The Ancillary Benefits of Greenhouse Gas Abatement in the United States. Nicholas Z. Muller Britt Groosman Erin Oneill-Toy June, 2009

Transcription

1 The Ancillary Benefits of Greenhouse Gas Abatement in the United States. Nicholas Z. Muller Britt Groosman Erin Oneill-Toy June, 2009

2 Purpose of this paper. Capture co-benefits of representative climate policy in the U.S. Local air pollutants: SO 2, NO x, PM, NH 3, VOC Electric power generation, transportation. Time period: Does not capture (yet) other sectors, toxics, or other ancillary benefits.

3 Empirical Methods External Models APEEP Model Results Aggregate Co-Benefits Co-Benefits/ton GHG Spatial Distribution Conclusions Outline of Talk

4 External Models Policy Scenario: Warner-Lieberman s Climate Security Act (S. 2191) Why? EPA s sectoral analysis of abatement. Carbon permit price projections. Typical abatement targets relative to other bills in 110 th Congress.

5 External Models Transportation BAU Emission Inventories. Air Quality & Modeling Center (Assessment & Standards Division - U.S. EPA Office of Transportation & Air Quality) emission inventory for the period Policy Scenarios. Fuel prices, price elasticities, consumption (emission) reductions. Electricity EPA s Projected Carbon Prices. EDF REM: Production-cost model (Spatial Detail) Validate Policy and BAU Emissions Adage:

6 Empirical Methods External Models APEEP Model Results Aggregate Co-Benefits Co-Benefits/ton GHG Spatial Distribution Conclusions Outline of Talk

7 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Muller, Mendelsohn 2007;2009

8 APEEP Specifications: Emissions EGU s and mobiles (external models). For non-mobile, non-egu USEPA 2002 NEI. PM 2.5,PM 10,SO 2,NO x,voc, and NH 3. All of the emissions of these 6 pollutants in the U.S. Source location and specifications. Muller, Mendelsohn 2007;2009

9 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Muller, Mendelsohn 2007;2009

10 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Primary pollutants: NO x, SO 2, PM, VOC, NH 3. Secondary Pollutants: PM, O 3. Muller, Mendelsohn 2007;2009

11 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Muller, Mendelsohn 2007;2009

12 Baseline PM Muller, Mendelsohn 2007;2009

13 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Local Exposures Muller, Mendelsohn 2007;2009

14 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Local Exposures County Inventories: Crops, timber, people, materials, visibility, recreation use. Muller, Mendelsohn 2007;2009

15 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Dose-Response: Human Health Agriculture Timber Visibility Recreation Materials Local Exposures Muller, Mendelsohn 2007;2009

16 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Dose-Response: Human Health Agriculture Timber Visibility Recreation Materials Local Exposures Muller, Mendelsohn 2007;2009

17 Air Pollution Emissions Experiments and Policy Analysis Model (APEEP) Emissions Air Quality Model Local Ambient Concentrations Economic Valuation Dose-Response: Human Health Agriculture Timber Visibility Recreation Materials Local Exposures Muller, Mendelsohn 2007;2009

18 Valuation: Premature Mortality Risks Employ USEPA VSL = $6 Million Future VSL? Elasticity: WTP avoid mortality risk and income. USEPA default (ε = 0.5). Personal income growth. 3% (DOE EIA) 2.7% (USEPA, Adage)

19 Experimental Design Run BAU scenario: Each pollutant, each source type. Run policy scenario: Each pollutant, each source type. APEEP computes difference (BAU policy) in aggregate mortality/morbidity damages. PV: δ = 5% Isolates benefits by sector.

20 Empirical Methods External Models APEEP Model Results Aggregate Co-Benefits Co-Benefits/ton GHG Spatial Distribution Conclusions Outline of Talk

21 Aggregate Benefits ($ 2006) Electricity Sector: $204 x x 10 6 tons abated ~ $2,100/ton Transportation Sector: $50 x x 10 6 tons abated ~$5,000/ton Present Value

22 Year 0.5 E d, Pope et al. (2002) PI = 3% ($ 2006), million, NPV 0.5 E d, Laden et al. (2006) PI = 3% ($ 2006), million, NPV 0.5 E d, Pope et al. (2002) PI = 2.7% ($ 2006), million, NPV Total Co-Benefits Due to Climate Policy ($2006), million, NPV ,122 3,225 1, ,923 5,522 1, ,706 16,357 5, ,851 24,152 8, ,032 28,600 9, ,184 31,878 11, ,771 36,168 12, ,115 39,984 13, ,637 41,528 14, ,119 42,921 14, ,213 43,121 14, ,263 43,161 14, ,517 43,882 15, ,660 44,419 15, ,932 45,128 15, ,197 45,911 15, ,102 45,706 15, ,017 45,477 15, ,922 45,405 15, ,836 45,301 15,276

23 Year 0.5 E d, Pope et al. (2002) PI = 3% ($ 2006), million, NPV 0.5 E d, Laden et al. (2006) PI = 3% ($ 2006), million, NPV 0.5 E d, Pope et al. (2002) PI = 2.7% ($ 2006), million, NPV ,122 3,225 1, ,923 5,522 1, ,706 16,357 5, ,851 24,152 8, ,032 28,600 9, ,184 31,878 11, ,771 36,168 12, ,115 39,984 13, ,637 41,528 14, ,119 42,921 14, ,213 43,121 14, ,263 43,161 14, ,517 43,882 15, ,660 44,419 15, ,932 45,128 15, ,197 45,911 15, ,102 45,706 15, ,017 45,477 15, ,922 45,405 15, ,836 45,301 15,276

24 Year 0.5 E d, Pope et al. (2002) PI = 3% ($ 2006), million, NPV 0.5 E d, Laden et al. (2006) PI = 3% ($ 2006), million, NPV 0.5 E d, Pope et al. (2002) PI = 2.7% ($ 2006), million, NPV ,122 3,225 1, ,923 5,522 1, ,706 16,357 5, ,851 24,152 8, ,032 28,600 9, ,184 31,878 11, ,771 36,168 12, ,115 39,984 13, ,637 41,528 14, ,119 42,921 14, ,213 43,121 14, ,263 43,161 14, ,517 43,882 15, ,660 44,419 15, ,932 45,128 15,436 Total Co-Benefit: $254 x 10 9 (NPV) Total Co-Benefit: $720 x 10 9 (NPV) Total Co-Benefit: $246 x 10 9 (NPV) ,197 45,911 15, ,102 45,706 15, ,017 45,477 15, ,922 45,405 15, ,836 45,301 15,276

25 Benefit per ton GHG Abated ($2006) NPV Year 0.5 E d, Pope et al. (2002) PI = 3% ($/ton GHG) 0.5 E d, Laden et al. (2006) PI = 3%, ($/ton GHG) 0.5 E d, Pope et al. (2002) PI = 2.7%, ($/ton GHG)

26 Benefit per ton GHG Abated ($2006) NPV SCC: $8/tCO 2 - $24/tCO 2 (Tol, 2009) MAC: $13.3/tCO 2 (EPA ADAGE) Year 0.5 E d, Pope et al. (2002) PI = 3% ($/ton GHG) 0.5 E d, Laden et al. (2006) PI = 3%, ($/ton GHG) 0.5 E d, Pope et al. (2002) PI = 2.7%, ($/ton GHG)

27 State Total Annual Co-Benefit Rankings (2018) State Co-bens ($ million) Co-bens/Cap State NY 3, DC TX 2, DE OH 2, IN PA 2, NC IL 2, GA CA 2, OH GA 1, KY NC 1, MD NJ 1, NJ FL 1, NY

28 State Total Annual Co-Benefits in 2018

29 State Per Capita Annual Co-Benefits in 2018

30 Total Annual Co-Benefits in 2018

31 Empirical Methods External Models APEEP Model Results Aggregate Co-Benefits Co-Benefits/ton GHG Spatial Distribution Conclusions Outline of Talk

32 Conclusions Co-Benefits range between $ $6.0 per ton GHG (default) $1.6 - $17.0/ton with alt. dose-response function. Co-Benefit/capita concentrated in Eastern U.S. Rust belt states, NC, and GA. Importance of coal (SO 2 abatement). Co-Benefits concentrated in cities.

33 Conclusions Co-Benefits range between $ $6.0 per ton GHG (default) $1.6 - $17.0/ton with alt. dose-response function. SCC: $8/tCO 2 - $24/tCO 2 (Tol, 2009) MAC: $13.3/tCO Co-Benefit/capita concentrated in 2 (EPA ADAGE) Eastern U.S. Rust belt states, NC, and GA. Importance of coal (SO 2 abatement). Co-Benefits concentrated in cities.

34 Conclusions Co-Benefits range between $ $6.0 per ton GHG (default) $1.6 - $17.0/ton with alt. dose-response function. Co-Benefit/capita concentrated in Eastern U.S. Rust belt states, NC, and GA. Importance of coal (SO 2 abatement). Co-Benefits concentrated in cities.

35 Benefit per ton GHG Abated ($2006) NPV SO 2 EGU Emissions at CAIR Level. Year 0.5 E d, DEFAULT Pope et al. (2002) PI = 3% ($/ton GHG) 0.5 E d, (NO SO 2 ) Pope et al. (2002) PI = 3%, ($/ton GHG)

36 Year NH3 Nox PM10 PM25 SO2 VOC Mobile Source Abatement Short tons E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E+05

37 Year NH3 Nox PM10 PM25 SO2 VOC Electricity Abatement Short tons E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E E+04

38 APEEP Specifications: Emissions Transportation sector: BAU: EPA projection. Policy: DOE projected fuel price increase, price elasticity, emission reduction. Electricity sector: BAU (with CAIR), EPA, DOE growth projections. Policy scenario: CO 2 permit price.

39 Electric Power Generation Sector Annual Co-Benefits in 2018

40 Mobile Source Annual Co-Benefits in 2018