Markus Amann International Institute for Applied Systems Analysis

Markus Amann International Institute for Applied Systems Analysis Methodologies for an effect-based approach

From the Working Group on Strategies and Review EB. AIR/WG. 5/80

Definition of the effect-based approach • “All proposed measures need to be justified by actual environmental improvements at least costs” • Leads to substantial cost-savings compared to traditional (source-based) approaches

The effects-based approach Decision makers: • Determine targets for environmental improvement, choose – Impact indicator (gains in life expectancy, ecosystems area where critical loads are not exceeded, etc. ) – Distribution of environmental improvements across Europe (e. g. , uniform absolute targets, uniform absolute improvements, uniform relative targets (gap closure), progressive improvements, etc. ; This includes the definition of gap. • Identify with RAINS the cost-minimal set of emission controls • Analyze distribution of costs and benefits

Gap closure approach for CAFE WGTSPA explored suitability of alternative target setting principles (CAFE scenarios A and B). Criteria were equity and efficiency: • No clear evidence for threshold for health impacts from PM and O 3 • Uniform absolute targets (e. g. , AQ limit values) result in uneven distribution of burdens and inefficient use of resources. • Also the traditional “gap closure” approach (gap defined as difference between environmental situation in base year and the noeffect indicator (e. g. , critical loads, 0/7 μg/m 3 for PM 2. 5)) does not trigger general improvements throughout the EU

Option 1 for PM target: Absolute limit on PM concentrations [Country-average PM 2. 5, μg/m 3] 18 16 14 12 10 8 6 4 Residual Baseline > MTFR NEC > Baseline UK Sweden Spain Slovenia Slovakia Portugal Poland Netherlands Malta Lithuania Latvia Italy Luxembourg PM Ireland Hungary Greece Germany France Finland Estonia Denmark Czech Rep. Cyprus Belgium 0 Austria 2 Lowest possible target

Option 2: Gap closure between base year and no-effect Uniform % improvement of PM effects in relation to 2000 [100% = 2000] 100% 90% 80% 70% 60% 50% 40% 30% 20% Residual Baseline > MTFR 2000 > Baseline Max. gap closure UK Sweden Spain Slovenia Slovakia Portugal Poland Netherlands Malta Lithuania Latvia Italy Luxembourg PM Ireland Hungary Greece Germany France Finland Estonia Denmark Czech Rep. Cyprus Belgium 0% Austria 10%

CAFE definition of gap closure Effect indicator Base year exposure (2000/1990) Gap concept used for NEC 2010 Baseline 2020 (Current legislation) GAP definition used for CAFE MTFR from EU 25 excluding EURO 5/6 MTFR from EU 25 MTFR from all Europe MTFR all Europe + shipping No-effect level (critical load/level) Zero exposure

Definition of “gap” in CAFE As a policy choice, the CAFE-WGTSPA decided for a gap as the difference in environmental impact indicators between • The situation projected for the baseline 2020, and • The situation resulting from the maximum technically feasible reductions (MTFR). Advantages: • All countries can improve between 0% and 100% on this scale. • Comparable gap closure percentages result in comparable marginal costs. Disadvantage: • Quantification of both endpoints (baseline projection in 2020 and MTFR) are arbitrary and could be modified for strategic reasons.

Environmental improvements of the CAFE scenario Impact indicator in 2000 = 100%

Optimized emission reductions for EU-25 of the D 23 scenarios [2000=100%]

Conclusions • An effect-based approach relates proposed emission reductions with actual environmental improvements. • Offers large potential for cost-savings. • The appropriate scale for the quantification of impacts is a genuine policy choice. • For CAFE, scaling the gap between 2000 and no-effect levels was found not useful as a starting point for negotiations: – No evidence for no-effect thresholds for health impacts – Little scope for relative improvements in (clean) countries at the margin of the EU (Cyprus, Finland) would stop possible measures at highly polluted places. • As a pragmatic approach, CAFE scaled the gap between the impact indicators calculated for Baseline 2020 and MTFR.