Draft Report Overview: March 20, 2003 Prepared for:

1. Developing a Common Frameworkfor Economic Analysis Draft Report Overview: March 20, 2003 Prepared for: Planning Team MeetingWestern 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

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? General Literatureand Practice Specific Literatureand Practice  Tribal economic issues  Industry health  Incentive-based approaches  Economic development  Market response  Benefits valuation  Guidance documents  Applications  WRAP member survey  EAF guidance  Study team experience Judgment

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

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