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Statement of Need: States are working to attain National Ambient Air Quality Standards for ozone, PM and NOx. Light-duty vehicles are responsible for a significant portion of the precursors to these pollutants and are large contributors to ambient air toxic pollution. In many nonattainment areas, by 2014, cars and light trucks are projected to contribute 30 to 45 percent of total nitrogen oxides (NOx) emissions, 20 to 25 percent of total volatile organic compound (VOC) emissions, and 5 to 10 percent of total direct particulate matter (PM2.5) emissions. Importantly, without future controls, by 2020 mobile sources are expected to be as much as 50 percent of the inventories of these pollutants for some individual urban areas. EPA has estimated that light-duty vehicles will contribute about half of the 2030 mobile source inventory of air toxics emissions from all mobile sources. The most recent National-Scale Air Toxics Assessment showed that, in 2005, mobile sources were responsible for over 50 percent of the cancer risk and noncancer hazard.

Summary of the Legal Basis: The Clean Air Act section 202(a) provides EPA with general authority to prescribe vehicle standards, subject to any specific limitations elsewhere in the Act. In addition, section 202(k) provides EPA with authority to issue and revise regulations applicable to evaporative emissions of hydrocarbons from all gasoline-fueled motor vehicles. EPA is also using its authority under section 211(c) of the Clean Air Act to address gasoline sulfur controls.

Alternatives: The rulemaking proposal discussed regulatory alternatives that were considered in addition to the Agency's primary proposal.

Anticipated Costs and Benefits: EPA estimates that the proposed program would cost about a penny per gallon of gasoline, and about $130 per vehicle. The annual cost of the overall program in 2030 would be approximately $3.4 billion; however, EPA estimates that in 2030 the annual monetized health benefits of the proposed Tier 3 standards would be between $8 and $23 billion.

Risks: Approximately 158 million people currently live in counties designated nonattainment for one or more of the NAAQS, and this figure does not include the people living in areas with a risk of exceeding the NAAQS in the future. These people experience unhealthy levels of air pollution, which are linked with respiratory and cardiovascular problems and other adverse health impacts that lead to increased medication use, hospital admissions, emergency department visits, and premature mortality. The reductions in ambient ozone and PM2.5 that would result from the proposed Tier 3 standards would provide significant health benefits. In addition, more than 50 million people live, work, or go to school in close proximity to high-traffic roadways, and the average American spends more than one hour traveling along roads each day. Exposure to traffic-related pollutants has been linked with adverse health impacts such as respiratory problems (particularly in asthmatic children) and cardiovascular problems. The Tier 3 standards would reduce criteria pollutant and air toxic emissions from cars and light trucks, which continue to be a significant contributor to air pollution directly near roads.