Saturday, November 28, 2020

Health costs of air pollution in European cities and the linkage with transport

Executive Summary
This study investigates the health-related social costs of air pollution in 432 European cities in 30 countries (the EU27 plus the UK, Norway and Switzerland). Social costs are costs affecting welfare and comprise both direct health care expenditures (e.g. for hospital admissions) and indirect health impacts (e.g. diseases such as COPD, or reduced life expectancy due to air pollution). These impacts affect welfare because people have a clear preference for healthy life years in a good and clean environment.

As a clean environment is not something that can be bought in the marketplace, however, a robust methodology is required to monetize them in order to quantify the wider public health impacts.

Environmental economists have performed numerous studies to quantify the impacts of air pollution on health and monetize these as social costs. These studies were used to develop the methodological framework adopted in the present study, which encompasses sixteen health impacts attributable to air pollution by fine particulate matter, ozone and nitrogen oxides (Table 2, Page 15). Using data on reported air quality in the Urban Audit statistics and the EEA Air Quality network, the physical impacts on human health were quantified using concentration-response functions based on the recommendations of the World Health Organization (WHO). The physical impacts were subsequently monetized using a valuation framework developed in the peer-reviewed Handbook of External Costs published by the European Commission’s Directorate General for Mobility and Transport, DG MOVE. The resulting social costs incurred in a specific city were then determined from the air pollution levels reported there and the size, age structure and living standards of the population in that particular city.

For all 432 cities in our sample (total population: 130 million inhabitants), the social costs quantified were over € 166 billion in 2018. In absolute terms, London is the city with the highest social costs. In 2018, the loss in welfare for its 8.8 million inhabitants totalled €11.38 billion. London is followed by Bucharest, with an annual loss in welfare of €6.35 billion and Berlin, with an annual loss of €5.24 billion. City size is a key factor contributing to total social costs: all cities with a population over 1 million feature in the Top 25 cities with the highest social costs due to air pollution (see Table 1).

In 2018, on average every inhabitant of a European city suffered a welfare loss of over €1,250 a year owing to direct and indirect health losses associated with poor air quality. This is equivalent to 3.9% of income earned in cities. It should be noted that there is a substantial spread in these figures among cities: in the Romanian capital Bucharest total welfare loss amounts to over €3,000 per capita/year, while in Santa Cruz de Tenerife in Spain it is under €400/cap/yr. In many cities in Bulgaria, Romania and Poland the health-related social costs are between 8-10% of income earned. Most of these costs relate to premature mortality: for the 432 cities investigated, the average contribution of mortality to total social costs is 76.1%. Conversely, the average contribution of morbidity (diseases) is 23.9%.

City air pollution stems from many sources: transport activities, household heating and a range of other activities including agriculture and industry. Without further analysis, the relative share of each source cannot be assessed with any certainty. In this study we did investigate the role of city transport in explaining these social costs using econometric methods. Although there is a severe lack of data at the level of individual cities, we do find evidence that transport policies impact the social costs of air pollution, using several proxy indicators that are available for many cities, including commuting times and car ownership.

Our results show that a 1% increase in the average journey time to work increases the social costs of PM10 emissions by 0.29% and those of NO2 emissions even by 0.54%. A 1% increase in the number of cars in a city increases overall social costs by almost 0.5%. This confirms that reduced commuting and car ownership has a positive impact on air quality, thus reducing the social costs of poor city air quality.

Comparison of our study’s findings regarding welfare losses with those from other research shows that our results are sometimes higher than previously found. To a large extent this can be explained by the more recent figures used here for valuing the adverse impacts of air pollution. Our findings provide additional evidence that reducing air pollution in European cities should be among the top priorities in any attempt to improve the welfare of city populations in Europe. The present COVID-19 pandemic has only underscored this. Comorbidities feature prominently in the mortality of COVID-19 patients and among the most important of these are those associated with air pollution.

The figures reported here are cited without uncertainty ranges. In this kind of study, uncertainty bounds are typically around 30-40%, implying that the figures reported here could be a factor 1/3 lower or 1/3 higher. Finally, it should be stressed that our study is based on reported levels of air quality, which may diverge from the actual situation, given that air quality is still relatively sparsely monitored across Europe. As a result, the social costs reported are likely to be an underestimate in some cities. If air pollution levels are in fact higher than the figures reported in official statistics, the social costs will increase accordingly.

by: Sander de Bruyn and Joukje de Vries
Delft, CE Delft, October 2020
Publication code: 20.190272.134
Client: A consortium of public interest NGOs in ten European countries ( ES, FR, DE, PL, SI, HU, RO, BG, NL, IT) led by the umbrella organisation European Public Health Alliance (EPHA) commissioned this report

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