Analysis for ENPI countries of Social and Economic Benefits of Enhanced Environmental Protection EuropeAid DCI-ENV/2009/225-962 Air Quality (AQ) Alistair Hunt Department of Economics University of Bath UK +44(0)1225.38.32.44 e-mail: ecsasph@bath.ac.uk

Overview of AQ presentation AQ as an environmental hazard AQ in the ENPI East Regional context Outline of Method Results Qualitative Quantitative Conclusions: Next steps for policy use 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Air Quality – Environmental Hazard AQ increasingly recognised as significant hazard in most countries in the world, including all ENPI East countries. Accumulating evidence showing adverse effects of air-borne pollutants on human health, agricultural crops, man-made environments (damage to building materials) and ecosystems. Impacts do not respect national boundaries. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Air Quality – Sources of pollution Air pollutants may be released by either stationary sources (e.g. a coal-fired power plant), or by moving sources (e.g. cars, buses) Common pollutants include particulate matter, NOx, SO2, CO, carbon dioxide (CO2), ozone (O3), (transport, energy combustion), lead (Pb), mercury (Hg), heavy metals (industry), etc. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Pollutant emissions (% of total) from various sources in Europe NOx NMVOC NH3 N2O CO2 CO CH4 Industrial power generation 60 20 0.4 0.1 6.1 33 0.8 0.2 Other industry and waste disposal 25 13 31 2.4 37 24 17 52 Road transport 7 63 39 0.9 5. 69 Domestic heating and cooking 3   2 15 10 1 Agriculture and animals 0.3 16 96 48 45 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Regional Context Air pollutants are emitted principally from Heavy industries in all ENPI East countries (e.g. Ukraine: metallurgical industries, mining, and oil processing sectors) Transport: In all ENPI East countries, rising levels of car ownership combined with poor levels of maintenance of an ageing car fleet 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Regional Context Moldova: large majority of cars are not in line with technical requirements (Euro 2 and Euro 3) and are old. More than 90% of the vehicles in Moldova are older than 10 years (MMoT). The law prohibiting import of cars older than 7 years has been amended and increased the limit from 7 to 10 years. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Regional Context Sources and Impacts predominantly in urban areas, where residential areas close to industry Trends: generally in line with levels of economic activity, though signs of de-coupling as technologies improve Previous studies in other world regions, plus ENPI national studies, show significant benefits of air pollutant reductions 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Pollution emissions by country in 2005 (thousand tonnes) NH3 NMVOC NOx PM2.5 PMco PM10 SO2 Armenia 17 101 6 16 10 26 8 Azerbaijan 64 318 76 18 9 27 135 Belarus 165 366 84 29 14 43 134 Georgia 39 68 7 3 5 Moldova 21 73 25 46 Russian Federation 1068 8394 4297 947 569 1516 6710 Ukraine 306 838 544 305 202 507 863 Total (rounded) 1680 10159 5036 1348 827 2175 7863 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Project Method (1) Benefits assessed under the project: resulting from 50% reductions from projected baseline levels of PM10, (transport) NMVOCs, (industry) NH3, (agriculture) SO2 and NOx (energy & transport) in 2020. based on equivalent reductions typically required in countries adopting the EU AQ Framework Directive. ((Directive 2008/50/EC) The selected pollutants account for majority of benefits in previous assessments 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Method (2) Qualitative assessment Describe various forms of impacts resulting from AQ Categorise benefits in terms of: Economic Social Environmental Health Data from in-country reviews & other assessments 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Methods (3) Quantitative assessment Outputs from integrated software tool called EcoSense - assesses impacts resulting from the exposure to airborne pollutants: human health, crops, building materials. (Note: under-estimates since does not include all air pollutants). modelling and the calculation of impact costs follow the Impact Pathway Approach (IPA). Worked example in BAM for policy makers 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Transport and chemical Transformation Methods (4) Transport and chemical Transformation Emissions Monetary Evaluation 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Methods (5) Derive Unit value per tonne of pollutant Unit value X Number of tonnes reduced = Total value of benefits (health, crops, materials) Air Quality Unit Values: Euro per ton of pollutant (€2008 PPP)   NH3 NMVOC NOX PM10 SO2 €/ton (mean) 8,400 30 4,700 32,400 9,500 €/ton (range) 2210 - 24,000 -280 - 710 1,900 - 11,600 8,300 - 78,600 3,300 - 14,600 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Methods (6) Impacts – relative importance (% of total): mortality (70 per cent); morbidity (20 per cent); crops (6 per cent); materials (4 per cent). To express the results in physical terms: total benefits apportioned to these splits divide by unit value. (Central unit values for mortality and morbidity are €1.1 million and €0.2 million, respectively, but need adjusting for PPP). 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results from the BAs for ENPI East countries (1): qualitative Environmental benefits Description Ecosystem condition improvements Reduced acidification from lower SO2 and NOx emissions Reduced climate change impacts on impacts from lower SO2 and NOx emissions Reduced damage to vegetation from low level ozone 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Results (2) Health benefits Description Lower incidence of acute and chronic disease Reductions in SO2 imply lower incidence of cardiovascular and respiratory disease Reductions in PM10 concentrations imply lower emergency-room visits due to asthma, and also hospital admissions on the grounds of respiratory diseases Reductions in NOx, when combined with ozone, organic compounds, particulates and sunlight result in corresponding reductions of photochemical ‘smog’ that otherwise cause respiratory impairment, irritation of the eyes and mucous membrane, with asthma patients and young children. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results (2b): case study Carcinogenic risk for the population of a metallurgical centre, Achinsk in Krasnoyarsk region (Siberia) at present levels of air pollution, the number of cases of cancer will amount to 48 cases during the next 70 years, or 0.66 cases per year. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Results (3) Social benefits Description Reduced damage to cultural heritage, including historic building surfaces in city centres   Black smoke from traffic is a prime cause of discolouring of buildings, including public buildings of important social cultural value, such as monuments, historic buildings, churches, museums Exposure of building materials to SO2 deposition from acidification results in premature ageing. Reduced blackening and erosion of surfaces (from SOx and NOx emissions from traffic fuel use), can improve the social appreciation and use of city centres and cultural heritage. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Results (4) Economic benefits Description ‘Green technology’ industries Increase in demand for products and processes that result in lower air pollution emissions, and subsequent employment opportunities, as long as such industries are domestic. Increased visits to improved landscapes and natural areas Increase in tourism and associated expenditures in local areas. Lower material cleaning costs Reductions in expenditures on building surfaces soiled by particulates. Crop damage reductions Reduced crop damage from lower SO2 and NOx emissions Reduced crop damage from low level ozone 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results (5): quantitative health benefits (physical numbers) The majority of health benefits in the ENPI East region are realised in Russia Deaths Chronic Bronchitis Cases Low High Armenia 100 340 250 810 Azerbaijan 230 750 580 1,870 Belarus 970 3,150 2,310 7,500 Georgia Moldova 450 1,460 920 3,000 Russian Federation 21,970 71,250 41,630 135,000 Ukraine 4,740 15,370 4,570 14,810 Total 28,570 92,660 50,490 163,740 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results (6): quantitative health benefits Deaths per 100,000 popn Armenia 6 Azerbaijan 5 Belarus 17 Georgia 4 Moldova 21 Russia 27 Ukraine 18 - - Premature deaths avoided per 100,000 popn reflects relative concentrations of polluting activity and proximity to urban centres 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results (7): Monetary benefits Annual Compliance: Domestic Benefits – 2020   Euro 2008 PPP (m) % of GDP Low High Armenia 71 231 0.3 1.1 Azerbaijan 227 736 0.8 Belarus 1,333 4,323 1.2 3.8 Georgia 57 184 0.9 Moldova 146 475 1.4 4.6 Russia 56,394 182,900 1.8 5.8 Ukraine 3,845 12,469 3.9 Total 62,073 201,319 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Results (8): Monetary benefits Annual Compliance: Trans-Boundary Benefits – 2020   Euro PPP 2008 (m) % of GDP Low High Armenia 72 233 0.3 1.1 Azerbaijan 157 509 0.2 0.6 Belarus 348 1,130 0.9 Georgia 71 230 Moldova 162 525 1.6 5.1 Russia 31,354 101,690 1.0 3.2 Ukraine 5,492 17,811 1.7 5.6 Total 37,656 122,129 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Conclusions (1) Total domestic benefits (health, crops, material) of reducing emissions by 50% from projected 2020 levels in all the Eastern ENP countries → €200 billion per year. Total trans-boundary impacts (i.e. all benefits outside country borders) → €120 billion of benefits per year (more uncertain) Benefits to human health - 90% of total benefits. 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Conclusions (2) Absolute levels of benefits from 50% reduction in air pollution are high: – average 1 – 2% of GDP, including trans-boundary effects Significant uncertainty in each part of the impact pathway (emissions-dispersion-exposure-impact-valuation) Under-estimates quantitatively since does not include all air pollutants. May over-estimate since assumes GDP-emissions rise together to 2020 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Final Project Event:ENPI-East , Chisinau Recommendations Dissemination of these results should raise awareness and add impetus to need for increased regulation Further country-specific analysis should be complemented by looking at costs and distributional effects of increased regulation 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Outstanding questions What do you think are the best ways of using these results in the ENPI-East region and in your respective countries in particular? What additional information would you find helpful in interpreting and disseminating these results? 23-24.06-2011 Final Project Event:ENPI-East , Chisinau

Thank you for your attention www.environment-benefits.eu Project Analysis for ENPI countries of social an economic benefits of enhanced environment protection (DCI-ENV/2009/225-962) Thank you for your attention www.environment-benefits.eu