CBA under the microscope

29 Aug 2014

General points Cost benefit analysis (CBA) seems to be increasingly referred to as a basis to support target setting for air quality policies when in the past (CAFE 2005 program) its function was to provide an ex-post perspective on costs and potential benefits associated with the delivery of the policy ambition levels. With CBA the societal costs and benefits of different ambition levels can be compared, provided that both costs and benefits are expressed in a monetary unit. Recent CBAs conducted in support of European air quality policies have focussed on comparing costs and benefits of 5 specific scenario’s (CIAM, 2011), each comprising a mix of targets for reducing the ambient concentrations of PM, ozone, acidifying and eutrophying substances. These studies suggest that the monetised benefits of air pollution control exceed the costs of emission reduction, for all of these five scenario’s. The benefits are driven by the particular value given to the statistical improvements in average life expectancy arising from reduced exposure to fine particulates.