ChBE Seminar Series: Elisabeth Gilmore
Tuesday, April 9, 2013
Room 2108 Chemical and Nuclear Engineering Bldg.
Professor Sheryl Ehrman
Variability and Uncertainty in Social Costs for Air Quality
School of Public Policy
University of Maryland, College Park
Regulations promulgated by the US Environmental Protection Agency (EPA) under the authority of the Clean Air Act must pass a benefit cost analysis. This process requires applying monetary values to the improvements in air quality that accompany the costs of compliance. Additionally, social costs are needed to compare products and processes on their full costs. Producing specific social costs, however, is resource intensive. Increasingly, reduced form estimates in $/ton are employed.
In this presentation, I evaluate the sources of variability and uncertainty in reduced form social cost estimates for air quality with the goal of providing guidance on the selection and interpretation of these values. First, I conduct a critical review of the reduced form values in literature. Second, I develop new social cost estimates to isolate the influence of the baseline emissions and the air quality model. Specifically, I model the contribution of emissions of elemental carbon, nitrogen oxides, sulfur dioxide, and volatile organic compounds to fine particulate matter (PM2.5) in different locations in the US and using different model parameterizations for the formation of secondary organic aerosol (SOA). I use the state of science 3-D chemical transport model, the Particulate Matter Comprehensive Air Quality Model with extensions (PMCAMx). I monetize the PM2.5 using the long-term premature mortality concentration response function and the EPA value of a statistical life. I find that both the baseline emission files and uncertainty in the modeled transport and chemistry have an important influence on the estimates. These results recommend caution in the use of literature values for the social cost of air quality emissions for benefit-cost analysis and externality pricing.