1. 欢迎 16 October 2014 CNREC Niels Bisgaard Pedersen, DEA
Economic Costs of Air-pollution from the Energy Sector
Niels Bisgaard Pedersen, DEA

2. PROGRAM
Beijing, The Guardian 14/01/2013

3. Beijing
Source: OECD

4. 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

5. 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

6. Consequence an negative externality
Price is low and consumption to high, a non-efficient allocation of resources

7. Social Costs - Principle
Result:
Produce and consume too much conventional and too little wind energy

8. 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

9. 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

10. Impact Pathway Approach
Methodologies
Result
Source – 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)

11. CO2 emissions in million ton per year
CNREC – DEA Scenarios
CO2 emissions in million ton per year

12. CNREC – DEA Scenarios
SO2 emissions in million ton per year

13. NOx emissions in million ton per year
CNREC – DEA Scenarios
NOx emissions in million ton per year

14. VOC emissions in million ton per year
CNREC – DEA Scenarios
VOC emissions in million ton per year

15. 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

16. Predicted difference in concentration of ozone 2050 REF – MAX RE

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

18. Predicted diffence in concentration of SO2 2050 REF – MAX RE

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

20. Pollutants and their impacts
Primary Pollutant
Secondary Pollutant
Impacts (End-points)
Particles
Mortality
Cardio-pulmonary morbidity
SO2
SO4
Sulphates
Like particles
NOx
Morbidity (? Not verified)
Nitrates
NOx+VOC
Ozone
Morbidity CO
Greenhouse Gases
None directly (Global warming)

21. 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

22. 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

23. Avoided number of deaths in China by following Max RE scenario 2015 -2050
Avoided death are estimated to for the period

24. 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

25. Economic costs from premature mortality in Million RMB Difference between REF and MAX RE

26. 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

27. 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

28. Economic Costs of air-pollution Million RMB

29. Future Directions 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

30. 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