Baseline Issues in the Estimation of the Ancillary Benefits of Greenhouse Gas Mitigation Policies

Greenhouse gas reduction policies which alter fossil fuel use can have near term environmental and social impacts quite distinct from the longer term benefits for climate change for which they were originally designed. The air pollution-related health improvements that accompany the reduction in GHGs are the best understood of these so-called ancillary or co-control benefits. Impacts on traffic congestion, ecosystem health, safety, and others are also potentially important, although to date they have been less well studied. Current estimates of the monetized health impacts associated with reductions in the use of carbon-intensive fuels range from $3 to several hundred dollars per ton of carbon abated. Reductions in the costs of meeting existing pollution control requirements – so called avoided costs can add to these benefits. Some experts have questioned whether estimates of ancillary benefits are largely an artifact of the (unrealistic) assumptions used to generate them. It is argued, for example, that previously established environmental policies, technological, demographic, economic or other patterns already underway will improve those areas that some would count as ancillary to GHG reduction policies. If that were the case then there could be a significant problem of double counting in the estimation of ancillary benefits. Without a credible and consistent specification of the health, environmental, economic or other conditions that occur in the absence of the contemplated policies it is not possible to estimate the true impact of such policies. To date, few studies have specified how the health, environmental or other ancillary benefits are expected to deviate from their current levels in the absence of GHG mitigation policies. Explicit and transparent specifications of the baseline conditions relevant to policy, technology, demography and other factors are crucial to the estimation of ancillary benefits. This five-part paper catalogues and analyzes the broad set of baseline issues that must be addressed in order to conduct an informed policy debate on ancillary benefits. Following the Introductory Section, Section II provides background on some of the major types of ancillary benefits and reviews the literature on the health studies of air pollution. Section III develops a framework for considering baseline issues and identifies the critical baseline issues posed by current studies. Section IV provides a prescriptive checklist of key baseline issues. Section V offers a series of broad conclusions and, in the context of recent IPCC discussions, suggests that the expanded use of carefully done case studies offers the best means to estimate ancillary benefits at this time. Throughout the paper efforts are made to balance analytic robustness against the practicalities of policy analysis. As much needed information is missing and many data gaps exist, this paper also provides some preliminary guidance