Overview: Benefit Analysis in CAFE Paul Watkiss AEA Technology Environment

Cost:Benefit Analysis in CAFE Objectives: Monetise environmental benefits of policies Estimates of the costs and benefits of different policy options

What Information from the CBA ?  Analysis of a wider set of quantified benefits of future air quality policy  Human health mortality and morbidity  Building materials  Crops  Monetisation of environmental benefits  Policy test – benefit to cost ratio  Importance of individual pollutants, common units for categories  Information for ‘getting the prices right’ (economic instruments)

Project Tasks Phase 1 Development and Application to Baseline  1. Developing conceptual framework for the analysis  2. Development of multi-criteria analysis (MCA)  3. Ensuring costs and benefits are measured with the same metric  4. Review/consultations on functions and monetary unit values  5. Estimating marginal damage of pollutants for 2010, 2015, 2020 (Beta)  6. Inclusion of costs and benefits at the local scale  7. Developing framework for social/macro-economic impacts of improved AQ  8. Creation of a modelling and reporting tool  9. Preliminary assessments Phase 2 Scenario Analysis

Conceptional Approach: Impact Pathway EMISSIONS tonnes/year of SO 2 DISPERSION Increase in ambient concentrations e.g. ppb SO 2 for all affected regions IMPACT Using exposure-response curves, e.g. change in building erosion COST IMPACT CONCENTRATION Damage costs, WTP estimates Stock at risk e.g. inventory building materials Benefits Model TREMOVE, EMEP, RAINS, etc.

Benefits Model Framework  Bring analysis of different impacts together – quantification and valuation – stock at risk, functions, values  Based around GIS  Take pollution concentration output from RAINS directly  Work at 50 km 2 resolution  but also provides way adapting to European and local level (resolution) for cities  Transparent framework – easy to update – sensitivity analysis - not a ‘black box’  Complemented by MCA for some categories

Health Benefits  Aim to undertake a HIA (Health Impact Assessment)  Includes impacts with high confidence but also new impacts and sensitivity  Progress through to valuation = health dominates overall benefits  Deaths brought forward from ozone  Respiratory hospital admissions ozone and fine particulates  Chronic mortality from fine particulates  Morbidity impacts fine particulates (e.g. effects in asthmatics)  Childhood mortality from fine particulates  Sensitivity analysis on other pollutants, other effects  Chronic morbidity from PM, long-term effects ozone High (WHO) New MCA

Man-Made and Natural Environment  Damage to buildings – corrosion and soiling  Crops  Ecosystems  Cultural Heritage  Other (visibility)  Ancillary (greenhouse gas emissions)  Social (employment, deprivation/inequality)  Economic (employment/growth) Quantified and monetised impact pathway Possible valuation/MCA Outside core analysis Separate analysis or MCA

What by When? Methodology outline Dec 2003  Phase 1 = development and baseline  Methodology complete July 2004 – peer review  Revised and application to baseline September 2004 Consultation workshop Dec Revised methodology March 2004 Draft final methodology Late June 2004 Peer Review July-August 2004 Consultation workshop July 5th Comments

Comments Received from December Workshop Comments at workshop, plus DG Enterprise (Dominique Simonis & Caroline Hager, Unit E.1 (Environment Aspects of Enterprise Policy)) UK DEFRA (Helen Dunn) INERIS (Sebastien Soleille) Coordination Center for Effects (JP Hettelingh) VITO (Rudi Torfs) UK Department of Health (Heather Walton)

Comments received on Methodology 2004

Methodology Updates and Open Points  Updated main health analysis so that consistent with WHO review  Meta analysis + follow-up to CAFE questions  Investigating background rates and transferability of morbidity functions  Finalising valuation of mortality (deaths brought forward / chronic).  Valuation workshop in UK (21 st June) - two new empirical studies  Discussion with UNECE groups on Crops and Materials  Discussion on Cultural Heritage ( Cultural Heritage in City of Tomorrow )  Open. Exact analysis to be carried out in sensitivity analysis