Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe

38 Pages Posted: 19 Jan 2016

See all articles by Milan Ščasný

Milan Ščasný

Charles University Prague

Emanuele Massetti

Georgia Institute of Technology; CESifo (Center for Economic Studies and Ifo Institute); CMCC - Euro Mediterranean Centre for Climate Change

Jan Melichar

Charles University in Prague

Samuel Carrara

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Date Written: 2015

Abstract

This paper presents estimates of the economic benefit of air quality improvements in Europe that occur as a side effect of GHG emission reductions. We consider three climate policy scenarios that reach radiative forcing levels in 2100 of three Representative Concentration Pathways (RCPs). These targets are achieved by introducing a global uniform tax on all GHG emissions in the Integrated Assessment Model WITCH, assuming both full as well as limited technological flexibility. The resulting consumption patterns of fossil fuels are used to estimate the physical impacts and the economic benefits of pollution reductions on human health and on key assets by implementing the most advanced version of the ExternE methodology with its Impact Pathway Analysis. We find that the mitigation scenario compatible with 2°C reduces total pollution costs in Europe by 76%. Discounted ancillary benefits are more than €2.5 trillion between 2015 and 2100. The monetary value of reduced pollution is equal to €22 per abated ton of CO2 in Europe. Less strict climate policy scenarios generate overall smaller, but still considerable, local benefits (14 € or 18 € per abated ton of CO2). Without discounting, the ancillary benefits are in a range of €36 to €50 per ton of CO2 abated. Cumulative ancillary benefits exceed the cumulative additional cost of electricity generation in Europe. Each European country alone would be better off if the mitigation policy was implemented, although the local benefits in absolute terms vary significantly across the countries. We can identify the relative losers and winners of ancillary benefits in Europe. In particular, we find that large European countries contribute to as much as they benefit from ancillary benefits. The scenarios with limited technology flexibility do deliver results that are similar to the full technology flexibility scenario.

Keywords: Ancillary benefits, External costs, Climate change mitigation, Integrated Assessment Models, ExternE, Impact Pathway Analysis

JEL Classification: Q47, Q51, Q53, Q54

Suggested Citation

Ščasný, Milan and Massetti, Emanuele and Melichar, Jan and Carrara, Samuel, Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe (2015). FEEM Working Paper No. 84.2015. Available at SSRN: https://ssrn.com/abstract=2715473 or http://dx.doi.org/10.2139/ssrn.2715473

Milan Ščasný (Contact Author)

Charles University Prague ( email )

Praha 1, 116 36
Czech Republic

Emanuele Massetti

Georgia Institute of Technology ( email )

685 Cherry St.
Atlanta, GA 30332-0345
United States

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

CMCC - Euro Mediterranean Centre for Climate Change

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Jan Melichar

Charles University in Prague ( email )

Celetná 13
Praha 1, 116 36
Czech Republic

Samuel Carrara

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Lecce, I-73100
Italy

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