Local Air Pollution and Global Climate Change A Cost-Benefit Analysis by Bollen, J., Brink, C.,...

Local Air Pollution and Global Climate Change

A Cost-Benefit Analysis

by

Bollen, J., Brink, C., Eerens, H., and van der Zwaan, B.

Johannes BollenDutch Environmental Assessment Agency (MNP)TFIAM

LAP 75%GCC 25%

60%40%

45%55%

LAP = Local Air PollutionGCC = Global Climate Change

2000 2020 2020Total (bn €'s) 1.9 6.7 12.8

MaximumCurrent Feasible

Legislation Reductions

calculations based on:1]RAINS/Milieubalans(MNP,2005)2] 2% growth yr-1 of GDP

Dutch share of expenditures on LAP and GCC may shift dramatically

Results CBA on LAP & GCC

• Discounted LAP benefits significantly exceed those of GCC

• LAP policies alone lead to modest CO2 emission reductions, but magnify when combined with GCC policies

• LAP expenditures in EU decline from GCC policy expenditures

LAP = Local Air PollutionGCC = Global Climate ChangeCBA = Cost Benefit Analysis

MERGE model (Manne&Richels) + LAP

• Top-down economy + bottom-up energy• Intertemporal maximization of discounted utility

– Abatement "where", "when“, and "what" flexibility

• 9 regions, Pareto-efficient solutions for 2010-2150• Market and much larger non-market damages

(human health, biodiversity)

+ LAP:Restrict to primary energy related particulate matter +

precautionary assumption– 6% attributive risk of premature deaths from long-term

exposure– Value of Statistical Life at Median values (1 million euro)


8 million PM death4.7 0Celsius



Discounted LAP benefits significantly larger than GCC benefits (ratio >> 1!!!!)

Temperature in 2150 = 4.8 0Celsius compared pre-industrial levelBaseline: Premature Deaths to PM2.5 = 108 million over 2000-2150 period

-0.5

0.0

0.5

1.0

1.5

2.0

GCC LAP GCC+LAP

GCC LAP Costs

% c

hang

e of

dis

coun

ted

cons

umpt

ion


Are we certain???

-1

bas

e

ratio

5

3.0

8

% o

f D

isco

un

ted

C

onsu

mp

tion

ratio

Global Temperature Change (Celsius)

3.0

Premature Deaths in 2000-2150 (millions)

ratiobenefits

3.0

Benefits GCC Benefits LAP Costs

0

2

4


hig

her

PM

em

issi

ons

in d

evel

opin

g co

un

trie

s

6

3.1

9

hig

her

urb

aniz

atio

nin

dev

elop

ing

cou

ntr

ies

7

3.0

8

low

er e

last

icit

yem

issi

on-c

once

ntr

atio

n

4

3.1

12lo

wer

cli

mat

ese

nsi

tivi

ty

21

2.3

8

hig

her

cli

mat

ese

nsi

tivi

ty

2

4.1

8

low

er V

alu

e of

Sta

tist

ical

Lif

e

3

3.0

10

hig

her

Val

ue

ofS

tati

stic

al L

ife

12

3.0

7

Pre

srip

tive

dis

cou

nti

ng

4

2.4

8

Val

ue

of s

tais

tica

l lif

e in

pu

rch

asin

g p

ower

par

ity

31

3.1

7

hig

her

Cli

mat

e C

han

ge d

amag

e va

luat

ion

2

2.8

8

low

er C

lim

ate

Ch

ange

dam

age

valu

atio

n

14

3.3

8

Yes, ratio betweenLAP and GCC benefits fallls in the range of 2-31

Co-benefits from LAP to GCC magnify when implementing climate policies (synergy!!!)

Western EuropeChina

gasoilcoal

0.0

0.5

1.0

1.5

20000.0

0.8

1.6

2.4

2000

Pg

C

CO2 emissions in 2050


base baseGCC GCCLAP LAPGCC+LAP GCC+LAP

LAP expenditures in EU decline from GCC policies

Western Europe

0.0

0.4

0.8

1.2

2000 2010 2020 2030 2040 2050

CO

2 in

Gt

C

1.2

1.7

2.2

2.7

LA

P E

xpen

dit

ure

s (b

n 2

000

US

$)

LAP GCC+LAP

LAP (right) GCC+LAP (right)

CO2 Emissions:

End-of-pipe abatement costs:


Results CBA on LAP & GCC

• Discounted LAP benefits = 2-31 * GCC benefits

• LAP policies alone lead to modest CO2 emission reductions, but magnify when combined with GCC policies

• LAP expenditures in EU decline from GCC policies

• Caveat: this analysis restricts to primary PM


Preliminary Policy conclusions

• No delay with GCC policies, but

• integrate them into LAP strategies (it is the robust option)

• Increase research to reduce uncertainty of GCC


Further and related work

• This work: – Paper will be finalized by mid-June

• Further work: – extend LAP to include

1] Secondary aerosols (and increase the PM concentrations)

2] SO2, NOx, and NH3 emissions and abatement cost curves

• Related work: – on MNP web-site entitled “Sustainable energy: trade-offs

and synergies between energy security, competitiveness, and environment”


Local Air Pollution and Global Climate Change A Cost-Benefit Analysis by Bollen, J., Brink, C.,...

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