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Benefits Analysis and CBA in the EC4MACS Project. Mike Holland, EMRC Gwyn Jones, AEA Energy and Environment Anil Markandya, Metroeconomica. What benefits?. Reduced damage from regional air pollution to: Health (quantified, monetised)
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Benefits Analysis and CBA in the EC4MACS Project Mike Holland, EMRC Gwyn Jones, AEA Energy and Environment Anil Markandya, Metroeconomica
What benefits? • Reduced damage from regional air pollution to: • Health (quantified, monetised) • Environment (quantified in GAINS but not monetised for the CBA) • Materials (quantified, partially monetised) • Crops (quantified, partially monetised) • Benefits of reducing climate change impacts? Review only.
Approach Developed through ExternE and related studies since 1991
Geographic scope • Can cover all countries for which EMEP provides pollution data • Valuation issues in non-EC states
The place of benefits analysis and CBA in EC4MACS PRIMES TREMOVE GAINS EMEP POLES CAPRI Benefits GEM-E3 CBA + uncertainty Costs, ecosystem impacts Impacts, monetary equivalents Probability of benefits>costs Competitiveness, employment
Responsibilities within the red box • Benefits analysis • CAFE-CBA model – AEA E&E • Uncertainty analysis – Mike Holland • Methodology update • Impact assessment – Mike Holland • Valuation – Metroeconomica
Common data with other models • Population data • Crop data? • Pollution data • Cost estimates for any scenario • Need for any updates in any dataset to be disseminated across the team
Inputs from other models • GAINS – cost data, ecosystem effects, emissions, some pollution data • EMEP – pollution data • Data transfer protocols being refined in work for the NECD revision
Inputs from other groups • WHO advice on health impact assessment • Not part of EC4MACS – not sure how this would happen • CLRTAP Working Groups, Task Forces, Expert Groups, etc. particularly: • Vegetation • Materials • Forests • Freshwaters • Linkage through Jean-Paul, Vladimir Kucera, Gina Mills/Harry Harmens
Outputs • To other models: • None? GEM-E3? • To policy makers: • Magnitude of impacts • Magnitude of benefits • Balance of cost and benefits according to best estimates • Probability of deriving a net benefit when uncertainties are accounted for
Example output: Monetised health benefits of Thematic Strategy
Example output: Benefit : cost ratio of the Thematic Strategy
Uncertainty analysis • Under CAFE we seek to address uncertainty through: • Statistical error • Sensitivity to methodological assumptions • Inherent (unquantified) bias in the analysis
Statistical error • Incidence rates for health impacts • Response functions • Valuation data
Sensitivities • Risk factor for chronic mortality effects of particles • Valuation of mortality
Combining statistical and sensitivity analysis • Following graphs combine: • Statistical errors in incidence rates, response functions and valuation data • Sensitivity to different approaches to mortality valuation • Sensitivity to error in quantification of abatement costs
Uncertainty so far… • Previosu slides show how we account for statistical error and methodological sensitivities • But what about inherent and unquantified biases?
Inherent bias • Examples: • Omission of secondary organic aerosols • Failure to monetise ecological impacts • Failure to quantify impacts to cultural heritage • Failure to quantify some possible health impacts because of a lack of data • Systematic upward bias in abatement costs?
Biases - general approach • Identify biases • Indicate strength and direction of bias • Provide scoping analysis if appropriate • Work out which biases matter, and if there is a consistent bias to over- or under-estimation from them
Further biases in GAINS and benefits assessments • Similar treatment to those in EMEP • Identify biases • Indicate strength and direction of bias • Provide scoping analysis if appropriate • Work out which biases matter, and if there is a consistent bias to over- or under-estimation from them
Priorities for further work • More effective integration of ecosystem impacts and other (currently) unquantified effects • Selling willingness to pay to a sceptical audience • Integration of climate benefits with regional pollution benefits • BUT…limited scope for this in EC4MACS