Air Pollution Health Effects: Toward an Integrated Assessment

Abstract

Scientists and policy makers have become increasingly aware of the need to jointly study climate change and air pollution because of the interactions among policy measures and in the atmospheric chemistry that creates the constituents of smog and affects the lifetimes of important greenhouse gases such as methane. Tropospheric ozone and aerosols, recognized constituents of air pollution, have important effects on the radiative balance of the atmosphere. Existing methods for estimating the economic implications of environmental damage do not provide an immediate approach to assess the economic and policy interactions. Towards that end, we develop a methodology for integrating the health effects from exposure to air pollution into the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium economic model of the economy that has been widely used to study climate change policy. The approach incorporates market and non-market effects of air pollution on human health, and is readily applicable to other environmental damages including those from climate change. The estimate of economic damages depends, of course, on the validity of the underlying epidemiological relationships and direct estimates of the consequences of health effects such as lost work and non-work time and increased medical expenses. We apply the model to the US for the historical period 1970 to 2000, and reevaluate estimates of the benefits of US air pollution regulations originally made by the US Environmental Protection Agency. We also estimate the economic burden of uncontrolled levels of air pollution over that period. Our estimated benefits of regulation are somewhat lower than the original EPA estimates, and we trace that result to our development of a stock model of pollutant exposure that predicts that the benefits from reduced chronic air pollution exposure will only be gradually realized. As modeled, only population cohorts born under lower air pollution levels fully realize the benefits. While other assumptions about the nature of health effects of chronic exposure are possible, some version of a stock model of this type is needed to accurately estimate the timing of benefits of reduced pollution.