The lead policy conclusion below is followed by descriptions of three major research components, and then discussion of estimates of total damages from China's air pollution (such as premature mortalities and percent of GDP).
Lead Policy Conclusion
Clearing the Air’s integrated modeling analyses foremost show that:
- Green tax policies in China could not only reduce health damages of air pollution and reduce carbon emissions but, depending on the use of the revenues, sustain or even increase China’s economic growth. In any case, the costs of such policies are modest compared to the benefits.
This encouraging result indicates that tax-based policy approaches should be prominently on the table for consideration and further evaluation if China seeks a comprehensive national strategy for controlling both domestic air pollution and carbon emissions. This and many other policy conclusions are discussed further in the book.
From the Economy to Emissions, and Policy
In the longest continuous activity of the China Project, JORGENSON, HO, and colleagues have developed, updated, and refined a 34-sector dynamic model used to evaluate the growth, energy use, and emissions trajectory of China’s economy. For more information on the model see the research link on modeling China's economy.
In Clearing the Air, this economic model incorporates results of the environment and health components described in the next two sections to estimate the health and economic damages of ambient air pollutants by detailed industries (Ho and Jorgenson 2007a). These estimates are then used to analyze the effects of market-based environmental policies on economic growth, production structure, and energy use on the one hand, and the effects on pollutant emissions and health damages on the other hand (Ho and Jorgenson 2007b). These policies are in the form of so-called “green” (or “Pigouvian”) taxes, which are taxes on fuels or outputs scaled to the amount of damages they cause. The national framework allows the team to assess the effects of such policies not just on economic activities directly affected by policies, but also indirect reverberations throughout the economy as it responds to changes in prices. See the last sections below for a summary of policy implications of the integrated modeling analyses.
From Emissions to Exposures
Two teams modeled air dispersion and human exposure to particulate matter and sulfur dioxide from burning fossil fuels, using the "intake fraction" approach developed for data-limited contexts common in less-developed countries (Levy and Greco 2007). One was led by Jonathan LEVY and ZHOU Ying (Harvard School of Public Health) and used an atmospheric "puff" model to estimate intake fractions of primary and secondary pollutants from the electric power sector (Zhou et al. 2007).
A major second effort was led by HAO Jiming, LIU Bingjiang, and WANG Shuxiao of Tsinghua University (of the then-Department of Environmental Science and Engineering). They deployed teams to five cities to collect data on four major emitting sectors: chemicals, iron and steel, cement, and transportation. LIU developed a national database of plants for a fifth critical sector: electric power.
To analyze the data, Tsinghua scholars served research residencies at the Harvard-China Project, including post-doctoral fellowships held by WANG (now professor at Tsinghua University School of Environment) and LIU (now Director-General, Department of Air Pollution Control, Ministry of Environmental Protection). They used the data to model air dispersion and exposures to emissions from hundreds of sources in the five sectors (Wang et al. 2007; Liu and Hao 2007). Regression analyses of the resulting intake fractions (based on the approach of Levy et al. 2002) produce sector intake fractions, which are incorporated into the economic model to estimate health damages.
Valuing Health Impacts
James K. HAMMITT and ZHOU Ying (Harvard School of Public Health) conducted a contingent valuation study to estimate the economic value of preventing adverse health effects in China (Zhou and Hammitt 2007). The CV surveys were conducted in urban and rural areas of Beijing and Anhui province. Combined with population exposures estimated by intake fractions and dose-response relationships from literature, these valuations (and those of Wang and Mullahy 2006, an earlier study initiated and sponsored by the Harvard-China Project) are used to monetize health damages of air pollution in the economic model.
National Damage Estimates: Number of Premature Deaths and Percent of GDP
The lead conclusion above reflects the main policy-related objective of Clearing the Air, in parallel to its research aims of advancing methods and published scholarship to build and encourage future research. Indeed the book emphasizes the developmental state of research capacities and inherent uncertainties behind all national environmental assessments in China. These include our own and related efforts like the damage modeling framework developed around the same time by the World Bank and China's State Environmental Protection Administration (SEPA, now the Ministry of Environmental Protection).
Estimates of aggregate national environmental damages, in health or economic terms, draw attention from popular media. They should best be qualified with strong caveats about their inherent imprecision and limits for policy inference. National air pollution damage estimates are among the results of Clearing the Air, though the book stresses caution in their interpretation. Several of our main estimates, reflecting different assumptions, are below. Other assumptions and estimates are described in the book.
|
|
Annual cases of premature mortality |
Health damage as a percentage of GDP |
Cases / Assumptions |
|||
Acute mortality only (particles and sulfur dioxide) |
|||
1 |
Low-end assumptions (dose-response and valuation) |
62,000 |
0.65% |
2 |
Base case assumptions (dose-response and valuation) |
93,700 |
1.84% |
3 |
High-end assumptions (dose-response and valuation) |
125,000 |
3.81% |
Chronic mortality only (particles only) |
|||
4 |
Base case assumption (valuation) |
561,000 |
4.36% |
Case 2 is treated as the primary base case in Clearing the Air. The epidemiological assumptions of Case 4 are closest to those of the World Bank-SEPA approach, though its objectives, methods, and capabilities differ substantially.[1]
The first three cases consider acute mortality only, applying published epidemiological results from studies on Chinese populations. The fourth case includes chronic mortality for particles, but applies epidemiological results from studies on U.S. populations because no analogous “cohort" studies have been conducted in China (as they take decades and are very costly).
To emphasize one of many tradeoffs researchers face in all such studies in China, it is highly advisable to include long-term pollution effects on mortality, estimated by cohort studies, while it is also problematic to try to transfer epidemiological results across dramatically different national conditions. As shown above, a single choice — here, whether to assume U.S. cohort mortality research applies to Chinese conditions — can strongly affect the totals. Many other types of assumptions also affect such aggregate damages, including ones related to the economy imbedded in the percent-of-GDP formulations. As China builds up its body of research in these areas, we believe it is necessary to report at least several estimates under a range of assumptions rather than spotlight any point estimate without qualification. Indeed doing so is essential to help identify priorities for new research to narrow these very uncertainties.
The more immediately relevant implications for policy of Clearing the Air result from its comparisons of outcomes under different policies, because they are evaluated using the same assumptions. In this case the influence of imprecisely known parameters is at the margin, rather than added repeatedly into a total. Such conclusions therefore will be more robust to the uncertainties than attempted point estimates of total damages to the public health or economy of an entire nation. These comparative analyses also move beyond simply scaling the damages to evaluating which response strategies might perform best. For these reasons, even with the parameter uncertainties, they can help inform China's deliberations now on optimal policy responses to its air pollution and carbon dioxide emissions.
Footnotes:
[1] The World Bank-SEPA initiative covered environment broadly and improved estimation of pollution damages, which in a policy context represent prospective benefits, damages that could be avoided. Our research is limited to emissions affecting air quality and climate, but it evaluates not just benefits but also costs — both direct and indirect ("general equilibrium") ones — in order to assess pollution control options in a complete, economy-wide benefit-cost framework.