To save content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about saving content to .
To save content items to your Kindle, first ensure email@example.com
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
This chapter describes two methods for quantifying air pollution damage of buildings in physical and economic terms; one is bottom-up, the other top-down. We begin by showing how the amenity cost can be obtained from the repair cost, without the need for a contingent valuation. Then we describe the effect of air pollution on the main building materials and we show the corresponding exposure–response functions. Sections 4.4 and 4.5 describe the bottom-up and the top-down methods. The results suggest that typical damage costs in the EU are in a range 0.1 to 0.4 €/kg of SO2; this is a very small percentage (about 1 to 4%) of the costs of health damages due to SO2. By contrast with the rather detailed calculations for SO2, only very preliminary estimates have been made for the damage costs from soiling caused by particulate emissions. These suggest values in the order of 0.07 to 0.3 €/kg of particulates emitted by combustion; like for SO2, this is only a very small percentage of the corresponding costs of health damages. For damage to historical buildings and monuments, despite the fact that this was one of the early motivations towards dealing with acid rain, we have regrettably no good numbers, merely a very rough estimate for France.
Our notation is somewhat different from many reports of the EPA and other organizations because we follow the custom of physics and engineering textbooks where a single letter is used for the “family name” of a variable, with subscripts to distinguish different variants. We choose subscripts that are fairly explicit and in most cases self-explanatory.
It is helpful to distinguish different substances by adding subscripts to some units: for instance mwat3 for a m3 of water. Likewise we sometimes add a subscript to the mass for clarity, e.g. kgsoil for a kg of soil.
To minimize the risk of confusion about units for items that can be stated as quantities or as rates (i.e. quantity per time), we indicate rates by dots over the respective symbol, the usual notation for time derivatives; for example if m = mass of emitted pollutant (kg), ṁ = emission rate (e.g. kg/yr).
For certain variables we sometimes add the location x as argument to indicate a possible dependence on the location where they are evaluated; when x is not shown, the average over the entire region is understood, for example kdep = average of kdep(x) over all locations x and SERF= population-weighted average of SERF(x).
Atmospheric dispersion and chemistry is a complex subject, for which this chapter offers only a brief introduction, with focus on a special class of models that are appropriate for damage cost calculations. Such models can be relatively simple, because damage costs involve long-term averages over large areas. Gaussian plume models, suitable for the local zone, are described in some detail and equations are provided for a specific version to allow the reader to carry out calculations. Further from the source, the removal of pollutants from the atmosphere becomes important and is crucial for regional modeling. The removal rates can be expressed in terms of a velocity that we call the depletion velocity, a quantity that accounts for dry and wet deposition and, for reactive pollutants, chemical transformation. To illustrate key features of regional modeling, we develop a simple model and compare it with results from the EMEP model. We present several methods of estimating depletion velocities. We also develop a simple model for an approximate calculation of impacts and damage costs due to air pollution. It is called the “uniform world model” (UWM), because it is exact in the limit where the depletion velocity and the receptor density are uniform. We have validated the model by about 200 comparisons with detailed site-specific calculations using the EcoSense software of the ExternE projects in Europe, Asia and the Americas. For emissions from stacks of 50 m or more, detailed calculations agree with the simplest version of the UWM, within a factor of two in most cases. We provide modifications for site, stack height and receptor distribution that greatly improve the accuracy and applicability of the UWM. The UWM is very relevant for policy applications because it yields representative results for typical situations, rather than for one specific site.
This chapter presents an analysis of the uncertainties of damage costs, all the more important because their uncertainties are large. Two methods for the analysis of uncertainties are presented. One is the customary Monte Carlo approach; it is general and powerful, but opaque because it produces only numbers. As an alternative we present an analytical approach that is suitable for multiplicative models, in particular the “uniform world model” (UWM) for damage costs; it has the advantage of being transparent and easy to modify if one wants to test different assumptions about the various sources of uncertainty. We show results, based on a literature review of the various sources of uncertainty in the steps of the damage cost calculation. We find that the uncertainty of damage costs can be characterized, with a sufficiently good approximation, by a lognormal probability distribution with multiplicative confidence intervals around the median estimate μg (a random variable has a lognormal distribution if the distribution of the logarithm of the variable is normal). The width of the confidence intervals is given by the geometric standard deviation σg, such that the 68% confidence interval ranges from μg/σg to μg σg. For the classical air pollutants (PM, NOx, SO2, VOC) we find that σg is approximately 3; for toxic metals we estimate that it is about 4 and for dioxins and greenhouse gases about 5. We also present a simple method for the uncertainty of the sum of damage costs due to different pollutants, for instance the damage cost of a kWh of electricity.
Countless tools, models and software packages have been developed for the analysis of environmental problems. This chapter focuses on tools that allow the assessment of environmental impacts and the comparison of technologies and policy choices. Impact Pathway Analysis (IPA) is presented in some detail because it is the correct approach for quantifying impacts and damage costs of pollution. Section 2.2 is an introduction to IPA; detailed discussions of the various elements follow in Chapters 3 to 9. We also discuss Life Cycle Assessment (LCA) and the relation between LCA and IPA. Difficulties and problems with the use of the various tools are addressed in Sections 2.4 and 2.5. Section 2.6 proposes an integrated framework for the analysis of environmental questions.
Overview of tools
Starting point: the DPSIR framework
There are a great number of tools, methods and models for the analysis of environmental problems. They differ in approach and objectives, but there is also much overlap and they are difficult to classify in a systematic scheme. We will not attempt a systematic survey but will focus instead on a few key features that are crucial for decision making, namely the ability to:
define the appropriate scope for the analysis,
model the dispersion of the pollutant(s) in the environment,
This chapter is fairly long and detailed because health impacts weigh heavily in the estimation of damage costs. It begins with an overview of the health impacts of air pollution. It then describes the methods used for measuring the health impacts of pollution. The key ingredient in the calculation of damage costs is the exposure–response function (ERF), and we discuss its general features in Section 3.3. The rest of the chapter presents ERFs for specific pollutants and end points. Section 3.4 discusses mortality and life expectancy, and Section 3.5 presents morbidity impacts of the classical air pollutants. Finally, Section 3.6 addresses other pollutants, especially the toxic metals. A summary of the ERFs used by ExternE (2008) will be provided in Table 12.3 in Chapter 12.
A word of caution should be given in relation to the contents of this chapter. There is a great deal of research going on into the health effects of air pollution at the current time. The core position defined here reflects relatively recent consensus, but this will inevitably be revised as more evidence becomes available. The two areas where this is most likely to make a difference concern quantification of the long-term (chronic) effects of exposure to ozone, and the effects of exposure to NO2. For the latter, there are significant questions of causality being considered – are the effects linked to NO2 a true effect of the pollutant, or is the pollutant simply an indicator of other stresses? Readers should refer to the final reports of the REVIHAAP and HRAPIE studies led by WHO-Europe on behalf of the European Commission, once they become available, for an updated perspective. Whilst we accept that new findings will influence the choice of response functions, the principles described in this chapter are likely to remain robust.
After a brief explanation of the greenhouse effect, we present some data from the 2007 assessment by the IPCC (2007a), the principal international body that is working on climate change. These data show the main anthropogenic contributions to climate change, as well as the increases in global average temperature and sea level that have been occurring since the industrial revolution. Since the impacts depend on cumulative emissions and involve long time constants, one needs to define emission scenarios before one can estimate the corresponding impacts, a topic addressed in Section 10.2. We then describe, in Section 10.3, the impacts that can be expected and discuss some of the difficulties in estimating the corresponding damage costs. In Section 10.4 we review damage cost estimates in the literature. It is also of interest to look at abatement costs, see Section 10.5. Finally, we discuss some of the implications of a CO2 tax in the light of emission reductions required to stabilize the climate at acceptable levels.
Greenhouse gases (GHG) and their effects: some data
Climate change is a vast subject and we cannot do it justice with a single chapter. Here we merely give an introduction to the problem of estimating the damage costs of GHG.
That anthropogenic emissions of CO2 would increase global temperatures had been recognized at the end of the nineteenth century, when the great chemist Arrhenius attempted a first estimate of the temperature increase that could be expected if the atmospheric CO2 concentration doubles relative to the pre-industrial level: he found that the average temperature at the surface of the earth would increase by about 5 to 6 K (Weart, 2008), not very far from current estimates, generally around 2.5 K.
In this chapter, we illustrate the use of external cost estimates for evaluating transportation options. We begin by presenting damage cost estimates in Section 15.1, with results for the EU and for the USA.
In Section 15.2 we use the damage cost estimates of ExternE to compare a hybrid passenger car with a conventional car on a lifecycle basis. In Section 15.3 we look at walking and bicycling as alternatives to commuting to work by car; here the reduction of air pollution is a significant collective benefit, but much more important is the value of the health gain for the individuals who make the switch to an active transport mode. We present sufficient detail in these two sections to show how the calculations are done.
In Section 15.4 we compare the greenhouse gas emissions of the main transport modes. In Section 15.5 we conclude the chapter with a discussion of policies that can internalize the damage costs of transport, including the low emission zones (LEZ) that have been created in many cities of Europe.
External cost estimates for transport
In the EU the emissions of vehicles must not exceed the limits specified in the EURO standards. As an example Table 15.1 shows the standards for passenger cars. Analogous standards are in force in the USA. The regulations of China, India and Australia are based on the EURO standards, although with different implementation schedules.
These standards are to be respected in actual use, and compliance is determined by testing the vehicle with a standardized test cycle. Developing realistic test cycles is difficult because the emissions vary strongly with driving conditions (cold engine, warm engine, speed, acceleration, etc.). There are always questions about how representative the tests are of typical driving conditions. The EURO standards specify the tests to be used for certifying compliance by vehicle manufacturers. The performance under other conditions can be estimated by using the COPERT 4 software of the European Environment Agency.
The responsibility of those who exercise power in a democratic society is not to reflect inflamed public feeling but to help form its understanding
Felix Frankfurter (former Supreme Court Justice) (1928) Carved in stone on the wall of the Federal Court House, Boston
In this chapter we explain why one needs to evaluate environmental costs and benefits. Cost–benefit analysis (CBA) is necessary for many choices relating to public policy, especially in the field of environmental protection, to avoid costly mistakes. Even when other, non-monetary criteria must also be taken into account, a CBA should be carried out whenever appropriate. Without a monetary evaluation of damage costs one can only do a cost-effectiveness analysis, as illustrated in Section 1.3. In Section 1.4 we explain how to determine the optimal level of pollution abatement, as a simple example of the use of a CBA. Impact pathway analysis (IPA), the methodology for quantifying damage costs or environmental benefits, is sketched in Section 1.5. The internalization of external costs is addressed in Section 1.6.
Why quantify environmental benefits?
The answer emerges through asking another question: “how else can we decide how much to spend to protect the environment?” The simple demand for “zero pollution” sometimes made by well-meaning but naïve environmentalists is totally unrealistic: our economy would be paralyzed because the technologies for perfectly clean production do not exist.
In the past, most decisions about environmental policy were made without quantifying the benefits. During the 1960s and 1970s increasing pollution and growing prosperity led to increased demand for cleaner air, and at the same time there was sufficient technological progress in the development of equipment such as flue gas desulfurization to allow cleanup without prohibitive costs. The demand for cleanup became overwhelming and environmental regulations were imposed with no cost– benefit analysis.
In this chapter, we evaluate the damage costs of landfill and incineration of municipal solid waste in Europe and North America, with due account for transport and for energy and materials recovery. Whilst air pollution provides some of the most significant externalities of waste management, the comparison of landfill and incineration also needs to consider potential impacts on drinking water due to leachates from landfill. A full impact pathway analysis of leachate is not possible here given that such impacts are extremely site specific. This is not to say that it could not be done for a specific site, though even this is far from straightforward given the complexity of the environmental pathways and the long time horizon of persistent pollutants. As an alternative we consider an extreme scenario, based on impact pathway thinking, to show that they are not worth worrying about if a landfill is built and managed according to regulations such as those of the EU. The damage costs due to the construction of the waste treatment facility are negligible, and so are the damage costs of waste transport, illustrated with an arbitrary choice of a 100 km round trip by a 16 tonne truck. The benefits of materials recovery make a relatively small contribution to the total damage cost. The only significant contributions come from direct emissions (from the landfill or incinerator) and from avoided emissions due to energy recovery (from an incinerator). Damage costs for incineration range from about 1.5 to 21 €/twaste, extremely dependent on the assumed scenario for energy recovery. For landfill the cost ranges from about 11 to 14 €/twaste; it is dominated by greenhouse gas emissions because only a fraction of the CH4 can be captured (here assumed to be 70%). Amenity costs (odor, visual impact, noise) are highly site-specific and we only cite results from a literature survey which indicate that such costs could make a significant contribution, on the order of 1 €/twaste.
The chapter on monetary valuation begins with a discussion of discounting, a tool that is necessary for the correct accounting of costs that occur at different times. A particularly important and controversial issue is the intergenerational discount rate, in Section 9.1.3. This is followed, in Section 9.2, by an overview of valuation methods, especially for non-market goods. Section 9.3 addresses the important case of the valuation of mortality, especially the loss of life expectancy due to air pollution. Morbidity valuation follows in Section 9.4, including a discussion of DALY and QALY scores. Section 9.5 addresses the valuation of neurotoxic impacts (value of an IQ point). Section 9.6 discusses the transfer of values to situations that are different from the original valuation studies.
Note that the valuation of some impact categories has been discussed in other chapters: Chapter 4 for buildings, Chapter 5 for agricultural losses and ecosystems, Chapter 6 for noise and traffic congestion (plus brief comments on visibility, non-renewable resources, accidents, employment, and security of energy supply), and Chapter 10 for global warming. A summary of the monetary values for health impacts will be provided in Table 12.3 of Chapter 12.
Comparing present and future costs
The effect of time on the value of money
It may be appropriate to begin this chapter with a tool that is needed whenever there are costs that occur at different times. Such a cost must be adjusted to a common time basis because a dollar (or any other currency) unit to be paid in the future does not have the same value as a dollar available today. This time dependence of money is due to two, totally different, causes. The first is inflation, the well-known and ever present erosion of the value of our currency. The second reflects the fact that a dollar today can buy goods to be enjoyed immediately or it can be invested to increase its value by profit or interest. Thus a dollar that becomes available in the future is less desirable than a dollar today; its value must be discounted. This is true even if there is no inflation. Both inflation and discounting are usually characterized in terms of annual rates.
Researchers interested in the calculation of environmental impacts;
Policy-makers and their advisors, in energy and environmental policy;
Graduate students and advanced undergraduates in environmental science.
In the past, decisions about environmental policy were made without quantifying the benefits. Pollution had become so bad, for instance with the Great London Smog of 1952 and rivers like the Rhine becoming too poisoned for fish to survive, that the demand for cleanup became overwhelming and environmental regulations were imposed in the absence of a cost–benefit analysis (CBA). The main sources of pollution and their impacts were obvious, and the regulations were clearly beneficial.
Nowadays, the remaining environmental problems tend to be more complex and so is the task of finding suitable solutions. For example, what should we do with our waste? Should what remains after recycling be incinerated or put into landfill, either method having some harmful impacts? Fortunately, environmental science has progressed to the point where the problems can be analyzed with a fair degree of confidence and CBA can help us to identify the best solutions. When cost-effective measures are proposed, CBA is a powerful tool for convincing concerned stakeholders that such measures should indeed be implemented.
Calculation of the damage costs of pollution (“external costs”) is multidisciplinary to the extreme, requiring expertise in engineering, environmental modeling, epidemiology, ecology, economics, statistics, life cycle assessment, and so on. This presents quite a challenge for the writing of a book on the subject. We do have a broad expertise in most of these fields, demonstrated by our publications in fields as diverse as economics, dispersion modeling, epidemiology, risk analysis, life cycle assessment, energy policy, waste treatment, and transport policy. We have been very active in all phases of the ExternE (External Costs of Energy) project series of the European Commission (EC), DG Research.
Whereas the classical air pollutants are harmful only via inhalation, persistent pollutants such as toxic metals are also harmful after entering the food chain. This is an important pathway, because the total population dose due to ingestion can easily be an order of magnitude larger than the dose via inhalation. Note that the geographic range of the analysis must be even larger than for atmospheric dispersion, because most food is transported over large distances, often worldwide. This chapter describes several approaches for estimating ingestion doses. Even though the detail about dispersion in the environment is exceedingly complex and difficult to model, some shortcuts are possible if one can find the right data for the relation between total emissions and total population dose under steady-state conditions. Thus one can carry out calculations of total population dose that are far simpler and probably more reliable than detailed site-specific models. That is the case for dioxins, the subject of Section 8.2. The pathways for mercury are complex, and because of its long residence time in the atmosphere it is dispersed over the entire hemisphere. But with data for the global emissions and the global ingestion dose, one can again obtain a simple model for the global health impact, as described in Section 8.3. In Section 8.4 we present a more detailed model, based on transfer factors between different environmental compartments that have been published by USEPA. The key result is the intake fraction, defined as the fraction of the emitted pollutant mass that will be inhaled or ingested by a human being. Results for impacts and damage costs of toxic metals can be found in Section 8.5.
This chapter provides an overview of issues linked to damage cost assessments, drawing on the material provided in earlier chapters. It also provides a list of applications of external costs analysis to demonstrate that the approaches outlined here are part of the policy toolkit for many authorities. Much of the focus is on applications within Europe, the area with which the authors are most familiar, although applications in other parts of the world are also discussed. The examples provided demonstrate a great breadth in policy applications, covering not only environmental quality standards but also the energy, industry, waste, transport, chemicals and domestic sectors.
Choice of method
There is a range of methods for sustainability appraisal of projects and strategies, as noted in Chapter 2 of this book. In addition to the impact pathway approach (IPA) to the quantification of externalities and associated cost–benefit analysis (CBA) they include life cycle analysis (LCA), cost-effectiveness analysis (CEA) and multi-criteria decision analysis (MCDA). Work performed for the Sustools project (Rabl et al., 2004) reviewed these methods and came to the view that each has a role to play: individually they all have their limitations, but used together they can provide a thorough overview of issues and present information in a form that is directly relevant to the decision making process. This is an important lesson for policy makers, that no matter how convinced an analyst is of the superiority of his or her own method, for most policy applications a single tool is unlikely to provide all of the answers.