1. Draft Report Overview: March 20, 2003 Prepared for: Planning Team Meeting Western Regional Air Partnership Presented by: Doug Jeavons — BBC Research & Consulting and Dr. Michael Mueller 3773 Cherry Creek N. Drive, Suite 850 Denver, Colorado 80209 800.748.3222 jeavons@bbcresearch.com March 13, 2003 Developing a Common Framework for Economic Analysis

2. WRAP survey of members’ needs / interests States and tribes want WRAP help Varied interests / needs, including:  Interpretation  Advice and guidance  Actual assistance  Tribal focus Analyze both benefits and costs

3. Project overview Develop a common framework for economic analysis:  Support policy decisions by WRAP members with respect to the RHR and other regional air quality issues  Promote consistency in methods, assumptions and data sources Objectives Draft final report for review in mid-April 2003 Complete framework by June 2003 Timeline Main report:  General framework  Special topics  Conceptual case study Literature review Deliverables

4. Where did the Framework come from? Judgment Guidance documents Applications WRAP member survey EAF guidance Study team experience Specific Literature and Practice Tribal economic issues Industry health Incentive-based approaches Economic development Market response Benefits valuation General Literature and Practice

5. What the Framework is Guidance document Tailored to the WRAP Specific and practical recommendations Addresses benefits, costs, regional economic impacts and distributional issues Tool to assist with policy decisions

6. What the Framework does Provide understandable economic definitions Identify a 17-step process for economic analysis Choose among alternative methods and models Recommend key data sources, equations and economic values Suggest approaches to characterize uncertainty Recommend ways to report information consistently and usefully in a policy-making context Depict examples from a hypothetical case study Identify sources of further information

7. What the Framework does NOT do Make advances in economic theory or technique Provide a turn-key model Make policy decisions Eliminate unique issues and challenges that will arise

8. Framework overview Overall Issues and Initial Information Requirements Benefit-Cost Analysis Economic Impact and Distributional Analysis Overall Issues Geographic scope Treatment of future Uncertainty Initial Information Requirements Establishing the baseline Defining regulatory strategies Benefits Categories of Benefits Quantification Costs Types of social costs Quantification Benefit-Cost Comparison Aggregating, comparing and reporting Regional Economic Impacts Modeling market response Assessing industry health Effects on economic development Distributional Analysis Assessing tribal effects Low-income, minority populations and small businesses

9. Next steps Further review by EAF and others Identify initial applications Establish socioeconomic baseline database Test on adopted strategies (exercise / test) Apply to likely alternative strategies (2007)

10. Strategic role