Cost of Air Pollution - Policy Highlights 2014

The cost of air pollution policy highlights

Health impacts of road transport

The cost of air pollution Health impacts of road transport

policy highlights

Outdoor air pollution kills more than 3.5 million people a year globally, far more than was previously estimated, according to new data collected under the auspices of the World Health Organization.

Air pollution has now become the biggest environmental cause of premature death, overtaking poor sanitation and a lack of clean drinking water. In most OECD countries, the death toll from heart and lung diseases caused by air pollution is much higher than from traffic accidents.

Building on this analysis, the OECD has estimated that people in its member countries would be willing to pay USD 1.6 trillion to avoid deaths caused by air pollution.

In OECD countries, road transport is likely responsible for about half of this.

Air pollution from all sources has fallen in many though not all, OECD countries in recent years, helped by stricter policies on emissions from vehicles. However, this has been offset by the switch to more polluting diesel vehicles. Emissions are increasing in China and India, because rapid growth in traffic is outpacing the adoption of tighter controls on emissions from vehicles.

Main recommendations • Remove any incentives for the purchase of diesel cars over gasoline cars.

• Maintain and tighten regulatory regimes, in particular vehicle standards regimes such as those currently in place in the European Union.

Make test-cycle emissions more similar to the emissions the vehicles cause under normal use.

• Promote less-polluting forms of transport, including improved public transport.

• Continue the research on the cost of illness caused by air pollution and on the specific evidence linking it to road transport.

• Mitigate the impact of air pollution on vulnerable groups, such as the young and the old.

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OECD : the cost of air pollution

Air pollution kills Some 3.4 million deaths are attributed to ambient outdoor air pollution in 2010. The World Health Organization released an updated number of 3.7 million for 2012, emphasising the gravity and worsening of the problem.

We now have more advanced monitoring technology for measuring emissions and ambient concentrations of pollutants, as well as a more comprehensive and rigorous methodology for relating exposure to air pollutants with mortality.

In OECD countries, the total number of deaths was reduced by 4% between 2005 and 2010. However, progress has not been uniform. Mortalities fell in 20 OECD countries, but increased in 14.

In China, deaths increased by about 5% in this period, and in India by 12%. China is home to one-fifth of the world’s population but accounts for nearly two-fifths of the global death toll linked to outdoor air pollution. India has far fewer air pollution-related mortalities, but deaths from ambient air pollution are rising more quickly.

Even when emissions have been reduced, the lagged effect of past pollution often causes a continuing increase in the global death toll.

6%

Figure 1: Outdoor air pollutioncaused deaths.

Breakdown by disease

3%

Ischaemic heart disease

11%

Heart strokes 40%

Chronic obstructive pulmonary disease Lung cancer

40%

Acute lower respiratory infections in children Source : WHO, 2014

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policy Highlights

OECD : the cost of air pollution

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Figure 2: Deaths caused by outdoor air pollution (in millions)

3,5 0,2 3

2,5

2 3,7 3,2

1,5

1 1,4 0,5

0

0,8

WHO's GBD 2000 study, 2000 data

OECD Environmental Outlook to 2050, 2010 data PM

WHO's GBD 2010 study, 2010 data

Ozone

WHO's GBD 2012 study, 2012 data

PM+ ozone

Note: The Cost of Air Pollution is based on mortality figures from the Global Burden of Disease 2010 study.

WHO has later on published 2012 data that indicate that mortalities from outdoor air pollution are still increasing.

WHAT’s the matter with particulate matter ?

Particulate matter is a complex mixture of sulfate, nitrates,

Euro 4, Euro 5 (2009), and the forthcoming Euro 6 (2014)

ammonia, sodium chloride, black carbon, mineral dust

are European emissions standards for motor vehicles and

and water, suspended in the air. PM10 has a diameter of 10

replacement parts. The Euro emission limits regulate how

microns or less, small enough to penetrate and lodge deep

much specific pollutants, such as NOx, may be emitted

inside the lungs. PM2.5 has a diameter of 2.5 microns or less,

by a car when it is tested under laboratory conditions and

and can spread even further in the body.

using a specific driving cycle. Diesel vehicles in the EU under the Euro 5 standard are allowed a NOx emission

Nitrogen oxides (NOx) are emitted by vehicles and industry.

level that is more than three times as high as for gasoline

They react with sunlight to produce ozone. Excessive ozone

vehicles. Although emission standards as measured under

in the air can cause breathing problems, trigger asthma,

test conditions have decreased over time, recent research

reduce lung function and cause lung disease. It includes

suggests that actual, on-road NOx emissions from diesel

nitrogen dioxide (NO2), a toxic gas emitted by combustion

vehicles did not change during the last decade.

processes (heating, power generation, vehicles engines), linked to bronchitis in asthmatic children and reduced lung

Adapted from WHO, 2014 and ICCT.org.

function growth.

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OECD : the cost of air pollution

DID YOU KNOW‌ Switzerland and the US are the only OECD countries where taxes per litre of diesel are higher than taxes per litre of gasoline.

Road transport is an important source of air pollutants A variety of sources are responsible for harmful air

compared to other emerging and developing

pollutants and these vary among countries. In many

countries. For example, the Euro 5 Standard was

developing and emerging economies, small boilers are

adopted in Beijing in 2012. However, the rapid growth

important sources. Indoor air pollution from heating

in traffic has outpaced the adoption of tighter

and cooking is also a major cause of death, but this is

emission limits. In many developing countries,

not considered in this analysis. Electricity generation,

vehicle standards remain very weak.

industry and shipping (in coastal areas) can also generate harmful air pollutants. However, in many

economic growth brings a societal demand

countries, road transport is a growing and sometimes

for clean air, but it also brings a rise in vehicle

the major source of harmful air pollutants.

ownership and vehicle kilometres driven. Between 2008 and 2011, China’s car population effectively

lower emissions per car... but more cars.

doubled from around 50 million to around 100

Most countries have taken measures to reduce

million.

pollution from vehicles. Much of the OECD world, including the United States and the European Union, has shown a downward trend in emissions of pollutants due to vehicle emission standards.

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While in OECD countries there has been a downward trend in emissions of pollutants from road transport over the last two decades, this has been off-set by a shift from less-polluting gasoline vehicles to

In Europe, transport-specific emissions diminished

more-polluting diesel vehicles. The full impact of

by 24% for PM10, by 27% for PM2.5 and by 31% for NOx

air pollution occurs after a time lag. As a result,

between 2002 and 2011 (EEA, 2013). This reduction is

mortalities have not fallen in line with the overall

largely due to the introduction of progressively tighter

decrease in air emissions. In much of the rest of the

emission limits for Euro 4 vehicles in 2005 and Euro

world, the shift to diesel has reinforced the prevailing

5 vehicles in 2009. Countries like China and India

upward trends in emissions. In India, this tendency

have established relatively strict vehicle standards,

has been amplified by large subsidies for diesel.

policy Highlights

OECD : the cost of air pollution

diesel vehicles generate most of the harmful air

Taxes on motor vehicles in many countries also tend

pollutants emitted by vehicles, as much as 80‑90%

to stimulate the purchase of diesel vehicles.

in some countries. Although the technology is

The provision of incentives for diesel is often justified

improving, diesel still generates more harmful

on the grounds that diesel vehicles are more efficient

pollutants than gasoline. In addition, the combustion

than gasoline. This is true: you can drive more

of one litre of diesel causes more CO2 emissions than

kilometres per litre of diesel than gasoline. But drivers

the combustion of one litre of gasoline.

will benefit from this efficiency anyway, so there is

In many countries, the majority of new cars entering

no need to provide additional tax incentives. From an

the market are diesel. One reason is that many

environmental point of view, there is no reason why

countries provide tax incentives to purchase diesel

diesel should be preferred over gasoline.

cars. Switzerland and the US are the only OECD countries where taxes per litre of diesel are higher than taxes per litre of gasoline.

why invest ? With the Thematic Strategy on Air Pollution, the European Union established objectives for air pollution and proposes measures for achieving them by 2030.

Its aim is to reinforce legislation on the most harmful pollutants and to work with sectors that have an impact on air pollution, including production of energy and electricity, heating, transport, aviation and agriculture.

Holland (2012) calculated the benefits of investing in clean air (green bars) and compared them to the costs (orange bars), with low-, mid-, high-policy scenarios, and the maximum technically feasible solution (MTFR). Net benefits are extraordinarily high, encouraging governments to invest.

Figure 3. Cost-Benefit Analysis for the European Thematic Strategy on Air Pollution

EUR millions per year

160 000 140 000 Costs over baseline

Benefits over baseline (With mean VSL)

120 000 100 000 80 000 60 000 40 000 20 000

Low

Mid

High

MTFR

Source : adapted from Holland, 2012

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OECD : the cost of air pollution

How much woud you pay to avoid health risks?

The OECD has estimated how much people in different countries would be willing to pay to avoid deaths caused by air pollution. This is important because governments can use this information in setting the stringency of the measures that should be applied to reduce pollution from the main sources of air pollution, including from vehicles. The new estimates indicate that people are willing to pay much more for clean air than previously thought.

Currently, drivers pay to enjoy personal mobility, but not for the damage they do to other peoples’ health. People are powerless to solve the problem individually. Governments on the other hand know that if they take action (e.g. via tighter emission standards, higher fuel taxes), they will impose costs on car manufacturers and drivers. But if they do not, the “cost” of illness and premature death falls on the general population. So governments need some way of weighing up both sets of costs.

The best way developed to date is to estimate the monetary value of the well-being that people say they would lose by dying early. Surveys are used to assess how much people would be willing to pay to reduce the risk, e.g. of death from air pollution. The results are extrapolated to come up with something called a “Value of a Statistical Life” (VSL). The VSL multiplied by the estimated number of mortalities gives an estimate of the consumption that people would be willing to forgo to avoid all mortalities from air pollution.

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Using this approach, the annual economic cost of deaths from ambient air pollution was calculated. It increased by approximately 10% between 2005 and 2010 in OECD countries, to reach ≈ USD 1.7 trillion (a figure which includes an indicative estimate for morbidity, i.e. the loss of good health). This is equivalent to about half the total governmental expenditure on health care services in OECD countries in the same year.

In China, the cost increased by 90% over the same period, to reach about USD 1.4 trillion for 2010. In India, it reached ≈ USD 0.5 trillion.

A review of available information suggests that, on average in OECD countries, road transport accounts for about 50% of the cost of air pollution.

In emerging economies such as China and India, estimates are lower, because of the contribution from other sources, but they still represent a significant burden.

policy Highlights

OECD : the cost of air pollution

Figure 4. Cost of air pollution

WHy does the value of statistical life vary from country to country?

VSL estimates how much consumption people would be willing to give up to reduce the risk of dying from air pollution.

Estimates of VSL vary among countries: generally the richer the country, the more disposable income people have to reduce their risk of death from air pollution. As a result, the VSL in countries like China or India is lower than in OECD countries.

This does not mean that life is worth less in those countries, but rather that people are not able to pay more to reduce the risk of death.

For an interactive data visualisation, country by country, and for more details, please visit www.oecd.org/environment/cost-of-air-pollution.htm

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OECD : the cost of air pollution

Further reading references Bhaskan, K. et al. (2011), “The effects of hourly differences in air

Read the publication on the OECD library : http://dx.doi.org/ 10.1787/9789264210448-en

pollution on the risk of myocardial infarction: case crossover analysis of the MINAP database”, BMJ, 2011; 343:d5531, http://dx.doi.org/10.1136/bmj.d5531.

European Environment Agency (EEA) (2013), Air Quality in Europe – 2013 Report, Publications Office of the European Union, Luxembourg.

Hunt, A. (2011), “Policy Interventions to Address Health Impacts Associated with Air Pollution, Unsafe Water Supply

Holland, M. (2012), Cost-benefit Analysis of Scenarios for Cost-

and Sanitation, and Hazardous Chemicals”, OECD Environment

Effective Emission Controls after 2020, Version 1.02, November

Working Papers, No. 35, OECD Publishing.

2012, Corresponding to IIASA Thematic Strategy on Air Pollution

http://dx.doi.org/10.1787/5kg9qx8dsx43-en.

Report #7, EMRC. IARC (2013), “IARC: Outdoor air pollution a leading cause of cancer deaths”, Press Release 221, 17 October 2013, IARC, Lyon.

ICCT.org. “Laboratory versus real world: Discrepancies in NOx emissions in the EU”, blog post by Peter Mock.

OECD (forthcoming), The Diesel Differential: Differences In The Tax Treatment Of Gasoline And Diesel For Road Use. OECD (2013), Taxing Energy Use: A Graphical Analysis, OECD Publishing. http://dx.doi.org/ 10.1787/9789264183933-en OECD (2012), Mortality Risk Valuation in Environment, Health and

Institute for Health Metrics and Evaluation (2013a), The Global

Transport Policies, OECD Publishing.

Burden of Disease (GBD) Visualizations: GBD compare. Institute for

http://dx.doi.org/10.1787/9789264130807-en

Health Metrics and Evaluation, Seattle.

OECD (2011), Environmental Impacts of International

Laumbach, R.J. and H.M. Kipen (2012), “Respiratory Health effects

Shipping: The Role of Ports, OECD Publishing. http://dx.doi.

of Air Pollution: Update on Biomass Smoke and Traffic Pollution”,

org/10.1787/9789264097339-en

Journal of Allergy and Clinical Immunology, Vol. 129, pp. 3-13, http:// dx.doi.org/10.1016/j.jaci.2011.11.021.

Shah, A.S.V. et al. (2013), “Global Association of air pollution and heart failure: A systematic review and meta-analysis”, The Lancet, Vol. 382, pp. 1039-48.

World Health Organization, Ambient (outdoor) air quality and health, Fact sheet N° 313, March 2014.

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related oecd publications

OECD (2010), Globalisation, Transport and the Environment, OECD Publishing. http://dx.doi.org/10.1787/9789264072916-en OECD (2009), A review of recent policy-relevant findings from the environmental health literature, OECD, Paris.

Photo credits :©istockphoto.com plherrera, gyn9038, lazyday, millionhope, yenwen, Phototreat, ©shutterstock.com Andrey Yurlov, Photobank gallery.

Health impacts of road transport

3.5 MILLION PEOPLE KILLED A YEAR GLOBALLY BY OUTDOOR AIR POLLUTION * THAT’S MORE DEATHS THAN FROM DIRTY WATER AND POOR SANITATION

50% OF DEATHS FROM OUTDOOR AIR POLLUTION IN OECD CAUSED BY ROAD TRANSPORT *DIESEL VEHICLES THE BIGGEST CULPRIT

US$ 1.6 TRILLION VALUE OF PREMATURE DEATH BY OUTDOOR AIR POLLUTION IN OECD = ALMOST THE SIZE OF THE CANADIAN ECONOMY

$

$

£

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www.oecd.org/environment/cost-of-air-pollution.htm

policy Highlights

The cost of air pollution

Outdoor air pollution kills more than 3.5 million people across the world every year, and causes health problems, from asthma to heart disease, for many more. This is costing OECD societies plus China and India an estimated USD 3.5Â trillion a year in terms of the value of lives lost and ill health, and the trend is rising. But how much of the cost of those deaths and health problems is due to pollution from cars, trucks and motorcycles on our roads? Initial evidence suggests that in OECD countries, road transport is likely responsible for about half the USD 1.7 trillion total.

Based on extensive new epidemiological evidence since the 2010 Global Burden of Disease study, and OECD estimates of the Value of Statistical Life, The Cost of Air Pollution provides evidence that the health impacts of air pollution are about four times greater than previously estimated and the economic costs much higher than previously thought.

These Highlights outline the key messages in the report.

www.oecd.org/environment/cost-of-air-pollution.htm