October 19, 2006

MEMORANDUM

SUBJECT:	Economic Impact Analysis for Hospital/Medical/Infectious Waste
Incinerators (HMIWI) 5-Year Review

FROM:	Tom Walton

Economist

ABCG (C439-02)

TO:		Mary Johnson

Engineer, ESG  (D243-01) 

Section 129 of the Clean Air Act requires EPA to regulate
hospital/medical/infectious waste incinerators (HMIWI), and requires
emission limits for nine pollutants, including hydrogen chloride (HCl),
carbon monoxide (CO), lead (Pb), cadmium (Cd), mercury (Hg), particulate
matter (PM), dioxins, nitrogen oxides (NOX), and sulfur dioxide (SO2). 
This document addresses   SEQ CHAPTER \h \r 1 the economic impacts of
the proposed changes resulting from the 5-year review of the HMIWI
standards, which were promulgated in September 1997.

Economic impact analyses focus on changes in market prices and output
levels.  If changes in market prices and output levels in the primary
markets are significant enough, impacts on other markets are also
examined.  This analysis began assessing the magnitude of the cost of
the changes due to the proposed 5-year review by comparing annualized
costs to annual sales for seventy of the seventy-six facilities
estimated to incur additional costs (sales were unavailable for six of
the facilities).

Control Costs 

EPA estimates that the national total costs for the 76 currently
operating HMIWI to comply with the proposed changes resulting from the
5-year review would be approximately $488,000 in the first year of
compliance and $308,000 per year for subsequent years.  For purposes of
assessing the economic impacts of the proposed changes, the total
annualized cost of the changes is estimated to be $328,000.  This total
annualized cost was determined by first annualizing at 7 percent over 15
years the difference between the first year costs and subsequent year
costs for each of the 76 HMIWI, and adding to that value the subsequent
year costs for each HMIWI; followed by then combining the annualized
costs for the 76 HMIWI.  As shown in Table 1, the total annualized cost
of $328,000 is distributed among the 76 HMIWI.  The average additional
control costs-to-sales ratio in percentage terms is 0.003 percent.  The
costs-to-sales ratios range from 0.0006 percent to 0.06 percent. 
Because of the small size of these regulatory costs, no additional
market analysis is needed.

 

Conclusions

Neither the modest national costs nor the facility level costs are
anticipated to significantly impact any market.  Because of the trend
towards fewer incinerators (prior to the original proposal there were
about 3,700 HMIWI units; at promulgation there were about 2,400 units;
now there are 76), it is possible that some facility may stop
incineration earlier than it would in the absence of the proposed
revisions to the regulations.  If a facility did stop incineration, it
would likely be a result of the availability of a less expensive
alternative to incineration rather than a result of the quite small
costs associated with the 5-year review as proposed.  Since no facility
is expected to be significantly impacted and, regardless, there are only
four small business facilities currently operating HMIWI units, a
finding of no significant economic impact on a substantial number of
small entities is very clear.

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