Finding the ambition level
Illustration: Lars-Erik Håkansson
A tentative central ambition level for 2025 has been identified that would further reduce air pollution damage, but it is still insufficient to achieve the EU’s long-term objective of effectively protecting peoples’ health and the environment
In a recent report1 to the European Commission, the International Institute for Applied Systems Analysis (IIASA) presents a newly developed central emission scenario for the revision of the EU’s Thematic Strategy on Air Pollution (TSAP) and National Emissions Ceilings (NEC) directive.
Review and revision of EU air pollution policy started in March 2011 and is expected to result in a clean air strategy package to be presented by the Commission in autumn 2013. One of the main components of the package will be a revised TSAP, updating the previous one from 2005, establishing new targets for reducing damage to health and the environment as well as associated ambition levels for future cuts in air pollutant emissions.
The TSAP will be accompanied by a proposal to revise the 2001 NEC directive, setting binding emission reduction targets for each member state for five air pollutants. The target year for achieving the reductions is yet to be decided, but it is likely to be 2020, 2025 or 2030, or possibly there could be more than one target year.
The new report differs from the previous ones in that it uses the most recent EU projections for expected economic growth, energy use and agricultural activities. The updated future emissions of the five main air pollutants and resulting environmental impacts are shown in Tables 1 and 2.
Table 1: Emissions of air pollutants in EU-28 in 2005 and projections for 2025 under three different scenarios (kilotonnes).
Table 2: Annual impact on health and ecosystems in EU-28 in 2005 and in 2025 under three different scenarios.
According to the analysis, full application of readily available technical measures – known as the Maximum Technically Feasible Reductions (MTFR) – would offer a significant potential for further improvements, which would bring the EU closer to the objective of its Environment Action Programme (EAP) which is to achieve “levels of air quality that do not give rise to significant negative impacts on, and risks to human health and environment.”
Last year, IIASA presented preliminary results of applying the optimisation mode of its GAINS computer model to identify the least-cost set of emission reduction measures for the EU as a whole that will achieve given interim environmental targets at differing levels of ambition. Together with information on the associated costs and benefits to health and the environment, this type of scenario analysis can be used to establish the level of ambition for EU air quality policy for future target years.
The optimised scenarios are constructed for what is known as a gap-closure approach, aiming at step-wise health and environmental improvements. In effect this means closing the gap between the impacts of the baseline and the MTFR scenarios.
In this new report, IIASA examines interim targets for 2025 that could serve as milestones towards the long-term objective of the EAP. As a starting point, the marginal costs of further emission reductions are compared with the marginal health benefits. The approach applied is seen as extremely conservative because the monetised benefits are restricted to account only for those of adult mortality from exposure to PM2.5 and using the lowest mortality valuation, i.e. the median value of a lost life year (VOLY). Hence the comparison ignores benefits of reduced infant mortality, lower premature mortality from less exposure to ground-level ozone, morbidity and all benefits to agricultural crops and ecosystems.
Using this conservative approach, marginal health benefits are found to equal marginal costs of further measures slightly above a 75 per cent gap closure between the baseline and the MTFR. At this level, additional emission reduction costs (on top of the baseline) amount to €4.5 billion/year, while the health benefits are estimated at €30.4 billion/yearin 2025.
While this approach identifies a health-related interim target, it does not account for the other benefits that are more difficult, or even impossible, to monetise. Additional analysis was therefore done to look at further environmental improvements, and the report assessed the improvements to these impacts that could be achieved for 5, 20 and 50 per cent higher costs compared to the health-only strategy. It was found that for 20 per cent higher costs, a 65 per cent gap closure for acidification could be realised, together with a 60 per cent gap closure for ground-level ozone and a 55 per cent gap closure for eutrophication.
The resulting cost-effective scenario was named A5. At costs of €5.8 billion/year (0.04% of GDP), the A5 scenario would cut sulphur dioxide by 77 per cent, nitrogen oxides by 65 per cent, volatile organic compounds by 54 per cent, PM2.5 by 50 per cent, and ammonia by 27 per cent relative to 2005. In addition, the same measures would cut emissions of black carbon by 33 per cent, particle number emissions by 73 per cent and mercury emissions by 33 per cent.
If the highest mortality valuation is used instead, i.e. the mean value of a statistical life (VSL), the “cost-optimal” target (the point where marginal health benefits are found to equal marginal costs) would instead be at 92 per cent gap closure. Unfortunately, no further analysis of this more ambitious target is presented in the report.
In a letter to the Commission2, a coalition of environmental organisations noted that the new approach of using marginal cost versus marginal benefits to investigate suitable levels of ambition brings with it the obvious risk of paying much higher attention to those air pollution impacts that can currently be monetised (i.e. health damage) than to the very significant and important damage air pollution causes to natural and semi-natural ecosystems, biodiversity, agricultural crops, modern materials and cultural monuments.
It should also be recognised, they say, that the costs are likely to be highly overestimated. This is because the cost estimates are based primarily on technical “end-of-pipe” abatement measures. Structural measures and behavioural changes are not included, despite the fact that some of these measures can reduce emissions at zero or low net cost, and many of them will also reduce emissions of greenhouse gases. Examples of such measures include those aimed at improving energy and transport efficiency, fuel switching, increased use of renewables and greening of agricultural policy.
They note further that the analysis is constrained by “current policy” scenarios for energy and agriculture, which hides the true potential for emission reductions and adds to the overestimation of perceived future air pollution abatement costs. It is also paradoxical because it is well known that the current addiction to fossil fuels is not sustainable – fast and drastic cuts in emissions of the main greenhouse gas, carbon dioxide, are necessary to keep global temperature rise below the high-risk level of 1.5–2 degrees. So if the EU and its member countries take action that is necessary to reduce emissions of carbon dioxide, the costs of reducing emissions of “traditional” air pollutants will be significantly lower.
These shortcomings in the approach result in overestimated costs and underestimated benefits of air pollution control, which is of great concern since it might significantly influence the overall level of ambition. According to the coalition of environmentalists, the overall level of ambition must be guided primarily by the objectives of the EU’s Sixth EAP, and therefore should not be based solely on a limited cost-benefit analysis.
The environmental groups expect the review of EU air pollution policy to include an identification of the emission reductions that are required to reach the EU’s long-term objectives for air quality, and the measures and actions that are needed for their attainment, i.e. it should show not only what needs to be done, but also how, and by whom.
IIASA’s new report was presented at a meeting with the Commission’s Stakeholder Expert Group (SEG) on 3 April, together with an update on progress in other work areas, including possible action for certain targeted source-sectors. It has not yet been decided if there will be another SEG meeting before the Commission finalises its proposals.
1 Policy Scenarios for the Revision of the Thematic Strategy on Air Pollution. TSAP Report #10 (March 2013).
2 NGO comments to DG Environment following the fifth SEG meeting on the review of the Thematic Strategy on Air Pollution (19 April 2013). Submitted jointly by the European Environmental Bureau (EEB), Transport & Environment (T&E), the Air Pollution & Climate Secretariat (AirClim), the Health and Environmental Alliance (HEAL) and ClientEarth.
Note: The production and analysis by IIASA of emission scenarios and their environmental impacts was done on behalf of the European Commission as part of the ongoing process to review and revise EU air pollution policy (see previous articles in AN 3/2012 and 1/2013). The IIASA reports prepared for the EU air pollution policy review can be downloaded from: http://gains.iiasa.ac.at/index.php/policyapplications/tsap. The presentations given at the 3 April SEG meeting are available at a dedicated CIRCA library website that can be reached from: http://ec.europa.eu/environment/air/review_air_policy.htm
Cut air pollution – save up to €150 billion/year
A cost-benefit analysis1 (CBA) has been carried out to compare the estimated cost for additional emission abatement measures beyond the baseline with the estimated health benefits.
Moving from the baseline to the A5 scenario (which aims for a 75% gap closure for PM health impacts; a 65% gap closure for acidification; a 60% gap closure for health impacts from ozone; and a 55% gap closure for acidification) would reduce annual health damage costs in 2025 by €45-150 billion in the EU-28. Implementing MTFR would provide health benefits valued at €59–206 billion.
Annual health improvements of moving from the baseline to the A5 scenario include avoiding 63,000 premature deaths, 12,000 respiratory hospital admissions, 28,000 cases of chronic bronchitis, and 50 million restricted activity days.
The costs for the additional emission abatement measures of moving from the baseline to the A5 scenario are estimated at €5.4 billion per year in 2025, while implementing MTFR is estimated to cost €45 billion/yr.
If expressed as a percentage of GDP in 2025, the cost for the A5 scenario is equivalent to 0.04 per cent, and for the MTFR 0.31 per cent as an average for the whole EU.
The monetised health benefits exceed the costs for the A5 scenario by between 8 times (lowest valuation) and 28 times (highest valuation). For the MTFR, the benefits-to-cost ratio is between 1.3 and 4.6.
It should be noted that these monetised benefits do not include impacts to ecosystems, agricultural crops, materials or cultural heritage. Nor do they include for example chronic effects of ozone on health.
1 Cost-benefit Analysis of Policy Scenarios for the Revision of the Thematic Strategy on Air pollution (March 2013). Report to the European Commission by Mike Holland, EMRC.