Brya n Hub b e ll Se nio r Adviso r o n So c ia l Sc ie nc e U.S. E - PowerPoint PPT Presentation

F or What It’s Wor th: Why and How We Put a Dollar Value on Cle an Air Brya n Hub b e ll Se nio r Adviso r o n So c ia l Sc ie nc e U.S. E PA Offic e o f Re se a rc h a nd De ve lo pme nt

Why do we c a re a bout a ir pollution? Source: Institute for Health Metrics Evaluation, GBD 2016. https://vizhub.healthdata.org/gbd-compare/

Air Pollution is Still a He alth Bur de n in the U.S. E stima te d pre ma ture de a ths in 2016 fro m O 3 a nd PM 2.5 = 125,000 to 313,000 Source: Fann N, Fulcher C, Baker K. 2013. The Recent and Future Health Burden of Air Pollution Apportioned Across U.S. Sectors. Environ. Sci. Technol. , 2013, 47 (8), pp 3580–3589. DOI: 10.1021/es304831q

Still a T op 10 Risk F a c tor in the U.S. 2005 2016 Rank Rank So urc e : I nstitute fo r He a lth Me tric s a nd E va lua tio n. GBD 2016, http:/ / www.he a lthda ta .o rg / unite d-sta te s

Air pollution he alth c osts ar e r e ally lar ge ! Global = $5,112 B Nor th Ame r ic a = $495 B Wo rld Ba nk a nd I nstitute fo r He a lth Me tric s a nd E va lua tio n. 2016. T he Co st o f Air Po llutio n: c o no mic Case fo r Ac tio n . Wa shing to n, DC: Wo rld Ba nk. L ic e nse : Stre ng the ning the E Cre a tive Co mmo ns Attrib utio n CC BY 3.0 I GO

Why Dollar s? Do lla rs a re a n e a sily-re c o g nize d, c o mmo n unit fo r a dding up a c ro ss diffe re nt type s o f he a lth a nd e nviro nme nta l e ffe c ts Do lla rs re fle c t pe o ple ’ s pre fe re nc e s fo r he a lth a nd the e nviro nme nt re la tive to o the r g o o ds a nd se rvic e s g ive n a b udg e t c o nstra int Co sts a re e xpre sse d in do lla rs: b e ne fit-c o st a na lysis is o nly po ssib le if b e ne fits a re e xpre sse d in do lla rs a s we ll

How doe s E PA use e c onomic valuation in analyse s of air pollution? Assig ning a c o st to the he a lth a nd e nviro nme nta l impa c ts o f a mb ie nt a ir po llutio n E stima ting the e c o no mic b e ne fits o f impro ve me nts in pub lic he a lth a nd the e nviro nme nt re sulting fro m a ir po llutio n re g ula tio ns

Be ne fit- Cost Asse ssme nts • Pa rt o f the rule ma king pro c e ss – Re q uire d unde r e xe c utive o rde r • No t use d to se t the le ve l o f a ir q ua lity sta nda rds • Ca n he lp de c ide b e twe e n diffe re nt po lic ie s • Ca n impro ve e ffic ie nc y • Ca n he lp de te rmine if a pa rtic ula r po lic y is “wo rth it” to so c ie ty

Ge ne ra l Princ iple s (How) E PA Guide line s fo r Pre pa ring E c o no mic Ana lysis • (Cha pte rs 6 a nd 7) – https:/ / www.e pa .g o v/ e nviro nme nta l- e c o no mic s/ g uide line s-pre pa ring -e c o no mic -a na lyse s

Be ne fits of Re duc e d Air Pollution A “Pyramid of Effects” from Air Pollution Magnitude of >90% of the monetized impacts benefits Thousands T ens of Thousands Severity of Effects Millions Proportion of population affected

How do we me asur e the se be ne fits? Air q ua lity mo de ls te ll us • ho w a ir q ua lity is e xpe c te d to c ha ng e E pide mio lo g y studie s g ive • us c o nc e ntra tio n-re spo nse re la tio nships to pre dic t ho w he a lth e ffe c ts will c ha ng e E c o no mic studie s te ll us • ho w muc h the c ha ng e s in he a lth a nd we lfa re e ffe c ts a re wo rth

How do we va lue re duc e d he a lth risks? • Co st o f illne ss (COI ) – Ho w muc h do e s it c o st to g o to the ho spita l? – Do mo m o r da d ha ve to sta y ho me a nd miss wo rk b e c a use a c hild is sic k? – Ho w muc h pa y do yo u lo se b e c a use yo u a re sic k a nd c a n’ t g o to wo rk? • Willing ne ss to Pa y – Ho w muc h is it wo rth to re duc e yo ur risk o f de a th o r dise a se ? – Ho w muc h is it wo rth to no t b e sic k? – Ho w muc h is it wo rth fo r yo ur c hild to no t b e sic k?

Cost of Illne ss Willingne ss to Pay Me a sure s the c o mple te Dire c t do lla r sa ving s to • • va lue o f a vo iding a so c ie ty o f a vo iding a he a lth o utc o me he a lth e ffe c t Re lie s o n e ithe r • I g no re s the va lue to • re ve a le d (what yo u do ) individua ls o f re duc e d o r sta te d (what yo u say pa in a nd suffe ring yo u will do ) pre fe re nc e s Ge ne ra lly a lo we r fo r risk re duc tio ns • b o und whe n no WT P Ge ne ra lly mo re • e stima te s a re unc e rta in tha n COI a va ila b le

He a lth is worth a lot! I n the U.S. we a re willing to pa y a b o ut $9 • s) to pre ve nt o ne e a rly million (in today’s dollar de a th a c ro ss the po pula tio n Avo iding …. • – a he a rt a tta c k sa ve s a b o ut $225,000 fo r so me o ne b e twe e n 55 a nd 65 ye a rs o ld – a ho spita l a dmissio n sa ve s a b o ut $17,000 to $46,000 de pe nding o n type – a n a sthma a tta c k sa ve s a b o ut $60

Re duc ing risk of pre ma ture de a th domina te s be ne fits 0.03% 0.29% 1.43% 97.51% 0.89% 0.57% Mortality Heart Attacks Hospital and ER Admissions ER Visits Respiratory illnesses Asthma Attacks Lost Work Days Minor restricted activity days

Calc ulating the Value of a Statistic al L ife $500 • 10,000 = $5m In a po pula tio n o f E a c h o f 10,000 a re VSL is the n WT P 10,000, re duc ing willing to pa y $500 to multiplie d b y the po llutio n wo uld a v o id re duc e risk o f de a th inv e rse o f the risk o ne pre ma ture de a th b y 1 c ha nc e in re duc tio n (i.e . re duc e risk b y 1 10,000 c ha nc e in 10,000)

T he VSL is NOTthe value of the life of a spe c ific pe r son

Ha rd va lua tion que stions Sho uld risks fo r o lde r pe o ple b e va lue d le ss tha n fo r yo ung e r pe o ple ? Ho w a b o ut po o r pe o ple ? Ho w do we va lue e ffe c ts tha t mig ht no t o c c ur until o ur g ra ndc hildre n’ s g e ne ra tio n? Ho w sho uld we disc o unt? Ho w do we de a l with thing s tha t we c a n’ t put a do lla r va lue o n ye t? Sho uld the y b e c o unte d? I s it b e tte r to inc lude a ve ry unc e rta in va lue with a wide ra ng e o r no thing a t a ll?

T he “Se nior De a th Disc ount” Controve rsy E c o no mic the o ry… …me e ts po lic y c o nstra ints U.S. PI RG use d this ima g e to pro te st the E PA’ s a pplic a tio n o f a VSL fo r pe o ple o ve r 70 ye a rs o ld tha t wa s 37% lo we r tha n tho se who a re yo ung e r 19

Disc ounting • Disc o unting is o fte n use d to a c c o unt fo r the time de la y b e twe e n a n a c tio n a nd its b e ne fits • Pe o ple g e ne ra lly like to ha ve the ir b e ne fits no w, so the va lue o f future b e ne fits to the m to da y is lo we r. T his re sults in disc o unting o f b e ne fits. • E PA typic a lly use s disc o unt ra te s o f 3 a nd 7% 20

1,200 1,000 800 600 Pre se nt v a lue o f 20 ye a rs o f b e ne fits to da y: 400 No disc o unting = $20,000 3% disc o unt ra te = $15,324 200 7% disc o unt ra te = $11,336 0 0 2 4 6 8 10 12 14 16 18 20 Undiscounted Benefit Benefits at 3% DR Benefits at 7% DR

F re e a nd o pe n so urc e pro g ra m tha t a llo ws use rs to use da ta supplie d b y E PA o r the ir o wn da ta to e stima te the he a lth a nd e c o no mic b e ne fits o f va rio us a ir q ua lity sc e na rio s Ava ila b le a t: https:/ / www.e pa .g o v/ b e nma p

Ste ps to Ca lc ula ting E c onomic Va lue of He a lth Be ne fits in Be nMAP Po lluta nt c ha ng e Po pula tio n E c o no mic He a lth He a lth E c o no mic Va lua tio n impa c t F unc tio ns Va lue F unc tio ns Ba se line inc ide nc e

Be nMAP F e atur e s I nc lude s a ir q ua lity a nd de mo g ra phic da ta , da ta b a se s o f e c o no mic va lua tio n e stima te s a nd po lluta nt-re spo nse re la tio nships Allo ws use rs to lo a d the ir o wn a ir q ua lity da ta fro m mo nito rs o r mo de ls Allo ws use rs to pic k fro m pre -lo a de d he a lth impa c t func tio ns o r a dd the ir o wn Ha s a b uilt in Ge o g ra phic I nfo rma tio n Syste m so yo u c a n ma p yo ur re sults o r e xpo rt to sha pe file s I nc lude s e stima tio n o f unc e rta inty b o unds o n he a lth a nd e c o no mic e stima te s Ope n so urc e – c o de is a va ila b le upo n re q ue st o r dire c tly fro m GitHub

Ac c e pte d by the sc ie ntific c ommunity Clo se to 100 pe e r- re vie we d a rtic le s using Be nMAP pub lishe d o ve r the la st 5 ye a rs – 65 o f the m b a se d o n U.S. a na lyse s Ma ny a dditio na l a pplic a tio ns use d fo r re g ula to ry pla nning a nd po lic y de ve lo pme nt

Used Around the World 27

Building Global Capacity

E nvironme nta l Costs of Air Pollution Va ry  By type o f a mb ie nt po lluta nt  By type o f e missio ns  By so urc e type  By lo c a tio n