Valuation Issues for EC4MAC Anil Markandya Metroeconomica

Issues to be addressed  Health impacts: mortality and morbidity  Agricultural impacts  Policy related valuation  Biodiversity  Overall approach.

Health Impacts: Mortality  Valuation of premature mortality for children (VERHI-Children project).  Variations in valuation across the extended EU and Europe.  Different valuations for countries outside Europe (esp. developing countries).  Different valuations for different impacts?  Ongoing projects HEIMTSA will address some of these.

Health Impacts: Morbidity  Updates based on valuations of endpoints based on European data and not US data.  Variations in valuation across the extended EU and Europe.  Different valuations for countries outside Europe (esp. developing countries).  Different valuations for different impacts?  Ongoing projects HEIMTSA will also address some of these.

Agriculture  Valuations of productivity changes caused by air pollution to include: –General equilibrium effects via changes in prices. –Changes in shadow prices resulting from opening of trade and reductions in subsidies. –Update on environmental costs of different agricultural practices (ongoing studies). –AG2020 will look at some of these issues in a CGE modeling context. –Other models will also provide data on structural changes.

Biodiversity  New work ongoing on valuing loss of species and damages to ecosystems. (e.g. EXIOPOL, SESAME).  Valuation of physical indicators via links to endpoints (e.g. eutrophication indicators and valuation studies related to eutrophication) (Thresholds project).

Valuation related to Policy  Sectoral social costs of unemployment and possible competitiveness effects versus benefits of reduced pollution.  Valuation of trade impacts that reduce pollution in A versus increasing it in B.  Similarly for CC policies that shift emissions from A to B.  Valuation of risk aversion associated with impacts that have a small probability but a large consequence.

Approach  To keep abreast of developments in the valuation literature in Europe and abroad.  To prepare updates for the valuation of endpoints that are in the other models of the program.  To integrate environmental costs assessments with other cost assessments.  To recognize the dynamic nature of the valuations undertaken.