18.104.22.168 Why Do Studies for the Same Country Differ?
It is enlightening to consider why estimates of ancillary benefits (or costs)
for two different studies of the same country differ.
In the case of Chile, Dessus and OConnor (1999) estimate benefits of
about US$250/tC, as compared to US$62/tC in Cifuentes et al. (2000).
Half of the Dessus and OConnor (1999) benefits are attributable to effects
on intelligence quotient (IQ) associated with reduced lead exposure, an endpoint
not considered by Cifuentes et al. (2000) and by most studies. The large
leadIQ effect seems to be at variance with US and European studies that
consider this and more conventional endpoints. Also, the VSL used by Dessus
and OConnor (1999) is more than twice as large as that used by Cifuentes
et al. (2000; US$2.1 million versus US$0.78 million by the year 2020).
These choices were driven by alternative benefit transfer approaches: Dessus
and OConnor (1999) used 1992 purchasing power parity to transfer a mid
estimate of US VSL, while Cifuentes et al. (2000) used 1995 per capita
income differences and the exchange rate to transfer a lower bound US VSL. This
comparison illustrates that the choice of benefit transfer approach in estimating
ancillary benefits dominates by far the modelling choices (Dessus and OConnor
(1999) used a T-D model while Cifuentes et al. (2000) used a B-U approach).
For the USA, Burtraw et al. (1999) found that for a US$25 carbon tax,
the ancillary benefits per tonne are US$2.30, while Abt Associates and Pechan-Avanti
Group (1999) found that for a slightly larger tax (US$30), the ancillary benefits
per tonne are US$8. For a US$50/tC tax, Burtraw et al. (1999) found ancillary
benefits of only US$1.50/tC, while for an even larger tax (US$67), Abt Associates
and Pechan-Avanti Group (1999) estimated the ancillary benefits to be US$68/tC.
These differences are explained by:
- The effect of a unit change in particulate nitrates (derived from NOx
emissions) on the mortality rate which in Burtraw et al. (1999) are
about one-third of those used by Abt Associates and Pechan-Avanti Group (1999).
- The value of statistical life used to value mortality risk reductions (about
35% lower in Burtraw et al. (1999) who adjust the VSL for the effects
of pollution on older people rather than on those of average age).
- Sectors included (Burtraw et al., 1999) are restricted to the electricity
sector by 2010, and NOx emissions per unit carbon are projected
to be lower for this sector than in the general US economy.
- Effect of carbon tax on SO2 emissions (Abt Associates and Pechan-Avanti
Group, 1999) finds that the US$67 carbon tax is large enough to bring SO2
emissions significantly under an SO2 cap 60% lower than the current
cap. It also cuts NOx emissions enough to bring significant numbers
of non-attainment areas under the national ambient standards. Burtraw et
al. (1999) does not find such a large effect.
- Baseline emissions (Burtraw et al., 1999) do not account for new,
tighter ozone and PM standards, but Abt Associates and Pechan-Avanti Group
(1999) do (while assuming only partial attainment of the standards). This
baseline assumption leaves lower emissions of conventional pollutants to be
controlled in the Abt Associates and Pechan-Avanti Group (1999) study than
in the Burtraw et al. (1999) study.
The diffusion of methods and key studies to estimate health effects and their
monetization has contributed to a reasonable degree of standardization in the
literature. However, some of the differences in estimates result from different
assumptions and/or methodologies used to estimate them:
- Selection of concentrationresponse functions, such as use of time
series rather than the cohort mortality studies.
- Consideration of more and/or different endpoints, such as considering the
lead effects on IQ.
- Use of different assumptions to perform benefit transfers across countries
and across time. For example, considering per capita income as opposed to
purchasing power parity to perform the unit value transfer; choice of the
income elasticity value.
- Defining the baseline differently: most of the literature on ancillary benefits
systematically treats only government regulations with respect to environmental
policies. In contrast, other regulatory policy baseline issues, such as those
relating to energy, transportation, and health, are generally ignored, as
have baseline issues that are associated to technology, demography, and the
natural resource base.
Therefore, although the standard methodology is generally accepted and applied,
a number of assumptions or judgements can lead to estimates of ancillary benefits
in terms of US$/tC for a given country that differ by more than an order of
magnitude. The least standardized, least transparent and most uncertain component
for modelling ancillary benefits is the link from emissions to atmospheric concentrations,
particularly in light of the importance of secondary particulates to public
Also, the above review reveals implicitly the lack of studies estimating non-health
effects from GHG mitigation policies (damages from traffic crashes, the effects
of air pollution on materials, and air pollution effects on crops losses, which
have been shown to be quite high in some regions). Depending upon the GHG mitigation
policies selected, some of this damage could well be reduced, but the nature
of this relationship remains a speculative matter. More information can be found
in sectoral studies reviewed in Chapter 9, but no comprehensive
evaluation can be derived from them.
For all these reasons, it remains very challenging to arrive at quantitative
estimates of the ancillary benefits of GHG mitigation policies. Despite the
difficulties, it can be said that the ancillary benefits related to public health
accrue over the short term, and under some circumstances can be a significant
fraction of private (direct) mitigation costs. With respect to this category
of impacts alone mortality tends to dominate. The exact magnitude, scale, and
scope of these ancillary benefits varies with local geographical and baseline
conditions; if the baseline scenario assumes a rapid decrease in non-GHG pollutant
emissions, benefits may be low, especially in low density areas. Net ancillary
costs (i.e., where the ancillary benefits are less than ancillary costs) may
occur under certain conditions, but the models reviewed here are generally not
designed to capture these effects. While most of the studies assessed above
address ancillary benefits of explicit climate mitigation measures, it should
be noted that in many cases, these ancillary benefits can be expected to be
as least as important as climate mitigation for decision making. Hence, the
terms co-benefits is also used in this report. Therefore, there is a strong
need for more research in the area of integrated policies addressing climate
mitigation alongside other environmental, social or economic objectives.