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Pollution Abatement Costs and Expenditures: 2005 Survey

This page contains information on the 2005 Pollution Abatement Costs and Expenditures (PACE) survey, including: information and references on efforts to evaluate and update the survey prior to collection of the 2005 data; uses of the PACE data by the EPA; and data collected in prior surveys conducted in the 1990s.

What is the Pollution Abatement Costs and Expenditures (PACE): 2005 Survey?

The Pollution Abatement Costs and Expenditures (PACE) survey is the most comprehensive national source of pollution abatement costs and expenditures related to environmental protection for the manufacturing sector of the United States. The US Census PACE survey collects facility-level data on pollution abatement capital expenditures and operating costs associated with compliance to local, state, and federal regulations and voluntary or market-driven pollution abatement activities. The survey has not been administered since 2000 in order for the EPA to evaluate the PACE survey and guidelines. The 2005 PACE survey is the result of a multi-year redevelopment/evaluation effort by the EPA to ensure the accuracy of the survey responses. The redevelopment/evaluation effort has been well-documented and links to research papers and reports can be found later on this website.

History of the PACE Survey

The PACE survey was conducted annually between 1973 and 1994 (with the exception of 1987), but was discontinued after 1994 by the U.S. Census Bureau for budgetary reasons. Recognizing the need for this type of data, the EPA provided the necessary funding to conduct a PACE survey in 2000 to collect pollution abatement costs and expenditures for 1999. However, the 1999 PACE survey was different in many ways than previous surveys making longitudinal analysis very difficult. See Becker and Shadbegian (Journal of Economic and Social Measurement, Volume 30, 2005, pp 63-95) for more information on the conceptual differences between the 1994 and 1999 PACE survey. An earlier draft of this paper can be found at:

A Change of PACE: Comparing the 1994 and 1999 Pollution Abatement Costs and Expenditures Surveys, Randy A. Becker, Ronald J. Shadbegian, NCEE Working Paper, Number: 2004-08, July 2004.

Because of the limited amount of resources and the costs to EPA and the Census Bureau required to administer this survey on an annual basis, there are no efforts underway at present to administer another PACE survey and collect more recent information than the data collected and reported for the year 2005. If resources become available to continue the PACE survey, it is expected that the next effort to collect PACE data would commence no sooner than 2009 in order to obtain expenditure data for 2008.

What information is collected in the 2005 PACE Survey?

The 2005 PACE survey and guidelines developed by the EPA was administered by the U.S. Census Bureau in 2006 to collect the 2005 expenditure data. The 2005 estimates are based on a sample of approximately 20,000 establishments in the Manufacturing sector with 20 or more employees (excluding Apparel Manufacturing (NAICS 315)). In May of 2006, a panel of PACE data users, Dr. Randy Becker of the Center for Economic Studies (CES), and EPA staff met to decide how to process, edit, validate, and impute survey responses. The editing and imputation algorithms developed during this workshop were implemented by the U.S. Census Bureau. The results of the survey data are summarized and presented in the U.S. Census Bureau report "Pollution Abatement Costs and Expenditures: 2005".

Who uses the information contained in the PACE Survey?

The data has been used by government, industry, and academic researchers to analyze a wide variety of policy questions, ranging from the overall costs of environmental regulations to how these costs influence economic activities. Some of these studies have led PACE data users to question the quality of the data collected by the survey. For a variety of reasons, the PACE survey may not capture accurate data on the costs and expenditures of pollution abatement. A more detailed discussion of the PACE survey and the issues surrounding it can be found at: 

PACE Survey: Background, Applications, and Data Quality Issues, Martin T. Ross, Michael P. Gallaher, Brian C. Murray, Wanda W. Throneburg, Arik Levinson, NCEE Working Paper, Number: 2004-09, July 2004.

Redevelopment of the 2005 PACE Survey

After a post-survey evaluation of the 1999 PACE survey responses, it became clear that the next PACE survey would need to be different than the 1999 survey. In response to the question of the ability of the survey to collect accurate data on pollution abatement, the EPA initiated a significant investigation examining the survey instrument and responses to the survey. Even though the PACE survey had been conducted annually for over 20 years, this was the first time in the history of PACE that the survey had undergone an extensive evaluation.  

The comprehensive review and evaluation of the PACE survey initiated by the EPA was in part led by RTI International (under subcontract to ICF Consulting). A multi-disciplinary expert panel, which consisted of economists (some with significant experience with PACE data), an environmental engineer, and a survey design expert, among others were consulted in all stages of the redevelopment.

During the initial stages of the project, RTI conducted one-on-one interviews with facilities and trade associations, and in consultation with the expert panel, Randy Becker of CES, and EPA staff, developed the 2004 PACE Survey and Guidelines that would undergo additional testing. This testing included a pretest with eighteen facilities (with independent cost estimation for comparison) conducted by RTI and a pilot test of the survey with 2000 facilities conducted by the U.S. Census Bureau. The results from the pretest and pilot test were reviewed by the expert panel, Randy Becker, and EPA staff and changes were made to the survey instrument and guidelines accordingly. The final product of this evaluation effort was the 2005 PACE Survey (MA-200 Form) and Guidelines (MA-200 Instructions).

The redevelopment of the PACE survey is well documented and information can be found at:
Redesign of the Pollution Abatement Costs and Expenditures (PACE) Survey: Findings and Recommendations from Pretest and Follow-up; Michael P. Gallagher, Brian C. Murray, Rebecca L. Nicholson, Martin T. Ross, Report Number: EE-0498, December 2006

Issues and Challenges in Measuring Environmental Expenditures by U.S. Manufacturing: The Redevelopment of the PACE Survey; Randy A. Becker and Ronald J. Shadbegian; NCEE Working Paper, Number: 2007-08; July 2007 

This paper is also available as a U.S. Census Bureau Working Paper: Issues and Challenges in Measuring Environmental Expenditures by U.S. Manufacturing: The Redevelopment of the PACE Survey, Ronald Shadbegian and Randy A. Becker, Center for Economic Studies, U.S. Census Bureau Working Paper 07-20. July 2007.Exit

Redesign of the 2005 Pollution Abatement Costs and Expenditure Survey, Michael Gallaher, Cynthia Morgan, Ronald J. Shadbegian, NCEE Working Paper, Number: 2008-01, January 2008; also available
Journal of Economic and Social Measurement, Volume 33, Number 4, 2008, pp 309-360.

Comparing the 2005 PACE Survey to Past PACE Surveys

The 2005 PACE survey is substantially different from the 1999 PACE survey making direct comparisons for most data items essentially meaningless. Most notable is the fundamental difference in the scope and definition of pollution abatement, as well as the definition of operating costs. There are also differences in the in-scope industries and sample selection procedures. While the sample for the 1999 survey includes the manufacturing sector (as does the 2005 and all previous PACE surveys), it also includes establishments in mining and electric power generation. The 2005 PACE survey did retain one feature of the 1999 survey that was not part of previous surveys and that is the recognition of four distinct pollution abatement activities: treatment/capture, prevention, disposal and recycling. However, this is essentially just an extra parsing of pollution abatement costs, relative to previous PACE surveys, rather than a change in the scope of these costs, which should not impact historical comparability. For additional information on the similarities and differences in the 2005 and previous PACE Surveys see Becker and Shadbegian (2004, 2005, 2007).

Because EPA recognized the need for longitudinal comparability, the 2005 PACE survey is more in the spirit of the 1994 PACE survey. With this in mind, a comparison is made between the 1994 and 2005 PACE expenditures. Pollution abatement capital expenditures totaled $5.9 billion in 2005 compared to $10.0 billion in 1994 (2005 dollars). In 2005 pollution abatement operating costs totaled $20.7 billion compared to $24.7 billion in 1994 (2005 dollars). In both years pollution abatement operating costs are less than 1% of total output while pollution abatement capital expenditures are less than 7% and 5% of total new capital expenditures in 1994 and 2005, respectively.

Both surveys disaggregated total pollution abatement capital expenditures and operating costs by media: air, water, and solid waste. In real terms between 1994 and 2005, operating costs increased by 6.2% for air and decreased by 28% for both water and solid waste. Capital expenditures on air, water, and solid waste fell by 32%, 56%, and 36%, respectively, between 1994 and 2005.

Download a copy of the 2005 PACE Survey Report and data and Related Studies and Reports on PACE

2005 PACE Survey Report and links to other websites providing descriptions of related studies and reports on PACE:

Sample of EPA Studies that use PACE Data:

Previously Published PACE Survey Data: