Air pollution policies in Europe: efficiency gains from integrating climate effects with damage costs to health and crops

Emissions of air pollutants cause damage to health and crops, but several air pollutants also have an effect on climate through radiative forcing. We investigate efficiency gains achieved by integrating climate impacts of air pollutants into air quality strategies for the EU region. The pollutants included in this study are SO2, NH3, VOC, CO, NOx, black carbon, organic carbon, PM2.5, and CH4. We illustrate the relative importance of climate change effects compared to damage to health and crops, as well as monetary gains of including climate change contributions. The analysis considers marginal abatement costs and compares air quality and climate damage in Euros. We optimize abatement policies with respect to both climate and health impacts, which imply implementing all measures that yield a net benefit. The efficiency gains of the integrated policy are in the order of 2.5 billion Euros, compared to optimal abatement based on health and crop damage only, justifying increased abatement efforts of close to 50%. Climate effect of methane is the single most important factor. if climate change is considered on a 20- instead of a 100-year time-scale, the efficiency gain almost doubles. our results indicate that air pollution policies should be supplemented with climate damage considerations. (C) 2009 Elsevier Ltd. All rights reserved.