benefit transfer in valuing the costs of air pollution
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Benefit transfer in valuing the costs of air pollution. Gordon Hughes The World Bank & NERA UK. The issues. How much does air pollution contribute to the total burden of disease ? Links between valuation-based approaches and those using a health metric (DALYs) - PowerPoint PPT PresentationTRANSCRIPT
Benefit transfer in valuing the costs of air pollution
Gordon HughesThe World Bank & NERA UK
The issues
How much does air pollution contribute to the total burden of disease ?
Links between valuation-based approaches and those using a health metric (DALYs)
Differences in impacts across countries or regions of the world
Role of different types of air pollution : indoor air pollution, urban air pollution, etc
Benefit transfer : DALYs vs dollars
Global burden of disease approach– includes discounting and age weighting– widely applied to assessing health interventions
Valuation for cost-benefit analysis across health / non-health concerns and policies
Sensitivity to demographic characteristics of the exposed populations
Are hazards proportional ?
A DALY-based approach
Wide range of YLLs lost per air pollution death– with proportional hazard the range is from 6.6 for
developed countries to 21.1 in India– with hazard after age 40 only, the range is from
5.4 for developed countries to 8.3 for Russia/Ukraine
In most cases the long run saving in YLLs is significantly lower because of the links between mortality rates and population age structure
Years of life lost due to air pollution deaths
Survival table Western China India Russia/Ukraine
Type of hazard Prop forall ages
Prop for> 40 yrs
Prop forall ages
Prop for> 40 yrs
Prop forall ages
Prop for> 40 yrs
Prop forall ages
Prop for> 40 yrs
A. Impact effect of 50 ug/m3 reduction in air pollution (for population of 1 million)
No of premature deathsavoided
440.7 421.3 272.6 221.4 319.3 155.1 523.9 468.9
No of YLLs avoided 2,900.3 2,287.0 3,058.5 1,383.4 6,725.2 1,279.2 5,641.0 3,884.7
No of YLLs per prematuredeath avoided
6.6 5.4 11.2 6.2 21.1 8.2 10.8 8.3
B. Long run effect of 50 ug/m3 reduction in air pollution (for population of 1 million)
No of YLLs avoided 2,184.8 1,594.5 2,755.4 1,054.1 6,871.2 1,082.3 4,197.9 2,533.8
No of YLLs per prematuredeath avoided
5.0 3.8 10.1 4.8 21.5 7.0 8.0 5.4
C. Baseline data
Crude mortality rate 10.8 6.7 7.8 12.9
Estimated no of YLLs perwork accident
24.3 24.9 25.4 24.5
Using DALYs for VOSL transfers
VOSLs derived from wage differential studies – an average loss of about 24 YLLs per death– typical VOSLs are 6-8 times GNP per capita per
YLL For air pollution deaths, range of VOSLs as
multiple of GNP per capita :– proportional hazard : 45 for the US, about 75 for
China & Russia/Ukraine,140 for India– non-proportional hazard : 37 for the US, 43 for
China, 57 for India & Russia/Ukraine
Values of a statistical life based on DALY / YLL calculations
Baseline data USA China India Russia
GNP per capita ($ 1995) 27,350 620 350 2,290VOSL based on work risks ($ 1995) 4,500,000YLLs for work risks 24.3VOSL per YLL 185,200Multiple of GNP per capita per YLL 6.8
VOSL estimates for proportional hazard with odds ratio of 1.0085YLLs lost per premature death 6.6 11.2 21.1 10.8Implied YLL-based VOSL 1,220,000 47,000 50,000 167,000
VOSL estimates for proportional hazard with odds ratio of 1.0200YLLs lost per premature death 6.8 11.5 21.4 11.1Implied YLL-based VOSL 1,260,000 48,000 51,000 172,000
VOSL estimates for non-proportional hazard with odds ratio of 1.0085YLLs lost per premature death 5.4 6.2 8.2 8.3Implied YLL-based VOSL 1,010,000 26,000 20,000 128,000
VOSL estimates for non-proportional hazard with odds ratio of 1.0200YLLs lost per premature death 5.6 6.4 8.4 8.5Implied YLL-based VOSL 1,030,000 27,000 20,000 132,000
Indoor air pollution in India
What is the role of environmental factors in the total burden of disease ?
Studies show large impact of indoor air pollution on infant mortality & morbidity
Environmental factors account for 18-21% of total burden of disease– indoor air pollution is largest component– urban air pollution relatively small but
growing
Indoor air pollution and rural infant/child mortality
0 5 10 15 20 25
Age in months
0.88
0.90
0.92
0.94
0.96
0.98
1.00
Probability of survival
Actual Clean cooking fuel All household environment
Improvements in the household environment and the burden of
diseaseScenario Total number of deaths (000s)
All India Urban RuralA. Infant deaths ( < 12 months old)Model baseline estimates 1,605 181 1,4241. All households use a clean cooking fuel 1,184 174 1,0112. All households with private water & sanitation 1,200 160 1,0403. All households with clean cooking fuel + privatewater & sanitation
910 154 757
B. Deaths of children < 5 years oldModel baseline estimates 2,051 223 1,8271. All households use a clean cooking fuel 1,442 213 1,2302. All households with private water & sanitation 1,515 196 1,3193. All households with clean cooking fuel + privatewater & sanitation
1,094 187 907
Urban air pollution in China & Asia
Costs of urban air pollution projected from 1995 to 2020 under various scenarios
Already large in 1995, but would get much worse under a business as usual scenario
Provided the basis for cost-benefit analyses of alternative environmental strategies
Analysis had significant role in efforts to persuade countries to adopt low/medium cost control strategies
Cost of urban air pollution in Asia(under a business as usual scenario)
1995 2000 2005 2010 2015 2020
Year
0
10
20
30
40
50Cost of air pollution as % of urban GDP
China cities
Jakarta
Manila
Bangkok
Seoul
The transition in CEE/NIS countries
Did the transition in the CEE/NIS countries reduce environmental damage ?
Yes, in Central & Eastern Europe– significant fall in exposure levels + stable or
declining mortality rates No, in Russia, Ukraine & the NIS
– small fall in exposure levels offset by significant deterioration in general health conditions and mortality rates
Premature mortality due to air pollution
in CEE/NIS countries, 1990-95
CEE/NIS CEE NIS0
10
20
30
40
50
Excess deaths per year in 000s
19901995
Source : World Bank estimates using data for 57 cities with comparable data for 1990 & 1995
Valuation of air pollution damages in CEE/NIS countries, 1990-95
CEE/NIS CEE NIS0
1
2
3
4
5
6
7
Total cost in $ billion per year at 1995 incomes
19901995
Source : World Bank estimates using data for 57 cities with comparable data for 1990 & 1995
Local, regional & global air pollution
Damage estimation & benefit transfer methods used to assess the relative importance of different categories of air pollution
Many technical questions but broad results are fairly robust
Highlights large health burden due to indoor & urban air pollution over next 2 decades
Very different regional priorities in addressing air pollution concerns
Premature mortality and burden of disease due to air pollution
(projected averages 2000-2020)
Region Premature deaths(‘000s p.a.)
Burden of disease(million DALYs p.a.)
Direct Local Total Direct Local Total
China 150 590 740 4.5 14.0 18.5East Asia and Pacific 100 150 250 3.5 3.8 7.3Established Market Economies 0 20 20 0 0.5 0.5Former Socialist Economies 10 200 210 0.2 3.8 4.0India 490 460 950 17.0 10.1 27.1Latin America & Caribbean 10 130 140 0.3 3.7 4.0Middle East Crescent 70 90 160 2.4 2.5 4.9South Asia 220 120 340 7.6 2.6 10.2Sub-Saharan Africa 530 60 590 18.1 1.2 19.3
World 1570 1810 3480 53.4 42.2 95.6
Present value of damage due to air pollution for 21st century
Region Present value of damage due to air pollutionin $ billion at 1995 prices
Direct Local Regional Global Total
China 245 1,328 121 22 1,715East Asia and Pacific 200 512 62 286 1,061Established Market Economies (EME) 0 1,031 1,361 1,151 3,543Former Socialist Economies 0 641 73 27 742India 481 605 23 252 1,360Latin America & Caribbean 39 1,074 56 357 1,527Middle East Crescent 100 483 43 168 794South Asia 247 164 3 50 464Sub-Saharan Africa 389 71 21 184 665
World excl EME countries 1,701 4,878 402 1,346 8,327World 1,701 5,909 1,763 2,497 11,870
Long run damage due to air pollutionper capita and relative to GNP
Region Present value of damage due to air pollutionPer person in $ 1995 as % of 1995 GNP
Direct+Local Global Direct+Local Global
China 1,307 18 211 3East Asia and Pacific 1,291 519 71 29Established Market Economies 1,199 1,338 5 5Former Socialist Economies 1,552 65 78 3India 1,168 271 365 85Latin America & Caribbean 2,347 754 70 22Middle East Crescent 1,641 474 77 22South Asia 1,457 176 352 42Sub-Saharan Africa 794 317 162 65
World 1,347 442 27 9
Cumulative costs of local and global damage by income
100 1000 10000 100000
GNP per person in 1995 $ (log scale)
0
2
4
6
8
Present values of damages in $ trillion
0
5
10
15
20
Ratio of local to global costs
Cumulative local damage Cumulative global damage Ratio of cumulative local damage tocumulative global damage
Conclusions 1
Simple methods of benefit transfer are not robust– must adjust for the type of air pollution hazard and
differences in age structures & mortality rates– impact of air pollution on infant/child mortality is
especially important Use of DALYs or YLLs as measure of damage
caused by air pollution may be sufficient for many types of policy analysis– e.g. comparing the burden of disease associated
with different environmental/social factors
Conclusions 2
Doubts about using VOSLs to value the costs of air pollution in developing countries– the resulting estimates are extremely high
relative to the income of those affected– problems of adding-up and consistency are more
severe for low income / high mortality countries But, benefit transfer methods can be useful
for comparisons of the relative damages from different types of air pollution or other environmental factors