Research Program Area: Economic Analysis
Topic Areas: Benefits
The objective of this research was, to the degree possible, to provide quantitative estimates of economic measures of benefits (or damage) from controlling air pollution under alternative policy relevant scenarios. While it is important to recognize and discuss the conceptual and practical limitations in conducting such an analysis, the overriding focus of this effort was to use the best available literature, data, methods and professional judgment to estimate and represent as fully and accurately as possible the economic measures of air pollution control benefits.
The study encompasses four air basins in California that have a combined 1980 population of just over 19 million people (80 percent of the state total): the San Diego Air Basin, the South Coast Air Basin, the San Joaquin Valley Air Basin, and the San Francisco Bay Area Air Basin. For each alternative scenario, emission estimates of particulate matter, nitrogen oxides, sulfur oxides, lead, and reactive organic gases are made. These are used with modeling to estimate ambient concentrations of total suspended particulates, nitrogen dioxide, sulfur dioxide, sulfates, lead, ozone, and visibility conditions for 641 locations in the four air basins. Physical and economic measures of air pollution control benefits are calculated for five effects categories: human health, agriculture, materials and soiling, forests, and visibility aesthetics. The physical impacts and economic measures are based upon the best available literature and include a "best" estimate, a "lower bound" estimate, and an "upper bound" estimate. An assessment of the probable percentage of economic benefits for each effects category is also presented.
Five air pollution control scenario comparisons are examined. The first two compare actual conditions in 1979 to estimates of conditions that would have occurred in 1979 with 1) 1960 levels of control (called the 1979 no control comparison) and 2) with those controls that would have been undertaken even without air pollution control regulations (called the 1979 prevailing practice comparison). The last three comparisons relate predicted conditions in 1987 under planned controls with estimates of conditions that would occur in 1987 with 3) no controls (1987 no controls comparison), 4) with prevailing practice controls (1987 prevailing practice comparison), and 5) with 1982 levels of controls (called the 1987 82 control comparison or 1987 curtailed control comparison). The comparisons are made as if Federal Standards do not exist.
The annual four air basin "best" economic measure of total annual quantified air pollution control benefits are estimated as approximately: $11.9 billion in the 1979 no control comparison, $9.6 billion in the 1979 prevailing practice comparison, $13.3 billion in the 1987 no control comparison, $10.5 billion in the 1987 prevailing practice comparison, and $1.9 billion in the 1987 curtailed controls comparison (all in 1983 dollars). Consideration of omitted pollutants and regions, and of physical impacts and economic values that could not be quantified, suggests the analysis may be capturing only 50 percent of total economic values. There is also considerable uncertainty in the estimates, as reflected by upper bound estimates roughly double the best estimates and lower bound estimates on the order of 10 percent of the best estimates. This large range is primarily due to uncertainties in the ability to confidently measure and value mortality impacts.
The approximate breakdown of the best benefit estimates by effects category is (depending upon the comparison used): 62-68 percent human health (about 54% mortality/lo% morbidity), 12-30 percent materials damage and soiling, 8-25 percent visibility, and less than 1 percent vegetation (agriculture and forests). Very few of the potential forest benefits were felt to be captured. The breakdown by air basin is (depending upon the comparison used): 42-76 percent in the South Coast, 3-33 percent in the San Francisco Bay Area, 1-16 percent in San Diego and 8-20 percent in the San Joaquin Valley. The breakdown of benefits by pollutants is more difficult as their effects are difficult to separate. Nevertheless, the pollutants with the largest change in ambient concentrations and those most likely related to the largest control benefits are total suspended particulates and sulfur compounds. The smallest benefits were associated with changes in ozone. This was due to small predicted changes in ozone across the scenarios. The value of changes in lead concentrations could not be economically quantified.
For questions regarding this research project, including available data and progress status, contact: Research Division staff at (916) 445-0753
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