Impacts of air pollution in La Paz, BCS.

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Impacts of air pollution in La Paz, BCS. Mexican Institute for Competitiveness www.imco.org.mx @IMCOmx facebook.com/imcomx

Background IMCO conducted a study to estimate the impact of air pollution in 34 Mexican cities considering that: Mexico became an urban country in the last 60 years Thus, increased its industrial, vehicular and service activities As a result, we went from emitting 1.63 metric tons per capita in 1961 to 3.76 in 2010. This translates into new challenges and threats to the health of the population. Air pollution is associated with five of the ten leading causes of death in our country. This represents a higher concentration of air pollutants. Source: IMCO with information from the Ministry of Health, INEGI, Semarnat, INECC

Association of pollution with 5 of the top 10 causes of death in Mexico Main causes of death in Mexico, 2011 Diabetes mellitus Mellitus diabetes Heart diseases Enfermedades del corazón Malignant Tumores malignos tumors 11.2% 12.5% 12.1% Affectations Afecciones originated originadas in en the el perinatal período perinatal period Pneumonia Neumonía and influenza e Enfermedades cerebrovasculares Cerebrovascular diseases Enfermedades del hígado Liver diseases Insuficiencia renal Kidney failure Accidentes Accidents Enfermedades pulmonares obstructivas crónicas Chronic obstructive pulmonary disease 7.0% 6.6% 6.1% 5.6% 4.5% 3.6% 2.8% Source: IMCO with information of the Ministry of health (2011)

IMCO s model estimates were based on PM 10 : As it is the most commonly measured and reported pollutant in Mexican cities Because their size allows them to enter directly into the respiratory system Human hair diameter 50-70 µm PM 10 Particles diameter: 10 µm Source: EPA

The model considers NOMs and WHO s limits*: The model was built considering the Mexican Official Standards (NOMs) that regulate the concentration of pollutants in Mexico, as well as the recommendations of the World Health Organization (WHO) on good air quality. Pollutant Formula Max limit in Mexico Who s recommendations Ozone O3 216 µg/m 3 in 1 hr. 100 µg/m 3 as an 8 hr. average 288 µg/m 3 as a 24 hr. average 20 µg/m 3 as a 24 hr. average Sulfur dioxide SO2 66 µg/m 3 yearly average 524 µg/m 3 as an 8 hr. average 500 µg/m 3 as a 10 min average Nitrogen dioxide NO2 395 µg/m 3 in 1 hr. 40 µg/m 3 yearly average 200 µg/m 3 as an 1 hr. average *World Health Organization Source: NOM-020-SSA1-1993, NOM-021-SSA1-1993, NOM-022-SSA1-2010, NOM-023-SSA1-1993, NOM-025-SSA1-1993, NOM-026- SSA1-1993 and WHO, Health and Air quality, Descriptive note N 313, September 2011.

The costs were estimated based on: Health damage attributable to pollution* Premature deaths Hospitalizations Medical consultations Associated costs Tangibles => Health expenses Average unit cost of hospitalization and medical consultations in a day Intangibles => Losses in productivity Average daily wage by those days of medical care Productive years lost to premature death based on an average annual salary * With epidemiological estimates that measure how sensitive the population is to suffer damage from particle exposure levels above WHO s recommendations.

Assumptions: CONAPO s population growth rate (2010-2025 projections). It is assumed that the pollutions of each city is equal to that recorded in 2010. A discount rate of 12% was used (SHCP). Results: from January 1, 2010 to September 24, 2013 the accumulated costs for Mexico are: 19,242 53,191 3,110,072 Premature deaths Hospitalizations Medical consultations Accumulated economic losses $ 1 3, 9 7 9 Million pesos of 2010 Calculator Data September 24, 2013 2010 2011 2012 2013 2014 2015 2016 2017 2018

Failure to address this issue will increase the costs to: 37,488 103,629 6,059,118 Premature deaths Hospitalizations Medical consultations Accumulated economic losses $ 2 0, 2 8 8 Million pesos of 2010 Calculator data Beginning of the administration End of the administration 2010 2011 2012 2013 2014 2015 2016 2017 2018 Assumptions: CONAPO s population growth rate (2010-2025 projections). It is assumed that the pollutions of each city is equal to that recorded in 2010. A discount rate of 12% was used (SHCP).

Consequences: In the short term: The diseases caused health expenditures, to the families or the public sector. Reduce productivity because of absenteeism and poor performance of workers In the long term: Repel talent Discourage of investments

Project La Paz

Objectives 1. To estimate the impacts of pollution on La Paz from an economic point of view, linked to health costs. 2. To estimate the externalities of the power generation plants in La Paz

1 Impacts of air quality in La Paz According to the global study of pollution (PM2.5 and ozone), based on satellite images, La Paz has no contamination problems PM 2.5 particles Ozone Under WHO s recommendations of 9.08 ug/m3. Under WHO s recommendations of 49.73ppb Source: Exposure Assessment for Estimation of the Global Burden of Disease Attributable to Outdoor Air pollution by Brauer et al 2011. Data for 2010

1 We were unable to incorporate La Paz to IMCO s calculator for 34 cities because of the lack of information on PM 10 emissions. It allows to analyze different scenarios and change the assumptions Impacts of air quality in La Paz It is the study with the largest number of cities (disaggregated results) It quantifies the costs associated with health damage www.imco.org.mx/calculadora-aire

1 Therefore, we built a model for La Paz The model was constructed from two official series: emissions (SINAICA) on the one hand and the other hospital records (IMSS) Poisson regression model with time series* Equation: Log(γ)=α+ β1 SO2+ β2 NO2+ β3 NOx+ β4 NO+U Dependent variable: logarithm of the number of hospital admissions for respiratory diseases. (Set of 884 days) Independent variables: average daily concentrations of SO2, NO2, NOX y NO. (Set of 1181 days with entries for 28,344 hours) Because of missing values in air quality measurements the model was constructed using information only from the 14 of march 2010 till the 31 of december 2012. * The Poisson regression model was used because it and the negative binomial regression are used when the dependent variable is generated by counts (number of events occurring in a given time). The Negative Binomial results were not significant, so we kept on with the Poisson regression.

1 Results from the model for La Paz The independent variables DO NOT explain the behavior of changes in the number of hospital admissions (with a confidence level of 95%). Modifying the model, SO 2 is the only pollutant with statistical significance and explains 0.43% of the variation in hospitalizations for respiratory diseases. In other words: the NO2, NOX, NO y SO2 pollutants have no impact on the health of the population of La Paz (respiratory diseases). Source: IMCO with information of SINAICA and IMSS 2013.

1 Results from the model for La Paz Although monitoring stations are not necesarrily in the most appropiate areas: Source: Javier Huerta Lara Alfredo Bermúdez Contreras en «Apuntes sobre la contaminación ambiental producida por las centrales eléctricas de Comisión Federal de Electricidad que afectan la imagen, salud y economía de La Paz, B.C.S» 2014

1 Results from the model for La Paz SINAICA records come from 1,181 days and 28,344 hours for each pollutant: SO 2 NO2, NOx and NO, which never exceed the limits of the Mexican NOMs but do surpass WHO s SO 2 standards 21.25% of the days. SO 2 concentrations in La Paz (24 hour average) PPM 0.12 0.1 NOM 0.08 0.06 0.04 0.02 0 Daily records WHO Source: IMCO with information of SINAICA.

1 Results from the model for La Paz On the other hand, NO2 concentrations in la Paz never exceed the limits of the Mexican regulation or WHO s standards. NO2 concentrations in La Paz (1 hour average) PPM 0.14 0.12 0.1 0.08 0.06 0.04 0.02 WHO There is no national or international regulatory framework to limit the concentrations of NOx and NO since they don t have a direct impact on the health. 0 Daily records Source: IMCO with information of SINAICA.

1 Limitations of the model for La Paz 1 Diseases database: The data used exclude valuable information from the public health units of the state government. It was not possible to differentiate the entry of chronic recidivists patients from the rest of the people. There was no hospital admissions entries recorded for the 46.38% of the days. As a result of the low number of hospital admissions, no distinction was made between younger patients, the people older than 65 years and the rest of the population. Source: IMCO with information of IMSS, 2013.

1 Limitations of the model for La Paz 2 Emissions database: Some records of the SO2, NO2, NOX and NO concentrations had negative figures, which were replaces by zeroes in order to run the Poisson regression. A significant number of hourly measurements recorded zero ppm for contaminants, which could be generated by: o Not having any particle contaminants that hour. o *Not accounting any measurement, recording a null entry (zero) We were unable to add control variables such as humidity and temperature. Two points of comparison were used (both with similar results): o The hospital admissions as a result of air pollution from the same day. o The hospital admissions as a consequence of pollution concentrations from the previous day. Source: IMCO with information of SINAICA, 2013.

2 Estimating the externalities of the generating plants located in La Paz There are 3 CFE power plants in La Paz Punta Prieta II Turbo gas La Paz Baja California Sur 1 (CI) * With IMCO s externalities methodology Source: IMCO with information of CFE, Cepal, Aipacks, IPCC, SENER

2 IMCO s externalities model in one slide It considers the 4 phases of the methodology of impact (ExternE), an universal externalities methodology created by an UN agency with the following considerations: 1. A model of simple pollutant dispersion 2. The operation of plants 3. Impacts on health, biodiversity and climate change The model consists of the quantification of: The sources characteristics Dispersion model Evaluation of impacts Economic assessment Respuesta Salud Materiales Cultivos Dosis Source: IMCO, to see more details: http://imco.org.mx/medio_ambiente/externalidades_asociadas_a_la_generacion_de_electricidad

2 Results: externalities costs by Mwh in the 3 plants of La Paz Externalities mean value (pesos /Mwh) Baja California Turbogás con Diesel "La Paz" Combustión Interna "Baja California Sur 1" 76% 78% 58% 87 $/Mwh 34% 202 $/Mwh 252 $/Mwh The annual costs of the externalities generated by "Punta Prieta", "Baja California Sur 1" and La Paz" are estimated at 126, 70 and 8 million per year respectively Nacional 37% 58% 260 $/Mwh Termoeléctrica "Punta Prieta" 58% 34% 288 $/Mwh Cambio Climático Salud Biodiversidad * Using IMCO s externalities methodology Source: IMCO with many sources of information, 2012 (CFE, Cepal, Aipacks, IPCC, SENER)

2 Externalities comparison against other CFE generation sources Externalities mean value (pesos /Mwh) to build a plant in BCS Combined Ciclo cycle Combinado 93.5% 93 $/Mwh Gas turbine Turbogás (gas) con gas Gas Turbogás turbine (diesel) con diesel Internal Combustión combustion Interna 93.5% 78.4% 58.1% 137 $/Mwh 202 $/Mwh 34.8% 250 $/Mwh The pipeline construction plans indicate that this might be the most viable option for CFE Termoeléctrica Thermoelectric Convencional 58.1% 34.8% 286 $/Mwh Coal-fired Carboeléctrica 46.8% 27.2% 434 $/Mwh CAMBIO Climate CLIMÁTICO change SALUD Health BIODIVERSIDAD Biodiversity

2 Pollutants emissions in La Paz (tons / Mwh) COV PM10 CO PST NOX ND ND 0 0.02 ND ND 0.18 0.01 ND ND 0.15 0.08 ND ND 0.48 0.60 0.72 0.90 The monitored concentrations of the plants meet the limits of NOMs, however these have very lax standards 2.26 3 SO2 3.51 4.37 13.31 18.20 Nacional Nacional (Sólo fósiles) CI Baja California Sur 1 TC Punta Prieta Source: IMCO based on the Annual Operating ballots of Punta Prieta and Baja California Sur 1 (Semarnat) and the Work Program and Power Sector Investment 2012-2026 (Federal Electricity Commission)

Recommendations

1 Increase and improve the information of air quality and hospital records Federal government Incentives for more cities to measure and report air quality Create an evaluation system of cities, through networks of parallel monitoring Create a national monitoring system BCS and La Paz governments To measure air quality in major cities with alternate monitoring systems (the technology is cheap, <300USD x equipment in real time)* Report daily pollution levels and provide access to historical records of both emissions and hospitalizations Source: IMCO s study «Impacts of air quality in 34 cities» ** http://airqualityegg.com/ that are sold in http://shop.wickeddevice.com/?main_page=index&cpath=28&zenid=lna905ijyg,pbagmuuye3

2 Enhance regulations on air quality Federal government Strengthen relevant air quality standards and emission standards for vehicles Approve the law that requires clean fuels distribution across the country BCS and La Paz governments Develop local standards under the federal regulations Make air quality indexes to increase the perception of risks Improve building regulations

2 Environmental health standards are low Ozone standards, 8 hr. average (ppm) 0.1 0.08 0.06 0.08 0.075 0.06 0.05 60% 0.04 0.02 0 México NAAQS-USEPA UE OMS 60 50 40 30 20 10 0 PM 10 standards, yearly average (μg/ m 3 ) 50 40 20 150% 20 50% 15 15 12 10 5 0 México NAAQS-USEPA UE OMS México NAAQS-USEPA UE** OMS 30 25 10 PM 2.5 standards, yearly average (μg/ m 3 ) 25 Source: IMCO with information from Ministry of Health in Mexico, EPA in US and Council of European Union

3 Improve policies that affect the air quality Federal government Provide incentives for the creation of more and better ProAires Accelerate the deployment of clean fuels across the country Discourage the use of cars Analyze options for replacing CFE fuel oil generation in favor of cost competitive renewable energy BCS and La Paz governments Develop a ProAire for La Paz, including measures adjusted to the needs of the city Follow up the goals set in the program Promote the densification of La Paz Adopt criteria for compact growth in cities and make more expensive the use of cars

3 Improve policies that affect the air quality Federal government BCS and La Paz governments Instal precipitadores electrostátic precipitators and dosifiers of chemichal components to remove particles and sulfur oxides in the internal Combustion plan of BC1 (similar to what Punta prieta has). Install catalytic systems to remove nitrogen oxides in Punta Prieta, similar to those in Baja California 1 plant Change the energy planning ( POISE) to substitute 100% the use of heavy oils in La Paz generation plants in the middle term instead of 70% as it is contemplated. Source: Analysis of Javier Huerta & Alfredo Bermudez Apuntes sobre la contaminación ambiental producida por las centrales eléctricas de Comisión Federal de Electricidad que afectan la imagen, salud y economía de La Paz, B.C.S. ICF 2013

www.imco.org.mx @IMCOmx facebook.com/imcomx