Cost Benefit Analysis of European Air Quality Targets for Sulphur Dioxide, Nitrogen Dioxide and Fine and Suspended Particulate Matter in Cities

The European Commission has proposed air quality standards for NO<Subscript>2</Subscript>, SO<Subscript>2</Subscript> and PM<Subscript>10</Subscript> to be in force by 2010. The present paper presents a study that gauged their costs and benefits. An analysis of the expected emissions for 2010 (reference emission scenario), using simplified air quality models, showed that non-compliance with these standards will occur in cities only, not in rural areas. Most compliance problems are expected for PM<Subscript>10</Subscript>, least for SO<Subscript>2</Subscript>. Central estimates of the costs to meet standards range from 21 MECU (SO<Subscript>2</Subscript>), to 79 MECU (NO<Subscript>2</Subscript>) to 87--225 MECU (PM<Subscript>10</Subscript>). The estimated benefits are 83--3783 MECU (SO<Subscript>2</Subscript>), 408--5900 MECU (NO<Subscript>2</Subscript>), and 5007--51247 MECU (PM<Subscript>10</Subscript>). Uncertainties are high, due to errors and incertitude in various steps of the methodology, mainly the estimation of the human health effects, in particular effects on mortality, and in the valuation of a statistical life. In the case of PM<Subscript>10</Subscript>, additional uncertainty results from the small size of the air quality database. Notwithstanding the uncertainties, the indications are that the benefits exceed the costs. Copyright Kluwer Academic Publishers 1999