A Breath of Fresh Air

Using environmental and health data to inform VW settlement funding decisions

Jemma Smith has one of the better sorts of problems. She finds herself in charge of a $70 million budget for diesel programs — that’s a little over 10 times as much as her typical annual budget.

As director of the air quality division at the Department of Environmental Protection, Jemma will have to design a strategy for spending her state’s share of the VW settlement fund. She can already envision the flood of proposals coming in from applicants across a dozen different sectors. New trucks for commercial fleets, upgraded buses for urban transit systems, new equipment for construction companies, improved cargo handling machines for port operators — they’re all worthy projects. But not even her newly flush budget can fund everything. She needs a plan.

Smith’s case isn’t real, but her dilemma is. At ERG, we’ve talked to the officials tasked with implementing VW settlement funds in dozens of states, and they’re all wrestling with similar problems.

How can we develop fair, objective, transparent, and easy-to-understand criteria for deciding which projects to fund?

The project cost and the magnitude of NOx reductions are obvious starting points. But when you already know you’ll be looking at a lot of proposals, odds are good that you’ll have several that score similarly on costs and reductions. So maybe it’s worth considering other factors:

  • Health benefits, such as reduced emergency room visits for asthma.
  • Economic benefits to fleet operators or in-state vendors and industries.
  • Productivity benefits like lower numbers of missed school and work days.
  • Environmental justice efforts to reduce disproportionate impacts in areas that already bear a high burden due to current air pollution levels.

Incorporating health considerations may sound costly — and it can be, if it’s implemented as a project-by-project cost-benefit analysis that formally translates health benefits to monetary costs.

But the good news is that it doesn’t have to be that complicated.

“There may not be a need to conduct detailed air quality modeling and health-related analyses for each project,” explains Sandeep Kishan. “You can accomplish quite a lot using readily available health data to prioritize projects.”

Kishan, who leads ERG’s work on mobile source emissions, suggests that data sets such as the National-scale Air Toxics Assessment and state-level Environmental Public Health Tracking (EPHT) data will often be sufficient for determining which areas in your state will benefit most from diesel emission reduction projects.

“EPHT data are an extremely valuable resource for setting funding and regulatory priorities,” says John Wilhelmi, an environmental health expert at ERG. “For most states, we now literally have at our fingertips spatially resolved data on pediatric asthma prevalence, asthma hospitalization rates, and other health outcomes for which exposure to diesel emissions is a known contributing factor.”

You might use these and other data sets to prioritize your VW settlement projects. Those priorities can be based on areas with the highest rates of asthma-related hospital admissions, the highest estimated levels of airborne diesel particulate matter, or the highest cancer risks attributed to outdoor air pollution. You can evaluate each of these metrics from readily available sources.

“Some states have told me that setting priorities and identifying areas that bear the greatest burden from diesel air pollution is very complex — but it doesn’t have to be,” adds Wilhelmi. “Scientifically sound and defensible decisions can be based on existing data sets.”

How much of this type of analysis you choose to do may vary. Formally, the VW settlement agreement requires that all funding requests must:

  1. Explain how the funding fits into the mitigation plan.
  2. Provide a detailed description of the project and its benefits, including community and air quality benefits.
  3. Certify that all vendors were or will be selected in accordance with applicable state public contracting laws.
  4. Describe how the eligible mitigation action addresses impacts of NOx emissions on communities that have historically borne a disproportionate share of the adverse impacts of such emissions.

Requirements 2 and 4 imply at least some consideration of health or environmental factors, though the specific requirements are quite general. That gives you a lot of flexibility in designing your funding systems. You may decide to include additional factors, particularly if your state will engage in formal legislative or rule-making processes to determine eligibility/selection criteria.

We have worked with several states that are already starting to think through how best to incorporate health benefits into their decision-making process. The end goal: project selection criteria and processes that are objective, clear, and transparent; have defined metrics of success; and can be implemented at a reasonable cost while meeting the requirements of the VW settlement agreement.

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