Summary Updating the external cost of environmental damage (general for Flanders) in relation to air pollution and climate change

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1 MIRA 2011 Updating the external cost of environmental damage in relation to air pollution and climate change Summary Updating the external cost of environmental damage (general for Flanders) in relation to air pollution and climate change This report includes a set of indicators for the calculation of the external costs of air pollutants and greenhouse gasses. The external costs or environmental damage costs relate to the damage to human health, ecosystems, buildings and the economy as a result of an activity. This results in a loss of prosperity for the inhabitants of Flanders and abroad, for present and future generations. The extent and evolution of the external or environmental damage costs resulting from air pollution are one of the indicators for the MIRA report, which translates the environmental status into consequences for humans and the economy. External costs of air emissions When updating the indicators of air pollutants, we apply the damage function method (see figure S1). We mainly use emissions, dispersion and exposure data and models from Flanders for the various steps because this allows more detailed calculations and is more consistent with information from other MIRA publications. In this way, the indicators are also consistent with the estimate of these effects in the context of the MIRA report. We combine this with the strong points of the European impact-assessment models and studies, specifically with regard to information concerning dose-effect relations for public health and their valuation in monetary terms. The monetary valuation builds on European research but also takes account of data concerning healthcare costs in Flanders. Figure S1 indicates which building blocks we used in the various stages of the damage function method. Emissions, concentrations, health impact and costs were calculated for 24 different scenarios. We carried out calculations for the sectors high stacks, low stacks and transport, the parameters particulate matter PM (2.5 and coarse), NMVOC, SO 2 and NOx and the target years 2010 and To determine the marginal effect of a sector, we assume a decrease in emissions by 20% compared to the reference scenario. By dividing the difference in external costs between the scenarios through the initial difference in emissions, we calculate the marginal external cost, expressed as a number of euro per tonne of emissions. In this way, the external healthcare costs in Flanders and the neighbouring regions were modelled in detail. Furthermore the impacts outside the neighbouring regions were also included on the basis of results of the European model to calculate external costs. This method is consistent, uses the same dose-effect relations and monetary valuation but uses other dispersion models on a coarser grid. The impact of air pollution on agricultural crops, building materials and buildings and biodiversity on the basis of calculations via this European model are included in addition to the health impact. These detailed calculations for Flanders illustrate the importance of including local factors better in the calculation. We estimate the impact of traffic on this basis higher than in European models. However, the external costs of secondary pollutants in particular are estimated differently, which illustrates the importance of a more detailed calculation of background concentrations. This is primarily of importance for external costs of NOx emissions for the current situation (2010), where the calculations via the BelEUROS model may result in lower external costs than via the EMAP source-receptor matrices used in the European EcoSense model

2 Updating the external cost of environmental damage in relation to air pollution and climate change MIRA 2011 Figure S1: Building blocks for the application of the damage function method for determining the external costs of emissions from the different sectors in Flanders The results for the 2010 emissions are summarised in the table below. For NO x we report the results including and excluding ozone. Because NO x contributes both to the formation and decomposition of ozone and because in the current situation the decomposition effect is higher in our region with the emission of one tonne of NO x, NO x emissions result in lower ozone concentrations and negative external costs. We must note here that this indicator does not give a complete picture of the contribution by NO x to the ozone issue. In the event of major reductions in the emission of NO x and NMVOC that could be realised in the future (40% reduction of NO x and NMVOC emissions in addition to the emissions from the MIRA Europe scenario 2020), we anticipate that the annual average ozone concentrations will not increase further but that these emission reductions will result in a decrease of the annual average ozone concentrations in Flanders. The external environmental damage costs of NO x emissions alone will probably also remain negative in the future, however, but this was not investigated in the context of this study. Table S2 illustrates that the impacts on public health in Flanders and the neighbouring regions have the greatest share in the total external costs. For primary particulate matter only health impacts were quantified. The impact on agricultural crops, building materials and biodiversity was also calculated for SO 2, NMVOC and NO x but their share is limited (resp. 8%, 5% and 22%, NO x excl. ozone)

3 MIRA 2011 Updating the external cost of environmental damage in relation to air pollution and climate change Table S1: Summary table for indicators for external costs of emissions into the air in 2010 (in keuro 2009 /tonne emissions). PM2.5 PMcoa PM10 S0 2 NMVOC NO x excl. NO x incl. Emissions in 2010 (e) (f) (g) (h) ozone (i) ozone (j) Energy sector, industry, services and households High stacks Low stacks Transport Road transport (a) City (b) (c) Motorway (c) Countryside (d) (c) Inland shipping (c) Railway (c) (a) Indicators are derived for exhaust emissions. We assume that these indicators are also the best approach for nonexhaust emissions. (b) for city centres in Flanders (c) Nb= not available, to be determined in relation to the share of PM2.5 and PM10 fraction. (d) includes all road traffic except the city and motorway (e) PM coarse or particles with a diameter between 2.5 and 10 µm. external costs PM2.5 and PMcoa can be added without any risk of counting them twice. (f) the impact of PM10 depends on the share of PM2.5 and PM coarse (2.5-10) in PM10 beware of double-counting with PM2.5 or PMcoa external costs (see Section 6.1.1) (g) includes the Impact of SO 2 on public health via particulate matter (h) includes NMVOC impact on public health via ozone (i) includes the Impact of NO x on public health via particulate matter (j) impact of NOx via ozone is net negative. Table S2: Share of impact categories on the total external costs: example for low stacks 2010 (in %). low stacks 2010 PM2.5 PMcoa S0 2 (a) NM VOC NOx excl. ozone (a) NOx via ozone EC Health 100% 100% 92% 95% 78% 98% within Flanders 75% 75% 25% 12% 6% 38% in neighbouring regions 24% 24% 52% 75% 54% 62% in the rest of Europe 1% 1% 15% 7% 18% -1% EC other impacts Nb Nb 8% 5% 22% 2% agricultural crops -1% 6% -1% 2% building materials Nb. Nb. 5% 0% 1% 0% Biodiversity 4% -1% 21% 0% (a) impact on health via the contribution to secondary particulate matter Nb.: not available The external costs for 2020 are higher for all pollutants due to population growth and ageing and because we assume that effects will be valued higher in the future in line with the higher purchasing power per capita due to economic growth (in total + 24%) (Table S3)(for figures in keuro/tonne see Table 44). For secondary pollutants (secondary particulate matter and ozone) changes in background concentrations as a result of lower emissions in Flanders and Europe are also important. As a result the external costs of NMVOC increase slightly more slowly but the rise is higher for SO 2. The rise is very large for NO x, both for impacts via secondary particulate matter and via ozone. These figures illustrate that for applications one must take account of the anticipated evolution of external costs. The indicators for the current situation (2010) may particularly for

4 Updating the external cost of environmental damage in relation to air pollution and climate change MIRA 2011 NO x not be applied for future years. Recent European research (ExternE-Needs) in which the figures for 2010 and 2020 are also reported separately, also shares this conclusion. However there are still not enough studies and data concerning the anticipated evolution of external costs and which factors contribute the most to this. Table S3: Anticipated evolution of external costs of emissions into the air from Flanders between (indicator for 2010= 100). Emissions in 2020 PM2.5 PMcoa PM10 S0 2 VOC Energy sector, industry, services and households, transport NOx excl. ozone NOx incl. ozone High stacks Low stacks External costs of CO 2 and greenhouse gas emissions The estimate of the external costs for greenhouse gas emissions for MIRA 2005 was based on a shadow price for CO 2 of 20 euro/tonne. Since 2005, additional information has become available concerning the estimation of external costs via the damage function method (damage due to climate change) and the prevention cost method (marginal reduction costs). The most recent studies use indicators with a foundation that fits both with the literature on damage and prevention costs linked to the target of a maximum warming of 2 C. The central estimates for external costs on the basis of the damage and prevention costs are comparable in size and both increase over time. The results of recent studies indicate figures that are significantly higher than the 20 euro/tonne CO 2 -eq. from For that reason a series of indicators were formulated for external costs that increase gradually to 100 euro/tonne CO 2 -eq. in 2030 and 220 euro/tonne CO 2 -eq in 2050 (see Table S4). Table S4: Series of indicators for external costs of the main greenhouse gasses for emissions in the period. Greenhous e gas: CO 2 CH 4 N 2 O SF 6 GWP unit euro/tonne keuro/tonne keuro/tonne keuro/tonne Global warming potential on the basis of SAR, IPCC, 1996 External costs of NH 3 emissions Furthermore we also give a figure for external costs of ammonia emissions (NH 3 ). These emissions also contribute to the formation of secondary particulate matter. On the basis of the European Ecosense web and EMAP source-receptor matrices, the external cost is estimated at 30 keuro2009/tonne of NH 3 emissions. This result cannot be compared directly to the estimates for SO 2 and NO x because the models differ

5 MIRA 2011 Updating the external cost of environmental damage in relation to air pollution and climate change Table S5: External cost of NH 3 emissions from Belgium (in keuro 2009 /tonne of emissions). EC NH 3 Emissions in 2010 Emissions in 2020 Total External costs of emissions of heavy metals We have taken over further results from previous studies of ExternE on external costs of heavy metals. Table S6 gives an overview of the costs to public health of emissions of heavy metals, taking account of exposure via air, in the drinking water and in the food chain. The figures are based on a European model (Watson) and updated for Table S6: External costs for the effect on health of the emission of heavy metals and dioxins into the air according to EcoSense web. high stacks unit low stacks high stacks =100 Cd 99.1 in keuro 2009 /tonne 111% As 627 in keuro 2009 /tonne 112% Ni 2.72 in keuro 2009 /tonne 183% Pb 329 in keuro 2009 /tonne 106% Hg 9.47 in million euro 2009 /tonne 100% Cr 15.7 in keuro 2009 /tonne 180% Cr-VI* 78.4 in keuro 2009 /tonne 180% Formaldehyde 0.24 in keuro 2009 /tonne 100% Dioxins: in million euro 2009 /tonne 100% * External costs for Cr and Cr-VI cannot be used together. Source: Based on Preiss, 2008c Comments and recommendations for further research The results of this study differ from the indicators derived from European studies in various areas. This shows the importance of incorporating local information and local dispersion models into the European ExternE framework for the calculation of external costs. There has been too little research into this as yet. A distinction must be made here between the consequences of the use of other dispersion models, a finer grid and local-specific data. For instance, less research has been done into the consequences of the choices of dispersion models in relation to health impacts and monetary valuation. The indicators relate to the marginal emissions reductions (calculated on the basis of a 20% decrease in those emissions). Additional research is needed to find out the extent to which external costs change if emissions fall by over 20%. This study shows that more research is needed into how external costs may evolve over time as a result of demographic, economic and environmental developments. This study confirms the importance of changes to background concentrations for external costs for secondary pollutants of particulate matter and ozone. Considering the major decrease in emissions in Europe in the recent past and also in the near future the emission of one tonne of a particulate matter or ozone precursor has a different effect depending on the time (year) of the emission. One cannot expect that the effects will remain constant over time. This is particularly important for NOx. As yet there have not been any calculations for external costs of NH 3 emissions in Flanders on the basis of the BelEUROS model

6 Updating the external cost of environmental damage in relation to air pollution and climate change MIRA 2011 An initial estimate was made in ExternE-Needs for impacts on biodiversity based on data from different European countries. It is necessary to apply this method with Flemish data and models. Calculation rules or indicators for the impact of particulate matter on the pollution of buildings, including historic pollution is lacking. Studies on the valuation of health effects in Flanders are lacking. Health effects are the main source of external costs and their valuation is based to a large extent on data for other European countries. There is a need for an instrument to calculate the results from dispersion models more quickly and consistently to external costs