1. CAFE CBA – Draft Baseline Results
Paul Watkiss and Steve Pye, AEA Technology Environment
Mike Holland, EMRC
Fintan Hurley, IOM
Alistair Hunt, Metroeconomica

2. Update on Progress Draft final methodology completed early July 2004
2nd Stakeholder consultation workshop mid July 2004
Peer review August – September 2004
Alan Krupnick, Bart Ostro, Keith Bull
First application (draft) to baseline November 2004
Final methodology report end November 2004
Application to MTFR and scenario December onwards

3. Peer Review Widespread acceptance of the methodology
‘Fit for purpose’…
‘reasonable basis for generating information to policy makers and the public about expected health / environmental benefits from improved air quality’
‘Only one part of informational package used… in policy assessment ‘
Uncertainty assessment on both the benefit and cost sides is noteworthy
Some specific points raised
Some specific issues on health, including WHO guidance
Chronic mortality - both life years lost and cases of premature mortality
Value of (statistical) life year lost (VOLY), value of a statistical life (VSL)

4. Benefits Framework – CAFE CBA Model
Based around GIS
Bring together – stock at risk, functions, values.
Take pollution concentration output from RAINS directly
Transparent framework – easy to update
Extended sensitivity analysis
Complemented by extended-CBA (qualitative) for some categories

5. Health Benefits Considered
Aim to undertake a HIA
Deaths brought forward from ozone
Chronic mortality from fine particulates (PM2.5) primary and secondary
Respiratory hospital admissions (ozone) and (PM10)
Restricted activity days (PM2.5) minor RAD (PM2.5, ozone)
Infant and childhood mortality (PM2.5)
Chronic bronchitis (PM2.5 chronic morbidity)
Respiratory symptoms in adults and in children (PM10)
Some additional impacts to finalise + sensitivity
RAINS +
CBA
CBA

6. PM Baseline Impacts – Respiratory Hospital Admissions (RHA)

7. PM Baseline Impacts - RHA
PM and Respiratory Hospital Admission by EU country in 2000, 2010, 2020
EU /year in 2000 falling to 31000/year in 2020

8. Baseline Infant Mortality Rates

9. PM Baseline Impacts – Infant Mortality

10. PM Baseline Impacts – Infant Mortality
PM and Infant (1-12 months) mortality by EU country in 2000, 2010, 2020
EU /year in 2000 falling to 260/year in 2020

11. PM Baseline Impacts – EU 25
In addition to change in loss of average life expectancy from ~12 months to ~5 months (chronic mortality) from RAINS
Significant reductions over baseline period, but remain serious numbers of impacts in 2020

12. Ozone Baseline Impacts – RHA

13. Ozone (SOMO35) Baseline – minor RAD
ozone and minor restricted activity day by EU country in 2000, 2010, 2020
56 million to 39 million EU25

14. Ozone Baseline Impacts – EU25
Numbers of impacts are lower than PM
Less reductions over baseline than seen for PM

15. Non-Core Endpoints Also calculating
Acute mortality PM2.5, PM10, PM2.5-10
Sensitivity of ozone effects with no cut point
Number of other effects, including US literature from peer review

16. Valuation Total economic cost from air pollution in 2000, 2010, 2020
For acute morbidity, annual rates directly assessed from impacts, WTP
For chronic effects (mortality)
Life expectancy from ~12 months to ~5 months from RAINS.
= Move to a new sustained pollution level – total benefits over future years
Not an annual effect, need to assess effects for 1 year. Need to annualise.
Based on peer review, assess life YOLL AND deaths. Monetise using value for year of life lost (VOLY), and value for statistical life (VSL)

17. Note: Results are still subject to internal review!
Preliminary EU25 estimates of the health impact of CAFE baseline (mean estimates based on VOLY)
Note: Results are still subject to internal review!

18. Note: Results are still subject to internal review!
Preliminary EU25 estimates of the health impact of CAFE baseline (median estimates based on VOLY)
Note: Results are still subject to internal review!

19. Man-Made and Natural Environment
Damage to buildings – corrosion and soiling
Crops
Ecosystems
Cultural Heritage
Other (visibility)
Social (employment, deprivation/inequality)
Ancillary (greenhouse gas emissions)
Economic (employment/growth)
Quantified and
monetised
impact pathway
Extended CBA
Outside core
analysis

20. Stock at Risk – e.g. Wheat

21. Next Steps Valuation of materials
Some minor amendments from ICP materials (April next year)
Crops – flux based approach based on Defra work
Finalised March next year
Interim position – quantify using existing data and approaches

22. Initial comparison of costs and benefits
Are model estimate benefits > model estimate costs?
What is the ratio of costs to benefits?
Is this likely to change much when uncertainties are accounted for?

23. Extended CBA Previously called ‘MCA’, ‘modified MCA’ Purpose
Raise profile and understanding of unquantified impacts
Are these effects so important that they would change views on the balance of costs and benefits?
Improve understanding of the impacts that we do quantify

24. Presentation of the results
Quantification of costs (RAINS)
Quantification of impacts (RAINS/CAFECBA)
Monetisation of impacts where possible
Initial comparison of costs and benefits
Extended CBA
Uncertainty analysis for benefits
Bias analysis, statistical analysis, sensitivity analysis
Further comparison of costs and benefits
Uncertainties
GEM-E3 outputs, competitiveness, employment

25. Quantified and valued impacts
Region
EU25
EU15
New Member States
UNECE
Individual countries
Economic basis
By scenario
Marginal

26. Presenting results Costs €€€€€ Benefits Health €€€€€ see ref… etc. €€…
Sub-total benefits
Ecosystem effects
Physical impact
Summary RAINS results
Economic effect
   see ref…
Cultural heritage
  see ref…
Crops – visible injury
 see ref…
Effects of ozone on paint
Negligible
  
Considered likely to have a significant effect at the European scale
 
May have a significant effect at the European scale 
May have a significant effect locally, but not Europe-wide
Negligible
Unlikely to be important at national or local scales

27. Conclusions Methodology peer review and agreed
Model working (CAFE CBA model)
Linked to RAINS output – demonstrated models work together
Draft analysis of baselines complete
Initial conclusions - move from mortality to morbidity will be significant in terms of the ‘evidence for health and air pollution’ – numbers of cases
Monetary valuation shows high values – biggest single effect is PM chronic mortality, but others important. PM>>>ozone (but non-health ozone)
Extended CBA for non-monetised effects. Sensitivity/uncertainty analysis
Next….. MTFR and scenarios