欢迎16 October 2014 CNREC

Economic Costs of Air-pollution from the Energy Sector

Niels Bisgaard Pedersen, DEA

Beijing, The Guardian 14/01/2013

PROGRAM

3Source: OECD

Beijing

Externalities

• A cost or benefit that affects a third party who did not chose to incur that cost/benefit

• Noise, air-pollution, water-pollution, accidents, waiting-time in transportation, visual pollution of the landscape, damage on flora and fauna etc.

• Local, trans-border and global impacts• Irreversible or reversible damage impacts

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Externalities

• PRIVATE COSTS – observed market costs • SOCIAL COSTS – includes damage imposed

by harmful air-emissions:• Green-house gasses - Global warming• SO2 – mortality, morbidity, acid rain, damage

agriculture and buildings• NOx – increased morbidity/mortality• PM2.5 – increased mortality/morbidity• Ozone – increased mortality/morbidity

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Consequence an negative externality

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Price is low and consumption to high, a non-efficient allocation of resources

Social Costs - Principle

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Result:Produce and consume too much conventional and too little wind energy

China

• A Word Bank reports that China’s• PM10 health damage represented nearly

700 billion RMB in 2009 or 2.8% of GDP• CO2 damage represents 1.0 % of GDP• Material damage from air pollution

represents 0.5 % of GDP• Other studies estimate health related

costs to pollution are 6% of GDP in 2005

CNREC - DEA Study

• CNRECs scenario tool CREAM quantifies the direct cost of energy production from the different energy technologies and the emission of harmful gases from combustion of fossil fuels.

• But the more indirect environmental costs are not quantified. This activity will use methodologies from Europe, meteorological modelling for China and empiric data from China to integrate environmental cost in CREAM. Focus will be on health effect on human health from emission of SO2, NOx, and CO2.

• CNREC responsible: Xie Xuxuan. • DEA responsible: Niels Bisgaard Pedersen.• External Assistance Yanxu Zhang, Harvard University

Impact Pathway Approach

Methodologies ResultSource – Scenarios   Emissions of CO2, SO2, SO4,

NOx, PM2.5, PM10 etc.

Dispersion in the air. Travelling distance possibly chemical reactions in the atmosphere (atmospheric dispersion models)  

Increase in pollutants concentration at receptor sites (concentration of substances in the air)

Dose-response function, exposure-response or concentration-response function 

Impacts on human health in terms of mortality and morbidity

Monetary evaluation Economic Cost (loss of income, costs for health system)

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CNREC – DEA Scenarios 2015 - 2050CO2 emissions in million ton per year

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CNREC – DEA Scenarios 2015 - 2050SO2 emissions in million ton per year

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CNREC – DEA Scenarios 2015 - 2050NOx emissions in million ton per year

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CNREC – DEA Scenarios 2015 - 2050VOC emissions in million ton per year

Atmospheric Dispersion Model

• An air-quality model for China (GEOS-Chem)

• Present day meteorological data (2004) and future emission data for 2015, 2020, 2030, 2040 and 2050

• Spatial allocation based on existing inventories for China

Predicted difference in concentration of ozone 2050 REF – MAX RE

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Predicted diffence in concentration of PM2.5 non-dust 2050 - REF – MAX RE

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Predicted diffence in concentration of SO2 2050 REF – MAX RE

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Predicted diffence in concentration of NOx 2050 - REF – MAX RE

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Pollutants and their impactsPrimary Pollutant Secondary

PollutantImpacts (End-points)

Particles   MortalityCardio-pulmonary morbidity

SO2   MortalityCardio-pulmonary morbidity

SO4 Sulphates Like particlesNOx   Morbidity (? Not

verified)NOx Nitrates Like particlesNOx+VOC Ozone Mortality

MorbidityCO   Mortality

MorbidityGreenhouse Gases   None directly (Global

warming)

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Impact of harmful air- emissions

• Estimation of human health impacts based on responsiveness to air-quality

• Impact Response function ΔMort= y0(1-e-βΔC)Pop• y0 is the baseline mortality rate,

• β is the concentration-response factor, • ΔC is the concentration difference of pollutants between RE and REF

scenarios,• Pop is the exposed population.

• β is derived from relative risks (RR) estimated in long-term epidemiological studies assuming log-linear relationships between pollutant concentrations and RR

Quantification of impact of harmful air- emissions• Mortality from Ozone and PM2.5

• Ozone a concentration-response factor of 0.52% (0.27%-0.77% as 95% confidence interval) increase in mortality per 10 ppbv increase of ozone (Bell et al., 2004)

• PM2.5: Mean of four studies over China: 0.35% per 10 μg/m3increase and 2.96% per 10 μg/m3increase for long term impacts

• NOx impacts are uncertain and SO2 impacts are relatively small

• Population and mortality data for each province is based on National Bureau of Statistics of China

Avoided number of deaths in China by following Max RE scenario 2015 -2050

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Avoided death are estimated to 1 750 000 for the period 2015 - 2050

Economic valuation of health impact of harmful air- emissions• Monetisation according damage costs principles:

• Mortality• Lost income/Willingness To Pay (WTP)/Value of Statistical

Life (VSL)• VSL willingness to pay for a small reduction in the risk of

premature mortality• Morbidity

• Increased illness, hospitalisation, medication, lost working days (respiratory diseases)

• VSL for China = 1.68 million RMB in 2010 price level• Economic Value = 2.9 trillion RMB 2015 – 2050 = 83

billion RMB per year in average

Economic costs from premature mortality in Million RMBDifference between REF and MAX RE

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Marginal costs benefits of emission on human health in China - RE scenario+- 10%

SO2 RMB per ton

Nox RMB per ton VOC RMB per ton

4 800 21 900 2 700

Economic Costs of CO2 emissions

Source Costs of CO2 per ton Comment

ExternE project 25 USD 2 700

Emission Trade Systems China

3.6 – 20 USD 6 pilot projects

Emission Trade System Europe

< 1 USD Number of emission permission too high.

Long term forecast 45 USD

Environmental Protection Agency

21 USD Damage cost assessment. Recently

updated. Recommended

Economic Costs of air-pollutionMillion RMB

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Future Directions

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Uncertainty Solution

More pollutants needs analysed PM10 etc.

Only mortality and damage from CO2 is included

Morbidity, impact in agriculture and material damage should be included

Dose – Response function Long term cohort studies in China

Spatial allocation of emission the same in the two scenarios

Calculate emissions at a regional level in CREAM

Present meteorological conditions for the whole period

Feed back between air-pollution and climate change needs to be taken into consideration

Internalisation - Policy

• Taxes and duties on CO2, SO2, Nox to reduce pollution

• CO2 trading schemes• Revenue to support renewable energy

deployment wind, solar and biomass• High environmental standards for power

plants, heavy industry, vehicles and fuels