Climate Change 2001:
Working Group III: Mitigation
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Table 8.6: Modelling choices of studies on valuation of ancillary benefits reviewed21
Study Baseline (as of 2010) Economic modelling Air pollution modelling Valuation Uncertainty treatment
Dessus and
O’Connor, 1999
4.5%/yr economic growth;
AEEI: 1%
Energy consumption: 3.6%
PM: 1%
Pb: 4.1%
CO: 4.8%
Dynamic CGE Assumed proportionality
between emissions and
ambient concentrations
Benefits transfer used: PPP
of 80% US
VSL: $2.1 mill.
VCB: $0.2 mill.
IQ loss: $2500/point
Sensitivity tests on WTP
and energy substitution
Cifuentes et al., 2000 For AP control, considers
implementation of Santiago
Decontamination Plan
(1998 to 2011)
No economic modelling
Only measures with private,
non-positive costs
Two models for changes in
PM2.5 concentrations:
1) Box model, which relates
SO2 and CO2 to PM2.5
2) Simple model assumes
proportionality between PM2.5
concentrations apportioned to dust,
SO2, NOx, and primary PM
Models derived with Santiagospecific
data and applied to nation
Benefits transfer from US
values, using ratio of
Uses original value for
mortality decreased by
standard deviation
VSL = US$407,000 in 2000
Parameter uncertainty
through Monte Carlo
Reports centre value
and 95% CI
Garbaccio et al., 2000 1995 to 2040 5.9% annual
GDP growth rate; carbon
doubles in 15 years;
PM grows at a bit more
than 1%/yr
Dynamic CGE model;
29 sectors;
Trend to US energy/
consumption patterns;
Labour perfectly mobile;
Reduce other taxes;
Two-tier economy explicit.
coefficients from Lvovsky and
Hughs (1998); three stack heights
Valuation coefficients from
Lvovsky and Hughs (1998);
VSL: US$3.6 million (1995)
to RMB 82,700 Yuan
(RMB 8.3 yuan = $1) in
2010 (income elasticity = 1).
5%/yr increase in VCB to
Sensitivity analysis
Wang and Smith, 1999   No economic modelling Gaussian plume Benefit transfer using PPP.
VSL = US$123,700, 1/24
of US value
Aunan et al., 2000 Assumes status quo emissions
Two analyses: bottom-up
approach and
macroeconomic modelling
Assumes proportionality between
emissions and concentrations
Benefit transfer of US and
European values using
“relative income” = wage
ratios of 0.16
Explicit consideration
through Monte Carlo
Reports centre value and
low, high
Brendemoen and
Vennemo, 1994
2025 rather than 2010
2%/yr economic growth
1% increase in energy prices
1%–1.5% increase in electricity
and fuel demand
CO2 grows 1.2% until 2000,
and 2% thereafter.
Dynamic CGE   Health costs of studies
reviewed based on expert
panel recommendations
Contingent valuation used
for recreational values
Assume independent and
uniform distributions
Barker and Rosendahl,
SO2, NOx, PM expected to
fall by about 71%, 46%, 11%
from 1994 to 2010
E3ME Econometric Model
for Europe
  US$/emissions coefficients
by country from EXTERNE:
B1,500/t NOx for ozone
(B1= $1); NOx and SO2
coefficients are about
equivalent, ranging from
about B2,000/t to B16,000/t;
PM effects are larger
(2,000–25,000) Uses VSLY
rather than VSL: B100,000
Scheraga and Leary,
1990 to 2010 7% growth
rate carbon emissions
Range for criteria
Pollutants 1%–7%/yr
Dynamic CGE      
Boyd et al., 1995 Static CGE     US$/emissions coefficients  
Abt Associates and
Pechan-Avanti Group,
2010 baseline scenarios –
2010 CAA baseline emission
database for all sectors, plus at
least partial attainment of the
new NAAQS assumed.
Benefits include coming closer
to attainment of these standards
for areas that would not reach
them otherwise. Includes NOx
SIP call
Static CGE   From Criteria Air Pollutant
Modelling System (used in
USEPA Regulatory Impact
Analysis and elsewhere)
SO2 sensitivity – SO2
emissions may not go
beyond Title IV
requirements –
NOx sensitivity – NOx SIP
call reductions not included
in final SIP call rule
Burtraw et al., 1999 Incorporates SO2 trading and
NOx SIP call in baseline
Dynamic regionally specific
electricity sector simulation
model with transmission
constraints. The model
calculates market
equilibrium by season and
time of day for three
customer classes at the
regional level, with power
trading between regions.
NOx and SO2. Account for
conversion of NOx to nitrate
Tracking and Analysis
Framework: the numbers
used to value these effects
are similar to those used
in recent Regulatory Impact
Analysis by the USEPA.
Monte Carlo simulation for
CRF and valuation stages.
21 AEEI, Autonomous Energy Efficiency Improvement; PM10, 2.5, particulate matter less than 10 or 2.5 microns, respectively; CGE, Computable General Equilibrium Model; PPP, Purchasing Power Parity; W TP, Willingness To Pay; AP: air pollution; CAA: Clean Air Act; NAAQS: National Ambient Air Qaulity Standards; SIP: State Implementation Plan; CRF: concenrtration-response function; CL: confidence level; VSLY and VSL: Value of Statistical Life Year, Value of Statistical Life; RIA: Regulatory Impact Analysis; VCB, value of a case of bronchitis.

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