec.OrderNo.12,866,58Fed.Reg.51,735(Oct.4,1993).581Fed.Reg.at91,594.

 

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cancerrisks,andthusdoesnotaccountforbenefitsassociatedwithreductionsinnon‐cancerrisksthatwillalsoaccompanytheRule.6

Itisclear,then,thattheRulewillincreasesocialwelfare.Nevertheless,aspectsofEPA’sEconomicAnalysiscouldbeclarifiedorexpandedupontoprovideanevenstrongeranalyticalfoundationfortheRule.Tothatend,werecommendthefollowing:

EPAshouldclarifyitsdiscussionoftherelativecostsandbenefitsofabanonTCEuseascomparedtoaperformancestandardthatlimitspermissibleexposuretoTCE.

EPAshoulddiscusswhetherandhowtheRulecouldaffectthepriceofsubstituteproducts.

EPAshouldclarifywhetherandwhyitattributeshealthbenefitstothesubstitutionofmethylenechloride‐basedspot‐removalproductsforTCE‐basedproducts.

I. EPAshouldclarifyitsdiscussionoftherelativecostsandbenefitsofabanonTCEuseascomparedtoaperformancestandardthatlimitspermissibleexposuretoTCE.

Initsdiscussionofalternativeregulatoryapproaches,EPAfindsthataperformancestandardsettingamaximumpermissiblelevelofworkplaceexposurewouldnotbelesscostlythanabanonTCEuse,becauseswitchingto“readilyavailable”substitutesischeaperthanothertechniquesthatworkplacescouldusetoreduceexposure,suchaspersonalprotectiveequipmentorengineeringcontrols.7Inotherwords,theAgencyassumesthataperformancestandardwouldserveasadefactoban,becausealluserswouldchoosetocomplythroughtheuseofsubstitutes.

Elsewhereinitsanalysis,however,EPAconcedesthat“forusers,noregulatoryoptioncanbemoreexpensivethanaban”and“acknowledgesthepossibilitythattherearesomeTCEdrycleaningspotremoverusersthathavestrongpreferencesforusingTCE,andthereforewouldincurawelfareloss”underaban,notwithstandingtheavailabilityofsubstitutes.8AperformancestandardwouldallowthoseusersalternativemeansofcomplyingwiththeRule(whichtheywoulduseonlyiftheirpreferenceforTCEwasstrongenoughtojustifytheadditionalcostofthealternativecompliancemethods).Accordingly,iftheprojected

                                                            6Id.7EPA,EconomicAnalysisofProposedTSCASection6ActiononTrichloroethyleneinDryCleaningSpotRemoversandAerosolDegreasersat2‐4(Nov.15,2016),availableathttps://www.regulations.gov/document?D=EPA‐HQ‐OPPT‐2016‐0163‐0003(“Sincealternativeproductsthataresimilarorlowerinpriceandhavesimilarefficacyarereadilyavailable,arulethatensuresthatcomplianceisachievedbyswitchingtothesealternativeproductswouldbealesscostlyapproachforallsegmentsoftheregulatedcommunity.”).8Id.at5‐11;seealsoid.at5‐15.

 

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benefitsofabanandaperformancestandardweretrulyequivalent,EPAwouldbemorelikelytomaximizethenetbenefitsoftheRulebyimposingaperformancestandard.

Butthebenefitsofaperformancestandardarealmostcertainlylowerthanthoseofaban.AsEPApointsout,aperformancestandardwouldnotaddressconsumer(asopposedtoworkplace)exposure.9Additionally,aperformancestandardwouldbemoredifficulttoenforce(andthushavealowercompliancerate),becauseitwouldapplytoalargenumberofproductusersasopposedtoasmallnumberofsuppliers.10Asaresult,“EPAhasconcludedthataperformancestandardwould[not]sufficientlyaddressrisksforallexposedpopulations.”11

Takentogether,EPA’sstatementsimplythatitbelievesthattheincreasedbenefitsassociatedwithaban(broaderscope,moreeffectiveenforcement,greatercompliance)outweighitspotentiallyincreasedcosts(welfarelossestouserswhowould,underaperformancestandard,choosealternativecompliancemethods).EPAshouldmakethisfindingexplicitinitsEconomicAnalysistoavoidanyconfusion.Ifpossible,theAgencyshouldsupportitsfindingbyquantifyingtheadditionalcostsandbenefitsofabanascomparedtothoseofaperformancestandard.Ifsuchquantificationisnotpossible,EPAshouldexplainwhyanddiscussitsfindingsqualitatively.

II. EPAshoulddiscusswhetherandhowtheRulecouldaffectthepriceofsubstituteproducts.

AccordingtoEPA,“usersofTCEaerosoldegreasersandTCEdrycleaningspotremoversarenotexpectedtoincuranycostsassociatedwithanyrequirementsthatdiscourageorprohibittheuseofTCE,”because“productswithsimilarorlowercostsandsimilarefficacyarereadilyavailable.”12EPAdoesnot,however,addressthepossibilitythatincreaseddemandforsubstituteproductswillleadtoincreasedpricesforthosesubstitutes.IftheAgencybelievessuchpricechangeswillnotoccurorwillbenegligible,itshouldexplainwhy.Ifitbelievessignificantpricechangeswilloccur,itshouldfactorthemintoitsanalysis.

III. EPAshouldclarifywhetherandwhyitattributeshealthbenefitstothesubstitutionofmethylenechloride‐basedspot‐removalproductsforTCE‐basedproducts.

Foritslowerbenefitsestimate,EPAreasonablyattributesnobenefitstotheportionofcurrentTCE‐containingproductsthatwillbereplacedbyproductscontainingperchloroethylene(“PCE”)or1‐bromopropane(“1‐BP”),becausethosetwochemicalsmay                                                            9Id.at2‐4.10Id.11Id.12Id.atES‐3.

 

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posehealthrisksoftheirown.13Indeed,EPApointsoutthatCaliforniahasalreadybanneduseofthesechemicalsinspot‐removalandaerosol‐degreasingproducts(explicitlyinthecaseofPCEandimplicitlyfor1‐BP).14

ButCaliforniahasalsobannedmethylenechloride(“DCM”),oneoftheotheranticipatedsubstitutesforTCEinspot‐removalproducts.15Furthermore,EPAanticipatesthatsomeblenderswillavoidreformulatingwithDCMdueto“perceptionsaboutfuturefederalregulations.”16BothofthesefactssuggestthatDCM‐containingproductsarehazardoustohumanhealth—or,atleast,areperceivedtobeso.Yet,unlikewithPCEand1‐BP,EPAdoesnotappeartoexcludetheportionofTCE‐containingproductsthatwillbereplacedbyDCM‐containingproductsfromitslowerbenefitsestimate.17

IfEPAhas,infact,excludedDCMsubstitution‐relatedbenefitsfromitslowerbenefitsestimate,itshouldexplicitlystatethisinitsEconomicAnalysis.IftheAgencyhasnotdoneso,itshouldexplainitsreasoningfortreatingDCMsubstitutionsdifferentlythanPCEor1‐BPsubstitutions.

 

Respectfully,

CarolineCecotJackLienkeInstituteforPolicyIntegrity

                                                            13Id.at6‐8.14Id.at4‐10,4‐18.15Id.at4‐10.16Id.17Seeid.at4‐10,tbl.4‐2(listingDCMinthe“Other”categoryofsubstitutesthatwillreplace70%ofTCEuseinspot‐removalproducts);id.at6‐8,tbl.6‐4(explainingthatbenefitsarenotattributedtosubstitutionsofTCEwithPCEand1‐BPbutareattributedtosubstitutionsofTCEwithotherproducts).