IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v38y2010i9p5059-5071.html
   My bibliography  Save this article

Measuring welfare loss caused by air pollution in Europe: A CGE analysis

Author

Listed:
  • Nam, Kyung-Min
  • Selin, Noelle E.
  • Reilly, John M.
  • Paltsev, Sergey

Abstract

To evaluate the socio-economic impacts of air pollution, we develop an integrated approach based on computable general equilibrium (CGE). Applying our approach to 18 western European countries shows that even there, where air quality is relatively high compared with other parts of the world, health-related damages caused by air pollution may be substantial. We estimate that as of 2005, Europe experienced an annual loss in consumption of about 220 billion Euro in year 2000 prices (about 3% of total consumption) with a range based on 95% high and low epidemiological response functions of 107-335 billion Euro and a total welfare loss of about 370 billion Euro (range of 209-550) including both consumption and broader welfare losses (around 2% of welfare level) due to the accumulated effects of three decades of air pollution in Europe. In addition, we estimate that a set of air quality improvement policy scenarios as proposed in the 2005 CAFE program would bring 18 European countries as a whole a welfare gain of 37-49 billion Euro (year 2000 prices) in year 2020 alone.

Suggested Citation

  • Nam, Kyung-Min & Selin, Noelle E. & Reilly, John M. & Paltsev, Sergey, 2010. "Measuring welfare loss caused by air pollution in Europe: A CGE analysis," Energy Policy, Elsevier, vol. 38(9), pages 5059-5071, September.
    • Handle: RePEc:eee:enepol:v:38:y:2010:i:9:p:5059-5071
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(10)00308-3
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Krupnick, Alan & Alberini, Anna & Cropper, Maureen & Simon, Nathalie & O'Brien, Bernie & Goeree, Ron & Heintzelman, Martin, 2002. "Age, Health and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 161-186, March.
    2. Xander Olsthoorn & Markus Amann & Alena Bartonova & Jocelyne Clench-Aas & Janusz Cofala & Kees Dorland & Cristina Guerreiro & Jan Henriksen & Huib Jansen & Steinar Larssen, 1999. "Cost Benefit Analysis of European Air Quality Targets for Sulphur Dioxide, Nitrogen Dioxide and Fine and Suspended Particulate Matter in Cities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(3), pages 333-351, October.
    3. Burtraw, Dallas & Krupnick, Alan & Palmer, Karen & Paul, Anthony & Toman, Michael & Bloyd, Cary, 2003. "Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 650-673, May.
    4. Alan fnKrupnick & Kenneth fnHarrison & Eric fnNickell & Michael fnToman, 1996. "The value of health benefits from ambient air quality improvements in Central and Eastern Europe: An exercise in benefits transfer," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(4), pages 307-332, June.
    5. Roberton C. Williams III, 2002. "Environmental Tax Interactions When Pollution Affects Health or Productivity," Chapters, in: Lawrence H. Goulder (ed.), Environmental Policy Making in Economies with Prior Tax Distortions, chapter 13, pages 200-209, Edward Elgar Publishing.
    6. Inge Mayeres & Denise Van Regemorter, 2008. "Modelling the Health Related Benefits of Environmental Policies and Their Feedback Effects: A CGE Analysis for the EU Countries with GEM-E3," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 135-150.
    7. Williams III, Roberton C., 2003. "Health effects and optimal environmental taxes," Journal of Public Economics, Elsevier, vol. 87(2), pages 323-335, February.
    8. N. Künzli & R. Kaiser & S. Medina & M. Studnicka & O. Chanel & P. Filliger & M. Herry & F. Horak & V. Puybonnieux-Texier & Philippe Quénel & Jodi Schneider & R. Seethaler & Jean-Christophe Vergnaud & , 2000. "Public health Impact of Outdoor and Traffic related Air Pollution," Post-Print halshs-00150955, HAL.
    9. Aunan, Kristin & Fang, Jinghua & Vennemo, Haakon & Oye, Kenneth & Seip, Hans M., 2004. "Co-benefits of climate policy--lessons learned from a study in Shanxi, China," Energy Policy, Elsevier, vol. 32(4), pages 567-581, March.
    10. P. Filliger & M. Herry & F. Horak & V. Puybonnieux-Texier & P. Quenel & J. Schneider & R.K. Seethaler & J.C. Vernaud & H. Sommer & N. Künzli & R. Kaiser & S. Medina & M. Studnicka & Olivier Chanel, 2000. "Public-health impact of outdoor and traffic-related air pollution: a European assessment," Post-Print hal-01462907, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wu, Xianhua & Deng, Huai & Huang, Yuxiang & Guo, Ji, 2022. "Air pollution, migration costs, and urban residents’ welfare: A spatial general equilibrium analysis from China," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 396-409.
    2. Sumei Chen & Ling‐Yun He, 2019. "Taxation and the Environment–Health–Poverty Trap: A Policy Experiment Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 27(1), pages 72-92, January.
    3. repec:avg:wpaper:en7433 is not listed on IDEAS
    4. Reilly, John M., 2012. "Green growth and the efficient use of natural resources," Energy Economics, Elsevier, vol. 34(S1), pages 85-93.
    5. John Reilly & Sergey Paltsev & Ken Strzepek & Noelle Selin & Yongxia Cai & Kyung-Min Nam & Erwan Monier & Stephanie Dutkiewicz & Jeffery Scott & Mort Webster & Andrei Sokolov, 2013. "Valuing climate impacts in integrated assessment models: the MIT IGSM," Climatic Change, Springer, vol. 117(3), pages 561-573, April.
    6. Carbone, Jared C. & Kerry Smith, V., 2013. "Valuing nature in a general equilibrium," Journal of Environmental Economics and Management, Elsevier, vol. 66(1), pages 72-89.
    7. Omolo, Miriam W.O., 2014. "Construction of Social Accounting Matrix for Kenya 2009," Conference papers 332512, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Li, Na & Zhang, Xiaoling & Shi, Minjun & Hewings, Geoffrey J.D., 2019. "Does China's air pollution abatement policy matter? An assessment of the Beijing-Tianjin-Hebei region based on a multi-regional CGE model," Energy Policy, Elsevier, vol. 127(C), pages 213-227.
    9. Zhiqiao Xiong & Dandan Li & Hongwei Yu, 2023. "Does PM2.5 (Pollutant) Reduce Firms’ Innovation Output?," IJERPH, MDPI, vol. 20(2), pages 1-19, January.
    10. Kozera, Agnieszka & Satoła, Łukasz & Standar, Aldona, 2024. "European Union co-funded investments in low-emission and green energy in urban public transport in Poland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 200(C).
    11. Mathias Mier & Jacqueline Adelowo & Christoph Weissbart, 2022. "Complementary Taxation of Carbon Emissions and Local Air Pollution," ifo Working Paper Series 375, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    12. CISCAR MARTINEZ Juan Carlos & FEYEN Luc & SORIA RAMIREZ Antonio & LAVALLE Carlo & PERRY Miles & RAES Frank & NEMRY Francoise & DEMIREL Hande & RÓZSAI Máté & DOSIO Alessandro & DONATELLI Marcello & SRI, 2014. "Climate Impacts in Europe. The JRC PESETA II Project," JRC Research Reports JRC87011, Joint Research Centre.
      • Ciscar, Juan-Carlos & Feyen, Luc & Soria, Antonio & Lavalle, Carlo & Raes, Frank & Perry, Miles & Nemry, Françoise & Demirel, Hande & Rozsai, Máté & Dosio, Alessandro & Donatelli, Marcello & Srivastav, 2014. "Climate Impacts in Europe - The JRC PESETA II Project," MPRA Paper 55725, University Library of Munich, Germany.
    13. HE Ling-Yun & OU Jia-Jia, 2016. "Taxing sulphur dioxide emissions: A policy evaluation from public health perspective in China," Energy & Environment, , vol. 27(6-7), pages 755-764, November.
    14. Ma, Xin & Fan, Di & Zhou, Yi & Yang, Cheng-Hu, 2021. "The impact of inspection on the sustainable production strategy: Environmental violation and abatement in emerging markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 150(C).
    15. Jacqueline Adelowo & Mathias Mier & Christoph Weissbart, 2021. "Taxation of Carbon Emissions and Air Pollution in Intertemporal Optimization Frameworks with Social and Private Discount Rates," ifo Working Paper Series 360, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    16. Zhang, Xu & Ou, Xunmin & Yang, Xi & Qi, Tianyu & Nam, Kyung-Min & Zhang, Da & Zhang, Xiliang, 2017. "Socioeconomic burden of air pollution in China: Province-level analysis based on energy economic model," Energy Economics, Elsevier, vol. 68(C), pages 478-489.
    17. Kyung-Min Nam & Xu Zhang & Min Zhong & Eri Saikawa & Xiliang Zhang, 2019. "Health effects of ozone and particulate matter pollution in China: a province-level CGE analysis," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(2), pages 269-293, October.
    18. Chang, Shiyan & Yang, Xi & Zheng, Haotian & Wang, Shuxiao & Zhang, Xiliang, 2020. "Air quality and health co-benefits of China's national emission trading system," Applied Energy, Elsevier, vol. 261(C).
    19. Mier, Mathias & Adelowo, Jacqueline & Weissbart, Christoph, 2024. "Complementary taxation of carbon emissions and local air pollution," Energy Economics, Elsevier, vol. 132(C).
    20. Amy J. Schulz & Graciela B. Mentz & Natalie Sampson & Melanie Ward & J. Timothy Dvonch & Ricardo De Majo & Barbara A. Israel & Angela G. Reyes & Donele Wilkins, 2018. "Independent and Joint Contributions of Fine Particulate Matter Exposure and Population Vulnerability to Mortality in the Detroit Metropolitan Area," IJERPH, MDPI, vol. 15(6), pages 1-15, June.
    21. Zhang, Shaohui & Worrell, Ernst & Crijns-Graus, Wina & Krol, Maarten & de Bruine, Marco & Geng, Guangpo & Wagner, Fabian & Cofala, Janusz, 2016. "Modeling energy efficiency to improve air quality and health effects of China’s cement industry," Applied Energy, Elsevier, vol. 184(C), pages 574-593.
    22. Bangzhu Zhu & Runzhi Pang & Julien Chevallier & Yi-Ming Wei & Dinh-Tri Vo, 2019. "Including intangible costs into the cost-of-illness approach: a method refinement illustrated based on the PM2.5 economic burden in China," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(4), pages 501-511, June.
    23. Chen, Su-Mei & He, Ling-Yun, 2014. "Welfare loss of China's air pollution: How to make personal vehicle transportation policy," China Economic Review, Elsevier, vol. 31(C), pages 106-118.
    24. Euijune Kim & Seung-Woon Moon & Shigemi Kagawa, 2019. "Spatial economic linkages of economic growth and air pollution: developing an air pollution-multinational CGE model of China, Japan, and Korea," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 63(2), pages 255-268, October.
    25. Jared C.Carbone & Yuzhou Shen, 2019. "Assessing the Benefits of Air-Quality Improvements in General Equilibrium: A Review," Working Papers 2019-05, Colorado School of Mines, Division of Economics and Business.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lars Hein & Pete Roberts & Lucia Gonzalez, 2016. "Valuing a Statistical Life Year in Relation to Clean Air," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-24, December.
    2. Ami, Dominique & Aprahamian, Frédéric & Chanel, Olivier & Joulé, Robert-Vincent & Luchini, Stéphane, 2014. "Willingness to pay of committed citizens: A field experiment," Ecological Economics, Elsevier, vol. 105(C), pages 31-39.
    3. Nathalie Mathieu-Bolh & Xavier Pautrel, 2014. "Environmental taxation, health and the life-cycle," Working Papers hal-00990256, HAL.
    4. Mathieu-Bolh, Nathalie & Pautrel, Xavier, 2016. "Reassessing the effects of environmental taxation when pollution affects health over the life-cycle," Economic Modelling, Elsevier, vol. 52(PB), pages 310-321.
    5. repec:hal:wpaper:hal-00930936 is not listed on IDEAS
    6. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stéphane Luchini, 2011. "A Test of Cheap Talk in Different Hypothetical Contexts: The Case of Air Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(1), pages 111-130, September.
    7. Huhtala, Anni & Samakovlis, Eva, 2003. "Green Accounting, Air Pollution and Health," Working Papers 82, National Institute of Economic Research.
    8. Alberto Longo & David Hoyos & Anil Markandya, 2012. "Willingness to Pay for Ancillary Benefits of Climate Change Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(1), pages 119-140, January.
    9. Shih, Yi-Hsuan & Tseng, Chao-Heng, 2014. "Cost-benefit analysis of sustainable energy development using life-cycle co-benefits assessment and the system dynamics approach," Applied Energy, Elsevier, vol. 119(C), pages 57-66.
    10. Meelan Thondoo & David Rojas-Rueda & Joyeeta Gupta & Daniel H. de Vries & Mark J. Nieuwenhuijsen, 2019. "Systematic Literature Review of Health Impact Assessments in Low and Middle-Income Countries," IJERPH, MDPI, vol. 16(11), pages 1-21, June.
    11. J. West & Arlene Fiore & Larry Horowitz, 2012. "Scenarios of methane emission reductions to 2030: abatement costs and co-benefits to ozone air quality and human mortality," Climatic Change, Springer, vol. 114(3), pages 441-461, October.
    12. Llop Llop, Maria, 2016. "A second-best analysis of alternative instruments for the preservation of natural resources?," Working Papers 2072/261533, Universitat Rovira i Virgili, Department of Economics.
    13. Bento, Antonio M. & Franco, Sofia F. & Kaffine, Daniel, 2011. "Is there a double-dividend from anti-sprawl policies?," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 135-152, March.
    14. Aubert, Diane & Chiroleu-Assouline, Mireille, 2019. "Environmental tax reform and income distribution with imperfect heterogeneous labour markets," European Economic Review, Elsevier, vol. 116(C), pages 60-82.
    15. Bento, Antonio M. & Jacobsen, Mark, 2007. "Ricardian rents, environmental policy and the `double-dividend' hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 53(1), pages 17-31, January.
    16. Poudenx, Pascal, 2008. "The effect of transportation policies on energy consumption and greenhouse gas emission from urban passenger transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 42(6), pages 901-909, July.
    17. Jean-Christophe Caffet, 2005. "Health effects and optimal environmental taxes in welfare state countries," Cahiers de la Maison des Sciences Economiques v05049, Université Panthéon-Sorbonne (Paris 1).
    18. Lin-Yu Xu & Hao Yin & Xiao-Dong Xie, 2014. "Health Risk Assessment of Inhalable Particulate Matter in Beijing Based on the Thermal Environment," IJERPH, MDPI, vol. 11(12), pages 1-21, November.
    19. Samakovlis, Eva & Huhtala, Anni & Bellander, Tom & Svartengren, Magnus, 2005. "Valuing health effects of air pollution--Focus on concentration-response functions," Journal of Urban Economics, Elsevier, vol. 58(2), pages 230-249, September.
    20. Yun-Gi Lee & Pureun-Haneul Lee & Seon-Muk Choi & Min-Hyeok An & An-Soo Jang, 2021. "Effects of Air Pollutants on Airway Diseases," IJERPH, MDPI, vol. 18(18), pages 1-17, September.
    21. Pock, Markus, 2007. "Gasoline and Diesel Demand in Europe: New Insights," Economics Series 202, Institute for Advanced Studies.

    More about this item

    Keywords

    Air pollution Human health Europe;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:9:p:5059-5071. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.