3 The costs of poor air quality |
20. The 2007 Air Quality Strategy proposed new
policy measures to improve air quality based heavily on a cost-benefit
analysis. In the analysis some costs were monetised while others
were assessed on a qualitative basis. In the next part of this
report we examine some of the key costs.
21. The main cost of air pollution arises from
the adverse health effects on people. The 2007 Air Quality Strategy
estimates that the health impact of man-made particulate air pollution
experienced in the UK in 2005 cost between £8.5 billion and
£20.2 billion a year.
These figures were provided by the Interdepartmental Group on
Costs and Benefits, which includes Defra, the Department of Health
and the Department for Transport. This estimate was based on life-years
lost and the monetisation of this reflects estimates of the UK
population's 'willingness to pay' to avoid these health impacts.
22. The Air Quality Management Resource Centre
note that the health impacts of air quality in the UK are almost
twice those of physical inactivity, estimated to be £10.7
billion per annum,
yet it fails to receive the same level of attention as the latter
within medical and media circles. The costs of poor air quality
are comparable to the cost of alcohol misuse to society, estimated
to be £12-£18 billion per annum.
Isabel Dedring, the Mayor of London's Environmental Advisor, said
that there was no link between the funding that was available
to tackle air quality and the avoided health costs from improvements
to air quality. She thought this was not the case for other social
23. The £8-20 billion total cost of poor
air quality is likely to be an under-estimate. The Air Quality
Strategy ignores the impact on morbidity, costing only mortality.
There are additional costs to the NHS from respiratory hospital
admissions triggered by air pollution. For example, in 2007/08,
there were over 74,000 emergency admissions to hospital because
of asthma and the NHS's non-elective spell tariff was £612
million for 2007/08. There are clear links between asthma and
air quality; Asthma UK estimate the annual cost of asthma to society
at £2.3 billion.
24. Defra recognised that health benefits from
policy measures to improve air quality are undervalued, but argued
that this was because it was not possible to quantify all health
outcomes. Work by COMEAP to review the evidence is ongoing and
is expected to show that there are health benefits over and above
those that have been monetised. COMEAP will also consider the
literature on chronic morbidity effects, an area it has not considered
before. It also plans to update its estimate of the risks associated
with short-term exposure to air pollutants.
25. Nitrogen dioxide has not been included in
past analysis of costs. Previous attempts to quantify the effects
of exposure to this have not been successful, and COMEAP did not
believe there was sufficient evidence on which to base any quantification
of the health impacts. It has been difficult to disentangle the
effects of NO2 from those of other pollutants.
No direct health benefits from measures to reduce NO2
have been included in the main cost-benefit analyses supporting
the 2007 Air Quality Strategy.
26. COMEAP have acknowledged that further work
is required in order to understand the health effects associated
with exposure to NO2 and is in discussion with the
Health Protection Agency to develop a programme of work in this
27. Good air quality makes a
key contribution to preventative healthcare. The Government should
ensure that local strategic partnerships embed plans to deliver
real improvements in local air quality.
28. Air pollution has wide-ranging environmental
impacts including loss of biodiversity, reduced crop yields and
a contribution to climate change. Following the very large reductions
in sulphur emissions in the UK and across Europe since the 1970s,
NOX, ammonia and ground level ozone now have the most
significant impact on the environment. Excess nitrogen from emissions
of ammonia and NOX leads to excessive plant growth
and decay (eutrophication) that disturbs the biodiversity of both
land-based and water-based ecosystems. Emissions of ammonia and
NOX also contribute to acidification of ecosystems.
Ozone has a direct effect on plants, damaging their leaf structure,
reducing growth and compromising their defence mechanisms.
29. A 'critical load' is an estimate of the exposure
to one or more air pollutants, above which there is risk of damage
to certain sensitive elements of the environment. Critical loads
for acidity and the fertilising effects of nitrogen are exceeded
in over half the UK's natural and semi-natural habitats. Currently
60% of sensitive habitats exceed the critical load for nutrient
nitrogen, and ammonia
is a major source of this. Agricultural activities are the principal
source of ammonia, but only a small fraction of national ammonia
emissions are subject to any regulatory control. The Environment
Agency called for a national ammonia reduction strategy, as was
originally proposed in the UK's Air Quality Strategy 2007: it
noted that there were still no firm proposals.
30. Defra told us that eutrophication problems
were being addressed, and that there had been a reduction in emissions
and concentrations of nitrogen oxides. But it recognised that
further policy action would be required to reduce emissions of
31. Ozone exposures exceed critical loads for
effects on crops, forests and semi-natural vegetation over substantial
areas of the UK. Defra estimate that ozone reduces the yield of
wheat grown in southern Britain by 5% to 15%, which would imply
a serious financial loss to agriculture.
Ground level ozone also contributes to global warming indirectly
by reducing carbon take up by vegetation, as well as being a greenhouse
gas in its own right.
32. The 2007 Air Quality Strategy does not cost
the impact of air pollution on ecosystems. Valuing ecosystems
is complex and a methodology is still at the developmental stage.
Friends of the Earth, however, believed that the UK's methodology
was in line with EU approaches and that the UK was going broadly
in the right direction.
Defra's ecosystems services approach will look at the services
a healthy ecosystem provides, including well-being, clean air,
clean water. It should enable a cost to be put on any impact on
an ecosystem. We welcomed this approach in our report of 2008,
Halting biodiversity loss and called on the Government
to complete it by the earliest opportunity.
In our current inquiry, however, Defra told us that more research
is still needed at both UK and EU levels to reach the point where
it is possible to value ecosystems to a satisfactory standard.
33. Defra believe that "there is a pretty
good chance" of not being fined for particulate matter limit
value exceedences. They recognised that the NOX emissions
ceiling targets and Nitrogen dioxide limit values present a "significantly
The size of any fines would depend on rulings from the European
Court of Justice but could be a combination of a lump sum payment
and a fine levied each day until targets were reached. It has
been reported that fines could reach £300 million should
the Commission continue to reject the UK's application for an
extension, but there
is no precedent for a similar environmental contravention and
the magnitude of any fines cannot be predicted with certainty.
34. The Local Authorities Coordinators of Regulatory
Services (LACORS) and the Chartered Institution of Water and Environmental
Management (CIWEM) argued that a cost-benefit approach was inappropriate
for identifying the best policies for achieving a mandatory requirement.
They favoured using cost effectiveness as this would identify
the cheapest package of measures to ensure mandatory targets were
35. The Government must assess
the most cost effective way of meeting mandatory EU targets rather
than relying only on a cost-benefit analysis of possible actions.
36. The cost-benefit analysis undertaken for
the Air Quality Strategy did not give sufficient weight to the
health and environmental benefits of improving air quality nor
did it take any account of likely EU fines. Many
of the potential benefits are not monetised and the impacts of
poor air quality go much wider than just mortality. A wider evaluation
of costs and benefits is needed as costs currently cover only
a small part of the impacts. The Interdepartmental Group on Costs
and Benefits is introducing a methodology that will account for
the cost of abating environmental damage when limit values are
likely to be exceeded, but this needs to be developed further
and address all environmental damage and take into account the
wider health benefits.
37. The Government's assessment
of the costs and benefits of action on air quality does not account
for all the health effects of poor air quality, the damage to
ecosystems and potential fines. The Government should improve
the assessment of the costs and benefits of better air quality.
The Government must therefore urgently:
- quantify the
impact on morbidity and the cost to the NHS of poor air quality;
- improve understanding of the
health effects of exposure to nitrogen dioxide;
- estimate the cost of the damage
to ecosystems and the environment from poor air quality;
- fund the research necessary
to fill the gaps in the evidence base; and
- take account of the likely fines
from missed EU targets in its air policy appraisal.
16 Defra, The Air Quality Strategy for England,
Scotland, Wales and Northern Ireland, July 2007 Back
Ev 72 Back
Ev 145 Back
Q 13 Back
Q 162 Back
Ev 140 Back
Ev 40 Back
COMEAP, Long-term exposure to air pollution: effect on mortality,
June 2009 Back
Centre for Ecology and Hydrology, Review of Transboundary Air
Pollution-Draft report, 2009 Back
Ev 121 Back
Ev 41 Back
Ev 42 Back
Ev 131 Back
Environmental Audit Committee, Thirteenth Report of Session 2007-08,
Halting biodiversity loss, HC 743 Back
Q 168 Back
Q 148 Back
"Air quality fine is a 'fantastic' prospect", ENDS
Report, January 2010, p 52 Back
Ev 82 Back
Defra, Air Quality Appraisal-Valuing Environmental Limits,
March 2010 Back