Benefit Analysis in CAFE 11-12 May 2004 Matti Vainio European Commission DG Environment, Unit C1

1. Benefit Analysis in CAFE 11-12 May 2004 Matti Vainio European Commission DG Environment, Unit C1

2. Objectives • Analysis of the impacts and the costs and benefits of different policy options for improving air quality in the enlarged EU. • Identify possible ancillary benefits and dis-benefits

3. Consortium Organisation Role AEAT AEA Technology Environment Co - ordinator . Co-ordinator. Paul Watkiss Project management Impact pathways Model development W eb - site Social effects S takeholder consultation EMRC EMRC Technical Coordinator, Lead Mike Holland Lead MCA IOM Institute of Occupational Medicine Health impacts Lead: Fintan Hurley IER Institut fuer Energiewirtschaft und Rationelle Modelling Energieanwendung , University of Stuttgart. Impact pathways Lead: Professor Rainer Friedrich E - CO E - CO Tech. Environmental valuation Lead: Stale Navrud ME Metroeconomica Environmental valuation, Lead: Professor Anil Markandya /Alistair Hunt Macro - economic effects WB Witteveen en Bos , Netherlands. Ecosystem valuation Lead: Elisabeth Ruijgrok

4. Organisation of work • Essential to share information with CLRTAP • Works for DG Environment • WG Target Setting and Policy Assessment will give guidance to DG Environment on choosing scenarios (including instrument choice) • Contractor will work closely with IIASA (RAINS) and and University of Leuven (TREMOVE)

5. Project Tasks Phase 1 Develop analytical framework and apply it to CAFE baseline (16 mo) • 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 • 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 (12 mo)

6. 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 km2 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’

7. Which Benefits? • Health (mortality and morbidity) • Building materials • Crops • Ecosystems • Cultural Heritage • Other (visibility) - possible impact pathway/MCA • Ancillary (greenhouse gas emissions) • Social (employment, deprivation/inequality) • Economic (employment/growth) Traditionally quantified and monetised impact pathway approach Traditionally quantified not monetised - Possible valuation/MCA Traditionally outside analysis - Separate analysis - MCA

8. RAINS pollutants SO2, NOX, PM10, VOC, ammonia each cell, 50 * 50 km2 grid across Europe ‘CAFE’ Benefits model (GIS) Agreed valuation endpoint list (health, buildings, crops, etc) Stock at Risk (population, buildings, crops, etc) Agreed dose-response list (health, buildings, crops, etc) Automated Impact Pathway Analysis Additional components analysis MCA component (e.g. cultural buildings, ecosystems?) GEM Macro-economic model (country by country) Social analysis Phase 1

9. Scenario development CBA inputs EMEP RAINS model Pollutant data Modelling of pollutant Processing of concentration across pollutant data Europe on 50 x 50 km Critical loads exceedence grid Impact assessment Core estimate of chronic effects on mortality Cost estimates by Cost analysis scenario, country Phase 2

10. Phase 1 Development and baseline Peer Review July-August 2004 Methodology outline Dec 2003 Revised methodology March 2004 Draft final methodology Late June 2004 Consultation workshop 5 July 2004 Comments Consultation workshop 13 Dec. 2003

11. Comments Received in December 2003 Workshop • Comments at workshop, plus • DG Enterprise (Unit E.1 Environment Aspects of Enterprise Policy) •  UK DEFRA •  INERIS •  Coordination Centre for Effects •  VITO •  UK Department of Health

12. Comments received on Methodology Paper in March 2004

13. Phase 2 Scenarios Peer Review July-August 2004 Feedback into scenarios Autumn 2004 Final methodology September 2004 Final Scenarios Apr 2005 Completion June 2005 Final baseline analysis

14. Further information Paul Watkiss [paul.watkiss@aeat.co.uk] Matti Vainio [matti.vainio@cec.eu.int]