Assessment of the economic costs of damage caused by air-pollution

Abstract

Cost-benefit analysis is one of the fundamental tools for the development of economic instruments for pollution control. The costs of various abatement measures are reasonably well characterised. However, assessment of the economic costs of pollutant impacts is less well developed. This paper reports on two studies carried out for DGXII of the European Commission, the ExternE-Project and the Green Accounting Research Project. Both studies have been performed by international, multi-disciplinary research teams.

Analysis of the effects of emissions of PM₁₀, SO₂, NO_x and VOCs (as ozone precursors) has included assessment of human health, materials, crops and other terrestrial ecosystems, and freshwater fisheries. The analysis follows the ‘impact pathway’ approach, linking dose-response functions, valuation data and other models. It differs significantly to earlier ‘top-down’ approaches that made only very limited use of the wealth of scientific data available. Most success has been achieved in analysis of impacts on human health, building materials and crops. Significant uncertainties exist for these receptors, though these have been identified and are now being addressed. Assessment of impacts on other receptors, perhaps most notably forests, is more limited. The methodology is particularly applicable for analysis of impacts on receptors for which the critical loads approach is not appropriate.