Monday, August 19, 2013

The U.S. and Australia have Similar, but Distinct, Stove Regulation Strategies.

Australia is in the process of developing stricter emission standards for wood heaters and their approach is a fascinating glimpse into another regulatory culture. The strategies and cost – benefit analysis in Australia should be a valuable comparison for the EPA as it finalizes its New Source Performance Standards (NSPS) for US wood heaters. This post is an overview of an Australian report showing the financial gains created by stricter regulations on wood heaters.

In 2011 the Council of Australian Governments (COAG) identified air quality as a Priority Issue of National Significance and agreed that the COAG Standing Council on Environment and Water (SCEW) would develop a National Plan for Clean Air to improve air quality, and community health and well being, to be delivered to COAG by the end of 2014. The first stage of the National Plan for Clean Air will focus on particle emission reductions and a consultation Regulation Impact Statement which assesses alternative policy options that could be employed to reduce emissions from wood heaters in Australia, and establishes their relative costs and benefits.

The current Australian Standards that cover wood heater emissions and efficiency set a criterion of 4 grams of particulate matter (PM10) per kilogram of fuel brunt (4g/kg). There is currently no efficiency criterion, but efficiency results must be reported on a label permanently attached to the appliance.

The report showed a large range of potential policy measures that could be implemented to reduce emissions from wood heaters. The potential measures fall into three major categories:
  • wood heater design or performance standards;
  • measures to promote compliance of retail models against these standards; and
  • measures influencing the in-service operational performance of wood heaters.
These measures could be delivered through a range of policy 'vehicles'. The policy delivery approaches examined are a voluntary national program, a collaborative approach or a national regulatory approach.

Under the business-as-usual or 'base case' scenario, particulate emissions from wood heaters in Australia are expected to fall by around 5000 tons (or 12%) over the next twenty years, as old heaters are progressively replaced with new, lower particulate emitting heaters. The reduction in annual particulate emissions from wood heaters under the policy options examined, over and above the business-as-usual reductions, range from 3% to 18%.

The estimated costs to government of implementing the different policy options range from $15 million over the next twenty years to around $39 million. The estimated costs to manufacturers range from $240,000 to $17 million, the strictest boasting an efficiency standard of 60% as well as an emission limit of 1.5 g/kg. The health benefits of the options are estimated to range from $760 million to around $1,850 million over the twenty year assessment period. Although the greatest emission reductions are estimated for the most expensive option, the highest health benefits are estimated for another which has a shorter phase-in period for the new standards. The estimated benefits far outweigh the estimated costs of all options included in the analysis. The present value of the net benefits range from around $750 million to $1,800 million.

The report concludes the greatest net benefits are likely to be achieved via a national regulatory approach for managing wood heater emissions, rather than through a voluntary or collaborative approach. This could be achieved either through a Commonwealth regulation, a National Environment Protection Measure (NEPM) or through mirror legislation.

View the full report here.

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