Milan Ščasný

Context and the VSL: Evidence from a Stated Preference Study in Italy and the Czech Republic

We report on the results of a survey based on conjoint choice experiments that was specifically designed to investigate the effect of context on the Value of a Statistical Life (VSL), an important input into the calculation of the mortality benefits of environmental policies that reduce premature mortality. We define “context” broadly to include (1) the cause of death (respiratory illness, cancer, road traffic accident), (2) the beneficiary of the risk reduction (adult v. child), and (3) the mode of provision of the risk reduction (public program v. private good). The survey was conducted following similar protocols in Italy and the Czech Republic. When do not distinguish for the cause of death, child and adult VSL are not significantly different from one another in Italy, and the difference is weak in the Czech sample. When we distinguish for the cause of death, we find that child and adult VSLs are different at the 1% level for respiratory illnesses and road-traffic accidents, but do not differ for cancer risks. We find evidence of a “cancer premium” and a “public program premium.” In both countries, the marginal utility of income is about 20% lower among wealthier people, which makes the VSL about 20% higher among respondents with incomes above the sample average. The discount rate implicit in people’s choices is effectively zero. We conclude that there is heterogeneity in the VSL, and that such heterogeneity is primarily driven by risk characteristics mode of delivery of the risk reduction, and income, while other individual characteristics of the respondent (e.g., age and education) are less important. For the most part, our results are in agreement with environmental policy analyses that use the same VSL for children and adults, and that apply a cancer premium.

Material flow accounts, balances and derived indicators for the Czech Republic during the 1990s: results and recommendations for methodological improvements

Abstract The economy and the environment are connected through material and energy flows. These flows are the key cause of environmental problems (together with land use and other biological and social factors) and can serve as an indirect indicator of pressure on the environment. The leading method for assessing material flows and dematerialisation at a macroeconomic level was developed during the 1990s by a number of research institutes and organisations. The result of this effort was the guide [‘Eurostat (2001) 92’]. This is a guide for the analysis of the total mass of annual material inputs and outputs for the whole economic system, using accounts, balances and derived indicators of material flows. The manual touches only briefly on the flows between various sectors of the economy. This article describes the application of material flow analysis (MFA) to the economy of the Czech Republic. Relevant indicators were derived on the basis of accounts and balances of material flows compiled for the Czech Republic for 1990–2000. The indicators and analysis of material flows presented here are the first results covering a long time period and a comprehensive set of material flow accounts in a transition economy. The results show that indicators of material flows decreased during the 10-year-period analysed by approximately 30–40%. Material intensity also dropped by 30% (i.e. material efficiency increased by 30%) while the material intensity of other countries such as Germany dropped by 30% in the 15-year-period. Finally it has been possible to demonstrate that economic growth as expressed by GDP has been decoupled from environmental pressure as expressed by material flow indicators. The article proposes further work that should be undertaken in MFA at macroeconomic level in the Czech Republic. In conclusion, recommendations are made on how to improve the methodology used.

The Benefits of Contaminated Site Cleanup Revisited: The Case of Naples and Caserta, Italy

Guerriero and Cairns (2009) recently estimate that contaminated sites and improper waste management result in 848 excess deaths per year in the provinces of Naples and Caserta in Southern Italy, 403 of which are fatal cancers. In the absence of estimates of the Value of a Prevented Fatality (VPF) in Italy or specific to the hazardous waste context, they use figures recommended by DG-Environment. Contrary to their claims, estimates of the VPF are available for Italy that are specific to the hazardous waste context, and for causes of death that have been linked to contaminated site exposures. We review them in this paper. We also produce new estimates of the cancer VPF using data from a recent survey conducted in Milan, Italy, in late November to mid-December 2008. The evidence points to much higher VPF figures than the ones used by Guerriero and Cairns, and hence to much larger estimates of the reduced mortality benefits of remediating the hazardous waste in the Naples and Caserta areas. We also examine the importance of the discount rates, since the mortality benefits of remediation begin in 20 years and are assumed to continue over 30 years.

Internalization of External Costs of Energy Generation in Central and Eastern European Countries

In this article a bottom-up approach to quantification of air pollution externalities from electricity generation is used to show that market-based instruments are not very effective in internalizing these external costs in six CEE countries. Although governments in CEE countries have regulated air emissions by imposing strict command-and-control measures, most of them have also introduced air emission charges and more recently taxes on electricity. We find however that the level of internalization by these two economic instruments is fairly low for existing fossil-fired power plants ranging from 3% for coal- and lignite-fuelled plants to 31% for gas-fuelled plants. The picture improves if cross-subsidies for renewable electricity are accounted for but the internalization level is still below air pollution–related external costs, between 9% and 55% for coal- and oil-fired power plants. A substantial overinternalization by these three instruments is however encountered in the case of gas-fired power plants.

Quantifying the Ancillary Benefits of the Representative Concentration Pathways on Air Quality in Europe

This paper presents estimates of the economic benefit of air quality improvements in Europe that occur as a side effect of GHG emission reductions. We consider three climate policy scenarios that reach radiative forcing levels in 2100 of three Representative Concentration Pathways (RCPs). These targets are achieved by introducing a global uniform tax on all GHG emissions in the Integrated Assessment Model WITCH, assuming both full as well as limited technological flexibility. The resulting consumption patterns of fossil fuels are used to estimate the physical impacts and the economic benefits of pollution reductions on human health and on key assets by implementing the most advanced version of the ExternE methodology with its Impact Pathway Analysis. We find that the mitigation scenario compatible with +2°C reduces total pollution costs in Europe by 76%. Discounted ancillary benefits are more than €2.5 trillion between 2015 and 2100. The monetary value of reduced pollution is equal to €22 per abated ton of CO2 in Europe. Less strict climate policy scenarios generate overall smaller, but still considerable, local benefits (14 € or 18 € per abated ton of CO2). Without discounting, the ancillary benefits are in a range of €36 to €50 per ton of CO2 abated. Cumulative ancillary benefits exceed the cumulative additional cost of electricity generation in Europe. Each European country alone would be better off if the mitigation policy was implemented, although the local benefits in absolute terms vary significantly across the countries. We can identify the relative losers and winners of ancillary benefits in Europe. In particular, we find that large European countries contribute to as much as they benefit from ancillary benefits. The scenarios with limited technology flexibility do deliver results that are similar to the full technology flexibility scenario.

Structure of Domestic Energy Saving How Many Dimensions

The purpose of this study is to examine whether we can find, behind the richness of energy-saving behavior, more general behavioral patterns. Specifically, this study compares the one-factor confirmatory model, the two-factor confirmatory model, and the Rasch model, which embody alternative assumptions about the dimensionality of energy-saving behavior. Unlike previous studies, this study uses a confirmatory approach to the testing of alternative models, and covers 10 Organisation for Economic Co-operation and Development (OECD) countries (N = 10,251). This makes our tests rigorous and generalizable beyond a country-specific context. Our results indicate that energy saving is a one-dimensional class of behavior that is a function of individual’s propensity to engage in energy saving and the difficulty of energy-saving behavior. The Rasch model provides a valid and parsimonious representation of energy-saving behavior that outperforms the one- and two-factor models. We also show that the curtailment–efficiency dichotomy is not empirically valid.

Public acceptability of climate change mitigation policies: a discrete choice experiment

The present study examines the public acceptability of the EU’s future climate change mitigation policies. Using the discrete choice experiment, the authors elicit the preferences of approximately 4098 respondents from the Czech Republic, Poland, and UK for the GHG emission reduction policies that differ in four attributes: emission reduction target, burden sharing across the EU Member States, the distribution of costs within each country, and cost. The three specific reduction targets analysed correspond to the EU 2050 Roadmap and deep decarbonization policy (80% target), the climate-energy 2014 targets (40% target), and the status quo policy (20% target); each will result in a specific emission trajectory by 2050. The results reveal stark differences between the three countries. Czechs would be on average willing to pay around EUR 13 per household per month for the 40% GHG emission reductions by 2030 or EUR 17 for 80% reductions by 2050, and the citizens of the UK are willing to pay about EUR 45. Conversely, the mean willingness to pay (WTP) of Polish households for achieving more stringent targets is not statistically different from zero. The WTP for adopting policies to reach the 40% and 80% targets are not statistically different in any of the examined countries. However, it was found that the preferences in all three countries are highly heterogeneous. In addition, an insight is provided into the preferred characteristics of the future GHG emission reduction policies. Policy relevance A detailed understanding of the acceptability of climate mitigation policies among the general public is crucial for identifying the potential for improvements in their design. This study examines the public acceptability of the EU’s future mitigation policies. The authors elicit preferences of respondents from three EU countries for three different emission trajectories and reduction targets through policy packages that include several options to share the burden among the EU Member States and to distribute the costs among citizens of each country. Preferences are analysed for each attribute and the willingness-to-pay values for several alternative policy packages are derived. The authors believe that understanding public acceptability can help support the successful implementation of climate mitigation policies.

Newborns health in the Danube Region: Environment, biomonitoring, interventions and economic benefits in a large prospective birth cohort study.

BACKGROUND The EU strategy for the Danube Region addresses numerous challenges including environment, health and socioeconomic disparities. Many old environmental burdens and heavily polluted areas in Europe are located in the Danube Region, consisting of 14 countries, with over 100 million people. Estimating the burden of environmental exposures on early-life health is a growing research area in Europe which has major public health implications, but the data from the Danube Region are largely missing. AIM This review presents an inventory of current environmental challenges, related early-life health risks, and knowledge gaps in the Danube Region, based on publicly available databases, registers, and literature, as a rationale and incentive for a new integrated project. The review also proposes the concept for the project aiming to characterize in utero exposures to multiple environmental factors and estimate their effect on early-life health, evaluate economic impact, as well as identify interventions with a potential to harness social norms to reduce emissions, exposures and health risks in the Danube Region. METHODS Experts in environmental epidemiology, human biomonitoring and social science in collaboration with clinicians propose to establish a new large multi-center birth cohort of mother-child pairs from Danube countries, measure biomarkers of exposure and health in biological samples at birth, collect centrally measured climate, air and water pollution data, conduct pre- and postnatal surveys on lifestyle, indoor exposures, noise, occupation, socio-economic status, risk-averting behavior, and preferences; and undertake clinical examinations of children at and after birth. Birth cohort will include at least 2000 newborns per site, and a subset of at least 200 mother-child pairs per site for biomonitoring. Novel biomarkers of exposure, susceptibility, and effect will be applied, to gain better mechanistic insight. Effects of multiple environmental exposures on fetal and child growth, respiratory, allergic, immunologic, and neurodevelopmental health outcomes will be estimated. Parents willingness to pay for reducing health risks in children will be elicited by survey, while values of cost-of-illness will be gathered from literature and national statistics. Effects of risk reducing interventions will be examined. CONCLUSIONS The proposed project would provide novel estimates of the burden of early childhood diseases attributable to environmental exposures and assess health impacts of different intervention scenarios in the Danube Region, in an integrated approach combining human biomonitoring, epidemiological and social science research.

Monetary and Non-Monetary Measures of Health Benefits from Exposure Reduction

Multiple pathways in which environmental hazards may affect human health translate to diversity of adverse impacts of impaired health on human welfare. Impaired health may in turn directly affect production or consumption opportunities at individual, household as well as societal level. While at a methodological level the channels of economic effects of impaired health are extensively identified and discussed it is considerably more challenging to establish respective empirical estimates. This chapter outlines approaches to economic valuation of health benefits from exposure reduction, discusses relevance of cost categories for various physical impacts and points to challenges in linking epidemiological findings to welfare implications. A succinct overview of available monetary values for a range of health outcomes is provided.

Market-Based Instruments in CEE Countries: Much Ado about Nothing

This paper overviews the use of environmentally related levies and other economic instruments in air quality and climate change policies in Central and Eastern European EU countries. It is shown that their overall effectiveness and efficiency is quite low and they help to secure revenues for dedicated environmental funds only. We pay a special attention to the implementation of 2003/96/EC Directive in the Czech Republic that presents the unique example of a revenue-neutral environmental tax reform actually introduced. By using a micro-simulation model we assess the distributional effects of this reform and found small effects both on households and environment.