Research Program Area: Economic Analysis
An ex ante and ex post cost analysis was conducted on selected rules in California to compare the accuracy of both the industryís and regulatorís estimated cost impacts with the actual cost of the rule after implementation. Ten candidate rules were identified from public hearing records at the California Air Resources Board (CARB) and the South Coast Air Quality Management District (SCAQMD). More in-depth research of these public records yielded ex ante cost information for eight of the ten rules. Three different efforts to contact stakeholders yielded ex post cost information, of varying degrees, for six of the eight rules. A comparison was made between the ex ante costs developed by the regulatory agency as well as the stakeholders to the ex post costs for the six rules. The regulatory agencies estimated capital cost impacts similar to actual impacts on five of the six rules fully analyzed. For cost per ton reduced, the agencies estimated very similar costs to the actual in two cases, overestimated somewhat for three cases, and underestimated in one of these cases. In the remaining case, the ex post cost information obtained was anecdotal and not sufficient to allow conclusion. In each case, the projection of the economic impact of the rule made by the stakeholders is significantly higher than the projection made by the agency. The capital costs comparison is considered more robust and accurate than analyses considering emissions data due to the difficulty in obtaining actual emissions reduction from stakeholders. A complete analysis of each rule along with recommendations for improving the process and availability of expost information is discussed.
For questions regarding this research project, including available data and progress status, contact: Research Division staff at (916) 445-0753
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