Expressing air pollution-induced health-related externalities in physical terms with the help of DALYs.

The unintended impacts of industrial activity on human health and the environment have regularly been assessed and monetised (referred to as "external costs"). External costs are, however, a rather abstract aggregate so that decision makers cannot easily relate them to tangible impacts. At the same time, physical health impact indicators have different units that cannot readily be compared and communicated in a joint way. To support better informed decisions at policy or company level, we propose and demonstrate a way to facilitate communication on non-monetized, that is, physical health indicators quantified in studies. The concept Disability-Adjusted Life Year (DALY) is chosen as metric due to its widespread use. We establish a comprehensive and consistent set of six health endpoints caused by particles and ozone, and derive related up-to-date DALYs. Further we apply the DALY values to a French smart grid demonstration project. Owing to its size, the gains in terms of reduced DALYs are however small. In contrast to external cost assessments, in the frame of which morbidity endpoints usually contribute to around 10-15%, they are found to be insubstantial in the overall DALY score (i.e. below 1%). This is because DALYs only consider time losses weighted by severity while external costs also factor in further welfare effects, i.e. combining resource, disutility and opportunity costs of illness. As a result, methodological limitations, mainly existing for the morbidity-related DALY values, appear to be less of concern. Overall, using the DALYs with and without morbidity impacts is justifiable. Either choice in the communication of health-related physical externalities induces the need to explain the limitations in terms of the treatment of morbidity endpoints (notably their definition and the disability weights used) or their complete disregard.

Assessing Air Pollutant-Induced, Health-Related External Costs in the Context of Nonmarginal System Changes: A Review.

Marginal analysis is the usual approach to environmental economic assessment, for instance, of health-related external costs due to energy-associated air pollutant emissions. However, nonlinearity exists in all steps of their assessment, i.e., atmospheric dispersion, impact assessment, and monetary valuation. Dedicated assessments thus appear necessary when evaluating large systems or their changes such as in green accounting or the implications of economy-wide energy transitions. Corresponding approaches are reviewed. Tools already exist that allow assessing a marginal change (e.g., one power plant's emissions) for different background emission scenarios that merely need to be defined and implemented. When assessing nonmarginal changes, the top-down approach is considered obsolete, and four variants of the bottom-up approach with different application domains were identified. Variants 1 and 2 use precalculated external cost factors with different levels of sophistication, suitable for energy systems modeling, optimizing for social (i.e., private and external) costs. Providing more reliable results due to more detailed modeling, emission sources are assessed individually or jointly in variants 3 and 4, respectively. Aiming at considering nonlinearity more fully and simultaneously following marginal analysis principles, I propose a variant 3-based approach, subdividing an aggregate (i.e., a nonmarginal change) into several smaller changes. Its strengths and drawbacks, notably the associated effort, are discussed.

Health-related external cost assessment in Europe: methodological developments from ExternE to the 2013 Clean Air Policy Package.

"Getting the prices right" through internalizing external costs is a guiding principle of environmental policy making, one recent example being the EU Clean Air Policy Package released at the end of 2013. It is supported by impact assessments, including monetary valuation of environmental and health damages. For over 20 years, related methodologies have been developed in Europe in the Externalities of Energy (ExternE) project series and follow-up activities. In this study, we aim at analyzing the main methodological developments over time from the 1990s until today with a focus on classical air pollution-induced human health damage costs. An up-to-date assessment including the latest European recommendations is also applied. Using a case from the energy sector, we identify major influencing parameters: differences in exposure modeling and related data lead to variations in damage costs of up to 21%; concerning risk assessment and monetary valuation, differences in assessing long-term exposure mortality risks together with assumptions on particle toxicity explain most of the observed changes in damage costs. These still debated influencing parameters deserve particular attention when damage costs are used to support environmental policy making.