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Johannes Bollen Dutch Environmental Assessment Agency (MNP) TFIAM Local Air Pollution and Global Climate Change A Cost-Benefit Analysis by Bollen, J., Brink, C., Eerens, H., and van der Zwaan, B. Dutch share of expenditures on LAP and GCC may shift dramatically 2000 1.9 75% 25% Current Legislation 2020 6.7 60% 40% Total (bn €'s) LAP GCC calculations based on: 1]RAINS/Milieubalans(MNP,2005) 2] 2% growth yr-1 of GDP LAP = Local Air Pollution GCC = Global Climate Change Maximum Feasible Reductions 2020 12.8 45% 55% Results CBA on LAP & GCC • Discounted LAP benefits significantly exceed those of GCC • LAP policies alone lead to modest CO2 emission reductions, but magnify when combined with GCC policies • LAP expenditures in EU decline from GCC policy expenditures LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis MERGE model (Manne&Richels) + LAP • Top-down economy + bottom-up energy • Intertemporal maximization of discounted utility – Abatement "where", "when“, and "what" flexibility • 9 regions, Pareto-efficient solutions for 2010-2150 • Market and much larger non-market damages (human health, biodiversity) + LAP: Restrict to primary energy related particulate matter + precautionary assumption – 6% attributive risk of premature deaths from long-term exposure – Value of Statistical Life at Median values (1 million euro) LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis Discounted LAP benefits significantly larger than GCC benefits (ratio >> 1!!!!) % change of discounted consumption Baseline: Premature Deaths to PM2.5 = 108 million over 2000-2150 period Temperature in 2150 = 4.8 0Celsius compared pre-industrial level 2.0 1.5 93 million PM death 3.3 0Celsius 8 million PM death 4.7 0Celsius 8 million PM death 3.0 0Celsius 1.0 0.5 0.0 -0.5 GCC LAP GCC LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis LAP GCC+LAP Costs % of Discounted Consumption 8 9 8 12 8 8 10 7 8 7 8 8 higher urbanization in developing countries lower elasticity emission-concentration lower climate sensitivity higher climate sensitivity lower Value of Statistical Life higher Value of Statistical Life Presriptive discounting Value of staistical life in purchasing power parity higher Climate Change damage valuation lower Climate Change damage valuation -1 higher PM emissions in developing countries 2 base Are we certain??? Yes, ratio between LAP and GCC benefits fallls in the range of 2-31 Benefits GCC 3.0 ratio benefits 5 3.1 3.0 6 7 LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis Benefits LAP Costs 4 3.1 2.3 4.1 3.0 3.0 2.4 3.1 2.8 4 21 2 3 12 4 31 2 3.3 0 Global Temperature Change (Celsius) 14 Premature Deaths in 2000-2150 (millions) Co-benefits from LAP to GCC magnify when implementing climate policies (synergy!!!) CO2 emissions in 2050 1.5 2.4 Western Europe China 1.6 0.5 0.8 0.0 0.0 LAP GCC+LAP Pg C 1.0 2000 base LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis GCC 2000 base GCC gas oil coal LAP GCC+LAP 1.2 2.7 0.8 2.2 Western Europe 0.4 1.7 0.0 2000 2010 CO2 Emissions: End-of-pipe abatement costs: LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis 2020 2030 2040 1.2 2050 LAP GCC+LAP LAP (right) GCC+LAP (right) LAP Expenditures (bn 2000 US$) CO2 in Gt C LAP expenditures in EU decline from GCC policies Results CBA on LAP & GCC • Discounted LAP benefits = 2-31 * GCC benefits • LAP policies alone lead to modest CO2 emission reductions, but magnify when combined with GCC policies • LAP expenditures in EU decline from GCC policies • Caveat: this analysis restricts to primary PM LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis Preliminary Policy conclusions • No delay with GCC policies, but • integrate them into LAP strategies (it is the robust option) • Increase research to reduce uncertainty of GCC LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis Further and related work • This work: – Paper will be finalized by mid-June • Further work: – extend LAP to include 1] Secondary aerosols (and increase the PM concentrations) 2] SO2, NOx, and NH3 emissions and abatement cost curves • Related work: – on MNP web-site entitled “Sustainable energy: trade-offs and synergies between energy security, competitiveness, and environment” LAP = Local Air Pollution GCC = Global Climate Change CBA = Cost Benefit Analysis