1 Introduction

The European Commission announced in its Acidification Strategy (COM(97)88 final) its intention to put forward a proposal for a Directive establishing national emission ceilings for sulphur dioxide (SO₂), nitrogen oxides (NO_x), volatile organic compounds (VOCs) and ammonia (NH₃) for 2010. In preparation for the Directive, the Commission has developed a series of emission control scenarios designed to attain given environmental targets in the most cost-effective way for the EU as a whole. These targets are set with respect to three effects: acidification and both the health and vegetation related impacts of ground-level ozone. Eutrophication is also taken into account.

The Air Quality Framework Directive (96/62/EC) establishes a system under which the European Commission will agree air quality limit values for specified pollutants in a series of daughter Directives. The proposed Ozone Directive is the third daughter Directive to be put forward by the European Commission. This sets target values, to be achieved by 2010, and long-term objectives for the protection of human health and vegetation. Given the obvious linkages that are present, the development of the Ozone Directive and the National Emission Ceilings Directive (NECD) have proceeded hand in hand.

In parallel to the above initiatives the past two years have also seen much activity in development of a new Protocol under the United Nations Economic Commission for Europe (UNECE) Convention on Long-Range Transboundary Air Pollution. This Protocol, formally called the Protocol to Abate Acidification, Eutrophication and Ground Level Ozone in Europe has a similar scope to the EU Directives in terms of pollutants, but applies to all European countries, not just the EU Member States. The Protocol was signed in Gothenburg in December 1999. [Note that it is also referred to as the Multi-pollutant, Multi-effect Protocol, the 2^nd NO_x Protocol or the Gothenburg Protocol.]

This report describes work undertaken to provide the UK Government with an understanding of the costs and benefits of the proposed legislation, to the UK as a whole and to England, Northern Ireland, Scotland and Wales individually. Information has been furnished which will allow the DETR to prepare Regulatory Impact Assessments (RIAs) for the UK, in respect of the proposed measures, and form the basis for the preparation of Impact Assessments by the Scottish Executive, National Assembly for Wales and Department of the Environment for Northern Ireland.

1.1 Approach

Previous analyses of UK emissions and control costs have been undertaken by the International Institute of Applied Systems Analysis (IIASA), using the RAINS model, with an analysis of the corresponding benefits by AEA Technology, using the ALPHA model. The accuracy of the analysis carried out for the EC and UNECE using these two models was necessarily limited, because of the broad geographical area subject to analysis. The same is true of the ASAM model, developed by Imperial College, which has previously been used in uncertainty analysis of the RAINS model results. These earlier analyses have been conducted at a resolution of 150x150 km. The work reported here has aimed to provide a more detailed analysis for the UK, using the latest available datasets and UK-based models. These have been used previously in work undertaken on behalf of the EC, UNECE and UK Government and have thus been widely reviewed. These models offer much higher resolution of the implications of emissions abatement as they operate on a scale of 10x10 km.

The work has drawn upon the expertise of AEA Technology, Imperial College, the Universities of Edinburgh and Lancaster, ITE Monkswood and the Meteorological Office. The models employed include the UK National Atmospheric Emissions Inventory (NAEI 1997), HARM atmospheric dispersion/deposition model, ELMO ozone model, MARACCAS ammonia model, and ALPHA-UK benefits evaluation model. These are described in greater detail in the sections that follow.

The costs and benefits of the Directives and Protocol should not be regarded in isolation from other legislation that is currently agreed but yet to take full effect, and for which the overall consequences are, as yet, uncertain. These include:

• the IPPC Directive
• the Kyoto Protocol
• the National Air Quality Strategy (NAQS)

The NAQS raises particular issues with respect to the negotiating position taken by the UK. It was noted in the review of the NAQS (DETR, 1999) that the targets for PM₁₀ and ozone will be extremely difficult to meet without significant action in other European countries.

1.2 Methodology

The methodology for estimating the costs and benefits to the UK of meeting specified emissions abatement targets follows a number of clearly defined steps:

• compilation and mapping of ‘baseline’ emissions projections disaggregated by sector for the target year (2010);
• identification of cost-effective abatement techniques and estimation of costs associated with the application of these to reduce projected emissions to the prescribed target levels;
• mapping of emissions disaggregated by sector for alternative emission scenarios for the target year;
• modelling of the dispersion and chemical transformation of the mapped emissions to generate maps of associated air quality and deposition for each alternative scenario;
• comparison of the deposition maps against critical loads maps to determine the degree of ecological protection attributable to the prescribed level of emissions abatement;
• assessment of the exposure of sensitive receptors (people, buildings, etc.) for each scenario, by combining maps of pollution levels with maps of (e.g.) population distribution;
• quantifying impacts by combining data on exposures with dose-response functions to provide estimates of changes in hospital admissions, premature deaths, rate of material degradation, crop yields, etc.
• comparison of results between the baseline and alternative scenarios to assess the incremental change in impacts arising from emissions abatement;
• estimation of the monetary value of the benefits attributed to emissions abatement.

Estimates of UK emissions of SO₂, NO_x, VOCs and NH₃ were based on the National Atmospheric Emissions Inventory (NAEI) and, for the purposes of mapping, were disaggregated between Scotland, Wales, Northern Ireland and England using existing information held within the NAEI database on the location of point and area sources. Many of the important sources, such as power stations, large combustion plant, ports, airports, and process plant, were defined as point sources and, therefore, could easily be assigned to one of the four countries. Emissions from road transport on major roads were defined as line sources and could also be assigned to individual countries. Remaining sources, such as domestic and small industrial combustion plant, agriculture, off-road vehicles, and military vehicles were treated as area sources, and were disaggregated using surrogate statistics, such as regional population, fuel use or employment.

Emissions data were presented in map form using a 10 km x 10 km grid, to act as input for the modelling of their dispersion and chemical transformation within the atmosphere. This was undertaken using the HARM model, to determine sulphur and nitrogen deposition and concentrations, and the ELMO model, to determine ground level ozone concentrations. These models take account of the complex chemical reactions taking place in the atmosphere, the changing chemical composition of the air as it moves away from one source area and into another, and the impact of a range of meteorological parameters.

The output from these models is also in map format, providing data on the change in pollution concentration and deposition across the UK as a result of emissions abatement. The maps of sulphur and nitrogen deposition were used with geographically disaggregated data on critical loads to produce maps of critical loads exceedance for the UK. By comparing exceedance maps for baseline and abated emissions, estimates are made of the reduction in critical loads exceedance and, hence, the threat of damage to sensitive ecosystems attributable to the prescribed level of emissions abatement.

The benefits analysis for impacts on health, crops and materials was based around the ALPHA and ALPHA-UK models, used previously in analysis of the Gothenburg Protocol and the NECD, and also the National Air Quality Strategy. Deposition/concentration maps were overlaid onto data showing the distribution of ‘stock at risk’ (people, buildings, crops etc.) and information on the sensitivity of the stock (death rates, age structure of the population, type of ecosystem etc.). This provided information on exposure, to which could be applied exposure-response functions, to derive estimates of the impact of the changes in pollution concentration and deposition, in biological and physical terms.

Impacts were monetised to the extent possible. For some effects, such as changes in crop yield, this can simply be done using data from relevant markets. In other cases, particularly for effects on human health, alternative methods were necessary, based, for example, on the contingent valuation technique. The current UK government position is against monetisation of health effects arising from exposure to air pollution. However, an extended sensitivity analysis is supplied to indicate how the balance of costs and benefits changes under different sets of assumptions, not just on monetisation, but also at other stages of the analysis.

1.3 Structure of the report

Part 1 of this report (sections 1+2) provides information on the background to the study, the scenarios considered, earlier analyses, etc. In Part 2 (sections 3+4) the development of the UKREF Scenario and the estimation of the costs to the UK as a whole, and England, Northern Ireland, Scotland and Wales individually, of meeting the emissions ceilings required by the scenarios are described. Additional, non-abatement costs attributable to the Ozone Directive are also identified.

Part 3 (sections 5+6) describes the quantification of the benefits attributable to achievement of the emissions ceilings. This includes a description of the modelling of emissions, air quality and deposition, as well as the analysis of ecological protection and reductions in human exposure and effect. The cost-benefit analysis is presented in a structured manner that seeks to retain understanding of the uncertainties of the analysis.

Part 4 (section 7) presents the conclusions of the study.

Additional detail of the analysis is given in a series of appendices:

Appendix 1: Abbreviations and terminology

Appendix 2: Scenario data from RAINS

Appendix 3: Monitoring for the proposed Ozone Directive

Appendix 4: Analysis using HARM and ELMO

Appendix 5: Analysis using RAINS and ASAM

Appendix 6: Detailed results for acidification and eutrophication

Appendix 7: Inputs to the benefits analysis

Appendix 8: Full results from the cost-benefit analysis

Appendix 9: References

Contents Page         Chapter 2

Report and site prepared by the National Environmental Technology Centre, part of AEA Technology, on behalf of the UK Department of the Environment, Transport and the Regions