Economic cost of the health impact of air pollution in Europe Clean air, health and wealth Abstract This paper extends the analyses of the most recent WHO, European Union and Organisation for Economic Co-operation and Development research on the cost of ambient and household air pollution to cover all 53 Member States of the WHO European Region. It describes and discusses the topic of air pollution from a Health in All Policies perspective, reflecting the best available evidence from a health, economics and policy angle and identifies future research areas and policy options. Keywords AIR POLLUTION COST OF ILLNESS ENVIRONMENTAL HEALTH HEALTH IMPACT ASSESSMENT HEALTH POLICY PARTICULATE MATTER Address requests about publications of the WHO Regional Office for Europe to: Publications WHO Regional Office for Europe UN City Marmorvej 51 DK-2100 Copenhagen Ø, Denmark Alternatively, complete an online request form for documentation, health information, or for permission to quote or translate, on the Regional Office website (http://www.euro.who.int/pubrequest). Citation advice: WHO Regional Office for Europe, OECD (2015). Economic cost of the health impact of air pollution in Europe: Clean air, health and wealth. Copenhagen: WHO Regional Office for Europe. © World Health Organization 2015 All rights reserved. The Regional Office for Europe of the World Health Organization welcomes requests for permission to reproduce or translate its publications, in part or in full. 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Editing: Nicole Satterley, Toulouse, France Design: Christophe Lanoux, Paris, France Layout: Edb&Rdb di Daniela Berretta, Rome, Italy Cover image and p. x: © Paul Maguire – Fotolia.com, © Graphies.thèque – Fotolia.com, © Ihnatovich Maryia/ Shutterstock.com Contents List of tables.............................................................................................................. iv List of abbreviations.................................................................................................. vi Acknowledgements.................................................................................................. vii Executive summary................................................................................................... viii Introduction............................................................................................................... 1 1. The evidence from epidemiology.......................................................................... 3 1.1 GBD owing to air pollution............................................................................ 3 1.2 The evolving evidence................................................................................... 4 1.3 The improved practice.................................................................................. 6 1.4 APMP and HAP in the WHO European Region............................................. 7 2. The evidence from economics.............................................................................. 14 2.1 The valuation of life and health..................................................................... 14 2.2 The standard method for calculating the cost of mortalities: value of a statistical life (VSL)........................................................................................ 16 2.3 Country-specific VSLs and intra- and international equity........................... 17 2.4 Estimating the cost of morbidity................................................................... 21 2.5 An indicative estimate for the additional cost of morbidity........................... 22 2.6 The economic cost of health impacts of air pollution in the WHO European Region.......................................................................................... 24 2.7 Economic cost calculation in relation to GDP............................................... 27 2.8 Economic cost calculation with a common VSL for EU countries............... 29 2.9 Economic cost calculation using values of life-years (VOLYs) lost in lieu of VSLs............................................................................................... 31 2.10 A comparison of economic (welfare) and GDP impact assessments........... 34 3. Policy implications: towards an evidence-based approach.............................. 37 3.1 The need for action and the need for reflection........................................... 37 3.2 Sector-specific technical evidence and its limits......................................... 39 3.3 Estimating the main sectoral sources of air pollution impacts and costs.... 39 3.4 The logical framework for correction: “pricing + investment + regulation”... 42 3.5 The evidence on the efficacy of pricing, investment and regulation............ 43 3.6 The chronological framework for correction: “regulation + investment + pricing”......................................................................................................... 45 References................................................................................................................ 48 iii List of tables Table 1.1 The reported change in estimates of premature deaths from AAP in successive studies, 2000–2012 (selected years)...................................................... 4 Table 1.2 Change in estimated premature deaths from AAP, 2005–2010................. 6 Table 1.3 Premature deaths from air pollution (APMP, HAP, and APMP + HAP) per country in the WHO European Region, 2005 and 2010..................................... 8 Table 1.4 DALYs lost as a result of air pollution (APMP, HAP, and APMP + HAP) per country in the WHO European Region, 2005 and 2010..................................... 10 Table 1.5 YLDs from APMP in relation to DALYs from APMP per country in the WHO European Region, 2010................................................................................... 12 Table 2.1 Computed country-specific VSL values per country in the WHO European Region, 2005 and 2010............................................................................. 19 Table 2.2 Estimated share of mortality costs saved in the United States EPA CAAA CBA for the year 2020.................................................................................... 23 Table 2.3 Estimated share of mortality costs in the EU TSAP CBA for the year 2025.................................................................................................................. 23 Table 2.4 Economic cost of premature deaths from air pollution (APMP and APMP + HAP) per country in the WHO European Region, 2005 and 2010.............. 24 Table 2.5 Indicative estimate of the economic cost of health impacts from air pollution (APMP and APMP + HAP) across the WHO European Region, 2005 and 2010.......................................................................................................... 26 Table 2.6 Economic cost of premature deaths from air pollution (APMP + HAP) as a percentage of GDP per country in the WHO European Region, 2005 and 2010.......................................................................................................... 27 Table 2.7 Economic cost (with a common VSL) of premature deaths from air pollution (APMP and APMP + HAP) per EU Member State, 2005 and 2010............ 29 Table 2.8 Indicative estimate of economic cost (with a common VSL) of health impacts from air pollution (APMP and APMP + HAP) per EU Member State, 2005 and 2010......................................................................................................... 30 Table 2.9 Estimated net health benefits of alternative scenarios using alternative metrics in the EU CAPP CBA, 2030.......................................................................... 33 Table 2.10 Estimated costs, benefits, net benefits and B/C ratios in the United States EPA’s CAAA CBA, 2020................................................................................. 34 Table 2.11 Estimated GDP impacts presented in the United States EPA’s CAAA CBA, 2020................................................................................................................