Estimating the Potential Air Quality Benefits of a Tighter Nitrogen Oxide (NOx) Emissions Standard for New Heavy-Duty-On-Highway Trucks

The Situation

Under the provisions of the Clean Air Act, the US Environmental Protection Agency (EPA) announced a “Cleaner Trucks Initiative” in November 2018 to lower the current federal nitrogen oxide (NOx) standards for “heavy-duty on-highway” (HDOH) trucks. Per the Clean Air Act, NOx emissions standards would need to be as stringent as technically feasible given “appropriate consideration of costs.” An approach used by the EPA in the past to determine an appropriate cost level is to carry out a benefit-cost analysis (BCA) of the proposed tighter NOx standard. A particular standard’s cost is generally viewed as appropriate if its benefits exceed those costs. 

NERA's Role

NERA was engaged by the Truck and Engine Manufacturer’s Association (EMA) to prepare scoping-level estimates of the potential per-truck air quality benefits of a 90% reduction in the current NOx “federal test protocol” (FTP) NOx emissions standard for HDOH trucks. These benefit-per-truck estimates can help identify the maximum per-truck compliance cost that would be likely to pass muster under a full BCA of the proposed tighter NOx standard. The quantifiable benefits for air quality regulations such as a tighter HDOH NOx emissions standard relate to the societal value of potential improvements in health outcomes from reduced exposures of the US population to ambient pollutants such as ozone and fine particulate matter (PM2.5). About 98% of the health benefits value from reductions in ozone and PM2.5 in other analyses are due to reductions in mortality risk alone. Thus, our scoping-levels benefits estimates were limited to mortality risk benefits.

To obtain the benefit-per-truck estimates, NERA calculated the lifetime tons of NOx emissions reductions from an average new truck meeting the tighter NOx standard for each year of a truck’s operational life and for each of the truck types that would be covered by the standard. The continued operation of the average truck in each future year was based on data on truck survival rates over time that were specific to each truck type. The emissions reduction in each year of the average truck’s life were translated into a dollar estimate of the associated health benefits using a range of potential “benefit per ton” values, which were discounted to obtain a range of potential present values of benefits per truck for each of the truck types analyzed. To account for the uncertainties caused by extrapolation of the “concentration-response” (C-R) relationship to exposure levels outside of the ranges providing the epidemiological evidence of such risk, NERA reported the sensitivity of the benefit-per-truck estimates to increasing constraints on the amount of extrapolation allowed in their calculation. NERA’s analysis also explored regional differences with respect to the estimated “benefit per ton” values.

The Result

For the HDOH truck NOx emission standard analyzed, the potential national average benefits-per-truck estimate was about $6,000. When moderate adjustments are made to account for uncertainties relating to extrapolations from the underlying mortality risk evidence, the estimates were less than about $4,000 per truck. The equivalent estimates obtained using a 7% discount rate were 25% lower. These scoping-level estimates indicate the maximum per-truck cost to achieve the estimated HDOH NOx reductions in our analysis that would be likely to pass a robust benefit-cost test. A regional analysis found that the national average of less than $4,000 per truck is based on about $12,000 for trucks operating in California, offset by an average of about $3,000 per truck operating in the rest of the lower-48 states.