Transcript Externalities Powerpoint show

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16 October 2014 CNREC
Economic Costs of Air-pollution from the Energy Sector
Niels Bisgaard Pedersen, DEA
PROGRAM
Beijing, The Guardian 14/01/2013
Beijing
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Source: OECD
Externalities
• A cost or benefit that affects a third party
who did not chose to incur that
cost/benefit
• Noise, air-pollution, water-pollution,
accidents, waiting-time in transportation,
visual pollution of the landscape, damage
on flora and fauna etc.
• Local, trans-border and global impacts
• Irreversible or reversible damage impacts
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Externalities
• PRIVATE COSTS – observed market costs
• SOCIAL COSTS – includes damage
imposed by harmful air-emissions:
• Green-house gasses - Global warming
• SO2 – mortality, morbidity, acid rain, damage
agriculture and buildings
• NOx – increased morbidity/mortality
• PM2.5 – increased mortality/morbidity
• Ozone – increased mortality/morbidity
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Consequence an negative externality
Price is low and
consumption to
high, a non-efficient
allocation of
resources
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Social Costs - Principle
Result:
Produce and
consume too much
conventional and
too little wind
energy
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China
• A Word Bank reports that China’s
• PM10 health damage represented nearly
700 billion RMB in 2009 or 2.8% of GDP
• CO2 damage represents 1.0 % of GDP
• Material damage from air pollution
represents 0.5 % of GDP
• Other studies estimate health related
costs to pollution are 6% of GDP in 2005
CNREC - DEA Study
• CNRECs scenario tool CREAM quantifies the direct cost of
energy production from the different energy technologies
and the emission of harmful gases from combustion of
fossil fuels.
• But the more indirect environmental costs are not
quantified. This activity will use methodologies from
Europe, meteorological modelling for China and empiric
data from China to integrate environmental cost in CREAM.
Focus will be on health effect on human health from
emission of SO2, NOx, and CO2.
• CNREC responsible: Xie Xuxuan.
• DEA responsible: Niels Bisgaard Pedersen.
• External Assistance Yanxu Zhang, Harvard University
Impact Pathway Approach
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Methodologies
Source – Scenarios
Result
Emissions of CO2, SO2, SO4,
NOx, PM2.5, PM10 etc.
Dispersion in the air.
Travelling distance possibly
chemical reactions in the
atmosphere (atmospheric
dispersion models)
Increase in pollutants
concentration at receptor sites
(concentration of substances in
the air)
Dose-response function,
exposure-response or
concentration-response
function
Impacts on human health in
terms of mortality and morbidity
Monetary evaluation
Economic Cost (loss of income,
costs for health system)
CNREC – DEA Scenarios 2015 - 2050
CO2 emissions in million ton per year
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
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REF
Renewable Energy
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
CNREC – DEA Scenarios 2015 - 2050
SO2 emissions in million ton per year
10
9
8
7
6
5
12
Reference Scenario
4
Max Renewable Energy
3
2
1
0
CNREC – DEA Scenarios 2015 - 2050
NOx emissions in million ton per year
10
9
8
7
6
5
4
3
2
1
0
13
Reference Scenario
Max Renewable Energy
CNREC – DEA Scenarios 2015 - 2050
VOC emissions in million ton per year
10
9
8
7
6
5
4
3
2
1
0
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Reference Scenario
Max Renewable Energy
Atmospheric Dispersion Model
• An air-quality model for China (GEOSChem)
• Present day meteorological data (2004)
and future emission data for 2015, 2020,
2030, 2040 and 2050
• Spatial allocation based on existing
inventories for China
Predicted difference in concentration of
ozone 2050 REF – MAX RE
50oN
45oN
40oN
35oN
30oN
25oN
20oN
80oE
0.00
16
90oE
1.50
100oE
3.00
110oE
120oE
4.50
130oE
6.00
ppbv
Predicted diffence in concentration of
PM2.5 non-dust 2050 - REF – MAX RE
50oN
45oN
40oN
35oN
30oN
25oN
20oN
80oE
0.00
17
90oE
2.50
100oE
5.00
110oE
120oE
7.50
130oE
10.00
ug/m
Predicted diffence in concentration of
SO2 2050 REF – MAX RE
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Predicted diffence in concentration of
NOx 2050 - REF – MAX RE
50oN
45oN
40oN
35oN
30oN
25oN
20oN
80oE
0.00
19
90oE
1.00
100oE
2.00
110oE
120oE
3.00
130oE
4.00
ppbv
Pollutants and their impacts
Primary Pollutant
Particles
Secondary
Pollutant
SO2
SO4
NOx
Sulphates
NOx
NOx+VOC
Nitrates
Ozone
CO
Greenhouse Gases
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Impacts (Endpoints)
Mortality
Cardio-pulmonary
morbidity
Mortality
Cardio-pulmonary
morbidity
Like particles
Morbidity (? Not
verified)
Like particles
Mortality
Morbidity
Mortality
Morbidity
None directly (Global
warming)
Impact of harmful air- emissions
• Estimation of human health impacts based on
responsiveness to air-quality
• Impact Response function ΔMort= y0(1-e-βΔC)Pop
• y0 is the baseline mortality rate,
• β is the concentration-response factor,
• ΔC is the concentration difference of pollutants between RE and REF
scenarios,
• Pop is the exposed population.
• β is derived from relative risks (RR) estimated in long-term
epidemiological studies assuming log-linear relationships
between pollutant concentrations and RR
Quantification of impact of harmful
air- emissions
• Mortality from Ozone and PM2.5
• Ozone a concentration-response factor of 0.52%
(0.27%-0.77% as 95% confidence interval) increase in
mortality per 10 ppbv increase of ozone (Bell et al.,
2004)
• PM2.5: Mean of four studies over China: 0.35% per 10
μg/m3increase and 2.96% per 10 μg/m3increase for long
term impacts
• NOx impacts are uncertain and SO2 impacts are
relatively small
• Population and mortality data for each province
is based on National Bureau of Statistics of China
Avoided number of deaths in China by following
Max RE scenario 2015 -2050
Avoided death are
estimated to 1 750
000 for the period
2015 - 2050
100000
90000
Avoided death per year
80000
70000
PM2.5
Ozone
60000
50000
40000
30000
20000
10000
0
2015
23
2020
2030
2040
2050
Economic valuation of health
impact of harmful air- emissions
• Monetisation according damage costs principles:
• Mortality
• Lost income/Willingness To Pay (WTP)/Value of Statistical
Life (VSL)
• VSL willingness to pay for a small reduction in the risk of
premature mortality
• Morbidity
• Increased illness, hospitalisation, medication, lost working
days (respiratory diseases)
• VSL for China = 1.68 million RMB in 2010 price level
• Economic Value = 2.9 trillion RMB 2015 – 2050 = 83
billion RMB per year in average
Economic costs from premature mortality in Million RMB
Difference between REF and MAX RE
180000
160000
140000
120000
100000
PM2.5
80000
Ozone
60000
40000
20000
25
2050
2049
2048
2047
2046
2045
2044
2043
2042
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2040
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2032
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
0
Marginal costs benefits of emission on human
health in China - RE scenario
+- 10%
SO2 RMB per
ton
4 800
Nox RMB per ton
21 900
VOC RMB per ton
2 700
Economic Costs of CO2 emissions
Source
Costs of CO2 per ton
Comment
ExternE project
25 USD
2 700
Emission Trade
Systems China
3.6 – 20 USD
6 pilot projects
Emission Trade
System Europe
< 1 USD
Number of emission
permission too high.
Long term forecast 45
USD
Environmental
Protection Agency
21 USD
Damage cost
assessment. Recently
updated.
Recommended
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2050
2049
2048
2047
2046
2045
2044
2043
2042
2041
2040
2039
2038
2037
2036
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2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
Economic Costs of air-pollution
Million RMB
700000
600000
500000
400000
CO2
VOC
300000
Nox
SO2
200000
100000
0
Future Directions
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Uncertainty
Solution
More pollutants needs analysed
PM10 etc.
Only mortality and damage
from CO2 is included
Morbidity, impact in agriculture
and material damage should be
included
Dose – Response function
Long term cohort studies in
China
Spatial allocation of emission
the same in the two scenarios
Calculate emissions at a
regional level in CREAM
Present meteorological
conditions for the whole period
Feed back between air-pollution
and climate change needs to be
taken into consideration
Internalisation - Policy
• Taxes and duties on CO2, SO2, Nox to
reduce pollution
• CO2 trading schemes
• Revenue to support renewable energy
deployment wind, solar and biomass
• High environmental standards for power
plants, heavy industry, vehicles and
fuels