CAFE CBA – Draft Baseline Results

Paul Watkiss and Steve Pye, AEA Technology EnvironmentMike Holland, EMRCFintan Hurley, IOM

Update on Progress

Phase 1 = development and baseline

Draft final methodology completed early July 2004

2nd Stakeholder consultation workshop mid July 2004

Peer review August – September 2004

Alan Krupnick, Bart Ostro, Keith Bull

First application to baseline November 2004

Impacts (WG) today, valuation to follow later

Revised methodology report mid November 2004 (for SG 18th)

Application to scenario December onwards

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, though some additional work with EMEP data for additional pollutants

Work at 50 km2 resolution, with potential for higher resolution

Transparent framework – easy to update

Extended sensitivity analysis

Complemented by extended-CBA (qualitative) for some categories

Health Benefits Considered

Aim to undertake a HIA

Includes impacts with high confidence but also new impacts

Deaths brought forward from ozone

Chronic mortality from fine particulates (PM2.5) primary and secondary

Respiratory hospital admissions (ozone) and (PM10)

Restricted activity days (PM2.5) minor RAD (PM2.5, ozone)

Infant and childhood mortality (PM2.5)

Chronic bronchitis (PM2.5 chronic morbidity)

Respiratory symptoms in adults and in children (PM10)

Some additional impacts to finalise + sensitivity

RAINS +

CBA

CBA

Health Benefits Approach

% change in background rates with pollution increment

Issues with data collection for rates, especially in NMS

Issues with definitions between countries

Number of cases per 100,000 people per pollution increment

Based on original studies and rates

Run for baselines with and without climate measures

2000, 2010, 2020, where available 4 met years (22)

PM Baseline Impacts - RHA

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PM and Respiratory Hospital Admission by EU country in 2000, 2010, 2020

EU25 49000/year in 2000 falling to 31000/year in 2020

PM Baseline Impacts - RHA

Baseline Infant Mortality Rates

2000 2010 2020

PM Baseline Impacts – Infant Mortality

2000 2010 2020

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PM Baseline Impacts – Infant Mortality

PM and Infant (1-12 months) mortality by EU country in 2000, 2010, 2020

EU25 530/year in 2000 falling to 260/year in 2020

Significant reductions over baseline period

Hundreds of infant deaths

Tens of thousands of serious cardiac/respiratory cases

Hundreds of thousands of cases of medication use

hundred million minor respiratory cases (1 in 2 two people per year)

Potentially hundred thousand severe chronic morbidity effects

PM Baseline Impacts – EU 25

EP_Desc Poll BL_2000 BL_2010 BL_2020

Infant Mortality Core PM 534 335 260

Cardiac Hospital Admissions Core PM 30134 22431 19296

Respiratory Hospital Admissions Core PM 48861 36370 31287

Respiratory Medication Use - children Core PM 59195 34713 26773

Respiratory Medication Use - adults Core PM 288132 224751 196947

Restricted Activity Days (RADs) Core PM 274,413,851 204,836,009 164,469,860

Chronic Bronchitis (adults) Core PM 128761 104015 94708

ButIn

2020still

Ozone Baseline Impacts – RHA

2000 2010 2020

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Ozone (SOM35) Baseline Impacts – mRAD

ozone and minor restricted activity day by EU country in 2000, 2010, 2020

56 million to 39 million EU25

Ozone Baseline Impacts – EU25

Mostly significant reductions over baseline period

Tens of thousands of deaths brought forward

Tens of thousands of serious cardiac/respiratory cases

Tens of millions of minor respiratory cases

EP_Desc Analysis_type Poll BL_2000 BL_2010 BL_2020

Acute Mortality Core O3 22032 19606 18861

Respiratory Hospital Admissions Core O3 13203 10979 9789

Minor Restricted Activity Days (MRADs) Core O3 55,909,387 46,167,934 38,649,878

Sensitivity Analysis

Also calculated

Chronic mortality PM, expressed in numbers of deaths (now part of Core analysis)

Acute mortality PM

Sensitivity of ozone effects with no threshold

EP_Desc Poll BL_2000 BL_2010 BL_2020

Asthma consultations (0-14) Sensitivity PM 139701 81923 63184

Asthma consultations (15-64) Sensitivity PM 238369 177930 142866

Asthma consultations (65+) Sensitivity PM 103430 97049 115143

MRADs Sensitivity PM 21,612,782 16,858,562 14,772,984

Next Steps

Remaining issues

PM10 vs PM2.5 metric and conversion

Data on background rates

Some remaining functions (both sensitivity vs. core)

Valuation

Total economic cost from air pollution in 2000, 2010, 2020

For acute morbidity, annual rates directly assessed from impacts

For chronic effects, note not an annual effect

Move towards a new sustained pollution level – total benefits for the population over future years

Consistent with standard economic analysis – discount benefits in future years (e.g. consistent with accidents in transport)

Evidence from NewExt shows that people do discount, in relation to willingness to pay for a change in risk of death now vs. later

Man-Made and Natural Environment

Damage to buildings – corrosion and soiling

Crops

Ecosystems

Cultural Heritage

Other (visibility)

Social (employment, deprivation/inequality)

Ancillary (greenhouse gas emissions)

Economic (employment/growth)

Quantified and monetised

impact pathway

Extended CBA

Outside coreanalysis

Stock at Risk – e.g. Wheat

Next Steps

Valuation of materials

Some minor amendments from ICP materials (April next year)

Crops – flux based approach based on Defra work

Finalised March next year

Interim position – quantify using existing data and approaches

Conclusions

Methodology peer review and agreed – into model (GIS benefit tool)

Demonstrated working model on benefits

Linked to RAINS output – demonstrated models work together to provide consistent outputs and analysis

Draft analysis of baseline complete – benefits (physical units)

Initial conclusions - move from mortality to morbidity will be significant in terms of the ‘evidence for health and air pollution’ – numbers of cases in millions

Next steps

Incorporation of EMEP transfer matrix data for all pollutants (additional to those needed in RAINS)

Valuation – how much does air pollution cost the EU each year?

Scenario analysis

Presentation of the results

Quantification of costs with uncertainties (RAINS)

Quantification of impacts (RAINS/ALPHA2)

Monetisation of impacts where possible

Initial comparison of costs and benefits

Extended CBA

Uncertainty analysis for benefits Bias analysis Statistical analysis Sensitivity analysis

Further comparison of costs and benefits Uncertainties GEM-E3 outputs, competitiveness, employment

Quantified impacts

Region

EU25

EU15

New Member States

UNECE

Individual countries

Economic basis

By scenario

Marginal

Quantification of impacts

EP_Desc Poll BL_2000 BL_2010 BL_2020

Infant Mortality Core PM 534 335 260

Cardiac Hospital Admissions Core PM 30134 22431 19296

Respiratory Hospital Admissions Core PM 48861 36370 31287

Respiratory Medication Use - children Core PM 59195 34713 26773

Respiratory Medication Use - adults Core PM 288132 224751 196947

Restricted Activity Days (RADs) Core PM 274,413,851 204,836,009 164,469,860

Chronic Bronchitis (adults) Core PM 128761 104015 94708

Initial comparison of costs and benefits

Are model estimate benefits > model estimate costs?

What is the ratio of costs to benefits?

Is this likely to change much when uncertainties are accounted for?

Extended CBA

Previously called ‘MCA’, ‘modified MCA’

Purpose

Raise profile and understanding of unquantified impacts

Are these effects so important that they would change views on the balance of costs and benefits?

Improve understanding of the impacts that we do quantify

Questions addressed through theExtended CBA

What is…

…acute mortality?

…chronic bronchitis?

…eutrophication?

…etc.

How important are effects in the broader European context

…health effects caused by pollution vs. total effects?

…visible injury on crops from ozone exposure?

…pollution damage to Europe’s cultural heritage?

Extended CBA and chronic bronchitis

Definition of impact: Bronchitis is an inflammation of the bronchi, the air passages connecting the windpipe (trachea) with the sacs of the lung (alveoli) where oxygen is taken up by the blood. This inflammation causes excessive phlegm (or mucus) production and swelling of the bronchial walls, resulting in cough and the expectoration of phlegm. Chronic bronchitis is defined to be the occurrence of chronic cough or chronic phlegm for at least three months of the year, for at least two years.

Extended CBA and chronic bronchitis

Strength of association with pollution: The SALPADIA study carried out at eight study sites in Switzerland found a statistically significant association between chronic cough or phlegm production and exposure to PM10 among non-smokers (OR: 1.27 per 10 μg.m-3 increase in annual concentration ; 95%CI: 1.08, 1.50), with similar results for current and former smokers.

Extended CBA and chronic bronchitis

Treatment of impact: There is no cure for chronic bronchitis, and treatment is primarily aimed at reducing irritation in the bronchial tubes. Chest infections are common in those with chronic bronchitis, and these can be treated with antibiotics. In addition, bronchodilator drugs may be prescribed to help relax and open up air passages in the lungs.

Extended CBA and chronic bronchitis

Related effects: The blocking of the airways can cause symptoms of breathlessness and wheezing. Once the bronchial tubes have been irritated over a long period of time, they become more susceptible to infections. At its most extreme, chronic bronchitis can cause serious injury to the lungs leading to serious respiratory problems or heart failure.

Extended CBA and chronic bronchitis

Frequency of occurrence of impact: Information from the ‘Global Burdens of Disease’ study estimates an annual incidence of chronic obstructive pulmonary disease (approximately equivalent to chronic bronchitis) in the WHO Europe sub-region of 770,000 in a population of 877,866,000; which is a rate of 88 per 100,000.

What this would give us…

A nice description of impacts

Mix of quantitative and qualitative data

Buried at the back of a long report

How do we draw attention to the things that we cannot monetise?

Presenting results

Costs €€€€€

Benefits

Health €€€€€ see ref…

etc. €€…

Sub-total benefits €€€€€

Ecosystem effects

Physical impact Summary RAINS results

Economic effect see ref…

Cultural heritage see ref…

Crops – visible injury see ref…

Effects of ozone on paint Negligible

Key

Considered likely to have a significant effect at the European scale

May have a significant effect at the European scale

May have a significant effect locally, but not Europe-wide

Negligible Unlikely to be important at national or local scales

Conclusions on the role of the Extended CBA

Can integrate some impacts with CBA much better than previously

Improves understanding

Provides decision makers with a structure from which to factor their own weightings on damage to cultural heritage, ecosystems and other impacts into the CBA

Dealing with uncertainty

Variety of techniques

Extended CBA

Bias analysis

Statistical analysis

Sensitivity analysis

Bias analysis

Source of bias Effect

Omission of eutrophication impacts ---

Omission of acidification impacts ---

Omission of organic aerosol --

Use of health functions from western Europe --?

Use of incidence data from all Europe ++?

Effect of EU subsidy on world crop prices +

Limited availability of crop - ozone flux data +/-

…

Statistical analysis

To use @RISK

Account for uncertainty through the chain of quantification

Concentrate on the impacts that contribute most to total benefits

Sensitivity analysis

Again, focused on effects that contribute most to benefits, particularly mortality

Functions used

Baseline rates

Valuation procedure

Discounting

Summary

Much work has gone into refinement of methods for air pollution CBA including presentation and interpretation of outputs

Methodology has been extensively peer reviewed

More extensive framework than previously used

Unquantified effects

Description of uncertainties and their effects