Clean Air Act: EPA Should Improve the Management of Its Air	 
Toxics Program (23-JUN-06, GAO-06-669). 			 
                                                                 
The Environmental Protection Agency's (EPA) most recent data	 
indicate that 95 percent of all Americans face an increased	 
likelihood of developing cancer as a result of breathing air	 
toxics--pollutants such as benzene and asbestos that may cause	 
cancer or other serious health problems. Sources of air toxics	 
include large industrial facilities, smaller facilities such as  
dry cleaners, and cars and trucks. The 1990 Clean Air Act	 
Amendments required EPA to regulate 190 pollutants from these	 
sources through a multifaceted regulatory program. While EPA	 
issues federal standards, state and local agencies generally	 
administer these standards, and some develop their own rules to  
complement the federal standards. In this context, GAO was asked 
to assess (1) EPA's progress and challenges in implementing the  
air toxics program, (2) available information on the program's	 
costs and benefits, and (3) practices of state and local air	 
toxics programs.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-669 					        
    ACCNO:   A55900						        
  TITLE:     Clean Air Act: EPA Should Improve the Management of Its  
Air Toxics Program						 
     DATE:   06/23/2006 
  SUBJECT:   Air pollution					 
	     Air pollution control				 
	     Cost analysis					 
	     Environmental monitoring				 
	     Environmental policies				 
	     Hazardous substances				 
	     Health hazards					 
	     Locally administered programs			 
	     Pollutants 					 
	     Program evaluation 				 
	     Standards						 
	     State-administered programs			 
	     Toxic substances					 
	     Program costs					 

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GAO-06-669

     

     * Results in Brief
     * Background
     * EPA Has Made Limited Progress in Addressing the Clean Air Ac
          * EPA Issued Most of the MACT Standards behind Schedule and Ha
          * EPA Faces Implementation Challenges and Lacks an Overall Man
          * Key Program Stakeholders Provided Further Insights on EPA's
     * Available Information on Costs and Benefits Is Not Sufficien
          * EPA's Assessments of the Clean Air Act Have Not Estimated th
          * EPA Lacks Key Data Needed to Estimate the Benefits of Air To
          * Other Indicators of the Program's Effectiveness Are Inconclu
     * State and Local Programs Employ Practices That Could Potenti
          * Several State and Local Programs Address Gaps in EPA's Progr
          * State and Local Programs Prioritize Their Actions Based on R
          * Several of the Programs We Reviewed Conduct More Comprehensi
          * Several Programs Have Systematic Approaches to Identify and
          * The Programs We Reviewed Stressed the Importance of Data on
     * Conclusions
     * Recommendations for Executive Action
     * Agency Comments
     * Appendix I: Status of EPA's Efforts to Respond to Recommenda
     * Appendix II: Objectives, Scope, and Methodology
     * Appendix III: Profiles of State and Local Air Toxics Program
          * California
          * New Jersey
          * Oregon
          * Wisconsin
          * Louisville, Kentucky
     * Appendix IV: Comments from the Environmental Protection Agen
          * GAO comments
     * Appendix V: GAO Contact and Staff Acknowledgments
          * GAO Contact
          * Staff Acknowledgments
               * Order by Mail or Phone

Report to Congressional Requesters

United States Government Accountability Office

GAO

June 2006

CLEAN AIR ACT

EPA Should Improve the Management of Its Air Toxics Program

GAO-06-669

Contents

Letter 1

Results in Brief 4
Background 8
EPA Has Made Limited Progress in Addressing the Clean Air Act's
Requirements for Air Toxics and Faces Significant Implementation
Challenges 15
Available Information on Costs and Benefits Is Not Sufficient to Measure
the Program's Effectiveness 25
State and Local Programs Employ Practices That Could Potentially Help EPA
Enhance the Effectiveness of the Federal Air Toxics Program 33
Conclusions 41
Recommendations for Executive Action 42
Agency Comments 43
Appendix I Status of EPA's Efforts to Respond to Recommendations in the
National Academies' Report on Air Quality 47
Appendix II Objectives, Scope, and Methodology 48
Appendix III Profiles of State and Local Air Toxics Programs 52
California 53
New Jersey 53
Oregon 54
Wisconsin 54
Louisville, Kentucky 55
Appendix IV Comments from the Environmental Protection Agency 56
GAO comments 63
Appendix V GAO Contact and Staff Acknowledgments 65

Tables

Table 1: The Five Most Commonly Emitted Air Toxics, 2002 10
Table 2: Overview of the Risk Assessment Process 12
Table 3: Number of Air Toxics Actions Required under the 1990 Clean Air
Act Amendments 14
Table 4: EPA Progress in Meeting Air Toxics Requirements 16
Table 5: Timeliness of MACT Emission Control Standards for Major Source
Categories 17
Table 6: EPA Funding for Air Toxics Program as a Percentage of Funding for
All Clean Air Programs, Fiscal Years 2000 through 2005 20
Table 7: Percentage of Estimated Total Air Toxics Emissions by Source
Type, 1993, 1999, and 2002 22
Table 8: Issues Rated by Stakeholders as Challenges to a Large or Great
Extent 24
Table 9: Summary of Annual Costs Imposed by the 1990 Clean Air Act
Amendments 26
Table 10: Key Steps in Estimating the Benefits of Controlling Air Toxics
28
Table 11: Results of Inspections at Facilities Regulated by Air Toxics
Standards, 2003 and 2004 33
Table 12: Selected State and Local Air Toxics Programs 52

Figures

Figure 1: Common Sources of Air Toxics Emissions 9
Figure 2: EPA Air Toxics Regulatory Framework for Major Stationary Sources
13
Figure 3: Emission Points at an Industrial Facility Emitting Air Toxics 38

Abbreviations

CRS Congressional Research Service DEP New Jersey Department of
Environmental Protection DEQ Oregon Department of Environmental Quality
DNR Wisconsin Department of Natural Resources EPA Environmental Protection
Agency IRIS Integrated Risk Information System MACT Maximum Achievable
Control Technology NATA National Air Toxics Assessment NSPS New Source
Performance Standards OAQPS Office of Air Quality Planning and Standards
OAR Office of Air and Radiation OMB Office of Management and Budget OPAR
Office of Policy Analysis and Review ORD Office of Research and
Development SAB Science Advisory Board STAPPA/ALAPCO State and Territorial
Air Pollution Program Administrators and the Association of Local Air
Pollution Control Officials STAR Strategic Toxic Air Reduction

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
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copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office

Washington, DC 20548

June 23, 2006

Congressional Requesters

The Environmental Protection Agency's (EPA) most recent data indicate that
95 percent of all Americans face an increased likelihood of developing
cancer from air toxics-pollutants such as benzene, asbestos, and
chlorine-by breathing outdoor air.1 Other adverse health effects
associated with air toxics include damage to reproductive functions and
birth defects.2 Air toxics are emitted into the air in the United States
by large stationary sources such as industrial facilities, small
stationary sources such as dry cleaners, and mobile sources such as
automobiles. According to the most recent data available, EPA estimates
that these and other sources emitted 4.6 million tons of air toxics in
2002.3 The Clean Air Act of 1970 established a program to reduce emissions
of air toxics, and the 1990 amendments to the act significantly expanded
the program. Prior to the amendments, the act had required EPA to identify
air toxics that posed unacceptable health risks and issue emissions
standards for sources of these pollutants. In part because of the limited
success of this approach-EPA established standards for seven air toxics
over a 20-year period-the amendments identified 190 specific air toxics to
be regulated, required EPA to list categories of sources to be regulated,
and established implementation timelines.

Specifically, the 1990 amendments established a range of air toxics
requirements for EPA to implement that generally fall into four
categories: (1) establishing emission standards based on existing
pollution control technologies, called Maximum Achievable Control
Technology (MACT), for an estimated 84,000 major stationary sources within
158 industries;4 (2) examining the remaining health risk (called the
"residual risk") from these sources 8 years after implementing each MACT
standard and, if warranted, issuing additional standards to protect public
health or the environment; (3) regulating air toxics emissions from small
stationary sources,5 such as dry cleaners; and (4) evaluating the need for
and feasibility of regulation of air toxics emissions from mobile sources,
such as cars, and regulating these sources based on this evaluation. In
addition, the 1990 amendments required EPA to periodically assess the
costs and benefits of the entire Clean Air Act. This included an
assessment of the act's costs and benefits prior to 1990 as well as
projections of future economic impacts resulting from the amendments.
Information on impacts, such as the costs to regulated industries and the
public health benefits resulting from cleaner air, is necessary for
analyzing whether the benefits of clean air regulations exceed the costs.
Furthermore, estimating the economic impacts of individual regulations and
clean air programs can help EPA compare the net benefits and
cost-effectiveness of its programs under the act. Finally, the amendments
required EPA to periodically review and revise the list of regulated air
toxics. The agency currently regulates 187 substances.6

1Cancer risk data from EPA's 1999 National-Scale Air Toxics Assessment,
released in February 2006, estimates that more than 270 million people in
the United States are exposed at levels of risk that exceed 10 in 1
million due to the combined impacts of all sources of air toxics. This
risk level implies that more than 10 persons out of a million may develop
cancer if exposed continuously over their lifetime. Section 112 of the
Clean Air Act identifies a lifetime cancer risk of 1 in 1 million as a
threshold above which regulation may be warranted for individual sources
of air toxics, considering feasibility and costs.

2The Clean Air Act refers to these substances as "hazardous air
pollutants," which EPA uses interchangeably with the more common term "air
toxics." In this report, we generally use the shorter term, air toxics.

3We discuss the limitations of EPA's emissions data later in this report.

Prior GAO work dating to 1991 identified EPA's difficulties in regulating
air toxics, including missed deadlines and inadequate funding.7 Most
recently, a May 2005 GAO report found that EPA had completed MACT
standards for major stationary sources but issued most of them behind
schedule.8 In addition, the EPA Inspector General, National Academies,
Congressional Research Service, and Office of Management and Budget (OMB)
have identified shortcomings with various aspects of the air toxics
program.

4Major stationary sources are those that emit 10 or more tons per year of
a single hazardous air pollutant or 25 or more tons per year of any
combination of hazardous air pollutants.

5The Clean Air Act refers to small stationary sources as "area sources."

6In total, three chemicals and several substances from a listed group of
chemicals have been removed from the list of air toxics originally
provided in the 1990 amendments. By a joint resolution, Congress corrected
the inadvertent addition of hydrogen sulfide to the substances originally
listed in the 1990 amendments. EPA delisted caprolactam and methyl ethyl
ketone. The agency also removed the compound ethylene glycol monobutyl
ether (EGBE) and compounds called surfactant alcohol ethoxylates and their
derivatives (SAED) from the listed glycol ethers category. The group
glycol ethers is still listed.

7See GAO, Air Pollution: EPA's Strategy and Resources May Be Inadequate to
Control Air Toxics, GAO/RCED-91-143 (Washington, D.C.: June 26, 1991); Air
Pollution: Progress and Problems in Implementing Selected Aspects of the
Clean Air Act Amendments of 1990, GAO/T-RCED-94-68 (Washington, D.C.: Oct.
29, 1993); Air Pollution: Reductions in EPA's 1994 Air Quality Program's
Budget, GAO/RCED-95-31BR (Washington, D.C.: Nov. 29, 1994); and Clean Air
Rulemaking: Tracking System Would Help Measure Progress of Streamlining
Initiatives, GAO/RCED-95-70 (Washington, D.C.: Mar. 2, 1995).

While responsibility for establishing federal standards under the Clean
Air Act rests with EPA, state and local air pollution control agencies
generally implement EPA's emission standards. The act allows these
agencies to impose more stringent requirements than the federal standards,
and some state and local agencies have developed innovative air toxics
programs that go beyond the federal program, thereby enabling them to
address air toxics concerns that remain unaddressed by EPA's standards.

In this context, you asked us to assess (1) EPA's progress toward
implementing the air toxics program and any implementation challenges the
agency faces, (2) available information about the costs and benefits of
EPA's efforts to control air toxics, and (3) the program design and
management practices of state and local air toxics programs that could
potentially help EPA enhance the effectiveness of the federal program. You
also asked us to assess EPA's progress in responding to recommendations
pertaining to the air toxics program made by the National Academies in
2004.9

To respond to the first objective, we updated our previous analysis of the
agency's progress in implementing the air toxics requirements under the
Clean Air Act and reviewed available studies by the National Academies,
OMB, and the EPA Inspector General to identify potential implementation
challenges. Based on this information, we conducted structured interviews
with EPA officials and external stakeholders to identify the most
important challenges. We met with senior air program officials to discuss
the priority of the air toxics program relative to other air programs as
well as priorities within the program. To respond to the second objective,
we analyzed available information on the economic impacts of the program
and data on trends in emissions, health risks, and compliance. We also met
with EPA staff responsible for analyzing the economic effects of clean air
regulations. To respond to the third objective, we conducted interviews
with officials from a nonprobability sample of four state and one local
air toxics programs to identify innovative program designs or management
practices. Among other criteria, we selected programs identified as
innovative by EPA and other stakeholders and that used strategies that
differ from those at the federal level. We focused primarily on practices
that EPA might find useful in addressing its program implementation
challenges and did not evaluate the effectiveness of these programs.
Finally, we obtained information from EPA officials on the agency's
progress in responding to the National Academies' recommendations
pertaining to air toxics and describe the status of these efforts in
appendix I. Our work included an assessment of data reliability and
internal controls. Unless otherwise noted, data are sufficiently reliable
for the purposes of this report. See appendix II for a more detailed
description of our scope and methodology. We conducted our work from June
2005 to June 2006 in accordance with generally accepted government
auditing standards.

8See GAO, Clean Air Act: EPA Has Completed Most of the Actions Required by
the 1990 Amendments, but Many Were Completed Late, GAO-05-613 (Washington,
D.C.: May 27, 2005).

9The National Academies, National Research Council, Air Quality Management
in the United States (Washington, D.C., 2004).

                                Results in Brief

While EPA has made progress toward implementing the air toxics program
mandated by the Clean Air Act, most of the completed requirements were met
late and many requirements and significant challenges remain. EPA has
completed one of the four categories of requirements-issuing 96 rules that
set emissions standards for major stationary sources-but did not do so
until 2004, which was 4 years behind the schedule outlined in the act.
These delays, in turn, pushed back the evaluation of the residual health
risks from these sources that EPA must complete 8 years after issuing each
standard. Consequently, EPA will not complete the residual risk
reviews-which are intended to provide information on any potential adverse
health effects that may warrant further regulation-until 2012 at the
earliest, rather than in 2008 as the act provided. Further, EPA has
completed only 16 of 70 emissions standards for small stationary sources
that cumulatively accounted for about one-third of all air toxic emissions
in 2002 and has proposed, but not finalized, a required rule making
covering mobile sources. Finally, EPA has not met the act's requirement to
review and update, as appropriate, the list of regulated air toxics,
despite evidence that potentially harmful chemicals remain unregulated. As
a result of EPA's limited progress, the agency has not identified and
reduced health risks from air toxics to the extent and in the time frame
envisioned in the act. EPA's limited progress to date stems, in part, from
the program's low priority relative to other air programs, such as those
targeting smog, which the agency believes have a higher potential to
reduce human health risks. Senior program officials also said that the
agency's progress in implementing the act's requirements does not reflect
all of the agency's progress in limiting toxic emissions because other EPA
programs decrease emissions of air toxics as a side benefit. In addition,
within the air toxics program, senior EPA officials said that the agency's
focus on issuing emissions standards for major stationary sources had
addressed the greatest risks from air toxics. However, EPA does not have
reliable data on the degree to which its programs have reduced risks.
Furthermore, the data that are available suggest that the agency still has
substantial opportunities to control emissions from mobile and small
stationary sources.

EPA faces significant challenges in implementing the air toxics program,
many of which stem from its relatively low priority within the agency.
Importantly, the agency lacks a comprehensive strategy for managing its
implementation of the remaining air toxics requirements. Senior EPA
officials said that the program's agenda is largely set by external
stakeholders who file litigation when the agency misses deadlines. For
example, EPA currently faces a court order to issue emissions standards
for small stationary sources. Previous reports by GAO identified
inadequate funding for the air toxics program as a challenge, and key
stakeholders-including senior EPA officials, environmental advocates, and
state and local agency officials-said resource constraints continue to
pose a major challenge. The percentage of funding for the air toxics
program relative to all clean air programs ranged from 18 percent to 19
percent between 2000 and 2003 and declined to 15 percent in 2004 and 12
percent in 2005. EPA has not estimated the level of resources necessary to
comply with the remaining requirements of the 1990 amendments, according
to a senior program official. We believe that such estimates would help
inform congressional oversight and appropriations decisions. Senior EPA
officials and other stakeholders also cited a lack of information on the
benefits of regulating air toxics as a major challenge, which, in turn,
reinforces the program's relative priority because the agency cannot
demonstrate its effectiveness. The stakeholders identified a number of
other challenges, but perceptions varied by stakeholder group. For
example, EPA and industry stakeholders rated the large number of statutory
requirements as a challenge, while environmental stakeholders rated a lack
of reliable data on air toxics sources and their emissions as a challenge.

Available information on the costs and benefits of EPA's efforts to
control air toxics is not sufficiently comprehensive to measure the total
economic impacts resulting from the air toxics program. As a result, it is
difficult to compare the net benefits (total benefits minus total costs)
of EPA's investments in the air toxics program with those of other air
quality programs. The agency's 1999 report responding to the act's mandate
for a comprehensive cost-benefit analysis of all Clean Air Act programs
contained limited information on the costs of regulating air toxics and no
estimates of the human health benefits, such as likely reductions in
cancer risk. The analysis estimated that the cost to industry of complying
with the 21 control standards that had been issued by 1999 would total
$780 million in 2000 and rise to $840 million in 2010. EPA officials said
the agency plans to issue a revised analysis in 2007 that will estimate
the costs of all standards issued before September 2005. However, the
analysis will only provide limited data on the benefits of regulating air
toxics because of the analytical challenges involved. These challenges
include a lack of reliable data on changes in emissions attributable to
air toxics regulations and difficulties in estimating the effects that
changes in emissions have on health outcomes. Specifically, EPA has not
monetized the health benefits of its air toxics regulations individually
or in total because of the analytical difficulty of characterizing health
outcomes associated with incremental reductions in exposure to 187
different chemicals. Instead of using a cost-benefit analysis to measure
the program's effectiveness, EPA uses data on national trends in emissions
of all air toxics. However, as EPA's Inspector General reported in 2004,
the agency needs to improve its methods for estimating emissions before it
can accurately gauge the extent to which its programs have actually
reduced emissions. Other indicators of the program's effectiveness, such
as changes in concentrations of air toxics in the ambient (outdoor) air
over time and data on compliance with air toxics standards, are also
limited and inconclusive. For example, the agency's data on compliance
with air toxics standards cannot be generalized to describe compliance at
the universe of regulated facilities because inspectors often target
facilities where they suspect noncompliance.

The five state and local air toxics programs we reviewed use several
program design and management practices that EPA could consider as part of
efforts to enhance the effectiveness of the federal air toxics program.
First, the programs we reviewed address gaps in the federal program by,
for example, regulating more emissions sources than EPA, or setting more
stringent standards to control emissions. As part of efforts to strengthen
its program and establish priorities for meeting its remaining obligations
under the act, EPA could benefit from assessing and considering what
states perceive as the primary gaps in the federal program. Second, these
programs use risk-based approaches to prioritize efforts to control air
toxics. For example, Oregon's air toxics program is designed to monitor
emissions in various parts of the state, identify areas of elevated risk
from air toxics, and then concentrate resources on the emissions sources
that drive these risks. Third, some of these programs base their
regulatory decisions on the risk posed by entire facilities, whereas, to
date, EPA has limited the scope of its residual risk program to only those
emission points within facilities that must comply with existing federal
standards. As a result, according to several state and local officials,
EPA's decision to exclude some emissions points from risk assessments may,
in turn, cause it to underestimate the total risk from facilities and
thereby enable some facilities to avoid further regulation. Fourth,
several of the programs we reviewed have systematic approaches for
identifying and prioritizing new chemicals. In contrast, EPA does not
proactively consider new chemicals and instead has taken a reactive
approach in which it considers petitions from external parties to list or
delist chemicals. Considering the practices used by these programs could
inform future EPA efforts to meet the act's requirement to periodically
review and update the list of regulated chemicals. In addition to these
practices, all of the programs we reviewed highlighted the importance of
reliable data on emissions and chemical toxicity. Several require major
and small stationary sources to submit standardized emissions reports and
certify their accuracy. In contrast, EPA, to date, generally has not
required emissions sources or state or local agencies to systematically
report these data. Such standardized data collection could enhance EPA's
analysis and decision making in future air toxics rule makings. In
addition, several officials said that EPA does not regularly update
chemical toxicity values that inform the work of state and local programs.

We are recommending that EPA develop an air toxics program improvement
plan that, among other things, (1) provides a schedule for completing its
mandated requirements under the act and identifies the resources necessary
to complete these actions, (2) prioritizes activities within the air
toxics program, (3) establishes a process and timeline for meeting the
act's requirement to review and update the list of air toxics, (4)
outlines an approach and timelines for improving the agency's ability to
measure the program's costs and benefits, and (5) describes how the agency
plans to improve its air toxics emissions inventory. In commenting on the
report, EPA's Acting Assistant Administrator for Air and Radiation said
that EPA agrees in part with our conclusions and recommendations. The
agency did not identify specific aspects of our conclusions or
recommendations with which it disagreed, but offered clarifications on our
statements regarding information on the costs and benefits of the agency's
efforts to control air toxics, the agency's progress in completing certain
air toxics requirements of the Clean Air Act, and EPA's management of the
remaining requirements. EPA also provided technical comments, which we
have incorporated, as appropriate. EPA's letter, and our response, are
included as appendix IV.

                                   Background

Under the Clean Air Act, EPA regulates two primary types of air
pollutants. The first category-the so-called "criteria pollutants" for
which EPA has established air quality criteria that limit the allowable
concentrations in the ambient air-includes carbon monoxide, ground-level
ozone (smog), lead, nitrogen oxides, particulate matter, and sulfur
dioxide. EPA sets these standards at a level it believes protects public
health and the needs of sensitive populations such as asthmatics,
children, and the elderly. EPA and the states use air quality monitoring
to measure compliance with the standards and develop pollution control
strategies to help bring areas with poor air quality into compliance.

The second category consists of hazardous air pollutants (or "air toxics")
for which no ambient air quality standards exist, and includes 187
chemicals that cause a variety of adverse health effects, including
cancer. A variety of sources emit one or more of these air toxics (see
fig. 1). In 2002, mobile sources emitted 41 percent of all air toxics,
small stationary sources emitted 30 percent, major stationary sources
emitted 20 percent, and other sources, such as fires, emitted 9 percent,
according to EPA's most recent data.

Figure 1: Common Sources of Air Toxics Emissions

Table 1 identifies the most widely emitted air toxics, the primary sources
of these pollutants, and some of the adverse health effects associated
with exposure to these substances. It is important to note that the health
risks posed by air toxics vary considerably. Thus, small quantities of
more harmful pollutants can pose greater health threats than large
quantities of less harmful pollutants.

Table 1: The Five Most Commonly Emitted Air Toxics, 2002

                Percentage of                                                 
                    total air                  
                       toxics  Primary sources 
Pollutant        emissions  of emissions    Health effects
Toluene                 18  Mobile sources  Impairment of the nervous      
                                               system with symptoms including 
                                               tiredness, dizziness,          
                                               sleepiness, confusion,         
                                               weakness, memory loss, nausea, 
                                               loss of appetite, and hearing  
                                               and color vision loss; kidney  
                                               problems; unconsciousness; and 
                                               death.                         
Xylenes                 13  Mobile sources, Irritation of the skin, eyes,  
                               asphalt paving  nose, and throat; headaches,   
                                               dizziness, memory loss, and    
                                               changes in sense of balance;   
                                               lung problems; stomach         
                                               discomfort; possible effects   
                                               on the liver and kidneys;      
                                               unconsciousness; and death.    
Hydrochloric            12  Coal-fired      Eye, nose, and respiratory     
acid                        utility and     tract irritation; corrosion of 
                               industrial      the skin, eyes, mucous         
                               boilers         membranes, esophagus, and      
                                               stomach; severe burns;         
                                               ulceration; scarring;          
                                               inflammation of the stomach    
                                               lining; chronic bronchitis;    
                                               and inflammation of the skin.  
Benzene                  9  Mobile sources, Drowsiness, dizziness,         
                               open burning,   vomiting, irritation of the    
                               pesticide       stomach, sleepiness,           
                               application     convulsions, rapid heart rate, 
                                               headaches, tremors, confusion, 
                                               unconsciousness, anemia,       
                                               excessive bleeding, weakened   
                                               immune system, increased       
                                               incidence of cancer            
                                               (leukemia), and death.         
Formaldehyde             7  Mobile sources, Irritation of the eyes, nose,  
                               open burning    throat, and skin; severe pain; 
                                               vomiting; coma; limited        
                                               evidence of cancer; and death. 

Sources: EPA and Agency for Toxic Substances and Disease Registry.

Note: Health effects are dependent upon the concentration of the air toxic
and the length of exposure.

Prior to 1990, the Clean Air Act required EPA to list air toxics it deemed
hazardous and then promulgate regulations for them. However, by 1990, EPA
had regulated only seven such pollutants. In 1990, Congress dramatically
changed the program. Instead of requiring EPA to develop ambient standards
for air toxics as it does for the six criteria pollutants, the Clean Air
Act Amendments of 1990 listed the air toxics to be controlled and directed
EPA to control them by, among other things, (1) developing
technology-based emissions limits (MACT standards) for major stationary
sources, such as incinerators and chemical plants; (2) regulating
emissions from smaller sources, such as dry cleaners and gas stations; and
(3) evaluating the need for and feasibility of regulations from mobile
sources, such as cars, and regulating these sources based on this
evaluation. The standards for major stationary sources generally require
the use of available control technologies to achieve emissions reductions
without the explicit consideration of a chemical's toxicity or potential
risk. To develop MACT standards, the 1990 amendments directed EPA to group
emissions points at industrial facilities into categories of similar
sources and then develop regulations for each "source category." Examples
of source categories include cement manufacturing, hazardous waste
combustion, and semiconductor manufacturing.10 The next step consisted of
evaluating the level of emissions control achieved by the best-performing
facilities in each source category and using this as the minimum level of
control required throughout the entire source category.11

Additionally, the amendments required EPA to review the MACT standards
every 8 years to evaluate any remaining, or residual, health risks from
these sources and identify developments in control technologies. EPA has
combined the residual risk assessments and technology reviews into a
concurrent process. Thus, the agency simultaneously evaluates the
remaining risks from each source category and the availability of new
pollution control technologies. The risk assessment process seeks to
estimate the cancer and other health risks faced by individuals exposed to
toxic emissions. As shown in table 2, the four steps of risk assessment
include hazard identification, dose-response assessment, exposure
assessment, and risk characterization.

10EPA currently regulates 158 major source categories. Some industrial
facilities may belong to multiple source categories.

11MACT standards require all sources within a source category to control
emissions to the same level. Existing sources generally must meet the
average emission level achieved by the best performing 12 percent of
sources in the source category. New sources must meet a more stringent
emission level.

Table 2: Overview of the Risk Assessment Process

Step                     Description                                       
Hazard identification    Determine the association between pollutants and  
                            adverse health effects. This involves reviewing   
                            studies of illnesses among groups of people or    
                            laboratory animals exposed to air pollutants.     
Dose-response assessment Describe the adverse health effects associated    
                            with different levels of exposure to a particular 
                            pollutant.                                        
Exposure assessment      Estimate the amount of an air toxic a person is   
                            likely to inhale in a given period of time using  
                            data on emissions, meteorological conditions, and 
                            information on the locations of homes and         
                            workplaces relative to emissions sources.         
Risk characterization    Integrate the information from the three previous 
                            steps to describe the degree of increased risk    
                            faced by individuals. Typical results of this     
                            step include measures of excess lifetime cancer   
                            risk (e.g., a risk of 100 in 1 million), the      
                            population risk (e.g., the number of people that  
                            face a cancer risk exceeding 100 in 1 million),   
                            or the estimated number of additional cancer      
                            cases each year.                                  

Source: GAO analysis of EPA documents.

Notes: EPA maintains information used in the hazard identification and
dose-response assessment stages of risk assessments in its Integrated Risk
Information System (IRIS) database.

Lifetime excess cancer risk refers to the estimated additional risk of
developing cancer that a person would have if exposed to a specific
concentration of an air toxic 24 hours a day, 7 days a week, for 70 years.

The risk assessment process is limited by scientific uncertainty about the
health effects associated with exposure to air toxics. Nonetheless, the
Clean Air Act's residual risk program seeks to determine whether the most
exposed individuals face excess cancer risk of more than 1 in 1 million.
In cases where estimated risks exceed this threshold, EPA develops a
residual risk standard that seeks to provide an ample margin of safety for
affected individuals.12 Figure 2 provides an overview of the regulatory
process for major stationary sources of air toxics, including MACT
standards and 8-year technology and residual risk reviews.

12EPA generally uses a lifetime cancer risk of 1 in 10,000 as the upper
boundary of acceptability. As part of the ample margin of safety decision,
EPA considers costs, technological feasibility, uncertainties, and other
relevant factors. In this step, EPA must also assess whether to adopt more
stringent standards to prevent adverse effects to wildlife, aquatic life,
or natural resources considering cost, energy, and other relevant factors.

Figure 2: EPA Air Toxics Regulatory Framework for Major Stationary Sources

In addition to requirements for major sources, the act required EPA to
develop a comprehensive strategy to control emissions of air toxics in
urban areas, including identifying at least 30 small stationary source
categories that account for 90 percent of the risk from these sources, and
issue regulations by November 2000. EPA has listed 70 small stationary
source categories for regulation. The act also required EPA to assess the
need for and feasibility of air toxics standards for motor vehicles and
fuels, and, based on that assessment, issue regulations to control air
toxics from motor vehicles and fuels.

Table 3 summarizes the 453 actions required of EPA under the air toxics
provisions of the 1990 amendments. Because these actions range in scope
from developing MACT standards to issuing reports, they vary in their
potential to reduce emissions.

Table 3: Number of Air Toxics Actions Required under the 1990 Clean Air
Act Amendments

Air toxics category                             Number of actions required 
Major stationary sources regulated by MACT                             158 
standards                                       
8-year residual risk reviews for MACT standards                         96 
8-year technology reviews for MACT standards                            96 
Standards for small stationary sources                                  70 
Mobile sources                                                           2 
Other (reports, studies, etc.)                                          31 
Total                                                                  453 

Source: GAO analysis of EPA documents.

Note: The act required EPA to list major and small source categories of
the listed hazardous air pollutants (currently 187 chemicals). In
response, EPA identified 158 major source categories and was required to
issue a standard for each category. EPA responded by issuing 96 different
standards, some of which apply to multiple source categories. The 8-year
residual risk and technology reviews apply to the 96 standards, which
accounts for the difference between the 158 requirements to regulate major
sources and the 96 requirements each for residual risk and technology
reviews.

EPA's Office of Air and Radiation has primary responsibility for
completing air toxics actions required under the Clean Air Act. Within the
Office of Air and Radiation, responsibility for implementing the air
toxics requirements of the Act rests primarily with the Office of Air
Quality Planning and Standards and, to a lesser extent, with the Office of
Transportation and Air Quality. The responsibility for analyzing the
health, economic, and other effects of individual air toxics programs also
rests with these offices. The Office of Policy Analysis and Review
supplements these program-specific analyses by conducting periodic
assessments of the health, ecological, and economic effects of the overall
Clean Air Act, including the air toxics provisions, and coordinating these
studies as appropriate with other EPA offices. In conducting these broader
studies, the Office of Policy Analysis and Review also works with the
Advisory Council for Clean Air Act Compliance Analysis, an independent,
multi-disciplinary panel of outside experts organized under the auspices
of EPA's Science Advisory Board. The agency's Office of Research and
Development performs scientific research on air toxics to support
regulatory efforts. The Office of Enforcement and Compliance Assurance
directs efforts to ensure compliance with air toxics requirements. In most
cases, state and local air pollution control agencies implement the
standards developed by EPA. Additionally, the act generally allows these
agencies to impose more stringent requirements than the federal standards,
although some states have enacted laws or rules prohibiting air pollution
control agencies from adopting more stringent requirements. Nonetheless,
some state and local programs have developed innovative air toxics
programs.

EPA Has Made Limited Progress in Addressing the Clean Air Act's Requirements for
           Air Toxics and Faces Significant Implementation Challenges

EPA has completed issuing emissions standards for major stationary sources
but issued most of these standards late and has made limited progress
toward completing the remaining air toxics requirements. In particular,
EPA has made little progress and is behind schedule in completing residual
risk and technology reviews and in issuing emissions standards for small
stationary sources and mobile sources. EPA's limited progress and program
implementation challenges have resulted primarily from the program's lower
priority relative to other clean air programs. Furthermore, the agency
lacks a program implementation strategy. Stakeholders we
interviewed-including EPA, state and local agency officials, environmental
groups, and industry representatives-provided additional perspective on
EPA's implementation of the air toxics program and highlighted data
limitations and inadequate funding as major challenges.

EPA Issued Most of the MACT Standards behind Schedule and Has Made Limited
Progress in Completing the Other Air Toxics Requirements

EPA has completed issuing the MACT standards for major stationary sources
but has made limited progress in addressing requirements related to
residual risk and technology reviews, and in issuing standards for small
stationary sources and mobile sources. As a result of the limited progress
in implementing these requirements, EPA has not reduced human health risks
from air toxics to the extent and in the time frames envisioned in the
act. Table 4 summarizes EPA's overall progress in implementing air toxics
requirements under the Clean Air Act.

Table 4: EPA Progress in Meeting Air Toxics Requirements

                                           Requirements             
                                               met        Requirements unmet
                                Number of   Met on  Met  Unmet-past Unmet-not 
                             requirements    timea late         due   yet due 
Issue MACT emission                                                        
standards for major                                              
source categories                  158        4  154           0         0
Residual risk reviews               96        0    5          16        75 
Control technology                  96        0    5          16        75 
reviews                                                          
Small stationary sources            70        0   16          54         0 
Mobile sources                       2        0    1           1         0 
Other                               31        8   21          2b         0 
Total                              453       12  202          89       150 

Source: GAO analysis of EPA documents.

Notes: This analysis reflects the status of the requirements as of April
2006.

aWe count requirements met by EPA that did not have deadlines specified in
the act as on time.

bEPA is required to periodically review the list of air toxics established
by the act but has not yet done so. This requirement was not accompanied
by a deadline. Based on other time frames required by the act, we list
this requirement as unmet/past due instead of unmet/not yet due.

To meet the act's requirements for major stationary sources, EPA had to
identify a list of major source categories and then issue standards
beginning in 1992, with all standards due by November 2000. In response,
EPA identified 158 major source categories and issued 96 standards
covering these categories between 1993 and 2004. Table 5 summarizes the
timeliness of EPA's MACT standards relative to the act's deadlines. While
the agency missed most of the deadlines, a senior EPA official said that
issuing the 96 standards represented a major achievement and that the
agency had never previously issued so many standards for one program in
such a limited period of time.

Table 5: Timeliness of MACT Emission Control Standards for Major Source
Categories

                                    Requirements met according to the    
                                 schedule specified in the Clean Air Act 
                                                        0-1    1-2  More than
                               Number of On time or   years  years    2 years
                            requirements      early    late   late       late
Issue MACT emission                                                   
standards for major                                             
source categories                 158          4      23     68         63

Source: GAO analysis.

Note: This analysis reflects the status of the requirements as of April
2006.

Because EPA issued most of the MACT standards well behind schedule, the
residual risk and control technology reviews, which EPA is to complete 8
years after issuing each standard, have been pushed back commensurately,
thereby delaying any additional public health protection that these
reviews may provide. Specifically, instead of completing the initial
residual risk assessments and technology reviews for all of the MACT
standards by 2008 as specified by the act, EPA is not required to complete
all of the initial reviews until 2012 because it issued many MACT
standards behind schedule. For example, because EPA issued the MACT
standard for industrial boilers in 2004 rather than 2000, as required, the
residual risk assessment and technology review for this source category
become due in 2012, almost 4 years later than the act's intended timeline.
Furthermore, EPA is behind schedule on the residual risk assessments and
technology reviews. As of April 2006, EPA had finalized only five of these
reviews, and all of these were late. Three additional reviews have
court-ordered deadlines and will be completed by the end of 2006,
according to EPA.

The act required EPA to develop regulations for small stationary sources
by November 2000.13 However, the agency has not met this schedule. In July
2000, EPA outlined its plans for issuing standards for small stationary
sources in a report to Congress describing its strategy for reducing
threats from air toxics in urban areas.14 This report identified 16
categories of small stationary sources that it described as "already
subject to regulation" or "will be subject to regulation." The report also
identified 13 additional categories for which it planned to issue
standards by 2004. In 2002, EPA expanded the list to include a total of 70
source categories. However, as of April 2006, EPA has issued standards for
only 16 categories of sources, leaving standards for 54 source categories
past due. Furthermore, the agency faces court-ordered deadlines to
complete standards for all of the remaining categories of small stationary
sources by June 15, 2009.

13EPA was to promulgate regulations for small stationary sources listed
under section 112(k) of the act by November 2000. Small stationary sources
not listed under section 112(k) were subject to a different schedule.

The act also required EPA to study the need and feasibility of air toxics
standards for motor vehicles and fuels and, based on the study, develop a
regulation to control air toxics from motor vehicles and fuels by 1995.
EPA completed the study in 1993 (about 11 months after the deadline) and,
after missing the 1995 deadline for the regulation, faced a court-ordered
consent decree to complete the regulation by 2001. To comply, EPA issued
an initial rule in 2001 that stated that a second and final rule making
would follow in 2004.15 The agency missed this deadline and eventually
proposed a second rule in February 2006, with a final rule planned for
February 2007.16 The proposed rule would limit the benzene content of
gasoline and reduce toxic emissions from passenger vehicles and gas cans
according to EPA.

Finally, the act contained 31 requirements that do not fit into the
categories discussed above, including reports to Congress and guidance for
state and local programs. As of April 2006, EPA has met 29 of these
requirements. One of the key areas where EPA has not taken action relates
to the act's requirement for the agency to periodically review and update,
as appropriate, the list of air toxics. Officials responsible for the
program said the agency does not proactively conduct such reviews and
instead has adopted a reactive approach, whereby the agency responds to
petitions filed by external stakeholders seeking to add or delete
chemicals. EPA officials, citing insufficient resources to develop a more
proactive approach, said that their efforts have focused on reviewing
petitions for additions and deletions filed by external stakeholders.

14U.S. Environmental Protection Agency, National Air Toxics Program: The
Integrated Urban Strategy, Report to Congress (Research Triangle Park,
North Carolina, 2000).

15Among other things, the 2001 rule required refiners to maintain current
levels of compliance with air toxic performance standards and did not
require refiners to install new equipment or use technologies beyond those
already in use. EPA did not set additional air toxics requirements for
vehicles at that time because the agency had already established other
standards for vehicles and fuels that it believed represented the greatest
degree of toxics control achievable at that time. See Control of Hazardous
Air Pollutants From Mobile Sources, 66 Fed. Reg. 17229 (Mar. 29, 2001).

16Control of Hazardous Air Pollutants from Mobile Sources, 71 Fed. Reg.
15804 (Mar. 29, 2006).

Since 1990, EPA has received one petition to list a new air toxic (diesel
exhaust) and seven petitions to delist. The petition to list diesel
exhaust is under review, and of the seven petitions to delist, three have
been granted, two have been denied, and two are under review, according to
EPA. Overall, EPA has not added any new chemicals to the list of regulated
pollutants, but three chemicals and several substances from a listed group
of chemicals have been removed. The agency's consideration of diesel
exhaust in response to an environmental group's petition has taken more
than 2 years, resulting in a lawsuit when the agency did not complete its
review within 18 months, as required by the act. EPA and the environmental
group reached an agreement in February 2006 that requires the agency to
decide by June 2006 whether to list diesel exhaust as an air toxic.

A 2004 report by the National Academies highlighted EPA's lack of a
process for reviewing new pollutants despite the estimated 300 chemicals
that enter commerce each year. The report recommended that EPA "establish
a more dynamic process for considering new pollutants." To date, EPA has
not addressed this recommendation, according to senior agency officials.
Furthermore, a 2004 study published in the Journal of the Air & Waste
Management Association screened 1,086 chemicals for potential addition to
the list of regulated air toxics and found that 44 merited further
consideration for addition to the list based on available toxicity and
emissions data.

Senior EPA air program officials said the agency's progress in meeting the
act's air toxics requirements should be viewed within the context of
limited funding for clean air programs and the agency's need to focus its
resources on the areas where it expects the greatest health-risk
reductions. Scientific information on the health effects of air toxics is
less comprehensive than that available for higher-priority clean air
programs, such as those targeting smog and particulate matter.
Additionally, several officials said that other regulatory and voluntary
programs limit emissions of air toxics as a side benefit.17

EPA Faces Implementation Challenges and Lacks an Overall Management Strategy

EPA considers the air toxics program a lower priority than its three other
major clean air programs-including those to address criteria pollutants,
international environmental issues such as climate change, and indoor air
quality issues such as exposure to radon gas-because senior officials in
EPA's Office of Air and Radiation believe these programs have more
potential to reduce health risks. As shown in table 6, the percentage of
funding for air toxics relative to all clean air programs ranged from 18
percent to 19 percent between 2000 and 2003, but declined to 15 percent in
2004 and 12 percent in 2005. However, the total dollar amounts (in
inflation-adjusted 2005 dollars) devoted to air toxics increased each year
between 2000 and 2004, with a decline in 2005.

Table 6: EPA Funding for Air Toxics Program as a Percentage of Funding for
All Clean Air Programs, Fiscal Years 2000 through 2005

Thousands of dollars                   
                                                       Funding for air toxics 
                                                      program as a percentage 
               Funding for air Funding for all clean         of all clean air 
Fiscal year  toxics program          air programs                 programs 
2000                106,475               605,574                       18 
2001                118,331               640,056                       18 
2002                121,668               636,851                       19 
2003                122,118               641,514                       19 
2004                143,575               936,286                       15 
2005                112,986               909,219                       12 

Source: GAO analysis of EPA data.

Note: Dollar amounts are in inflation-adjusted 2005 dollars.

Within the air toxics program, EPA's initial priority was to complete the
MACT standards because the agency believed that this aspect of the program
had the greatest potential to address risks from air toxics. Despite EPA
placing a priority on issuing the MACT standards, the agency still fell
behind schedule when it missed deadlines for the first round of standards
(due in 1992) and has never caught up to the act's implementation
schedule. EPA officials said they missed some of the MACT deadlines
because of technical challenges, including a lack of emissions data from
affected source categories and the complexity of many of the regulated
facilities. The missed deadlines led to lawsuits filed by external parties
seeking compliance with the act's implementation schedule, resulting in
court-ordered deadlines for the agency to complete standards. Furthermore,
senior EPA officials said these court-ordered deadlines largely drive the
program's agenda. In this way, EPA ceded control of the priority-setting
process, and this problem is still evident. For example, a senior official
responsible for the development of regulations said that the agency's
highest priority for the remaining requirements is addressing residual
risk reviews and small stationary source standards with court-ordered
deadlines.

17EPA officials cited the Toxics Release Inventory, various rules
affecting motor vehicle fuel formulations, Design for the Environment, the
Green Suppliers Network, and community-based initiatives such as Community
Action for a Renewed Environment (CARE).

The lower priority of the air toxics program in general and the priority
given to MACT standards within the program, as well as technical
challenges, have caused delays in completing the residual risk and
technology reviews, as well as standards for small stationary and mobile
sources. Further, as shown in table 7, available EPA data indicate that
small stationary and mobile sources in total have accounted for more
emissions than major stationary sources in every emissions inventory
completed since the 1990 amendments. Furthermore, the agency has estimated
that benzene-a known carcinogen emitted primarily by mobile
sources-accounts for about 25 percent of the cancer risk posed by air
toxics across the nation. Benzene is also the only air toxic that, to
date, EPA has determined poses sufficient risks to qualify as a "national
cancer risk driver."18

18EPA applies the term "national cancer risk driver" to any air toxic that
poses an estimated maximum lifetime cancer risk exceeding 10 in 1 million
to more than 25 million people.

Table 7: Percentage of Estimated Total Air Toxics Emissions by Source
Type, 1993, 1999, and 2002

Percent                                                                 
                                                                  Major    
                    Estimated total  Mobile Small stationary stationary 
Year    emissions (million tons) sources          sources    sources Other
2002                         4.6      41               30         20     9
1999                         5.1      43               25         25     6
1993                         7.1      46               24         27     3

Source: GAO analysis of EPA data.

Note: Totals may not add to 100 percent due to rounding.

EPA developed air toxics emission inventories for 1993, 1996, 1999, and
2002. A large part of the 1993 baseline inventory is based on data
obtained from 1990. For simplicity, and because EPA has traditionally
referred to it as such, we refer to this data as the 1993 baseline
inventory. EPA said it did not provide data for 1996 because the agency
has not updated the information from that year for consistency with the
methodology used for the 1993, 1999, and 2002 data.

EPA expects that the proposed mobile source air toxics rule will reduce
benzene emissions. In addition, a senior EPA air program official said
that other regulations for mobile sources, including standards that affect
gasoline formulations as well as programs addressing emissions from diesel
engines, will also reduce emissions of air toxics as a side benefit.
Nonetheless, mobile sources will continue to represent an area of
significant opportunity to reduce emissions and related human health
risks.

Addressing the remaining requirements for residual risk standards and
small stationary sources will require overcoming significant technical
challenges. Regarding residual risk standards, the Clean Air Act's
requirement that EPA introduce a risk element into the regulatory
decision-making process marks a departure from the approach the act used
with MACT standards, which generally did not require EPA to take the
inherent toxicity or health risks from pollutants into account. EPA
officials said that conducting the residual risk assessments requires a
large amount of data, much of which is difficult to obtain. For example,
to adequately assess the human health risk posed by a particular source,
EPA needs data on the health effects associated with each pollutant, the
location of sources, distances between sources and affected populations,
and the concentrations of emissions at different distances from
facilities.

Challenges in regulating small stationary sources center on difficulty in
characterizing the large number of widely dispersed facilities such as
industrial boilers, paint-stripping operations, and auto-body shops. In
some cases, data do not exist on the number or location of facilities
potentially subject to a regulation. Furthermore, unlike the large
stationary sources affected by MACT standards, owners and operators of
these sources have limited resources to implement regulations and will
require extensive outreach and compliance assistance.

EPA's challenges in meeting the act's remaining requirements are
exacerbated by the lack of a management plan that identifies priorities
and necessary resources. The agency's overall strategic plan outlines the
goals and targets for emissions and risk reduction across all clean air
programs but does not specify priorities or necessary levels of funding
for the air toxics program. Similarly, the agency's budget requests
provide limited information on the agency's air toxic program activities
or priorities. Furthermore, a senior EPA official said that the agency has
not estimated how much funding the air toxics program needs to meet the
act's remaining requirements. Such information could assist Congress in
making its appropriations decisions, enhance the program's transparency to
the public, and guide the agency in implementing the program.

Key Program Stakeholders Provided Further Insights on EPA's Implementation
Challenges

To better understand the challenges facing EPA's air toxics program, we
interviewed various stakeholders, including officials from EPA, industry
and environmental groups, and state and local air pollution control
agencies.19 Each respondent rated the extent to which nine specific issues
posed a challenge to EPA in implementing the air toxics program, and we
then averaged the responses within each stakeholder group. As shown, in
table 8, the average response within each group identified at least one of
seven different issues as a challenge to a large or very great extent.20
Although perceptions varied among the stakeholder groups, three issues
emerged as primary challenges-the availability of reliable data to assess
the benefits of regulating air toxics, the adequacy of program funding,
and the program's low priority relative to other clean air programs. As
shown in the table, respondents from at least three of the four
stakeholder groups we interviewed identified each of these challenges as
significant.

19See appendix II for information on our methodology for interviewing
stakeholders.

20The two challenges not rated as significant by any stakeholder groups
were "complexity of required analyses to support regulatory actions" and
"rigidity of Clean Air Act requirements."

Table 8: Issues Rated by Stakeholders as Challenges to a Large or Great
Extent

                                                  Stakeholder groups
                                                                    State and 
Challenges                            EPA Industry Environmental   local   
Availability of reliable data to                                 
assess benefits of regulating                                    
hazardous air pollutants                                         
Adequacy of program funding                                      
Priority of program relative to other                            
air programs                                                     
Number of Clean Air Act requirements                             
pertaining to hazardous air                                      
pollutants                                                       
Adequacy of resources at the state,                              
local, and tribal levels to implement                            
regulations                                                      
Strain on resources due to litigation                            
Availability of reliable data on                                 
sources and their emissions                                      

Source: GAO.

Several stakeholders identified linkages among the three primary
challenges. For example, some stakeholders said that the problems with
limited resources stemmed from the program's low priority. In addition,
some stakeholders said that the lack of information on the benefits of
regulating air toxics reinforced the program's low priority because the
agency cannot demonstrate the results it achieves through investments in
the program.

In addition, industry and EPA stakeholders cited the number of air toxics
requirements as a challenge to a large or very great extent. Respondents
from both groups stated that the agency has insufficient resources to meet
such a large number of requirements in the specified time frames. Industry
officials noted that the number of requirements was unrealistic, and some
EPA stakeholders said that Congress did not understand the number of
emissions sources involved or the level of effort required to write
standards. EPA and state and local stakeholders also cited the adequacy of
resources at the state, local, and tribal levels to implement regulations
as a significant challenge.

  Available Information on Costs and Benefits Is Not Sufficient to Measure the
                            Program's Effectiveness

The information available on the costs and benefits of EPA's air toxics
program is not sufficiently comprehensive to measure the overall
effectiveness of the program. For example, because of limited data, EPA's
major economic assessments of the Clean Air Act have not included
monetized estimates of the program's benefits, such as reduced incidence
of cancer, and have provided only limited information on costs. The
absence of information on benefits stems from a lack of data on the extent
to which incremental reductions in exposure to air toxics affect an
average person's chance of developing adverse health effects. The agency
also lacks reliable data on the quantities of each pollutant emitted prior
to the adoption of air toxics regulations or in the years thereafter.
Furthermore, other potential indicators of the program's effectiveness,
such as data on compliance with air toxics regulations, are inconclusive.
As a result, it is difficult to compare the results of investments in the
air toxics program with those generated by clean air programs on which EPA
has placed a higher priority.

EPA's Assessments of the Clean Air Act Have Not Estimated the Economic Benefits
of the Air Toxics Program

Although EPA has conducted two major assessments of the costs and benefits
of its programs under the Clean Air Act, the agency has not fully analyzed
the air toxics program primarily because of difficulty in characterizing
the program's effects on public health.21 Without a comprehensive
assessment of costs and benefits, it is difficult to gauge the program's
cost effectiveness or net benefits (total benefits minus total costs) or
compare these effects with those of higher-priority air pollution control
programs.

The two assessments of the act's costs and benefits focused on separate
time periods. EPA refers to the first assessment, completed in 1997, as
the "retrospective" analysis because it covered the period 1970 to 1990.
It is of limited use in understanding the economic effects of the current
air toxics program because this time period predates the significant
expansion of the program after the 1990 amendments.

The second analysis, completed in 1999, is referred to as the
"prospective" analysis because it covered the period 1990 to 2010. This
study attempted to forecast the future economic impacts of the 1990
amendments and estimated that the overall net benefits of clean air
regulations from 1990 to 2010 would total $510 billion (1990 dollars),
with a benefit-to-cost ratio of four to one. Most (over 90 percent) of the
monetized benefits included in the analysis stemmed from reduced incidence
of health effects associated with exposure to five of the six criteria
pollutants-carbon monoxide, ground-level ozone, particulate matter,
nitrogen oxides, and sulfur dioxide. EPA places the highest priority
within its clean air programs on the criteria pollutants.

21U.S. Environmental Protection Agency, The Benefits and Costs of the
Clean Air Act, 1970 to 1990 (Washington D.C., 1997); and The Benefits and
Costs of the Clean Air Act, 1990 to 2010 (Washington D.C., 1999).

The prospective analysis is of limited use in understanding the effects of
the air toxics program because it provided incomplete information on the
costs of air toxics standards and did not include estimates of the human
health or other benefits of these standards. Specifically, the cost
estimates reflect only the 21 standards EPA had issued at the time of the
study-a number that has since grown to 96. EPA estimated that the cost to
industry of complying with these 21 MACT standards would total $780
million in 2000 and rise to $840 million by 2010. According to EPA, these
estimates primarily reflect the cost of purchasing, operating, and
maintaining pollution control equipment. As shown in table 9, these costs
represent a relatively small fraction of the total estimated costs of the
1990 amendments over that time period.

Table 9: Summary of Annual Costs Imposed by the 1990 Clean Air Act
Amendments

Dollars (in millions)                                    
                                Costs in Percentage of Costs in Percentage of 
Programs                         2000   total costs     2010   total costs 
Title I-Ambient air quality                                                
standards                      $8,600            44  $14,500            54
Title II-Mobile sources         7,400            38    9,050            34 
Title III-Air toxics              780             4      840             3 
Title IV-Acid rain              2,300            12    2,040             8 
Title V-Permitting                300             2      300             1 
Total annual costs            $19,400           100  $26,800           100 

Source: EPA.

Note: Dollar Amounts are in 1990 dollars.

An EPA official responsible for the prospective study said that the agency
did not include estimates for the aspects of the program that it had not
yet implemented-such as the 75 remaining MACT standards-because, at the
time, the agency did not have information on the number of facilities that
would have to comply with future standards or the level of emissions
control the standards would require. Without this information, the
official said it was appropriate to exclude these future standards from
the analysis. Nonetheless, EPA acknowledged the lack of information on the
costs of future air toxics standards as a key uncertainty of the
analysis.22

EPA plans to update its cost estimates as part of a new prospective
analysis covering 1990 to 2020. The revised cost estimates will include
all of the completed MACT standards as well as any other air toxics rules
issued by September 2005 (except the residual risk rule for coke ovens,
which entails emissions reductions and compliance costs that would have a
negligible effect on the overall analysis). An EPA official responsible
for the analysis said the agency expects to have preliminary results of
the revised cost estimates in late 2006, with a final report expected in
2007.

EPA Lacks Key Data Needed to Estimate the Benefits of Air Toxics Regulations

The prospective analysis of the 1990 Clean Air Act amendments did not
include monetized estimates of the benefits of air toxics regulations,
such as decreased cancer risks to affected individuals, because the agency
did not have sufficient data to estimate these effects. As shown in table
10, estimating the benefits of EPA's air toxics program requires a
substantial amount of scientific data. Specifically, this process involves
determining the extent to which reductions in exposure to air toxics have
decreased the incidence of adverse health effects, including cancer and
noncancer illnesses. This, in turn, requires estimating the extent of
adverse health effects stemming from exposure to air toxics both before
(see steps 1 to 3 below) and after (see steps 4 to 6 below) adopting air
toxics regulations. For example, exposure to air toxics prior to the
adoption of a regulation may have caused 1,000 cases of cancer per year
but the presence of a regulation may have decreased this number to 500
cases per year. The 500 avoided cases would represent a key health benefit
of the regulation. The final step of the process (step 7) involves
assigning dollar values to these health benefits.

22EPA identified other key uncertainties with its cost analysis, including
that the estimates were based on the costs of pollution control
technologies that were available at the time and did not account for
potential reductions in future costs due to technological innovation.

Table 10: Key Steps in Estimating the Benefits of Controlling Air Toxics

Step Task                             Data requirements                    
1    Characterize the relationship    Information on cancer and noncancer  
        between pollutants and the       effects of 187 different pollutants, 
        adverse health effects           as well as on how incremental        
        associated with exposure to      decreases in exposure to these       
        these pollutants (referred to as pollutants affect the incidence of   
        "dose-response" relationships).  each adverse health effect.          
2    Determine the baseline level of  Information on concentrations of     
        human exposure to pollutants in  each pollutant in the ambient air    
        the absence of air toxics        prior to adoption of air toxics      
        regulations.                     regulations, and on human exposures  
                                         to these pollutants. This requires   
                                         information on the amount of each    
                                         pollutant emitted prior to the       
                                         regulations, as well as computer     
                                         models that calculate human          
                                         exposures based on emissions data    
                                         and other key variables such as      
                                         meteorological conditions.           
3    Use data from steps 1 and 2      No additional data required.         
        above to determine the number of 
        cases of each adverse health     
        effect in the absence of         
        regulations.                     
4    Determine level of human         Information on the amount of each    
        exposure to pollutants after the pollutant emitted after adopting air 
        regulation. This involves        toxics regulations, and computer     
        estimating the extent to which   models used in step 2 to estimate    
        the regulation has decreased     the remaining level of exposure to   
        emissions of each pollutant and  each pollutant.                      
        related human exposures.         
5    Calculate the remaining          Same as step 3; no additional data   
        incidence of each health effect  required.                            
        after implementing the           
        regulation.                      
6    Determine the number of cases of No additional data required.         
        each health effect avoided as a  
        result of the regulation by      
        subtracting the number of        
        remaining cases of adverse       
        health effects (identified in    
        step 5) from the number of       
        baseline cases prior to the      
        regulation (identified in step   
        3).                              
7    Assign dollar values to the      Economic studies on the value of     
        number of avoided cases          reducing incidence of cancer and     
        identified in step 6.            noncancer health effects.            

Source: GAO analysis of EPA data.

Two primary factors limit EPA's ability to estimate the benefits of air
toxics regulations. First, EPA lacks adequate information on the extent to
which incremental reductions in exposure affect an average person's chance
of developing adverse health effects. The limited information on these
"dose-response" relationships represents the greatest challenge for the
agency in conducting a benefits assessment for the air toxics program,
according to a senior EPA official responsible for the retrospective and
prospective analyses. A senior EPA official responsible for risk analysis
drew a distinction between the type of data needed for a risk assessment,
which often involves extrapolation from studies involving laboratory
animals, and the type of data that economists need for a benefits
assessment, which generally requires studies of human exposures. The
official said that EPA currently has sufficient toxicological data,
primarily from animal studies, to assess risks from 133 of the 187 air
toxics. However, the official said the agency only has the type of
dose-response data needed to estimate the economic benefits for a handful
of pollutants.23

Second, EPA lacks reliable information on the quantities of each pollutant
emitted prior to the adoption of air toxics regulations or in the years
after adopting the regulations. EPA has tracked emissions of air toxics
since 1993 and prepares a National Emissions Inventory every 3 years. In
2006, EPA completed its most recent inventory, which has information on
emissions in 2002. While the inventory represents the best available data
on emissions of air toxics and is useful for identifying the relative
contribution of emissions from different sources, a 2004 EPA Inspector
General report identified shortcomings of the inventory that raise
questions about its reliability and usefulness in measuring the effects of
the air toxics program.24 For example, the report said that EPA cannot
tell whether apparent reductions or increases in the inventory have
resulted from changes in the way the agency estimated the inventory or
from real reductions or increases in emissions. The report also cited
problems with the limited involvement of state agencies in the development
and validation of the inventory.

Although the data in the emissions inventory are limited, EPA has used the
emissions inventory and other available data to estimate human exposures
to these pollutants. In 1999, EPA released its first National-Scale Air
Toxics Assessment (NATA), which relied on data from the 1996 emissions
inventory to estimate the potential health risks posed by air toxics in
different geographic areas. EPA updated this analysis in 2006 using data
from the 1999 emissions inventory. While NATA is a useful indicator of
potential health risks from air toxics at a given point in time, it is not
useful as a measure of the agency's effectiveness in implementing the air
toxics program because, according to EPA, the agency revised the number of
stationary sources and pollutants included in its analysis. For example,
the analysis based on the 1996 emissions inventory assessed risks from 33
pollutants, while the most recent analysis included 177 pollutants. As a
result, EPA believes it is not meaningful to compare the results of the
two assessments.

23EPA has some dose-response data for benzene and plans to include the
results of a case study assessing the benefits of reductions in benzene
emissions in the Houston area in the next comprehensive assessment of
Clean Air Act programs, which the agency expects to issue in 2007.

24U.S. Environmental Protection Agency, Office of Inspector General, EPA's
Method for Calculating Air Toxics Emissions for Reporting Results Needs
Improvement (Washington, D.C., 2004).

Overall, the limited information on health outcomes associated with
changes in exposure to air toxics hinders EPA's ability to quantify or
monetize the economic benefits resulting from the air toxics program. In
turn, this limits EPA's ability to develop monetized estimates of the
program's net benefits or cost effectiveness. Such information would be
useful not only for better understanding the economic effects of the air
toxics program, but also for comparing the cost effectiveness of different
air quality programs, which would help prioritize funding in addressing
human health problems caused by air pollution. This information would also
help EPA prioritize its remaining obligations under the 1990 amendments.
In May 2002, EPA's Office of Research and Development (ORD) released a
draft air toxics research strategy that discussed the agency's plans for
improving information on dose-response relationships.25 In addition, ORD
issued an air toxics plan in April 2003 that identified the shortcomings
of existing dose-response data and plans for improving this information.26
In reviewing these documents, the agency's Science Advisory Board
identified several concerns, including poor linkages across the two
documents, inadequate research funding, and the need for a better research
prioritization scheme.27

Other Indicators of the Program's Effectiveness Are Inconclusive

Without sufficient information to conduct a comprehensive cost-benefit
analysis, EPA measures the effectiveness of its air toxics program based
on estimated data from its emissions inventory. Specifically, EPA measures
the changes in aggregate emissions (measured in tons per year) of all air
toxics by comparing estimates from the most recent emissions inventory
with the 1993 baseline inventory. While estimated emissions decreased by
about 35 percent between 1993 and 2002 according to EPA, the data quality
problems discussed above limit their usefulness in measuring the program's
effectiveness.

25U.S. Environmental Protection Agency, Office of Research and
Development, Air Toxics Research Strategy (external review draft)
(Washington, D.C., 2002).

26U.S. Environmental Protection Agency, Office of Research and
Development, Air Toxics Multi-Year Plan, (Washington, D.C., 2003).

27U.S. Environmental Protection Agency, Science Advisory Board, EPA's Air
Toxics Research Strategy and Air Toxics Multi-Year Plan (Washington, D.C.,
2004).

Two other problems also limit the usefulness of the emissions data as a
performance measure. First, because pollutants differ substantially in
their toxicity-small quantities of some chemicals pose greater risks than
large quantities of less harmful chemicals-measuring changes in the total
tons of all air toxics emitted does not necessarily provide a strong
indication of the program's effectiveness in addressing health risks. The
EPA Inspector General report discussed above recommended developing
performance measures that address progress toward reductions in human
exposure and health risk. Such measures would provide a better indication
of changes in risks from air toxics. In the justification for its proposed
fiscal year 2007 budget, EPA said that it was developing a
"toxicity-weighted" emissions measure for the program.

Second, EPA's practice of measuring the air toxics program's performance
using estimated aggregate emissions data may not accurately measure the
effect that the program has had on changes in emissions. The current
performance measure attributes all changes in emissions to the federal air
toxics program, but emissions may change for reasons unrelated to the
agency's regulations. Some decreases in emissions may reflect cases where
state and local air pollution control agencies have issued rules to
control emissions that go beyond the federal regulations. As discussed in
the next section of this report, some states set more stringent standards
than EPA. On the other hand, a senior EPA official responsible for the
economic analysis of air pollution regulations said that the agency may
actually underestimate the program's effect. The official said that
because of economic growth and related increases in industrial production
over time, emissions would far exceed the current levels without the
existing EPA air toxics regulations.

We also evaluated two other potential indicators of the program's
effectiveness-data on levels of air toxics in the ambient air and
information on the degree of compliance with clean air regulations-to
determine their usefulness as indicators of the program's effectiveness.
While both could eventually serve as useful performance indicators, the
available data are currently limited and inconclusive. Regarding data on
ambient levels of air toxics, EPA has a monitoring network that includes
22 locations nationwide. The monitors generally track ambient levels of
six priority air toxics that EPA believes pose a concern in all geographic
areas of the United States.28

A 2005 EPA Inspector General report found shortcomings of the monitoring
network, including limited monitoring in areas with the highest estimated
cancer risks from air toxics as well as inconsistencies in the operation
of the monitors.29 In responding to the report, EPA said that the
Inspector General's concerns generally aligned with the agency's
monitoring improvement efforts. It is currently unclear whether the
existing monitoring data are representative or reliable indicators of the
program's effectiveness. Nonetheless, ambient monitoring is a valuable
component of the air toxics program and could eventually serve as a useful
performance measure. It is also important to note that, while not part of
the national monitoring network, a number of state and local agencies
conduct their own air toxics monitoring.

Finally, we reviewed available information on the degree of compliance
with air toxics standards identified through evaluations of regulated
facilities conducted by federal and state enforcement officials. As shown
in table 11, inspectors have found most facilities in compliance with air
toxics standards, with some degree of noncompliance at about one-quarter
of all facilities. Compliance rates for these facilities may not represent
the degree of compliance at all facilities because enforcement officials
do not visit each facility every year and often target facilities where
they suspect noncompliance.30 EPA enforcement officials said they do not
currently have comprehensive data explaining the magnitude of the
noncompliance in cases where inspectors found violations. For example,
noncompliance could range from record-keeping problems to more serious
violations, such as exceeding an emissions standard. Furthermore, it is
important to note that, while EPA has completed issuing all of the MACT
standards, 16 standards have compliance dates after June 2006. Thus,
information on compliance with these standards will not become available
until after that time.

28The six priority air toxics include acrolein, arsenic, benzene,
hexavalent chromium, formaldehyde, and 1,3 butadiene. EPA currently
monitors for arsenic, benzene, hexavalent chromium, formaldehyde, and 1,3
butadiene at all locations, and plans to monitor for acrolein at all
locations beginning January 1, 2007.

29U.S. Environmental Protection Agency, Office of Inspector General,
Progress Made in Monitoring Ambient Air Toxics, But Further Improvements
Can Increase Effectiveness (Washington, D.C., 2005).

30According to EPA, a total of 4,271 facilities were required to comply
with MACT standards as of 2004.

Table 11: Results of Inspections at Facilities Regulated by Air Toxics
Standards, 2003 and 2004

                    Facilities in  Facilities in                              
             Total     compliance  noncompliance      Facilities with unknown 
        facilities (percentage of (percentage of            compliance status 
Year  inspected         total)         total)        (percentage of total)
2004        731       483 (66)       194 (27)                       54 (7) 
2003        664       432 (65)       174 (26)                       58 (9) 

Source: GAO analysis of EPA data.

While the available enforcement data are limited, EPA has identified cases
of significant noncompliance with air toxics regulations. Specifically,
the agency has initiated a nationwide air toxics enforcement strategy to
identify and correct noncompliance and achieve emissions reductions in
targeted industry sectors. According to EPA, in 2005, the agency took
enforcement actions against facilities that failed to comply with targeted
MACT standards which resulted in air toxics reductions of more than 160
tons and fines exceeding $600,000 (2005 dollars). Furthermore, an official
in EPA's Office of Enforcement and Compliance Assurance said that the
agency achieved about 190 additional tons of air toxics reductions in 2005
through enforcement actions that were not associated with the national air
toxics enforcement strategy.

State and Local Programs Employ Practices That Could Potentially Help EPA
          Enhance the Effectiveness of the Federal Air Toxics Program

State programs we reviewed in California, New Jersey, Oregon, and
Wisconsin, and the local program we reviewed in Louisville, Kentucky, have
air toxics programs that go beyond the federal program and employ
practices that might help EPA enhance the effectiveness of its program.
First, these programs address some public health risks that have not been
addressed by the federal program. EPA could potentially strengthen its
program by assessing and considering what states perceive as the primary
gaps in the federal program. Second, the programs generally prioritize air
toxics activities based on their risk reduction potential, which could
serve as an example for EPA in prioritizing its remaining obligations
under the act. Third, some of the programs conduct comprehensive risk
assessments to identify the risk posed by all emissions from a facility,
while EPA's residual risk program assesses risk in a more piecemeal and
limited fashion. Fourth, several of the programs employ systematic
approaches to identify and prioritize chemicals for addition to their
lists of regulated air toxics, whereas EPA does not have such a process.
Finally, the agencies stressed the importance of reliable data on
emissions and chemical toxicity, and several programs have processes to
better ensure the accuracy of emissions data submitted by regulated
facilities. (See app. III for information on the key features of the state
and local programs we reviewed.)

Several State and Local Programs Address Gaps in EPA's Program

The five programs we reviewed address some public health risks that EPA's
program does not. For example, the programs regulate smaller sources than
EPA, set more stringent technology standards to control emissions, and
include some large stationary sources that EPA does not address.31 In
Wisconsin, any facility that emits one of 535 air toxics in amounts that
exceed certain thresholds may be subject to the state's air toxics
program. In some cases, annual emissions of less than 1 pound per year
from a facility could trigger the state rule, depending upon the toxicity
of the chemical. Wisconsin officials said that they use lower thresholds
than the Clean Air Act's 10- or 25-ton thresholds because even small
emissions of very toxic chemicals can present risks to the public.
Similarly, New Jersey officials said that their state program addresses
smaller facilities than EPA because most of the numerous chemical
facilities in the state are not subject to MACT standards since they do
not emit air toxics at levels that exceed federal thresholds. In contrast,
in accordance with the Clean Air Act, MACT standards for major sources and
the corresponding residual risk reviews apply to facilities in 158
industries with emissions of 10 tons or more of a single air toxic or 25
tons or more of a mixture of the 187 federal air toxics.

In terms of the stringency of the technology standards used to limit
emissions of air toxics, California and New Jersey officials said that the
technology standards in their states were often more stringent than EPA's
MACT standards. For example, California officials said that petroleum
refineries in their state use more stringent control technologies, and
they noted that EPA chose not to include these technologies as part of its
survey of controls already in use when it developed the MACT standard for
this industry.

Regarding the types of facilities that are regulated by EPA, some state
officials expressed concern that EPA did not develop MACT standards for
some major stationary sources of air toxics in their states. For example,
Oregon officials said that they requested EPA to issue MACT standards for
several categories of sources, including ceiling tile manufacturing and
titanium smelting if it found that they were major sources of air toxics.
Oregon officials expressed concern with EPA's apparent lack of response to
their request because these significant emitters of air toxics in Oregon
do not fall into one of the 158 major source categories that EPA
identified and regulates. Further, the State and Territorial Air Pollution
Program Administrators and the Association of Local Air Pollution Control
Officials (STAPPA/ALAPCO) has compiled a list of over 40 major emission
source categories of air toxics that were not regulated by EPA MACT
standards. While the five programs we reviewed would generally address
such sources, similar sources would be unregulated in the states whose
programs are based entirely on the federal program. Importantly, in a
number of cases, state law limits the ability of state and local programs
to go beyond federal requirements. For example, in 2002, STAPPA/ALAPCO
found that 26 states from every region in the country have precluded their
state air pollution control agencies from imposing clean air requirements
beyond those established by EPA.

31Establishing more stringent pollution control requirements generally
involves trade-offs between regulatory costs and potential public health
benefits.

State and Local Programs Prioritize Their Actions Based on Risk Reduction
Potential

The approaches some state and local agencies use to develop their air
toxics programs differ from EPA's approach in that they direct resources
to the areas of highest risk, whereas, given the Clean Air Act's
prescribed schedule, EPA has primarily focused on regulating emissions
from certain large stationary sources. In contrast, several state and
local programs generally rely on monitoring (the measurement of air toxics
in the ambient air) and modeling (estimating toxics in the air using
computer models) to identify chemicals, geographic areas, or facilities of
concern and develop measures to address these risks.

The Oregon and Louisville, Kentucky, programs illustrate the use of
risk-based prioritization. Oregon's air toxics program seeks to identify
geographic areas of high risk through modeling and monitoring and to then
concentrate resources on those areas. While not yet fully implemented, the
program plans to conduct statewide modeling using its emissions inventory
to identify areas of potential concern and then conduct monitoring to
delineate geographic areas of high risk. According to program staff, the
geographic approach is an efficient way to address risk because it is
targeted and focuses on the greatest risks. Because public health risks
from air toxics may vary depending on proximity to emissions sources and
other factors, the practice of identifying areas of high risk and taking
steps to address these risks shows promise as part of an overall risk
reduction strategy.

Similarly, Louisville created a program to address high health risks near
an industrial complex and in the surrounding community that were
identified through monitoring of pollutants in the ambient air. According
to program officials, toxic emissions from a section of Louisville called
"Rubbertown"-home to a complex of chemical facilities and other
manufacturers-have been the subject of public concern since the 1940s.
From 2000 through 2001, program officials worked with the University of
Louisville, EPA, and other stakeholders to monitor the ambient air near
Rubbertown and the surrounding community to assess the extent of the
problem. A risk assessment based on the monitoring data determined that 18
chemicals posed an unacceptable risk to the public. Consequently,
Louisville officials designed the program to target large emitters of
these 18 chemicals before targeting smaller emitters of air toxics.

In addition to some states' focus on identifying geographic areas or
chemicals of concern, the state and local programs we reviewed use
monitoring and modeling data to focus their efforts on specific facilities
that pose risks to the public. For example, California requires certain
large and small sources of air toxics to conduct facilitywide risk
assessments using a standardized risk-screening model. If the modeling
results show that risks exceed certain thresholds, the facility must
conduct a more comprehensive risk assessment. This process allows
California's state and local agencies to identify and focus on the sources
that pose high risks to the public. In addition, Louisville and Wisconsin
require certain sources to conduct facilitywide risk assessments as part
of the permitting process.32

In contrast, several state and local officials said that EPA's program has
not focused on the greatest risks. While EPA may have been driven by
certain deadlines in the act, some state and local officials said that the
agency has chosen to focus on certain large stationary sources even though
EPA's data suggest that emissions from small stationary sources and mobile
sources may pose greater risks. Further, EPA is currently developing a
rule that would exempt MACT-regulated facilities from regulation under its
residual risk program if, on the basis of risk assessments, the facilities
demonstrate that the cumulative risks from all of their toxic emissions do
not exceed certain thresholds. According to EPA, this strategy could
achieve voluntary risk reductions from facilities that would not be
required to reduce risks under the current residual risk program and will
provide high-quality, site-specific emissions data for use in future
assessments and emission reduction strategies. While this approach has the
potential to ease the regulatory burden on low-risk facilities, EPA may
have opportunities to apply its limited resources to approaches that have
greater potential to reduce risks.

32New Jersey may also require some sources to conduct facilitywide risk
assessments as part of the permitting process, but this is not a routine
practice, according to a New Jersey program official.

Several of the Programs We Reviewed Conduct More Comprehensive Facilitywide Risk
Assessments Than EPA

Several state and local programs we reviewed generally evaluate the
emissions from all of the emissions points within a facility in a single
risk assessment in order to assess the health risks associated with the
entire facility. In contrast, EPA's residual risk assessments-aimed at
identifying and mitigating any remaining health risk from emissions
sources subject to MACT standards-have only evaluated risk from a portion
of the facilities. Specifically, to date, EPA has limited the scope of its
residual risk determinations to emissions points within facilities that
must comply with the MACT standards at issue, although other emissions
points may also emit air toxics.33 As a result, according to several state
and local officials, some facilities with a high impact on public health
may avoid additional control requirements because EPA's focus on limited
portions of facilities may underestimate the risk posed by whole
facilities.

Figure 3 illustrates a facility emitting air toxics from four emission
points. Of the four emission points within the facility, points 1 and 2
are each covered by different MACT standards and, therefore, are subject
to separate residual risk assessments. Emission points 3 and 4 emit air
toxics, but are not subject to MACT standards, because emissions from
these two points do not exceed the MACT threshold.

33The preamble to EPA's first final residual risk rule, the National
Emission Standards for Coke Oven Batteries, 70 Fed. Reg. 19991, 19998
(Apr. 15, 2005), articulates the agency's approach for evaluating
remaining health risks from facilities regulated by MACT standards. EPA
relied on this approach in its five final residual risk rules to date.

Figure 3: Emission Points at an Industrial Facility Emitting Air Toxics

The programs we reviewed in California, Wisconsin, and Louisville would
generally evaluate the emissions from all of the emissions points in this
facility in a single risk assessment.34 In contrast, EPA's approach to
date would be to conduct a residual risk assessment for emission point 1
that would consider the exposure and human health risk attributable to
emissions from that emission point, and generally would not consider the
emissions from point 2, which falls under a different MACT standard, or
the emissions from points 3 and 4. According to EPA, it is not entirely
precluded from considering emissions from additional emissions points not
covered by the MACT standards at issue, but the agency, to date, has not
exercised this discretion in a final rule.

Several state and local stakeholders said that they were concerned that
EPA's risk assessments may show a lower level of risk to the public than
if the agency considered emissions from all of the emission points at the
facility. They said that EPA's residual risk approach may exclude some
facilities with a high impact on public health from more stringent control
requirements. Several officials said it would make more sense, from a
public health perspective, to consider the impact from all sources at the
facility at once, as some states do, rather than review each emission
point individually. Along these lines, several EPA officials said that
evaluating all of the emissions from a facility simultaneously would
enhance the efficiency of the program and better protect public health.

34According to New Jersey officials, the program in that state does not
routinely require sources to conduct facilitywide risk assessments.
However, New Jersey's program may evaluate emissions from all emission
points in a facility in a single risk assessment in situations where there
is the potential for high risk.

Several Programs Have Systematic Approaches to Identify and Prioritize Air
Toxics

Several of the state programs we reviewed use systematic approaches to
identify and prioritize chemicals for addition to their air toxics lists.
In contrast, EPA has not acted on the requirement to periodically review
and revise the list of regulated federal air toxics.35 For example,
California officials work with the state's public health agency to
determine if a substance qualifies as a state air toxic. This process
includes assessing (1) the potential for human exposure to a substance,
(2) the chemical's cancer-causing potential, (3) any noncancer effects
such as irritation of the lungs or nausea, and (4) the impact on
children's health, among other factors. A panel of scientific experts
reviews the work for accuracy, followed by the formal development of a
regulation, including a public hearing. Similarly, Oregon works with a
committee composed of toxicology, public health, and technical experts to
periodically identify air toxics for review and to develop health-based
emission benchmarks. The committee prioritizes air toxics for review based
on Oregon's emission inventory, the pollutant's toxicity or potency, the
number of people at risk, and the impact on sensitive populations such as
children, among other factors spelled out in state regulations. The
systematic approaches of these programs could inform EPA's efforts to meet
the act's requirement to review and update the federal list of regulated
air toxics.

The Programs We Reviewed Stressed the Importance of Data on Emissions and
Toxicology

Several of the state and local programs we reviewed require major and
small stationary sources to submit standardized annual emissions reports
and certify their accuracy. These programs, like EPA, rely on emissions
inventory data to develop regulations and conduct risk assessments. For
example, Wisconsin requires over 2,000 facilities to report emissions of
623 air toxics each year if the facility emits more than certain
quantities of each pollutant. Facilities must certify the accuracy of
their final submissions. The air toxics program in California similarly
requires certain major and small stationary sources to report air toxics
emissions of over 450 chemicals and to certify that the data are correct.
New Jersey and Louisville have similar requirements for a smaller subset
of air toxics and sources.

35As noted above, about 300 chemicals enter commerce each year.

In contrast to the programs that require sources to report and certify
their emissions, EPA, to date, generally has not required emissions
sources or state or local agencies to systematically report these data.36
Such data collection could enhance EPA's analysis and decision making in
future air toxics rule makings. However, it is not clear how states
without air toxics emissions inventories would comply with a federal
requirement or the extent to which the data collected from the states
would be comparable. For example, in 2002, EPA solicited comments on a
rule to require state and local agencies to submit standardized air toxics
emissions inventory data but the agency postponed consideration of the
requirements partly due to concerns raised by state and local agencies
about the lack of detail in EPA's proposal.37 EPA officials also told us
that they had concerns over whether there is adequate statutory authority
to collect these data.

Officials representing the state and local programs we spoke with
expressed mixed opinions about a potential EPA requirement to submit
standardized air toxics emissions inventories. For example, officials in
the states we reviewed except California supported a federal requirement
to report air toxics emissions because it would improve the consistency of
the federal inventory and its usefulness to states in activities such as
risk assessment modeling. In addition, some state officials said that a
federal requirement would enable states that are prohibited from having
their own programs to collect information on emissions of air toxics.
However, several officials cautioned that some programs would have
difficulty meeting such a requirement without additional funding.
California officials said that EPA should focus on states that do not
currently have an inventory.

36For fiscal year 2006, EPA Region 4 included a grant commitment for the
Louisville Metro Air Pollution Control District to submit its air toxics
emission inventory as part of an air planning agreement to obtain federal
funding for the local air program. EPA officials said that the agency's
fiscal year 2007 grant guidance for state and local agencies does not
require the submission of air toxics emissions inventories as a condition
to obtain federal funding.

37EPA, in its Consolidated Emissions Reporting Rule, 67 Fed. Reg. 39602,
39604 (June 10, 2002), agreed with commenters and stated that it planned
to develop air toxics reporting measures at a later date.

In addition, state and local officials said that EPA does not regularly
update chemical toxicity values that describe the potency of different air
toxics-key information for conducting risk assessments. These officials
told us that their agencies generally do not have the resources to develop
quantitative risk estimates for air toxics and must rely on other sources
of data, such as EPA's Integrated Risk Information System (IRIS).
According to several officials, the basic science necessary to develop air
toxics regulations is lacking in many cases. For example, Oregon officials
cited limited and out-of-date toxicity values for a number of common
chemicals in the IRIS database. Officials from other programs expressed
similar concerns and said that EPA needed to enhance its efforts to
provide quantitative toxicity information and conduct studies of
sufficient quality to make determinations about chemical toxicity. A 2004
report by the National Academies also identified the need for more timely
updates to EPA's IRIS database. In addition, California officials pointed
out that EPA does not have a cancer toxicity value for diesel particulate
matter, so some states have developed a patchwork of different toxicity
values. Further, state and local officials questioned EPA's use of a
formaldehyde risk factor developed by an industry group instead of its
peer-reviewed IRIS value when developing a recent MACT standard for
plywood and composite wood products.38 Several officials were concerned
that the deviation from IRIS would cause confusion about what toxicology
data were most accurate for state and local requirements.

                                  Conclusions

EPA has made some progress in controlling emissions of air toxics, but its
overall implementation of the air toxics program falls short of the
agency's statutory obligations because of the limited progress in (1)
addressing requirements to limit emissions from small stationary sources
and mobile sources, (2) evaluating the residual health risks associated
with existing emissions standards and setting additional standards as
appropriate, and (3) reviewing and updating the list of regulated
pollutants, as appropriate. While EPA places a lower priority on air
toxics than other programs that it believes have a greater potential to
reduce adverse health effects from air pollution, more comprehensive
information on the air toxics program's costs and benefits would help the
agency compare the cost effectiveness of its investments in various clean
air programs. Key data issues affecting the agency's ability to develop
more comprehensive cost and benefit estimates include unreliable data on
emissions and limited information on the extent to which changes in
exposure to air toxics affect the incidence of adverse health effects.
Until EPA supports efforts to address these data gaps that hinder its
ability to evaluate the health risks of air toxics, the agency will not
have assurance that its current priorities and programs necessarily target
the areas of greatest opportunity for reducing health risks associated
with air pollution.

38National Emission Standards for Hazardous Air Pollutants: Plywood and
Composite Wood Products, 71 Fed. Reg. 8342 (Feb. 16, 2006).

EPA still has a significant number of remaining requirements under the
act, including (1) setting 54 emissions standards for small stationary
sources; (2) conducting more than 90 reviews of the remaining health risks
associated with emissions sources covered by its existing standards, and
issuing additional standards as necessary; and (3) reviewing and updating,
as appropriate, the list of regulated air toxics. Over the past 15 years,
the air toxics program has not met its statutory deadlines, in part,
because of its low priority relative to other programs and related funding
constraints. Obtaining sufficient funding will continue to pose a
challenge for EPA, especially in light of the nation's current fiscal
situation. We believe that developing an implementation plan that
identifies the remaining tasks, data needed to estimate the benefits of
reductions in exposure to air toxics, timelines, and required funding
would improve the management of the program as well as its transparency
and accountability to Congress and the public. In addition, EPA could
examine state and local approaches to air toxics that may have the
potential to more effectively address risks by focusing resources on
sources, communities, and geographic areas that face the greatest risks.
This would require EPA to evaluate opportunities to enhance its efforts to
focus on the greatest risks to human health within the current legislative
framework.

                      Recommendations for Executive Action

To improve the management of EPA's air toxics program and enhance its
ability to reduce risks of cancer and other adverse health effects, we
recommend that the EPA Administrator require the Assistant Administrator
for Air and Radiation to develop an air toxics program improvement plan
that incorporates the following five issues:

           o  provides a detailed schedule for completing its mandated air
           toxics activities and identifies the staffing and funding
           resources needed to meet the schedule and address the health risk
           assessment needs;

           o  prioritizes activities within the air toxics program, placing
           the highest priority on those actions that have the greatest
           potential to address health risks, to the extent permitted by the
           Clean Air Act;
           o  establishes a process and timelines for meeting the act's
           requirements to periodically review and update the list of air
           toxics;

           o  outlines an approach and timelines for improving the agency's
           ability to measure the program's costs and benefits; and

           o  describes how the agency plans to improve its air toxics
           emissions inventory, including a discussion of the statutory
           authority for, and the merits of, requiring states and emissions
           sources to submit standardized emissions data.

           Agency Comments
			  
			  We provided EPA's Office of Air and Radiation with a copy of this
           report for review and comment. In commenting on the report, the
           Acting Assistant Administrator for Air and Radiation said that EPA
           agrees in part with the conclusions and recommendations in the
           report. The agency did not identify specific aspects of our
           conclusions or recommendations with which it disagreed, but rather
           provided only clarifications to statements in the report regarding
           the availability of information on the costs and benefits of the
           agency's efforts to control air toxics, the agency's progress in
           completing certain air toxics requirements of the Clean Air Act,
           and on EPA's management of the remaining requirements. EPA's
           letter and our response to their clarifications are included as
           appendix IV. EPA also provided technical comments, which we have
           incorporated, as appropriate.

           As agreed with your offices, unless you publicly announce the
           contents of this report earlier, we plan no further distribution
           until 30 days from the report date. At that time, we will send
           copies to the EPA Administrator and other interested parties. We
           will also make copies available to others upon request. In
           addition, the report will be available at no charge on the GAO Web
           site at http://www.gao.gov .

           If you or your staff have any questions about this report, please
           contact me at (202) 512-3841 or [email protected] . Contact
           points for our Offices of Congressional Relations and Public
           Affairs may be found on the last page of this report. Key
           contributors to this report are listed in appendix V.

           John B. Stephenson Director, Natural Resources and Environment

           List of Congressional Requesters

           The Honorable James M. Jeffords Ranking Minority Member Committee
           on Environment and Public Works United States Senate

           The Honorable Lincoln Chafee Chairman Subcommittee on Fisheries,
           Wildlife and Water Committee on Environment and Public Works
           United States Senate

           The Honorable Barbara Boxer Ranking Minority Member Subcommittee
           on Superfund and Waste Management Committee on Environment and
           Public Works United States Senate

           The Honorable Thomas R. Carper Ranking Minority Member
           Subcommittee on Clean Air, Climate Change, and Nuclear Safety
           Committee on Environment and Public Works United States Senate

           The Honorable Hillary Rodham Clinton United States Senate

           The Honorable Patrick J. Leahy United States Senate

           The Honorable Joseph I. Lieberman United States Senate

           The Honorably Paul Sarbanes United States Senate

           The Honorable Olympia J. Snowe United States Senate

           The Honorable John D. Dingell Ranking Minority Member Committee on
           Energy and Commerce House of Representatives

           The Honorable Tom Allen House of Representatives

           The Honorable Lois Capps House of Representatives

           The Honorable Edward J. Markey House of Representatives

           The Honorable Hilda L. Solis House of Representatives

           The Honorable Henry A. Waxman House of Representatives

           Appendix I: Status of EPAï¿½s Efforts to Respond to Recommendations
			  in the National Academiesï¿½ Report on Air Quality
			  
			  This appendix discusses the Environmental Protection Agency's
           (EPA) response to the findings and recommendations of the National
           Academies' (Academies) report on air quality management. The
           Academies prepared this report in response to a congressional
           request for an independent evaluation of the effectiveness and
           implementation of the Clean Air Act. The report examined the roles
           of science and technology in the implementation of the act and
           recommended ways to improve air quality management. One of the
           report's key recommendations was for EPA to form a work group to
           evaluate the report and provide a detailed list of actions EPA
           could take to improve its implementation of clean air programs.
           The work group completed this review in December 2004 and provided
           the agency's Clean Air Act Advisory Committee with a list of 38
           recommendations.

           EPA's Office of Policy Analysis and Review has taken the lead in
           responding to the recommendations and provided an initial response
           in April 2005, which was updated in November 2005.1 The response
           included information about ongoing and proposed activities to
           address the recommendations and estimated time frames for
           responding to each recommendation. The agency has prioritized the
           recommendations and developed a proposed schedule for completing
           its activities, with some actions already under way or completed
           and others not scheduled for completion until fiscal year 2008.
           Based on our review of available documents and discussions with
           EPA program managers, the agency has taken affirmative steps to
           respond to a number of the recommendations, and its proposed
           actions generally appear responsive to the Academies' findings. A
           comprehensive evaluation of EPA's response to the Academies'
           recommendations will not be possible until the agency has made
           further progress in implementing its proposed response actions.

           Appendix II: Objectives, Scope, and Methodology
			  
			  We were asked to assess (1) EPA's progress toward implementing the
           air toxics program and any implementation challenges the agency
           faces, (2) what available information indicates about the costs
           and benefits of EPA's efforts to control air toxics, and (3) the
           program design and management practices of state and local air
           toxics programs that could potentially help EPA enhance the
           effectiveness of the federal program. In addition, we were asked
           to assess EPA's progress in responding to recommendations
           pertaining to the air toxics program made by the National
           Academies in 2004.

           To respond to the first objective, we updated our previous
           analysis of the agency's progress in implementing program
           requirements. We reviewed the requirements of the Clean Air Act
           Amendments of 1990 and EPA's actions to respond to these
           requirements, including the number of regulations the agency
           promulgated and other requirements to issue reports and guidance.
           Specifically, we considered EPA's Maximum Achievable Control
           Technology (MACT), small stationary source, mobile source,
           residual risk, and technology review activities, and other
           activities in the act that were specifically related to air
           toxics.

           We also evaluated the timeliness of EPA's actions versus the
           schedule mandated by the act by comparing the dates specified in
           the act with the dates on which EPA published the rules in the
           Federal Register. We independently developed a list of actions
           required by EPA and worked with agency officials to refine and
           confirm the list we used. We made minor modifications to the list
           approved by EPA to account for the promulgation of residual risk
           and area source standards, to separately count area source
           standards issued in conjunction with MACT standards, and to delete
           source categories that were delisted.

           To determine the priority of the air toxics program relative to
           other air programs, and the priorities within the air toxics
           program, we met with senior air program officials and analyzed
           budget data submitted by EPA. Specifically, we compared the
           funding for EPA's air program as a whole with the funding for the
           air toxics program.

           To identify the implementation challenges EPA faces, we reviewed
           available studies by the National Academies, the Office of
           Management and Budget (OMB), and the EPA Inspector General. We
           identified nine implementation challenges, such as the adequacy of
           program funding and the priority of the program relative to other
           air programs, and developed a structured interview in order to
           evaluate the magnitude of the challenges identified by these
           studies in the opinions of various stakeholders. We pretested the
           interview questions and made relevant changes to the questions
           based on the pretest.

           We designed the structured interview so that respondents could
           rate each implementation challenge on a scale from 0 (not a
           challenge at all) to 4 (a challenge to a very great extent). When
           conducting the interviews, we asked followup questions if the
           respondents rated the challenge as a 3 (a challenge to a large
           extent) or 4, such as what they thought could be done to address
           the challenge. We also provided a list of key definitions, an
           explanation of the rating system, and a description of each
           challenge to respondents prior to conducting each interview.

           We conducted structured interviews with a nonprobability sample1
           of 22 officials, including 8 EPA, 5 industry, 4 environmental, and
           5 state and local officials. Specifically, for EPA, we interviewed
           senior officials within the Office of Air Quality Planning and
           Standards and the Office of Transportation and Air Quality. We
           identified national-level environmental and industry stakeholders
           through consultation with EPA (and referrals from contacts
           identified through this consultation) and membership on the Clean
           Air Act Advisory Committee. The five industry groups we
           interviewed were the American Forest & Paper Association, the
           American Petroleum Institute, the Council of Industrial Boiler
           Owners, the American Chemistry Council, and the Alliance of
           Automobile Manufacturers. The four environmental groups we
           interviewed were the Natural Resources Defense Council,
           Environmental Defense, Earth Justice, and an air toxics consultant
           recommended by environmental stakeholders and EPA. We interviewed
           officials from state and local programs in California, New Jersey,
           Oregon, Wisconsin, and Louisville, Kentucky.

           Following the structured interviews, we determined the most
           significant challenges for all of the stakeholders by averaging
           the ratings from all 22 respondents for each challenge. However,
           because ratings of the most significant challenges differed for
           each stakeholder group, we also averaged the scores for each
           challenge for each stakeholder group. We identified the greatest
           challenges identified by each stakeholder group (an average rating
           of 3 or higher, or those rated as challenges to a large or very
           great extent) to assess how perceptions of the challenges differed
           among the stakeholder groups.

           To respond to the second objective, we analyzed available
           information on the economic impacts of the program, as well as
           data on trends in emissions, health risks, and compliance.
           Regarding data on economic impacts, we reviewed EPA's 1997 and
           1999 reports to Congress on the economic impacts of the Clean Air
           Act as well as the agency's guidance for analyzing the effects of
           air pollution regulations. We also met with EPA staff in the
           Office of Air Quality Planning and Standards and Office of Policy
           Analysis and Review responsible for analyzing the economic effects
           of clean air regulations. Regarding emissions and monitoring data,
           we met with EPA staff responsible for maintaining the National
           Emissions Inventory, reviewed the agency's documentation and plans
           for improving the inventory, and reviewed relevant reports by
           EPA's Inspector General. Regarding data on health and risks, we
           met with EPA staff responsible for risk assessment and the
           development of the National-Scale Air Toxics Assessment. We also
           reviewed EPA's methodology for developing the assessment and
           available information on the risk assessment process. We obtained
           compliance data from the Office of Enforcement and Compliance
           Assurance's Air Facility Subsystem. We reviewed these data for
           obvious completeness and consistency problems, reviewed available
           documentation, and interviewed the system administrator. Unless
           otherwise noted, we determined the data were sufficiently reliable
           for the purposes of this report.

           To respond to the third objective, we reviewed a nonprobability
           sample of air toxics programs from California, New Jersey, Oregon,
           and Wisconsin and from Louisville, Kentucky to identify innovative
           program designs or management practices. We focused on programs
           that (1) went beyond federal standards, (2) were identified by EPA
           and other stakeholders as innovative programs, (3) used strategies
           to address air toxics that differed from those used by EPA, and
           (4) represented a range of geographic locations and experience
           addressing air toxics. Specifically, we asked EPA and the State
           and Territorial Air Pollution Program Administrators and the
           Association of Local Air Pollution Control Officials
           (STAPPA/ALAPCO), the stakeholders most knowledgeable about state
           and local air toxics programs, whether there were specific
           programs we should review, and used their recommendations as
           selection criteria. GAO conducted independent research to confirm
           that the selections cited by these stakeholders were reasonable,
           including analyses of the stringency of state and local air toxics
           programs based on current law, policy, and guidance documents and
           summary documents developed by EPA and state and local agencies.

           We visited each program selected for review and conducted
           semistructured interviews with state and local officials. We
           developed an interview protocol and revised it after limited
           testing with respondents. The semistructured interview included
           questions about how the programs interact with EPA, how the
           program views EPA's current and future requirements, regulate
           different chemicals and sources, account for risk, collect
           emissions inventory data, and measure progress, among other
           factors. We focused primarily on practices that EPA might find
           useful in addressing its program implementation challenges and did
           not evaluate the effectiveness of the state and local programs we
           reviewed. Our discussion of the practices employed by these
           programs should not be construed as an endorsement of any
           particular approach but rather as an acknowledgement that
           alternative strategies exist.

           In addition, we obtained information about EPA's response to the
           recommendations of the National Academies' 2004 report entitled
           Air Quality Management in the United States. We reviewed the
           recommendations in the report, the associated recommendations of
           the Clean Air Act Advisory Committee, and EPA's actions to respond
           to these recommendations. We worked with EPA officials to
           determine whether EPA's actions addressed the recommendations. Our
           work included an assessment of data reliability and internal
           controls. We conducted our work from June 2005 to June 2006 in
           accordance with generally accepted government auditing standards.

           Appendix III: Profiles of State and Local Air Toxics Programs
			  
			  This appendix provides general information on the nonprobability
           sample of four state and one local air toxics programs we reviewed
           to identify innovative program designs or management practices. We
           focused on programs that (1) went beyond federal standards, (2)
           were identified as innovative by EPA and other stakeholders, (3)
           used strategies to address air toxics that differ from EPA's, and
           (4) represented a range of geographic locations and experience
           addressing air toxics. Table 12 presents basic information about
           the programs we reviewed, followed by profiles of each program.

                                

1Environmental Protection Agency, Compilation of Status Reports on the
Implementation of Recommendations Made to EPA by the CAAAC on Air Quality
Management (Washington, D.C., November 2005)

1Results from nonprobability samples cannot be used to make inferences
about a population, because in a nonprobability sample, some elements of
the population being studied have no chance or an unknown chance of being
selected as part of the sample.

Table 12: Selected State and Local Air Toxics Programs

                   Date Number of                                             
Program      created chemicals   Strategy    Description
State                                        
California      1983       245   Control     Requires certain large and    
                                    technology  small stationary sources to   
                                                apply control technologies to 
                                                reduce emissions.             
                   1987       451   Risk        Requires certain large and    
                                    assessment  small stationary sources to   
                                                report emissions of air       
                                                toxics, estimate the public   
                                                health impact of their        
                                                emissions, and reduce         
                                                emissions as necessary to     
                                                meet health-based standards.  
New Jersey      1979       237   Control     Requires certain facilities   
                                    technology  seeking permits to apply air  
                                    and risk    toxics emission control       
                                    assessment  technology, estimate the risk 
                                                posed by the remaining        
                                                emissions, and take           
                                                additional measures as        
                                                necessary to meet             
                                                health-based targets.         
Oregona         2003       49b   Geographic, Requires facilities in        
                                    control     specific geographic areas of  
                                    technology, high risk to develop, with    
                                    and risk    other stakeholders, a risk    
                                    assessment  reduction plan to meet        
                                                health-based benchmarks. In   
                                                addition, some stationary     
                                                sources may be required to    
                                                apply control technologies    
                                                and estimate and mitigate the 
                                                risk they pose to the public. 
Wisconsin       1988       535   Control     Requires certain facilities   
                                    technology  that emit specific amounts of 
                                    and risk    cancer-causing air toxics to  
                                    assessment  apply control technology to   
                                                reduce emissions. Certain     
                                                facilities that emit specific 
                                                amounts of other air toxics   
                                                must estimate the risks posed 
                                                by these chemicals and meet   
                                                health based standards.       
Local                                        
Louisville,     2005       191   Risk        Requires certain facilities   
Kentucky                         assessment  seeking permits to construct  
                                                or modify processes or        
                                                equipment to estimate the     
                                                risk posed by their air       
                                                toxics emissions and to       
                                                reduce the risk, potentially  
                                                through the application of    
                                                control technologies, to meet 
                                                certain health-based goals.   
                                                Certain existing facilities   
                                                must meet similar             
                                                requirements for 37           
                                                chemicals.                    

Source: GAO analysis of state and local agency data.

aOregon's program is still being developed and has not been fully
implemented. This description presents the requirements as spelled out in
the 2003 state rule that created the program.

bThe Oregon Department of Environmental Quality proposed to adopt
benchmarks for 49 air toxics in February 2006. The benchmarks were not
final as of the date of this report.

                                   California

California's air toxics program regulates certain new and existing major
stationary sources, small stationary sources, and mobile sources more
stringently than EPA. In 1983, the state legislature adopted Assembly Bill
1807, the Toxic Air Contaminant Identification and Control Act, which
defined a process for identifying chemicals that qualify as state air
toxics and developing control standards to reduce emissions from certain
sources based on the application of pollution control technology.
California has listed 245 toxic air contaminants as of May 2006. The state
regulates diesel particulate matter emissions from motor vehicles, such as
school buses, under its program.

In 1987, the state legislature passed an additional law, Assembly Bill
2588, the Air Toxics "Hot Spots" Information and Assessment Act, which
required the submission of air toxics emissions inventory data from
certain facilities and notification of local residents of significant risk
from nearby sources of air toxics. Under this act, certain sources of air
toxics must conduct risk assessments to determine their health impact on
the community. In conducting these risk assessments, regulated facilities
must consider the risks posed by their emissions of 451 different
chemicals.1 In 1992, the legislature passed an amendment to the "hot
spots" law that required facilities that pose a significant health risk to
the community to develop risk management plans. Policy documents and other
information are available at the program's Web site
http://www.arb.ca.gov/toxics/toxics.htm .

                                   New Jersey

New Jersey's air toxics program regulates certain large and small
stationary sources more stringently than EPA through the state's
permitting program. The New Jersey Air Pollution Control Act of 1954
requires new or modified sources that emit air pollutants, including air
toxics, to incorporate state-of-the-art air pollution controls to reduce
their emissions. In 1979, the New Jersey Department of Environmental
Protection (DEP) adopted a regulation that specifically addressed air
toxics emissions. This rule listed 11 air toxics and required sources
emitting these chemicals to register with DEP and demonstrate that they
utilize state-of-the-art controls to limit their emissions. The department
incorporates control requirements for other air toxics on a case-by-case
basis as part of the permitting process. In the early 1980s, the DEP
instituted a risk assessment policy to better ensure that sources with
state-of-the-art controls protect public health. The risk assessment
policy requires certain facilities seeking permits to estimate the risk to
the community that remains after the application of technology standards
and to take additional measures as necessary to meet health-based targets
established for 237 air toxics. General information about New Jersey's air
toxics program is available at
http://www.state.nj.us/dep/airmon/airtoxics/ , and policy documents, such
as risk assessment policies are available at
http://www.state.nj.us/dep/aqpp/risk.html .

1California requires certain facilities to quantify and report emissions
of 451 chemicals as part of its risk assessment program. In 2006, the
state may consider the addition of several hundred chemicals to the list
of chemicals reported and used in risk assessments. Some facilities are
also required to report the use or manufacture of 310 additional chemicals
for a potential total of 761 chemicals, but these chemicals are not
currently considered in risk assessments.

                                     Oregon

Oregon's air toxics program is authorized to go beyond federal
requirements for some large and small stationary sources. In November
1998, the Oregon Department of Environmental Quality (DEQ) convened a
broad-based stakeholder group to outline a program to complement the
existing federal program and reduce the impact of air toxics in Oregon.
DEQ worked with stakeholders until the adoption of Oregon's air toxics
rule on October 9, 2003. The rule requires sources in specific geographic
areas of high risk to develop, with other stakeholders, a risk reduction
plan to meet certain health based goals.2 In addition, some stationary
sources may be required to estimate and mitigate the risk they pose to the
public and apply control technologies. The program is still being
developed and has not been fully implemented. Policy and guidance
documents and other information are available at the program's Web site
http://www.deq.state.or.us/aq/hap/index.htm .

                                   Wisconsin

Wisconsin's air toxics program regulates certain new and existing
stationary sources more stringently than EPA. In 1983, the Wisconsin
Department of Natural Resources (DNR) formed a group of scientists,
industry, environmental, and government stakeholders in response to public
concern about the health effects of air toxics and the lack of policy and
regulations at the federal level. The group recommended an approach for a
state air toxics rule in 1985, and DNR developed a rule that became
effective in 1988. This original rule was rewritten and redeveloped from
2000 through 2004 using an advisory committee process that included
government, industry, and environmental stakeholders. The final rule
became effective in July 2004. The rule lists 535 air toxics and requires
certain facilities that emit specific amounts of cancer-causing air toxics
to apply control technology to reduce emissions. In addition, certain
facilities that emit other air toxics beyond specific thresholds must
estimate the risks posed by these chemicals and meet health-based
standards.3 Guidance documents and other information are available on the
program's Web site,
http://www.dnr.state.wi.us/org/aw/air/health/airtoxics/ .

2The Oregon Department of Environmental Quality proposed to adopt
benchmarks for 49 air toxics in February 2006. The benchmarks were not
final as of the issue date of this report.

                              Louisville, Kentucky

In September 2004, the Louisville Metro Air Pollution Control District
prepared a draft Strategic Toxic Air Reduction (STAR) program in response
to air monitoring that documented and modeled data that suggested that air
toxics posed significant risks to the community. Adopted by the Louisville
Metro Air Pollution Control Board in June 2005, the STAR program requires
certain facilities to estimate the risk posed by their air toxics
emissions and to reduce the risk, potentially through the application of
control technologies, to meet certain health-based goals. Louisville's
program first focuses on emissions of 18 air toxics that posed
unacceptable risk to the public based on monitoring studies. In total, the
STAR program applies to new or modified processes and process equipment
that will emit any of 191 air toxics, and existing sources that emitted
any of 37 air toxics in quantities that exceed certain thresholds. Policy
documents and other information are available on the program's Web site,
http://www.apcd.org/star/ .

3Wisconsin state law provides that Wisconsin's air toxics program does not
apply to emissions that are regulated by federal MACT standards under
section 112 of the Clean Air Act.

Appendix IV: Comments from the Environmental Protection Agency Appendix
IV: Comments from the Environmental Protection Agency

Note: GAO comments supplementing those in the report text appear at the
end of this appendix.

See comment 1.

See comment 2.

See comment 3.

                                  GAO comments

           1. Regarding our discussion of the economic effects of air toxics
           regulations, EPA stated that the agency finds it appropriate to
           focus risk assessments and benefits analysis on the air toxics
           that pose the most significant risks within the context of the
           residual risk program. EPA's letter also stated that such an
           approach would assist the rulemaking process to a greater extent
           than comprehensive assessments of the total benefits and costs of
           all air toxics controls. While EPA may hold this view, the Clean
           Air Act requires the agency not only to assess residual risks
           after completing the MACT standards, but also to periodically
           assess the costs and benefits of clean air programs. Regarding the
           first set of requirements, EPA was late in issuing almost all of
           the MACT standards and is already well behind schedule in
           completing the residual risk assessments. With respect to the
           second set of requirements, EPA's economic assessments of clean
           air programs have included limited information on the costs of
           regulating air toxics and have not included monetized estimates of
           the human health or other benefits-either for individual
           pollutants or for all of the pollutants in total. More complete
           information on costs and benefits would help the agency, Congress,
           and the public understand the effects of the air toxics program
           and enable the agency to compare the net benefits of the air
           toxics program with those achieved under other clean air programs
           on which the agency has placed a higher priority.
           2. In its letter, EPA stated that GAO uses an inappropriately
           narrow measure of progress in regulating air toxics and that the
           agency has issued a number of regulations that control air toxics
           as a side benefit. However, as we discuss in the report, data
           limitations compromise the usefulness of other performance
           measures. EPA has indeed taken regulatory actions outside of the
           air toxics program that control toxic emissions as a side benefit.
           However, the progress-in terms of emissions reductions-that EPA
           cites should be considered in the context of the limitations of
           the emissions data discussed in this report. For example, the EPA
           Inspector General has reported that EPA cannot tell whether
           apparent reductions or increases in emissions have resulted from
           changes in the way the agency estimates emissions or from actual
           reductions. It is also important to note that EPA does not expect
           some of the emissions reductions cited in its letter to occur
           until 2020. Furthermore, EPA's most recent data on risks from air
           toxics identifies benzene-a known carcinogen emitted primarily by
           mobile sources-as a national risk driver that accounts for 25
           percent of the cancer risks posed by air toxics across the nation.
           This suggests that EPA has substantial opportunities to further
           address air toxics risks from mobile sources. Finally, the Clean
           Air Act mandated specific actions and timelines for evaluating and
           regulating toxic emissions from mobile sources. As discussed in
           this report, the agency has missed its deadlines for completing
           these actions but has proposed a mobile source air toxics rule
           that it intends to finalize in 2007.
           3. In response to our finding that EPA lacks a strategy for
           managing its implementation of the remaining air toxics
           requirements, the agency's letter stated that the Clean Air Act
           provides a road map for air toxics and that EPA developed an
           integrated air toxics strategy in 1999. EPA also stated that the
           agency is developing a strategy to respond to its court-ordered
           deadlines for completing certain air toxics requirements. As
           discussed in the report, EPA has missed most of the act's
           deadlines related to air toxics and has not fully implemented the
           actions outlined in its integrated strategy. Additionally, EPA's
           discussion of its efforts to meet court-ordered deadlines
           underscores the need for more proactive management.

Appendix V: A Appendix V: GAO Contact and Staff Acknowledgments

                                  GAO Contact

John B. Stephenson, (202) 512-3841 or [email protected]

                             Staff Acknowledgments

In addition to the contact named above, Christine Fishkin (Assistant
Director), Jennifer Dougherty, Cindy Gilbert, Tim Guinane, Michael Hix,
Andrew Huddleston, Karen Keegan, Alison O'Neill, Judy Pagano, Melissa
Saddler, and Joseph Thompson made significant contributions to this
report.

(360594)

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Highlights of GAO-06-669 , a report to congressional requesters

June 2006

CLEAN AIR ACT

EPA Should Improve the Management of Its Air Toxics Program

The Environmental Protection Agency's (EPA) most recent data indicate that
95 percent of all Americans face an increased likelihood of developing
cancer as a result of breathing air toxics-pollutants such as benzene and
asbestos that may cause cancer or other serious health problems. Sources
of air toxics include large industrial facilities, smaller facilities such
as dry cleaners, and cars and trucks. The 1990 Clean Air Act Amendments
required EPA to regulate 190 pollutants from these sources through a
multifaceted regulatory program. While EPA issues federal standards, state
and local agencies generally administer these standards, and some develop
their own rules to complement the federal standards. In this context, GAO
was asked to assess (1) EPA's progress and challenges in implementing the
air toxics program, (2) available information on the program's costs and
benefits, and (3) practices of state and local air toxics programs.

What GAO Recommends

GAO recommends that EPA develop a plan for improving the management of its
air toxics program, including a prioritization scheme, timelines, and
estimates of resources needed to meet its statutory obligations. EPA
agreed, in part, with our conclusions and recommendations, and provided
clarifications on three statements in the report.

While EPA has made some progress in implementing its air toxics program
mandated by the 1990 Clean Air Act Amendments, most of its regulatory
actions were completed late and major aspects of the program have still
not been addressed. Most of EPA's progress relates to issuing emissions
standards for large stationary sources, although EPA completed these
standards about 4 years behind schedule. However, many of the unmet
requirements pertain to limiting emissions from small stationary and
mobile sources, which collectively account for most emissions of air
toxics. The agency faces continuing implementation challenges stemming
from the program's low priority relative to other programs and related
funding constraints. To this end, the agency lacks a comprehensive
strategy for completing the unmet requirements or estimates of resources
necessary to do so. Senior EPA officials said the program's agenda is
largely set by external stakeholders who file litigation when the agency
misses deadlines. As a result of EPA's limited progress, the agency has
not addressed health risks from air toxics to the extent or in the time
frames envisioned in the Clean Air Act. Senior EPA officials said that
issuing standards for large stationary sources had addressed the greatest
risks from air toxics and that other clean air programs also control air
toxics as a side benefit. However, EPA does not have reliable data on the
degree of risk reduction achieved through its regulations. Furthermore,
the data that are available suggest that the agency has substantial
opportunities to reduce emissions from mobile and small stationary
sources.

Available information on EPA's efforts to control air toxics is not
sufficiently comprehensive to measure the program's total costs and
benefits. Specifically, EPA has not comprehensively estimated the national
economic costs of all air toxics standards and lacks the data necessary to
assess the benefits of these standards, such as decreased incidence of
cancer. Information on these impacts would help the agency assess the
overall net benefits (total benefits minus total costs) of the air toxics
program and compare these effects with those generated by higher-priority
clean air programs, such as those intended to address smog. Data on other
indicators of the program's effectiveness, such as changes in emissions,
concentrations of air toxics in the (ambient) outdoor air, and data on
compliance with air toxics standards are also limited and inconclusive.

The state and local programs we reviewed use practices that could
potentially help EPA enhance the effectiveness of its air toxics program.
For example, several state programs have systematic approaches for
identifying and prioritizing new pollutants that could inform EPA's
efforts to meet the act's requirement to review and update the list of
regulated pollutants.
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