As part of the preparation of a World Bank Program-for Results (PforR) operation on PM2.5 pollution in Hebei, the current report provides an economic evaluation of the health benefits that may be achieved from alternative scenarios for PM2.5 reductions in Hebei in 2017 and onwards. We also include a qualitative evaluation of other benefits, e.g., how the program may contribute to abating emissions of CO2 and short-lived climate forcers (SLCF).
We estimate a population weighted exposure to ambient PM2.5 (PWE) of 95 g/m3 in the province for the base year 2012. The area weighted concentration is 51 g/m3. In nearly all parts of the province, the annual average PM2.5 concentrations is exceeding China’s Air Quality Standard of 35 g/m3 PM2.5 (annual mean). The number of annual premature deaths due to PM2.5 pollution in the base year is estimated at approximately 69,000, with a monetized value of 254 (127-381) bill RMB (corresponding to 10% of the province GDP). Taking into consideration the additional PM2.5 exposure burden due to household air pollution from traditional cooking fuels in the province, we arrive at around 86,000 premature deaths.
According to our model, a general 15% reduction in ambient PM2.5 concentration in Hebei (assumed to result from the current Action Plan) would result in approximately 3,420 avoided deaths annually. An expanded Action Plan, leading to a 25% reduction, would result in approximately 6,160 avoided deaths. Thus, expanding the Plan may contribute to an additional 2,740 avoided deaths. The present value of the annual health benefit of the expanded Plan over an assumed 10 years lifetime (i.e. the benefit of expanding from a 15% to a 25% reduction) is estimated at 120 (49-210) bill RMB (21 (9-37) bill USD). The corresponding figure assuming a 5 years lifetime is 72 (31-121) bill RMB (12 (5-19) bill USD). We thus find that an investment of 0.5 bill USD is firmly justified, given that it assists the Government of Hebei in reaching the 25% reduction target.
In addition to the main scenarios, we include health benefit estimates for alternative scenarios that target ambient air pollution abatement in urban areas only and exposures to household air pollution from solid fuel use particularly.
Overall, we suggest there is only a modest co-control potential for CO2 mitigation from the current and expanded HAP plan, with important exceptions for policies targeting coal consumption in industry and power production and policies promoting industrial transformation, which potentially bring large reductions in CO2. We suggest there may be large co-benefits for short-lived climate forcers, but do not have data to conclude quantitatively on the sign and amount of the avoided forcing from the program. As some of the sub-programs target black carbon intensive sources, some reduction in forcing may be expected for limited parts of the program. Particularly, we suggest that abating domestic black carbon emissions is important for abating short-term climate forcing. Such action will also bring large health benefits from reduced exposure to household air pollution and contribute to reducing ambient PM2.5 levels in Hebei.