4. Issues Related to the Regulatory Impact Analysis Statement : Comments and Reply

• MECA stated: "These standards are expected to be met through an increased use of proven technologies already demonstrated to be effective on 4-stroke engines, such as air injection, electronic fuel injection systems, and catalytic converters."

Reply:

As indicated in the RIAS for the proposed Regulations, the EPA estimates that compliance with the new emission standards for 2006 and later model year motorcycles is technologically feasible. In the case of Class IA motorcycles (i.e., motorcycles having an engine displacement of less than 50 cc), the EPA believes that the standards can be met by replacing traditional 2-stroke engines with 4-stroke or possibly with advanced technology 2-stroke engines, and in some cases with catalysts. For other classes of motorcycles, the EPA believes that existing emission control systems that are already being used on many recent model year motorcycles (e.g. secondary pulse-air injection, fuel injection, engine modifications, etc.) will be sufficient to meet Tier 1 standards (i.e., 2006 and later model years for Classes IB/II and 2006-2009 model years for Class III). While the EPA also believes that compliance with the Tier 2 standards (2010 and later model years) for Class III motorcycles is technologically feasible using advanced emission control technologies such as close-coupled and closed-loop three-way catalyst, it recognizes that there will be additional technical challenges for motorcycle manufacturers and will be evaluating the progress towards meeting the standards to determine if changes are warranted.

• DOW stated: "Given these emissions are very small, from the data in the RIAS, they can be characterized as 1/400^thof transportation; and an even smaller portion of all contributing sources of smog, thus raising the question:
  
  Are these sources material to the smog issue being addressed? Will such emissions make any difference?
  
  At face value, the data presented to justify the regulatory amendments will not make a significant difference in the creation or formation of smog; but that does not preclude the regulatory amendments from proceeding. What should change is the justification; this is not longer a regulation for environmental improvement but a level playing field regulation that has an environmental contribution. Should the RIAS recognize this reality?"
• MECA stated: "Highway motorcycles are significant contributors to mobile-source air pollution and produce more harmful emissions per mile than a car or even a large SUV. The implementation of the new emission standards for exhaust and evaporative emissions from highway motorcycles will help reduce the public's exposure to mobile source air pollution and help avoid a range of adverse health effects associated with ambient ozone and particulate matter levels."

Reply:

The RIAS for the proposed Regulations recognizes that total motorcycle emissions will continue to represent a small portion of all contributing sources of smog. Nonetheless, motorcycles can be an important source of air pollution given that these vehicles are often used in urban areas during periods of warm weather associated with the formation of ground-level ozone and smog. In addition, motorcycle emissions can also be a source of airborne toxic substances for persons who operate or work with, or who are otherwise active in close proximity to these sources.

Emission standards for motorcycles have remained unchanged for the past 20 years and motorcycles have generally not kept pace with advancements in emission control technology. For example, maximum allowable levels for hydrocarbon exhaust emissions are about 90 times higher for motorcycles than for light vehicles. Tightening emission standards for motorcycles takes advantage of the opportunity to implement widely-available technologies to reduce smog-forming emissions.

The proposed Regulations are important to ensure that the environmental improvements to motorcycles will be achieved in Canada and also to maintain a level playing field for companies in Canada and the U.S.

Dow stated:

• "While we agree in principle; if the statement "There are also direct health benefits from reductions in toxic substances (e.g. benzene, 1,3-butadiene, formaldehyde, acetaldehyde, acrolein)" is made, greater detail should be forthcoming to justify. Given the materiality question raised in the preceding point, information and/or data substantiating the above assertion should be provided."
  
• "Environment Canada is encouraged to provide data on what the specific health benefits are and quantify the benefits which result from this actual regulatory amendment"

Reply:

Although the proposed Regulations do not include specific limits for benzene, 1,3-butadiene, formaldehyde, acetaldehyde and acrolein, the standards will have the effect of reducing their emissions through the application of improved emission control technologies. The following explanation was provided in the RIAS supporting the publication of the current Regulations and also applies to motorcycles.

• The U.S. EPA indicates that "technologies used to reduce exhaust hydrocarbons also reduce the hydrocarbon species listed as MSATs [Mobile Source Air Toxics]. This is true whether control is achieved through engine or component modifications, add-on devices, or the use of aftertreatment devices such as oxidation or three-way catalysts. We are not aware of vehicle or engine technologies that selectively reduce MSATs without reducing other hydrocarbons to a similar degree[2]"

In addition, the EPA indicated in its final rule for motorcycles that the projected reduction in hydrocarbon emissions should result in an equivalent percent reduction in air toxic emissions. For Canada, the emission reduction for hydrocarbons (i.e. VOCs) is estimated at 45 percent for the year 2020 relative to a base case without regulations.

Dow stated:

• "This statement " the fact that the incremental costs associated with the proposed amendments are low, the benefits of the Canadian proposed amendments are expected to outweigh the associated costs" presents a conclusion that benefits are greater than costs. But it is presented in terms of what is "expected". In the making of regulation and their justification, the conclusion should be based on fact and analysis and not expectations. Environment Canada is encouraged to conduct RIAS analytically. It is recommended the cost/benefit be on a scientifically sound, economically justifiable basis."
  
• "If Environment Canada is moving away from an objective analytical approach to that of opinions and expectations, this establishes a precedent worthy of greater communication to the regulated community."
  
• "With this regulatory amendment, Environment Canada is encouraged to analytically justify the statement asserting that benefits exceed costs."

Reply:

The RIAS that was published with the current Regulations described the environmental and economic rationale that support a policy of alignment of Canadian emission standards for all classes of on-road vehicles with those of the U.S. - an approach that has been broadly supported by stakeholders in various regulatory consultation processes.

The structure of the current Regulations incorporates the U.S. technical emission standards by reference to the U.S. Code of Federal Regulations for a given model year of vehicle and therefore most of the EPA's new emission requirements for 2006 and later model year on-road motorcycles are automatically incorporated in the current Regulations. There are, however, some new elements in both the application and structure of future U.S. motorcycle emission standards that must be addressed in order to maintain complete Canada/U.S. alignment, including the incorporation of a new class of previously unregulated motorcycles having an engine displacement of less than 50 cc and compliance-related flexibilities.

In the support document[3] for the final rule for motorcycles, the EPA estimated an average cost per ton of less than US$2,200/ton to meet the emission standards. The EPA found the cost effectiveness of the standards for this rule to be comparable to the cost per ton values of other recent mobile source rules for on-road vehicles (i.e. range from US$300 to $2,600/ton). While it is true that some previous programs have been more cost efficient, the EPA indicated that getting further emission reductions from sources that are already well regulated will be more expensive than reducing emissions from those sources that have not been as well regulated in the past since the costly mean of reducing emission is generally pursued first. Accordingly, the EPA also compared the cost effectiveness of the rule for motorcycles to various potential future technologies that were identified to achieve the emission reductions needed to meet National Ambient Air Quality Standards (NAAQS) as part of a regulatory impact analyses for the particulate matter (PM) and ozone NAAQS and regional haze rule[4]. The average cost effectiveness of these technologies estimated by the EPA exceeded US$5,000/ton, confirming that future emission control strategies necessary to meet the NAAQS are likely to be more expensive than the rule for motorcycles.

Canada's regulatory policy recognizes that the extent of cost and benefit analyses can vary and should be proportional to the significance and impact of the regulations. In view of the highly integrated nature of the North American vehicle manufacturing industry and the fact that the proposed Regulations continue to be aligned with those of the U.S., the impact of the proposed Regulations are considered to be minimal. Accordingly, the department believes that a qualitative assessment of costs and benefits is sufficient to conclude that the expected health and environmental benefit of reducing motorcycle emissions exceed the costs of meeting the Canadian Regulations. While the analysis only consider those impacts associated with the proposed Canadian Regulations, the RIAS has been supplemented with quantitative information on the cost per ton for meeting the U.S. final rule for motorcycles to provide more context on the cost-benefit impacts of the Regulations.

[2]Final Rule: Control of Emissions of Hazardous Air Pollutants from Mobile Sources, U.S. Environmental Protection Agency, Federal Register of March 29, 2001.

[3] Final Regulatory Support Document: Control of Emissions from Highway Motorcycles, U.S. Environmental Protection Agency, EPA420-R-03-015, December 2003.

[4] Regulatory Impact Analyses for the Particulate Matter and Ozone National Ambient Air Quality Standards and Regional Haze Rule, U.S. Environmental Protection Agency, Document II-A-77, July 1997.