Working Papers,
Swedish National Road & Transport Research Institute (VTI)

Abstract: The purpose is to provide a background for a discussion concerning the methods and values used in cost-benefit analysis in Sweden for air pollutions', from traffic, impact on human health and the research needs in this area. We provide an overview of the current state of the art of models used for and input needed for external cost calculations of the health impacts. The calculations are not straightforward and depend on the collaboration between several research disciplines. In the ExternE projects, which have been used as a reference point in this study, there are still uncertainties concerning which pollutants to take into consideration.

Regarding the health impacts, we have recapitulated some of the main conclusions in a review by the American Heart Association (2010). They state that e.g. the following issues need further research: the importance of ultrafine particles, what constituent parts make traffic related air pollution more harmful than PM2.5 in general and the importance of coarse particles.

Concerning external cost calculations these can be of help to reveal important health aspects to consider in further research, if done in a transparent way. Some pollutants which are very harmful are released in such small concentrations that the overall effect is still relative limited. Hence, undertaking external cost calculations gives an indication of which pollutants to cover in the models and analyses to make them relevant but at the same time manageable.

Further, there are the questions of how to handle the relationship between Value of a Statistical Life and age, and of which values that should be used for children. This is an area where little research has been carried out. One important area is how to use discounting to account for the time dimension since current air pollution may influence children’s health in the future. More research is also needed regarding the valuation of morbidity. Here there are two issues to consider, the value of the welfare loss from being ill and the cost of illness. We have not found reliable estimates of these components for Sweden.

Keywords: Health effects; External cost calculations; ExternE; Emissions; Transport

JEL-codes: H23

41 pages, August 18, 2010

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