APPENDIX C Cost Effectiveness Analysis August 19, 2010

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis

August 19, 2010

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Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis I.

August 19, 2010

INTRODUCTION

The California Health and Safety Code 40920.6(a) requires the San Joaquin Valley Unified Air Pollution Control District to conduct both an "absolute" cost effectiveness analysis and an “incremental” cost effectiveness analysis of available emission control options prior to adopting each Best Available Retrofit Control Technology (BARCT) rule. The purpose of conducting a cost effectiveness analysis is to evaluate the economic reasonableness of the pollution control measure or rule as it applies to operators in the San Joaquin Valley Air Basin. The analysis also serves as a guideline in developing the control requirements of a rule. Incremental cost effectiveness is intended to measure the change in costs (in $/year) and emissions reductions (in tons reduced/year) between two progressively more effective control options or technologies. For this rule project, the limits are considered the lowest achieved in practice, therefore, no incremental cost effectiveness analysis was conducted. Rule 4653 applies to any person who supplies, sells, offers for sale, or applies any adhesive product, or associated solvents for use within the San Joaquin Valley Air Basin (SJVAB). Amendments to Rule 4653 would make the VOC content limits of some types of adhesives more stringent than they currently are to fulfill commitments in the District 2007 Ozone Plan. Amendments to Rule 4653 will also add sealants and sealant primers to rule language as newly regulated sources. II.

SUMMARY AND CONCLUSION

A. Absolute Cost Effectiveness Analysis Absolute cost effectiveness of a control option is the added cost of a control technology or technique, divided by the emission reduction achieved (in tons reduced per year). The costs typically include capital equipment costs, engineering costs, labor and maintenance costs. In developing the amendments to Rule 4653, staff found no serious economic impacts. Analysis indicates that there would be little to no cost difference to businesses to purchase compliant products as these products are currently readily available. Therefore, staff have determined that there would be no significant adverse impacts on the profitability of businesses affected by the rule. This cost effectiveness analysis accounts for the costs associated with this ruleamending project. Proposed rule language indicates that the VOC content limits for certain adhesive categories will become more stringent on and after January 1, 2011. The costs associated with the amendments effective on and after January 1, 2011 were accounted for during the previous rule-amending project to adopt EPA CTG requirements. C-3

Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis

August 19, 2010

B. Incremental Cost Effectiveness Analysis Incremental cost effectiveness (ICE) is intended to measure the change in costs (in $/year) and emissions reductions (in tons reduced/year) between two progressively more effective control options or technologies. ICE compares the differences in costs and the differences in emissions reductions of candidate control options. ICE does not reveal the emission reduction potential of the control options. Unlike the absolute cost effectiveness analysis that identifies the control option with the greatest emission reduction, ICE does not present any correlation between emission reductions and cost effectiveness. Therefore, the relative values produced in the ICE analysis and the absolute cost effectiveness values are not comparable and cannot be evaluated similarly. The District is required to conduct an ICE analysis for BARCT rules or emission reduction strategies in accordance with Health and Safety Code Section 40920.6 when there is more than one control option. No incremental cost increases are expected to occur since there are no other lower emission control options. As such, staff did not conduct an ICE analysis. III.

COST EFFECTIVENESS ANALYSIS

District staff used available cost information obtained from Internet searches, and staff reports from other Air Districts to conduct a cost effectiveness analysis of the proposedamendments to Rule 4653. For this project the compliance costs are associated with purchasing new adhesive, adhesive primer, sealant and sealant primer products with complaint VOC content limits. It is important to note that the proposed VOC content limits for Adhesives and Adhesive Primers are not more stringent than existing VOC content limits of the same adhesive categories in other air districts. The proposed VOC content limits have been in effect for several years in other air districts, for example, South Coast Air Quality Management District (SCAQMD), Bay Area Air Quality Management District (BAAQMD), San Diego Air Pollution Control District (SCAPCD), and Ventura County Air Pollution Control District (VCAPCD). As indicated in table C-1, the proposed VOC content limits have been in rule language of adhesives rules in other air districts for five to eight years. Therefore, these products are readily available and currently sold in stores. Searches have indicated that the adhesives with the proposed VOC content limits are available in stores, and at the same price points as adhesives with VOC contents that will become non-compliant upon rule implementation on January 1, 2012.

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Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis

August 19, 2010

Table C-1 Adhesives Rules in Other Air Districts Air District

Adhesive Rule Number

Rule Adoption Date

Last Amendment Date

BAAQMD SDAPCD SCAQMD VCAPCD

Regulation 8 Rule 51 67.21 1168 74.2

11/18/92 12/16/98 4/7/89 6/8/93

7/17/02 5/14/08 1/7/05 1/11/05

The following tables illustrate the adhesive product categories that would become more stringent with this rule-amending project effective on and after January 1, 2012. Also, Table C-4 indicates the new categories of sealants and sealant primers that would be added to rule language as newly regulated categories. The tables include current VOC content limits, as appropriate, and new VOC content limits that would become effective on and after January 1, 2012. In Table C-2 some of the adhesive products listed are currently regulated as a different adhesive category. These adhesive categories would be new to regulation even though the product is currently regulated under a different category. In such instances, the previous adhesive product category is listed in the second column of the table. Adhesives with an “n/a” listed for the 2011 VOC content limit are categories that are new to regulation and were previously unregulated. Table C-2

Adhesive Categories with Current and Proposed VOC Content Limits

Adhesive Category

Previous Adhesive Category

Multipurpose Construction Ceramic Tile Adhesive Cove Base Installation Dry Wall and/or Panel Adhesive

Multipurpose Construction

Ceramic Floor Tile Installation Indoor Carpet Adhesive Carpet Pad Adhesive Rubber Flooring Adhesive

Floor Covering Installation Floor Covering Installation Floor Covering Installation

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VOC Limit Effective on and after January 1, 2011 (Grams per Liter) 200 130 150

VOC Limit Effective on and after January 1, 2012 (Grams per Liter) 70 65 50

200

50

130

65

150

50

150

50

150

60

Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis Table C-2

August 19, 2010

Adhesive Categories with Current and Proposed VOC Content Limits (continued)

Adhesive Category

Subfloor Adhesive VCT and Asphalt Tile Adhesive Wood Flooring Adhesive Non-Membrane Roof Adhesive Structural Wood Member Adhesive Contact Adhesive Motor Vehicle Weatherstrip Adhesive Traffic Marking Tape Adhesive/ Primer

Previous Adhesive Category

Floor Covering Installation Floor Covering Installation Floor Covering Installation Multipurpose Construction

Contact Adhesive/Adhesive Primer

Top and Trim Adhesive Thin Metal Laminating Adhesive Elastomeric Adhesive ABS Welding Adhesive Cellulosic Plastic Welding Adhesive Styrene-Acrylonitrile Welding Adhesive Plastic Cement Welding Adhesive Primer Other Plastic Cement Welding Adhesive Automotive Glass Primer

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VOC Limit Effective on and after January 1, 2011 (Grams per Liter)

VOC Limit Effective on and after January 1, 2012 (Grams per Liter)

150

50

150

50

150

100

n/a

300

200

140

250

80

n/a

750

250

150

n/a n/a n/a 400

540 780 750 325

n/a

100

n/a

100

650

400

450

250

n/a

700

Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis

August 19, 2010

Table C-3 VOC Content Limits for Adhesive Products VOC Limit Effective on and after January 1, 2011 [Grams Per Liter]

VOC Limit Effective on and after January 1, 2012 [Grams Per Liter]

Porous Materials Plastic Foam

120 120

50 50

Fiberglass

250

80

Material Bonded

Table C-4 VOC Content Limits for Sealants and Sealant Primers Sealant Product Architectural Sealant Architectural Non Porous Sealant Primer Architectural Porous Sealant Primer Marine Deck Sealant and Sealant Primer Modified Bituminous Sealant Primer Non-Membrane Roof Sealant Single-Ply Roof Sealant Roadway Sealant Other Sealants Other Sealant Primers

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VOC Limit (grams per liter) 250 250 775 760 500 300 450 250 420 750

Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653

SAN JOAQUIN VALLEY UNIFIED AIR POLLUTION CONTROL DISTRICT Appendix C: Cost Effectiveness Analysis

August 19, 2010

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Final Draft Staff Report with Appendices For Proposed Amendments to Rule4653