The Integrated
Environmental Strateg
A Resource Guide for Air Quality Planning

About This Handbook	1

  The Benefits of IBS	2
  The Purpose of This Handbook	3
  For More Information 	4
  Acknowledgments	4

Chapter 1—Introduction to the IES Program  	6

  Background 	6
  Overview of the IES Process	10
  Sample IES  Results	14

Chapter 2—Planning and Team Building	16

  Who Is Involved in an IES Project?  	16
  Getting Started	17
  Scoping Activities 	20
  Scoping Meetings 	22
  Key Project  Design Decisions	26
  Developing the Work Plan	27

Chapter 3—Energy/Emissions Analyses and Modeling  	30

  Determining the Focus of the Energy Sector for Analysis	31
  Developing the Base-Year Emissions Inventory	31
  Developing Energy and Emissions Scenarios	36
  Energy/Emissions Model Selection	38
  Forecasting Future Emissions	40

Chapter 4—Air Quality  Modeling  	42

  Identifying Targeted Emissions for Analysis	43
  Selecting an Air Quality Model	45
  Obtaining Data	49

Chapter 5—Health Effects Analysis	51

  Defining the Scope of the Analysis	52
  Estimating Avoided Health Effects	53
  C-R Functions and Health Effects Modeling  	53
  Epidemiological Studies and Health Damage	54
  Importing and Pooling Data  	57
  Developing Local Epidemiological Studies  	58
  Uncertainty Analysis 	59
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Chapter 6—Economic Valuation and Analysis 	60

  Using Valuation Analysis to Assist Policymakers	61
  Methods to Estimate Economic Values for Specific Health Effects	62
  Applying Unit Value Estimates	66
  Obtaining Data	68
  Benefits Transfer	69
  Aggregating Unit Values for Total Benefit Estimates	72
  Presentation of Results 	72

Chapter 7—Policy Analysis and Results Dissemination	74

  Evaluating Policy Measures  	74
  Dissemination of Results	80
  Next Steps 	83

Chapter 8—Implementation	84

  Implementation Hurdles 	84
  Moving From Analysis to Implementation	85
  Clean Energy Case Studies  	90

Chapter 9—Conclusions and Lessons Learned	94

  Distinguishing Features of the IES Framework 	94
  Policy and Program Results	99
  IES Program Lessons Learned 	105
  Areas for Future Consideration	108

Appendix A—Bibliography  	111

Appendix B—Glossary/Acronyms  	121

Appendix C—IES Process Tools   	141

Appendix D—Analytical Resources 	156

Appendix E—Funding Tools and Resources  	168

Appendix F—Case Studies  	180
                                                                  IES Handbook

                  About This  Handbook
 As urbanization and industrialization expand globally at a rapid pace, a
 growing number of developing countries are experiencing a corresponding
 increase in air pollution and greenhouse gas (GHG) emissions. In recent
 years, numerous studies have linked certain types of conventional air
 pollutants with adverse health effects ranging from increased respiratory
 ailments to premature deaths. Air pollution can also damage crops and
 forests, disrupt ecosystems, contaminate water bodies, corrode building
 materials, and reduce visibility. All of these problems can have significant
 and long-lasting impacts on a country, its people, and its  economy.
 Depending upon their source, emissions of conventional  air pollution
 might be accompanied by GHG emissions. When both types of emissions
 are generated together (e.g. through fossil fuel combustion), opportunities
 exist to reduce them simultaneously through "integrated measures."
 Readers should note that there is a clear distinction between GHGs and
 conventional air pollutants. Conventional air pollutants pose local and
 regional environmental and health risks, while GHGs are more often seen
 as a global concern, contributing to climate change.
 As an element of the United States government's commitment to address
 climate change, the United States Environmental Protection Agency (U.S.
 EPA) developed this handbook. The handbook is designed to help readers
 in developing countries learn about and potentially adopt "co-benefits"
 measures to improve local air quality and reduce associated GHGs.
 This handbook describes the U.S. EPA's Integrated Environmental
 Strategies (IES) Program approach. The IES approach enables local
 researchers to quantify the co-benefits that could be derived from
 implementing policy, technology, and infrastructure measures to reduce
 air pollutants and GHG emissions. Quantifying the effects of air emissions
 brings research into the public decisionmaking process and provides a
 solid foundation upon which to build environmental  and  public health
About This Handbook

                                                                          IES Handbook
The  Benefits of IES

Eight countries (Argentina, Brazil, Chile, China,
India, Mexico, the Philippines, and South Korea)
are using the IES approach with impressive
results. IES has influenced institutional thinking,
policy analysis, and technical capacity building
in important ways in all of the participating

Policies Are  Changing

In several participating countries, the ultimate
goal of IES is being achieved-the process and
its results are influencing the direction of a
region's planning and urban development:

• In Beijing, China, the IES approach and
  results are informing efforts to improve local
  air quality. The air quality improvements are
  part of an overarching plan to make the 2008
  Olympics in Beijing the world's first "green"

• IES methods and results have been
  successfully incorporated into air quality
  planning processes for Shanghai, China's,
  10th  and llth five-year plans. Unlike previous
  plans, policymakers are  now placing the
  highest priority on the cost-effective control of
  particulate pollution. This  change is due, in
  part,  to consideration of the city's IES results.

• IES methods and analyses are helping to
  shape the planning process undertaken by the
  regional office  of the National Environment
  Commission (CONAMA)  in Santiago, Chile,
  as it considers revisions to the city's pollution
  control plan.

Policymakers Are Considering
Benefits and Costs

In developing and developed countries alike,
emissions control and mitigation efforts can be
expensive. By sharing decisionmaking tools and
technical expertise, IES is helping countries
calculate the benefits of avoided human health
effects  from mitigation strategies (other benefits
categories of interest could also be monetized).
Quantifying the costs and benefits of particular
mitigation measures can illustrate their cost-

• Researchers in Santiago, Chile, for example,
  estimate that, cumulatively, more than 1,700
  premature deaths,  150,000 emergency room
  visits, and 2 million asthma attacks and
  bronchitis cases could be avoided by
  implementing an IES  policy scenario over
  20 years. The corresponding annual value
  of these avoided health effects is over $700
  million U.S. dollars by 2020.

• By 2010, potential carbon reductions from
  IES measures in Shanghai, China, could
  equal the amount of carbon dioxide emitted
  from the combustion of more  than 100 million
  barrels of oil annually.

• Improvements in local air quality in Buenos
  Aires, Argentina, could save as many as
  4,000 lives annually between  2000 and 2010.

• A national benefits study of South Korea
  shows that approximately 70 percent of the
  cost of measures to mitigate carbon by 10
  percent in 2010  would be offset by their
  human health co-benefits. The measures
  would also result in substantial reductions in
  local and global emissions.

Technical Capacity Is Growing

There are also less tangible, but equally
important benefits to adopting the IES approach.
For example, the process offers  researchers in a
country the opportunity to "learn by doing,"
which enhances technical capacity and helps
institutionalize the process at the same time. In
this way, analysis  and implementation of
integrated environmental strategies will more
likely continue beyond the completion of any
particular IES project. The IES  program is
moving towards this goal in several countries:

• An initial IES study in Seoul, South Korea,
  led to a national study and continued efforts to
  calculate the costs and benefits of individual
  measures for "real-world" policymaking.
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• In Santiago, Chile, and Shanghai, China,
  initial IES analyses have stimulated follow-on
  projects focusing on key policy and
  implementation decisions.

Communication Is Improving

In many countries, IES projects have fostered
communication and interaction-not only
between researchers, but also among policy
staffs in diverse fields. In some instances, such
close working relationships are unprecedented.
IES can also help remove institutional barriers
and promote cooperation among different
stakeholders within a country. In addition, IES
facilitates information exchange and training
opportunities-both within and among countries:

• In Shanghai, China, policymakers lauded IES
  for bringing together a number of ministries to
  discuss integrated policy and the impact of
  one ministry's decisions on another.

• In an example of South/South exchange and
  networking, the leader of the IES team in
  Santiago, Chile,  shared his expertise with
  researchers in India and  the Philippines.  He
  also provided health benefits training for
  researchers in China, India, and the

• The lead IES coordinator in Buenos Aires,
  Argentina, was named to the Climate Change
  Unit of the country's Sustainable Development
  Office because of his recognized expertise.

• The IES program has also facilitated
  interaction and cooperation among
  multidisciplinary agencies in several
  countries, including Chile, China,  and Korea,
  where it had not occurred previously.

The  Purpose of  This

This handbook is designed to help inform both
technical and nontechnical audiences about
lES-how the process works and the types of
results that can be achieved.
All readers will benefit from reading the
background and introductory material on IES
in Chapter 1, the planning and "scoping" steps
described in Chapter 2, and the lessons learned
in Chapter 9.

In addition, policymakers and ministry officials
will be particularly interested in learning how
IES results can be quantified, compared, and
disseminated (Chapter 7) and how these results
can be translated into specific policy
recommendations and incorporated into a
country's planning processes (Chapter 8).

Technical experts will be interested in the
remaining chapters, which each focus on a
particular type of technical analysis:

• Energy/Emissions Analysis and Modeling
  (Chapter 3):  Describes the process for
  developing a base-year emissions  inventory
  of selected pollutants and GHGs, as well as
  energy/emissions scenarios illustrating how
  different implementation measures could
  affect emissions levels.

• Air Quality Modeling (Chapter 4): Discusses
  the selection of emissions to be included in
  the analysis, collection of relevant data, and
  modeling approaches for forecasting future
  atmospheric concentrations of targeted

• Health Effects Analysis (Chapter 5):
  Describes how to estimate the avoided health
  effects (morbidity and premature mortality)
  associated with each developed scenario.

• Economic Valuation and Analysis (Chapter
  6): Describes how to estimate the  monetary
  values of avoided mortality and morbidity
  incidences resulting from each scenario using
  an appropriate valuation approach.

Together, these four sections form the IES
analytical framework. Although each chapter is
oriented towards the technical experts in that
particular field, the background information and
explanatory detail included can help  all readers
understand the objectives of the analysis and the
  About This Handbook

                                                                        IES Handbook
kinds of data that must be collected. Because
each step in an IES analysis is linked, and the
output from one analysis informs the others,
all IES analysts benefit from having a general
understanding of the process and how their
particular analytical component fits into the
larger picture.

The appendices to this document provide
background information for all readers and
include the following:

• Bibliography (Appendix A): Lists all works
  cited in the handbook.

• Glossary/Acronyms (Appendix B): Defines
  key terms used in the handbook and provides
  the meanings of all acronyms and
  abbreviations referenced.

• IES Process Tools (Appendix C): Provides
  sample templates, forms, and other tools to
  help organize and plan an IES project and to
  disseminate results.

• Analytical Resources (Appendix D):
  Provides model descriptions, studies,
  equations, and other resources that can be
  used in the technical analyses.

• Funding Tools and Resources (Appendix E):
  Briefly describes funding sources that are
  applicable to environmental projects in
  developing countries. Also describes several
  models that can be used to analyze important
  financial, economic, and environmental
  features of potential investment projects.

• Case Studies (Appendix F): Describes four
  different IES projects, including the history  of
  each project, the team that was formed, the
  methodologies used, and the results achieved.

For More Information

For more information about IES, visit
 or call
+1 202343-9731.

The U.S. EPA's Office of Atmospheric Programs
prepared this handbook with support from a
number of staff within the U.S. EPA, other
federal agencies, and international organizations.
This handbook would not have been possible
without the dedicated assistance of those

Original authors of the handbook include
numerous individuals on the IES team at the
U.S. EPA and the National Renewable Energy
Laboratory (NREL); Jason West (American
Association for the Advancement of Science
(AAAS) Fellow) from the U.S. EPA Office of
Air and Radiation; and experts from other
organizations. Among IES country partners,
authors include:

        Changhong Chen (China)
        Luis Cifuentes (Chile)
        He Kebin (China)
        Luiz Tadeo Prado (Brazil)
        Pablo Tarela (Argentina)
        Mary Anne Velas (Philippines)

A number of individuals also served as
reviewers of the handbook; their reviews greatly
enhanced the document. Reviewers from IES
country partners include:

        Changhong Chen (China)
        Mariana Conte Grand (Argentina)
        Wang Fable (Philippines)
        Seunghun Joh (South Korea)
        Flavio Pinheiro (Brazil)
        Zhang Qiang (China)
       N.S. Vatcha (India)

Other reviewers include:
       Antonio DelMonaco, Global
        Environment Facility
        Majid Ezzati, Resources for the Future
        Johanna Gregory, Winrock International
  About This Handbook

                                                                        IES Handbook
       Omar Hopkins, U.S. Agency for
       International Development
       Simone Lawaetz, U.S. Agency for
       International Development
       Eric Martinet, Global Environment
       Helen Walsh, U.S. Department of
Reviewers from the U.S. EPA include:
Office of Air and Radiation
       Jackie Krieger
       Judi Maguire
       Trent Wells
       Jason West (AAAS Fellow)
Office of Atmospheric Programs
       Jane Leggett
       Steve Seidel
       Michael Shelby
Office of Air Quality Planning and Standards
       Tyler Fox
       Carey Jang
       Sara Terry
Office of the National Center for Environmental
       Chris Dockins
       Nathalie Simon
Office of Research and Development
       Darrell Winner
The U.S. EPA also wishes to thank organiza-
tions and individuals who contributed
photographs, including the NREL; Adam
Chambers, NREL; Maria Hendriksson,
U.S. EPA Office of Environmental Justice;
Luis Cifuentes from the IES Chile team; and
Deborrah Lindsay (freelance photographer).
 About This Handbook

              Introduction to the IES Program
The United States Environmental Protection Agency's (U.S. EPA's) Integrated
Environmental Strategies (IES) program assists developing countries in
identifying, analyzing, and implementing technologies and policy measures
to improve local air quality and, secondarily, reduce greenhouse gas (GHG)
emissions. These measures provide local public health, economic, and
environmental benefits. Governmental agencies and research institutions in
Argentina, Brazil, Chile, China, India, Mexico, the Philippines, and South
Korea participate in the IES  program.

The IES program grew out of a U.S. domestic
effort to analyze the costs and benefits of air
quality measures enacted under the Clean Air
Act (CAA).1 The Act, and its subsequent
amendments, has been the centerpiece of the
U.S. air quality management strategy for the last
three decades. The CAA covers many criteria
 pollutants and hazardous air pollutants
 (see sidebar below) and includes guidelines
 for managing stationary and mobile sources.
 (Table 1.1 lists the chemical compounds,
 elements, and emissions referenced in this
 handbook, along with their corresponding
 abbreviations; these abbreviations are used
 throughout the document.)
  Criteria Air Pollutants and GHGs

  The U.S. EPA uses six "criteria pollutants" as
  indicators of air quality: O3, CO, NOX, SO2,
  PM, and Pb. For each pollutant, the Agency
  has established National Ambient Air Quality
  Standards to protect human health and welfare.

  Because other countries might designate dif-
  ferent pollutants or refer to local air pollutants
  using other terms, this document uses the term
  "criteria pollutants" only when citing specific
  U.S. air quality rules. Otherwise, the more
  general terms "conventional air pollutants"
  or "local air pollutants" are used. These terms
  refer to air pollutants in any country that can
  induce human health impacts and that are
  usually regulated or monitored. The term "con-
  ventional pollutants" does not include GHGs.
The U.S. EPA and United Nations Framework
Convention on Climate Change (UNFCCC)
cite the six major GHGs affected by human
activities as CO2, CH4, N2O, HFCs, PFCs,
and SF6. In addition to these GHGs, there are
also naturally occurring GHGs, such as water
vapor and O3. Each of these GHGs differs in
its ability to absorb heat in the atmosphere,
with HFCs and PFCs being the most heat-
absorbent. When only GHGs are being
referred to in the handbook, the term "GHGs"
is used. The general terms "emissions" or
"targeted emissions" are used to refer to both
GHGs and conventional pollutants.
1 U.S. EPA. 1997. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1970 to 1990.
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                                                                           IES Handbook
Table 1.1 Chemical Abbreviations
Chemical Compounds and Elements
carbon monoxide
carbon dioxide
nitrogen dioxide
nitrogen oxides
nitrous oxide
sulfur hexaflouride
sulfur dioxide
sulfur oxides
Selected Emissions
greenhouse gas
hazardous air pollutant
particulate matter
particulate matter less than 2.5 micrometers
particulate matter between 2.5
and 10 micrometers
total suspended particulates
volatile organic compound
As standards were enacted under the CAA,
federal lawmakers began to question whether
these standards were achieving the desired
benefits at a reasonable cost. In response,
Congress directed the U.S. EPA to analyze the
costs and benefits of federal air quality
standards. The resulting 1997 study concluded
that significant health and economic benefits
could be achieved by reducing criteria air
pollutants. While the study's findings focused
primarily on U.S. domestic  policy, they formed
the basis of an important analytical framework
that could be applied to other countries.

At the same time this study was conducted,
many other researchers and policymakers were
beginning to investigate methods for quantifying
the multiple benefits of strategies that improved
air quality and reduced GHGs. In 1998, the U.S.
EPA created the International Co-Controls
Analysis Program (ICAP), which was based
upon these methods.

ICAP was launched as the international public
health community began to  assess the health
costs associated with increasing air pollution in
many of the world's megacities. In response,
several leading public health experts from the
World Resources Institute and the World Health
Organization conducted a study that linked the
health benefits of reduced air pollution to
associated GHG reductions. The approach
focused on quantifying the local co-benefits (see
sidebar on "What Are Co-Benefits?"on page 8)
derived from adopting energy, transportation,
and other measures that reduced local air
pollutants and associated GHGs.2

Many countries struggle to balance economic
and environmental issues, which are often
perceived to be in conflict. For example, raising
economic output without compromising local
environmental conditions, such as air quality,
can be a challenge. In addition, many countries
are concerned  about global  issues such as
climate change. To address  the multiple
economic, environmental, and health issues
and risks simultaneously, EPA introduced the
concept of "integrated planning" (see sidebar
on "What Is Integrated Planning?"on page 8).
 1 Davis et al. 1997. Short-term Improvements in Public Health.
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                                                                           IES Handbook
"Integrated strategies" refer to actions that
generate direct air quality improvements and that
measure their downstream impacts (e.g., reduced
human health effects), as well as estimate their
associated reductions in GHG emissions. The
concept shows the interrelationship between air
pollution and both public health and economic
impacts, while also providing the additional
benefit of GHG reductions. This shift from
simply analyzing the co-benefits of integrated

  What Are Co-Benefits?

  Throughout this document, the term co-
  benefits is used to refer to two  or more ben-
  efits that are derived together from a single
  measure or set of measures. Co-benefits  are
  generally 1) the health and economic bene-
  fits that result from reducing local air pollu-
  tion, and 2) the GHG reductions associated
  with reducing ambient emissions.

  The literature presents different perspec-
  tives on co-benefits (sometimes termed
  "co-controls" or "co-control measures"),
  and some of these viewpoints are more
  restrictive than others. For example, some
  studies do not consider benefits generated
  unintentionally as co-benefits. Benefits can
  be generated unintentionally when decision-
  makers implement a policy with a single
  aim and then later discover that the policy
  resulted in additional co-benefits. This doc-
  ument reflects a broader view and considers
  any positive benefit derived from a policy
  measure or scenario to be a co-benefit of
  the policy, provided that one of the benefits
  achieved is reduced GHG emissions.

  While IES projects can estimate the
  potential GHG emission reductions from
  specific actions, they do not estimate the
  possible climate change mitigation benefits
  of reducing GHGs. The estimates of bene-
  fits generated through IES analyses relate to
  health impacts of improved local air quality,
  not to GHG reductions per se, since  limited
  understanding of global climate change,  its
  causes, and its potential impacts precludes
  any such estimates at this time.
measures to analyzing and implementing policies
and measures with multiple local and global
benefits marked the transition from ICAP to the
current IES program.

  What Is Integrated Planning?

  This handbook uses the term "integrated
  planning" (also termed "co-control planning"
  in the literature) to refer to the active design
  and implementation of integrated measures
  that achieve co-benefits. The process can
  occur within the context of planning new
  infrastructure development in urban areas
  (such as "smart growth" measures that com-
  bine rational land-use plans, high-density
  development, and public transportation that
  result in lower energy use, and thus lower
  GHG emissions) and improved air quality as
  compared to a baseline, non-integrated plan-
  ning approach. Integrated planning can also
  occur within a context of redesigning exist-
  ing systems to take advantage of co-benefits
  potential through integrated measures.
Goals of the IES Program

IES is part of the U.S. government's strategy to
promote long-term engagement and increased
capacity in developing countries as they seek
economic growth opportunities that will achieve
greater environmental sustainability. The
multidisciplinary approach of the IES Program
brings together leading experts from a range of
academic  disciplines such as economics,
environmental policy, air quality management,
and public health.

Specific objectives of the IES Program are to:

• Identify tools, training opportunities, and
  approaches to help analyze and quantify
  potential environmental, public health, and
  economic benefits.

• Facilitate consideration of global issues
  (i.e., climate change) in local energy and
  environmental policy initiatives.
  Chapter 1
                                                                   Introduction to the IES Program

                                                                            IBS Handbook
• Build expertise in integrated energy and
  environmental analysis.

• Promote implementation of measures and
  policies with multiple benefits.

• Refine, improve, and disseminate analytical
  methodologies for benefits analysis.

The U.S. EPA sponsors and manages IBS. The
National Renewable Energy Laboratory (NREL)
serves as a technical advisor for the program.
The United States Agency for International
Development (USAID) provides funding for
projects in some of the participating IBS countries.

Why  Co-Benefits Analysis?

Countries participating in the IBS program have
analyzed a variety of measures covering the
transportation, power and energy, industry,
commercial, and residential sectors. These
measures include clean technological approaches
(e.g., energy-efficient industrial boilers) and
nontechnological approaches (e.g., vehicle
operator training), as well as incentive programs
(e.g., incentives to retire aging vehicle fleets) and
end-of-pipe controls (e.g., diesel particulate
traps). This broad range of measures reflects both
the diverse set of participating IBS countries and
the unique conditions in each nation.

Many of the activities that generate emissions of
local air pollutants also produce GHGs. Therefore,
policies such as improving transportation and
power generation efficiency or reducing
transportation or power demand can have multiple
benefits. A single set of policies can reduce
emissions of the local air pollutants associated
with fossil fuel combustion (such as PM10, SO2,
NOX, and Hg), as well as lower emissions of
associated GHGs (such as CO2 and CH4).
However, not all air pollution control measures
also reduce GHG emissions. In fact, some
measures, such as using scrubbers on power
plants, can actually increase GHG emissions by
raising energy use. Conversely, not all GHG
reduction measures reduce local air pollution.

Given these complexities, it is particularly
worthwhile to undertake analyses that 1) identify
measures for producing both local air quality and
associated GHG co-benefits, and 2) estimate the
magnitudes of these co-benefits. While a certain
level of analytical precision is necessary,
absolute perfection is not—particularly given
the limited resources in developing countries.
The IBS program aims to provide an integrated
approach, and a means of applying this approach
through permanent capacity enhancement, that
can be improved over time as needs evolve and
additional resources become available.

  Key Terms at a Glance
  • Criteria Pollutants = Air pollutants for
    which standards have been established in the
    United States.
  • Conventional Pollutants (or local air
   pollutants) - Air pollutants  in any country
    that can cause human health impacts.
  • GHGs - Greenhouse gases.
  • Emissions or Targeted Emissions — Both
    GHGs and conventional or local pollutants.
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                   Introduction to the IES Program

                                                                           IES Handbook
Scope of IES Co-Benefits Analyses     Figure 1.1 IES Process Flow Diagram
This handbook discusses a variety of co-benefits
that, in theory, includes all possible positive
effects that could occur from the policy
measures being analyzed. It is nearly
impossible, however, to capture and quantify all
of these direct and indirect effects. In addition to
resource constraints, many uncertainties exist in
our scientific understanding of these effects.
Therefore, the IES program primarily focuses on
benefits derived from reductions of conventional
air pollutant emissions and assessment of
associated GHG emissions reductions.

The monetary value of co-benefits is mostly
related to human health impacts, where the science
is relatively certain and avoided damage values are
high. While quantifying the costs of morbidity and
mortality (especially across different societies) can
be difficult, IES researchers have found such
analyses useful. As understanding grows and data
become more readily available, IES analyses can
consider additional co-benefits, such as ecosystem
benefits or avoided material damages, as well as
potential economic opportunities to develop and
deploy innovative clean technologies. Analyses
could also be extended to include other co-benefits
resulting from impacts in other media (e.g., water,
soil). Such analyses are beyond the scope of the
current IES projects.

Overview of the IES  Process

The IES process is largely defined by an
analytical framework that is directly linked
to policy implementation. The process
consists of seven integral steps (see Figure 1.1).
A preliminary IES team building/project scoping
phase precedes four technical analyses
(emissions analysis, air quality analysis, health
effects analysis, and valuation). Each technical
analysis builds upon the results of the previous
one; however, each analysis is a discrete activity.

The results of the analyses are then shared with
in-country policymakers and other stakeholders.
The team might also disseminate results more
           Scope Project and Build Team

        Develop Energy/Emissions Scenarios

       Calculate Atmospheric Concentrations

           Quantify Public Health Effects

           Perform Economic Valuation
                 of Health Benefits
         Rank Measures and Share Results
               Implement Measures
   broadly through publications or attendance at
   local, national, regional, or international
   workshops. At this point, implementation of the
   most promising measures is ready to begin.
   Often, however, additional steps might need to
   be taken (such as undertaking additional
   analysis or building public support) to pave the
   way for implementation. While each IES team
   follows the same general approach, its
   application and results are unique.

   Step 1: Scope Project and Build Team

   An IES project begins when a host organization
   (usually the government) within a country
   commits to a project and identifies a technical
   team to perform the analytical tasks. The host
   organization also identifies an in-country project
   coordinator to lead the project technically and
   administratively; this individual is responsible
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                                                                           IES Handbook
for harmonizing the efforts of the individual
technical teams and ensuring the project stays
focused in order to meets its desired outcomes.

Once the IES team is defined, it organizes a
formal scoping meeting, which provides a forum
for the project team, policymakers, and other
stakeholders to come together to refine the scope,
objectives, and desired outcomes of the project.
The meeting also provides an opportunity for
different team members to share information
about available data, tools, and methodologies.
The ultimate outcome of the scoping meeting is a
project work plan, which serves  as the master
document identifying all of the project activities
that need to be performed, as well as how these
pieces will come together to ensure an integrated
analytical, outreach, and implementation program.
Step 2: Develop Energy/Emission
In this initial analytical step, the technical team
develops a comprehensive base-year emissions
inventory of selected conventional pollutants
and GHGs, which serves as the foundation for
much of the IES analysis. Once the base-year
emissions inventory is complete, the team
develops a series of energy/emissions scenarios,
or portrayals of how energy demand and
resulting emissions might evolve into the
future (e.g., 10 and/or 20 years) based on the
implementation of various control measures,
coupled with economic indicators.
   The team develops a baseline scenario
   (against which all other scenarios are compared)
   and a variety of integrated mitigation scenarios,
   which include specific technologies and policy
   measures. These scenarios are carried through
   each analytical step, allowing the team to
   compare the co-benefits and associated costs
   for each. Once the energy/emission scenarios
   have been developed, the  technical team will
   run the appropriate input data through its
   selected energy/emissions model to forecast
   future energy demand and associated emissions
   for each scenario.

   Step 3: Calculate Atmospheric

   The air quality technical team quantifies
   changes in air pollutants and GHGs from the
   baseline for each integrated mitigation scenario
   under analysis. One of the team's most critical
   tasks is selecting the targeted emissions  for
   inclusion in the analysis. This  selection is most
   often determined by data availability and a
   qualitative assessment of ambient conditions.
   All IES projects to date have selected directly
   emitted PM10 as their sentinel emission  of focus
   due to the strong body of evidence linking it to
   compromised human health. As for GHGs, all
   IES studies to date have focused on CO2.

   Upon selecting the targeted emissions for analysis,
   the technical team collects a variety of local
   ambient air quality and meteorological data.
   These data, along with the output from the energy/
   emissions model, is then run through the selected
   air quality model to forecast future atmospheric
   concentrations of the targeted emissions.

   Step 4: Quantify Public Health
   In this analytical step, the health effects
   technical team utilizes the output  data from the
   air quality modeling to forecast the avoided
   health effects (morbidity and premature
   mortality) associated with each developed
   scenario. In order to make this forecast,  the
   technical team first determines the set of health
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effect endpoints for inclusion in the analysis.
This set can include increased incidence and
prevalence of respiratory symptoms and
illnesses, increased asthma attacks, chronic and
acute bronchitis, hospital admissions, days of
work loss, and infant and elderly mortality.

Once the set of health effect endpoints is selected,
the technical team adopts or develops its own
concentration-response (C-R) functions, which
describe the relationship between increased
concentrations of emissions and resulting health
effects. The C-R functions chosen must be
compatible with the scenarios under
consideration. The team must also account for
uncertainty in its analysis, particularly if it is
extrapolating studies from one location to another.

Step 5: Perform Economic
Valuation of Health Benefits

The economics technical team is responsible for
estimating the monetary values of health-related
benefits resulting from improved air quality for
the scenarios under consideration. The team
estimates the monetary values of avoided
mortality and morbidity incidences resulting from
each scenario using an appropriate valuation
approach. As part of this process, most IES teams
utilize the "benefits transfer" technique, which
extrapolates economic values from a study site
where original research was  conducted to the
local site, adjusting for important differences in
the local economy and health care system. The
IES team can utilize these valuation data to
compare the health-related economic benefits and
costs associated with each scenario. An accurate
valuation of public health effects is useful to
policymakers as they examine the policies and
technologies under consideration.

Step 6: Rank Measures and Share

Once the technical analyses are complete, the
IES team assesses the cumulative results to
determine which integrated  scenarios provide
the most cost-effective co-benefits. To assist
policymakers in making informed decisions, the
team ranks the mitigation measures under
   consideration based on a set of selected criteria,
   such as the relationship between monetized
   benefits and mitigation costs.

   The team then begins sharing its results to
   promote the eventual implementation of the
   recommendations and the ultimate realization of
   the estimated co-benefits. An IES team typically
   utilizes a number of dissemination strategies,
   including policymakers' meetings; publication of
   final project reports; presentations at conferences
   and workshops; and outreach to the general public
   or specific subpopulations. Following this initial
   round of information exchange, researchers might
   find that more data are needed or  additional
   studies should be conducted to  strengthen their
   analysis and build support for implementation.
   Step 7:  Implement Measures

   An IES program does not end with the
   completion of the analytical steps. To begin
   achieving the co-benefits that characterize the
   IES program, teams need to continue engaging
   stakeholders and policymakers to promote the
   implementation of recommended measures. To
   transition from the analytical component of the
   IES process into the implementation component,
   teams must often utilize a number of strategies,
   including building public support for the
   recommended measures and seeking funding to
   implement the measures.

   A Harmonized Approach

   The IES framework is designed for
   interdisciplinary, yet independent, technical
   teams working towards the common goal of
   identifying the most cost-effective policies
   and technologies that produce the desired
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co-benefits. By dividing the process into
individual analyses, each technical team can
contribute its expertise to a manageable portion
of the project.

The technical team spearheading each analysis
performs a number of specific tasks (outlined in
Figure 1.2 on page 15). In some instances,
however, a team might not have the resources
(data or funding) available to perform each task
as suggested. Teams are encouraged to complete
as many of the individual tasks as possible, as
they lend  additional credibility to a project  and
ultimately contribute to a more sound set of
recommended mitigation measures.

  The Benefits of a Modular
  The modular structure of the IES analytical
  approach is particularly  appealing when
  applied in developing countries,  as it
  enables teams to tailor their approach to
  their specific needs, data availability, and
  unique conditions (e.g.,  economic, energy
  use, geographic, demographic, and meteo-
  rological). Teams can also adapt methodolo-
  gies, tools, and results from both in-country
  and outside studies.
  In addition to being modular, the IES
  process is also iterative in nature. This char-
  acteristic  allows teams to expand the scope
  of their original study to include additional
  targeted emissions, sectors, and/or geo-
  graphical areas in future iterations. In addi-
  tion, a successful IES project in one city
  might lead to interest in conducting a simi-
  lar study in other cities or neighboring
   Sample  IES  Results

   Tables 1.2, 1.3, and 1.4 illustrate the types of
   benefits information that can be generated through
   IES analyses. These tables are not intended to
   make comparisons across cities. Variations among
   cities are substantial because each is unique in
   terms of size, geography, energy use profile,
   population, and economy. Additionally, each IES
   country team started at different points in terms
   of air quality and existing policies, and each
   team considered its own particular set of policy
   measures. Results are often presented as a range
   due to variations among selected scenarios as well
   as uncertainties within each scenario. It should be
   noted that many important assumptions went into
   the analyses that produced these results.

   Table 1.2 shows the number of premature human
   deaths caused by exposure to PM10 that could be
   avoided annually in 2010 and 2020 through
   policy measures designed to improve air quality
   and secondarily reduce GHGs. All IES studies to
   date have excluded additional harmful air
   pollutants beyond  PM10 from the health impact
   and economic valuation analyses  due to data and
   resource limitations. It is therefore expected that
   these estimates are conservative.

   Table 1.2 Estimated Avoided Annual
   (Number of Avoided Premature Deaths Due to Change in
   PM10 Concentrations)
Buenos Aires3
Sao Paulo5
                                                  *Note: Cumulative figures are estimated as linear extrapolations
                                                  between the year 2010 and 2020 endpoints, except for those for Sao
                                                  Paulo, which the IBS-Brazil team derived using a different appproach.
3Gaioli et al. 2002. Valuation of Human Health Effects and Environmental Benefits. This reference also applies to
 Tables 1.3 and 1.4.
4Cifuentes et al. 2001. International Co-controls Benefits Analysis Program. This reference also applies to
 Tables 1.3 and 1.4.
5Pinheiro et al. 2004. Integrated Environmental Strategies (IES) in Sao Paulo, Brazil. This reference also applies to
 Tables 1.3 and 1.4.
6Joh et al. 2001. Ancillary Benefits Due to Greenhouse Gas Mitigation. This reference also applies to Tables 1.3 and 1.4.
7Chen et al.  2001. The Integrated Assessment of Energy Options and Health Benefit. This reference  also applies to
 Tables 1.3 and 1.4.
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Table 1.3 estimates the social value of future
benefits accruing from avoided morbidity and
mortality as a result of air quality improvement
from IES measures. These co-benefits are
compelling and could be persuasive to public
officials who might want to enact similar kinds
of policies. Any potential benefits from the
mitigation of climate change are not included in
these valuations.

Table  1.3 Estimated Social Benefits of
Annual PM10 Reductions
(Millions of U.S. Dollars)8
   Table 1.4 Reductions in Annual CO2
   (Millions of Metric Tons of CO2)
Buenos Aires
Sao Paulo
*Note: Cumulative figures are estimated as linear extrapolations
between the year 2010 and 2020 endpoints.
Table 1.4 illustrates the potential future
reductions in CO2 that would result from the
policy measures analyzed in four of the IES
country-based analyses. The table suggests that
IES measures can provide significant,
quantifiable carbon reductions. For example,
Shanghai's potential CO2 reductions by 2010 are
estimated to be equivalent to the amount of CO2
emitted from the combustion of 20.9 to 109
million barrels of oil.9 Santiago's potential CO2
reductions by 2010 are estimated to be equivalent
to the amount of carbon sequestered by 4.5
million acres of fir or pine forests in one year.10
Buenos Aires
Sao Paulo
   *Note: Cumulative figures are estimated as linear extrapolations
   between the year 2010 and 2020 endpoints.

   These summary results illustrate the type of
   analytical outputs that are possible through the
   IES analytical framework. Frequently, the
   information provided about the benefits that can
   accrue from several different measures allows
   policymakers to distinguish among the types of
   solutions available to them. This information
   can also help to educate  stakeholders within a
   country, who in turn can incorporate the
   information into their ongoing dialogues and
   policy formulation processes. The ultimate
   intended outcome is to implement the most cost-
   effective and politically viable policy measures.
   Recent IES projects have placed much more
   emphasis on tangible policy efforts to ensure
   that co-benefits are realized as policies are
8Constant dollar years vary. The Shanghai and Buenos Aires valuations use year 2000 U.S. dollars; the Santiago
 valuation uses 1997 U.S. dollars; and the Sao Paulo and Seoul valuations use 1999 U.S. dollars.
9This number was calculated using the high- and low-end reduction estimates (9 and 47 million metric tons of CO2) in
 the U.S. EPA's Greenhouse Gas Calculator at .
10 This number was calculated using the reduction estimate (5.4 million metric tons of CO2) in the U.S. EPA's Greenhouse
  Gas Calculator at .
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Figure 1.2  Summary of IES Steps
                                   Scope  Project and  Build Team
     Acquire commitment from government host organization.
     Identify technical team, project coordinator, technical leaders,
     and IES partners.
      Organize formal scoping meeting.
      Develop project work plan outlining the coordination of all
      project activities.
                              Develop Energy/Emissions Scenarios
     Determine energy sector categories for inclusion.
     Compile base-year emissions inventory.
     Develop baseline and integrated mitigation energy/emissions
     Select energy/emissions model.
      Perform fuel consumption and emissions sector survey(s).
      Collect fuel-use data.
      Develop/adopt emissions factors.
      Run model to project future emissions for each scenario.
      Summarize results for air quality analysis.
                             Calculate Atmospheric Concentrations
     Assess existing ambient air quality.
     Identify targeted emissions.
     Select air quality model.
     Refine emissions data (from energy/emissions model),
     if necessary.
      Collect local, historical ambient air quality monitoring data.
      Collect local, historical meteorological data.
      Run model to project future ambient concentrations for each
      Summarize results for health effects analysis.
                                   Quantify Public  Health Effects
     Determine health endpoints and analytical methodologies.
     Develop/identify appropriate C-R functions.
     Collect local public health data.
     Perform local epidemiological studies or adapt results.
      Estimate avoided health effects for each scenario.
      Perform uncertainty analysis.
      Summarize results for economic valuation analysis.
                      Perform Economic Valuation of Health Benefits
     Collect economic valuation data.
     Determine appropriate valuation methods.
     Apply selected valuation approaches.
      Perform benefits transfer, if necessary.
      Perform comprehensive valuation analysis.
      Summarize results through a range of valuation scenarios.
                                Rank Measures and Share Results
     Quantify cumulative costs and benefits for each recommendation.
     Develop benefit-cost ratios for each recommendation.
      Prioritize recommended measures based on benefit-cost
      ratios or other criteria.
      Share project results.
      Identify additional steps to advance implementation.
                                         Implement  Measures
     Incorporate results into policymaking processes.
     Build support for implementation.
      Institutionalize IES process and results.
      Develop funding proposals.
  Chapter 1
Introduction to the IES Program

                 Planning and  Team  Building
Because of the multifaceted nature of integrated environmental strategies (IBS)
work, a project must be thoroughly planned and coordinated. Before a country
embarks on an IBS project, an initial round of information gathering typically
occurs to ensure the project's feasibility. Once a country decides to pursue an
IBS project, more extensive planning activities occur, including a  formal
"scoping" meeting. The host country also establishes an in-country IBS
technical team to gather data and conduct the necessary analyses.
Additionally, some countries set up a steering committee to help guide the
project and to comment on key decisions. After the scoping meeting, the IES
technical team develops a work plan delineating the project goals, timetable,
management structure, major tasks, key products, data gaps, and desired
outcomes. The work plan is instrumental in linking and managing all of
the information needed to conduct an IES project and in facilitating the
implementation of policy measures to achieve the desired co-benefits.
Who Is  Involved  in an
IES Project?

As described in Chapter 1, the United States
Environmental Protection Agency (U.S. EPA)
initially responded to the needs of a number of
developing countries to help them quantify the
local co-benefits derived from adopting energy,
transportation, and other policies that reduce local
air pollutants and associated GHGs. This work
evolved into the current IES program. As these
countries have begun completing IES projects and
disseminating results, interest in the work has
grown. As a result, more countries are considering
or embarking on co-benefits projects like IES.

In many cases,  one or more experts in a
particular field  are responsible for championing
an IES project to the appropriate government
officials and getting the project started. In some
cases, these individuals have also become IES
program coordinators-leading the scoping and
   analytical steps of a project and moving the
   project (and its outcomes) among policymakers
   and other stakeholders toward implementation.

   A government host organization and a technical
   lead institution are at the core of every IES
   project. The host organization is generally a lead
   government (i.e., a national, regional, or local)
   agency or other organization that has interests
   in the environmental objectives of the program.
   The host organization is responsible for selecting
   a technical institution and a technical team
   to lead the IES process. The lead technical
   institution can be a research laboratory (such
   as the Korea Environment Institute), a university
   (such as the P. Catholic University of Santiago,
   or Tsinghua University in Beijing), or other
   similar institution. The technical team (discussed
   in more detail later in this chapter) is made up
   of experts in relevant disciplines. It conducts the
   co-benefits analysis and disseminates results.
   See Figure 2.1 for an overview of the key
   players involved in an IES project.
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Figure 2.1 Key IES Players
   Other International
      IES Partners
                                                                   U.S. IES Partners
    (Technical Leader)
        Technical Team
(Technical Leader)
(Technical Leader)
(Technical Leader)
  Key Players in an IES Project
  Throughout this handbook, the following terms
  are used to describe the groups and individuals
  typically involved in an IES project:
  • Technical Team. In-country experts in
    relevant disciplines, such as health, air,
    energy, and economics.
  • Project Coordinator. Leader of the
    in-country technical team.
  • IES Technical Leader. Leader of each
    individual technical analysis (e.g., health,
    air quality).
  • IES Partners. The U.S. EPA; other
    U.S. organizations, such as the National
    Renewable Energy Laboratory (NREL),
    which has provided technical support to the
    U.S. EPA for the IES projects, and the U.S.
    Agency for International Development
    (USAID), which has provided funding
    for some of the participating IES countries;
    in-country technical teams; and
    international IES experts.
Getting Started
Before a government host organization commits
to an IES project, a preliminary amount of
information gathering and exchange typically
occurs to determine if a project is technically and
politically feasible. Often, IES partners meet with
in-country government officials to brief them on
                          the IES program and to garner their support.
                          Some of the key issues that IES partners will
                          want to address during these meetings include:

                          • The motivation for a project. Why embark on
                            an IES project? What are the project's needs?

                          • The policy and societal benefits of an IES
                            project. What kinds of local and global
                            benefits have been achieved elsewhere? How
                            have these benefits been quantified and
                            documented? How have teams disseminated
                            project results?

                          • The IES process. What is involved in an IES
                            project? What is the process and who are the
                            key players? What is the timeframe from start
                            to finish? What are the end results?

                          • The resources needed to support a project.
                            What kind of commitment will government or
                            ministry officials need to make? How much
                            funding is needed, and where do these monies
                            typically come from?

                          • The scope of a project. What geographic
                            area will the study cover? What sectors
                            will be targeted? Will the study capture just
                            co-benefits or costs as well?

                          These initial meetings also provide an opportunity
                          to gain insight into the policymaking processes that
                          an IES project could help to support. Therefore, in
                          addition to briefing officials on IES and its
                          benefits, partners will want to elicit pertinent
                          information from these individuals, such as:
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                                                                            IES Handbook
• What are the public policy priorities of the
  city or country? For example, how do air
  quality, public health, climate change
  mitigation, and clean energy
  systems/technologies rank as priorities?

• What relevant policies, regulations, decrees,
  and legislative acts are  already in place or
  expected in the near term? (It is useful to have
  this information at the local, state, and central
  government levels.) How can IES projects be
  designed to support policy development or

• Which existing planning, policy review,  or
  policymaking processes (such as air quality
  plans, transportation working groups, or
  review committees) are most relevant to IES?

• What kind of institutional oversight or
  involvement is desired?

With answers to these questions, IES partners
can begin outlining relevant policymaking goals
at all levels of government. They can then begin
to strategize ways to integrate IES project
objectives and results into decisionmaking
structures in a way that supports and adds the
most value to a country's policy priorities. For
example, the Manila IES  team presented the
results of its analysis to a range of senior
policymakers at the local  and national levels,
including those from the federal Departments
of Environment and Natural Resources, Energy,
Transportation and Communication, and Public
Health. These briefings might influence air
quality planning in Metro Manila and other cities
across  the Philippines. In China, IES methods
are now regularly used to support the Shanghai
Five-Year Plan formulation process. Integrating
IES results into existing decisionmaking
structures is often more effective than trying to
convene special initiatives focused only on IES.

Engaging Stakeholders

IES partners will want to engage key
policymakers, nongovernmental organizations
(NGOs), and other stakeholders at the very
   beginning of an IES project. Policy and
   planning organizations, as well as politically
   appointed officials, also need to be involved
   early on and kept apprised of project
   developments, particularly if their involvement
   can advance the implementation of promising
   measures. Early engagement serves several
   purposes. It ensures that key stakeholders have
   been amply consulted, builds support and
   visibility for the project, and encourages
   participation at the formal scoping meeting.

   Stakeholders involved in an IES project
   typically include:

   •  Central or national government officials
     from ministries or departments of
     environment, energy, power, health, and
     transportation.  Officials and technical support
     staff within these government offices generally
     are responsible for environmental policy,
     climate change, air quality, public health,
     planning, and transportation policy portfolios.

   •  State or provincial government officials who
     work at energy, power, health, transportation,
     and environment agencies. Many countries
     have established state or provincial air quality
     planning boards. It is useful for officials from
     these agencies  to be involved from the very
     beginning of an IES project.

   •  Municipal government officials who are often
     responsible for local-level implementation of
     state or national level policies or directives, as
     well as for their own cities' planning and
     implementation processes.

   •  Technical experts from the government or
     from research institutions/academies with
     expertise in energy, industry, transportation,
     air quality, public health,  and economics.

   •  NGOs, especially those working on
     environmental, air quality, public health,
     transportation,  and energy issues.

   •  Business network and trade association
     representatives that are active in the sector(s) of
     focus (e.g., the power or transportation sector).
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Many IES partners have found that in addition to
establishing contact with high-level officials at
government offices, it is also helpful to have a
staff-level contact who can provide data, answer
questions, and act as a liaison between IES
researchers and ministry or department heads.
Because IES projects involve multiple
stakeholders, it is useful to identify different ways
that they can participate in a project. Suggestions
for stakeholder involvement include:

• Providing initial input as the project is

• Participating in the scoping meeting by
  delivering a keynote address, chairing a
  session, or preparing a technical presentation.

• Providing data sets or relevant documents.

• Leading or contributing to specific analytical

• Supporting IES by linking it to existing or
  planned policy efforts.

• Participating in a steering committee.

• Reviewing technical analyses or project plans.

• Participating in education, outreach, and
  implementation efforts.

• Identifying funding.

• Promoting buy-in from the public and other
  stakeholders not represented.

Selecting the Technical Team

The technical team is a specialized group of
technical, analytical, and research professionals
who are responsible for carrying out the
analytical tasks of the IES project. The host
government organization can draw team
members from different sources, including
universities, consulting organizations, NGOs,
and research institutions. In some countries,
government experts also contribute to the
technical team. A strategically selected team of
professionals can streamline the IES process and
recommend effective strategies for reducing air
   pollution and GHG emissions. They can also
   make recommendations that add value to the
   country's policy initiatives and are most likely
   to be implemented.
   While every IES project is different, and the
   scope of the project can require specific staffing
   and expertise, a typical team includes:

   •  Energy/emissions experts (sector
     specialization in areas such as transportation,
     industry, and power; modeling; emissions
     factors and emissions inventories; and
     mitigation and control technologies).

   •  Air quality experts (emissions monitoring,
     dispersion modeling, airshed modeling, and
     regulatory analysis).

   •  Health professionals/epidemiologists (air
     pollution exposure analysis, health effects

   •  Economists (health impacts valuation, cost-
     benefit analyses).

   •  Aproject coordinator who  leads the team
     technically and administratively.  This person
     is responsible for connecting all the  diverse
     aspects of the project into a single, integrated
     effort, as well as engaging stakeholders,
     experts, and policymakers.

   •  A technical leader for each technical analysis

   Suggested responsibilities for team members are
   listed in Table 2.1. It should be noted that some
   of these duties can overlap or could be assigned
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                                                                           IES Handbook
differently, depending upon how the team is
structured. Additionally, to maximize the project's
potential for success, team members must closely
coordinate their efforts. IES is an interdisciplinary
process and requires that economists work with
health professionals, who must work with air
quality experts, who must work with energy
experts.  Open communication and good
coordination managed by the project coordinator
are important, as some analytical tasks cannot
proceed without the products of other tasks.

Establishing a Steering

Some IES projects establish a formal or
informal steering committee to support the
technical team and guide the project toward a
desired outcome. Steering committee members
provide  feedback on the proposed scope of
analysis and all key research decisions. They
also ensure that the approaches taken are
analytically acceptable  and adequately reflect
policy priorities at the local and national level.
For example, methodologies for conducting
economic valuations  of health effects are often
presented to the steering committee.  These
valuations can be controversial,  and it is
important to have policymaker support for
the selected approach.

The steering committee might include members
from industry, academia, advocacy groups, and
government. It is particularly important that
policymakers from municipal, state, and national
agencies be included. Ideally, the government
agencies that should be  represented include those
dealing with air quality, climate change,
transportation, industry, energy planning,
economic development, and public health.

Other stakeholders, such as representatives from
industry trade associations, transportation groups,
and NGOs, can also be included. These
individuals often provide alternative viewpoints
while contributing valuable knowledge. Although
recruiting steering committee members  from all
   of these stakeholder groups can be challenging, a
   diverse steering committee will provide the most
   balanced guidance for IES projects.

   Scoping  Activities

   Because IES is a host country-driven process
   that is responsive to local conditions and needs,
   local information must be thoroughly "scoped"
   before initiating the IES analysis. Scoping
   activities typically include a formal meeting, as
   well as data gathering and information exchange
   meetings with  stakeholders.

   Before the scoping meeting is held, the technical
   team typically  investigates related initiatives,
   local expertise, training/technical assistance
   needs, data availability  and data gaps, and
   funding needs. This information is useful in
   shaping the agenda for the scoping meeting (see
   Appendix C for a sample  scoping meeting
   agenda) and helping the technical team envision
   how an IES project can support or add value to
   a city's or country's policies.

   Existing Initiatives and

   One of the first scoping steps involves  gathering
   descriptions of relevant initiatives under way,
   such as state, provincial, or national government
   air quality plans, clean air committees,
   transportation plans, and industrial incentive
   programs. Multilateral initiatives also can be
   relevant, since  so much work is occurring
   internationally on air quality. Projects supported
   by the World Bank Group, the Asian
   Development Bank, the United Nations
   Environmental Programmed (UNEP), and other
   organizations can have important synergies with
   IES. Developing collaborative strategies with
   such initiatives can often leverage resources,
   avoid duplication of efforts, and support
   implementation of promising measures. The  IES
   project coordinator can establish a point of
   contact for each local and international initiative
   to explore commonalities between the programs.
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Table 2.1 Suggested Responsibilities of In-Country Team Members
  Project Coordinator
Coordinates with host government organization and lead technical
Leads team technically and administratively.
Organizes scoping activities and scoping meeting.
Holds team meetings.
Coordinates work plan  development, reviews work plan, and ensures
its distribution.
Maintains contact with  program managers of related initiatives.
Distributes project updates to key stakeholders and team members.
Organizes policymakers' or stakeholders' meetings.
Champions the project  and its results to stakeholders.
  Technical Leader of Each
Performs scoping activities.
Selects team members.
Assigns and oversees each team member's role in the technical
Coordinates data gathering, modeling, and analysis.
Coordinates report writing and results dissemination by team mem-
Maintains contact with project coordinator and provides project
  Members of Each Analytical
Participate in scoping activities.
Contribute to work plan.
Gather data.
Conduct analysis.
Perform modeling.
Write summary reports.
Disseminate results.
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Technical Capacity and Data Sources

The IES project coordinator can organize a
meeting with the technical leaders of each IES
analytical area (energy, air pollution and GHG
emissions, health effects, and economic
valuation) to evaluate existing capacity and
define the project scope. The team leaders can
identify local experts who can be asked to share
information on their own research, models and
methodologies, and data sources. Technical
assistance from international experts can also be
discussed to determine if these individuals can
add value to the project.

Since IES projects often rely on secondary data,
the team can conduct a qualitative study of
readily available data prior to the scoping
meeting. Government agencies, universities,
trade groups, industry, and research centers are
good sources for data. The team will want to
assess all data sets to ensure their completeness,
validity, and internal consistency.

For most IES projects, the following data sets
are needed:

• Basic demographic and spatial or geographic

• Energy data (e.g., fuel use, technologies).

• Sector-specific information (e.g., data on
  transportation patterns, emissions from
  industrial facilities).

• Energy use forecasts.

• Emission factors.

• Air quality monitoring data.

• Local meteorological data.

• Epidemiological data (e.g., hospital records,
  database of health endpoints).

• Local studies on the health effects of air
  pollution, if available.

• Local studies on the valuation of air pollution
  health impacts, if available.
   • Relevant state and municipal planning

   • Cost information.


   Developing country governments typically face
   many urgent and competing priorities for limited
   funds. Investments in improved efficiency or new
   technologies, even if highly cost-effective in the
   long run, can be difficult to secure. For this
   reason, the IES project coordinator or team
   leaders might find it useful to meet with the
   project managers of related efforts to inquire
   about technical assistance as well as opportunities
   for leveraging financial and data resources.
   Additionally, some international nonprofit and
   institutions (such as private foundations, regional
   development banks, and foreign aid agencies)
   support economic and social development
   activities in developing countries. (See Appendix
   E for more information about funding sources.)

   Scoping  Meetings

   Most IES projects are launched with a scoping
   meeting that brings stakeholders together to refine
   the technical project design. The organizers of the
   scoping meeting typically include the project
   coordinator and the technical team members,
   as well as members of the host government
   organizations, lead technical institutions, and
   sponsoring organizations. The meeting provides
   a forum for discussing pressing needs, the most
   promising approaches and methodologies
   available, as well as strategies for linking the
   different analytical processes into a coherent plan.
   Scoping meeting objectives typically include:

   • Developing specific goals, outcomes,
     and products for the new IES project.

   • Reaching agreement on the core local
     technical team, as well as any needs  for
     technical assistance from specialists.

   • Resolving key project design and research
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• Identifying alternative scenarios or promising
  policy options that will be the focus of
  co-benefits analysis.

• Developing the basis for agreement on a work
  plan with project timeline and products.

• Identifying opportunities for collaboration
  with related efforts.

• Discussing strategies for using IES analysis in
  the policymaking process and for
  implementing IES recommendations.

• Developing strategies and mechanisms (e.g.,
  regular meetings and project status updates)
  for keeping key stakeholders  engaged.


In addition to the stakeholders already identified,
meeting organizers can invite international
experts in fields such as energy, air quality
modeling, and health effects analysis to the
scoping meeting to contribute their insights. IES
experts from  other countries also can participate
to share their experiences. Approximately 50
participants typically attend the  scoping meeting,
including the following:

• Policymakers: Government officials from
  central, provincial, and municipal levels can
  describe how  their respective agencies are
  approaching air quality, public health, GHG
  emissions, urban planning, and energy policies.
  Policymakers can share information on public
  policy objectives, legal obligations, legislative
  goals, and specific policy processes (such as
  regional planning meetings or  air quality
  committees) that might benefit from IES results.

• Local technical experts: Local researchers
  can introduce previous or ongoing work in
  areas such as energy planning, air quality
  monitoring and modeling, and health effects
  analysis. For  each topic, experts can discuss
  data availability, models typically used in the
     country, and accepted methodologies. Experts
     can also be asked to present ideas on how IES
     can be structured to build on existing research.

     International technical experts: Technical
     experts from other IES countries can present
     case studies describing the different
     methodologies, approaches, and models used in
     their analyses. They can also suggest ways to
     structure the project under consideration.
     Experts from other countries can also discuss
     strategies for applying IES analysis to the
     policymaking process, as well as ideas for how
     to build support for implementing promising
     IES measures.

     NGOs, civic organizations, and business
     groups: These stakeholders can help select
     and refine alternative measures for analysis
     and identify strategies for implementing
     integrated measures. Leaders from prominent
     groups can be invited to the scoping meeting
     and asked to comment on the information
     presented during discussion periods.

     IES program representatives: When the
     U.S. EPA is a direct partner, U.S. EPA
     representatives can present information on the
     Agency's goals for the IES program, as well
     as how other countries have structured their
     IES projects and addressed hurdles such as
     model selection and data gaps.
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  Scoping Meeting in Manila
  A two-day scoping meeting was held in
  Manila to launch its IES project. During the
  meeting, relevant stakeholders came togeth-
  er to discuss plans and objectives for the
  project. Participants included the Filipino
  research team; representatives from relevant
  government agencies, including the
  Philippines Departments of the
  Environment and Natural Resources,
  Transportation and Communications, and
  Energy; the U.S. EPA; USAID; internation-
  al experts from the IES program; NGOs,
  business representatives, and academics

Scoping meetings are generally one or two
days long. Part of the first day is used for
presentations, and the second day features
breakout groups for in-depth discussion,
decisionmaking, and project planning. Most
scoping meetings begin with a keynote address
delivered by a high-ranking government official,
usually stressing the importance of confronting
compromised air quality in a given city or
country. Then, an  overview of the IES approach
is given, along with information on IES project
scenarios, outcomes, and results in other
countries. With this basic information,
policymakers and other meeting participants are
asked to share their ideas on how IES can add
value in their country.

The remaining presentations are usually technical,
focusing on key IES analytical tasks. The
presentations are grouped thematically so that all
relevant discussions on a particular topic can take
place in a single block of time. Note takers can
record these sessions in the meeting minutes so
that all valuable input is captured for subsequent
dissemination to participants and other interested
parties. Notes from the scoping meeting will be
invaluable in developing the project's work plan,
as described later in this chapter.
   Technical presentations and subsequent
   discussions typically cover the following universe
   of topics (the extent to which each of these topics
   is covered can vary from project to project):


   •  Which fuels and technologies are currently
     used for in each sector category?

   •  What are the projected future energy/fuel

   •  What plans for meeting future energy needs
     have been made?

   •  What are the critical demand-side and supply-
     side concerns?

   •  What are the relevant and recent studies in
     this area?

   Sectoral Focus

   •  Will the focus be on transportation, power
     generation, industrial sources, household
     sources, or a combination of sources?

   •  What are the critical concerns (e.g.,
     environmental, health, social, economic), and
     how can IES add value?


   •  What kinds of alternative mitigation measures
     are being considered?  (A preliminary list of
     measures can be presented to encourage

   Air Pollutants

   •  What are the pollutants of concern? These can
     include PM10 and PM2 5, CO, NOX, Pb, SO2,
     VOCs, O3, Hg, and NH3. From a health
     perspective, PM is  generally selected as the
     key pollutant of concern.

   •  What are the endpoints for analysis? These
     can include human health, ecosystem health,
     crop damage, materials and structural damage,
     and reduced visibility.
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• What are the GHGs of concern? These can
  include CO2, CH4, andN2O. Most IES studies
  have focused on CO2.

Air Quality Monitoring and Modeling

• What is the ambient air quality monitoring

• What air pollutants are measured, and what is
  the quality of the monitoring data?

• For both conventional air pollutants and
  GHGs, what emissions factors and inventories
  have already been completed?

• What air quality dispersion models have been
  used to study the airshed in question?

• How will ambient concentrations be

• How can IES build on existing efforts or
  refine completed studies?

• Who can provide the relevant data to the team?

Human Health Exposure and Health
Effects Analysis

• How will human health exposure be

• What existing literature can be drawn upon?
  What relevant local studies have been
  conducted to date?

• What data are available on hospital
  admissions for air pollution health impacts?
  What are the base rates for these effects in the
  general population? What other data  are
  available on other health impacts endpoints?

• What local, regional, or international
  concentration-response (C-R) functions exist
  that could be used for this study?

Economic Valuation of Impacts

• Is valuation of health impacts desirable in the
  country? Has it been done before?
   •  Can existing studies be drawn upon? If not,
     can international valuation studies be adapted
     to local conditions?

   •  What valuation approaches are desirable?


   •  What kinds of measures will be most feasible?

   •  How can IES outputs be used to support
     policymaking processes?

   •  How can promising measures be

   •  Is funding available, if needed?

   •  Is outreach needed?
   After the technical presentations and discussion,
   concurrent breakout groups meet to discuss
   important technical questions in depth. Issues
   that can be covered include energy and pollution
   mitigation policy measures or scenarios; air
   quality issues, including modeling and emission
   inventories; health impacts; and valuation. The
   function of the breakout groups is to reach
   consensus on recommended project scope and
   design decisions. The breakout groups also can
   work out broad methodological issues regarding
   the selection of models, tools, and approaches
   that could be used for each analytical task.
   Consideration should be given to how these
   decisions could affect all of the different
   components of the analysis so that proper
   coordination occurs.
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Once the breakout groups have completed their
discussions, all attendees can come back together
in a general session to hear the outcomes of the
breakout sessions, summarize next steps, and bring
closure to the scoping meeting. To maintain the
momentum from the scoping meeting and ensure
that stakeholders continue to be engaged, meeting
organizers can send a meeting summary to all
participants. A short list of models and
methodological approaches for each analytical task
also could be prepared from meeting notes and
distributed to key participants. Monthly project
updates should continue to be sent to scoping
meeting participants and stakeholders over the
duration of the IES project. (See Appendix C for a
sample scoping meeting agenda.)

Key Project  Design
Even with an ambitious agenda of presentations,
large group discussions, and breakout groups, the
scoping meeting will not fully resolve all project
design issues. Many critical outputs can result
from a scoping meeting, however. Key scope
issues-including sectoral, geographical, temporal,
and analytical-can be resolved and categories of
alternative measures for analysis agreed upon.

Sectoral  Focus
The sectoral scope of the project needs to be
defined early in the process.  Because the energy
sector generates large amounts of air pollutants
and GHGs, it is an obvious target to discuss
during the scoping meeting. IES projects often
focus on one or more energy sector categories,
such as transportation, residential, commercial,
industrial (manufacturing), or power generation.
Projects address emissions from some aspect of
these categories, further narrowing the scope of
the project.

Geographic Scope
Many IES projects are defined geographically
by urban boundaries; metropolitan planning
boundaries; regional, state, or national borders;
or political jurisdictions. Defining a project by
   airshed is ideal, but airsheds can encompass
   multiple metropolitan areas, regions, or even
   countries. As a result, airshed analyses are often
   too cumbersome for IES projects. Use of
   nonscientific, political boundaries are acceptable
   as long as any limitations or assumptions are
   identified early in the process. In some
   circumstances, using political boundaries can
   enhance a project's policy relevance.

   Geographic scoping decisions can include a
   discussion of air pollution transport and
   transboundary pollution. In some urban areas,
   pollutant flux across airshed boundaries can
   account for a significant proportion of observed
   pollution levels (i.e., background pollution). For
   example, in Beijing, 40 to 60 percent of particulate
   pollution is believed to be regional pollution and
   not originating from the local Beijing airshed.

   The breadth of impact to be considered in air
   pollution and GHG reduction scenarios needs
   to be well defined at  the scoping meeting.
   Grid-connected energy efficiency and renewable
   energy technologies can have significant GHG
   and air quality benefits outside of the IES
   project area. For example, phasing in natural gas
   vehicles in an urban area will not only benefit
   the city, but also nearby cities and suburbs.
   The project team can decide whether to include
   all these results in the IES project summary.


   Once the sectoral and geographic scopes of the
   project have been defined, a timeline for the IES
   project can be determined. The team will want to
   decide if the project will be  a retrospective
   quantification or if the goals of the project are
   more prospective. It also should determine
   approximately how long the project will take and
   if there are particularly desirable retrospective
   benchmark or milestone years. In making these
   decisions, the team can consider the timeframe
   used in the studies and literature sources for the
   project, as well as the availability of historical
   data sets. (Appendix C provides a sample
   timeline for an IES project.)
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Analytical Scope

The project's analytical scope needs to be
precisely defined-whether the project focuses on
a combination of health effects, economic
impacts, biological effects, ecosystem effects, or
some other combination of socioeconomic and
environmental factors. One of the most important
analytical decisions that must be made is the
development of appropriate emissions reduction
scenarios. Team members need to decide whether
short-term (10 years out) scenarios are more
critical than long-term (20 years  out) scenarios,
or if they should include both. A mixture of
scenarios can be examined, venturing outside of
well-known strategies, where permitted.
Ambitious scenarios can often catalyze change
and substantially reduce emissions. It might also
be easier to trim an ambitious plan than to bolster
an easily attained strategy.

It is also important to consider—but not be
limited to—scenarios that contain politically
acceptable elements. Policymakers on the
steering committee can help develop and refine
alternative scenarios that are appealing. This will
help to ensure that the results of IES analysis
will be well received. (See Chapter 3 for a more
detailed discussion of scenario development.)
Linkage Issues
"Linkage" issues must also be resolved. Linkage
issues define the information that must be
produced by one technical group in the team and
passed as input to the next group's technical
   analysis. Coordination of project components is a
   key challenge in a co-benefits analysis. Care must
   be taken to ensure that each component takes input
   from previous components and generates useful
   output in the necessary format for other
   components in the analytical chain. For example,
   decisions made by the air quality team concerning
   modeling considerations, such as pollutant
   averaging times (hourly, annual) and grid-scale
   resolution, are also of interest to the health effects
   analysis team. Many different team members can
   take part in linkage discussions in order to  explain
   what information is important for their analyses
   and how they are best able to estimate their results.

   Developing the Work Plan

   After the scoping meeting, IES project managers
   and select members of the technical team can
   begin drafting  a work plan. The technical
   discussions, presentations, and collective
   decisions made at the scoping meeting will form
   the basis of this plan. The objective of the work
   plan is  to develop a coherent project concept,
   including project goals, management structure,
   major tasks, key products, and desired outcomes
   within  a logical timetable that links all project
   activities. The  work plan needs to  clearly
   articulate the analytical framework that will be
   developed to carry out the complex
   multidisciplinary project, as well as the project
   activities to be performed by each team member.
   The work plan is also instrumental in managing
   the information and data exchanges between
   different components of the analytical research.

   To develop  a project with both a reasonable
   scope and schedule, IES projects typically
   build upon the body of knowledge gained from
   existing and recently completed analyses,
   studies, and projects, as well as data that  are
   available locally, nationally, and sometimes
   internationally. The work plan should therefore
   thoroughly  characterize past research and policy
   analyses. Linking the newly devised work plan
   with other ongoing related projects and programs
   will help form a  foundation for the IES analysis.
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In addition to assessing the building blocks of
the IES program, the work plan also addresses
the question of "how to put the pieces together"
in a manner that ensures an integrated analytical
program. Table 2.2 on page 29 lists a number of
scoping decisions that need to be addressed by
the work plan.

IES projects typically encounter several difficult
questions at this juncture.  Questions regarding
pollutant concentrations, geographical
complexity, temporal and  seasonal variability,
and annual averaging can  all present challenges
for the analytical teams.

Conclusions or assumptions need to be drawn
from existing and available data in a timely
manner, often relying on the team's technical
judgment. Judgment decisions, along with all
other decisions, need to be well documented to
promote an open and transparent analysis. The
work plan should be well  documented with
adequate detail to justify actions that may have a
lasting impact on the entire IES project.

In the process of linking the methodologies and
tools from past efforts,  a number of gaps or
inconsistencies also can emerge.  For example,
there can be a shortage of locally derived
information and studies linking air pollutant
concentrations with specific health  effect
endpoints (e.g., morbidity—respiratory and
cardiovascular disease; mortality) and the
economic valuation or avoided costs of
emissions reduction strategies. In these
situations, the work plan can identify
information gaps, assess the importance of these
gaps to the overall project analysis, and suggest
approaches to link data inconsistencies with
studies from international  literature,
epidemiological research,  or contingent valuation
studies. The work plan can also identify experts
to fill research gaps with new or  proxy research.
   Any new research activities will typically
   require funding resources of a considerably
   higher magnitude than what is typically
   available for an IES analysis. IES project teams
   have found that making a case for taking on
   additional necessary primary research is  one
   useful outcome of the IES analysis and is often
   based on recommendations of policymakers for
   increased use of locally derived coefficients that
   reduce uncertainty in project results.

   The technical team, steering  committee,  and
   interested stakeholders  can be invited to
   comment on the draft work plan. A template for
   developing an IES work plan is included in
   Appendix C.
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Table 2.2 Scoping Decisions
 Scoping Decisions Affecting Many
  Scoping  Decisions Affecting Particular
  A number of critical scoping decisions affect many
  components of the IES analysis. These include the
  Geographic scale and uniformity
  • What is the geographical scale, and how will
    geographic boundaries be determined?
  • Will the analysis assume that all people in the region
    are exposed to the same concentration, or will it
    distinguish among different geographical areas to
    account for "hot spots" or other irregularities?
  • If the analysis is geographically specific, can the
    air quality analysis produce different concentra-
    tion changes for different regions?
  Static or dynamic implementation
  • Will all mitigation measures be implemented
    instantaneously, or will implementation be
    dynamic, with measures  being implemented over
  • If dynamic, what is the baseline against which
    control actions will be compared?
  • Will a projection of future emissions and air qual-
    ity be necessary, and how will this  be achieved?
  Emissions of concern
  • What ambient pollutants  and GHGs will be con-
  • What primary pollutant emissions are relevant for
    these ambient pollutants?
  • Should secondary emissions and atmospheric
    chemical processing of these pollutants be
    included in the analysis?
  • Are local emission factors available?
  Health effects
  • What concentrations do the studies support?
  • What health  effects or endpoints (e.g., mortality,
    cases of asthma, cases of bronchitis, hospital
    admissions) should be considered? Should they
    be calculated separately for different populations
   Some other scoping decisions are more important
   for particular components:
   Air quality analysis
   • What methods can be used to translate emissions
     reductions into changes in ambient concentra-
   • Can these methods be tested for predicting cur-
     rently observed ambient concentrations?
   Health impacts
   • Will local or international studies be used?
   • Will the analysis consider one impact (such as
     mortality or morbidity) or multiple impacts? Will
     acute or chronic morbidity (or both) be consid-
   Environmental impacts
   • Are other environmental impacts, such as crop
     damage or reduced visibility, also relevant for the
     benefits calculation and worth quantifying?
   Health valuation
   • Will the valuation use a local study, an interna-
     tional study, or try to correct international studies
     to  local conditions?
   • Will the valuation analysis use loss of productivity
     (human capital), cost of illness, willingness to
     pay, or other methods?
   • Are outreach/education programs needed?
   • Will costs be just direct technology, infrastruc-
     ture, and investment costs, or also include indi-
     rect costs such as fuel, operation, or maintenance
     costs?  Will they include avoided costs? Will they
     include health costs?
   • If the analysis is dynamic, will future costs (or
     avoided costs) be discounted to a present value?
   • Is  it important to distinguish and keep track of
     public and private costs (costs borne by the
     government versus costs borne by individuals
     or companies)?
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     Energy/Emissions Analyses and Modeling
  Projected  \_^

Health Impacts
Once the Integrated Environmental Strategies (IBS) scoping process is
complete, the in-country technical team can begin its individual analyses.
The energy sector is the typical starting point for most IBS projects, as it is
the primary source of anthropogenic air pollutants and GHGs in urban settings.
Energy/emissions analyses and modeling represent the initial step in the
IES technical process. During this step, the technical team will determine
the energy sector of focus for analysis; compile a comprehensive base-year
emissions inventory;  develop baseline and integrated mitigation scenarios; and
select an energy/emissions model (or alternative tool) to forecast future energy
demand and associated emissions.
Throughout this technical step, the energy/emissions experts are encouraged to
work closely with other IES team members, seek input from regional experts,
and utilize existing studies with similar goals. Because this first step in the IES
analytical process provides the foundation for much of the work that follows,
good communication with the other team members is important.
Harnessing expert knowledge and accepted results can lend important
credibility to the IES study as well as conserve resources. The steering or
technical review committee should review all key decisions to ensure their
technical integrity and policy relevance. Teams  should also provide
comprehensive documentation of project decisions to ensure transparent
disclosure of all steps taken.
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Determining the Focus  of
the Energy Sector for
The energy sector encompasses a broad range of
processes and activities. It is often divided into
several categories for an IES analysis, such as:
• Power generation
• Transportation
• Residential
• Commercial
• Industrial
Identifying the particular energy categories of
focus will provide the overarching direction for
the IES project, as all subsequent analyses are
affected by this decision. The selected sectoral
scope typically arises from circumstances unique
to each IES country. For example, in Hyderabad,
India, the sectoral focus has been on the
transportation and industrial energy  sectors. Air
quality in this region is being compromised by
emissions from many kinds of motor vehicles,
particularly high pollutant-emitting two-wheelers,
auto-rickshaws, and buses, which are used
extensively in the city and its environs.
Once the energy sector categories are selected,
the team should determine the precise
geographic scope of the energy analysis. This is
an important consideration because energy
distribution grids do not necessarily correlate
   with political boundaries or airsheds. The
   technical team should consider whether to limit
   its energy analysis to the geographic boundaries
   selected for the overall IES project, or broaden
   the scope to include power generation from
   outside the urban area.

   When contemplating the breadth of the energy
   sector's geographic scope, a team should
   consider several important factors, including:

   •  Data availability for the proposed area and
     compatibility of these data for other IES
     analytical steps (i.e., air quality analysis,
     health benefits analysis, and economic

   •  Technical capacity for analyzing more
     complex regional issues (e.g., transboundary
     air pollution, energy dispatch modeling).

   •  Political sensitivity to expanding the project's

   The team will want to carefully deliberate the
   focus of its energy/emissions analysis and
   thoroughly document all final determinations to
   prevent any ambiguity and to ensure consistency
   throughout all steps in the technical analysis.

   The focus of the energy sector selected will
   highly influence the targeted emissions for
   analysis. Most IES projects initially include
   many of the same conventional pollutants (SO2,
   NOX, and PM) and GHGs (CO2, CH4, and N2O).
   While consideration of targeted emissions begins
   during the scoping phase, this selection process
   can be refined throughout the project to include
   additional emissions. (Chapter 4 provides more
   details about the selection of targeted emissions.)

   Developing  the Base-Year
   Emissions Inventory

   After selecting the focus of the energy sector for
   analysis, the next critical step for the team is to
   develop a comprehensive base-year emissions
   inventory consisting of conventional pollutants
   and GHGs. This base-year emissions inventory
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                                                                            IES Handbook
sets the stage for all energy and emissions
analyses, and serves as the reference point
for measuring future emissions reductions.
Technical teams are encouraged to devote
sufficient time and detail to this process because
the base-year inventory will also serve as the
foundation for subsequent analyses within the
IES methodological framework.

Developing an original, comprehensive emissions
inventory is a resource-intensive task. To date,
most IES teams have utilized pre-existing, partial
emissions inventories as the basis for developing
tailored base-year inventories, saving significant
time and resources.

A team might use an existing GHG inventory
and a conventional pollutant inventory that were
developed independently of each other using
different data inputs. In these projects, teams
will need to resolve consistency issues between
the two inventories in order to meet the needs of
the IES analysis. In addition, many IES teams
will need to identify and remedy gaps in the
initial inventory data as well as the input data
required for modeling future emissions.

The team needs to consider several important
factors when  developing the base-year
emissions inventory, including data collection
and availability, pollutants and GHGs for
inclusion, emission sources, measurements and
estimates, spatial disaggregation of emissions,
and temporal disaggregation of emissions.

Data Collection  and Availability

Identifying and reviewing available local
emissions data is an important initial activity for
developing the base-year emissions inventory.
While each IES project is tailored to address the
particular issues unique to its region, all studies
focus on various categories of the energy sector.
As a result, technical teams typically begin
developing their base-year emissions inventory
by collecting  fuel use  and characteristics data
and emissions factors.
   Fuel Use and Characteristics Data

   To estimate emissions from fossil fuel and
   biomass combustion, most energy/emissions
   analyses require input data on fuel use and fuel
   characteristics. Fuel consumption records are
   good sources for these data. Data availability
   usually varies by fuel and combustion sector.
   For example, annual industrial coal use is often
   easier to estimate than household biomass
   consumption used for cooking purposes. Both
   combustion techniques contribute to
   compromised air quality, however, and should
   therefore both be included in the emissions
   inventory whenever possible. In the absence of
   existing data, comprehensive fuel consumption
   surveys can be conducted to estimate fuel use
   data. These surveys should be developed to also
   collect important data on the characteristics of
   the fuel being burned (e.g., energy content,
   sulfur content, ash content). Transparent
   disclosure of any data gaps is important, as it
   allows any assumptions made to be addressed
   or incorporated into future studies.

   Emissions Factors

   Emissions factors are key elements for
   developing the base-year emissions inventory,
   as they quantify the emissions associated with
   surveyed fuel consumption. Emissions factors
   are usually drawn from engineering manuals
   and emissions factor databases. Although not
   always available, locally generated emissions
   factors are preferable as  they more accurately
   represent emissions characteristics in the region
   of study. Teams should consult with their
   Ministry of Environment or comparable agency
   to determine if local emissions factors are
   available. When necessary, international
   resources can be used to supply emission
   factor input data:

   • The U.S. EPA's  Compilation of Air
     Pollutant Emission Factors, AP-42,
     This document offers a wide array of emission
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• The Intergovernmental Panel on Climate
  Change (IPCC) Guidelines for National
  Greenhouse Gas Inventories,
  This set of internationally approved guidelines
  is a particularly helpful source of emissions
  factors and calculation methodologies for use
  in IES energy/emissions models.

When utilizing externally generated emissions
factors, teams should ensure that the adopted
emissions factors coincide with the unique
conditions in which they will be applied. For
example, the U.S. EPA's comprehensive mobile
source emissions model, MOBILE6,1 calculates
emissions for a variety of situations.  The
baseline data, however, were  developed for U.S.
vehicle standards and driving patterns. As a
result, direct extrapolation of MOBILE6 results
to other countries is not appropriate.

Once appropriate emissions factors (EF) are
established, emissions can be calculated in a
model through the following classic procedure:

(1) Activity x EF = Emissions (Activity Related)

where Activity is the volume  of activity of the
emitting source and EF is the emissions factor,
or emissions rate, of the polluting agent's mass
per activity  unit (usually in units of tons or liters
combusted). For each category of the energy
sector being analyzed, the Activity is based on
fuel use data collected through consumption
records and/or surveys.

Additional Data

In addition to fuel use data and emissions
factors, IES teams typically collect the
following types of data:

• Pre-existing emissions inventories  (complete
  or partial).

• Emissions monitoring data  (from select
  industries or specific sources).
                       3T3WT 4^5
   • Source testing data.

   • Stack heights.

   • Combustion technology.

   • Emissions control technology.

   • Production data (e.g., cement, smelting, steel

   • Demographic data.

   • Transportation preference data.

   • Geographic location of emissions sources
     (e.g., transportation networks, power plants
     locations, and industrial complexes).

   Filling Data Gaps

   The availability of required input data, including
   energy demand, fuel  consumption,
   demographics, technology use, and emissions
   factors, can often be  quite limited in many
   developing countries. Although not the preferred
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methodology, "gap-filling," or data
interpolation, is sometimes required to provide
this missing information. If the limitations
regarding quantity and quality of the available
data to estimate the emissions are moderate,
data substitution from other studies can
complete the required data set. When the
regional circumstances between the IES city and
another similar region are similar, the
information gaps can be filled directly. If,
however, there are any glaring differences in
regional characteristics, such as fuel types used,
available technology, or population,  the external
data should be appropriately calibrated to the
unique local conditions.

For example, U.S. EPA's AP-42 emissions factor
database allows the modification of each
emissions factor according to  the degree of
deterioration of the vehicle. These deterioration
rates, however, were developed for vehicles
within the United States, and assume
compliance with U.S.  maintenance programs
and driving patterns. Driving habits  and traffic
patterns are different in developing countries,
where vehicles tend to have a much longer
useful life.  Accordingly, their deterioration rates
would also vary. The Argentina IES  team used
the AP-42 series to model local traffic patterns;
however, it modified emissions factors
appropriately to account for the longer life spans
of vehicles used in Buenos Aires.2

Pollutants and GHGs for Inclusion

Selecting the conventional air pollutants and
GHGs for inclusion in the base-year emissions
inventory and future analyses is a process that
should include input from other IES technical
team members, including air quality experts and
health professionals. These members' familiarity
with the models and data used within their
particular fields can influence the selection of
pollutants and GHGs included in the inventory.
For example, the type and complexity of the air
quality model(s) used  will have significant
   implications on the emissions included in the
   inventory and analyses. For example, most
   dispersion air quality models are unable to
   model the complex chemical reactions in the
   atmosphere that form secondary air pollutants.
   In addition, a strong body of literature exists
   that links PM10 to significant health impacts As
   a result, this pollutant is typically the first to be
   considered for inclusion in the base-year
   emissions inventory. (See Chapter 4 for more
   details about identifying the targeted emissions
   for analysis.)

   Emission  Sources

   To accurately compile base-year emissions,
   the IES team should include emissions data
   from all source types, including fuel combustion
   (e.g., oil, coal, natural gas, biomass); industrial
   processes (e.g., smelting, cement kilns);
   agricultural processes; forestry; and
   transportation activities. The following are
   examples of specific emissions sources for
   which data are included in comprehensive
   base-year emission inventories:

   • Power plants

   • Refineries

   • Incinerators/open burning

   • Manufacturing plants

   • Domestic households

   • Automobiles and other on-road and
     off-road vehicles

   • Animal farming operations

   • Fossil fuel extraction and mining

   • Offices and municipal buildings

   • Fuel distribution pipelines

   • Agricultural land use

   • Landfills
2 Gaioli et al. 2002. Valuation of Human Health Effects.
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Measuring  and Estimating

Emissions from different sources can be
measured or estimated to develop the base-year
emissions inventory. Ideally, emissions from
every possible source would be included to
make the inventory as accurate as possible;
however, this is not always feasible. Thus, in
practice, emissions inventories are developed by
1) estimating emissions on the basis of
measurements made at selected or representative
sources and source types, and 2) modeling
emissions for sources and  source types where
measurements are not possible or practical.

In the absence of measurements, the basic model
for estimating emissions involves the product of
(at least) two variables: an Activity metric and an
emissions factor for the Activity (as illustrated in
Eq. 1). For example, to estimate annual SO2
emissions from a power plant, one would need
data on annual fuel consumption and fuel sulfur
content, and an emissions factor (in units of SO2
emitted/quantity of fuel consumed). These
individual emissions estimates are typically
documented in a database that also contains
supporting  data related to the emissions, such as
the physical locations of sources, stack heights,
emissions factors, source capacity, production or
activity rates in source sectors, operating
conditions, and other relevant information.
   Spatial Disaggregation of

   As discussed in the previous section, several
   different emissions sources contribute to the
   base-year emissions inventory. These different
   sources can be categorized into three classes:
   1) stationary point sources, 2) mobile sources,
   and 3) dispersed, or area, sources.

   Stationary Point Sources

   Examples of stationary point sources include the
   industrial and power generation sectors.
   Emissions estimates are typically provided on
   an individual plant basis, usually for large
   emissions sources and their respective emitting
   facilities. These emissions estimates are often
   accompanied by Cartesian coordinates (latitude
   and longitude); plant operating capacity;
   operating conditions (e.g., frequency of
   operation, actual efficiency of installed pollution
   control measures, plant heat rates); and other
   characteristics affecting emissions output.

   Mobile Sources

   Vehicle emissions can result from both on-road
   and off-road sources, including automobiles,
   trucks, buses, locomotives, construction
   equipment, ships and vessels, aircraft, and
   lawn and garden equipment.3

   Area (Dispersed) Sources

   Emissions from small or more diffuse sources
   (such as residential heating and cooking, open
   burning, and small diesel generators) are often
   aggregated into this  category due to the small
   quantity of individual  emissions. Although
   relatively inconsequential on the individual
   level, these emissions  sources can adversely
   impact ambient, or background, air quality when
   examined at the aggregate level. As a result,
   emissions from area sources should be included
   in the base-year emissions inventory. These
   emissions are not usually spatially
3 Note: Not all mobile sources listed above have been included in IES studies; however, their inclusion contributes to
 a more comprehensive base-year emissions inventory.
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disaggregated; they simply contribute to
background concentrations and are calculated
from proxy information such as population
distribution from census data, employment
activity data, or economic activity data.

Temporal  Disaggregation of
Different air quality models can require varying
levels of temporal disaggregation (i.e., monthly,
weekly, daily, and hourly) of emissions data.
Emissions data might also require temporal
disaggregation to account for daily or seasonal
climatic differences. These differences can
affect emissions and dispersion rates, ultimately
influencing ambient air quality and resulting
human health impacts. For example, in colder
climates, residential and commercial space
heaters can make significant contributions to
total emissions. Cold weather can also affect
vehicle emissions due to cold starts and low
combustion efficiency at start-up.

Developing Energy and
Emissions  Scenarios
Energy and emissions scenarios are portrayals of
how future energy demand and emissions might
evolve over time based on a set of assumptions
regarding economic indicators, growth
projections, policies, technologies, and control
measures. These scenarios typically project 10
and 20 years into the future. The assumptions
included in energy and emissions scenarios
ultimately influence the selection of the
energy/emissions models used for the IES
analysis. All IES projects include two important
categories of energy and emissions scenarios:
baseline and integrated mitigation scenarios.

Baseline Scenarios
The baseline scenario is usually the first and
most robust scenario conceived by the team and
is the metric from which all other mitigation
scenarios are evaluated. The baseline scenario
serves as a "best estimate" projection of future
energy demands and energy-related emissions
   (both ambient air pollutants and GHGs). The
   baseline scenario should be based on
   scientifically defensible, base-year energy and
   emissions analyses.

   Several types of baseline scenarios can be

   • Business as usual

   • Air pollution control

   • No further control

   A "business as usual" (BAU) scenario represents
   the continuation of existing trends in the energy
   sector and in emissions control development. It
   accounts for policies already enacted and
   assumes continued progress will be made on
   implementing measures to improve ambient air
   quality. Teams with access to local ambient air
   quality monitoring networks are encouraged to
   utilize these data to develop the BAU scenario.

   An "air pollution control" baseline scenario
   considers all of the measures of BAU with an
   additional focus on specific measures that will
   be implemented to improve ambient air quality.
   Air pollution control baselines assume that
   policymakers are motivated to implement
   measures that improve air quality above the
   BAU scenario. When estimating the benefits of
   the air pollution control baseline, "double
   counting" of air quality improvements already
   included in the BAU should be avoided.

   The "no further control" baseline scenario
   assumes that no additional measures for
   improving air quality will be implemented after
   the base year of the analysis. Although
   unrealistic, this scenario effectively depicts the
   expected benefits resulting from all policies,
   technologies, and mitigation measures included
   in the other scenarios developed. Policymakers
   often find this information valuable when taken
   cumulatively. A graphical comparison of even
   minimal controls and no future controls can
   illustrate the effectiveness of mitigation
   measures and provide mounting support for
   future policies.
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Each of these baseline scenarios can serve as a
valuable reference point when presenting
recommended mitigation measures to
policymakers for evaluation. Ideally, IES projects
should include all three types of baseline
scenarios. Limited resources can preclude
participating countries from developing the
complete array of scenarios, however. In these
instances, a team can utilize its resources to
develop the air pollution control baseline scenario,
which is the most realistic of the three and thus
provides the most accurate point of reference.

Integrated  Mitigation Scenarios

Once the baseline scenarios have been developed,
the team can develop integrated mitigation
scenarios for consideration. These scenarios
include various clean energy policies,
technologies, and/or measures that might be
implemented to  reduce emissions with respect
to the baseline (see Table 9.1 on page 96 for
examples of mitigation measures with positive
benefits). The team can then model these
scenarios to generate new emissions profiles as
well as the costs associated with emissions
reductions. A team might also agree to analyze
and model an ambient air quality target  (such as a
10 percent reduction in conventional pollutants).

Mitigation scenarios can differ considerably in
their scope; some focus on a single sector,
technology, or fuel, while others are broader,
addressing several  sectors or multiple
technologies and policies. Developing a range of
alternative scenarios that are relevant to future
policy objectives is important. By offering
multiple scenarios that include different
assumptions about future technologies  and
policies, policymakers will have a broader
context for evaluating proposed scenarios.

Utilizing Existing Studies and
Pre-Established Scenarios

When developing energy and emissions
scenarios, a team should consider soliciting
input from regional metropolitan and
transportation planners, energy and air  quality
   experts, and other professionals performing
   parallel efforts. Existing studies that analyze
   energy management strategies and their co-
   benefits can serve as valuable resources when
   developing alternative mitigation scenarios. In
   some instances, credible government scenarios
   and/or forecasts might already be established.
   Adopting, building upon, and/or modifying
   these accepted scenarios can often be more
   practical than developing new scenarios,
   especially if project resources are limited.

   Transparency of Scenario

   Making assumptions about the future is integral to
   developing scenarios. As a result, all developed
   scenarios inherently contain some level of
   uncertainty. To ensure the credibility of developed
   scenarios, therefore, the team should fully disclose
   all assumptions included. A clear record of data
   collection and modeling assumptions will ensure
   the transparency of the analyses.

   Review of Scenarios

   Sharing alternative mitigation scenarios with the
   IES steering committee or a technical review
   group is crucial. Steering/review committee
   members who are intimate with policymaking
   processes can help ensure that the proposed
   mitigation measures are policy-relevant. In
   addition, the technical review committee can
   ensure that all scenarios are technically accurate,
   providing further credibility within the academic
   and policymaking communities and other
   stakeholder groups.
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Energy/Emissions Model

Most models that forecast future energy demands
and associated emissions are closely tied to
projected trends in the economy. For the purpose
of this handbook, these models are referred to as
"energy/emissions models." (They are also
called energy-economy models in the literature.)

Selecting an appropriate energy/emissions model
to run the developed baseline and integrated
mitigation scenarios is an essential step in the
IES process. In addition to fuel and energy
utilization data, the energy/emissions model
provides the core scenario-specific emissions
(local air pollutants and GHGs) output on which
all subsequent analyses are based. The projected
annual emissions of PM10 in each developed
scenario are input into an air quality model (see
Chapter 4) to  forecast future atmospheric
concentrations of PM10. These forecasted
atmospheric concentrations of PM10 associated
with each scenario are then used to  estimate the
change in the  number of expected health effects
(see Chapter 5). During the economic valuation
step (see Chapter 6), the team estimates a
monetary value associated with the  reduced
occurrence of health effects for each scenario.

Energy/emissions models are generally
categorized as either bottom-up or top-down.
Both approaches provide useful insights when
analyzing policy proposals. Additionally, some
convergence between the two types of models
has evolved over time.

Bottom-up Energy/Emissions

Bottom-up models generally take a
disaggregated approach to forecasting energy
demand and emissions by beginning with a
detailed catalogue of representative energy
consumption and production technologies.
Assumptions  for existing and proposed
technologies are often built into bottom-up
   model scenarios. Incremental investments in
   efficiency and fuel switching can also be
   included. Because of their focus on technology,
   bottom-up energy models are typically more
   appropriate for analyzing integrated mitigation
   scenarios containing discrete technology-
   specific GHG mitigation policies and energy
   efficiency measures. The primary disadvantage
   of bottom-up models is their limited insight into
   the market response to a proposed policy.

   An example of a common bottom-up model used
   in energy/emissions modeling is the broad-based
   Market Allocation (MARKAL) model, which
   was used in IES projects in Shanghai. MARKAL
   analyzes the supply and  demand sides of existing
   and future energy and emission technologies that
   are input to the model. In a series of model runs
   resulting in successive emissions reductions, the
   model selects the least expensive combination of
   technologies required to meet each reduction.
   Other bottom-up models, such as EPA's
   MOBILE6, can be more sector specific.

   Top-down Energy/Emissions

   Top-down energy/emissions  models attempt to
   describe the interrelationship between the
   energy sector and the economy. These models
   begin with an aggregated view of the economy,
   and then break it down into its numerous sectors
   (e.g., energy, transportation,  agriculture). While
   top-down models provide valuable insight into
   sector-wide economic interactions and
   responses, they lack detail on specific energy
   production and consumption technologies and
   policies. This characteristic can severely limit a
   top-down model's capacity to analyze integrated
   mitigation scenarios that include any policies
   requiring or encouraging specific technologies.
   A common top-down model  is the computable
   general equilibrium (CGE) model, which
   considers the simultaneous interaction of
   economic sectors to policy change.
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Table 3.1 Typical Characteristics of Bottom-up and Top-down Models4
                Bottom-Up Model
                Top-Down Models
   Provide insight into specific energy production and consumption
   Useful for analyzing scenarios proposing specific technologies.
    Provide insight into sector-wide economic interactions.
    Useful for analyzing the interaction between the energy sector
    and the economy at large.
*A description of selected energy/emissions models is provided in Table 3.2.
Criteria for Model Selection

The most appropriate energy/emissions model
or tool for this step in the IES technical analysis
should ideally meet several criteria, including:

• Scenario Compatibility—Capable of
  analyzing all sectors and emissions examined
  in the developed scenarios.

• Input/Output Compatibility—Able to utilize
  data available to the technical team and
  provide emissions  output compatible with
  a broad array of air quality models.

• Operational Flexibility—Flexible enough to
  run scenarios that are both sector/technology-
  specific and broad.

• Ease and Familiarity  of Use—User-friendly
  and familiar to project  teams.

The selected energy/emissions model must be
capable of handling all sectors, technologies,
fuels and assumptions in each scenario. Bottom-
up models are generally preferred within the
IES methodological  framework due to their
capacity for analyzing scenarios containing
numerous energy and consumption technologies.

When evaluating energy/emissions models, the
technical IES team should consider the
availability of all required input data. Insufficient
data inputs (defined as lacking completeness
and/or credibility) can result in inaccurate output,
potentially skewing all future analyses.

IES teams should also ensure the output is
compatible with the input requirements for the
air quality and human health models used in the
   later stages of the IES analysis. Selection of the
   appropriate model, therefore, must take into
   account the selected targeted emissions and the
   time index included in all future analyses.
   Additional post-processing steps might be
   necessary after model runs, depending on the
   emissions and air quality models used. For
   example, geographic and seasonal distributions
   of emissions must be generated through an
   intermediary step where the total emissions
   figure outputted by a typical energy/emissions
   model is allocated geographically.

   The selected energy/emissions model should
   provide flexibility for analyzing a variety of
   scenarios with varying data levels. For example,
   a sector-specific model would not be appropriate
   for a team analyzing multiple energy sector
   categories. In selecting a flexible model, a team
   should allow for the possibility of developing
   additional scenarios that might be conceived
   throughout the course of the project.

   Another consideration in model selection is the
   team's familiarity with a particular model and
   members' confidence in its accuracy and ease of
   use. Adopting familiar and easy-to-use models
   can save both time and resources. The Sao Paulo,
   Brazil, IES team selected the Long-range Energy
   Alternatives Planning (LEAP) model for its
   flexibility and ease of use compared to other
   similar models (e.g., the Integrated Energy
   Planning Model).  In addition, the interface allows
   the modeler to work with a variety of energy
   sources, technologies,  and measurement units.
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Table 3.2 Overview of Energy/Emissions Models used in IES4
Energy and Power Evaluation
Program — Model for
Analysis of Energy Demand

MARKAL (Market Allocation)
Long-range Energy
Alternative Program (LEAP)
Bottom-up model that projects future electricity gen-
eration of power plants within a study region and cal-
culates corresponding future GHG emissions based
on the Energy: Prospectiva 2000 Energy Report.

Bottom-up model that depicts the evolution of a spe-
cific energy system at the national, regional, state,
provincial, or community level over 40 to 50 years.
Bottom-up model that forecasts energy consumption
by sector and projects national energy demand by
summing sectoral energy consumption. Emission
factors are used to calculate total emissions.
• S02
• PM
• C02
• S02
' PM10
• C02
' PM10
IES Projects
Used In
• Argentina

• China (Shanghai)
• China (Beijing)
• Korea
• Brazil
 1 Note: A more comprehensive version of this table with additional resource information can be found in Appendix D.
Forecasting  Future
Once an IES team establishes its base-year
emissions inventory, the team can build upon
this foundation and model future emissions
associated with the developed mitigation
scenarios. During the development of the
comprehensive base-year emissions inventory,
the technical team typically will have already
collected much of the data needed to forecast
future emissions. Forecasting future emissions,
however, typically requires the collection of
additional data for the selected model.
The particular energy/emissions model that a
team selects will ultimately determine the types
of additional input data that are required for
developing the energy and emissions scenarios.
For example, models that focus specifically on
the transportation category of the energy sector
typically require statistical data on vehicles, e.g.,
life-span, mean distance and speed typically
traveled (see Table 1  in Appendix D for more
details). Using this same example, if the team
   has not yet collected this detailed data for the
   base-year emissions inventory, the team will
   need to do so to forecast future emissions.

   Modeling future emissions associated with a
   team's integrated mitigation scenarios takes into
   account potential changes in future activity in
   various categories of the energy sector. So,
   technical teams will likely also need to collect
   additional data in order to project future trends
   in the population, economy, and energy demand
   that can affect future activity.  Modeling should
   also account for changes in emissions factors
   that result from proposed control measures and
   technologies included in the integrated
   mitigation scenarios.

   Some national or state/provincial energy planning
   offices have conducted modeling and analyses on
   future national energy  demand. Assumptions and
   emissions growth factors used in these analyses
   are  often valuable for modeling future emissions
   scenarios. When existing energy analyses are
   unavailable, IES teams should consider using
   steady-state growth factors, which are often
   linked to  published national indices. These
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growth rates will allow the model to project
future activity data, while adding credibility to
both the energy and emissions analyses. Once a
team makes all necessary decisions pertaining to
emissions growth scenarios, it can begin
evaluating future emissions for each integrated
mitigation scenario.
Qualitative Data Checks

Projecting future energy demands and associated
emissions is a complicated modeling task that is
inherently characterized by a degree of
uncertainty. To help reduce this level of
uncertainty, the IES team can perform certain
qualitative data checks. For example, cross-
checking baseline emissions data with ambient
monitoring network readings can help calibrate
the modeling process and validate emissions
output data. Although extremely rough, these
data checks can be useful in refining the
modeling process and output data used for
subsequent analyses within the IES
methodological framework.
     Alternatives to Modeling

     In most IES projects, such as in Shanghai,
     Beijing, Mexico City, Buenos Aires, and
     Sao Paulo, the technical team elected to
     develop an energy/emissions model to assist
     with the development of baseline and alter-
     native energy forecast scenarios. While
     energy/emissions modeling is a traditional
     step in the IES process, teams with limited
     data  and/or funding resources might consid-
     er adapting the results of parallel studies
     instead. While original, project-specific data
     are preferable, existing  studies  and informa-
     tion can be used as the basis of the analysis.
     Original, project-specific data,  however, are
     preferable whenever possible.

     Several IES projects have selected existing
     energy sector forecasts  as the basis for their
     energy and emissions analysis. The IES-
     South Korea team used a comprehensive
     energy sector study conducted by its
     Ministry of Commerce, Industry, and
     Energy as the foundation for its analysis.
     The energy study analyzed numerous
     energy sectors, including transportation,
     industry,  household, commercial, power,
     and agriculture, and considered a wide
     range of conventional and clean energy
     technologies. The South Korean govern-
     ment officials and energy experts had
     already thoroughly reviewed and accepted
     the energy sector study, making its adoption
     for IES analysis a logical choice over
     creating a new IBS-specific study.
  Chapter 3
Energy/Emissions Analyses and Modeling

                    Air Quality Modeling
                Health Impacts
The energy/emissions analysis step in the Integrated Environmental Strategies
(IBS) process generates a forecast of future energy demand and a corresponding
emissions inventory. During the air quality modeling step, the technical team
uses these output data, as well as monitoring and meteorological data, to project
future atmospheric concentrations of emissions. Air quality modeling enables an
IBS team to quantify reductions in air pollutants and GHGs from the baseline
for each integrated mitigation scenario analyzed.  Output from the air quality
model is then used in the following technical step to estimate human health
impacts (see Chapter 5).

Modeling air quality is a highly complex process. To comprehensively model
future air quality, especially in urban regions, substantial amounts  of input data
are required. While local data sets are preferable whenever possible, IES teams
must sometimes incorporate assumptions or borrow data. Air quality modelers
should be cautious, however, about building in too many assumptions, as doing
so can  skew the entire analysis. As with other components of IES analysis and
modeling, all assumptions and borrowed data should be clearly documented.
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Identifying Targeted
Emissions for Analysis
Identifying the targeted emissions for an IES
analysis begins during the project's scoping
phase. The emissions included will influence
many key project decisions, including the
sectoral focus, selected models, and endpoints
for the health effects analysis. To attain the
co-benefits that characterize the IES approach,
teams typically include emissions from both
local ambient air pollutants (particularly those
that most adversely impact ambient air quality
and those  for which health impacts are known
and data are  available) and GHGs with a high
potential for reduction. Typically, both air
quality experts and health analysts participate in
selecting the targeted emissions. Many technical
teams often also solicit input from
decisionmakers to ensure relevance to local
policies and  concerns.
   Primary Pollutants and  GHGs

   Most IES air quality teams begin by considering
   primary, or nonreactive, pollutants (those
   emitted directly into the atmosphere from
   stationary point, mobile, and area sources), as
   well as GHGs. Combustion-related PM10 is
   often selected as the first pollutant of concern
   for IES projects. The health benefits associated
   with reduced concentrations of PM10 are well
   documented,1  as are many of the  emission
   factors and mitigation strategies.  The most
   prevalent anthropogenic GHG, CO2, is also
   included in most IES projects. While IES teams
   typically consider PM10 and CO2 initially, a
   team can also consider other emissions based on
   unique regional circumstances. Table 4.1 lists
   ambient air pollutants and GHGs that could be
   included in an analysis.

   Secondary Pollutants

   Secondary, or reactive, pollutants are those
   formed in the atmosphere through complex,
   nonlinear chemical reactions.  For example, O3
   is formed through chemical reactions between
Table 4.1 Ambient Air Pollutants and GHGs
Ambient Air Pollutants

 1 Some ambient air pollutants, such as PM2 5 can also affect the planetary albedo.
1 Samet et al. 2000. Fine Particulate Air Pollution and Mortality in 20 U.S. Cities.
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VOCs and NOX in the presence of sunlight.
Atmospheric concentrations of O3 can therefore
be reduced by reducing emissions of its
precursors—VOCs and NOX. PM2 5 is formed
through atmospheric conglomeration of
chemicals around a carbon, nitrogen, or sulfur
core and through atmospheric nucleation of
chemical compounds.

Secondary pollutants can adversely impact
ambient air quality and human health, especially
in urban regions. Due  to their complex
formation, however, concentrations of secondary
pollutants are typically more difficult to model
than primary pollutants and GHGs, as larger
quantities of input data are required (see Air
Quality Model Selection for more details).
As a result, secondary pollutants are often not
included in the first iteration of an IES analysis.
They can, however, be included in subsequent
iterations by using estimates and filling gaps
where data are not available. If a team chooses
to analyze O3 or PM2 5 on an urban geographic
scale, it would still need to account for
atmospheric chemical reactions.

Data Availability and

When selecting emissions for analysis, IES
teams should consider the availability of local
emissions data, including historic emissions and
monitoring data. Without this information, the
accuracy of projected atmospheric emissions
concentrations, and subsequent human health
impact analyses, can be compromised. The air
quality team should also consult with other IES
technical team members to ensure that sufficient
emissions-specific data exist for their respective
analyses and that these data are compatible with
their modeling inputs and outputs.
   Local Conditions

   During the emissions selection process, the air
   quality team should consider the full array of
   ambient air pollutants and GHGs. Unique
   regional conditions within each IES country,
   such as urban-industrial activity, will influence
   the group of emissions ultimately selected.
   Some IES projects might require a thorough air
   quality assessment to determine the emissions
   of highest concern. In other projects, however,
   emissions might be more intuitively identified.
   For example, the South Korea IES team selected
   PM10 as its emission of highest concern based
   on local research linking these emissions to
   approximately 50 percent of all regional air
   pollution health impacts.

   Compliance with  Local Air Quality

   The team can also select emissions for inclusion
   by comparing local air quality monitoring
   data with existing air quality standards. Those
   emissions with ambient concentrations near
   or above a country's standards should be
   considered of great potential interest to the
   IES project. If a country does not have existing
   regional air quality standards, the team might
   consider using the World Health Organization's2
   or the U.S. EPA's3 air quality guidelines as a

   Flexibility  in Emissions Selection

   While early consensus on emissions selection
   is necessary for initiating technical analyses, the
   team should build flexibility into its approach.
   During the course of an IES project, a variety of
   factors, such as data availability and new studies,
   can influence the emissions  selected. In fact,
   while most teams consider numerous targeted
   emissions at the outset of an IES project, they
   typically narrow their selection to a single local
   pollutant and a single GHG  emission.
  Chapter 4
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                                                                         IES Handbook
Selecting an Air Quality
Within the IES methodological framework, the
air quality model utilizes output data from the
energy/emissions model, as well as ambient air
quality monitoring and meteorological data, to
project future atmospheric concentrations of
pollutants and GHGs. There are numerous
approaches to forecasting these concentrations;
however, two main classes of emissions-based
air quality models are typically used:
1) dispersion models and 2) photochemical grid
models (see Table 4.2, which illustrates the
similarities and differences between the two
classes of models).

Dispersion Air Quality Models
Dispersion air quality models are the most
widely used tools to project air quality impacts
of primary pollutants (e.g., PM10, SO2, and
   NOX) and future concentrations of GHGs.
   Dispersion models perform complex
   mathematical equations using emissions
   inventories and meteorological input data to
   estimate the atmospheric transport (advection
   and diffusion) and removal processes (dry and
   wet deposition) of a given emission from its
   source to the location of impact. The model then
   uses this information to forecast ambient
   atmospheric concentrations at a given location.

   Dispersion models have the advantage of
   requiring limited input data compared to more
   complex models, such as photochemical grid
   models. While this simplicity lends itself well to
   IES projects with limited data, most dispersion
   air quality models are unable to model the
   complex chemical reactions that form secondary
   air pollutants. The majority of IES projects to
   date have utilized a variation of dispersion
   models to project ambient air quality.

   The most common type of dispersion model
   used to forecast air quality is a Gaussian
   dispersion model, which uses the Gaussian
   equation to project the transport of emissions
   from a particular source. An example of a
   Gaussian dispersion model is the U.S. EPA's
   Industrial Source Complex Model (ISC3).4 ISC3
   is a steady-state Gaussian model used to project
   emission concentrations from a wide variety
   of sources associated with the industrial sector.
   ISC3 also provides modelers with flexibility,
   as it allows for operation in both short- and
   long-term modes.

   Photochemical Air  Quality Grid

   Photochemical air quality grid models are
   similar to dispersion models; however, they
   have the added capability of modeling complex
   photochemical transformations of emissions in
   the atmosphere. This feature allows
   photochemical grid models to project both
   primary and secondary air pollutants.
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Table 4.2 Typical Characteristics of Dispersion and Photochemical Grid Models
                 Dispersion Models
              Photochemical Grid Models
   Require limited input data.
   Model atmospheric transport and removal processes of a given
   Used to project primary (nonreactive) pollutants.
   Model concentrations without grid cells.
    Require significantly larger quantities of input data.
    Model atmospheric transport, removal processes, and photo-
    chemical reactions of a given emission.
    Used to project both primary and secondary (reactive) pollu-
    Model concentrations within grid cells.
The most common type of photochemical grid
model used to forecast air quality is a 3-
dimensional (3-D) Eulerian grid model. An
Eulerian grid model computes an array of
complex algorithms for an airshed, which is
divided into discrete grid cells. While Eulerian
grid models have the capacity to project
secondary pollutants, they require significantly
larger quantities of input data than a simpler
dispersion model. As a result, this class of air
quality models is typically not as suitable for
IES countries that have limited data sets.

Some examples  of Eulerian grid models are the
U.S. EPA's Urban Airshed Model (UAM)5 and
the Comprehensive Air Quality Model
(CAMx).6 Both  of these models utilize
emissions, meteorology, and terrain data to
derive atmospheric concentrations of both
primary and secondary pollutants for each
discrete grid cell.

Factors Influencing Model

Air quality models are highly specialized
analytical tools.  In addition to the targeted
emissions, several other project-specific factors
should be considered when evaluating an air
quality model, including:

• Data availability and resolution.

• Geographic scope.

• Meteorological and topographical
   • Compatibility with emissions sources.

   • Model run times.

   Data Availability and Resolution

   The selection of an air quality model primarily
   depends on the availability of input data.
   Models that are capable of processing larger
   amounts of input data can provide more detailed
   estimates of local air quality improvement and
   GHG reductions. More precise output data, in
   turn, can strengthen subsequent analyses and
   provide greater confidence in the team's policy
   recommendations. Many IES teams, however,
   do not have enough data to sufficiently run these
   more detailed models and have projected air
   quality using less data-intensive  approaches. In
   these cases, the air quality team must make
   broader assumptions regarding changes in
   ambient emissions concentrations (based on
   emission mitigation projections), while leaving
   background concentrations unchanged. Making
   such assumptions is acceptable under the IES
   project structure; however, teams are
   encouraged to transparently document all
   assumptions and to address data gaps in future
   project iterations.

   Difficulties arise when a model's data input
   requirements exceed the available emissions
   inventory, ambient air quality monitoring, and
   meteorological data. In these cases, the team
   must incorporate estimates or spend additional
   time collecting the necessary data to properly
   run the model. To avoid these situations, the
6 l/7thconf/information/camx.pdf
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                                                                            IES Handbook
team should thoroughly analyze all existing data
sets and compare them to the specific data
requirements of each candidate air quality
model before making a final selection.

Geographic Scope

The geographic scope of the modeling exercise
and overall project (determined during the
scoping process) should also be considered
when selecting an air quality model. Modeling
large geographical areas (i.e., state, province, or
nation) often requires a different model than one
used for urban airshed modeling. Consulting
with the health effects team during the model
selection phase is important, as there may be
particular data and/or funding limitations  to
gathering health effects data with a broad or
rural geographical area. For example, hospital
documentation of the causation of morbidity and
mortality is often more limited in rural areas of
developing countries compared to urban regions.

Meteorological and Topographical

When selecting an air quality model, IES  teams
typically also consider regional meteorological
conditions that might affect the mixing height
(the vertical depth in the atmosphere in which
pollutants are mixed by convective currents)
and atmospheric stability, as well as any terrain
complexities, such as surface roughness (flat
versus mountainous regions). These factors
can significantly influence the transport and
chemical reactions of airborne emissions, and
thus the resulting local air quality. IES teams
should ensure that its selected air quality model
is capable of accounting for these  regional
considerations. This is especially important
when incorporating the air quality model's
output with health effects, environmental
impacts,  and benefit-cost analyses. For
example, a first order dispersion model alone
might not be capable of depicting  the benefits
of reduced secondary pollutants that result from
an emissions reduction strategy.
   Compatibility with Emissions Sources

   The air quality model selected should also
   be capable of analyzing all emission sources
   included in the developed scenarios. Most
   dispersion models are capable of analyzing major
   point sources, small point sources, area sources,
   and mobile sources. Depending on the emission
   sources included, however, some models are more
   appropriate than others. For example, emission
   sources can be manipulated for use in a number of
   models.  In the ISC3, line sources, which represent
   transportation networks, are not directly
   represented. They can,  however, be aggregated as
   elongated area sources  or linear clusters of
   volume sources, for use in the model. As with all
   other models selected for IES projects, the air
   quality model should also be compatible with
   other steps in the technical analysis.

   Model Run Times

   Another consideration in model selection is
   the time required to complete model runs. Once
   the results of an IES analysis are disseminated,
   policymakers might request immediate followup
   analyses on particular  study elements. These
   analyses might require slight modifications to
   the assumptions included, followed by another
   iteration of the model  run. At this stage of
   policy development, policymakers generally
   prefer a rapid response to their inquiries.
   So, while evaluating air quality models, the
   technical team might consider those models
   that can generate  output relatively quickly, to
   accommodate typical policy  development needs.
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                                                                              IES Handbook
Table 4.3 Summary of Available Air Quality Models"
Model Name
Software de Impacto
Atmosferica (SofIA)
Box Model
(Urban Branching
Trajectory) Model
California Institute
of Technology (CIT)
Models-3/ Community
Multiscale Air Quality
(CMAQ) Model
Industrial Source
Complex 3 (ISC3)
Gaussian Plume
Model (custom)
Urban Air Model
Model Type
Lagrangian disper-
Eulerian 3-D photo-
chemical grid
Multiscale 3-D pho-
Gaussian plume
Primary dispersion
Eulerian 3-D photo-
chemical grid
Uses an Eulerian framework to
derive long-term pollutant con-
Used to calculate change in PM
Used to calculate changes in ambi-
ent PM concentrations due to
changes in primary
pollutant emissions.
Models dispersion of pollutants
and computes concentration and
Calculates the distribution
of emissions in a region by solving
equations of mass
Evaluates the impact of air quality
management practices for multiple
pollutants at
varying scales.
Models pollutant concentrations
from a wide variety of sources
associated with an industrial com-
Uses simple Gaussian plume meth-
Derives concentrations for 23
species of air pollutants using
meteorological, air quality,
terrain, and emissions data.
' PM10
' PM10
' PM2,
' PM2,
' PM10
' PM10
• S02
• CO
• C02
• sox
' PM10
' PM2,
• sox
' PM10
• sox
' PM10
• VOCs
• CO
IES Projects
Used In
• Argentina
• Chile
• Chile
• China (Shanghai)
• Brazil
• Mexico
• China (national
• China (Beijing)
• India
• China (Shanghai)
Not currently in use
for IES
1 Note: A more comprehensive version of this table with additional resource information can be found in Appendix D.
  Chapter 4
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                                                                           IES Handbook
Most dispersion models have the advantage of
simplicity, thereby minimizing calculation times.

Table 4.3 provides a brief summary of available
air quality models and their characteristics. This
table is by no means exhaustive, and only lists
those air quality models that have been used in
IES studies to date.

Obtaining Data

Obtaining comprehensive data is critical for
accurately projecting future atmospheric
concentrations. The core inputs for most air
quality models are emissions data from
energy/emissions modeling and developed
emissions inventories, as well as ambient air
quality monitoring and meteorological data. IES
teams should utilize data sets specific to the
region whenever possible. If necessary, teams
can import data from neighboring countries or
similar studies. When importing data, the team
should account for any conditions unique to the
region, such as terrain differences.

Emissions Data

Emissions data and emissions inventories should
be compiled prior to modeling, as these data
serve as the primary inputs for air quality
modeling. If necessary, the team can seek
additional sources of information to fill in any
remaining gaps in emissions data. This
refinement in the emissions inventory prior to
beginning modeling activities will help ensure
more accurate modeling results.

Ambient Air Quality Monitoring

Determining ambient atmospheric
concentrations before modeling helps improve
the effectiveness of the modeling exercise. The
background air quality concentrations for the
study should be defined using reliable
information, such as regional monitoring
networks that measure concentrations of PM10,
O3, and other ambient emissions.
   Historical ambient air quality data collected
   from monitoring networks are typically quite
   reliable and accurately represent the change in
   local air quality over time. These data can help
   the IES technical team better understand
   background emissions concentrations and
   anticipate future episodes of compromised air
   quality. IES teams with access to local  ambient
   air quality monitoring data are encouraged to
   utilize these data to develop the business-as-
   usual (BAU) baseline emissions scenario. While
   complete data from a comprehensive monitoring
   network are preferred, limited monitoring data
   are still useful for scenario development.

   After completing air quality modeling runs,
   historical air quality data can be compared to
   the ambient air quality concentrations projected
   by the model. This comparison allows the team
   to analyze the air quality benefits resulting from
   the policies and technologies proposed in the
   integrated mitigation scenarios, as well as the
   associated economic impacts. In this way,
   sufficient historical ambient air quality data can
   help  support future mitigation activities
   recommended to policymakers by an IES team.

   Meteorological Data

   Regional meteorological data are crucial  to any
   air quality analysis and modeling effort, as the
   fate and transport of air pollutants and GHGs are
   greatly influenced by the characteristics of the air
   mass into which they are emitted. The following
   meteorological measurements are typically
   collected and input into air quality models:

   • Vertical profile of wind speed and direction

   • Vertical profile of temperature

   • Vertical profile of humidity

   • Mixing height

   • Daily rainfall

   • Solar radiation
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                                                                           IES Handbook
Accessing Meteorological Data

Official meteorological data can be housed in
a variety of different organizations from country-
to-country. In the United States, most model-
ready, electronic meteorological data are recorded
at airport weather stations. In other countries,
these data might be available  from the national
meteorological office. Meteorological data are
not always easily accessible or available in the
correct resolution or format, however, particularly
in countries without comprehensive and advanced
weather monitoring infrastructure. In these
instances, air quality teams might consider
importing data from parallel studies (see box at
right). Regardless of the source of meteorological
data, teams should check all data for quality to
ensure the credibility of their  analysis.
     Filling Data Gaps

     As with other technical steps in the IES
     methodological framework, the team might
     find it necessary to import data from paral-
     lel studies or to include a variety of assump-
     tions when local data sets or resources are
     lacking. The team should document all
     assumptions and instances of importing
     data. In addition, the team should be  cau-
     tious when filling gaps with data sets from
     other regions. If there are any significant
     differences in regional characteristics (e.g.,
     topographical, meteorological), external
     data should be appropriately calibrated to
     account for unique local conditions. For
     example, where monitoring information was
     limited in Buenos Aires, the Argentina IES
     team adopted monitoring data from similar
     countries. The team carefully cross-checked
     all imported data with its own to ensure that
     differences in fuel types and topography did
     not greatly skew results.
  Additional U.S. EPA Air Quality Management Tools and Resources

  The U.S. EPA is currently developing two new Web-based products that provide additional
  guidance to international audiences regarding local air quality management. These tools include
  the Air Quality Management Online Manual and the Global Air Web site. The Manual provides
  readers with helpful information about each interconnected component of an air quality manage-
  ment system. The Global Air Web site includes information about and links to a host of trans-
  boundary air concerns, including stratospheric ozone and global climate change. These resources
  will be available through the U.S. EPA Web site in the near future. In addition, the U.S. EPA's
  Air Pollution Training Institute (APTI) provides Web-based and classroom courses on a wide
  range of air pollution topics. Many of these courses can be accessed for no cost by international
  users. For more information about APTI or to view a list of available courses from APTI, visit
  Chapter 4
Air Quality Modeling

                   Health Effects Analysis
Health Impacts

The health effects portion of the Integrated Environmental Strategies (IBS)
analysis estimates the public health impacts from conventional pollutants
(e.g., PM, O3, SO2, CO, NOX, and Pb). Health effects modeling translates
the projected atmospheric emissions concentrations (the primary output of
the air quality modeling analysis) into avoided health effects for each integrated
mitigation scenario being analyzed. Once the avoided health impacts are
determined for each scenario, they can be valued in monetary terms using
a variety of approaches, including the willingness to pay and cost of illness
methods (see Chapter 6).

To provide the greatest relevance for policymakers, the health effects analysis
should primarily draw upon in-country data, where possible. The health
effects team can import information from other studies when locally developed
parameters are nonexistent or lack sufficient credibility,  but care must be taken
in using or pooling foreign data sets. Uncertainty should also be factored into
the analysis and accounted for, where possible.
 Chapter 5
                   Health Effects Analysis

                                                                          IES Handbook
Defining  the Scope of the
The first step is to define the scope of the health
effects analysis. The team must make several
decisions regarding:
• Time span. Most IES analyses use time
 horizons of 10 and 20 years. As the time
 span of the analysis lengthens, the uncertainty
 associated with scenario parameters increases.
 As the time span shortens, the magnitude
 of health benefits realized decreases, since
 countries phase in new policies and technolo-
 gies over time and, as a result, health benefits
 are not realized instantaneously.
• Geographical area. The geographical area
 of study is influenced by the presence of popu-
 lation and pollution, and usually includes a city
 or urban area. The target resolution and domain
 size of emissions and air quality models will
 also limit the definition of the study area.
    Targeted Emissions. Most IES country studies
    have used average annual concentrations of
    PM (usually PM10) as the sentinel pollutant
    for health impact analysis. Other ambient
    pollutants that can be considered include O3,
    SO2, CO, NOX, and Pb. In addition to these
    indicator pollutants, IES analyses examine
    GHGs, such as CO2. To date, no studies directly
    link ambient CO2 to adverse health impacts.

    Health endpoints. Many studies  conducted in
    different regions of the world have identified
    health endpoints associated with air pollution.
    Not all of the suspected health effects can be
    quantitatively estimated based on empirical
    relative risk studies, however. Table 5.1  lists
    some health effects of air pollution that can be
    quantitatively estimated, as well as additional
    suspected health effects. This list  can be used
    as a starting point for selecting the health
    effects to be included in the analysis.
Table 5.1 Quantifiable and Suspected Health Effects
Quantifiable Health Effects Suspected Health Effects
Mortality (elderly)
Mortality (neonatal, infant)
Bronchitis — chronic and acute
Upper respiratory illness
Lower respiratory illness
Increased asthma attacks
Respiratory hospital admissions
Cardiovascular hospital admissions
Emergency room visits for asthma
Days of work loss
Days with restricted activity
Induction/exacerbation of asthma attacks
Non-bronchitis, chronic respiratory disease
Increased airway responsiveness
Exacerbation of allergies
Fetus/child developmental effects
Neurological disorders
Behavioral effects (e.g., learning disabilities)
Cancer and lung cancer
Respiratory cell damage
Decreased time to onset of angina
Cardiovascular arrhythmia
Source: Adapted from U.S. EPA. 1999. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1990 to 2010.
  Chapter 5
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                                                                           IES Handbook
Estimating Avoided  Health

Once the scope of the analysis is defined, the
team can estimate the avoidable health effects for
each scenario analyzed. Computing these health
benefits requires four types of inputs:

• Changes in air quality for each analysis
  scenario. Air quality monitoring analysis
  provides projected ambient concentrations
  of targeted emissions.

• The number of people exposed to these
  changes. Population data can be taken from
  census information. An analysis can focus on
  the entire population of a study area or among
  members of a particular subgroup (e.g., chil-
  dren, the elderly). The population data used
  should also be compatible with the geographi-
  cal grid of the air quality analysis (see sidebar).

• Concentration-Response (C-R) functions.
  A C-R function is a mathematical equation  that
  describes the relationship between a change in
  pollutant concentration and a change in the
  occurrence of a health endpoint. C-R functions
  can help estimate how many deaths and how
  much illness are attributable to a given concen-
  tration of pollution. The team will  need to
  develop C-R functions or adapt them from
  other studies, as detailed later in this document.

• Baseline incidence of adverse  health effects.
  Baseline incidence rates are usually expressed
  as the number of a given event per  100,000
  inhabitants. The team needs to collect baseline
  health effect rates  for each of the chosen health
  endpoints. National and local public health
  departments can often provide data on the inci-
  dence rates of the most common diseases.1
  Hospital registers and databases are additional
  sources of information. Epidemiological studies
  are valuable sources for those diseases not
  addressed by official statistics.
     Matching Population Data and
     Grid Size
     The geographic grid size of the air quality
     model output is the primary input compati-
     bility concern for health effects models. The
     grid must match the population data used
     for the health effects analysis. Standard grid
     sizes output by air quality models include
     36 km2, 12 km2, and 4 km2. Mismatches in
     scale between the population distribution
     data and air quality data can be problematic.
     Population data that are too coarse will not
     take advantage of the finer-level informa-
     tion in air quality data. Some preprocessing
     may be needed to produce matching grid
     sizes for the health effects analysis.
   C-R Functions and  Health
   Effects Modeling
   Human health effects modeling centers around
   C-R functions. C-R functions are based on C-R
   coefficients obtained from local epidemiological
   studies or derived from imported studies that are
   usually modeled using a log-linear form  (Poisson
   regression). The models isolate the effects of air
   pollution on health, taking into account the most
   common confounder (e.g., weather, especially
   temperature, and seasonal changes).2'3
1 Note that these sources represent only reported cases; complete incidence data are rare. Also, these numbers are subject
 to issues of diagnosis criteria. For a discussion of the problems that can arise, see Mathers et al. 2002. The Global Burden
 of Disease.
2 Cifuentes et al. 2001. Assessing the Health Benefits of Urban Air Pollution Reductions.
3 Kunzli et al. 2000. Public-Health Impact of Outdoor and Traffic-related Air Pollution.
  Chapter 5
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                                                                          IES Handbook
Calculating the Health Effects
of a Given Concentration of PM

To calculate the health effects for a given
change in pollutant concentration (using the
results from the air quality modeling phase),
an IES team will need the following data:

• Control and baseline pollutant concentrations

• Baseline health effects

• C-R functions

For information about the corresponding
equation for this calculation, see Appendix D.

  Tools for Analysis—APHEBA

  The Air Pollution Health Effects Benefit
  Analysis (APHEBA) model is an  integrated
  assessment model designed to evaluate the
  social benefits associated with changes in air
  pollution concentrations for a given location
  and time period. It was developed by the
  IES Chile principal investigator for use in
  Chile's health impacts analysis. Subsequently,
  APHEBA has been used by other  IES
  countries including China, India, and the
  Philippines as a result of training sessions led
  by the Chilean team. These training sessions
  highlight the ongoing South-South informa-
  tion-sharing and capacity strengthening
  efforts through IES. The model helps users
  build scenarios tailored to specific ambient
  pollutants that are then assessed for expo-
  sures, health impacts, and economic valua-
  tion. By assisting with health impacts analy-
  sis and valuation, this model makes co-bene-
  fits analysis more readily attainable. APHEBA
  uses the Analytica® modeling software.
Calculating the Change in
Expected Number of Health Effects

The change in the number of cases of health
effects is an exponential function of the C-R
coefficient multiplied by the variation in air
pollution, measured from a reference level.
For the specific equation, see Appendix D.
   Epidemiological Studies
   and  Health Damage

   Epidemiological studies offer a scientific method
   for determining how a pollutant influences the
   health status of a defined group of individuals.
   Researchers use epidemiological studies to eval-
   uate the causes, rate of occurrence, and patterns
   of health effects in the population. These studies
   can also assess the significance of environmen-
   tal, genetic, social, geographic, and physiological
   factors that might influence the study results.
   Epidemiological studies are the primary refer-
   ence for C-R analyses.  Epidemiological studies
   are preferred over clinical or experimental stud-
   ies (in humans or animals), which require the
   complex and uncertain extrapolation of experi-
   mental conditions to real conditions.

   Epidemiological studies conducted in the United
   States,  Europe, and elsewhere clearly indicate
   that air pollution causes adverse health effects.
   PM10 is the most commonly studied pollutant
   associated with these ill effects. Studies have
   found an association between short-term
   increases in ambient levels of PM and increases
   in hospital admissions  and deaths from acute
   cardiovascular and respiratory disorders.
   Possibly the largest knowledge gap is the
   extrapolation from low pollutant concentrations,
   where most epidemiological studies  have taken
   place, to higher pollutant concentrations, which
   are more likely the case in developing countries.

   Identification of the Populations
   at Risk

   Many studies have identified children and the eld-
   erly as the two age groups most susceptible to air
   pollution exposure. Among the elderly, air pollu-
   tion is strongly associated with cardiopulmonary
   diseases. Despite the low incidence and preva-
   lence of cardiovascular  diseases among children
   and adolescents,  respiratory diseases are common
   causes of morbidity and mortality among youth.

   People with chronic obstructive pulmonary
   disease (COPD), asthma, myocardial infarction,
  Chapter 5
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                                                                             IES Handbook
and other cardiopulmonary diseases are also at
high risk. Studies suggest that individuals with
preexisting disease might be more susceptible
than healthy individuals to the effects of air
pollution. Numerous studies have found that
short-term exposure to PM exacerbates asthma
symptoms and can decrease lung function in
people with asthma, including children.4

Identification of the  Relevant
C-R Functions

Countries can either conduct their own C-R stud-
ies or use existing literature to obtain coefficient
values. Studies conducted locally (in the city or
country of analysis) are preferred to studies con-
ducted in other locations. Extrapolating health
effects from one region to another can be diffi-
   cult, due to differences in such parameters as the
   major sources of air pollution, types of fuel used,
   differences in air emissions toxicity, socioeco-
   nomic conditions, and population susceptibility.
   It is also important to recognize that a single epi-
   demiological study can be subject to systematic
   or random error. When relying on foreign stud-
   ies, analysts should consider examining more
   than one study for each health endpoint consid-
   ered, using endpoint-specific meta-analysis or
   other systematic aggregation approaches.

   Time-Series Versus Cohort Studies

   The main health effects associated with air
   pollution are asthma, bronchitis, and premature
   mortality. Two types of studies have related air
  Estimating Health Impacts of Lowering PM10 Concentrations5
  Estimating the impact of lowering ambient PM10 concentrations on avoided hospital admissions
  for respiratory problems is given below, taken from a study in Mexico City.
  Step 1: Epidemiological Study (Transferred)6
  • Demographic groups: All
  • C-R relationship: 0.139 percent change in hos-
    pital admissions for a change in the daily aver-
    age PM10 concentration of 1 (jLg/m3
  Step 2: Data from Mexico City
  • Population at risk: 18,787,934 persons
  • Baseline rate of hospital admissions for
    respiratory problems: 411 admissions
    per 100,000 persons
  • Baseline number of hospital admissions:
    Population at risk x 0.00411 admissions/
    person = 77,218 admissions
    Current population- weighted annual
    average PM10 concentration: 64 (jig/m3
    Population-weighted annual PM10 concentra-
    tion after policy implementation: 51.2 (jig/m3
    Change in PM10 concentration in response to
    policy implementation: 64 (jig/m3-51.2 (jig/m3
    = 12.8
  Step 3: Calculation of estimated
  avoided cases

  Avoided hospital admissions: 77,218 admis-
  sions x 0.00139 change/(jLg/m3 x 12.8 (jLg/m3 =
  1,376 admissions.
  Note: Reduced hospital admissions are only one of
  the health benefits of reducing PM}0 concentrations.
  Other impacts include premature death and less
  serious illnesses not requiring hospitalization.
4 Gavett et al. 2001. The Role of Particulate Matter. See also Gauderman et al. 2000. Association Between Air Pollution
 and Lung Function Growth.
5 Gwilliam et al. 2004. Reducing Air Pollution from Urban Transport.
6 A meta-analysis was undertaken of 126 national and international epidemiological studies to derive this information.
 For more information see:
 - The Mexico Air Quality Team. 2002. Improving Air Quality in Metropolitan Mexico City.
 - Cesar et al. 2000. Economic Valuation of Improvement of Air Quality in the Metropolitan Area of Mexico City.
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pollutant concentrations (mainly PM) and
premature mortality and/or morbidity: 1) time-
series studies, which study the short-term varia-
tions in daily mortality due to daily variations in
air pollutant concentrations, and 2) long-term
cohort studies, which assess the chronic effects
of pollution by following a cohort of subjects
over several years.

Most of the studies carried out in developing
countries are time-series, which have been
replicated in more than 100 cites around the
world to date, with similar results. Long-term
   studies have been conducted primarily in the
   United States, so their application in other
   countries can be problematic. Adopting C-R
   functions from cohort studies must be done
   carefully as extrapolation can devalue results.
   For example, a recent long-term cohort study7
   found an increase in total mortality of 4 percent
   for each additional  10 (jL/m3 of PM25. This
   increase is three to  four times the risk found by
   the time-series studies. Applying these results to
   high pollution cites should be done with care.
   At the very least, the log specification of the
   C-R function should be used.8
Table 5.2 Considerations in Selecting C-R Functions for IES Health
Effects Analysis9
Consideration Comment
Study type
Study period
Study population
Pollutants included in the
Measure of PM
Economically valuable
health effects
Non-overlapping endpoints
Peer-reviewed research is preferred.
For studies that consider chronic exposure (over a year or longer), cohort studies are preferred over
cross-sectional studies (ecological studies) because they control for important confounders. In addition,
only studies that present quantitative results, with information on the uncertainty (standard deviation or
confidence interval) of the coefficients should be considered.
Studies examining a relatively longer period of time are preferred because they have more data and are
statistically better able to detect effects. More recent studies are also preferred because of possible changes
in emissions, medical care, and lifestyle over time.
Studies examining a relatively large sample are preferred. Studies of narrow population groups are
generally disfavored, except when studying populations that are potentially more sensitive to pollutants
(e.g., children, asthmatics, elderly). If the age distribution of a study population is different from the age
distribution in the assessment population, bias may be introduced into the analysis.
Models with more pollutants are generally preferred to models with fewer pollutants, though careful
attention must be paid to potential collinearity between pollutants. Because PM is acknowledged as an
important and pervasive pollutant, models that include some measure of PM are highly preferred.
PM2 5 and PM10 are preferred to other measures of particulate matter, such as TSP, coefficient of haze,
or black smoke. This is because there is evidence that PM2 5 and PM10 are more directly correlated with
adverse health effects than are the more general measures of PM.
Studies that examine economically quantifiable health effects are preferred. Some health effects, such
as forced expiratory volume and other technical functions of lung functioning, are difficult to value in
monetary terms.
Because the benefits associated with each individual health endpoint may be analyzed separately, care must
be taken in selecting health endpoints to avoid double counting. If "emergency room visits" are included in
an analysis that already considers "total hospital admissions," some benefits will be double counted
because the hospital admissions category includes emergency room visits.
7 Pope III et al. 2002. Lung Cancer, Cardiopulmonary Mortality, and Long-term Exposure.
8 Burnett. 2002. Comparing Linear and Log-Linear Forms. Burnett re-estimated the C-R of the original study using the log
 of the PM concentrations. This change does not have a significant effect in the range  of concentrations of the study, but
 makes a substantial difference for highly polluted cities.
9 U.S. EPA. 1999. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1990 to 2010.
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Other Considerations in Selecting C-R Functions

Selecting the C-R functions to use in an IES
analysis requires careful consideration of the
health literature and an understanding of the
variations among studies. Table 5.2 provides
some useful recommendations for IES teams,
whether they are using a local study or
importing data from a foreign study.

Importing and Pooling  Data

Several IES analyses have used both local and
international studies to build up C-R functions.
Chile used C-R data based on PM2 5. When
studies contained PM10 information, the
Chile team used the following conversion:

The IES Shanghai team selected C-R functions
from Chinese studies whenever they were
available. When the selected health endpoints
  Tools for Analysis—BenMAP
  Developed by the U.S. EPA, the
  Environmental Benefits Mapping
  and Analysis Program-International
  (BenMAP-Int) is a software package that
  allows analysts to convert air quality changes
  into quantified human health benefits in sup-
  port of air quality planning. BenMAP-Int
  estimates avoided morbidity and mortality
  by combining C-R functions derived from
  epidemiological studies with background
  disease incidence and prevalence and
  demographic data for a study population.
  By applying either willingness to pay
  functions or cost of illness measures,
  BenMAP-Int can also apply valuation
  functions to translate specific categories
  of mortality and morbidity into monetized
  values. Numerous IES countries, including
  Korea, plan to utilize BenMAP-Int in
  subsequent phases of their analyses.
   were not studied in China, the team used results
   from international, peer-reviewed literature. If
   several studies described the C-R function for
   the same health endpoint, the Shanghai team
   pooled the estimates to find the mean and a 95
   percent confidence interval of the coefficient.
   The team used a variance-weighted average
   (studies with lower standard errors had more
   weight in the resulting pooled estimate).

   China used PM10 as the indicator of air pollu-
   tion, but some studies used other measures of
   particulate matter (TSP, PM 2 5). When neces-
   sary, the following conversion was used:
   PM10=0.65TSP, and PM25=0.65 PM10.n
   These ratios (as well as the Chilean PM2 5-PM10
   ratio above) were specifically developed based
   on local data comparisons between existing PM
   monitors. These are not applicable on a global
   scale, and should therefor not be adopted for
   application to other countries without first ana-
   lyzing local conditions and monitoring data.

   When considering the use of pooled study results
   for an analysis, several factors must be taken into
   consideration. For example,  studies of short-term
   and long-term (or acute and  chronic) exposures
   cannot be pooled. Similarity of health endpoints
   and population subgroups across studies are
   additional considerations in whether to pool
   results or evaluate the C-R functions separately.

   Important site-specific and scenario-dependent
   variations in C-R function development include:

   • Affected population. Studies can consider
    changes in the health endpoint only  among
    members of a particular subgroup (e.g.,
    children, people aged 65) or among  the
    entire population of the  study area.

   • Functional form. Most studies assume that a
    log-linear form (the relationship between the
    natural logarithm of Y and PM is estimated by
    a linear regression) best describes the relation-
10 Cifuentes et al. 2001. International Co-controls Benefits Analysis Program.
11 Chen et al. 2001. The Integrated Assessment of Energy Options and Health Benefit.
  Chapter 5
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                                                                            IES  Handbook
 ship between health effects and PM. Others
 assume that it is a linear form (a linear regres-
 sion where Y is the dependent variable and PM
 is one of several independent variables), or
 logistic form (a model where the probability
 of occurrence of Y depends on a matrix of
 variables). The appropriate form can depend
 on where a population falls on the response
 curve and what levels of concentrations are
 assumed in the scenarios under analysis.

• PM concentrations exposure period. Some
 studies use daily (24-hour) average PM concen-
 trations, while others use annual averages. Daily
 average studies estimate relationships between
 acute health effects and short-term (or daily)
 changes in air pollution, while the annual aver-
 age studies estimate relationships with chronic
 exposures, such as the incidence of disease.

• Characterization of health endpoint. The
 way certain health conditions are classified
 and grouped can vary from study to study
 (e.g., respiratory diseases as a group, cate-
 gories such as chronic obstructive pulmonary
 disease or pneumonia).

• Study location. Analysts might prefer using
 C-R functions from studies conducted in
 geographically or  culturally similar locations.

Developing Local
Epidemiological Studies

When no local studies are available, a retrospec-
tive time-series study can be developed within the
time span of an IES  project. A local study will
provide better estimations of the avoided health
effects for each scenario analyzed. Developing
new studies can be resource-intensive, however.
Choosing the best methodology for statistical
analysis is a critical step. Generalized additive
Poisson Regression Models have been adopted as
standard in environmental time-series analyses.
   Statistical modeling and data analysis programs
   such as S-PLUS may be useful tools for develop-
   ing local epidemiological studies.

   Daily records of morbidity and mortality events
   are essential for time-series studies. The lack of
   these data, which are not always collected and
   provided by health departments on a daily basis,
   can make conducting a local study difficult. Using
   alternative sources of health data or adopting a
   sentinel hospital as representative of a whole city
   can compensate for a lack of morbidity data.12

   Confounding factors, such as weather (especial-
   ly temperature), and both short- and long-term
   seasonal variations also must be considered.
   The set of confounder included in the  analysis
   will depend upon the endpoints adopted. For
   example, during the holiday season in one
   particular study, air emissions decreased in
   urban centers as did hospital admissions.13
12 Lin et al. 1999. Air Pollution and Respiratory Illness of Children in Sao Paulo, Brazil.
13 Braga et al. 2001. Health Effects of Air Pollution Exposure on Children and Adolescents in Sao Paulo, Brazil.
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Regional differences among industrial activities,
automotive fleets, and types of fuel combustion
result in site-specific distribution of air
pollutants. This varied geographical distribution
makes it difficult to isolate a single pollutant
as the primary source of adverse health effects
observed in different regions of the world. As
a result, analyses are typically completed for
all pollutants of interest present in the studied
region.  Single-pollutant and co-pollutant model-
ing is often performed to explore the effects of
each pollutant and its interaction with others.

Uncertainty Analysis

Uncertainty is inherent in health effects
analyses.14 Some sources of uncertainty include:

• Extrapolation of studies from one location
  to another: Differences in sources of air
  pollution, air pollutant toxicity, and population
  susceptibility can make the extrapolation of
  the effects from one region to another difficult.

• Statistical uncertainty of the C-R function
  coefficient: Many authors have analyzed the
  shape of the C-R function. A non-effects thresh-
  old level exists for most pollutants. PM is the
  only pollutant for which scientists are certain
  there is no non-effects threshold. Studies carried
  out in London, Detroit, St. Louis, Philadelphia,
  and Sao Paulo all show the same linear behav-
  ior for the PM-mortality and C-R relation.15

• Statistical uncertainty of the baseline
  incidence of the health  effects: To compute the
  total number of events that will be avoided in
  the scenarios analyzed, it is necessary to esti-
    mate baseline incidences. Uncertainty can be
    associated with rates provided by health services
    in locations where IES studies will be performed
    since they assume that the rate will be constant
    in time. When no local information exists on
    incidence rates, adopting and extrapolating inci-
    dence rates  can also cause statistical uncertainty.

   Monte Carlo simulation is an effective method
   to  propagate  the uncertainty from the C-R coef-
   ficient, the base rate, and the conversion factors
   to  the final results.  Model uncertainty (like the
   shape of the  C-R function) is more complex to
   consider, but can also be estimated using simu-
   lation methods.16

   Because there will be uncertainty associated
   with final results, they are typically presented
   with two significant digits and always accompa-
   nied by the standard error, or preferably, the
   confidence interval. Results  are most often pre-
   sented in terms of the number of excess cases of
   health effects over the baseline incidence.

   Appendix D provides a comprehensive summary
   of the literature on health effects studies and
   methodologies (organized by health endpoint, pol-
   lutant, country,  etc.) used in previous IES studies.
     U.S. EPA Paniculate Matter
     Research Publications
     This document is a comprehensive source
     of PM research conducted by the U.S. EPA
     since 1998 and can be found online at
14 Murray et al. 2003. Comparative Quantification of Health Risks.
15 For information about health effects of air pollution exposure in these cities, see the following:
 - Braga et al. 2001 Health Effects of Air Pollution Exposure on Children and Adolescents in Sao Paolo, Brazil.
 - Ostro, B. 1984. A Search For a Threshold in the Relationship of Air Pollution to Mortality.
 - Schwartz J. et al. 1990. Mortality and Air Pollution in London.
 - Schwartz J. 1991. Particulate Air Pollution and Daily Mortality in Detroit.
 - Schwartz J. et al. 1992. Increased Mortality in Philadelphia.
 - Schwartz J. et al. 2002. The Concentration-Response Relation Between PM25 and Daily Deaths.
16 Deck et al. 1996. A Particulate Matter Risk Analysis for Philadelphia and  Los Angeles.
17 U.S. Environmental Protection Agency. 2004. U.S. EPA Particulate Matter Research Publications.
  Chapter 5
Health Effects Analysis

            Economic Valuation  and Analysis

                     Concentrati ons

                 Health Impacts
During the economic valuation step of the analysis, the technical team
estimates monetary values of health-related benefits (avoided mortality and
morbidity) resulting from improved local air quality for the scenarios under
consideration. The primary output of the health impact modeling and analysis
(Chapter 5) is the estimated number of morbidity and mortality incidences
associated with each scenario. Comparing each alternative scenario with the
baseline scenario highlights how changes in local air quality will affect health.
The IBS team can also express these changes as the net economic value
of health effects that result from improved local air quality. The team can
then utilize these valuation data to compare the health-related economic
benefits and costs associated with each integrated mitigation scenario.

Ideally, the benefit-cost analysis would quantify all of the benefits from
reducing air pollution (e.g., avoided crop damage, visibility losses, clean-up
costs, building deterioration). These effects are substantial, but methods have
not yet been developed to estimate  them reliably. Thus, they are usually only
a small proportion of the measurable damage caused by air pollution.1 All IBS
projects to date have limited their valuation analysis to health-related benefits.
1 Lvovsky et al. 2000. Environmental Costs of Fossil Fuels.
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Using Valuation Analysis
to Assist Policymakers

An accurate valuation of public health effects
is a critical input to benefit-cost analysis of pro-
posed policies and technologies, and constitutes
the enumeration of the benefits side of the equa-
tion. Similar to other IES analytical steps, the
valuation step should have clearly documented
methodologies and assumptions to  contribute to
the study's credibility and increase acceptance
among local policymakers. This is most likely
achieved by using locally derived estimates,
even though imported data may be more
comprehensive. This issue  should be discussed
during the scoping phase of the IES process.
As with other IES analysis, importing data from
outside regions is sometimes necessary, but
refining local estimates, whenever possible,
should be a priority.

Benefit-cost analyses provide a useful frame-
work for comparing  the pros and cons  of a social
decision. By requiring an analyst to clearly enu-
merate the sources of benefits and costs, estimate
their magnitude, and show the assumptions used,
benefit-cost analyses organize thinking about the
consequences for social well-being  of a policy
decision. Benefit-cost analyses are rarely the pri-
mary decision criterion for regulation and policy
development in the United  States and Europe;
however, impacts assessment of U.S. federal reg-
ulatory decisions typically requires  benefit-cost
analysis. The application of health valuation in
decisionmaking is still not  fully mature, but it is
attracting increased attention as techniques
become more reliable and accepted.

  Guidelines for Preparing
  Economic Analyses
  This U.S. EPA document is a comprehensive
  source of information on benefit-cost
  analyses and can be found online at
  < http://yosemite.'epa/eed. nsf/
   Unit  Economic Values

   The primary benefit of an air quality program
   is a reduction in incidences of mortality and
   illness. Earlier chapters discussed methods to
   estimate changes in health effects from
   improved air quality. To estimate the monetary
   value of avoided mortality and morbidity, each
   avoided health effect is multiplied by a mone-
   tary,  or "unit," value for that health endpoint.
   This  monetization requires IES teams to esti-
   mate discrete unit economic values associated
   with  each health  endpoint included in the  analy-
   sis. By adding these unit values across all health
   endpoints included in the study, a team can then
   calculate the total estimated economic value of
   the avoided health effects for each scenario.
   Comparison with the baseline scenario reveals
   the net economic value of the scenario.

   Morbidity valuation involves estimating
   monetary values  for each of the health effect
   endpoints identified in the health impact
   analysis, including (but not limited to) hospital
   admissions, emergency room visits, new cases
   of chronic bronchitis, respiratory symptoms,
   and lost days of work. An ideal mortality valua-
   tion involves estimating the value of a statistical
   life (see "Mortality Valuation" later in chapter).
   While estimates for mortality valuation typically
   represent the majority of the total benefits
   resulting from improved local air quality, it is
   important for IES teams to perform valuation
   estimates for both morbidity and mortality for
   an accurate valuation analysis.

   Unit  economic values for an avoided case of
   mortality/morbidity generally consist of three

   • Value of lost work or leisure time due to
    illness and reduced life span due to premature

   • Medical expenditures (e.g.,  hospitalization,

   • Value associated with pain and suffering.
2 U.S. EPA. 2000. Guidelines for Preparing Economic Analyses.
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Willingness to Pay Values

Benefit-cost analysis is based upon the concept
that social well-being is made up of the well-
being of all of the individuals in the society.
Benefit-cost logic also requires that people have
well-defined preferences among alternative
bundles of goods (e.g., an environmental
amenity or one's own health) and that they
are willing to  substitute one good for another.
Values based on this substitutability are
expressed as willingness to pay (WTP).

WTP is the maximum sum of money an individ-
ual would pay to obtain an improvement (or
avoid a decrement) in some good. In a health
context, WTP is the sum of money that would
make an individual indifferent to paying for and
having medical treatment versus forgoing the
treatment and keeping the money to spend on
other things. Someone suffering an acute asthma
attack, for example, might be willing to pay no
more than $10 for a treatment that would short-
en an attack by four hours. If the treatment cost
$15, the individual would forego the treatment
and suffer four hours longer. This individual's
WTP for the asthma treatment is $10, and would
be the relevant value for benefit-cost analysis in
this example.

In the context of health valuation, economists
generally agree that WTP includes all three
components of a unit economic value:  1) the
value of lost wages and leisure time; 2) medical
expenditures;  and 3) the value associated with
pain and suffering. As a result, it is ideal for IES
teams to collect  WTP values when performing
the economic  valuation analysis, as WTP gener-
ally captures the complete value associated with
an avoided death or specific health effect. These
WTP values, then, represent the unit values that
are summed across all heath  endpoints to calcu-
late the net economic value of the avoided
health effects  of a scenario.
   Opportunity Cost Values

   In some instances, IES teams might not be able
   to obtain WTP values. In most cases, teams can
   still estimate the values associated with lost
   wages and medical expenditures—values that
   represent the opportunity cost to society of poor
   air quality. Although these opportunity cost val-
   ues do not fully capture the changes in social
   well-being from improved local air quality, as a
   proxy for WTP, they do represent real cash costs
   that can be avoided with environmental improve-
   ments—information useful for policymaking.
     WTP—The Target Value for IES
     Economic Valuation
     In a health context, WTP can be thought
     of as the sum of money that an individual
     is willing to pay for an improvement in
     one's health or to reduce the risk of future
     detrimental health or death. When perform-
     ing an economic valuation within the IES
     framework, it is preferable for IES teams to
     estimate WTP values whenever possible, as
     these values generally capture the full value
     an individual places on avoided morbidity
     and mortality. These WTP values represent
     the target values that IES teams should
     aim to obtain since they are ultimately used
     to quantify the potential health benefits
     associated with improved local air quality.
     When WTP values cannot be obtained, IES
     teams can generate other estimates to serve
     as proxies for WTP; however, these proxies
     will likely yield varying monetary values
     for the scenarios under consideration.
   Methods to  Estimate
   Economic Values  for
   Specific Health Effects
   WTP values can be estimated using two types
   of methods: 1) stated preference methods, which
   ask the individual through a survey about his or
   her WTP, and 2) revealed preference methods,
   which rely on observations of individual choices
   to infer WTP.
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When a technical team cannot estimate WTP
values, it can instead estimate the opportunity
cost values associated with the appropriate
health endpoints, which account for the lost
wages and medical expenditures components
of the unit economic values. To estimate
opportunity cost values, teams can use a variety
of resource cost techniques, which provide a
proxy for WTP by utilizing numerous economic,
demographic, and social data. Table 6.1 on
page 66 summarizes the elements of social
costs and the methods used to estimate them.
Stated Preference Methods

Stated preference methods involve conducting
surveys to determine individuals' WTP for a
good in a hypothetical setting and are used
for both morbidity and mortality valuation.
While this economic valuation method generally
captures the full value associated with an avoid-
ed death or specific health effect, substantial
resources are often required to conduct these
surveys and locate appropriate cost data. As
a hypothetical situation can be constructed for
almost any good, stated preference methods
can address almost any valuation scenario.
   Consequently, their results are sometimes viewed
   as being controversial. The two most common
   stated preference methods are contingent
   valuation (CV) surveys, and conjoint analysis.

   Contingent Valuation (CV) Survey

   A CV survey establishes a hypothetical situation
   in which an individual can state his or her WTP
   for the good. For example, a survey might ask
   whether an individual is willing to pay $15 in
   additional taxes for an emissions reduction
   program that would reduce particulate emissions
   by 20 percent, and thus reduce the occurrence of
   chronic bronchitis in the population by 12 percent.
   If the individual says "Yes," his/her WTP for a 12
   percent reduction in the occurrence of bronchitis
   in this population is equal to or greater than $15.
   Because CV surveys elicit only a hypothetical
   answer to a hypothetical question, however, their
   use continues to be somewhat controversial.

   Conjoint Analysis

   Conjoint analysis is a valuation technique that
   was first developed in the marketing arena and
   has recently been applied to the  environmental
   field. In a conjoint survey, the respondent is
   shown two or three alternative situations and
   asked to rank them or indicate which one he or
   she prefers. A conjoint analysis might compare
   two illness scenarios. For example, the respon-
   dent might be asked to choose between:

   Scenario 1:  Three days  of bed rest with some
               difficulty breathing.

               Ten days at home recovering with
               a cough.

               No cost.

   Scenario 2:  One day of bed rest.

               Four days of at home recovery.

               Cost of $250.

   By varying the related dollar amounts and char-
   acteristics of the situation, an analyst can discov-
   er which "trade offs" of money, illness, time, and
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other factors are preferred by an individual.
While the cognitive task for the respondent in a
conjoint survey may be more intuitive than a con-
tingent valuation survey, the statistical assump-
tions necessary to extract the unit values from the
survey data lead to many of the same concerns
that some economists have with CV results.
  Sensitivities to Economic Valuation
  While valuable for the support of proposed
  policies and technologies, the economic
  valuation phase of the IES process includes
  elements that some economists view as
  controversial. This step of the IES process
  provides teams the opportunity to discuss
  the various political, social, and cultural
  sensitivities that might dictate whether or not
  to perform this particular analytical process.
  If a team's circumstances  are not favorable for
  the completion of an economic valuation, or if
  a team has strong reservations against per-
  forming the benefit-cost analysis, it can elect
  to forgo this step within the IES framework.
Revealed Preference Methods

Revealed preference techniques do not involve
any direct surveying of individuals using hypo-
thetical situations; instead, they infer an individ-
ual's WTP through actual market transactions
and observed behavior. As a result, many econo-
mists tend to prefer revealed preference methods
over stated preference methods because they are
generally viewed as being less controversial.
Two commonly used revealed preference tech-
niques are discussed here: averting behavior
studies, and hedonic models/wage-risk studies.

Averting Behavior Studies

Averting behavior studies examine preventive
measures taken by individuals to avoid particular
health risks or premature mortality. Examples of
averting behaviors to avoid air pollution
include wearing a face mask or installing an air
conditioner. Examples of averting behaviors to
   avoid drinking water contamination are purchas-
   ing bottled water or installing water filtration
   devices. The underlying theory behind the avert-
   ing behavior method in a health context is that
   an individual will continue to take preventive
   measures so long as he or she believes the health
   benefits exceed their costs. So,  the amount of
   money spent on these defensive measures can
   be used as an estimate of an individual's WTP.

   When conducting an averting behavior study, tech-
   nical teams should be aware that many observed
   averting behaviors are based on factors other than
   health protection. For example, an individual
   might purchase bottled water because it is conven-
   ient and tastes good. To generate a more accurate
   estimate of WTP using the averting behavior
   method, teams should isolate the value associated
   with the health benefit of interest. While isolating
   this value can be difficult, if the value of interest is
   not isolated from the ancillary benefits, the result-
   ing WTP estimate can be inflated.

   An opposing argument is that averting behavior
   studies underestimate WTP because they cannot
   fully account for additional values that individu-
   als might place on related, but less obvious
   environmental benefits. For example, an indi-
   vidual might replace his/her indoor, biofueled
   stove with a newer, cleaner burning one to
   improve the indoor air quality. This individual
   may, however, also value the improved local
   outdoor air quality resulting from reduced levels
   of particulate emissions. A team must therefore
   be aware that averting behavior studies can both
   inflate and deflate WTP values, depending on
   how the values are interpreted.

   Hedonic Models/Wage-Risk Studies

   Hedonic models break apart the net value an
   individual places on a good into separate values
   for its components. For example, the overall
   value of a house is determined by such factors
   as its location, condition, number of bedrooms
   and bathrooms, lot size, and age. By statistically
   comparing numerous house sales transactions
   having different sets of characteristics, analysts
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can estimate the public's WTP for each charac-
teristic of the house. For example, an analyst
might be able to infer that an additional bath-
room would add $2,500 to the  value of a house
or that a particular location would add $5,000
to a home's value. Similarly, by considering the
characteristics and wages of different jobs, ana-
lysts can place a value on different aspects of the
job. For the purposes of IES studies, the critical
aspect for valuation analysis is the degree of risk
of death associated with an occupation.

Using regression  analysis, hedonic wage-risk
studies use the relationship between wage rates
and job-related risks to estimate workers' WTP
to avoid the risk of death.  For  example, a study
might compare coal miners' wages with the
wages of construction workers who do similar
tasks more safely above ground. These studies
statistically hold all other worker and occupa-
tion characteristics constant  to isolate the value
of the change in the risk of death.

Occupational risks are considerably different
from environmental risks.  One of the key
differences is that occupational risks are
often traumatic in nature (e.g., falls, vehicular
accidents), while environmental risks generally
have a much longer latency period. The value an
individual places on reducing an immediate risk
is generally different from the value placed on
reducing a latent risk. In addition, occupational
   risks involve a certain degree of voluntary
   acceptance, and allow the individual some
   control over the risk through safety precautions
   and other behaviors. Environmental risks, on
   the other hand, tend to be more involuntary and
   difficult to avoid; they can also affect individuals
   (including children and the elderly) outside of
   the working population. Thus, wage-risk studies
   provide useful insight, but are an imperfect
   means of valuing changes in environmental
   risks. It is important to note, however, that wage-
   risk studies are still the most common method
   used to estimate the value of fatal risks because
   they are widely available and have the advantage
   of relying on revealed preference techniques,
   which are often preferred by economists.

   Resource Cost Techniques

   Another approach to estimating the value of the
   societal benefits  of reduced illness  and mortality
   is measuring the lost opportunity costs resulting
   from illness and  mortality. These estimated val-
   ues are unable to capture behavior responses to
   illness or the threat of illness, or values for pain
   and suffering. As a result, resource cost tech-
   niques only provide a proxy for WTP and are
   generally considered to yield a lower-bound
   estimate. Two resource cost techniques are
   widely used: 1) cost of illness, and 2) the human
   capital approach.

   Cost of Illness

   The cost of illness (COI) method estimates
   values for morbidity based on the concept that an
   individual would be willing to pay at least as much
   as the cost of treating an illness in order to avoid
   getting it. COI has two basic components:  1) med-
   ical expenditures and 2) lost earnings. Medical
   expenditures refer to all medical resources used to
   treat an individual during an illness, including the
   daily costs of a hospital bed, medication (e.g., pills,
   bandages), and labor services of hospital personnel.
   Under the IES methodological framework, medical
   expenditures should be accounted for consistently,
   regardless of who pays for the resources (i.e., an
   individual or insurance company). Lost earnings
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are calculated from daily wages and the number of
work days lost. COI generally underestimates
WTP because it does not include any consideration
of the pain and suffering of the individual.

Human Capital Approach

The human capital approach (HCA) is used to
value mortality by estimating the value of prema-
ture death in terms of foregone earnings. Similar
calculations are used in the lost earnings compo-
nent of the COI method to estimate the present
value of lost wages from long-term morbidity (see
Table 6.1 below). The value is calculated by esti-
mating the earnings that an individual might have
generated had the person not died prematurely.
Because the HCA is based on foregone earnings,
estimations are highly dependent on variables such
as age at death, employment rates, average income
levels, and life  expectancy. For example, HCA
typically yields lower monetary values for elderly
individuals, given that they would have minimal
or no future income at the time of death. Similarly,
values for unemployed individuals and children
are not readily captured using this method. HCA
also tends to be a somewhat controversial method
as it tends to yield significantly higher mortality
values in developed countries.
   Applying  Unit Value
   Once a team has estimated individual WTP, or its
   proxy, for changes in mortality and morbidity
   (which serves as the "unit value" in the IES
   framework), the team can add these unit values to
   evaluate the total economic benefits versus costs
   for each of the different alternative mitigation sce-
   narios developed. This  section discusses the gen-
   eral process for valuing mortality and morbidity.

   Mortality Valuation
   Environmental policy  changes do not cause or
   avoid specific deaths; they cause small changes
   in the risk of death. As discussed  above, several
   methods can be used to estimate how people
   value  changes in their  risk of premature mortali-
   ty. A common way to summarize the results of
   WTP values that are estimated using stated or
   revealed preference techniques is  as the value
   of a statistical life (VSL). It is important to note
   that VSL estimates do  not represent the value
   of any particular life and should not be framed
   as the value someone places on his/her own
   life. The total value of avoided mortality can
   be estimated by multiplying the VSL by the
Table 6.1 Health Benefit Unit Values and Estimation Methods3
Economic Unit Value Used to Estimate Health Benefits
Lost work and leisure time
Medical treatment costs
Avoided risk of death
Avoided pain and suffering
(not independently valued)
Due to premature mortality
Due to morbidity
Due to morbidity
Due to premature mortality
Due to morbidity
Applicable Valuation Methods
• Human capital approach
• Cost of illness
• Cost of illness
• Contingent valuation
• Conjoint analysis
• Hedonic wage-risk models/studies
• Averting behavior studies
• Contingent valuation
• Conjoint analysis
• Averting behavior studies
3 Note that the unit values represented in this table are not necessarily additive. That is, if one were to attempt to sum
 the values obtained in the far left column, significant double counting would occur, leading to an overestimation
 of the total value of effects.
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number of deaths avoided for each year of the
policy evaluation period, discounting the value
to a present value and summing the results
(see "Aggregating Unit Values for Total
Benefit Estimates").

Because different stated and revealed preference
techniques return varying estimates for WTP
values, estimates for VSL will likely vary based
on the exact technique used. For example, stated
preference techniques—although somewhat con-
troversial—are generally thought of as being
able to capture the full value of WTP because
they account for behavioral responses and the
value placed on avoided pain and suffering.
Conversely, averting behavior studies have the
tendency to both inflate and deflate WTP values,
depending on how the  study is conducted.

  Example of Valuing  Mortality
  Suppose an  emissions reduction policy is
  expected to  result in ten less premature
  deaths in a population of 1 million in the
  next year (i.e., a change of one-hundred
  thousandth (0.00001) in the risk of death).
  If a CV survey shows that each person's
  WTP for this small reduction in mortality
  risk is $5, then VSL for that annual
  mortality risk reduction is $500,000
  ($5 x (1/0.00001)) per avoided death and
  the total yearly social benefit is $5 million
  ($500,000 x 10 avoided deaths). Using this
  same example, the VSL estimated for this
  particular year can be added for multi-year
  estimates, but must be  discounted at the
  social rate of time preference to be compa-
  rable to costs.  Therefore, if a team were
  evaluating the policy over a 20-year period,
  it would multiply the total yearly benefit by
  20 years ($5 million x 20 years = $100
  million), and then discount that figure to get
  the present value of the stream of benefits,
  or $76.6 million using  a three percent social
  discount rate.4
     Creating a Range of Mortality Values
     Information from stated and revealed prefer-
     ence techniques as well as resource cost
     techniques can be used to create discrete
     sets of values for premature mortality result-
     ing from poor local air quality. For example,
     the IES  South Korea team estimated mortal-
     ity values by using three different approach-
     es: HCA, CV, and benefits transfer using
     adjusted estimates from studies conducted in
     the United States (see the "Benefits
     Transfer" section later in this chapter to
     learn more about this method). The team
     then used this range of mortality values to
     estimate the value of premature mortality in
     its analysis.6
   Using the Human Capital Approach

   The term "VSL" is generally only associated with
   WTP values. So, while WTP proxies returned
   from resource cost techniques can be used to
   derive a value for a fatal outcome, this value is
   typically not referred to as VSL. Within the con-
   text of IES, values for mortality that are derived
   using WTP proxies are referred to as "the value
   of a premature mortality." HCA, which can only
   provide  a proxy for WTP, is an indirect and
   somewhat controversial method for valuing mor-
   tality, as it utilizes the present value of future
   earnings (PVFE) as the basis for mortality valua-
   tion. In addition, the HCA does not account for
   the value of pain and suffering. Hence, the value
   of a premature mortality calculated using the
   HCA is  considered to be a relatively low estimate
   (see Table 6.2 on page 72). Moreover, the VSL
   value (which is derived from more complete
   WTP values) can be 8 to 20 times the value of a
   premature mortality estimated using the HCA.5
   For more details about the appropriate formulas
   for estimating the value of a premature mortality
   using the HCA, see Appendix D.
4 There is no single universally accepted social discount rate. It is helpful to express the values of a stream of future
 benefits at several different discount rates. This is a form of sensitivity analysis that provides a view of the specific
 impact of alternative discount rate assumptions.
5 Viscusi. 1993. The Value of Risks to Life and Health.
6 Joh et al. 2001. Ancillary Benefits Due to Greenhouse Gas Mitigation.
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Morbidity Valuation

Each health outcome the team is assessing
requires a separate valuation estimate. The
WTP to reduce the risk of contracting a case
of chronic bronchitis is very different from
the WTP to avoid an acute asthma attack. When
IES teams cannot collect original WTP values
for morbidity valuation, they typically conduct
benefits transfer to adjust values from another
study site or use the COI method. If a team
elects to use the COI method, it should develop
a typical course of illness for each health end-
point, which includes the  following information:

• Number of doctor visits

• Length of hospitalization

• Length of recovery in bed and at home

• Costs of medical treatment

The typical course should also include charac-
teristics of the affected population to estimate
the lost productivity.  Again, it should be noted
that the COI method yields a lower proxy for
WTP because it cannot account for the value
associated with pain  and suffering.

Teams can estimate the total value of non-fatal
health outcomes by multiplying the number of
cases avoided each year by the value associated
with each respective  outcome (see "Aggregating
Unit Values for Total Benefit Estimates").
Values of future outcomes and illnesses occur-
ring  over a number of years should be discount-
ed to their present value. Teams should be care-
ful to avoid double-counting unit values, which
can return an artificially high net value for a
scenario under consideration. Since WTP values
returned from stated  and revealed preference
techniques generally provide a  complete esti-
mate for morbidity valuation, no additional ele-
ments from the COI method need to be  added.
   Obtaining Data

   Within the IES methodological framework, it is
   preferable for unit value estimations to come
   from surveys and/or studies developed locally
   (i.e., in the country of analysis). In cases where
   local surveys or studies are not feasible, esti-
   mates can be developed by transferring results
   from other countries. In these instances, IES
   teams must adjust imported data to account for
   any differences between the source of the values
   (the study site) and the place where the values
   will be applied (the policy site). Such adjust-
   ments are discussed in more detail in the
   "Benefits Transfer" section.

   Data for  Mortality Valuation

   It is widely acknowledged that valuation esti-
   mates of mortality are far greater in magnitude
   than estimates for morbidity effects. For exam-
   ple, U.S. EPA studies indicate that 80 percent
   of monetized benefits due to air quality improve-
   ments are attributed to reductions in premature
   mortality.7'8 Therefore, researchers typically
   concentrate more of their time and resources
   on mortality valuation.

   The following three U.S. EPA sources provide
   original values for mortality and morbidity
   endpoints (which can be transferred to the
   country of analysis):

   • Final Report to Congress on Benefits and
    Costs of the Clean Air Act, 1970 to 1990

   • Final Report to Congress on Benefits and
    Costs of the Clean Air Act, 1990 to 2010

   • BenMAP: Environmental Benefits Mapping
    and Analysis Program (Appendix H of the
    manual provides many air quality related
    unit values)
7 U.S. EPA. 1997. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1970 to 1990.
8 U.S. EPA. 1999. Final Report to Congress on Benefits and Costs of the Clean Air Act, 1990 to 2010.
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Another source of data for mortality valuation is
the ExternE report by the European Union,9'10
available at .

Data for Morbidity Valuation

Morbidity valuation is ideally estimated using
WTP values, which can be derived using stated
or revealed preference techniques, or benefits
transfer. When a team cannot use WTP values, it
can value morbidity effects using the COI
method, which involves deriving values for two
primary components: 1) medical expenditures;
and 2) lost earnings. Both of these values can be
estimated using local data and statistics.

Medical Expenditures

Medical treatment options and their associated
costs are different in each region, especially in
developing countries. As a result, IES teams
generally use local data for medical treatment
costs. In general, the best data sources for health
endpoint cost information are studies conducted
by the Ministry of Health or other government-
funded health  studies.

Lost Earnings

Calculating the value of lost earnings due to
morbidity requires an estimate of the number of
work days lost (for each quantifiable health
effect) and an  average daily wage. When per-
forming these  calculations, it is  important to
only include data for the working population.

Lost time spent caring for sick children or elder-
ly individuals  by a working adult should also be
calculated and assigned to the health effect
being valued. For example, if a  working adult
cares for a hospitalized child, the number of
work days lost can be estimated from the
average length of hospital stay, plus the
convalescence period.
   If possible, local employment statistics for
   each relevant age group should be used for
   these calculations. The average daily wage can
   be calculated using regional income data, which
   is usually readily available from the Ministry
   of Labor. If possible, teams should also attempt
   to account for the value of lost leisure time
   resulting from an illness.

   Benefits Transfer

   While original valuation analyses are preferable
   for IES projects, they are often costly and time-
   consuming. In addition, WTP values for avoided
   premature mortality are usually not readily avail-
   able for developing countries.11 As a result, most
   IES teams have used "benefits transfer" instead.
   This technique enables teams to extrapolate
   WTP values from a study site, where the original
   valuation research was conducted, to the policy
   site (local region of analysis). Some teams have
   also combined extrapolated values with original
   research to tailor valuation approaches to a
   particular study area.

   Necessary Conditions for
   Performing  Benefits Transfer

   Three basic conditions should be addressed to
   perform a benefits transfer:

   1) Adequate quality of original study.
      Transferring unreliable data from an outside
      study site provides  no added value to an IES
      study. The source study must meet the basic
      standards for current practice in the field
      regarding data source(s), collection methods,
      and transparency of methodology used and
      assumptions included. Ideally, the source
      study would have been published in a peer-
      reviewed publication, verifying its credibility
      within the academic community.
9 EU. 1999a. Fuel Cycles for Emerging and End-Use Technologies.
10 EU. 1999b. Methodology 1998 Update.
11 This is true for Argentina (Conte Grand et al. 2002), Mexico (Cesar et al. 2000), and Brazil (Seroa da Motta and
  Fernandes Mendes. 1996), but not for Chile where a preliminary figure of WTP for mortality based on the CV
  method is available (Cifuentes et al. 2000).
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2) Similar characteristics of risk change being
   valued. Characteristics of the change in risk
   of morbidity/mortality being valued at the
   study site should be similar to the change
   expected at the policy site. Hedonic wage-
   risk studies typically provide the best avail-
   able data, but these studies focus on occupa-
   tional risks at the study site, which do not
   directly correlate to the environmental risks
   present at the policy site. Therefore, it is
   important that technical teams be aware
   of the possible issues involved when
   transferring hedonic wage-risk study results.

3) Similar population characteristics.
   Characteristics of the population affected by
   the policy should be similar to the population
   at the study site.  Income, demographics, and
   social characteristics of the population at the
   study site should match the population at the
   policy site. Since an exact correlation
   between sites is rare, teams can adjust for
   differences in variables such as life span,
   health care, and insurance coverage. It is not
   possible, however, to adjust for differences in
   tastes, preferences, or risk tolerance.

Some IES countries might not be able to fully
meet all of these conditions. If no local studies
exist, however, benefits transfer is the only
alternative available.

Benefits Transfer Methods

IES teams  electing to perform benefits transfer
typically use one of the following two methods:
1) transferring point values from a study site to
a policy site or 2) transferring functions from a
study site  to a policy site. Both methods can be
based on a single study or a meta-analysis of
existing similar studies.
   Transferring Point Values

   Point value transfers involve using a single
   WTP "point" value, or an average of WTP
   point values estimated in a previous study. Point
   values offer a clear representation of the study
   site population's value for a non-market good;
   however, point value transfers are unable to
   account for different population characteristics
   between the study and policy site, such as age,
   education, and health status. To make this trans-
   fer more applicable, IES teams typically adjust
   WTP point values by the ratio of per-capita
   income in the policy to that in the study site
   (see Appendix D for the appropriate formula).
   Values for VSL typically fall within a broad
   range. For example, research shows a range of
   $3.8 million to $9 million (year 2000 dollars) in
   the United States,12 while European estimates are
   approximately $3.4 million (year 2000 dollars,
   which is equivalent to approximately 3.1 million
   euro), based primarily on United Kingdom
12 Viscusi et al. 2003. The Value of a Statistical Life: A Critical Review of Market Estimates.
13 EU. 1999a. Fuel Cycles for Emerging and End-Use Technologies.
14 EU. 1999b. Methodology 1998 Update.
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Along with possible variation in VSL, two
other issues emphasize the need for sensitivity
analysis when monetizing health effects. First,
approximately 75 percent of the deaths avoided
by air pollution abatement are for people of age
65 years or older.15 Labor market studies of
VSL focus on people of working age, which
might not apply to this population. Empirical
evidence suggests that VSL can vary by  age in
some cultures (Canada and Britain) but not in
others (United States).16 Another issue deserving
attention is the question of how many years of
life are lost due to compromised air quality. For
example, some research indicates that for mor-
tality resulting from cardiovascular disease (the
disease most commonly associated to long-term
exposure to air pollution), there is a lost  life
expectancy of 6.35  years in the United States.17
Because of these uncertainties, a team could
consider preparing  sensitivity analysis substitut-
ing low and high VSLs and showing the effect
of a lower VSL for persons over 70 years old  on
benefit estimates.

Transferring WTP Functions

Researchers report  the results of valuation  sur-
veys in a number of ways. WTP functions  are
typically estimated  from survey data by regress-
ing the stated or revealed value on characteris-
tics of the respondent, such as age, education,
health status, experience with the good, and
other relevant factors such as environmental
preferences. In a benefit function transfer, the
WTP function makes it possible to adjust the
estimate of WTP to account for the characteris-
tics of the population at the new policy site. For
example, if a source survey is conducted in a
young population, the WTP value can be adjust-
ed to  an older population at the new site  by sub-
   stituting the new site's average age into the
   function. Transferring a point estimate carries an
   implicit assumption that the populations at the
   study site and the new policy site are similar; a
   WTP function allows an explicit adjustment of
   the WTP value in response to the characteristics
   of the target population.

     Transferring  COI Values
     Adjustments made to COI values depend on
     similarities in the cost components (medical
     expenditures and lost earnings) between the
     study site and the policy site. For medical
     expenditures, adjustments to the cost of labor
     services of hospital personnel can be made
     using the World Bank's estimates of national
     gross domestic product (GDP) per capita
     adjusted for the purchasing power of the
     local currency in the local economy.18 This
     purchasing power parity (PPP)  GDP expresses
     all incomes in terms of what they can buy and
     so avoids issues of currency exchange rates
     and interest rate fluctuations. The adjustment
     of medication  costs is more complex because
     people in different countries spend varying
     proportions of their income on medication.
     Two different procedures are used for adjust-
     ing medication costs. The first procedure
     assumes that medication costs are a constant
     share of income, regardless of geographical
     location. The second procedure assumes that
     the price of medication is the same in all
     countries and thus adjusts medication costs
     using a PPP exchange rate. To account for
     the varied nature of these two procedures,
     an average of the results obtained from both
     procedures can be used. Variations in the
     practice of health care in different countries
     are also important. If the style of health
     care at the study  site is far different from the
     style of health care at the policy site, it is
     preferable to estimate the local  COI rather
     than transfer values.
15 Krupnick et al. 2000. Age, Health, and the Willingness to Pay for Mortality Risk Reductions.
16 Very few studies examine the issue of age and WTP for mortality risk reductions, and not all experts agree that
  adjustments to VSL should be made. While the Krupnick, et al. 2000 study finds evidence to support declining WTP at
  older ages (age 70 and over) in Canada, there is no evidence to support declining WTP at younger ages. The decrease
  that is found does not support making  an adjustment based on VSL year. Hence, it is questionable whether there is a
  clear case for an age-based adjustment.
17 Viscusi et al. 1997. Measures  of Mortality Risks.
18 For more information, go to the World Bank's International Comparison Program at 
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Aggregating  Unit Values
for Total Benefit  Estimates
Unit economic values provide a monetary
measure of value per unit of an impact measure.
Original valuation analysis or benefits transfer
yields value per incidence of illness, or value
per mortality avoided. To calculate the value of
the social benefits, these values must be added
up. The change in social benefits resulting from
the reduction in ambient concentrations of
pollutant, P, is given by the following equation
       are the reductions in the expected inci-
       dence of the health effect k (output from
       previous health effects analysis), and

       is the unit economic value assigned to it.
To estimate a net economic value of the social
benefits, the summation should be done for all
health effects associated with pollutant P. The
social benefit (SBp) associated with a given sce-
nario is represented by the summation of the
above benefits for all of the pollutants that are
reduced by the mitigation measures included in
the scenario.

Two issues regarding aggregating benefit
measures should be noted:

1) Unit values represent averages. Even when
   values are measured in the affected popula-
   tion or adjusted using benefits transfer to
     match the population at the policy site, they
     represent only the average individual. Other
     individuals or groups within the population
     can have considerably different values. Thus,
     simply adding up the average values can
     overestimate or underestimate the WTP for
     some segments of the population, even
     though it might give a reasonable estimate for
     the population as a whole.

   2) Avoid double-counting. IES teams should be
     careful to avoid double-counting benefits from
     air pollution reductions. Benefits from eliminat-
     ing one pollutant should not be added with those
     of another pollutant if the emissions are highly
     correlated. This would amount to taking credit
     for the same reduction in emissions twice.

   Presentation  of Results

   As with the results of the health effects analysis,
   IES teams should consider presenting the results
   using median  estimates, limited significant dig-
   its, and a confidence interval due to the uncer-
   tainty of the calculations. Since different types
   of values are involved, it is preferable to present
   the results for each health effect separately and
   aggregate all costs in a summary statement.

   It can be helpful to summarize results for
   resource measures of value and WTP measures,
   as shown in Table 6.2. Decisionmakers often
   appreciate resource cost estimates because they
   represent budgetary outcomes. Only WTP meas-
   ures can be appropriately compared with costs
   in a benefit-cost analysis, however.  In addition,
Table 6.2 Suggested Valuation Scenarios for the Presentation of Results
Valuation Method
(Full estimate)
Resource cost
(low/incomplete estimate)
Morbidity Values
Lost work and leisure time
Medical expenditures
Value of avoided pain and suffering
Lost work and leisure time
Medical expenditures
Mortality Values
Willingness to pay to reduce the risk
of premature mortality
Human capital loss
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it is useful to show the range of values obtained
when alternative VSL and WTP values are used in
a sensitivity analysis.
Along with the considerations just noted,
it is important to note that economic modeling
involves large uncertainties and numerous
assumptions. These caveats should be made
clear when presenting the results of IES studies
to policymakers and stakeholders.

Summary of Approaches Used
in Previous IES Studies for
Health Benefits Valuation
As discussed throughout the handbook, the
IES analytical approach relies on a sequence
   of interconnected modeling and analysis tools.
   These tools, when used together, ultimately
   quantify the economic benefits associated with
   the specific scenarios under consideration.
   Table 6.3 summarizes the health effects valuation
   methodologies used by some IES teams.
   The table, which includes information about
   characteristics of each methodology, can help
   inform the model selection process. Care must
   be taken, however, to consider a country's
   unique characteristics when choosing
   valuation methodologies.
Table 6.3 Health Effects Valuation Methodologies Used by IES Programs
Approach Description Advantages Disadvantages Data Requirements
Morbidity and Mortality Valuation

WTP study

Estimates population's
WTP for averting
hypothetical health
Different WTP
approaches include
CV method, hedonic
wage-risk studies,
and averting behavior

Based on individual
preferences, such
as WTP to avoid
pain and suffering.

Difficult to accurately quantify WTP
for hypothetical changes in health.

CV method: Results of
surveys designed to elicit
Hedonic wage-risk
studies: Compensation
data for jobs of different
Averting behavior
methods: Averting actions
Morbidity Valuation

COI study

Estimates COI as
medical expenditures
plus lost earnings.

Does not require
household surveys.
Cost components
are generally easy
to collect.

Does not account for the value placed
on pain and suffering.

Medical expenditure
data (e.g., mean cost of
a hospital stay).
Mean length of
hospital stay.

Median daily wage.
Mortality Valuation


Calculates the value of
a statistical life as the
current value of net
foregone earnings in
the event of premature

Relatively straight-
forward calculation.

Assumes value of an individual is solely a
measure of his/her economic productivity.
Does not incorporate welfare economics
(i.e. individual preferences).
Not consistent with WTP estimates for
small changes in the risk of death.
Controversial method.

Demographic data.
Mean wage by age group.

  Chapter 6
Economic Valuation and Analysis

     Policy Analysis and Results Dissemination
Once the technical analyses are complete, the Integrated Environmental
Strategies (IBS) team should examine the policies and scenarios under
consideration to determine those which are most effective in meeting the
targeted co-benefits of air quality improvements, health benefits, and greenhouse
gas (GHG) reductions. To help decisionmakers understand the analysis, the
technical team can use different criteria, or metrics, to prioritize and rank
specific policy measures. The team also can calculate the net "co-benefit"
potential of the proposed abatement measures so that policymakers can see
the relationship between monetized benefits and expected mitigation costs.
Sharing the results of the analysis  is another critical part of the IBS process.
Results dissemination can help ensure that the analysis and the methodology
continue to penetrate the policy, technical, and academic sectors. It can also
lead to collaboration with other initiatives, additional funding opportunities,
and, optimally, the implementation of projects that improve air quality and
reduce GHGs. Results can be conveyed through many avenues, including
policymakers' meetings, reports, presentations, Web sites, and publications.
Evaluating Policy Measures

A primary objective of the IBS program is to
identify policy measures that reduce ambient air
pollutants and GHG emissions cost-effectively.
A well-directed policy analysis can help the tech-
nical team assess the effectiveness of different
scenarios in achieving the targeted co-benefits.
This analysis, in turn, can help decisionmakers
weigh and compare different policy outcomes.

Assessing the different policies and measures
under consideration involves evaluating the
changes in conventional air pollutant concentra-
tions (including the estimated health benefits)
and GHG emissions. The base case scenario
(the air quality situation without any mitigation
measures) should be compared with alternative
integrated scenarios (situations in which mitiga-
tion measures are implemented). Policymakers
   should understand how effectively each
   alternative scenario and mitigation measure
   helps achieve key objectives of sustainable
   development, economic growth, and protecting
   public health.

   Using Metrics

   Policymakers often balance competing
   priorities when seeking to realize the human
   health co-benefits from associated air quality
   improvements and simultaneously reduce GHG
   emissions. For example, some policymakers
   might be constrained by budget limitations,
   so they will favor measures with low implemen-
   tation and abatement costs. Others might need
   to work within a specific sector, encourage
   the growth of a certain technology, or use a
   particular policy instrument based upon the
   priorities of their governments.
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For policymakers seeking to meet multiple
objectives, IES projects—which present new
information from a variety of perspectives—
can be especially valuable. No single piece
of information, however, can address all of a
policymaker's interests. IES supports decision-
making, but does not dictate the decisions.

Using criteria that are important to decision-
makers, the in-country technical team can
prioritize and rank the different policy measures
under consideration. These criteria, or metrics,
bring a common standard to all measures, which
can help policymakers accurately compare them.
Metrics are usually prepared early  in the IES
project and need to be well  documented and
    Different sets of metrics can provide alternative
    perspectives for decisionmakers. Some examples
    of these metrics are described in the following
    sections and include: 1) emissions reduced;
    2) health impacts reduced and monetized health
    benefits;  and 3) costs of abatement measures.
    Note that graphical representations of policy
    options, such as figures and charts, can be
    useful in relaying information to policymakers.

    Emissions Reduced

    One metric often used to quantify benefits is
    "emissions reduced" (e.g., tons of GHGs or
    local pollutants mitigated). Figure 7.1 classifies
    different mitigation measures according to
    the relationship between local  air pollution
    reductions and GHG reductions.
Figure 7.1  Classification of Mitigation Measures By Emissions Reduction
          Local pollutant  ; l
                                 Air Pollution
   Source: Cifuentes et al. 2001. International Co-controls
   Benefits Analysis Program.
Type A measures simultaneously reduce both GHGs and
local air pollutants. Examples of Type A measures include
increasing the efficiency of a power plant furnace or boiler
so less fossil fuels are combusted, switching from incandes-
cent lighting to compact fluorescent lamps, and increasing
the use of hybrid-electric vehicles.
Type B and C measures do not display any interaction
(positive or negative) between GHGs and local air pollu-
tants. A Type B measure could be landfill methane flaring,
which reduces GHG emissions by converting methane with
a global warming potential (GWP) of 21 to carbon dioxide
with a GWP of 1, while having virtually no effect on local
air quality.  A Type C measure could be a fuel switch from
leaded to unleaded gasoline (assuming that no change in
vehicle fuel efficiency accompanies the switch), which
reduces local air pollutants but does not affect GHGs.
  Type D and E measures have a negative association between GHGs and local air pollutants. Measures that
  reduce one class of emissions (e.g., local air pollutants) result in increases in the other type of emissions (GHGs).
  Although they are less desirable than Type A measures, Type D and E measures can still be important in an
  integrated strategy that combines several measures to achieve overall and combined targeted emissions reduction
  benefits. A Type D measure could be a power plant scrubber that reduces local air pollutants, yet results in a net
  increase in GHG emissions due to decreased energy efficiency. An example of a Type E measure is the switch
  from natural gas (NG) to wood from a sustainable forest for residential heating. This switch will produce a net
  reduction of GHG emissions, with an increase of local pollutant emissions.
  Measures that fall in the bottom left quadrant are not desirable by any criteria as they result in increases in  all
  types of targeted emissions.
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                                                                              IES Handbook
Health Impacts Avoided and Monetized
Health Benefits

Many studies conducted in different regions of the
world have associated a variety of illnesses, and
even deaths, with exposure to conventional air
pollutants, especially PM.  Some of these health
effects can be estimated quantitatively based on
risk studies; others cannot. (See Chapter 5 for
more information on health effects analysis.)
Researchers can use a set of metrics to evaluate
the effectiveness of proposed measures on avoid-
ed mortality, reduced morbidity, and the economic
value associated with these avoided outcomes (see
Chapter 6 for information on economic valuation).

These metrics involve estimating the "delta," or
the difference between the health impacts in the
baseline scenario and the alternative scenario, and
the associated monetary value. The results can be
expressed on an annual basis (e.g., avoided ill-
nesses  or deaths per year, for a given future year)
or as cumulative effects (e.g., total avoided excess
benefits from present to an identified future year).
Figure 7.2 and Table 7.1 show examples of such
metrics from the case study in Santiago, Chile.
   Table 7.1 Cumulative Health Effects
   Avoided in the Climate Policy Scenario
   Compared to the Business-As-Usual
   Scenario, Santiago, Chile, 2000 to 2020"
Health Effects
Premature death
Chronic bronchitis
Hospital admissions
Child medical visits
Emergency room visits
Asthma attacks
and bronchitis
Restricted activity days
Effects Avoided
   Source: Cifuentes et al. 2001. International Co-controls
   Benefits Analysis Program.
   *NOTE: Health effects are not additive (i.e., an
    emergency room visit for chronic bronchitis based on
    PM exposure would count towards both categories).
Table 7.2 Mid-Value of Social Losses for Each Scenario in Santiago, Chile, 2020
(Millions of US$)
Policy Scenario
Premature death
Chronic bronchitis
Hospital admissions
Emergency room visits
Child medical visits
Asthma attacks & bronchitis
Restricted activity days
Source: Cifuentes et al. 2001. International Co-controls Benefits Analysis Program.
Note:   BAU = Business as Usual scenario
       ISP = Integrated Scenario Policy
       BAU-ISP = Expected benefit of the ISP over BAU
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Costs of Proposed Abatement Measures

While it is important to provide decisionmakers
with information on targeted emissions reduc-
tions and avoided health impacts and their
associated economic benefits, they also need
to understand the costs of proposed abatement
measures. By analyzing the relationship between
monetized benefits and expected mitigation
costs, the team can assess the "net co-benefit"
potential of various mitigation measures. The
team can use several measures to rank mitiga-
tion strategies in terms of their expected costs
and benefits, including:

• Net social benefits (expected public  health
  benefits  less implementation costs).

• Benefit-cost ratios (monetized public health
  benefits  divided by estimated program
  implementation costs).

• Emissions mitigation effectiveness ratios (e.g.,
  monetized health benefits, program implemen-
  tation costs, or net social benefits divided by
  tons of pollutant and/or GHGs reduced).

Another method for assisting policymakers in
understanding the analysis is to compare the best
measures according to their reductions of carbon
or local pollutants on a relative scale. In this way,
                         mitigation measures can be ranked according to
                         their abatement cost for both carbon and air pol-
                         lution precursors. Measures ranked first, or of
                         highest priority, are those that reduce emissions at
                         negative net cost, followed by those measures
                         that reduce emissions with positive costs. Those
                         measures that do not reduce emissions, or that
                         actually increase emissions, are ranked last.

                         Linking air quality improvement and GHG miti-
                         gation can enhance the potential for leveraging
                         project funding or obtaining additional funds
                         from carbon credits or organizations such as the
                         United Nations or World Bank (see Appendix
                         E). These resources can help reduce total project
                         investment costs, making co-benefits projects
                         more attractive and feasible to decisionmakers.
                         In the  future, if the nascent carbon market
                         grows, it could also enhance policymakers'
                         interest in GHG mitigation.

                         Figure 7.2, from the IES case study in Santiago,
                         Chile,  shows mitigation measures plotted accord-
                         ing to their rank order in each criterion: the best
                         measure (lowest abatement cost) is assigned rank
                         order 1 (i.e.,  Incandescent to CFL (Peak hours)),
                         the next best measure is rank order 2, and so on.
                         Most of the measures have abatement cost ranks
                         that are close for both carbon and PM2 5 (i.e.,
                Figure 7.2 Ranking of Measures by Their Carbon
                Abatement Costs and PM2 5 Precursors' Abateme
                for Santiago, Chile (in US$/Ton of Carbon)

                a I
                                       Residential Wood to N6
                                       Diesel ParticulateTraps

                                         • Residential Kerosene to NG
                          • Taxi Renovation
     • CN6 Bus
                                   • CN6 Conv. Kit
                                • FL High Efficiency Reflectors (Normal hours)
                    • Hybrid Diesel-Electric Buses
                             • Mercury to Sodium (Normal hours)
        • FL High Efficiency Reflectors (Peak hours)
                 • Boilers—Diesel to NG
           • Residential Wood to NG (Deforestation)
                       • Incandescent to CFL (Normal hours)
  • Mercury to Sodium (Peak hours)
' Incandescent to CFL (Peak hours)
           5              10             15
            Rank Order PM2.5 Abatement Costs
                Source: Cifuentes et al. 2001. International Co-controls Benefits Analysis Program.
                Key: CFL = compact fluorescent lamp, CNG = compressed natural gas, FL= fluorescent lamp,
                   NG = natural gas
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most of the measures are close to an imaginary
45° line in the graph). However, there are some
notable exceptions, like the CNG buses and the
switch from burning wood in homes to using
NG.  Both of these measures have relatively low
PM2 5 abatement costs, but relatively high car-
bon  abatement costs.

The  IES team in Chile calculated the fraction of
the direct abatement costs of conventional air
pollution reduction measures that would be off-
set by the co-benefit of associated carbon emis-
sion reductions, assuming two hypothetical
prices for carbon at $20  and $50 per ton of car-
bon. Table 7.3  shows the potential savings for
local air quality decisionmakers by considering
the value of carbon reductions in their air quali-
ty management practices.

This analysis shows the abatement measure of
switching to hybrid diesel-electric buses has a sig-
nificant carbon co-benefit to mitigation cost ratio,
ranging from 14 percent to 37 percent, depending
on the assumed value of carbon credits available.
Conversely, the abatement measure of installing
diesel particulate traps has negative carbon co-ben-
efits  because this measure decreases fuel efficiency,
increases energy use, and generates more carbon.
     Linear Programming1
     Coordinating multiple measures to develop an
     overall plan to cost-effectively meet both air
     quality and GHG goals can be a challenge. A
     variety of models and tools are available to
     enhance multiple-attribute planning, including
     mathematical optimization tools like linear
     programming. The IES Mexico team used lin-
     ear programming to help find comprehensive,
     minimum-cost solutions to emission reduc-
     tions. This tool is most useful when quantita-
     tive estimates of costs and emission reduc-
     tions are available for several different control
     First, the team gathered information on the
     costs and emissions reductions of many differ-
     ent measures, estimating values where infor-
     mation was missing. These data were com-
     bined into a harmonized database of measures
     using consistent methods and assumptions. The
     results showed the value of considering many
     options in the analysis. Even options that can
     increase emissions of some pollutants can be
     desirable if they cost-effectively reduce other
     pollutant emissions.
     For more information about linear program-
     ming, see Stokey (1978).2
Table 7.3 Benefit-Cost Ratios for Select Measures from Santiago, Chile3
Abatement Measure
Residential Kerosene to NG
Hybrid Diesel-Electric Buses
Diesel Particulate Traps
Abatement Cost
M US$/ug/m3
At 20 US$/ton C
M US$/ugym3
Abatement Cost

-1 .4%
At 50 US$/ton C
M US$/ugym3
Abatement Cost

1 .5%
Source: Cifuentes. 2002. Methods and Analyses of Air Pollution Local and Global Impacts.
*M US$/ug/m3 PM25: million U.S. dollars per microgram per cubic meter of PM25
Key: CNG = compressed natural gas, NG = natural gas
1 West et al. 2003. Co-control of Urban Air Pollutants and Greenhouse Gases in Mexico City.
2 Stokey. 1978. A Primer for Policy Analysis.
3 The co-benefits reported in this table are those from carbon reductions when carbon is valued at $20 per ton and
 $50 per ton. The co-benefit values in this table do not independently value the health impacts from PM2 5 reductions.
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The IES team in Chile considered a set of
measures that would simultaneously reduce both
conventional air pollutants and GHGs. The team
analyzed the effectiveness of these measures
along with their approximate abatement costs.
Team members developed a method and
approach for the evaluation and also produced
results that could be used to screen mitigation
measures for an integrated strategy.
Table 7.4 shows the summary reductions in
GHG emissions and PM2 5 concentrations
obtained by applying each measure. Nearly
                             all of the measures have positive reductions for
                             both types of emissions, except particulate traps,
                             which increase carbon emissions due to increased
                             fuel consumption, and the CNG conversion kit,
                             which has no measurable effect on PM concen-
                             trations. The electricity savings measure reduces
                             the electricity generation and thus reduces all
                             pollutants by the same percentage.

                             These figures can help decisionmakers understand
                             the types of tradeoffs that exist between GHG mit-
                             igation and PM2 5 mitigation, coupled with a con-
                             sideration of cost-effectiveness. For example, from
Table 7.4 Mitigation Measure Outcomes, Santiago, Chile (2000 annual benefits and costs)
 Mitigation Measure*
_.....   „  .  .
Carbon Emissions Reductions
                                              PM, = Concentrations
    Abatement    Ancillary
    Cost        Benefits
                                                                    US$/TCE     US$/TCE
Fuel Switching
Residential Wood to NG
Residential Wood to NG
Residential Kerosene to NG
Boilers: Diesel to NG
Electricity Savings
Incandescent to CFL
(Peak Hours)
Incandescent to CFL
(Normal Hours)
Efficient FL Reflectors
(Peak Hours)
Efficient FL Reflectors
(Normal Hours)
Sodium Lamps
(Peak Hours)
Sodium Lamps
(Normal Hours)
Transportation Sector
CNG Buses
Hybrid Diesel-Electric
CNG Conversion Kit
Diesel Particulate Traps
Taxi Renovation
Source: Cifuentes et al. 2001. International Co-controls Benefits Analysis Program.
Key: CFL = compact fluorescent lamp, CNG = compressed natural gas, FL = fluorescent lamp, NG = natural gas, TCE = tons of carbon equivalent
% = percentage carbon emissions reductions and percentage PM25 concentrations reductions
*Note: Each mitigation measure produces a flow of costs and benefits. In this table, they are all annualized and the indicators are
 computed for the year 2000.
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a purely emissions and concentrations mitigation
viewpoint, it is clear that some measures are effec-
tive in reducing carbon (such as the 80 percent
reduction in carbon from switching incandescent
to compact fluorescent lamps), while others are
more effective in reducing PM2 5 (such as the 95
percent concentrations reduction due to switching
from residential wood burning to natural gas).

While "net abatement costs" capture both costs
and co-benefits, the table also shows carbon
abatement costs and co-benefits (due to PM2 5
reductions) so that decisionmakers can see the
constituents. Depending on the resources and
priorities of the policymaker, the best policy
choice might require  a lower abatement cost even
if co-benefits are diminished (such as converting
diesel boilers to natural gas). In other situations,
a decisionmaker might be willing to pay higher
abatement costs to address a priority sector
(such as adopting hybrid diesel-electric buses).

Dissemination of  Results

Since policymakers participate in the develop-
ment of an IES project, results dissemination
can occur informally throughout the entire study.
Once the core analyses are complete, the IES
country team can take additional steps to share
results with key stakeholders and broaden the
reach of the analysis at both the domestic and
international level. The ultimate outcome of shar-
ing results is to support or set the stage for imple-
menting measures that will reduce conventional
pollutant concentrations and GHG emissions.

Policymakers' Meetings

A policymakers' meeting is  often the first step in
disseminating the results of the analysis to key
governmental decisionmakers, other experts, and
nongovernmental organizations (NGOs). The
meeting enables policymakers to preview results
prior to broad distribution and to anticipate ques-
tions they might receive related to the analysis. It
also provides an opportunity for the IES team to
receive policymakers' immediate feedback on
the analysis and to discuss next steps, improve-
ments, and potential collaborations.
   Workshop planning usually takes several weeks.
   It is important to ensure the participation of
   policymakers from the national energy and envi-
   ronment ministries, technical experts, and other
   interested parties, such as project developers,
   financial organizations, and members of acade-
   mia. It is also important to invite representatives
   from various other programs involved in similar
   fields of work. For example, representatives
   from the Clean Air Initiative (CAI) and from the
   International Council for Local Environmental
   Initiatives (ICLEI) participated in the Argentina
   policymakers' workshop in October 2002 to
   explore synergies and possible collaboration
   among their respective organizations.
   In addition to the in-country policymaking team,
   members from other IES teams from other coun-
   tries can attend the meeting to share experiences
   and to explore additional areas of cross-team col-
   laboration. Members from the local media should
   be invited to cover the event in area newspapers.

   Invitations should be sent out far enough in
   advance of the workshop to allow attendees
   time to review analysis materials and prepare
   comments. Ideally, a set of questions should be
   provided to policymakers in advance of the
   forum to help ensure a high-quality discussion at
   the workshop. Appendix C  includes the working
   agenda from the Argentina policymakers' work-
   shop. A draft of the agenda was distributed to
   panelists and speakers prior to the workshop,
   which included key questions for consideration
   by attendees.
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                                                                              IES Handbook
  Shanghai Policymakers' Workshop

  In Shanghai, a policymakers' workshop brought together 28 local and national decisionmakers to review
  the results of The Final Assessment of Energy Options and Health Benefits.4 The study marked the first
  time that a quantitative evaluation approach had been used to integrate energy, emissions, and human
  health impacts in an environmental policy analysis in China.

  Workshop attendees discussed the policy implications of the analysis and identified priorities for future
  research and collaboration. Through the IES work, the Chinese research team had enhanced its analytical
  capacity for integrated analysis. The research effort had also improved coordination among the energy,
  environment, and public health organizations of the Shanghai municipal government.

  In addition, the study and associated outreach efforts helped to build consensus among various agencies
  for more integrated policy analysis and decisionmaking. Attendees recommended that a strong effort be
  placed on project dissemination and outreach among key decisionmakers at the national, provincial, and
  city levels to promote the use of integrated policy frameworks throughout China.

  Though feedback was generally positive, attendees suggested the following enhancements:

  • Expanding the type of emissions studied. The study only examined the health impacts of PM10.
    Health experts and government officials recommended including other pollutants linked to adverse
    health effects such as NOX, SO2, O3, and secondary PM compounds. They also encouraged addi-
    tional work to better understand the sources, distribution, and contribution of PM10 and PM2 5
    pollution and to identify policy measures to address these pollutants.

  • Improving the methodology. Experts recommended linking the energy/emissions health model
    with macroeconomic analysis tools and making it an integral part of macroeconomic policy assess-
    ment. They also recommended additional work to better understand the health risks attributable to
    air pollution, in combination with the health risks attributable to other factors, such as water pollu-
    tion, food contamination, and lifestyle.

  • Broadening the scenarios analyzed. Policymakers desired scenarios representing a broader array
    of policy and technological initiatives.

  • Improving models and data. Attendees wanted improved models and better information for
    estimating the costs of mitigation policies to determine whether the investments would be socially
    and economically justifiable.

  • Expanding benefit assessment to non-human health endpoints. In addition to quantifying
    the human health benefits of energy and environmental scenarios, non-human health benefits
    (e.g., ecosystem, materials, agriculture) should also be captured in the analytical framework.

  • Widening the geographic scope for implementation. Attendees suggested that the recommended
    approaches could be applied to other regions of China for local and nationwide  air pollution-related
    health risk assessments.
Results of the Policymakers'

A summary of the policymakers' meeting offers
an opportunity to disseminate results and assess
the analysis before entering the next phase of
the IES program. Other countries (as well as the
IES technical team) will be keenly interested in
   the comments and feedback from the partici-
   pants. Policymakers' input can help determine
   if further refinements of certain portions of the
   analysis are necessary. Discussion from the
   meeting can also help the team select a specific
   measure for implementation or engage other
   programs  or initiatives in the project.
4 Chen et al. 2001. The Final Assessment of Energy Options and Health Benefits.
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Final Project Report

A comprehensive, final project report is essential
for disseminating results and promoting the
IES approach, both within the IES country and
internationally. These reports are useful in
demonstrating the results, methodology, and
barriers encountered while conducting the
analysis. The final project report also helps
identify focus areas for the next phase of work
in that country. For example, a team might seek
to further analyze specific mitigation measures,
explore a public outreach program, or seek
funding and partners for implementation. The
executive summary of the IES  Shanghai final
report is included in Appendix C.

Workshops and conferences provide good oppor-
tunities for sharing results. It is particularly useful
to seek speaking engagements at events related to
the IES program. For example, CAI and ICLEI
often have meetings in the same countries where
IES projects are under way. Members of the IES
team in the Philippines made presentations to the
Better Air Quality (BAQ) conference. Following
the presentations, these findings were posted on
BAQ's Web site, . The more
publicity and promotion that IES projects receive,
the more familiar the IES concept will become
among air quality mitigation, health benefits,
and GHG emissions reduction experts.
   Several IES side events and mini-symposia
   have been held since the inception of the IES
   program at events such as the United Nations
   Framework Convention on Climate Change
   (UNFCCC) meetings, the  Conferences of the
   Parties (COPs) meetings, the International
   Society of Environmental  Epidemiologists'
   meetings, the Earth Technology Forum, and the
   Intergovernmental Panel on Climate Change
   (IPCC) meetings. Convening IES team represen-
   tatives in an international forum provides an
   opportunity for them to present results and share
   experiences with a wide range of experts who
   have conducted similar analyses. These forums
   also promote the sharing of ideas for improving
   methodologies, models, and approaches.


   Some IES teams have developed training
   to disseminate information on the analytical
   methods and modeling strategies developed.
   The IES Mexico team presented training to other
   Mexican researchers on the Mexico City co-bene-
   fits model they developed for the IES  analysis (see
   Chapter 5 for more information on this model).


   Many IES technical team members have pub-
   lished articles on their work and IES project
   findings in well-known journals. Publication
   provides an opportunity for colleagues in the
   field to read about the analytical results and
   IES methodology. For example, the IES team
   in China published an article in the spring 2003
   issue of Sinosphere Journal5 on the  Shanghai
   and Beijing IES program.

   Web Sites

   Project results can be posted on Web sites for
   broad dissemination. IES teams can  establish
   their own project-specific  Web site to provide
   a comprehensive, single source for information,
   or establish links on other Web sites, including
   the pages of the lead technical institution or the
   sponsoring government. For example:
5 Chiu et al. 2003. Air Quality and Greenhouse Gas Co-Benefits of Integrated Strategies in China.
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• India sponsors a Web site on its IES work
 at .

• Mexico features its IES work in Spanish at

• The U.S. EPA provides information on
 IES studies at .

Next  Steps

IES programs typically evolve over time.
After the initial, analytical phase is complete,
researchers often need to gather more data or
conduct additional studies to strengthen their
analysis and build support for implementation.
For example, the initial IES project may demon-
strate a need to gather more primary data to sup-
port improved emission inventories or epidemi-
ological research to  support locally developed
concentration-response (C-R) functions.

The initial IES project generally results in:

  • A list of measures for reducing emissions.

  • An estimate of the associated emission

  • A determination of the impact of these
    reductions on atmospheric concentrations.

  • An assessment of the resultant changes in
    health impacts.

  • A monetary valuation of these changes.

The initial analysis is not likely to include
significant information regarding:

  • The costs to implement the measures.

  • The financial, technological, political, social,
    and economic barriers to implementation.

  • Potential sources of financial support.
   Subsequent phases of an IES program can be
   structured to address these gaps or expand in
   other ways. For example, the suite of emissions
   targeted could be broadened to include more
   complex and secondary emissions. Additionally,
   IES analysis in one city may lead to interest in
   conducting similar studies in other cities or on a
   national scale. When the analytical and outreach
   activities included in the work plan are complet-
   ed, it is often useful for IES researchers to iden-
   tify directions for future research so that inte-
   grated analysis is furthered in a given country.
   The overall goal is to move from analysis to
   implementation, as described in Chapter 8.
     Broadening the Reach of IES
     in South Korea
     The IES program in South Korea has
     evolved through multiple phases. The first
     phase of the program concluded with a poli-
     cymakers' meeting where the methodology,
     results, and recommendations of the
     analysis were discussed with stakeholders,
     including policymakers from the Ministry
     of Environment (MOE) and Parliament. A
     key observation made at the meeting was
     that the approach, tools, and methodology
     developed under IES could be applied to a
     broader analysis of energy and environmen-
     tal policies in South Korea—extending
     beyond the Seoul metropolitan area to other
     key industrial cities. Such an extended
     analysis could help inform MOE of the
     broad scope of health benefits that could be
     expected from wider implementation of
     mitigation measures. The MOE ultimately
     conceived and implemented such a project
     using capacity built through IES at the
     Korea Environment Institute and the
     approach to co-benefit analysis developed
     through the program.
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Policy Analysis and Results Dissemination

One of the key components of the Integrated Environmental Strategies (IBS)
program is to build support in the host country for adopting integrated measures
with local and global benefits. The ultimate goal of any IBS co-benefits analysis
is to put policies and programs in place (through mechanisms such as rules,
legislation, decrees, executive orders, or demonstration efforts) to reduce emissions
of conventional pollutants and GHGs. Real environmental, economic, health, and
other benefits can only be realized through the adoption of such measures.
Moving from analysis to implementation, however, is not always a straight-
forward process,  and a number of hurdles can impede the adoption of new
policies. It is useful for IES program partners to keep implementation clearly
in mind throughout the developmental and analytical phases of the program.
IES partners can  also work to continually engage policymakers, build support
for implementation among key constituencies, identify and secure funding for
implementation, and integrate IES methodologies and results into existing
policymaking processes.
Implementation Hurdles

A number of barriers can impede the
implementation of recommended measures to
reduce conventional pollutants and GHGs. While
the specific hurdles vary from country to coun-
try, a number of common obstacles also exist.

During the 1990s, 35 developing and transition
countries examined a variety of measures  for
reducing GHGs as part of the United States
Country Studies Program (USCSP).1  Many of
the measures considered were similar to ones
commonly identified in IES studies, applied pri-
marily to the energy supply/demand sectors, and
were no-cost or low-cost actions (i.e., the  esti-
mated economic benefits of the measures either
   exceeded their economic costs, or the costs were
   greater than the benefits by a relatively small
   amount). Importantly, from the IES perspective,
   the estimated benefits did not take into account
   changes in health or other improvements in
   social welfare. If the value of these other posi-
   tive changes had been included, more of the
   actions would have produced positive net eco-
   nomic benefits.

   The Intergovernmental Panel on Climate
   Change's Special Report on Methodological and
   Technological Issues in Technology Transfer
   also discusses factors that can impede the imple-
   mentation of technological measures commonly
   identified in the IES program. The report identi-
   fies many of the same issues as the USCSP.
1 U.S. Countries Studies Management Team. 1999. Climate Change Mitigation, Vulnerability, and Adaptation in Developing
 and Transition.
2 Metz et al. 2000. Methodological and Technical Issues in Technology Transfer.
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The studies identified the following barriers to

• Insufficient domestic expertise and
  infrastructure for supporting new
  technologies and energy sources (e.g., lack
  of reliable infrastructure for distributing
  electricity and natural gas).

• Lack of capital for developing or investing
  in new technologies, energy sources, and
  infrastructure because of (1) competing
  domestic  priorities for scarce  capital and
  (2) a lack of foreign investment in these areas.

• The need for training of people in
  the manufacture, installation,  use, and
  maintenance of new technologies, as well
  as in the implementation of new resource
  management practices.

• Lack of domestic supply of new technologies
  and alternative fuels sources, resulting in the
  need to increase dependence on imports if these
  technologies and fuel sources are to  be used.

• Existing policies and regulations that
  favor current technologies and energy
  sources and discourage the development
  and implementation of new technologies
  and energy sources.

• Lack of data and methods for conducting
  comprehensive benefit-cost analyses of
  mitigation options.

• High initial capital costs of purchasing
  more efficient technologies and  a lack of
  mechanisms for reducing the  initial costs
  borne by the end user.

• Lack of a system of codes, standards,
  and certification processes to ensure the
  performance and reliability of new goods  and
  services, as well as the compatibility of any
  intermediary products and services.
     The need for appropriate legal institutions
     and frameworks to provide assurance that the
     product or service can be sold, that contracts
     will be enforced, that legal disputes can be
     resolved, and that property rights will be

     The need for general education to improve
     citizens' awareness and acceptance of new
     technologies and resource conservation
     opportunities and to change their choices
     and habits.

     General  economic or political instability,
     leading to competing demands for scarce
     economic resources and political attention.
   Moving  From Analysis
   to Implementation
   The IES analytical framework helps countries
   move toward implementation by producing
   quantitative information on the relative benefits
   of different policies and technologies under
   consideration. However, moving from analysis
   to implementation requires a focus on process as
   well as on product. As discussed in Chapter 2,
   when IES partners engage policymakers and other
   stakeholders early in the process, they are more
   likely to have a receptive audience to hear IES
   results, refine initial analyses, and move towards
   implementation. Partners also benefit from con-
   sidering ways to build momentum for implemen-
   tation at the very start of an IES project.
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Another challenge in moving from IES analysis
to implementation is taking the alternative sce-
narios that were developed (often a combination
of different policies) and transferring those
scenarios to specific mitigation measures
(e.g., introduce hybrid buses, switch fuels).

The experience of the eight countries that have
participated in the IES program to date suggests
four strategies for effectively moving from
analysis to implementation:

• Develop funding proposals.

• Incorporate results into existing planning and
  policymaking processes.

• Build support for implementation.

• Institutionalize IES process and results.
Develop Proposals for Funding

The quantified information that results from IES
analyses can be useful in developing proposals
for implementing promising measures. Since
multilateral development banks and other
funding entities frequently lend or give grants
to governments, it is important that IES partners
engage government officials early in the IES
process. Government officials and in-country IES
   researchers typically work together to develop
   project proposals. See Appendix E for a descrip-
   tion of funding sources relevant to IES projects.

   For example, the Chilean government submitted
   a proposal to the Global Environment Facility
   (GEF)  for a grant that would support the imple-
   mentation of the 2000-2010 Urban Transport
   Plan for Santiago, an important planning docu-
   ment for the city. The plan calls a long-term shift
   to more efficient, less-polluting forms of trans-
   portation. Specific objectives include reducing
   private car use and promoting public transporta-
   tion through road pricing measures, replacing old
   buses with cleaner low-emission buses, increas-
   ing the use of bicycles and other non-emitting
   modes  of transportation, and laying the ground-
   work for more energy-efficient travel patterns
   through land use changes such as redistribution
   of education and shopping facilities. Chile's GEF
   proposal, which is still pending approval, relied
   heavily on analysis conducted by IES partners.
   The Chilean government's interest in IES (and
   the strong ties between IES researchers and
   government  officials) have been  instrumental
   in helping Chile move closer to implementation
   of promising mitigation measures.

   Incorporate Results  into Existing

   In many cities where IES  projects are initiated,
   systems are already in place for  implementing
   policies, technologies, and strategies to improve
   air quality and reduce GHGs. IES partners in
   many countries have found that building an
   early rapport with policymakers  and linking the
   results  of IES analysis to existing decisionmak-
   ing structures facilitate implementation. By
   feeding directly into existing structures, IES
   can support local objectives while introducing
   new ideas and information.  Implementation
   will be most effective if the process is tailored
   to specific policy processes  and  conditions in
   each city. Some examples include:
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• City/Regional Management or Development
  Plans: Air quality management plans, energy or
  environmental development plans, transportation
  plans, and city land use or development plans
  can all be effective mechanisms for adopting
  integrated strategies. For example, IES partners
  are studying the air quality and GHG mitigation
  benefits of several measures that could be
  adopted as part of Mexico City's formal air
  quality management plan, PROAIRE. Although
  they were not originally included in PROAIRE,
  some of these measures might be adopted if they
  prove as technically feasible and cost-effective
  as other measures under consideration.

• Major Event Planning: IES can assist
  policymakers looking to achieve environmental
  targets in conjunction with a large, visible
  international event. For example, Shanghai is
  planning to host the World Exposition in 2010,
  and, as a result, the municipal government
  wants to present to the world a city with air
  quality at the same level (or better) than similar
  world-class cities. In Beijing, planning for the
  2008 Olympics includes a number of initiatives
  to improve local air quality and reduce GHG
  emissions (see "Planning for a 'Green'
  Olympics" sidebar on page 88).

• Project-Based Environmental Analysis: If
  research indicated that certain industrial-sector
  improvements could be effective in improving
  air quality and reducing GHGs in an area, a
  project-specific analysis could be carried out on
  a single enterprise, or a collection of enterprises
  or industrial sectors. Although such an analysis
  has not been attempted through the IES
  program,  it would be a straightforward extension
  of the urban-scale IES study, utilizing similar
  analytical tools, models, and methodologies.

IES partners can also consider delivering regular
briefings to existing decisionmaking bodies,
such as  air quality management boards or
planning agencies, to build relationships with
policymakers and develop opportunities for
an IES analysis to provide useful input to
decisionmaking processes.
   In the Philippines, the IES technical team
   conducted a series of in-depth presentations
   and discussions on the policy implications of the
   Manila study with key government ministries,
   including the Department of Environment and
   Natural Resources, the Department of Energy,
   the League of Cities/Municipalities (mayors),
   and the Interagency Committee on
   Environmental Health, to help integrate study
   conclusions into policy decisions.

   In Shanghai and Beijing, IES teams have also
   found effective ways to work with local officials
   to support existing decisionmaking structures. IES
   researchers in Shanghai regularly brief officials
   involved  in Shanghai Province's  Five-Year Plan.
   Since this planning process is an important blue-
   print in China, the consideration  of IES results in
   the process, now in the 11th cycle, has influenced
   the shape of policy in this large and populous
   province. As previously noted, IES researchers in
   Beijing are participating in planning for the 2008
   Olympics. The Chinese government plans to use
   this preparation for the Olympics to implement
   the 11th Five-Year Plan and the Strategy of
   Three-Phased Development for Beijing.

   Build Support for Implementation

   Many IES partners have found that while reliable
   data and a refined analytical framework are neces-
   sary tools for effective decisionmaking, support
   from key constituencies (such as businesses, non-
   governmental organizations, citizen groups, and
   policymakers) is vital to build momentum for
   implementing promising measures. IES partners
   in some countries have found it beneficial to
   undertake outreach activities, such as education
   campaigns, to complement IES analysis. Outreach
   activities  are often an implicit recognition that the
   issues at the heart of IES analysis affect people's
   lives, and they require careful planning and good
   coordination among multiple partners to be
   effective  (see Figure 8.1 on page 88).
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Outreach activities can include the following:

• Education campaigns to provide individuals
  with information on how the choices they
  make (individually and collectively) can affect
     air quality, public health, and climate change.
     Campaigns can include many kinds of
     activities,  such as distributing educational
     flyers and other publications; airing public
  Planning for a "Green" Olympics

  A key component of the IES work in Beijing is its connection to the China's efforts to make the 2008 sum-
  mer games the world's first "green" Olympics. The Beijing IES project was launched in January 2002, six
  months after the city was awarded the rights to host the event. By the time the IES project began, the Beijing
  government had already published several policies for improving air quality as a part of the preparations for
  the Olympics. The IES team incorporated these policies into the development of scenarios for the IES project
  (see Table 8.1), so that results of the study would be directly applicable to the policy decisions being made.

  In July of 2002, the Beijing municipal government released an action plan to guide the city's preparations for
  the Olympics. The plan includes numerous initiatives to improve urban infrastructure and environmental
  quality in Beijing by 2008. Goals include 1) reducing emissions of SO2 and NOX in urban areas so that con-
  centration levels meet World Health Organization standards and 2) reducing particulate concentrations so that
  they are on par with those of major cities in developed countries. The IES Beijing team has been careful to
  make its scenarios consistent with the city's plans. The assumptions made in the clean energy supply, indus-
  try structure, and green transport scenarios are directly relevant to the government's action plan.

  Table 8.1 Beijing  IES Scenarios
Scenario Key Aspects
Base Case
Clean Energy Consumption
Industry Structure Transformation
Energy Efficiency
Green Transport
"Business as usual."
• Switch from coal-fired industrial boilers to natural gas.
• Use liquid petroleum gas for cooking in rural residences and expand
grid-based natural gas power.
• Relocate steel production.
• Reduce trichloroethylene capacity of coking.
• Modify growth in cement, petroleum, and chemical industries to high-tech industries.
• Improve residential lighting and heating, ventilation, and air conditioning systems.
• Promote a fuel economy program in light vehicles.
• Expand public transportation development.
• Slow growth in private car ownership.
• Promote liquid petroleum gas in taxis and buses.
• Improve vehicular emission standards.
• Promote advanced technology vehicles.
  Preliminary results from the Beijing IES study indicate that if all of the measures mentioned in Table 8.1
  are fully implemented, the ambient concentration of SO2 and NOX in major urban areas will meet air quality
  standards in 2008. However, additional measures will need to be implemented to control energy use, fugitive
  dust, and regional emissions if the city is to reach its targets for particulates.

  IES tools and analytical techniques are having a direct impact on policies and initiatives to improve air
  quality in the Beijing urban area. The city's efforts to meet its 2008 Olympics' goals provide an excellent
  opportunity for incorporating the IES program's analytical and capacity-enhancing strengths.
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                                                                             IES Handbook
  service announcements on radio and
  television; hosting Web sites such as India's
  site at ; and
  displaying posters in buses or rail systems;
  sponsoring health fairs or other events to
  raise awareness of the links between
  environmental/health issues.

Figure 8.1 Steps for Conducting an IES
Outreach Campaign
  Identify specific sectors within the IES study area:
                • General public
                • Industry
                • Transportation
                • Policy Makers
    Develop a multi-level approach to sharing
      the message with applicable sectors
    Develop a simple and unique message to
        "brand" the education campaign
  • Inform policy officials of the campaign prior
   to initiation and seek their endorsement

  • Develop metrics for measuring campaign
        Conduct the outreach campaign
          Measure level of success
          Summarize results
          Share results with policymakers
          Identify lessons learned
   • Articles and press coverage of IES findings
     (or related topics of local interest such as air
     quality and public  health issues) in journals,
     newspapers, and other venues.

   • Initiatives to encourage businesses to adopt
     low-cost energy-efficiency measures that have
     local and global benefits.

   • Initiatives to encourage and reward industry
     for implementing voluntary strategies for
     reducing GHGs and air pollutants.

   • Collaboration with the medical community
     to raise  awareness  of the links between health
     effects and air quality.

   • Joint efforts with transportation organizations
     to raise consumer awareness of transportation
     choices, encourage mass transit, and build
     momentum for adopting new measures and/or
     technologies (e.g., hybrid buses).

   • Curriculum development to teach children
     about local/global  environmental issues and
     potential impacts.

   • Policymaker briefings for central, regional,
     provincial, and local decisionmakers to keep
     them informed  of IES progress and results and
     build support for implementation.

   In Chile, a single journal article in Science^ about
   the potential health impacts of deteriorating air
   quality in  Santiago generated significant local
   press coverage and public attention; as a result,
   the issue was raised in importance with local
   environmental officials.

   In the metropolitan area of South Korea, IES part-
   ners are contributing  to a government-sponsored
   outreach initiative that seeks to educate citizens
   about the links between energy, air quality, and
   public health.4 The IBS-South Korea team also
   has been involved in  a multifaceted outreach
   program to disseminate IES analytical results,
   publicize the health impacts of air pollution,
3 Cifuentes et al. 2001. Hidden Health Benefits of Greenhouse Gas Mitigation.
4 Note that the metropolitan area of Seoul, South Korea, defined for the IES study includes the city of Seoul, the city of
 Inchon, and part of Kyonggi area.
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and promote policy measures to address GHGs
and air quality. In 2001-2002, the daily newspaper
Hankyoreh published a series of 26 articles on air
quality, health, and global climate change. This
media campaign was steered, in part, by the IES
South Korea coordinator and is credited with edu-
cating the public about the importance of air qual-
ity as a national issue. As a result of the campaign,
television news programs now regularly report on
climate change, air quality, and health in Korea.

Outreach activities do not have to wait to be
implemented until the IES analysis is complet-
ed. In India, the IES team designed an outreach
program to complement the core analysis. The
team took this approach to publicize the IES
analytical framework. The team hopes that these
outreach activities will lay the groundwork for
focused discussions on implementing mitigation
measures identified by the analysis. Outreach
activities have focused on building support for
implementation among three key groups in
Hyderabad: businesses, the general public, and
policymakers at key agencies in both Hyderabad
and the central government in New Delhi.

Use the  Framework as a
Decisionmaking Tool

IES offers an analytical framework that can
refine and assist decisionmaking. One strategy for
implementation is to explore opportunities for the
adoption and use of the IES framework by gov-
ernment agencies themselves, with the assistance
of IES partners. In this way, the IES approach can
be institutionalized, and the legacy of the IES
project could be the assessment of integrated
measures on many different issues in the future.

Clean  Energy Case Studies

The following case studies (which are not from
IES projects) examine factors that have impeded
the greater use of three environmentally and eco-
nomically beneficial technologies and processes
   in some developing country contexts. Although
   each of the case studies focuses on a different
   technology in a different set of circumstances,
   they illustrate a number of similar problems.

   Compact Fluorescent Lamps

   A compact fluorescent lamp (CFL) uses about
   20 percent of the electricity consumed by the
   more common incandescent lamp. Greater use
   of CFLs is often cited as a measure for increas-
   ing energy efficiency and reducing pollutants
   generated in fossil fuel combustion. Researchers
   in India examined the reasons that sales of this
   product are not increasing as rapidly as expected
   in the country and identified strategies for
   changing the situation.5
   The study notes that while the purchase price of
   a CFL is 10 to 30 times greater than an incan-
   descent lamp, a consumer can recover this cost
   in energy savings in less than two years if the
   lamp is used for only one hour a day.
   Furthermore, these savings would increase as
   electricity prices rise and as CFL prices come
   down. Despite sound underlying economics and
   significant marketing efforts by the Indian light-
   ing industry, the actual use of CFLs in India is
   only 1 percent of the potential. Some of the rea-
   sons identified for this  gap were:

   • Poor awareness of CFLs among ordinary
5 Kumar et al. 2002. Disseminating Energy-efficient Technologies.
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• Limited awareness of longer-term economic
  savings, even among people aware of the

• High purchase price.

• Lighting levels below those desired by

• Consumer preference for a whiter light than
  produced by the CFLs.

• Longevity less than  claimed due to problems
  caused by the Indian power grid.

• Lack of a performance guarantee.

To be successful, any IES strategy that included
or implied significant use of CFLs would need
to address these problems and achieve greater
market penetration. Some of the recommenda-
tions from the study were:

• More intensive advertising by both the
  government and industry.

• Free and-no-obligation trial offerings.

• Longevity warranties and/or certificates of

• Installment purchase mechanisms.

• Attractive point-of-purchase materials.

• Large-scale seminars, conferences, and trade
  shows to raise public awareness.

• Subsidies for approved manufacturers of CFLs.

One other reason that sometimes contributes
significantly to the gap between potential and
actual use of CFLs in some  areas, but not men-
tioned in the study discussed above, is the lack
of availability of products and replacement parts
in the market.
   CFC-Free, Super-Efficient

   The U.S. EPA has cooperated with China since
   the late 1980s on a number of activities to pro-
   mote use of energy-efficient products and equip-
   ment. The ultimate goal of these activities has
   been to reduce air pollutants, including ozone-
   depleting substances (ODS), and to promote the
   reduction of GHG emissions through increased
   energy efficiency.

   One major area of cooperation has been on CFC-
   free super-efficient refrigerators.7 In the 1980s,
   the Chinese Government was considering ratify-
   ing the Vienna Convention for the Protection of
   the Ozone Layer and the Montreal Protocol, but
   was concerned about the impact of ratification
   on its refrigerator industry. Refrigerator use was
   growing rapidly in Chinese households, and the
   volume of ODSs consumed in the refrigerator
   sector was becoming substantial.

   The U.S. EPA had demonstrated that technolo-
   gies existed in the United States to make refrig-
   erators both CFC-free and significantly more
   energy efficient and wanted to demonstrate that
   an ODS phase-out could be achieved with little
   or no  adverse impact on Chinese industry or
   consumers. Some of the barriers faced by China
   in implementing a strategy requiring such a
   phase-out were:

   • Uncertainty over appropriate CFC
     replacements. While a range of CFC
     replacements existed, experts did not know
     which would be most appropriate under
     Chinese conditions.

   • Lack of basic industry information. China
     lacked comprehensive information on the
     nature of the country's refrigerator market
     (e.g., production quantities for specific models,
     technologies in use, consumer preferences and
     perceptions, and purchasing behavior).
6 Hathaway et al. 2002. U.S.-China CFC-Free Super-Efficient Refrigerator Project.
7 See  for more information.
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• Shortage of industry technical expertise.
  The industry comprised dozens of companies
  that varied widely in their technical capacities,
  but most lacked the technical knowledge,
  experience, and skills necessary to research,
  select, design, test, manufacture, and market
  advanced refrigerator.

• Limited standards development and testing
  capacity. China's minimum energy-efficiency
  standards were relatively weak, and its
  calculation methods and test procedures could
  not be compared with other countries. Its
  infrastructure for standards development and
  product testing required strengthening, and
  more expertise was needed to develop test
  procedures, life cycle cost analysis, modeling,
  and data collection methodologies.

• Lack of understanding of cost/savings
  information. The costs and benefits of
  CFC-free and energy-efficient refrigerators
  were not well understood by government,
  manufacturers, or consumers.

Working with the U.S. EPA, China's State
Environmental Protection Agency (SEPA) initi-
ated a comprehensive set of market transforma-
tion activities that included:

• Collecting basic industry information on
  refrigerator production, sales, market share,
  technologies, and energy use by model.

• Identifying appropriate CFC replacements and
  building industry technical expertise,
  especially in the area of technology research
  and testing.

• Building institutional capacity for establishing
  minimum efficiency standards.

• Gathering information on costs and savings.

• Providing technical assistance to compressor
  manufacturers and refrigerator manufacturers.

• Instituting a consumer education program.
   • Monitoring and evaluating the results of all
     these activities.

   The project successfully transformed the refrig-
   erator industry in China. The industry leader
   introduced a new CFC-free, energy-efficiency
   model and conducted extensive advertising to
   promote its new product. The messages received
   considerable consumer attention, and helped to
   influence other manufacturers to develop CFC-
   free models of their own to remain competitive.

   Efficient Biomass Stoves

   Much of the world's population cooks with bio-
   mass, including a significant portion of the poor
   in urban areas. Most traditional biomass stoves
   are very inefficient, and the negative impacts of
   excessive biomass fuel use, especially if used in
   an unsustainable manner, include:

   • Depletion of increasingly scarce wood and
     other biomass resources.

   • In some situations, use of scarce cash
     resources for purchasing fuel wood or
     charcoal;  in other situations, use of significant
     amounts of time for gathering  fuel.

   • Acute respiratory infections, especially in

   • Chronic lung disease and cancer.

   Furthermore, in addition to CO2, biomass
   combustion creates products of incomplete
   combustion that are more powerful GHGs on
   a unit basis than  CO2.

   After the significant increases in oil prices in the
   1970s, many bilateral and multilateral assistance
   organizations developed programs to encourage
   greater use of more efficient biomass stoves.
   The results were usually less robust than expect-
   ed. The World Bank Group examined the factors
   than can contribute to the success or failure of
   efficient biomass stove programs, and some of
   the lessons learned were:8
 ' Barnes et al. 1994. What Makes People Cook with Improved Biomass Stoves.
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Programs were more likely to succeed where
there were immediate opportunities to save
money (among users currently buying both the
fuel and the stove) or valuable time (not
among users with easy access to free fuel or
no significant opportunity cost for their time).

Fuel efficiency is only one of many factors
that consumers value; the involvement of local
experts  was generally necessary to ensure that
the stove design met the multiple needs of the

Prices of more successful stoves were kept
relatively low through the use of local
materials, including scrap, and local mass

Significant subsidization tended to undercut
the long-term commitment of producers and
consumers to the newer stoves; when
subsidies disappeared, so did the stoves.
     Government and donor assistance was
     particularly useful in assessing market
     potential; disseminating information;
     providing technical advice, testing, and
     quality control; and facilitating financing.

     Monitoring and evaluation criteria and
     responsibilities were  carefully developed
     during the planning stages of successful

     Government or donor support extending over
     at least five years and designed to strengthen
     local institutions  and expertise greatly
     increased the chances of program success.
Chapter 8

            Conclusions  and  Lessons Learned
A great deal has been accomplished and learned during the years the Integrated
Environmental Strategies (IBS) program has been active. The developing
countries participating in the program have realized considerable co-benefits,
including improved public health, better air quality, and associated greenhouse
gas (GHG) reductions. These co-benefits have generated strong interest among
policymakers and stakeholders, as the availability of this information is seen
as beneficial to their policy processes. This interest shows that well-planned,
integrated measures can help  address important social and development
priorities, such as public health and employment, while also encouraging
participation in efforts to mitigate air pollution and associated GHGs.
One of the key accomplishments of the IBS program is the development of
a unique process, which differs from other co-benefits  work in  several ways.
The approach is built around an iterative, analytic framework that is directly
linked to policy development and implementation. The IES team also works
closely with a host government to build capacity in the participating country.
The strengths and weaknesses of this approach, as discussed in this chapter,
reflect the results of a 2002 IES program evaluation, which surveyed IES
country teams and drew information from their reports and case studies. As
the  program continues to evolve, it is hoped that more  countries will use the
IES approach to effect positive change and take the program in new directions.
Distinguishing Features of
the IES Framework

One of the central accomplishments of the IES
program, which provides the basis for many
lessons learned, is the development of a unique
approach to co-benefits analysis and policy
implementation. This approach is specifically
designed to build capacity in participating
countries to encourage the implementation of
identified mitigation measures. Several
characteristics of this approach distinguish IES
from most other international co-benefits analyses.
  A Multifaceted Process

  The IES process entails far more than a single
  analytic exercise. As detailed in Chapter 2,
  numerous planning, scoping, and team-building
  steps must occur before analysis can begin. After
  the initial analysis, additional steps must be
  taken prior to or in tandem with any expected
  implementation efforts. These steps typically
  include dissemination of results, outreach, and
  policy advice (as described in Chapter 7).
  Additional analytical efforts must then be
  initiated to address uncertainties that arise,
  to incorporate improved data and tools, and
  to focus in on policies of specific interest. The
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Conclusions and Lessons Learned

                                                                           IES Handbook
complexity of this process requires careful
coordination of the distinct elements and teams
involved in the project.

Government Sponsorship

At the core of every IES project is a lead
government ministry (i.e., a national, regional,
or local agency) or other organization that has
policy interests in the environmental objectives
of the program. While selection of this host
sponsor can add considerable time and
complexity to a project's startup, it greatly
enhances the likelihood that policy
recommendations will result in concrete action.
The host organization is also responsible for
endorsing a lead technical institution for the
project that is considered credible by the
government decisionmakers and able to provide
input to the policy development process. The
technical institution typically conducts the co-
benefits analysis and disseminates results.

Host Country Capacity

The IES program is specifically designed to
build capacity for continued analysis, policy
development, and implementation by local
institutions after a project is completed. The
host country, through the participating
institutions, develops the methodology, conducts
the assessments, recommends policy measures,
supports implementation, and conducts
outreach. This "learning-by-doing" approach
can add time and complexity to the program;
however, it ensures lasting capacity.

Co-Benefits Analysis Framework

IES is a co-benefits analysis  framework. The
concept of considering more than one
environmental (or other) benefit is not unique to
IES, but it is an important feature of the
   program. Co-benefits analysis can significantly
   improve the information available to
   policymakers and the quality of their decisions.
   To date, the IES program has focused on air
   quality and related public health improvements
   and associated GHG reductions. The health
   benefits are monetized so policymakers can
   consider their economic value. The framework
   also recognizes the potential for analyzing other
   categories of environmental/health benefits that
   could be of interest in policy development, such
   as local employment benefits or traffic
   congestion relief.

   Linkage to Policy Implementation

   IES is a practical approach for applying a
   co-benefits analysis framework that is directly
   connected to policy and investment processes. The
   program has the advantage of ensuring that key
   stakeholders are engaged early in the process and
   serve as a receptive audience for the subsequent
   analytical results. Integrated analysis is a critical
   component of the process, but the analysis must
   be embedded within a larger process (such as air
   quality management or transportation planning)
   to be effective. Co-benefits studies that have been
   undertaken in the absence of a larger process can
   become simply informative studies, with no
   particular link to outreach or opportunities for
   implementation of measures.

   Studies of integrated measures in the literature
   (including both IES and non-IES research) show
   that the monetary values of air pollution and
   public health benefits range broadly, due to a
   variety of factors (which are discussed in the
   following sections). When  assessed in relation
   to the cost of enacting these measures, the
   non-climate co-benefits can represent from
   30 percent to more than 100 percent of the
   cost of implementing mitigation measures.1'2'3
1 Burtraw et al. 2000. Estimating the Ancillary Benefits of Greenhouse Gas Mitigation Policies in the U.S.
2 Kverndokk et al. 2000. Greenhouse Gas Mitigation Costs and Side Effects.
3 Ekins. 1996. How Large a Carbon Tax Is Justified?
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All IES studies (and most others in the
literature) quantify health effects of a subset of
the air pollutants of concern. Even for those
pollutants considered, the studies estimate only
a portion of the effect (e.g., the studies capture
mortality and morbidity benefits due to acute,
but not chronic, effects of air pollution exposure
because of a lack of scientific studies).
Especially in developing  country situations,
data, methods,  and resource constraints can
further limit  the coverage.

For example, when decisionmakers reviewed the
first IES study for South Korea in a
policymakers' workshop in October 2000, they
strongly agreed that the monetized health
benefits were conservatively estimated due to
limitations in the study. The study had estimated
20-year cumulative health benefits of $1.03
billion of mitigation measures in the Seoul
metro area. However, the study assumed a very
modest level of implementation,  considering
only directly emitted PM10, and excluding
certain important health endpoints.

Despite these limitations, the attendees agreed
that the IES approach was useful for
policymaking at both the  local and national
levels, and that a number of measures  could be
justified on cost-effectiveness grounds, even
with conservative co-benefit estimates.
Additionally, based on the initial interest in this
project, the Korean Ministry of Environment
sponsored the IES research team to undertake a
                  second study that covered the entire country of
                  South Korea and addressed many of the initial
                  study's limitations. This study found the
                  national health benefit values to be significantly
                  greater than those from the initial analysis of
                  Seoul. Researchers estimated that 71 percent of
                  the cost of implementing a national 10 percent
                  reduction in CO2 emissions by 2010 would be
                  offset by the resulting health benefits  from
                  associated air quality improvements.

                  While the IES work to date has focused on a
                  subset of public health-based  co-benefits
                  associated with improved ambient air quality,
                  other air pollution effects (e.g., materials damage,
                  ecological damage) or related effects (e.g.,
                  tourism, visibility) can be examined. In addition,
                  many other benefits can be realized, including
                  environmental benefits in other media  (such as
                  water and land quality) and economic and social
                  benefits, such as local job creation and traffic
                  relief. These co-benefits come from air quality
                  improvements, not climate change mitigation.
Table 9.1 Mitigation Measures with Positive Benefits
  Urban (Local Air Quality Benefits)
Integrated (Air Quality and
Global Benefits)
Global (GHG and Climate Benefits)
    Low-sulfur coal
    Smokestack controls
    Catalytic converters
    Inspection and maintenance (I/M)
    Diesel particle traps
    Evaporative controls
-  Clean fuels (wood > coal > oil >
  gas > renewables)
-  Energy efficiency
-  Carbon and energy taxes
-  Public transport and land use
-  Retirement of old vehicles
-  Efficiency standards for new
-  Carbon sequestration
-  Forest management
-  Control of other GHGs (CH4, N20,
  CFCs, SF6)
-  Geoengineering
 Source: West et al. 2002. Co-control of Urban Air Pollutants and Greenhouse Gases.
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Sources of Variations in  Results

The results achieved by countries participating
in the program vary considerably. These
variations can be attributed to differences in the
real-life conditions in the countries, as well as
the methods, data, and assumptions used in the
analyses. A number of country-specific factors
can influence the results achieved, including:

• Stringency and enforcement of existing
  environmental regulations.

• Economic conditions.

• Energy/fuel mix and structure of the economy
  (e.g., shares of light/heavy industry, services).

• Geographic/airshed conditions.

• Land-use patterns (including transport systems
  and power facility siting).

• Population exposures.

• Socioeconomic status of populations.

In addition, researchers can choose different
methods, models, data, and assumptions, which
can substantially affect the quantitative
estimates of co-benefits. Studies also vary
greatly in terms of their coverage of mitigation
measures, pollutants, and categories of benefits
calculated. The literature includes  dozens of
studies from many countries. While each study
attempts to quantify co-benefits accurately, no
single  fixed analytic method is universally

For example, two separate co-benefits analyses
of Santiago, Chile, resulted in significantly
different results. (Note that co-benefits results
   reported in this section are reported, by
   convention, as dollars per ton of carbon
   reduced. It is important to emphasize that these
   co-benefits accrue from improvements in air
   quality, not from climate change mitigation.)
   One study showed co-benefits on the order of
   $250 per ton of carbon reduced,4 while the other
   study5 estimated benefits at about  one-fourth
   that level.6 Much of this variation  can be
   explained by two factors. The first study
   considers the avoided intelligence  loss (lost IQ
   points) due to reduced human exposures to lead
   while the second study does not consider this
   pollutant and health endpoint. In addition, the
   first study used a value of a statistical life that is
   more than double the value employed by the
   second one, due to distinct benefits transfer
   methods (see Chapter 6 for a fuller discussion of
   benefits transfers). Both studies are
   methodologically sound and rigorously
   conducted, so their different outcomes illustrate
   the potential variation inherent in conducting
   co-benefits estimates.

   To date,  IES studies have focused  on the human
   health impacts associated primarily with PM10.
   Some other analyses conducted outside the IES
   program have included additional  categories of
   potential health and other co-benefits. The
   analyses that consider more elements tend to
   yield greater co-benefits than those covering
   fewer elements.  For example, a co-benefits
   study of Hungary considered nine  different
   emissions and endpoints related to human
   health, materials damage, and vegetation
   damage. The study estimated co-benefits in
   excess of $500 per ton of carbon reduced.7'8
4 Dessus et al. 1999. Climate Policy Without Tears.
5 Cifuentes et al. 1999. Co-controls Benefits Analysis for Chile.
6 Reporting co-benefits in terms of dollars per ton of carbon reduced is a widespread practice within the co-benefits lit-
 erature. This approach has the advantages of "normalizing" the co-benefits results for scale, and of providing a sense
 of the co-control effectiveness of measures that simultaneously reduce carbon and conventional air pollution.
 However, it is important to note that the estimated co-benefits come from local air quality improvements, not carbon
 reductions themselves. Carbon dioxide is a gas that naturally exists in the Earth's atmosphere and is exhaled by human
7 Aunan et al. 1998. Health and Environmental Benefits From Air Pollution Reductions in Hungary.
8 Aunan et al. 2000. Reduced Damage to Health and the Environment From Energy Savings in Hungary.
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A study of Norway included lost recreational
value from polluted lakes and forests, materials
corrosion, traffic noise, road maintenance and
congestion, and traffic accidents, as well as
human health effects. This study covered eight
types of emissions and yielded co-benefits of
nearly $250 per ton of carbon reduced.9

The IES approach can help address some of
these sources of variation by presenting a
framework that enables users to understand the
importance of varying inputs and assumptions to
all IES analyses, while still permitting the
analysis to be tailored to the unique conditions
prevailing in each country. This common
approach ensures that IES countries include
similar elements in their analyses, where
appropriate, and benefit from the experiences
gathered from the program to overcome analytic

IES experts in different countries routinely
compare their work with others in the program
and with research published in the literature.
The current state of understanding, however,
makes it difficult to compare the effectiveness
of a policy or the quality of an analysis across
countries based on higher or lower aggregate
numerical results, even within the IES program.
Real variations in country conditions and
differences in data quality, assumptions, and
coverage,  can influence the aggregate results
over a wide range. It is necessary to understand,
in some detail, the specific measures included;
the health outcomes estimated; and the quality
of data, models, and assumptions used in each
IES analysis in order to assess the meaning of
the differences in aggregate results (e.g., total
monetary benefits, $/ton of emissions).

Even with the current limitations, however, IES
studies are very useful to policymakers within
individual countries. The results often indicate
that some  categories of policies are clearly
preferable to others and that accounting for a
larger set of benefits can be important for policy
   design. The approach can also focus attention
   and further research on the important issues
   facing a country and promote communication
   among different government decisionmaking
   groups, including the environmental, energy,
   public health, economic, and transportation
   ministries. In developing countries, the IES
   approach provides a consistent and sound
   starting point for co-benefits analysis and policy
   implementation. As greater analytic detail and
   data become available over time, the co-benefits
   approach will become even more useful to

   Focus on Priority Pollutants,
   Sectors, and Measures

   Most IES studies have focused on the health
   effects of PM10. This pollutant is a useful one to
   study for several reasons. First, it is relatively
   easy to gather data on direct PM10, make
   estimations, and perform modeling. More
   significantly, however, a solid body of health
   effects studies exists in many countries that
   links the dominance of PM10 to adverse health
   effects (see Chapter 5). Researchers know more
   about the linkages between PM10 and health
   impacts than for many other pollutants.

   IES studies have generally accounted for
   multiple source sectors in explaining existing
   air quality and health effects, and projecting
   future baseline conditions. Industrial/electric
   power generation, transportation, residential,
   commercial, and other sectors have all been
   evaluated in policy scenarios and yielded
   significant benefits in specific localities (see
   Table 9.2). As described in Chapter 3, the
   transportation and industrial/power generation
   sectors, in particular, generate significant
   amounts of air pollution and GHGs, and
   thus represent potentially fruitful targets for
   mitigation measures that produce co-benefits
   (even though the climate change mitigation
   co-benefits of GHG emissions reductions  are
   poorly understood). In most developing
9 Brendermoen et al. 1994. A Climate Treaty and the Norwegian Economy.
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                                                                         IES Handbook
countries, these sectors also have the most
growth potential and the largest forecast
emissions projections into the future.

Policy and Program Results
IES projects have generated reports from the
initial phase of co-benefits analysis in seven
cities in six developing countries: Santiago,
Chile; Buenos Aires, Argentina; Seoul, South
Korea; Shanghai  and Beijing, China; Manila,
Philippines; and Mexico City, Mexico, with
   several more analyses underway. Each analysis
   estimates the co-benefits of various measures
   that curb air pollution and associated GHGs and
   provides a solid quantitative foundation upon
   which to build policy implementation efforts.
   These analyses form the core of the IES projects
   and have helped raise awareness and inform
   decisionmakers in the countries. The IES
   program has influenced institutional thinking,
   interactions, and development; policy analysis;
   and capacity enhancement in important ways in
   all of the participating countries.
                           (continued on page 103)
Table 9.2 Measures Analyzed in IES Programs
                                                Countries Analyzing Measure
       (bold terms are
   defined following table)
     Transportation Sector
Expansion of subway, rail (light/heavy),
trolley, and bus lines
Road improvements
Improvements in traffic flows such as
changes in fare structures, synchronized
traffic lights, express lanes/buses, and
speed controls
Use of particulate traps for diesels
Improved I/M programs
Conversion to different fuels/hybrids
Retrofitting of catalytic converters to
old vehicles
Mandatory renovation of aging taxicab
fleets to current year models
Vehicle operator training
Reduced growth of car ownership
Improvement/construction of bike lanes
Continuously variable transmission
Road pricing measures
Improvements in fleet operations






















** Analyzed in Phase 2 study
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                                                                        IES Handbook
Table 9.2 Measures Analyzed in IES Programs (continued)

       (bold terms are
   defined following table)
                                               Countries Analyzing Measure
     Transportation Sector
Transportation demand management (TDM)
Fuel economy program
Decrease vehicle weight
Lean burn engines
Modal Substitution
New vehicular technology
Incentives to remove older vehicles from
the road





Industry/Power Generation Sector
Fuel additives
Improved efficiency in boilers
Use of renewable energy such as solar,
wind, and landfill gas
Improved pumps and motors
Demand side management (DSM)
Use of energy efficient/clean coal
Pressurized fluidized bed combustion
(PFBC) and integrated gasification com-
bined cycle (IGCC) fuel cell
More efficient controls on HC, PM10, NOX,
and SOX
Inverter system
Smokestack controls
Use of lower sulfur fuel in boilers
Structural reform
Fuel switching

















Residential Sector
Use of energy efficient appliances

* Wants to look into as of August 2003

** Analyzed in Phase 2 study
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                                                                    IES Handbook
Table 9.2 Measures Analyzed in IES Programs (continued)
Residential Sector
Reduce liquid propane gas (LPG) leaks
from stoves
Use of more efficient and cleaner fuels for
Use of energy efficient lighting
Use of solar water heaters
Increasing insulation standards
Use of condensing gas bailers
Town gas





Commercial Sector
Convert lighting systems to more efficient
Use of energy efficient motors
Use of solar water heaters
Increase building energy efficiency
Inverter system
Use of condensing gas boilers
More efficient air conditioning






Carbon taxes
Carbon sequestration
Land use management, such as relocation
of education and shopping facilities
Forest conservation
Forest restoration
Improvements in water/waste water treat-
Fuel pricing
"Low/no tillage" agriculture









  Analyzed in Phase 2 study
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                                                                            IES Handbook
Table 9.2 Measures Analyzed in IES Programs (continued)
More stringent S02 targets
More stringent NOX targets
More efficient livestock production
Waste minimization and incineration
Evaporative controls
PM10 targets
"Green Olympics" goal (by 2008, meet
ambient AQ standards)
Agroforestry options







Diesel paniculate traps: attached to tailpipe and
can reduce PM emissions.10

Inspection/Maintenance (I/M) programs:
permitting, licensing, and management of vehicle
use, maintenance, and registration.

Catalytic converter retrofitting: attaching a
catalytic converter to the tailpipe of old vehicles
and to convert hydrocarbons (unburned
gasoline), CO, and NOX into CO2, H2O, N2, and
O2 respectively.11

Vehicle operator training: teaches drivers how
to maintain and best utilize their vehicle.

Continuously variable transmission (CVT):
allows for the optimum torque and vehicle speed
   needed to result in better fuel efficiency.12

   Transportation demand management (TDM):
   a management system whose goal is to achieve
   a more efficient use of transportation resources
   focusing on the demand aspect of transit.

   Fuel economy program: aims to increase the
   miles per gallon of each vehicle on the road
   through more efficient vehicle technology.

   Lean burn engines: use more air when there
   is a low vehicle load. This results in higher fuel
   efficiency because less fuel is being used.13

   Co-generation: the utilization of two forms of
   energy from one source. Usually combined heat
   and power from one source.14
10 Swiss Agency for the Environment, Forests and Landscapes.
11 .
12 The Henry Samueli School of Engineering and Applied Science.
13 .
14 The Midwestern Cogeneration Association Web site, .
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Table 9.2 Measures Analyzed in IES Programs (continued)
Demand side management (DSM): a program
that encourages consumers to decrease their
pattern and level of electricity usage.15

Pressurized fluidized bed combustion (PFBC)
and integrated gasification combined cycle
(IGCC) fuel cells: coal technologies that result
in higher efficiency (40-45 percent) and lower
SO2, NOX, and particulate emissions. PFBC uses
upward blowing jets to create a mixing of gases
and solids like a bubbling fluid.16 IGCC uses
solid coal and gasifies it to make a gas form.17
   Inverter system: converts direct current (DC)
   into alternating current (AC).18

   Condensing gas boiler: a boiler that captures
   the latent heat of condensing water vapor.19

   Town gas: coal gas, which is the mixture of
   gases produced by the distillation of bituminous
   coal consisting mostly of H2, CH4, and CO,
   which is used for industrial and domestic use.20

   Evaporative controls: evaporative emissions
   controls reduce the amount of gasoline vapors that
   enter the atmosphere if they are not combusted.
(continued from page 99)

Direct Influence on Policymaking

Through workshops and other outreach,
decisionmakers in an array of developing
countries have become informed of the potential
benefits of integrated measures. Analytic results
have been directly incorporated into several policy
plans. For example, IES results have been used to
prepare the air pollution management component
of the 10th five-year plan (2001-2005) for
Shanghai. Unlike previous plans, this five-year
planning document placed the highest priority on
the  control of particulates, in part due to the city's
IES results, which represented the first locally
developed quantitative estimates of the health
benefits associated with mitigation measures.

In Beijing, IES results are being used in the
planning for the 2008 Olympics. In 2003, experts
from the Olympics planning process participated
   in the Beijing IES Policymakers' Workshop,
   which was held to review results and implications
   of the Beijing IES study. One of the key results
   presented was that full implementation of the
   Olympics' Action Plan for the Environment
   would achieve the desired ambient concentrations
   of SO2 and NOX in 2008. A subgroup of the
   U.S./China Joint Working Group for Cooperation
   on the Beijing Olympics has also developed a
   proposed cooperative program that builds on
   existing activities, including IES, to  support the
   design and implementation of cost-effective
   strategies for improving air  quality.

   In Chile, the regional office of the National
   Environment Commission (CONAMA) is
   considering integrated measures suggested by
   the IES team in its revision of Santiago's
   decontamination (pollution  control) plan.
15 Energy Information Association, .
16 Department of Energy.
17 International Energy Administration (IEA) Greenhouse Gas Emissions R&D Program.
18 .
19 Consortium for Energy Efficiency. .
20 .
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                                                                           IES Handbook
Development of Self-Sustaining

Another prime objective of the IES program is
to build permanent or self-sustaining capacity
within partner countries. In this way, analysis
and implementation of integrated strategies will
more likely continue beyond the completion of
any particular IES project. The program has
demonstrated a successful partnership approach
for moving toward that goal in several countries.

The program promotes interdisciplinary
cooperation from the outset. A real challenge
(and a mark of success) of the program is the
way that different technical experts must work
together to gather all the needed data inputs and
conduct the analysis. In many countries, IES
analyses have fostered communication and
interaction for the first time—not only among
researchers, but also policy staff in diverse
fields, such as energy policy, air quality
management, transportation,  and public health.

For example, in Shanghai, policymakers lauded
the program for bringing different ministries
together to discuss integrated policy and the
impact of one ministry's decisions on another.
IES has broken down institutional barriers and
promoted cooperation among environmental,
energy, and health policymakers in the city.

Significant attention is paid to capacity building
from a project's start. Not only are locally
produced results more effective in driving policy
implementation, but the "learning-by-doing"
process dramatically increases the likelihood
that further iterations and applications of the
methods will continue after the initial round.

Closely related to capacity building is an
explicit effort to institutionalize support for the
analytical policy framework and its application
to real policy implementation. This effort
requires attention to the selection of the lead
technical institution,  as well as coordination
among the technical team, policymakers, and
stakeholders in order to build acceptance and
support for the approaches.
   The use of the IES framework for follow-on
   analysis in partner countries is a measure of the
   success of the approach in building capacity and
   institutional support. In South Korea, the initial
   Seoul study led to a national study, as well as to
   continued efforts to apply the framework to
   more real-world policy and to provide
   costs/benefits for comparison of individual
   measures. In Santiago and Shanghai, similarly,
   the initial analysis has stimulated follow-on
   iterations and focuses on key policy and
   implementation decisions. The integrated
   approach has also helped technical experts and
   policymakers see the value of new tools and
   techniques for policy decision support. For
   example, partner countries have decided that
   benefits valuation, which was initially provided
   as an optional component of the IES program, is
   an important and integral part of the framework.

   Leveraging  of Resources

   Securing the resources to conduct an IES
   analysis and support implementation initiatives
   is a challenge for all participating countries.
   Leveraging resources can help initiate and
   extend the IES work. One source of funding to
   carry out the IES work is the local country
   partner, such as a government ministry. For
   example, the South Korean government directly
   contributes funds to the IES program. In most of
   the other countries, governments either provide
   time for staff to work on IES analyses or in-kind
   contributions of workshops or other resources.

   Other funding sources include outside
   organizations, foundations, and governments.
   The U.S. EPA has partnered with the U.S.
   Agency for International Development (USAID)
   to conduct IES analysis in two countries—India
   and the Philippines. As described in Chapter 8,
   countries seeking funding sources can contact a
   variety of bilateral and multilateral organizations
   for assistance in co-benefits analysis. See
   Appendix E for more information.
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                                                                          IES Handbook
Contributions to the Published
Most of the completed IES country analyses have
been presented at conferences and published in
respected technical journals. Publication in
international, domestic, and specialized journals
helps generate broad publicity for the work,
contributes to the science of co-benefits analysis,
and disseminates results and methods to a wider
audience. Consult the U.S. EPA's IES Web site,
, to access some of
these publications and reports.

IES  Program Lessons
A great deal has been learned through the IES
process, and the program has improved over
time. While the IES approach is still evolving,
this handbook offers an opportunity to record
and share some of the lessons learned to date.
This information can be instructive to other
developing countries as they embark on co-
benefits analyses and implement integrated
The overarching lesson that has been learned is
that the IES approach can be implemented
successfully with considerable technical,
scientific, and economic benefits for
participating developing countries. The
approach has clearly provided technical
information and support to policymakers in
several cities, enabling them to address
practical, real-time, policy issues and obtain
useful information for future policy
   development and planning for energy,
   transportation, and other areas.

   Lessons for the Initial Stages

   As described in Chapter 2, it is necessary to
   establish the host government sponsor, set up
   the technical team, and identify key stakeholders
   and policymakers during the initial stages  of the
   IES process. Awareness of policy drivers and
   early involvement of key decisionmakers greatly
   increases the likelihood that the results will be
   seriously considered and implemented in the
   participating country.

   The Importance of A National-Level
   Government Relationship
   The IES approach has always started with the
   establishment of a national-level government
   relationship. Government involvement can
   ensure commitment to the project; contributions
   of resources, if needed; access to required data;
   and assistance in developing alternative
   scenarios and measures for analysis and
   implementation. In some cases, the government
   sponsors advocate the integrated approach and
   promote its use and dissemination within other
   governmental bodies. Countries with strong
   government sponsors are greatly advantaged in
   their pursuit of co-benefits projects.

   The Critical Role of the Technical Team
   Assembling a skilled, cohesive, and dedicated
   in-country technical team is critical to the  IES
   process. Because the team is responsible for
   many different tasks, its members must possess
   a variety of characteristics to function
   effectively. For example, the organizer of a
   scoping meeting should have community
   stature, good leadership skills, and contacts with
   key individuals at different levels. A principal
   investigator should possess organizational skills,
   provide intellectual leadership, and serve as the
   primary spokesperson for the project's analytic
   components. The other members of the technical
   team need to be recognized experts in energy
   policy, economics, atmospheric modeling, health
   effects, and other relevant disciplines.
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IES is an interdisciplinary process, which
requires close coordination and open lines of
communication among team members. Team
members must be able to interact effectively
with technical experts as well as policymakers
in different parts of government. Members
should understand from the beginning that
promoting and implementing policy measures
with co-benefits is a complex and long-term
process. They will be involved in many stages
of design analysis, review, and revision.

Linkage to the Policy Process
As described in Chapter 2, key policymakers
should be engaged in the project from its
inception. In this way, they will more likely
understand that the analysis should feed into a
policy development process and lead to the
implementation of cost-effective mitigation
measures. Engaging policymakers early in the
project also builds their comprehension of the
science and analysis involved. This involvement
will help them understand that even initial
results  and  uncertain analyses are valuable for
policy formulation. Additionally,  once
policymakers are informed of initial results, they
can request that more  detailed analyses are
performed to optimize measures and maximize
the cost-effectiveness  of priority measures and

The Importance of Stakeholder Engagement
In addition to selecting the technical team to
lead the IES process, the government sponsor is
also responsible for identifying the key
stakeholders to be engaged in the project. These
stakeholders play important roles in selecting
measures for analysis  and in identifying
implementation strategies. Leaders from various
government ministries, prominent community
groups, nongovernmental organizations, and key
industries should be involved early in the
process, invited to the scoping meeting, and
asked to comment on the information presented.
Stakeholders can provide an authoritative and
objective resource to policymakers.
    The Need to Recognize Policy Drivers
    Everyone involved in an IES analysis needs to
    recognize the general and specific policy drivers
    that can advance the adoption of integrated
    measures. Generally, the issues of most interest
    to developing countries, beyond improving
    living standards for their populations (e.g.,
    access to clean water and modern sanitation
    systems), involve local benefits, such as reduced
    air pollution and associated health effects. The
    specific policy  drivers vary with each country
    project, but can include alignment with existing
    policy priorities, enlistment of the support of
    influential policymakers and opinion leaders,
    linkage to external policy-drivers like bilateral
    or multilateral agreements, and others.

    Benefits of the Layered Approach
    In most cases, the initial co-benefits analysis will
    lack detail because the first priority is to generate
    useful order-of-magnitude analysis. While the
    technical team might want to develop better
    basic data before implementing an integrated
    assessment, adapting credible data sets from
    other studies can help move the policy analysis
    forward. Because IES is a layered approach,
    available tools and data can be used to develop
    an integrated framework whose components can
    be improved as resources permit. It is better for
    developing countries with limited resources to
    work initially with less than optimal data and
    simplified assumptions than to omit one or more
    steps of the process. Following the entire process
    is essential to success.

    Lessons for Program

    Once the initial pieces of the project are in
    place, the ultimate success of the project will
    depend upon the sustained effort of the technical
    team, the ongoing engagement of policymakers
    and stakeholders, and the ability to
    institutionalize  IES into the policy process.
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Focus on Technical Team Capacity
To ensure that the IES program will create
sustainable technical capacity in a participating
country, local experts (with support from the
international program if available) must carry
out the project activities. The local technical
team becomes a repository of,  and champion
for, the project's capabilities and its
applications. Experience in the IES program to
date suggests that a technical team  comprised of
multidisciplinary experts works best.

While government staff plays a key role in the
program, a technical team based outside of the
government is recommended. This  allows for
continuity amid political changes; long-term
capacity enhancement; flexibility and
adaptability; and ability to grow and to take
advantage of varied funding opportunities. The
project will not succeed, however, if the team is
too independent from the government. The lead
technical institution, in particular, needs to be a
trusted technical "advisor" to government
policymakers. It should have a track record of
successful cooperation with the relevant
government policy staff.

Ongoing Engagement of Policymakers and
Multiple iterations and  adjustments will be
needed for certain aspects of the IES process.
For example, the technical team might need a
series of discussions with key stakeholders to
develop appropriate policy scenarios for
analysis. The analysis might require several
rounds of revisions to ensure its results are
credible. Also, events might need to be organized
for policymakers to adequately acquaint them
with the co-benefits methods and results.

The dynamic nature of the process requires
continual engagement.  Integrated analyses and
information products must be responsive to
policymakers' and stakeholders' needs and
interests. The initial analysis can prove to be
insufficiently detailed or too targeted to specific
policy concerns. Later iterations might need
   more detail or, conversely, simplification of
   some framework elements (e.g., atmospheric
   concentration matrices instead of full models) to
   provide the flexibility and response time needed
   to serve as a basis for policy development.
   Where key uncertainties impede policy, more
   detailed studies could be conducted in a second-
   phase analysis (as is currently underway in
   South Korea).

   It is also important to recognize the potential for
   turnover of government contacts.
   Administrations change, key individuals leave
   government, and many developing countries
   rotate civil servants frequently.  The country's
   technical team and its international partners
   must make concerted efforts to  sustain the
   engagement of government partners and other
   stakeholders. Periodic policymakers' workshops,
   training, and other outreach activities can  all
   help maintain engagement in the project.

   Attention to Institutionalizing the Framework
   It is important to  institutionalize the process and
   the concepts of integrated policy analysis in the
   participating country. In this way, the institutions
   involved recognize the value of the integrated
   analysis, which becomes a part  of their
   institutional procedures. Institutionalizing the
   process also means that the work can continue,
   even if the original team members can no longer
   be directly involved. Such institutionalizing is
   taking place in Santiago, where health benefits
   and carbon reductions are now a given part of
   the cost/benefit analysis for revisions of the
   decontamination  (pollution control) plan.

   The appropriate policy process also must be
   identified for IES to be effectively
   institutionalized.  For example, in Shanghai, the
   five-year planning process serves that purpose.
   As a result, IES is firmly embedded in the
   Shanghai process. In Korea, the second phase
   of the IES analysis for Seoul seeks to analyze
   specific measures under the Seoul Air Quality
   Management Plan for their cost-effectiveness
   and co-benefits potential. This information will
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                                                                          IES Handbook
help policymakers identify measures that are
well-suited to meeting the air quality goals of the
plan, while also reducing associated GHGs. The
plan will be phased-in over a 10-year period.

Building Linkages
It is useful for the IES team to look for
opportunities to sustain the project and advance
the analysis. For example, team researchers can
seek out their colleagues' assistance in gaining
access to hard-to-find data or other information to
facilitate the analysis. They might also use their
assorted contacts to find funding sources for
implementation. Funding or other assistance can
come  from domestic sources, bilateral sources, or
international organizations. (See Appendix E for
information on selected funding sources).

Outreach in Parallel with Policy Development
Outreach is useful in communicating the benefits
of potential mitigation strategies and in building
the broad support needed for implementation. In
South Korea,  for example, a national outreach
campaign has spurred considerable public
interest in  co-benefits measures.

Public officials are frequently more receptive to
co-benefits information that is endorsed by key
stakeholders and the general public. Therefore,
in addition to promoting the program through
official channels, team members should examine
other opportunities for input. Many countries
recognize that effective advocacy is based upon
credible and objective analysis, so public
outreach and  stakeholder engagement need to be
coordinated with the local and national

Areas  for Future

Areas for future investigation, beyond the scope
of the core IES program, are numerous. The
breadth and depth of the IES program creates
many opportunities for refinement. Future
directions  could include broadening the project's
approach and expanding its reach.
   Expanding the Project's Approach

   The IES process can be enhanced in a number
   of ways, including the incorporation of
   additional emissions, media, and co-benefits in
   the analysis; approaching the process on a
   different geographical scale; and standardizing
   the analytical tools used.

   Inclusion of Additional Emissions
   IES teams can consider incorporating additional
   emissions in the co-benefits analysis. As noted
   earlier, the majority of IES studies have
   concentrated on PM10. As the co-benefits
   analyses are refined in a second phase, countries
   can consider addressing other air pollutants,
   such as PM2 5, NOX, ground-level O3, Hg, and
   Pb—all of which have considerable impacts on
   human health. CH4 is an additional GHG that
   could be analyzed.
   Analysis of Other Environmental Media
   To date, the IES process has focused on air
   pollutants and GHGs. Another environmental
   medium of interest is water. Future co-benefits
   analysis could examine the impacts of pollution
   mitigation actions and their related health
   impacts. For example, mercury from coal-fired
   power generation can end up in water supplies
   and threaten human health. Policy measures that
   reduce air pollution, and thereby curtail mercury
   in water, can result in avoided health effects.
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Consideration of Other Co-Benefits
Human health co-benefits usually are chief (in
terms of valuation) among the possible co-
benefits resulting from a given policy measure,
and health benefits are the primary
consideration of all completed IES studies. In
the future, project teams might incorporate
estimates  of additional co-benefits categories.
For example, some co-benefits studies estimate
the value of avoided material damage as a result
of a policy measure. A growing body of
literature on ecosystems valuation also exists.
Evaluating the economic efficiency benefits of
addressing multiple objectives through a single
set of policy measures is another potentially
fruitful area for study. In addition to the
economic value of the avoided air quality
impacts, other direct economic and social
benefits (such as increased local employment or
traffic  congestion relief) could be factored into
the overall cost/benefit analysis.

Expansion of Geographical Scale
Approaching co-benefits assessment and policy
development on different geographic scales is a
challenging, but potentially useful, area for
enhancing the process. In China, an effort is
under way to develop a national-scale IES
assessment. Over the next several years, this
assessment might provide a model for
evaluating the interactions of policies and
benefits on local, regional, and national scales.

Standardization of Tools
Developing a more standardized set of tools
(such as simple software, training materials, and
methods) might improve consistency and
comparability among  countries. One tool under
development is an international version of the
U.S. EPA's Benefits Mapping and Analysis
Program (BenMAP). This model will provide
users with a sophisticated, flexible, and user-
friendly tool for refining health impact and
valuation  estimates. Standardized tools could
also  facilitate the implementation of strategies
for expanding the impact of the IES program
   through partnerships with other sponsoring
   institutions and technical expert networks, as
   discussed below.

   Expanding the Program's Impact

   In addition to expanding the scope of the IES
   process, the reach and impact of the program
   could be enhanced in a number of ways,
   including furthering the institutionalizing of the
   process, building broader support for co-benefits
   analysis, facilitating partnerships, and enhancing
   coordination with other programs.

   A long-term vision of the IES program is to
   fully institutionalize the assessment of integrated
   measures into the planning processes of
   developing country governments. With enhanced
   access to experts and tools for broad co-benefits
   analysis, governments will be better equipped to
   propose integrated policy measures. These
   proposals  can also be more resource-efficient than
   policies designed without reference to co-benefits.
   The process could be further institutionalized by
   enhancing capacity building in key technical
   institutions (which could be linked to each other
   and eventually become a resource for others);
   ensuring the continued engagement of
   government policymakers; and involving more
   individuals and institutions in the process.

   Building Broad Support
   As IES projects evolve from the analysis stage
   to the information dissemination stage, it will
   become increasingly valuable to enhance
   participating countries' outreach and
   implementation capabilities. The IES process
   can evolve to include a greater focus on
   identifying target groups and creating outreach
   campaigns to better inform stakeholders of
   co-benefits concepts and results.

   Facilitating Partnerships to Expand the Impact
   A variety  of resources are required to
   successfully conduct an IBS-type  project,
   including funding, tools, and human resources
   (in the form of person power or expertise).
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These resources can be difficult to garner. The
ability of international programs to respond to
these needs could be enhanced in several ways.
In some cases, expertise might be available on a
consultative basis from developing countries
that have participated in the IES program. Other
key resources, such as data and models, might
be available from existing networks. These
kinds of resources can help overcome barriers
that might prevent countries from embarking  on
or successfully completing a project.

Coordinating with Other Programs
Coordinating with regional clean air initiatives
and other ongoing or emerging programs can
enhance the IES process and further
implementation efforts. In the future, teams
embarking on an IES project could expand their
efforts to fully investigate relevant in-country
initiatives and build relationships with the
leaders of these programs.
  Chapter 9
Conclusions and Lessons Learned

                                 APPENDIX  A
Chapter 1—Introduction to the IES Program

Chen, Changhong, Bingheng Chen, Qingyan Fu, Chuanjie Hong, Minhua Chen, and Haidong Kan. December 2001.
  The Integrated Assessment of Energy Options and Health Benefits. Final Integrated Environmental Strategies Report
  (available online at ).

Cifuentes, Luis, Hector Jorquera, Enzo Sauma, and Felipe Soto. December 2001. International Co-controls Benefits
  Analysis Program. Final Integrated Environmental Strategies Report. P. Catholic University of Chile, School of
  Engineering (available online at ).

Davis, D. L., T. Kjellstrom, R. Slooff, A. McGartland, D. Atkinson, W. Barbour, W. Hohenstein, P. Nagelhout, T.
  Woodruff, F. Divita, J. Wilson, L. Deck, and J. Schwartz. 1997. Short-term improvements in public health from
  global climate policies on fossil-fuel combustion: An interim report. Lancet Vol. 350.

Gaioli, Fabian, Pablo Tarela, Anna Sorensson, Tomas Svensson, Elizabeth Perone, and Mariana Conte Grand.
  December 2002. Valuation of Human Health Effects and Environmental Benefits of Greenhouse Gases Mitigation
  and Local Air Pollution Abatement Options in the Buenos Aires Metropolitan Area. Final Integrated Environmental
  Strategies Report (available online at ).

Joh, Seunghun, Yunmi Nam, Sauggyoo Shim, Joohon Sung, and Youngchul Shin. June 2001. Ancillary Benefits Due
  to Greenhouse Gas Mitigation, 2000 to 2020, The International Co-Control Analysis Program for Korea. Final
  Integrated Environmental Strategies Report. Korea Environment Institute (available online at ).

Pinheiro, Flavio C., Luiz Tadeu Siqueira Prado, Alfesio Luis Ferreira Braga, Luiz Alberto Amador Pereira, Simone
  ElKhouri Miraglia, Paulo Hilario Nascimento Saldiva, Gyorgy Miklos Bohm, Maria de Fatima Andrade, Odon Roman
  Sanchez-Ccoyllo, Regina Maura de Miranda, Ramon Arigoni Ortiz, and Ronaldo Seroa da Motta. 2004. Integrated
  Environmental Strategies (IES) in Sao Paulo, Brazil. Final Integrated Environmental Strategies Report (available online
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U.S. Environmental Protection Agency. 1997. Final Report to  Congress on Benefits and Costs of the Clean Air Act,
  1970 to 1990. EPA410-R-97-002.

Chapter 3—Energy/Emissions Analyses and Modeling

Gaioli, Fabian, Pablo Tarela, Anna Sorensson, Tomas Svensson, Elizabeth Perone, and Mariana Conte Grand.
  December 2002. Valuation of Human Health Effects and Environmental Benefits of Greenhouse Gases Mitigation
  and Local Air Pollution Abatement Options in the Buenos Aires Metropolitan Area. Final Integrated Environmental
  Strategies Report (available online at ).

Chapter 4—Air  Quality Modeling

Samet, J.M., F. Dominici, F.C. Curriero, I. Coursac, and S.L. Zeger. 2000. Fine particulate air pollution and mortality
  in 20 U.S. cities. New England Journal of Medicine 343 (24): 1742-1749 (available online at

Chapter 5—Exposure and Health Impact Analysis

Abt Associates. July 3, 1996. A Particulate Matter Risk Analysis for Philadelphia and Los Angeles. Bethesda, MD:
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Braga, A.L., P.H.N. Saldiva, L.A.A. Pereira, J.J.C. Menezes, G.M.S. Conceicao, C.A. Lin, A. Zanobetti, J. Schwartz,
  and D.W. Dockery. 2001. Health effects of air pollution exposure on children and adolescents in Sao Paulo, Brazil.
  Pediatric Pulmonology 31:106-113.

Burnett, Rick. 2002. Comparing Linear and Log-Linear Forms of the Association. Between Long-Term Exposure to
  Fine Particulate Matter and Longevity in the ACS Study. Sent by E-mail, September 9, 2002.
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                                   APPENDIX  A
Cesar, H., K. Borland, X. Olsthoorn, L. Brander, P. van Beukenrng, V.H. Borja-Aburto, V. Torres Meza, A. Rosales-
  Castillo, G. Oliaz Fernendez, R. Mufioz Cruz, G. Soto Montes de Oca, R. Uribe Ceron, E. Vega L6pez, P. Cicero-
  Fernandez, A. Citlalic Gonzalez Martinez, M.M. Nifio Zarazua, and M.A. Nifo Zarazua. 2000. Economic
  Valuation of Improvement of Air Quality in the Metropolitan Area of Mexico City. Institute for Environmental
  Studies (IVM) WOO/28 + WOO/28 Appendices. Vrije Universiteit, Amsterdam.

Chen, Changhong, Bingheng Chen, Qingyan Fu, Chuanjie Hong, Minhua Chen, and Haidong Kan. December 2001.
  The Integrated Assessment of Energy Options and Health Benefits. Final Integrated Environmental Strategies Report
  (available online at ).

Cifuentes, Luis, Victor H. Borja-Aburto, Nelson Gouveia, George Thurston, and Devra Lee Davis. 2001. Assessing
  the health benefits of urban air pollution reductions associated with climate change mitigation (2000-2020):
  Santiago, Sao Paulo, Mexico City, and New York City. Environmental Health Perspectives 109 Suppl 3: 419-25.

Cifuentes, Luis, Hector Jorquera, Enzo Sauma, and Felipe Soto. 2001. International Co-controls Benefits Analysis
  Program. Final Integrated Environmental Strategies Report. P. Catholic University of Chile, School of Engineering.

Gauderman W.J., R. McConnell, F. Gilliland, SJ. London, D. Thomas, E. Avol, H. Vora, K. Berhane, E.B. Rappaport,
  F. Lurmann, H.G Margolis, and J.M. Peters. October 2000. Association between air pollution and lung function
  growth in Southern California children. American Journal of Respiratory and Critical Care Medicine 162(4): 1-8.

Gavett, S.H.  and H.S. Koren. 2001. The role of particulate matter in exacerbation of atopic asthma.  International
  Archives of Allergy and Immunology 124  (1-3):109-112 (available online at  January-March).

Gwilliam, Ken, Masami Kojima, and Todd Johnson. June 2004. Reducing Air Pollution from Urban Transport. World
  Bank: 153.

Kiinzli, N., R. Kaiser, S. Medina, M. Studnicka, O. Chanel, P. Filliger, M. Kerry, F. Horak Jr, V Puybonnieux-Texier,
  P. Quenel, J. Schneider, R. Seethaler, J-C. Vergnaud, and H. Sommer.  2000. Public-health impact of outdoor and
  traffic-related air pollution: A European assessment. Lancet 356(9232): 795-801.

Lin, C. A., M.A. Martins, S.C. Farhat, C.A.  Pope, GM. Conceicao, V.M. Anastacio, M. Hatanaka, W.C. Andrade,
  W.R. Hamaue, GM. Bohm, and PH. Saldiva. 1999. Air pollution and respiratory illness of children in Sao Paulo,
  Brazil. Paediatr Perinat Epidemiol 13(4): 475-88.

Mathers C.D., C. Stein, D. Ma Fat, C. Rao, M. Inoue, N. Tomijima, C. Berbard, A.D. Lopez, and C. J.L. Murray. 2002.
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Mexico Air Quality Team. 2002. Improving Air Quality in Metropolitan  Mexico City. Washington, DC: The World
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Murray, C., M. Ezzati, A.D. Lopez, A. Rodgers, and S. Vander Hoorn. 2003. Comparative quantification of health
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Ostro, B. 1984. A search for a threshold in the relationship of air pollution to mortality: A reanalysis of data on
  London winter. Environmental Health Perspectives 58:397-9.

Pope III, C.A., R.T. Burnett, M.J. Thun, E.E. Calle, D. Krewski, K. Ito,  and GD. Thurston. 2002. Lung  cancer,
  cardiopulmonary mortality,  and long-term  exposure to fine particulate air pollution. JAMA: 287 (9): 1132-41.

Schwartz J. and A. Marcus. 1990. Mortality and air pollution in London: A time series  analysis. American Journal of
  Epidemiology. 131: 185-94.

Schwartz J. 1991. Particulate air pollution and daily mortality in Detroit. Environmental Research 56: 204-13.

Schwartz J. and D.W. Dockery.  1992. Increased mortality in Philadelphia associated with daily air pollution
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Schwartz J. F. Laden, and A. Zanobetti. 2002. The concentration-response relation between PM2 5 and daily deaths.
  Environmental Health Perspectives 110: 1025-9.

U.S. Environmental Protection Agency. 1999. Final Report to Congress on Benefits and Costs of the Clean Air Act,
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Chapter 6—Economic Valuation and Analysis

Cesar, H.S.J., C. Borland, A.A. Olsthoorn, L.M. Brander, P.J.H. Beukering, V.H. van Borja-Aburto, V. Torres-Meza,
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  P. Cicero-Fernandez, A. Citlalic Gonzalez Martinez, M.M. Nino Zarazua, and M.A. Nino Zarazua. 2000. Economic
  Valuation of Improvement of Air Quality in the Metropolitan Area of Mexico City, Working document IVM-
  WOO/28 +WOO/28 Appendices. Instituut voor Milieuvraagstukken, 300pp.

Cifuentes, L., JJ. Prieto, and J. Escobari. 2000. Valuation of mortality risk reductions at present and at an advanced
  age: Preliminary results from a contingent valuation study. Tenth Annual Conference of the European Association
  of Environmental and Resource Economists, Crete, Greece.

Conte Grand M., F. Gaioli, E. Perone, A. Sorensson, T. Svensson, and P. Tarela. December 2002. Impacts of
  Greenhouse and Local Gases Mitigation Options on Air Pollution in the Buenos Aires Metropolitan Area:
  Valuation of Human Health Effects, Documento de Trabajo No. 230, Universidad del Centro de Estudios
  Macroeconomicos de Argentina.

European Union. 1999a. Fuel cycles for emerging and end-use technologies, transport, and waste. Externalities of
  Energy, Vol.9. European Commission, Directorate General XII: Science, Research and Development.

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Joh, Seunghun, Yunmi Nam, Sauggyoo Shim, Joohon Sung, and Youngchul Shin. June 2001. Ancillary Benefits Due
  to Greenhouse Gas Mitigation, 2000 to 2020, The International Co-Control Analysis Program for Korea. Final
  Integrated Environmental Strategies Report. Korea Environment Institute.

Krupnick A., A. Alberini, M. Cropper, N. Simon, B. O'Brien, R. Goeree, and M. Heintzelman. September 2000. Age,
  Health, and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario
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Lvovsky K., G. Hughes, D. Maddison, B. Ostro and D. Pearce. 2000. Environmental costs of fossil fuels:
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Seroa da Motta, R. and A.P. Fernandes Mendes. 1996. Health costs associated with air pollution in Brazil.
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  Act,1970 to 1990. EPA410-R-97-002.

U.S. Environmental Protection Agency. 1999. Final Report to Congress on Benefits and Costs of the Clean Air
  Act,1990 to 2010. EPA410-R-99-001.

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                                  APPENDIX  A
Viscusi W.K., J. Hakes, and A. Garlin. 1997. Measures of mortality risks. Journal of Risk and Uncertainty 14(3): 213-233.

Chapter 7—Policy Analysis and Results Dissemination

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Chiu, Kong, Collin Green, and Katherine Sibold. 2003. Air quality and greenhouse gas co-benefits of integrated
  strategies in China. Sinosphere Journal 6(l):40-7.

Cifuentes, Luis, Hector Jorquera, Enzo Sauma, and Felipe Soto. December 2001. International Co-controls Benefits
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Cifuentes, Luis. 2002. Methods and analyses of air pollution local and global impacts. Presented at the 2002
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West, J. J., P. Osnaya, I. Laguna, J. Martinez, and A. Fernandez 2004. Co-control of urban air pollutants and
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Chapter 8—Implementation

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Chapter 9—Conclusions  and Lessons  Learned

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                                  APPENDIX  A
Cifuentes, Luis, E. Sauma, H. Jorquera, and F. Soto. 1999. Co-Controls Benefits Analysis for Chile: Preliminary
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  the UK and Ireland: A Survey. Unpublished manuscript.

Midwestern Cogeneration Association, .

Swiss Agency for the Environment, Forests and Landscapes. Diesel particulate traps for heavy-duty vehicles.

West, J.J., P. Osnaya, I. Laguna, J. Martinez, and A. Fernandez. 2002. Co-Control of urban air pollutants and
  greenhouse gases in Mexico City. Presented at Workshop on Co-Control of Urban Air Pollutants and Greenhouse
  Gases, August 2002 in Mexico City, National Institute of Ecology, Mexico. .

Appendix B—Glossary/Acronyms

Carbon Sequestration Leadership Forum..

Cooper, Andre R. 1997. Cooper's Comprehensive Environmental Desk Reference. Van Nostrand Reinhold.

D. Davis, A. Krupnick, and G Thurston. 2000. The Ancillary Health Benefits and Costs ofGHG Mitigation: Scope,
  Scale, and Credibility. In OECD, ed. "Ancillary benefits and costs of greenhouse gas mitigation." Washington, DC.

The Economist, .

Gielen, DJ. 1997. The MARKAL Systems Engineering Model for Waste Management. The Energy Center of the

Godish, Thad. 1997. Air-Quality, 3rd Edition. Lewis Publishers.

Merriam-Webster, Incorporated. 2003. Merriam-Webster's Collegiate Dictionary, Eleventh Edition. (Available online
  at .
  Appendix A

                                  APPENDIX  A
Sedjo, Roger A., Brent Sohngen, and Pamela Jagger. 1998. Carbon Sinks in the Post-Kyoto World: Part I. Resources
  for the Future.

Appendix C —IES Process Tools

Cifuentes, Luis, Hector Jorquera, Enzo Sauma, and Felipe Soto. December 2001. International Co-controls Benefits
  Analysis Program. Final Integrated Environmental Strategies Report. P. Catholic University of Chile, School of

Appendix D— Analytical Resources

Abbey DE, F. Petersen P.K. Mills, and W.L. Beeson. 1993. Long term ambient concentrations of total suspended
  particles, ozone and sulfur dioxide and respiratory symptoms in a non-smoking population. Archives of
  Environmental Health 48:33-46.

Bowland BJ. and J.C. Beghin. 2002. Robust estimates of a value of a statistical life for developing economies.
  Journal of Policy Modeling 23(4): 385-396.

Dockery DW, F.E. Speizer, D.O. Strain, J.H. Ware, J.D. Spengler, and B.C. Ferris Jr. 1989. Effects  of inhalable
  particles on respiratory health of children. American Review Respiratory Disease 139:597-594.

Dockery DW, C.A. Pope, X. Xu, J.D. Spengler, J.H. Ware, M.E. Fay, B.C. Ferris Jr., and F.E. Speizer.  1993.
  An association between air pollution and mortality in six U.S. cities. New England Journal of Medicine

Dockery DW, J. Cunningham, A.I. Damakosh, L.M. Neas, J.D. Spengler, P. Koutrakis, J.H. Ware, M. Raizenne, and
  F.E. Speizer. 1996. Health effects of acid aerosols on North American children-respiratory symptoms.
  Environmental Health Perspectives 104(5):500-505.

Dusseldorp A, H. Kruize, B. Brunekreef, P. Hofschreuder, G. de Meer , and A.B. van Oudvorst. 1995. Association of
  PM10 and airborne iron with respiratory health of adults living near a steel factory. American  Journal of
  Respiratory and Critical Care Medicine 152:1032-39.

European Union.  1999a. Fuel cycles for emerging and end-use technologies, transport, and waste. Externalities of
  Energy, Vol.9. European Commission, Directorate General XII: Science, Research and Development.

European Union.  1999b. Methodology 1998 update. Externalities of Energy, Vol.7.

European Commission, Directorate General XII: Science, Research and Development.

Gielen M, S. van der Zee, and J. van Wijnen et al. 1997. Acute effect of summer air pollution on respiratory health of
  asthmatic children. American Journal of Respiratory and Critical Care Medicine 155:2105-08.

Hiltermann T, J.  Stolk J, and S.  van der See et al. 1998. Asthma severity and susceptibility to air pollution. European
  Respiratory Journal 11: 686-93.

Jin LB, Y. Qin, and Z. Xu et al. 2000. Relationship between air pollution and acute and chronic respiratory disease in
  Benxi. Journal  of Environment and Health 17(5):268-270.

Krewski D, R. Burnett, M.  Goldberg, K. Hoover, J. Siemitaycki, M. Jerret, M. Abrahmowicz, and M. White. 2000.
  Reanalysis of the Harvard six cities study and the American Cancer Society study of particulate air pollution and
  mortality. Health Effects Institute, Cambridge, MA.

Krupnick AJ, W. Harrington, and B. Ostro. 1990. Ambient ozone and acute health effects: evidence from daily data.
  Journal of Environmental Economics and Management 18(1):1-18.

Ma HB, and C.J.  Hong. 1992. Effects of particulate air pollution on respiratory disease. Chinese Journal of Public
  Health ll(4):229-232.

Moolgavkar, SH, E.G. Luebeck, and E.L. Anderson. 1997. Air pollution and hospital admissions for respiratory
  causes in Minneapolis, St. Paul and Birmingham. Epidemiology 8(4):364-370.
  Appendix A

                                   APPENDIX  A
Mrozek J.R. and L.O. Taylor. 2002. What determines the value of life? A Meta-Analysis. Journal of Policy Analysis
  and Management. 21(2): 253-270.

Neukirch F, C. Segala, and Y. Le Moullec et al.  1998. Short-term effects of low-level winter pollution on respiratory
  health of asthmatic  adults. Archives of Environmental Health 53:320-28.

Ostro BD. 1987. Air pollution and morbidity revisited: a specification test. Journal of Environmental Economics and
  Management 14: 87-98.

Ostro BD, and S. Rothschild. 1989. Air pollution and acute respiratory morbidity: an observational study of multiple
  pollutants. Environmental Research 50(2): 238-247.

Ostro BD. 1996. A methodology for estimating air pollution health effects. Geneva: Office of Global and Integrated
  Environmental Health, World Health Organization. WHO/EHG/96.5.

Ostro BD, GS. Eskeland, J.M.  Sanchez, and T. Feyzioglu. 1999. Air pollution and health effects: a study of medical
  visits among children in Santiago, Chile. Environmental Health Perspectives 107:69-73.

Poloniecki J, R. Atkinson, and A. Ponce de Leon et al.  1997. Daily time series for cardiovascular hospital admissions
  and previous day's air pollution in London, UK. Occupational and Environmental Health 54: 535-40.

Pope CA, D.W. Dockery, J.D. Spengler, and M.E Razienne. 1991. Respiratory health and PM10 pollution: a daily
  time series analysis. American Review of Respiratory Health Diseases 144:674-688.

Pope CA, M.J. Thun,  and M.M. Namboodiri. 1995. Particulate Air Pollution as a predictor of mortality in a
  prospective study of U.S. adults. American Journal of Respiratory and Critical Care Medicine 151:669-74.

Portney, Paul R. and John P. Weyant (eds.), 1999. Discounting and Intergenerational Equity. Washington, DC:
  Resources for the Future Press.

Prescott GJ, GR. Cohen, R.A. Elton, F.G Fowkes, and R.M. Agius.  1998. Urban air pollution and cardiopulmonary
  ill health: a 14.5 year time series study. Occupational and Environmental Medicine 55: 697-704.

Roemer W, G Hoek, and B. Brunekreef et al. 1993. Effects of ambient winter air pollution on respiratory health of
  children with chronic respiratory symptoms. American Review of Respiratory Disease 147: 118-24.

Samet J, S. Seger, F. Dominici, F. Curriero, I. Coursac, D. Dockery, J. Schwartz,  and A. Zabonetti. 2000. The
  national morbidity,  mortality, and air pollution study. Health Effects Institute, Cambridge MA.

Schwartz J. 1993. Particulate air pollution and chronic respiratory disease. Environmental Research 62:7-13.

Schwartz J., D. Slater, T.V. Larson, WE. Pierson, and J.Q. Koenig. 1993. Particulate air pollution and hospital
  emergency room visits for asthma in Seattle. American Review of Respiratory Disease 147 (4):826-31.

Schwartz J, D.W. Dockery, L.M. Neas, D. Wypij, J.H. Ware, J.D. Spengler, P. Koutrakis, F.E. Speizer, and B.J. Ferris.
  1994. Acute effects of summer air pollution of respiratory symptom reporting in children. American Journal of
  Respiratory Critical Care Medicine 150:1234-1242.

Schwartz J and R. Morris. 1995. Air pollution and hospital admission for cardiovascular disease in Detroit, Michigan.
  American Journal of Epidemiology 142:23-35.

Schwartz J, D.W. Dockery, and L.M. Neas. 1996. Is daily mortality specifically associated with fine particles?
  Journal of the Air and Waste Management Association 46 (10):927-39.

Schwartz J. 1997. Air pollution and hospital admissions for cardiovascular disease in Tucson. Epidemiology

Segala C, B. Fauroux, and J. Just et al. 1998. Short term effect of winter air pollution on respiratory health of
  asthmatic children in Paris. European Respiratory Journal 11:677-85.

Sheppard L, D. Levy, G. Norris, T.V. Larson, and J.Q. Koenig. 1999. Effects of ambient air pollution on nonelderly
  asthma hospital admissions in Seattle, Washington 1987-1994. Epidemiology 10(1):23-30.
  Appendix A

                                 APPENDIX  A
Sunyer J, J.M. Anto, C. Murillo, and M. Saez. 1991. Effects of urban air pollution on emergency room admissions
  for chronic obstructive pulmonary disease. American Journal of Epidemiology 134:277-288.

Whittemore AS and E.L. Korn. 1980. Asthma and air pollution in the Los Angeles Area. American Journal of Public
  Health 70:687-696.

Woodruff TJ, J. Grillo, and K.C. Schoendorf. 1997. The relationship between selected causes of postneonatal infant
  mortality and particulate air pollution in the United States. Environmental Health Perspectives 105(6):608-612.

Wordley J, S. Walters, and J. Ayres et al. 1997. Short term variations in hospital admissions and mortality and
  particulate air pollution. Occupational and Environmental Medicine 54:108-16.

Xu X et al. 1994. Air pollution and daily mortality in residential areas of Beijing, China. Archives of Environmental
  Health 49(4):216-222.

Xu XP, D. Dockery, and D. Christiani et al. 1995. Association  of air pollution with hospital outpatient visits in
  Beijing. Archives of Environmental Health 50(3):214-220.

XuZ et al. 2000. Air pollution and daily mortality in Shenyang, China. Archives of Environmental Health 55(2): 115-120.

Zmirou D,  J. Schwartz, and M. Saez et al. 1998. Time series analysis of air pollution and cause specific mortality.
  Epidemiology 9: 495-503.

The following references were not specifically cited in the IBS Handbook; they did, however, serve as
valuable resources throughout the development of the Handbook and might be helpful for those readers
seeking additional information.

Chapter 3—Energy/Emissions Analyses and Modeling
Economopoulos, A.P. 2003. Assessment of Sources of Air, Water and Land Pollution, Part Two: Approaches for
  Consideration in Formulating Environmental Control Strategies. World Health Organization, Geneva.

Energy International Inc. 1996. The use of natural gas for transit buses and heavy duty vehicles in Argentina. Report
  No. 9474R530. Bellevue, Washington.

Faiz, A., C.S. Weaver, and M.P. Walsh. 1996. Air Pollution from Motor Vehicles: Standards and Technologies for
  Controlling Emissions. Washington, DC: The World Bank.

International Association of Natural Gas Vehicles. 1994. Task Force Report Milan. International Gas Union and
  International Association of GNV.

Onursal, B. and S.P. Gautam. 1997. Vehicular air pollution. World Bank Technical Document No. 373S, Cap. 3
  (sobre la base de estandares).

Stern, A.C., editor. Air pollution, Vol I. New York: Academic Press.

Tarela, PA. 2001. Emission Factors for the Vehicle Fleet of Buenos Aires. Unidad de Cambio Climatico, Secretaria
  de Desarrollo Sustentable y Politica Ambiental (SDSyPA).

World Gas Conference Proceedings. 1997. The report on diesel exhaust, scientific review panel, 20th World Gas
  Conference Proceedings, Copenhagen, Denmark, April 22.

Chapter 4—Air Quality Modeling

Gifford, F. A. 1961. Use of routine meteorological observations for estimating atmospheric dispersion. Nuclear
  Safety 2(4): 47-57.
  Appendix A

                                  APPENDIX  A
Gifford, F.A., D.H. Slade (ed.). 1968. An outline of theories of diffusion in the lower layers of the atmosphere.
  Meteorology and Atomic Energy 66-116. USAEC Report TID-24190, U.S. Atomic Energy Commission, NTIS.

Gifford, F.A., Jr., W. England (ed.). 1970. Atmospheric diffusion in an urban area. In Proceedings of Second
  Congress of the  International Radiation Protection Association, May 3-8, 1970. Brighton, England: Air Pollution
  Control Association.

Hanna, S.R. 1971.  A simple method of calculating dispersion from urban area sources. Journal of Air Pollution
  Control Association. 21: 774-777.

Hanna, S.R. 1973.  Description of ATDL computer model for dispersion from multiple sources. Industrial Air
  Pollution Control, pp.23-32, Ann Arbor Science Publishers, Ann Arbor, Michigan.

Lettan, H. 1970. Physical and meteorological basis for mathematical models of urban diffusion. In Proceedings of
  Symposium on Multiple Source Urban Diffusion Models, Air Pollution Control Official Publication No. AP 86.
  U.S. Environmental Protection Agency.

Pasquill, F. 1961. The estimation of the dispersion of windborne material. MeteorologicalMagazine 90: 33-49.

Pasquill, F. 1974. Atmospheric diffusion, 2nd ed. New York: John Wiley & Sons.

Sutton, O.G 1932. A theory of eddy diffusion in the atmosphere. Proceedings of the Royal Society of London. Series
  A: Mathematics  and Physical Sciences, 135:  143.

Chapter 5—Health  Effects Analysis

Schwartz, J., D. Slater, T.V. Larson, W.E. Pierson, and J.Q. Koenig. 1993. Particulate air pollution and hospital
  emergency room visits  for asthma in Seattle. American Review of Respiratory Diseases 147:826-831.

Dockery,  D.W.  and C.A. Pope III. 1994. Acute respiratory effects of particulate air pollution. Annual Review of
  Public Health 15:107-132.

Burnett, R.T., R. Dales, D. Krewski, R. Vincent, T. Dann, and J.R. Brook. 1995. Associations between ambient
  particulate sulfate and admissions to Ontario hospitals for cardiac and respiratory diseases. American Journal of
  Epidemiology 142:15-22.

Anderson, H.R., C. Spix, S. Medina, J.P. Schouten, J. Castellsague, G Rossi, D. Zmirou, G Touloumi, B. Wojtyniak,
  A. Ponka, L.  Bacharova, J. Schwartz, and K. Katsouyanni. 1997. Air pollution and daily admissions for chronic
  obstructive pulmonary disease in 6 European cities: Results from the APHEA project. European Respiratory Journal

Choudhury, A.H., M.E. Gordian, and S.S. Morris. 1997. Associations between respiratory illness and PM10 air
  pollution. Archives of Environmental Health 52:113-117.

Koren, H.S. and M.J. Utell. 1997. Asthma and the environment. Environmental Health Perspectives 105:534-537.

Lipsett, M., S. Hurley, and B. Ostro. 1997. Air pollution and emergency room visits for asthma in Santa Clara County,
  California. Environmental Health Perspectives  105:216-222.

Medina, S., A.  Le Tertre,  P.  Quenel, Y. Le Moullec, P. Lameloise, J.C. Guzzo, B. Festy, R. Ferry, and W. Dab.  1997.
  Air pollution and doctors' house calls: Results from the ERPURS system for monitoring the effects of air pollution
  on public health in Greater Paris, France, 1991-1995. Evaluation des Risques de la Pollution Urbaine pour la
  Sante. Environmental Research 75:73-84.

Pope, C.A. Ill,  D.W Dockery, J.D. Spengler, and M.E. Raizenne.  1991. Respiratory health and PM10 pollution: A
  daily time series analysis. American Review of Respiratory Diseases 144:668-674.

Romieu I., F. Meneses, S. Ruiz, J. Huerta, J.J. Sienra, M. White, R. Etzel, and M. Hernandez. 1996. Effects of
  intermittent ozone exposure on peak expiratory flow and respiratory symptoms among asthmatic children in Mexico
  City. Archives of Environmental Health 52:368-376.
  Appendix A

                                 APPENDIX  A
Gielen, M.H., S.C. van der Zee, J.H. van Wijnen, CJ. van Steen, and B. Brunekreef. 1997. Acute effects of summer
  air pollution on respiratory health of asthmatic children. American Journal of Respiratory and Critical Care
  Medicine 155:2105-2108.

Pekkanen, J., K.L Timonen, J. Ruuskanen, A. Reponen, and A. Mirme. 1997. Effects of ultrafine and fine particles in
  urban air on peak expiratory flow among children with asthmatic symptoms. Environmental Research 74:24-33.

Peters, A., D.W. Dockery, J. Heinrich, and H.E. Wichmann. 1997. Short-term effects of particulate air pollution on
  respiratory morbidity in asthmatic children. European Respiratory Journal 10:872-879.

Vedal, S., J. Petkau, R. White, and J. Blair. 1998. Acute effects of ambient inhalable particles in asthmatic and
  nonasthmatic children. American Journal of Respiratory and Critical Care Medicine 157(4 Pt  1): 1034-1043.

Chapter 6—Economic Valuation  and Analysis

Bowland, B.J. and J.C. Beghin. 2001. Robust estimates of a value of a statistical life for developing economies.
  Journal of Policy Modeling 23:385-396.

Mrozek, J.R. and L.O. Taylor. 2002. What determines the value of life? A Meta-Analysis. Journal of Policy Analysis
  and Management, 21(2):253-270.

Ostro, B. May 1994. Estimating the Health Effects of Air Pollutants: A Method with an Application to Jakarta, World
  Bank Policy Research Department, Public Economics Division, Policy Research Working Paper No.1301.

Portney, Paul R. and John P. Weyants (eds.). 1999. Discounting and Intergenerational Equity. Resources for the
  Future Press.
  Appendix A

                                 APPENDIX  B
Reducing the degree or intensity of, and sometimes eliminating, a pollutant or emission or the condition of
generating the pollutant or emission.
Source: U.S. EPA

Abatement Costs
The measure of the cost to achieve a reduction in a pollutant or emission.
Source: RFF

Adverse Effect
A change in morphology, physiology, growth, development or life span of an organism exposed to air pollution,
which results in impairment of functional capacity or impairment of capacity to compensate for additional
stress or increase in susceptibility to the harmful effects of other environmental influences.
Source: WHO

Air Pollutant
Any substance in the air that could, in high enough concentrations, harm humans, other animals, vegetation,
or material. Pollutants may include almost any natural or artificial composition of airborne matter. Matter
may be in the form of solid particles, liquid droplets, gases, or in combination thereof. Generally, air pollutants
fall into two main groups: (1) those emitted directly from identifiable sources and (2) those produced in the air
by interaction between two or more primary pollutants, or by reaction with normal atmospheric constituents,
with or without photoactivation. Exclusive of pollen, fog, and dust, which are of natural origin, about 100
contaminants have been identified by the U.S. EPA as air pollutants. Air pollutants are often grouped in
categories for ease in classification; some of the categories are:  solids, sulfur compounds, volatile organic
chemicals, particulate matter, nitrogen compounds, radioactive compound, and odors.
Source: U.S. EPA

Air Pollution
The presence of contaminant or pollutant substances in the air that do not disperse properly and that interfere
with human health or welfare or produce other harmful environmental effects.
Source: U.S EPA, World Bank

Air Pollution Sources
Activities that result in air pollution, including agricultural activities, combustion processes, dust producing
processes, manufacturing activities, nuclear-energy related activities, spray painting, printing, and dry-cleaning.
Source: OECD

Air Quality Criteria
The levels and length of exposure to pollution, resulting in adverse effects on human health and welfare.
Source: U.S. EPA

Air Quality Standards
The level of pollutants prescribed by regulations that may not be exceeded during a specified time in a defined area.
Source: U.S. EPA

Ambient Air
Any unconfined portion of the atmosphere; open air; surrounding air that is accessible to the public.
Source: U.S. EPA
  Appendix B

                                 APPENDIX  B
Ancillary Benefits
A benefit derived from greenhouse gas mitigation that is reaped in addition to the benefit targeted by a policy,
which is a reduction in the adverse impact of global climate change. Such benefits include reductions in local
and regional air pollution associated with the reduction in the use of fossil fuels, and indirect effects on issues
such as transportation, agriculture, land use practices, employment and fuel security. Depending upon one's
viewpoint, primary and ancillary benefits may be reversed so that GHG reductions are considered ancillary to
reducing local air pollution.  Developing countries might prefer this perspective.
Source: RFF, IPCC

Ancillary Costs
A negative impact experience in addition to the targeted benefit.
Source: RFF

Changes in the atmosphere resulting from or produced by human beings.
Source: NFS, IPCC

Anthropogenic Emission Sources
Emissions that are the result of human behavior. Included in this group are emissions from agricultural and
industrial operations, biomass burning, and emissions from microbial activity during waste treatment.
Source: U.S. EPA

Area Source Emissions
Emissions that are assumed  to occur over a given area rather than at a specified point; often includes emissions
from sources considered too small or numerous to be handled individually in a point source inventory.
Source: U.S. EPA

Avoided Cost
The cost a utility would incur to generate the next increment of electric capacity using its own resources.
For example, many landfill gas projects buy back rates are based on avoided costs.
Source: U.S. EPA


A reference point against which change is measured. Alternative interpretations of the reference conditions can
give rise to multiple baselines. The set of market projections used as a benchmark for the analysis of the impact
of different  economic and policy scenarios.
Source: OECD

Benefit-Cost Analysis
An economic technique applied to public decisionmaking that attempts to quantify in monetary terms the
advantages (benefits) and disadvantages (costs) associated with a particular policy.
Source: U.S. EPA

Benefits Transfer
The practice of using concentration-response and valuation information from a developed country where such
studies have been conducted and applying them, with or without adjustments, to a developing country for the
purpose of estimating human health impacts and valuation of environmental pollution.
Source: D. Davis, A. Krupnick, and G. Thurston. 2000.

All of the living material in  a given area; often refers to vegetation.
Source: U.S. EPA
  Appendix B

                                 APPENDIX  B
Bottom-up Models (see also "Top-down Models")
Also known as energy end-use forecasting, systems engineering, or energy-engineering models, bottom-up models
focus on the energy sector and the technologies of energy production and address economic concerns secondarily.
They originated in the 1970s as energy planners sought to develop models to forecast future energy demand.

As applied, bottom-up models take a disaggregated approach to modeling energy supply and demand. They
consider how energy can be used cost-effectively in providing a level of energy service as well as how the
energy demand can be satisfied through a portfolio of technologies that provide services competitively. These
models have proven beneficial in surveying the potential of new, alternative technologies and for studying
direct policy instruments such as regulations, public investment, and laws.
Source: CBO, OECD
Capacity Building
The means by which skills, experience, and technical and management capacity are developed within an
organizational structure—often through the provision of technical assistance, short/long-term training, and
specialists inputs (e.g., computer systems). The process may involve the development of human, material,
and financial resources.

In the context of climate change, capacity building is a process of developing the technical skills and
institutional capability in developing countries and economies in transition to enable them to participate
adequately in efforts to assist their economies in adaptation, mitigation, and research on climate change.
Source: OECD, IPCC

Carbon Dioxide (CO2)
CO2 is a colorless, odorless, nonpoisonous gas that results from fossil fuel combustion and is part of the
ambient air. It is the primary anthroprogenic GHG with a 100-year Global Warming Potential of 1.
Source: U.S. EPA,  WHO

Carbon Monoxide (CO)
A colorless, odorless gas that depletes the oxygen-carrying capacity of blood. Major sources of CO emissions
include industrial boilers, incinerators, and motor vehicles.
Source: U.S. EPA,  WHO

Carbon Sequestration/Carbon Sink (see also "Sequestration")
The capture, from power plants and other facilities as well as through natural reservoirs, and storage of carbon
dioxide and other greenhouse gases that would otherwise be emitted into the atmosphere. The gases can be
captured at the point of emission and can be stored in underground reservoirs, (geological sequestration),
injected into deep oceans, (ocean sequestration), or converted into rock-like solid materials. Terrestrial
sequestration in terrestrial ecosystems is either the net removal of CO2 from the atmosphere or the prevention
of CO2 emissions from the terrestrial ecosystems into the atmosphere.
 Source: Carbon Sequestration Leadership Forum < >

Chlorofluorocarbons (CFCs)
A family of inert, nontoxic, and easily liquefied chemicals used in refrigeration, air conditioning, packaging,
and insulation or as solvents and aerosol propellants. Because CFCs are not destroyed in the lower atmosphere,
they drift into the upper atmosphere where their chlorine components deplete the ozone layer.
Source: U.S. EPA,  WHO

Climate Change (also referred to as Global Climate Change—see also "Global Warming")
The term is used to imply a significant change from one climatic condition to another. In some cases, "climate
change" has been used synonymously with the term "global warming." Scientists tend to use the term in the
wider sense to also include natural changes in the climate. Source: U.S. EPA
  Appendix B

                                 APPENDIX  B
A readily combustible black or brownish-black rock whose composition, including inherent moisture, consists
of more than 50 percent carbonaceous material by weight and more than 70 percent by volume. It is formed
from plant remains that have been compacted, hardened, chemically altered, and metamorphosed by heat and
pressure over geologic time.
Source: U.S. DOE

All the beneficial outcomes of a policy measure or set of measures that reduces two or more emissions
simultaneously. In the IBS context, at least one of the reduced emissions must be a GHG, and typically, one or
more of the reduced emissions is a local, conventional pollutant. The "downstream" benefits to human health and
their associated economic benefits due to reduced local air pollution are also included among the co-benefits.
Source: U.S. EPA

Specific measures that control two or more harmful emissions at one time (typically within the context of IBS, one
or more of the emissions is a GHG and one or more is a conventional local air pollutant), thus yielding co-benefits.
Source: U.S. EPA

Co-Control Planning
The process of active planning to design and implement integrated measures that achieve co-benefits.
This process may occur within the context of planning new infrastructure development in urban areas, such
as so-called "smart growth" measures  that combine rational land-use plans, high density development, and
public transportation that result in lower  energy use (and thus lower GHG emissions) and improved air quality
as compared to a baseline, non-integrated planning approach. Co-control planning may also occur within a
context of redesigning existing systems to take advantage of co-benefits potential through integrated measures.
Source: U.S. EPA

Concentration Response (C-R) Function
Demonstrates the relationship between the minimum dose or exposure concentration of a toxic substance and
the amount required to produce a detectable response in a test population.
Source: NIEH

Computable General Equilibrium Model  (see also "General Equilibrium Model")
An empirical model that provides outputs that indicate the net impact of an external stimulus (such as a new
policy or a price shock) as it flows through an economy within a general equilibrium framework.

Contingent Valuation (CV)
A survey based on economic methods that is often used to quantify in monetary terms the benefits (or costs) of
an environmental policy. In the context of IBS, some developing country participants have conducted original
CV surveys in order to provide local estimates of the value of reduced risk of morbidity and premature mortality.
Source: U.S. EPA, World Bank, OECD

Conventional Pollutants
Statutorily listed pollutants in the form of organic waste, sediment, acid, bacteria and viruses, nutrients, oil and
grease, or heat. For the most part, the physical/chemical properties and exposure hazards of these substances
are understood well by scientists.
Source: U.S. EPA

A relationship existing between phenomena or things or between mathematical or statistical variables that tend
to vary, be associated with, or occur together in a way not expected on the basis of chance alone.
Source: Webster's Eleventh New  Collegiate Dictionary,  2003
  Appendix B

                                 APPENDIX  B
Cost of Illness (COI) (see also "Human Capital Approach")
A method of analysis of the costs incurred by a society due to a specific disease. Such cost consists of two
components: medical expenditures and lost earnings. In addition to medical expenditures and lost earnings,
some Cost of Illness estimates include a Willingness To Pay component as well as direct costs associated with
receiving treatment.
Source: World Bank

Cost of Lost Productivity
A measure of the total value of goods and services foregone associated with the loss of economically productive
activity resulting from the effects of pollution exposure.
Source: U.S. EPA

Cost-Benefit Ratio
The ratio of total costs of a proposed project to total benefits, with both costs and benefits being discounted over the
life of the project at an annual rate of interest. The difference between the two values is the present value of the net
benefit  identified. In the context of the IBS program, projects may report results using the cost-benefit ratio.
Source: Cooper s Comprehensive Environmental Desk Reference

Cost Effectiveness Efficiency
Cost-effectiveness efficiency occurs when inputs are combined so as to minimize the cost of any given output.
The requirement may also be stated such that output is maximized for a given cost.
Source: World Bank

Criteria Pollutants
Refers to a set of pollutants for which National Ambient Air Quality Standards (NAAQS) in the United States
have been  set. The criteria air pollutants include CO, Pb, NOX, O3, PM, and SO2. These air pollutants are
regulated by the U.S. EPA pursuant to the Clean Air Act.
Source: U.S. EPA
Damage Costs
The cost incurred by repercussions (effects) of direct environmental impacts. For example, such damage costs
can flow from the emissions of pollutants or degradation of land by humans. In environmental accounting, it is
part of the costs borne by environmental agents.
Source: OECD

A representation of facts, concepts, or instructions in a formalized manner, suitable for communication,
interpretation, or processing by humans or by automatic means.
Source: OECD

Data Analysis
The process of transforming raw data into usable information, often presented in the form of a published
analytical article, to add value to a statistical output.
Source: OECD

Data Collection
The process of gathering data. Data may be observed, measured, or collected by means of questioning, as
in a survey or census response. Generally, reliable data are collected in an orderly fashion using consistent
Source: OECD
  Appendix B

                                 APPENDIX  B
The result of the extraction of abiotic resources (non-renewable) from the environment and the extraction of
biotic resources (renewable) faster than they can be renewed.
Source: OECD

Developing Countries
According to the World Bank classification, countries with low or middle levels of per capita GNP. Also
include five high-income economies (Hong Kong (China Special Autonomous Region), Israel, Kuwait,
Singapore, and the United Arab Emirates). These five economies are classified as developing despite their high
per capita income because of their economic structure or the official opinion of their governments. Several
economies in transition (EITs) are sometimes grouped with developing countries based on their low or middle
levels of per capital income and sometimes with developed countries based on their high industrialization.
Greater than 80 percent of the world's population lives in more than 100 developing counties.
Source: World Bank

Disability-Adjusted Life Years (DALY)
A unit used for measuring both the global burden of disease and the effectiveness of health interventions, as
indicated by reduction in the disease burden. It is calculated as the present value of the future years of disability-
free life that are lost as the result of the premature deaths or cases of disability occurring in a particular year.
Source: World Bank

Dose Response
A term referring to how an organism's response to a toxic substance changes as its overall exposure to the
overall substance increases or decreases. For example, a small dose  of CO may cause drowsiness; a large dose
may result in a death. Dose refers to the amount of a toxic substance taken into the body over a given period of
time based on exposure levels.
Source: World Bank, OECD
Ecological Environmental Sustainability
Maintenance of ecosystem components and functions for future generations.
Source: U.S. EPA

Economic Valuation
The practice of estimating the value of a non-market commodity. This term is commonly applied within the
context of estimating the value of human health effects of environmental pollution control measures.
Source: U.S. EPA

The interacting system of a biological community and its non-living environmental surroundings.
Source: U.S. EPA

Achieving the maximum output from a given level of resources used to carry out an activity.
Source: World Bank

Elasticity (see also "Inelasticity")
A measure of the responsiveness of one variable to changes in another.
Source: The Economist
  Appendix B

                                APPENDIX  B
A discharge of a gas or aerosol substance into the atmosphere from smokestacks, other vents, and surface areas
of commercial or industrial facilities; from residential chimneys; and from motor vehicle, locomotive aircraft,
or other non-road engines.
Source: U.S. EPA

Emission Factors
Ratios that relate emissions of a gas or aerosol substance to an activity level that can be easily measured, such
as an amount of material processed, or an amount of fuel used. Given an emissions factor and a known activity
level, a simple multiplication yields an estimate of the quantity of emissions.
Source: U.S. EPA

Emissions Inventory
A list of the amount of gas and aerosols for all sources entering the air in a given time period.
Source: U.S. EPA

Emissions Standard
The maximum amount of discharge legally allowed  from a single source, mobile or stationary.
Source: U.S. EPA

Environmental Costs
Cost connected with the actual or potential deterioration of natural assets including human health due to
economic activities.
Source: OECD

Environmental Effect
The result of environmental impacts on human health and welfare. The term is also used synonymously with
environmental impact.
Source: OECD

Environmental Health Indicators
Indicators that describe the link between environment and health by measuring the health effects due to
exposure to one or  several environmental hazards.
Source: OECD

Environmental Impact
The direct effect of socio-economic activities and natural events on the components of the environment.
Source: OECD

Environmental Impact Assessment (EIA)
An analytical process that systematically examines the possible environmental consequences of the
implementation of projects, programs, and policies.
Source: OECD

Environmentally Sound Technologies
Techniques and technologies capable of reducing environmental damage through processes and materials that
generate fewer potentially damaging substances, recover such substances from emissions prior to discharge,
or utilize and recycle production residues. The assessment of these technologies should account for their
interaction with the socioeconomic and cultural conditions under which they are implemented.
Source: OECD

An illness occurring suddenly in numbers clearly in  excess of normal expectancy, especially of infectious
diseases but applied also to any disease, injury, or other health-related event.
Source: IPCC
  Appendix B

                                 APPENDIX  B
The branch of medical science that studies the incidence, distribution, and control of disease in a population.
Source: World Bank

Environmental Equilibrium
Balance between, and harmonious coexistence of, organisms and their environment.
Source: OECD

A potential health threat to the living organisms in the environment due to the presence of radiation or a pollutant.
Source: U.S. EPA

The positive (beneficial) or negative (harmful) effects that market exchanges have on people who do not
participate directly in those exchanges. Also called "spillover" effects.
Source: World Bank
Fixed Cost
A cost which is entirely independent of the volume of activity.
Source: World Bank

Fossil Fuel
Fuel derived from ancient organic remains (e.g., peat, coal, crude oil, and natural gas).
Source: U.S. EPA

Fugitive Emissions
Emissions not caught by a capture system.
Source: U.S. EPA
Conversion of solid material such as coal into a gas for use as a fuel.
Source: U.S. EPA

Gaussian Dispersion Air Quality Model
In general, the objective of an air quality model is to determine mathematically the effect of source emissions
on ground-level concentrations, and to establish that permissible levels are not being exceeded. Gaussian plume
models assume that concentrations of pollutants associated with a continuously emitting plume are proportional
to the emission rate and inversely proportional to wind speed.
Source: Godish. 1997. Air Quality. 3  Edition

General Equilibrium Model (see also "Computable General Equilibrium Model")
A model of an economy that portrays the operation of many markets simultaneously. The state of general
equilibrium exists when the opposing market forces of demand and supply exactly offset each other and there is
no inherent tendency for change. Once achieved, market equilibrium persists unless or until it is disrupted by an
outside force. Market equilibrium is indicated by equilibrium in price and quantity.
Source: U.S. EPA; Regional Research Institute West Virginia University

General Equilibrium Theory
In the context of climate policy, this theory implies that the various parts of an economic system are
interrelated, and the net effect of an action may be markedly different from the initial (and intended) effect.
Source: RFF
  Appendix B

                                 APPENDIX  B
Global Warming (see also "Climate Change")
An increase in the near surface temperature of the Earth. Global warming has occurred in the distant past as
the result of natural influences, but the term is most often used to refer to the warming predicted to occur as a
result of increased emissions of anthropogenic GHGs. Scientists generally agree that the Earth's surface has
warmed by about 1 degree Fahrenheit in the past 140 years. The Intergovernmental Panel on Climate Change
(IPCC) concluded that increased concentrations of GHGs are causing an increase in the Earth's surface
temperature and that increased concentrations of sulfate aerosols have led to relative cooling in some regions,
generally over and downwind  of heavily industrialized areas.
Source: U.S. EPA, IPCC

Greenhouse Effect
The warming of the Earth's atmosphere attributed to a build-up of CO2 or other gases that allow passage of
incoming solar irradiance but prevent the escape of infrared radiation or heat; some scientists think that this
build-up allows the sun's rays  to heat the Earth, while making the atmosphere impermeable to infrared
radiation, thereby preventing a counterbalancing loss of heat.
Source: U.S. EPA

Greenhouse Gas (GHG)
Gaseous constituents of the atmosphere, both natural and anthropogenic, that allow passage of incoming solar
irradiance but prevent the escape of infrared radiation emitted by the Earth's surface, the atmosphere, and
clouds. Water vapor, CO2, NOX, CH4, and O3 are the primary GHGs in the Earth's atmosphere.
Source: U.S. EPA

Grid Cell
The three-dimensional box-like cell of a grid system; also commonly used to refer to the ground-level
horizontal layer of grid cells over which emissions are allocated for modeling.
Source: U.S. EPA

Ground-Level Ozone
Ozone that is present as a secondary pollutant in the lower atmosphere, where its formation can be enhanced by
other pollutants. It is highly toxic at levels above 0.1 part per million (ppm).
Source: U.S. EPA


Harmonized Measures (see also "Integrated Measures")
Refers to strategies and policies to reduce air pollution and address climate change simultaneously, enhancing
both the environmental and economic effectiveness of these efforts.

Hedonic Method
A regression technique used to estimate the value of certain attributes of a commodity that are not readily known
because they are embedded. This technique can be applied to estimate the wage premium of occupational risk in
order to value changes in the risk of mortality due to measures that reduce human exposures to pollution.
Source: U.S. EPA

Hedonic Wage Risk
A compensation premium received by an employee for bearing occupational risk in a labor market in equilibrium,
estimated through hedonic regression. Such wage differentials include occupations that can be characterized by
various attributes, including the risk of accidental death. This approach may be used to construct estimates of the
value of reduced risk of mortality or morbidity from measures that reduce environmental pollution.
Source: U.S. EPA
  Appendix B

                                APPENDIX  B
Human Capital
The stock of accumulated skills and experience that makes workers more productive.
Source: U.S. EPA

Human Capital Approach (HCA) (see also "Cost of Illness")
Equates the value of a human life to the market value of the output produced by an individual over an
expected lifetime.
Source: World Bank


Implementation Costs
In the context of climate change, costs associated with the implementation of mitigation options. These costs
are associated with the necessary institutional changes, information requirements, market size, opportunities for
technology gain and learning, and economic incentives needed (grants, subsides, and taxes).
Source: IPCC

Income Elasticity of Demand
The percentage change in the quantity demanded of a good or service given a percentage increase in income.
Source: U.S. EPA

Indoor Air Pollution
Chemical, physical, or biological contaminants occurring in the indoor air environment.
Source: U.S. EPA

Inelasticity (see also "Elasticity")
When the supply or demand for something is insensitive to changes in another variable, such as price.
Source: Economist

Integrated Measures (see also "Harmonized Measures")
Policy measures that consider co-benefits and that coordinate the planning and decisionmaking on air quality,
health, economics, and GHGs.
Source: U.S. EPA
Joint Mitigation Action
In the context of IBS, measures that simultaneously, or jointly, reduce local air pollution and GHG emissions.
Source: U.S. EPA
Local Air Pollution
Release of conventional air pollutants and other local air toxics in a given geographical setting.
Source: U.S. EPA

LEAP (Long-range Energy Alternatives Planning System) Model
An energy planning model that simulates the current energy situation for a given area and assists energy
planners with the development of forecasts under selected assumptions.
Source: U.S. EPA
  Appendix B

                                 APPENDIX   B

Margin of Exposure
The ratio of the non-observed adverse-effect-level to the estimated exposure dose.
Source:  U.S. EPA

Marginal Abatement Costs (MAC)
The cost of reducing pollution emissions by an additional unit. It is generally assumed that the MAC increases
as abatement increases. Another approach to MAC also takes into consideration the marginal willingness to
pay for one additional unit of environmental services. As the supply of environmental service is decreased,
the consumer is willing to pay more for one unit of the environmental service.
Source:  U.S. EPA; also includes concepts from the University of Oslo; Madras School of Economics.

Marginal Social Benefit
The benefits associated with producing one more unit of a good or service. When positive externalities are
present,  they may be added to marginal private benefits to obtain marginal social benefits.
Source:  World Bank

Marginal Social Costs
Social costs that represent the total value of resources used to produce one more unit of output of a good or service.
Source:  World Bank

MARKAL Model (Market Allocation Model)
A representation of the economy of a region. The economy is modeled as a system, represented by processes
and physical monetary flows between these processes. These processes represent all activities that are
necessary to provide products and services. Many of these products and services can be generated through
a number of alternative processes. The model contains a database of several hundred processes, covering the
whole life cycle  for both energy and materials. The model calculates the least-cost system configuration. This
system configuration is characterized by process activities and flows.
Source: D.J. Gielen-The MARKAL Systems Engineering Model for Waste Management; CBO

Market Failure
The situation in which a market economy fails to allocate resources efficiently.
Source:  World Bank

A method for combining and integrating the results of independent studies of the effect of a given intervention.
The label is used broadly to mean the averaging of results across studies. In a strict sense, it refers to a defined
method for acquiring reports of randomized clinical trials, rating and culling these reports for quality of the
research, and statistically combining these results of the remaining studies.
Source:  World Bank

Methane (CH4)
A colorless, nonpoisonous  flammable gas created by anaerobic decomposition of organic compounds;
considered a greenhouse gas.
Source:  U.S. EPA

Measures taken to reduce adverse impacts on the environment.
Source:  U.S. EPA

Mitigation Costs
Expenditures required to achieve reductions in the adverse impacts on the environment.
Source:  U.S. EPA
  Appendix B

                                APPENDIX  B
Mobile Source
Amoving producer of air pollution, mainly from various forms of transport such as cars, trucks, motorcycles,
and airplanes.
Source: U.S. EPA

Mobile Source Emissions
Emissions from non-stationary sources. Also, commonly used to designate emissions from on-road
vehicles only (as opposed to "other mobile" sources). This general category includes emissions from different
operational modes.
Source: U.S. EPA

Mobile Source Emissions Model
A tool based on a set of assumptions that seeks to estimate the impact of mobile sources over a given area. This
technique relies on mobile source emission estimation tools and underlying emission factors have been focused on
the estimation of mobile source emissions based on average operating characteristics over broad geographical areas.
Source: U.S. EPA

Periodic or continuous surveillance or testing to determine the level of emissions or pollutant levels  in various
media or in humans, animals, and other living things.
Source: U.S. EPA

Illness or disability, especially when expressed as a rate.
Source: World Bank

Death, usually expressed as a rate per one hundred, thousand, or hundred-thousand.
Source: World Bank

Multiple Benefits
Refers to the complete benefits derived from an environmental policy that is designed to control one type of
emissions while reducing other emissions as well. For example, a policy to reduce CO2 emissions might reduce
the combustion of coal, but when coal combustion is reduced, so too are the  emissions of particulates and SO2.
The benefits associated with reductions in emissions of particulates and SO2 are among the multiple benefits of
reductions in CO2.
Source: U.S. EPA
Natural Pollutant
A pollutant created by substances of natural origin such as volcanic dust, sea salt particles, photochemically
formed ozone, and products of forest fires.
Source: OECD

Natural Resources
A natural asset (raw materials) occurring in nature that can be used for economic production or consumption.
Source: OECD

Net Present Value (NPV)
The difference between how much an investment is worth and how much it costs, discounted to the present.
Source: U.S. EPA
  Appendix B

                                 APPENDIX  B
Net Social Benefits
The social gain that results from an intervention, measure, or scenario when total benefits exceed total costs,
including external benefits and costs.
Source: U.S. EPA

A nitrogen-containing compound that can exist in the atmosphere or as a dissolved gas in water. It may produce
harmful effects on humans and animals.
Source: U.S. EPA

Nitric Oxide (NO)
A colorless gas formed by combustion under high temperatures and high pressures in an internal combustion
engine. It changes into NO2 in the ambient air and contributes to photochemical smog. It is the most thermally
stable of the nitrogen oxides.
Source: U.S. EPA

Nitrogen Dioxide (NO2)
A colored gas that is light yellowish-orange to reddish-brown at relatively low and high concentrations, respectively.
It has a pungent, irritating odor and is relatively toxic and is extremely corrosive due to its high oxidation rate.
Source: U.S. EPA

Nitrogen Oxides (NOX)
Combustible emissions from transportation and stationary sources and a major contributor to the formation of
O3 in the troposphere and acid rain deposition.
Source: U.S. EPA

Nitrous Oxide (N2O)
A colorless gas with a mild, pleasing odor and sweet taste. Its behavior resembles that of oxygen as an
oxidizing agent with combustible substances. It is considered a naturally occurring GHG.
Source: U.S. EPA
Ozone (O3)
Found in two layers of the atmosphere, the troposphere and the stratosphere. In the troposphere (the layer
extending seven to 10 miles up from the Earth's surface), O3 is a chemical oxidant and major component of
photochemical smog. In the stratosphere (the atmospheric layer beginning seven to 10 miles above the Earth's
surface), O3 is a form of oxygen found naturally that provides a protective layer shielding the Earth from the
harmful health effects of ultraviolet radiation on humans and the environment.
Source: U.S. EPA
Particulate Matter (PM)
A form of air pollution that includes soot, dust, dirt, and aerosols. It has readily apparent effects on visibility and
exposed surfaces, can create or intensify breathing and heart problems, and can lead to cancer and premature death.
Source: U.S. EPA

Particulate Matter of Aerodynamic Diameter Less Than or Equal to 10 Micrometers (PM10)
PM10 is PM with a particle diameter of 10 microns and smaller. Small particles can penetrate deeply into the
lungs where they can cause respiratory problems. Emissions of PM are significant from fugitive dust, power
plants,  commercial boilers, metallurgical industries, forest and residential fires, and motor vehicles.
Source: U.S. EPA
  Appendix B

                                APPENDIX  B
Particulate Matter of Aerodynamic Diameter Less Than or Equal to 2.5 Micrometers (PM2 5)
PM2 5 is fine particles of PM that come from such sources as fuel combustion, agricultural burning, and
woodstoves. On November 27, 1996, the U.S. EPA proposed to revise the current primary (health-based)
PM standards by adding new annual PM2 5 standards. In 1997, the U.S. EPA established annual and 24-hour
NAAQS for PM2 5 for the first time.
Source: U.S. EPA

Photochemical Model
An air quality model that simulates the photochemical reactions that occur over an area during each hour of the day
or days for which the model is being applied. Photochemical models allow for the analysis of secondary pollutants.
Source: U.S. EPA

Point Source
A stationary location or fixed facility from which pollutants are discharged or emitted. Also, any single
identifiable source of pollution, such as a pipe, ditch, ship, ore pit, or factory smokestack.
Source: U.S. EPA

Point Source Emissions
Emissions that occur at a specified location from a specific process.
Source: U.S. EPA

Matter or energy whose nature, location, or quantity produces undesired environmental effects.
Source: U.S. EPA

Potential Years of Life Lost (PYLL)
A measure of premature mortality that provides an explicit way of weighting preventable deaths occurring at
younger ages.
Source: OECD

Present (Discounted) Value (PV or PDV)
The value of the stream of returns to be received at future dates, discounted to the equivalent of present dollars.
Source: World Bank

Present Value Cost
The sum of all costs over all time periods, with future costs discounted to the equivalent of present dollars.
Source: IPCC

Purchasing Power Parity (PPP)
A method that uses a common set of prices to value the final output of goods and services in all countries based
on cost of living in order to obtain estimates of national income. The PPP approach provides a more meaningful
way to make international comparisons than do approaches based on exchange rate conversions.
Source: World Bank

Purchasing Power Parity Theory
A theory that the exchange rate between any two national currencies adjusts to reflect differences in the price
levels of the two nations.
Source: World Bank
  Appendix B

                                APPENDIX  B
Quality of Life
A notion of human welfare (well-being) measured by social indicators rather than solely by more quantitative
measures of income and production. Some of the social indicators that are used include health, economics,
politics, environment, aesthetics, and spiritual aspects.
Source: World Bank and OECD

Quality-Adjusted Life Expectancy (see also "Quality Adjusted Life Year")
Life expectancy computed using quality-adjusted life years rather than nominal life years.
Source: World Bank

Quality-Adjusted Life Year (QALY) (see also "Quality-Adjusted Life Expectancy")
A common measure of health improvement used in cost-utility analysis that measures life expectancy adjusted
for quality of life.
Source: World Bank
Relative Risk Assessment (see also "Risk Assessment")
Estimation of the risks associated with different stressors or management actions.
Source: U.S. EPA

Renewable Resource
Natural resources that can be replaced or replenished by natural processes or human action. For example,
fish and forests are potentially renewable natural resources. On the other hand, mineral and fossil fuels are
nonrenewable resources because they are regenerated on a geological, rather than human, time scale.
Source: World Bank

Revealed Preference (see also "Stated Preference")
Within the context of health effects valuation, a method of inferring individuals' WTP for small reductions in
risks to human health among a group. This method is based on statistical analysis of market transactions and
observed behavior, and contrasts with the stated preferences approach.
Source: U.S. EPA

Risk Analysis
The method of evaluation of the probability of the adverse effects of a substance, industrial process, technology,
or natural process.
Source: OECD

Risk Assessment (see also "Relative Risk Assessment")
The qualitative and quantitative evaluation of risk, performed in an effort to define the risk posed to human
health and/or the environment by the presence or potential use of specific pollutants.
Source: U.S. EPA
Secondary Air Pollution
Pollution caused by reactions in air already polluted by primary emissions (from factories, automobiles).
An example of secondary air pollution is photochemical smog.
Source: OECD
  Appendix B

                                 APPENDIX  B
Sequestration (see also "Carbon Sequestration/Sink")
Generally refers to capturing carbon in a natural reservoir, such as the oceans, or a terrestrial sink such as
forests or soils, so as to keep the carbon out of the atmosphere. The biological approaches to sequestration
include direct removal of carbon dioxide from the atmosphere through land-use change, afforestation,
reforestation, and practices that enhance soil carbon in agriculture.
Source: RFF and Sedjo, Roger A., Brent Sohngen, and Pamela Jagger. Carbon sinks in the post-Kyoto world.

Air pollution associated with oxidants present in the atmosphere that, as a result of a temperature inversion
under no-wind conditions, are brought extremely close to the Earth's surface. Smog has led to air pollution
episodes, resulting in serious human illness and death.
Source: U.S. EPA

Social Benefits/Costs
The overall impact of economic activity on the welfare of society. Social benefits/costs are the sum of
private benefits/costs arising from the activity and externalities. In the context of IBS, social benefits include
the value of benefits to human health and other categories of analyzed co-benefits resulting from integrated
measures or scenarios.
Source: U.S. EPA; The Economist

A process or activity resulting in the release of emissions to the atmosphere.
Source: U.S. EPA

Spill-over Effect
The economic effects  of domestic or sectoral mitigation measures on other countries or sectors. Spill-over
effects can be positive or negative and include effects on trade, carbon leakage, transfer and diffusion of
environmentally sound technology, and other issues.
Source: IPCC

Persons or groups who are affected by or can affect the outcome of a policy or project. These can include
affected communities, local organizations, and NGO and government authorities. Stakeholders can also include
politicians, commercial and industrial enterprises, labor unions, academics, religious groups,  national social  and
environmental public sector agencies, and the media.
Source: World Bank

Stated Preference (see also "Revealed Preference")
Using the contingent valuation method, economists can estimate the value placed by individuals on reducing
the risk of environmentally related morbidity by surveying respondents. The practice of understanding people's
WTP to reduce risk by using a survey instrument is considered a stated preference  approach (as contrasted with
a revealed preference approach).
Source: U.S. EPA

Statistical Data
Data from a survey or administrative source used to produce statistics.
Source: OECD

Portion of the atmosphere that is  10 to 25 miles above the Earth's surface.
Source: U.S. EPA
  Appendix B

                                APPENDIX  B
Stratospheric Ozone-Depleting Compounds
Title VI of the U.S. Clean Air Act Amendments (CAAA) regulates certain ozone depleting compounds because
they may destroy stratospheric ozone. These compounds include CFCs, halons, carbon tetrachloride, methyl
chloroform, and hydrochloroflurocarbons (HCFCs). Title VI is primarily designed to limit the manufacture of
these materials, not their use. The pollutants are divided into two classes (Class I and Class II) based on the
dates by which their manufacture must be discontinued.
Source: U.S. EPA

Sulfur Dioxide (SO2)
A heavy, pungent, colorless, gaseous air pollutant formed primarily by processes involving fossil fuel
combustion. Some of the demonstrated health effects resulting from excessive exposure include damage
to the respiratory system as well as aggravation of heart and lung problems.
Source: U.S. EPA

Sulfur Oxides (SOX)
A compound that is comprised primarily of SO2 and SO4.  Some of the known health effects include reduced
lung function and aggravation of existing heart and lung problems.
Source: U.S. EPA
Top-down Models (see also "Bottom-up Models")
Top-down economic models begin with aggregated information and disaggregate as much as they can; In
contrast, bottom-up models begin with disaggregated data and aggregate as far as they can. Top-down models
focus on the economy as a whole and the energy sector insofar as it contributes to emissions, whereas
bottom-up models focus specifically on the demand for energy services and depict only minimal feedbacks into
the larger economy. Top-down models, owing to their economic foundation, are generally designed to answer
questions about how the market responds to changing prices at given levels of GDP growth, while bottom-up
models are designed to determine least-cost strategies for providing energy services.
Source: OECD

Total Cost
All items of cost added together. The total cost to society is made up of both the external cost and the private
cost, which together are defined as the social cost.
Source: IPCC

Transboundary Pollution
Pollution that originates in one country, but by crossing the border through pathways of water or air, is able to
cause damage to the environment in another country.
Source: OECD

An environment in which the objectives of a policy and its legal, institutional, and economic framework; policy
decisions and their rationale; data and information related to monetary and financial policies; and the terms of
agencies' accountability are provided to the public in a comprehensive, accessible, and timely manner.
Source: OECD

The lower atmosphere; the portion of the atmosphere between seven and 10 miles above the Earth's surface
where clouds are formed.
Source: U.S. EPA
  Appendix B

                               APPENDIX  B

Value of a Statistical Life (VSL)
The VSL is the measurement of the sum of society's willingness to pay (WTP) for one unit of fatal risk
reduction (i.e., one statistical life).  Rather than the value for any particular individual's life, the VSL represents
what a whole group is willing to pay for reducing each member's risk by a small amount.
Source: U.S. EPA

Variable Cost
A cost, which is entirely dependent on the volume of activity, as opposed to a fixed cost, which is not affected
by volume.
Source: World Bank


Willingness to Pay (WTP)
The amount that an individual is prepared to pay in order to acquire some good or service may be elicited
from stated or revealed preference  approaches. In the context of the IBS program, WTP also considers the
amount that an individual is  willing to give up to achieve a reduction in the health risk to society of a particular
morbidity or mortality endpoint.
Source: UNEP; U.S. EPA
Years of Healthy Life (YHL)
The duration of an individual's life, as modified by the changes in health and well-being experiences over a life
time. Also, called quality-adjusted life years, or health-adjusted life years.
Source: World Bank
  Appendix B

                                APPENDIX   B
AP-42  	U.S. EPA emissions factors database
APHEBA	Air Pollution Health Effects Benefits Analysis (Chile)
AQM  	air quality management
BAMA	Buenos Aires Metropolitan Area
BAU  	business as usual
BenMAP  	Environmental Benefits Mapping and Analysis Program
BS  	black smoke
CAA  	Clean Air Act (U.S.)
CAT  	Clean Air Initiative
CBO	Congressional Budget Office (U.S.)
CCICED  	China Council of International Cooperation on Environment and Development
CETESB  	(Companhia de Tecnologia de Saneamento Ambiental) Sao Paulo Environmental
                   Agency (Brazil)
CFC	chlorofluorocarbon
CFL	compact fluorescent lamp
CGE	computable general equilibrium
CH4  	methane
CNG  	compressed natural gas
CO	carbon monoxide
CO2  	carbon dioxide
COH  	coefficient of haze
COI  	cost of illness
CONAMA	(Congreso Nacional del Medio Ambiente) National Environment Commission (Chile)
COP	Conference of the Parties of the U.N. Framework Convention on Climate Change
COPD  	chronic obstructive pulmonary disease
C-R  	concentration-response
CV	continent valuation
DALY  	disability-adjusted life years
EF  	emissions factors
EIA  	environmental impact assessment; U.S. Energy Information Administration
EPTRI  	Environmental Protection Training and Research Institute (India)
GDP	gross domestic product
GEF	Global Environment Facility
GHG  	greenhouse gas
GNP	gross national product
HCA  	human capital approach
IAQ  	indoor air quality
ICAP	International Co-controls Benefits Analysis Program (U.S.)
IBS	Integrated Environmental Strategies (U.S.)
ICLEI	International Council for Local Environmental Initiatives
INE  	(Instituto Nacional de Ecologia) National Institute of Ecology (Mexico)
IPCC  	Intergovernmental Panel on Climate Change (UN/WMO)
ISC-3	Industrial Sources Complex Dispersion Air Quality Model
IVE  	International Vehicle Emissions Model
KEEI 	Korea Energy Economics Institute
KEI  	Korea Environment Institute
LEAP	Long-range Energy Alternatives Program
LPG	liquid propane gas
MAC 	marginal abatement costs
MARKAL	market  allocation model
MO  	Manila  Observatory (Philippines)
MOBILE6	U.S. EPA vehicular emissions model
MOE  	Ministry of Environment
  Appendix B

                                 APPENDIX  B
MOEF	Ministry of Environment and Forests (India)
NGO  	nongovernmental organization
NH3 	ammonia
NIEH	National Institute of Environmental Health
NO	nitric oxide
NO2	nitrogen dioxide
NOX	nitrogen oxides
N2O	nitrous oxide
NFS	National Park Service (U.S.)
NPV	net present value
NREL  	National Renewable Energy Laboratory (U.S.)
O3  	ozone
OECD 	Organisation for Economic Co-operation and Development
PDV	present discounted value
PI	principal investigator
PM  	particulate matter
PM25  	particulate matter less than 2.5 micrometers
PM10  	particulate matter between 2.5 and 10 micrometers
PPP 	purchasing power parity
PROAIRE 	(Programa para Mejorar la Calidad del Aire en la Zona Metropolitana de la Valle
                   de Mexico) Program to  Improve Air Quality in the Mexico City Metropolitan Area
                   2002-2010 (Mexico)
PROCONVE	(Programa do Controle da Poluicao do Ar por Veiculos Automotores) Vehicle Air
                   Pollution Control Program (Brazil)
PV	present value
PVFE	present value of future earnings
PYLL	potential years of life lost
RFF 	Resources for the Future (U.S.)
SAES	Shanghai Academy of Environmental Sciences (China)
SEPA	State Environmental Protection Administration of the People's Republic of China
SF6	sulfur hexaflouride
SO2 	sulfur dioxide
SO4 	sulfate
SOX 	sulfur oxides
SOFIA	(Software de Impacto Atmosferico) Atmospheric Impact software (Argentina)
SRMC 	Sri Ramachandra Medical College (India)
STAPPA/ALAPCO . . .State and Territorial Air Pollution Program Administrators/Association of Local Air
                   Pollution Control Officials  (U.S.)
TCE	total control of emissions
TERI  	The Energy and Resource Institute (India)
TSP 	total suspended particulates
UNDP 	United Nations Development Program
UNEP  	United Nations Environment Program
UNFCCC	United Nations Framework Convention on Climate Change
UR-BAT  	Urban Branching Atmospheric Trajectory
USAID  	United States Agency for International Development
U.S. DOE  	United States Department of Energy
U.S. EPA	United States Environmental Protection Agency
USP	University of Sao Paulo (Brazil)
VOCs	volatile  organic compounds
VSL	value of statistical life
WB  	World Bank
WHO  	World Health Organization
WMO	World Meteorological Organization
WRI	World Resources Institute (U.S.)
WTP  	willingness to pay
  Appendix B

                               APPENDIX C
                              IES Process  Tools
This appendix provides a number of helpful tools, including sample templates, meeting summaries, and
agendas, to assist teams in organizing and planning an IES project. The following illustrative items are
included in this appendix:

   • IBS-India scoping meeting agenda (Cl)

   • Workplan template, including a sample project timeline (C2)

   • IBS-Argentina policymakers meeting agenda (C3)

   • IBS-Philippines final policymakers meeting agenda (C4)

   • IBS-Philippines policymakers meeting summary (C5)

   • IBS-Chile final policymakers meeting summary (C6)


The following agenda was developed for the IES scoping meeting held in Hyderabad, India, on February 11-12,
2002. The meeting was hosted by the Environmental Protection Training and Research Institute (EPTRI).

Day 1

Chair: U.S. Environmental Protection Agency (U.S. EPA)

08:3 0-09:00     Registration of Participants

09:00-09:45     Welcoming Remarks: Representatives from Ministry of Environment and Forests, USAID,
               and EPTRI

Chair: EPTRI

09:45-10:00     Discussion of Meeting Objectives and Review of Agenda
10:00-10:30     Introduction to the Integrated Environmental  Strategies (IES) Program
10:30-10:45     IES Chile's Experience in Moving from Analysis to Implementation
10:45-11:00     Discussion and Questions
11:00-11:20     Tea/Coffee Break

Chair: USAID

11:20-12:00     Discussion of Policymakers' Key Considerations in Formulating Air Quality and GHG
               Mitigation Energy Measures

               Discussion will address which air quality issues are of greatest concern, which energy sector
               measures are of most interest, which analytical endpoints (e.g., health effects, economic
               impacts, decrease in pollutant concentrations) are of primary concern, and outreach and
               education to promote integrated policy implementation. Panel discussion with representatives
               from Central Pollution Control Board, the Andhra Pradesh Pollution Control Board, and the
               Municipal Corporation of Hyderabad.

12:00-12:30     General Discussion on Key Air Quality, Energy Sector Measures, Appropriate Analytical
               Endpoints, and Outreach Opportunities Useful for Policymakers

12:30-13:30     Lunch
  Appendix C
IES Process Tools

                                APPENDIX  C
                                IES  Process Tools
Chair: NREL

13:30-14:45     Air Quality and GHG Mitigation Scenarios

               Data and scenarios for the power, industry, residential/commercial sectors. Integrated air
               quality/GHG mitigation measures. Identification and discussion of key issues for project

14:45-16:00     Transportation Sector (presentations by local and international experts)

               Energy, air quality, and planning for improving air quality and reducing GHG emissions;
               transportation planning; identification and discussion of key issues for project implementation

16:00-16:20     Tea/Coffee Break

16:20-18:00     Air Quality Programs and Initiatives (presentations by local and international experts)

               Status of air quality monitoring, emission inventories, air quality regulation and air quality
               modeling; ambient air quality modeling; identification and discussion of key issues for
               project implementation

18:00-18:30     Closing and Day 2 Outline, EPTRI

Day 2

Chair: EPTRI

8:30-9:45       Indoor Air Pollution (presentations by local and international experts)

               Summary of available research on indoor air pollution and GHG mitigation including mitigation
               measures and health impacts in rural and urban areas; indoor air pollution; identification and
               discussion of key issues for project implementation

9:45-10:15      Tea/Coffee Break

10:15-12:00     Air Pollution Health Impact and Valuation Analysis (presentations by local and international experts)

               Summary of available research, key impacts and health effects endpoints, available data
               and data sources for health effects research and information on air pollution health impacts
               valuation efforts; health impact analysis model; identification and discussion of key issues
               for project implementation

12:00-13:00     Lunch

Chair: NREL

13:00-15:00     Breakout Groups Meet and Discuss IES India Approach and Structure
               - Scenarios and measures
               - Ambient air quality modeling
               - Indoor air quality analysis
               - Health effects analysis and economic analysis
  Appendix C
                                                                                 IES Process Tools

                                 APPENDIX  C
                                IES Process Tools
Breakout Groups Report Results of Small Group Discussion to Larger Group

Tea/Coffee Break
Chair: EPTRI

16:30-17:00    Group Discussion on Strategies for Utilizing IES Analytical Results and Implementing
               IES Recommendations in India, U.S. EPA

17:00-17:45    Discussion of lES-India Next Steps (Workplan, schedule, team, deliverables, technical
               assistance), EPTRI

17:45-18:00    Closing Remarks, EPTRI


Most countries participating in the IES program have followed a common template for developing program
workplans. An annotated and condensed outline of a workplan with a short discussion of key elements is
included below. Recognizing that each country's situation is different, this template should be tailored to
account for local conditions and desired outcomes.

Section 1—Introduction

This section should establish the context for the project. Elements of this section should include the background,
history, justification for the project, objectives, technical and policy analysis team, and the project scope.

• Background: Information to support the genesis of the project including current policy environment for air
 quality and climate change, environmental situation, and definition of the problem.

• Project Objectives: Goals, research, policy implications.

• Project Team: Project leaders and coordinators, technical team leaders for each project component, political
 steering committee.

• Project Scope: Clearly defined decisions that outline the analytical boundaries of the project.  Workplans can
 also include detailed summaries of the discussions and decisions made with respect to project scope recorded
 by technical experts at the project-scoping meeting.

    - Time Horizon-Balancing
     The workplan should indicate the time horizon for the analysis (i.e., short-term vs. long-term). Short-
     term studies (looking at a horizon of 2 to 10 yrs) would favor local air pollution policy analysis
     whereas long-term studies (10+ yrs) favor global pollutant analysis.

    - Geographic Considerations
     The geographic  area for the study should be well defined at urban, regional, and/or national scales.

    - Air Pollutants and GHGsfor Consideration
     This section should include a detailed discussion of the  key pollutants and GHGs for analysis, along with
     the justification  for their selection. For example, in most IES projects to date, the analyses have focused
     on PM10 as the primary air pollutant and CO2 as the GHG
  Appendix C
                                                                                  IES Process Tools

                                 APPENDIX  C
                                IES  Process Tools
    - Measures and Scenarios
     Consultation with experts and policymakers should result in the development of a list of potential
     measures that could be analyzed by the IES project. This section should discuss the measures that are
     currently under consideration by policymakers as well as potential alternative "integrated" measures.
     Furthermore, this section should discuss the priority emission sectors that will be analyzed
     (e.g., transportation) and possible alternative scenarios that may be analyzed as part of the project.

    - Health Impact Endpoints
     Based on available  data and studies of hospital admissions, rates of illness, and mortality rates and their
     causes, a list of health impact endpoints for mortality and morbidity effects due to air pollution levels
     should be identified for possible inclusion in the analysis.

    - Quantified Benefits
     There are many types of benefits that could be included in the analysis. IES projects thus far have
     focused on quantifying the economic value of avoided morbidity and mortality and GHG mitigation ben-
     efits; however, other benefits such as reduced traffic congestion, increased visibility, and ecosystem
     health benefits could also be quantified as part of the IES analysis.

Section 2—Activities and Methodologies

For each of the main project components, a specific task-based workplan should be developed in detail. At
a minimum, each component of the workplan should describe the following: analytical objectives, data inputs
and outputs, data sources,  analytical methodologies, and models that will be employed during the analysis. The
workplan should also describe how the different project components will be linked together and how information
will be  exchanged between the different components. The following components should be described in detail:

• Energy scenarios and mitigation measures

• Emission inventories (air pollutants and GHGs) and projected emissions for each scenario

• Air quality analyses including monitoring and modeling

• Health effects analyses

• Economic valuation and benefits analyses

• Cost-benefit analyses, policy analyses,  and ranking of measures

Section 3—Collaboration Activities, Needs for Capacity Development, and
Technical Assistance

The workplan should identify opportunities for collaboration and information-sharing with other related proj-
ects and programs at the national and local levels. These programs could be technical research efforts, policy
analysis projects, and/or other policy processes (i.e., development of air quality management plans or trans-
portation management plans) with which the IES project could share information and provide input to ongoing
policy development processes. In addition, it is important for the project team to identify areas where capacity
development and technical assistance may be needed to improve the outcomes and results of the IES effort.
This part of the workplan has been an important aspect of the IES program, as it has helped prioritize and focus
the provision of technical assistance to the local, in-country technical team. Tasks range from model develop-
ment and analytical  guidance to adoption of key analytical parameters and training.
  Appendix C
                                                                                   IES Process Tools

                                APPENDIX  C
                                IES  Process Tools
Section 4—Identification  of Work Products and Information Dissemination

This section should outline the key products expected from the project along with the mechanisms for
disseminating project results to policymakers and other stakeholders.

    Reports: IES country teams have developed project reports for policymakers, published papers in journals,
    authored articles in local media, and participated in local media events. The workplan should identify the
    kinds of reports and other dissemination tools that IES researchers intend to produce.

    Workshops: Country teams have also organized policymaker workshops and technical review meetings
    for local, national, and international decisionmakers. At these workshops, technical experts typically
    present project findings, obtain critical reviews, seek technical feedback, and provide direct input into
    the decisionmaking processes. Training seminars have also been held to disseminate information on the
    analytical methods and modeling strategies developed, with the hope of replicating the IES framework
    in other cities and/or regions. National plans for such workshops should be identified in the workplan.

Section 5—Development  of Project Management  Plan

IES programs are inherently complex; these multidisciplinary efforts involve multiple stakeholders and experts
from a wide range of disciplines. Effective coordination of both the technical work and the results dissemina-
tion requires a well-developed management plan. Project coordination is a critical bridge for ensuring a coher-
ent linkage between the analytical components of the IES project and results dissemination to decisionmakers
and other stakeholders. In addition to technical coordination, the plan must also interface with the goals of
decisionmakers and the project steering committee. This coordination will ensure that the project provides
meaningful and timely results, adding value to the decisionmaking processes.

Section 6—Project Timeline/Schedule

Finally, the project timeline, which outlines (usually in a graph or chart) the timing of the various analytical
components and their sequential nature will help ensure the smooth flow of information between project
components. Typically, IES projects have taken between 12 and 24 months to complete, depending on the
magnitude and complexity of new research, analysis, models, and methodology development. Many activities
in the timeline can occur in parallel, thereby maximizing project efficiency. However, researchers must be care-
ful to coordinate assumptions, tools, and methodologies to ensure that the final integrated analysis will combine
all of the individual elements into a single, linked framework. Below is an example of an IES project timeline.
Preparation of Action Plan
Collection of Secondary Data
(transportation, AAQ, emissions, etc.)
Screening and Compilation of Data
Air Quality Modeling (preparation,
calibration, data input, model runs)
Report Preparation, Workshops,
Training, etc.
Final Report and Presentations
Final Report
Follow-on Activity Report











  Appendix C
                                                                                 IES Process Tools

                                APPENDIX  C
                               IES  Process Tools

Integrated Environmental Strategies
Policymakers Workshop on Project Results and Report

Venue:         Secretariat of Environment and Sustainable Development
Participants:     60-90 from Argentina, 3-4 from the United States
Language:       Spanish (translation to English)
Documents:     English with Spanish, if applicable


• Present project report, analysis, and results to policymakers and experts from Buenos Aires.

• Obtain feedback from policymakers and experts on project, results, and lessons learned.

• Develop recommendations for follow-up activities, including implementation of projects and continuing col-

• Identify or assess the impact of this work on policy and policy development in Argentina.

08:30-9:00      Registration

09:00-9:30      Welcome and Opening Remarks (representative from Energy or Environment Ministry

09:30-10:00     U.S. EPA's Integrated Environmental Strategies Program: Overview of IES program

10:00-12:15     IES—Buenos Aires Project: analysis and results; presentation of the final report of the project
               by the Buenos Aires Team

10:00-10:15     Scenarios Development

10:15-10:30     Mobile Sources

10:30-10:45     Fixed Sources

10:45-11:00     Break

11:00-11:15     Air Quality Modeling

11:15-11:30     Health Effects Analysis

11:30-11:45     Economic Valuation of Health Effects

11:45-12:15     Conclusions, Questions, and Discussion

12:15-13:30     Lunch

13:30-14:00     Clean Air Initiative (CAI) in Argentina; overview of CAI program in Argentina, including
               accomplishments, current status, future plans, and ideas for collaboration and needs for
               technical assistance in the future.

14:00-14:30     IES in Chile and Mexico; overview of results of the IES  Program for Mexico and Chile

14:30-15:45     Roundtable discussion with Argentine experts to provide comments and feedback on the
               lES-Buenos Aires project, methodology, results, and lessons learned (areas for technical
               improvement), and related experiences in other programs in order to motivate the kind of
               studies conducted by IES.
  Appendix C
                                                                                IES Process Tools

                                 APPENDIX  C
                                IES  Process  Tools
Panel  discussion:

Each panelist is asked to address several previously suggested questions focusing on the usefulness of the inte-
grated analysis project approach and results including specific examples of where and how the integrated work
has been useful:

    1. Comment on how the IES project was used as input for their own work.

    2. How much have the IES results improved over the state-of-the-art?

    3. Is this project likely to help improve future developments related to air quality, health improvement,
      economic valuation of environmental impacts, and greenhouse gas mitigation?

    4. Suggestions for further steps.

15:45-17:00     Experts' considerations on available data to extend the analysis performed by the IES-
                Buenos Aires project.

Panel  discussion:

Each panelist is asked to address several previously suggested questions focusing on the way to improve data
collection and how the integrated work and synergies with other related programs can provide assistance:

    1. Comment on how the IES project has handled available data.

    2. How much can the IES analysis improve the state-of-the-art?

    3. Is this project likely to help improve future developments related to data gathering on emission factors,
      air quality, health, and economic trends?

    4. Suggestions for further steps.

17:00-17:15     Break

17:15-18:30     Roundtable discussion with Argentine policymakers to provide comments and feedback
                on the lES-Buenos Aires project. Panelists share their views on the role and potential
                contribution of integrated analysis studies to assist effective policymaking for air quality
                improvement and GHG mitigation in Buenos Aires.

Panel  discussion:

Each panelist is asked to address several previously suggested questions focusing on the usefulness of the
integrated analysis project approach and results including specific examples of where and how the integrated
work can be useful:

    1. Is this project likely to help improve future policy development related to air quality, health improvement,
      and GHG mitigation? Can you provide specific examples of how this project has led or could lead to the
      development of better information, new institutional arrangements, policy or technical working groups, etc.?

    2. Have new  or related projects been developed to use or improve the methodologies and tools developed
      by this study to aid future policy analysis and development?

    3. Do you believe that this information would be useful to groups  other than the government,  such as
      industry, NGOs, and the international energy and environmental community?

    4. Suggestions for policy recommendation.
  Appendix C
                                                                                   IES Process Tools

                                APPENDIX  C
                               IES Process  Tools
18:30-19:00     Workshop summary and general discussion on potential areas for further collaboration and

               This session includes general discussion with participants (e.g., government, NGO, private
               sector, experts) to summarize various stakeholders' viewpoints on the IES program in Buenos
               Aires, lessons learned, and recommendations for improvement.

               Members of the technical team, the local and national government, the CAI, and the U.S.
               EPA will exchange  ideas for further cooperation on the IES project in Buenos Aires. Ideas
               could include revisions to the air quality management plan for Buenos Aires, inputs to the
               policy planning process, outreach to policymakers and general public, strategies to begin
               implementation of key integrated policies, expansion of IES analysis to other technical areas,
               increase regional collaboration and establish links to a regional center for this analysis with
               participants from the major countries and cities in the  region.

               Policymakers and participants in this session are asked to provide comments and give specific
               examples on future  activities to promote integrated strategies for environmental and public
               health improvement in Buenos Aires.  Please provide recommendations for specific activities
               to promote:

                       1.  Implementation—Activities that would promote implementation of promising
                         and beneficial recommendations to improve human health and air quality.

                      2.  Research—Institutional and analytical improvements that could aid in the
                         development of future policies that will lead to the adoption of IES.

                      3.  Information dissemination—Activities that would encourage the exchange of
                         information about the benefits of integrated strategies among Argentine govern-
                         ment, industry, research, NGOs, and the public, as well as international groups.

                      4.  International Cooperation—Where can international assistance be most useful
                         to assist with carrying out the above activities?

                      5.  Regional cooperation—How to promote increased cooperation among Latin
                         American countries.
Integrated Environmental Strategies—Philippines
Presentation of Results and Policymakers Forum
12 December 2003, Asian Development Bank, Ortigas Center, Pasig City
Organized by the Manila Observatory
with support from the U.S. Agency for International Development (USAID),
and the U.S. Environmental Protection Agency (U.S. EPA)
Venue host: Asian Development Bank

8:00-8:3 0 AM   Registration
Opening Ceremony
Welcome Address
  Appendix C
                                                                                IES Process Tools

                               APPENDIX  C
                               IES  Process Tools
Welcome Address

Opening Remarks
Executive Director, Manila Observatory and Project Director, lES-Philippines

Keynote Address
Secretary, Department of Environment and Natural Resources

Keynote Address
Secretary, Department of Transportation and Communications

Presentation of Preliminary Results

Overview of lES-Philippines
Technical Advisor, lES-Philippines
Associate Professor, University of the Philippines-College of Public Health

Unit I: Scenario Development
Consultant on Transportation Sector,
lES-Philippines and Associate Professor, University of the Philippines NCTS

Unit II: Modeling
Consultant on Air Quality Modeling, lES-Philippines, and Associate Professor, Ateneo de
Manila University

Unit III: Health Affects Analysis

Unit IV: Economic Analysis
Consultant on Economic Analysis, lES-Philippines and Professor, Ateneo de Manila

Summary of Results

11:00-1:00 PM  Workshop/Discussion
               Guidelines to be announced

1:00-1:15       Closing Remarks
               Secretary, Department of Energy

1:15            Lunch


Manila Observatory is compiling comprehensive notes from the policymakers workshop, which will be
distributed in the near future. Following is an interim overview.

Attendance at the workshop was good, with approximately 45 participants, including representatives of the
Department of Environment and Natural Resources, Department of Energy, Department of Health, Department
of Transportation and Communication, the United States Agency for International Development (USAID), the
U.S. Environmental Protection Agency (U.S. EPA), ADB/Clean Air Initiative, Partnership for Clean Air, and
local government officials from Quezon City and Marikina.

After welcoming remarks and a presentation on the IES program and goals of the meeting delivered by the
U.S. EPA and the National Renewable Energy Laboratory (NREL), the IES team delivered a presentation on
the structure of IES analysis in Manila and key results. Because transportation is thought to be the cause of an
  Appendix C
                                                                               IES Process Tools

                                  APPENDIX  C
                                 IES  Process Tools
estimated 70 percent of ambient air pollution in Manila, the IES effort focused on reducing emissions from
mobile sources of pollution. PM10 and CO2 are the focal air quality and GHG emissions analyzes respectively.
The team outlined the transportation scenarios considered, which included improved motor vehicle inspection
system (MVIS), replacement of two-stroke tricycles with four-stroke tricycles, introduction of CNG, introduction
of coco-methyl ester (CME), creation of bike lanes, improved rail transit, introduction of catalytic converters,
traffic demand management, diesel particulate traps, and bans on second-hand engines, as well as combinations
of these scenarios.

The team found that the greatest benefits would be gained from the combination of MVIS, conversion of tricycles
to four-stroke, and improved rail transit. Of course, the cost-benefit assessment (which will be completed in early
January) will provide better guidance on the cost-effectiveness of these measures. However, the scenarios have
been developed to be reasonable and "implementable" in the near term, so it is expected that all these scenarios are
viable, though their costs relative to each other will also be assessed in January. The team also found that the intro-
duction of CME and CNG will have a negligible impact on air quality unless implemented on a far wider scale.

IES analysis found that, if a combination of the three most effective alternative measures were adopted, PM10
levels would be reduced by half of what they would be under a BAU scenario by 2015. It  is estimated that the
health damages from following a BAU scenario would range from US$15  million-$18 million/year.

Under-Secretary Art Valdez from the Department of Energy immediately responded to the IES results
presentation, noting that DOE is already implementing MVIS (Fr. McNamara noted that IES results can
assist DOE in justifying these programs) and that taking on tricycle operators is just not politically feasible.

Participants made several suggestions during an open forum, including the following:

• Emissions of SOx and NOx should be assessed to facilitate analysis of scenarios in other sectors and to
  improve assessment of transportation scenarios (by allowing for the assessment of impact of low-sulphur
  diesel, for instance). Ronald Subida noted that this assessment may be addressed in a future iteration but
  cannot be addressed in the January report.

• While the government is indeed implementing a partial MVIS system, it  should be noted that there will be no
  benefits without stringent enforcement.

• Railway is an expensive option and is perhaps not realistic, despite great potential benefits. Ronald Subida
  replied that the team believed the cost-benefit analysis showed that benefits would be much greater than
  the costs.

• Given the difficulty of creating change at the national government level, the project should engage leaders of
  local government units (LGUs) to encourage and support change at the municipal level in Metro Manila. Mei
  Velas agreed that this was a valid suggestion and thanked the two LGU representatives in the audience.

• One speaker questioned the assumptions made for the growth of tricycles, noting that the real rate of growth
  might be much higher. Karl Vergel responded that the team had made conservative estimates in the absence of
  good forecasts.

• It was suggested that future iterations of the IES analysis could consider more ambitious scenarios to show
  the dramatic difference that clean energy/transportation policies can have. Such scenarios might include tax
  measures, congestion pricing, and the development of major new infrastructure. Mei Velas replied that the
  study in this round had been structured to support decisionmaking in the  short term but that different goals
  were possible in the future.

• The Clean Air Act is underfunded, so may not have much influence on decisionmaking.

• Findings from URBAIR and ADB studies should be referenced in the report, and the team agreed that this
  would be  done.
  Appendix C
                                                                                     IES Process Tools

                                 APPENDIX  C
                                 IES Process Tools
• A participant asked if BAU scenarios took into account policies that are already being implemented, and the
 team replied that this was indeed the case.

• In order to really reduce CO2 emissions, it would be necessary to tax fuels to encourage more efficient use.

• Manila is a place of tightly organized groups, where key stakeholders have formed representative organizations.
 Given this characteristic, it was suggested that social marketing campaigns be used to engage these stakeholders
 and build support for change.

• One participant asked how emission factors were picked. Ronald Subida replied that the team had selected
 factors recommended for use in Manila by the ADB, though these are not based on monitoring or primary
 data-gathering by the ADB. Dr. Subida noted that there are many viable sources of emission factors and noted
 that the team would be transparent in sharing information on the factors used.

• Future iterations of IES analysis might benefit from utilizing work being conducted in Thailand (with
 assistance from Japan) to develop reliable emission factors.

• While the government commitment to CME is a step in the right direction, there are many questions about it
 that remain unanswered. The team agreed, noting that  CME was not one of the scenarios with the greatest
 impact in the IES assessment.

IES-Philippines Technical Team  Meeting

Overall, the initial results of the IES—Philippines team's work are promising. NREL offered detailed
comments on the presentation, which included the following:

• Many of the transportation assumptions being made are perhaps too conservative, leading to a distortion in
 the final recommendations. Since it is understood that  severe data limitations prevent more robust predictions
 about the demand for and use of private cars, tricycles, and jeepneys, this may be an area where primary
 data-gathering in the future could greatly improve the value of analytical results.

• Confidence intervals and value ranges should be given when reporting estimates of health impacts.

• Data from other IES countries (NREL will provide this) should be shared to show that the health effects results
 from the Manila analysis, while high, are consistent with results from  other densely populated Asian cities.

• Emissions inventories could be more prominently mentioned, since compiling this information is a key
 contribution of IES.

• GHG impacts should be noted, both in terms of tons reduced and cost per ton of carbon equivalent.

• The  final report should list areas where more or better data (primary data-gathering) would add significant
 value to this and other efforts.

• Include SO2 and NOX in a future iteration of the  IES analysis to better assess the impacts of diesel emission
 reduction strategies and alternative scenarios for stationary sources of pollution.

• Explain why different scenarios are assessed for  impacts for different times.

• Present SPM results without breaking them down by mode (e.g., number of jeepneys, number of buses), as
 these bar graphs are too busy to be understood. Perhaps the final report could have both aggregate results and
 the breakdown of results.

• Include SPM and GHG targets on the slide itself to give context for the emission forecasts under BAU and
 alternative scenarios.

• Need a better way to present "optimal" mortality results, as the slide  has a lot of information.
  Appendix C
                                                                                    IES Process Tools

                                APPENDIX  C
                               IES  Process Tools
• The slide and comments on different transportation options for different areas within Metro Manila are very
 interesting; perhaps this could be developed further to offer specific suggestions (e.g., "based on IES analysis,
 it seems like that restricting tricycles would be particularly important in municipality X"). This could support
 implementation of results at the LGU level within Metro Manila.

• MVIS measures should be described more comprehensively so that people understand and so that it involves
 implementation and enforcement as well as testing.

It was agreed that team members would send their written sections to Ronald Subida by 9 January; he in turn
will assemble the final report by the end of January. USAID, the U.S. EPA, and NREL will provide comments
by mid-February, and the final report will be produced by the end of February.

USAID Meeting

Cecile Dalupan and Jose Boy Dulce, of USAID/Philippines said that USAID is very pleased with the results
of the IES analysis  and is impressed with what the team has been able to accomplish.  However, USAID does
not have funding to support further work. Dalupan and Dulce are interested in searching for funds, but there is
no guarantee that these efforts will be successful. Dalupan and Dulce said that USAID is interested in keeping
the team together to do further analysis, but it is not clear if this will be possible. USAID/Philippines have
authorized Manila Observatory to use some funds from the Climate Change Information Center budget to
complete the proposed "road show" of briefings to government agencies and bodies.

Partnership for Clean Air  Forum on Industry and Transportation

Information from key presentations:

Rolando Metin, Under-Secretary, Department of Environment and Natural Resources  (DENR):

• Under the Clean Air Act, DENR is creating airshed governing boards for Metro Manila and other areas.

• DENR is also finalizing attainment and non-attainment areas in 2004.

• DENR is developing emission fees for industrial dischargers.

• DENR is issuing operation permits and asking for compliance plans where necessary.

• DENR is currently reviewing emissions standards  and wants to develop health-based standards.

• DENR is considering developing an emissions trading program, but this is not yet well-developed.

• DENR is looking  at the introduction of MTBE with guidelines to protect ground water.

Dr. Alabastro, PhilExport:

• Industry wants regulatory certainty as soon as possible.

• Industry wants relaxation of environmental laws that would have low impacts.

• Industry wants to  make sure measures required by government are cost-effective.

Dr. Desiree Narvaez, Department of Health, presented information on the health impacts of transportation-
related emissions. She referenced IES results as part of this presentation.

Involvement of Policy Makers :  ICAP  in  the Chilean Policy-Making Context

The following diagram summarizes the institutional arrangements of the Chilean government agencies that are
involved in environmental issues and implementation of mitigation measures:
  Appendix C
                                                                               IES Process Tools

                                 APPENDIX  C
                                IES Process Tools
Figure C-1. Institutional Structure for Climate Policy and Implementation in Chile1
           I                         I
 Ministry of Foreign Affairs      Ministry of Economy
                                      Secretary General
                                      of the Presidency
   Chilean Delegation to
   Climate Negotiations
   Membership includes
     National Conama
National Commision
    on Energy
Interministerial Committee
                                         Advisory Committee on Climate
                                      Change Membership includes Ministry
                                         of Foreign Affairs and National
                                             Comission on Energy

                                         Metropolitan Region CONAMA
                                                 Regional CONAMAs
The Minister of Foreign affairs is the policymaker for the climate change negotiations. The National Conama's
Advisory Committee on Climate Change includes representation by the Ministry of Foreign Affairs. National
greenhouse gas (GHG) mitigation goals would be adopted by the Ministry of Foreign Affairs, with input from
the Advisory Committee on Climate Change and the Chilean negotiating team. It should be noted, however,
that national policies declared at the highest levels and implemented throughout all government agencies are
rare, especially in environmental policy. The technical review of these goals would occur through the National
and Regional CONAMAs and Secretary of Energy. The National CONAMA sets local air quality mitigation
goals, which the Regional CONAMAs implement.

On the GHG mitigation side, the International Co-controls Benefits Analysis Program (ICAP) has built
connections to the COP6 negotiating team and the CONAMA Advisory Committee through Juan Pedro Searle,
who can draw on the ICAP results in his work in both of these groups. Members of these GHG policymaking
groups have also been engaged through specific events, including a COPS ICAP side-event and the
policymakers meeting in October 2000.

Among regional CONAMAs, which are the implementing agencies for air pollution mitigation measures,
the Santiago Metropolitan Regional CONAMA is the most advanced in addressing environmental and energy
policy issues. It frequently turns to the team of Dr. Luis Cifuentes for policy analysis, so he can use the ICAP
project experience to discuss strategies for Santiago that incorporate both air quality and GHG mitigation.
Strong connections have thus been established between ICAP and the important parts of the Chilean policy-
making institutions. While the ultimate decisionmakers for national climate policies are not directly engaged,
the ultimate decisionmakers for local air quality mitigation goals can be.

Implications for Policymaking: Applications and  Limitations of Results

In October 2000, ICAP results were presented and discussed in several contexts in Santiago, Chile. The
discussions revealed the applications and limitations of the ICAP program to date for policymaking. Based on
participation in these events and discussions, three important stakeholders emerged:
1 Cifuentes et al. December 2001. International Co-controls Benefits Analysis Program.
  Appendix C
                                                                                  IES Process Tools

                                  APPENDIX  C
                                 IES  Process  Tools
1) A core of government technical employees, academic researchers, and representatives of non-governmental
  organizations who are familiar with climate change issues, who endorse the validity of the co-benefit princi-
  ple and support the need for development of integrated strategies to address local environmental concerns
  and GHG mitigation. Within government, many of these people are key technical staff to the climate nego-
  tiators and Interagency Climate Change Committee.

2) Representatives of business interests who are deeply concerned about economic impacts of,  and seek techni-
  cal solutions to meet, local air quality goals.

3) Local air quality decisionmakers who have very limited resources to address urgent air quality concerns, and
  who are not worried about GHG mitigation.

The first event was a policymakers meeting consisting of a Seminar on Co-Benefits of Mitigating Air Pollution,
and discussion in a Policymakers Roundtable, on October 20, 2000. At this meeting the results of the analyses
were presented, and an assessment was made of the hypothesis that integrated strategies can address both
GHG and local air pollution more effectively than strategies developed separately. The roundtable participants
represented key institutional stakeholders  for the development of integrated policies, including the National
Commission on Energy (CNE), the National Environmental Commission (CONAMA), the Foreign Ministry
(RR. EE.), the  Energy Research Program (PRIEN), and the United Nations Development Program (UNDP).
No representatives of the Metropolitan Region CONAMA attended the meeting.

During the roundtable, Juan Pedro Searle moderated a one-half hour discussion of the following questions:

• How can climate change and air pollution policies be harmonized?

• What is the usefulness of this information for policymakers, considering climate change objectives?

• How can decisionmakers use this information to formulate energy policy?

• Is this type of information useful to make climate change issues more relevant in the opinion of the public
  and politicians?

• Does this work help increase recognition of the benefits that the carbon offset projects would have  to attract
  investment in technologies that reduce local air pollution?

Decisionmakers thought the analysis was helpful in considering complex factors when coordinating different
goals. The participants observed that this kind of study can show where resources and policies  should be
directed, and they learned to avoid adopting measures that have lower co-benefits.

Directing international resources was raised as an important issue. For the consideration of international
investors, the participants suggested that Chile may wish to develop a portfolio of projects that meet both goals.
This could help organize input from multilateral and bilateral assistance projects and industries, and help target
funds for climate change that could assist with local goals, such as the air Decontamination Plan of Santiago.
Directing international resources to target such harmonized policies and measures would be particularly
important if a global carbon offset program were established.

In the development of harmonized policies, it was recommended that consideration should not be limited to
air quality and  GHGs, but that additional factors should be addressed, including social issues, economic issues,
and quality of life. Participants cited the need for increased interministerial cooperation, especially between the
National Commission on Energy (dependent on the Minister of Economy)  and the National Commission on the
Environment. The legal framework separates these policy issues and presents a challenge to the development
of integrated strategies for local air pollution and GHG mitigation. Also, meeting air quality goals may not be
possible without using some measures that will increase GHG emissions.
  Appendix C
                                                                                     IES Process Tools

                                 APPENDIX  C
                                 IES  Process Tools
The second event was the Clean Air Initiative Mini-Course. During this event, representatives of businesses
cited the expense of meeting air quality objectives and called for advanced technologies to assist in achieving
these goals. Financial considerations are extremely important to this group, and GHG objectives would be of
interest primarily if financial advantages could be gained. Also, some participants expressed their concerns
about a developing country worrying about global climate change, which has been considered the responsibility
of developed nations.

The third policy-relevant event was a discussion with Gianni Lopez, director of the Metropolitan Region
CONAMA. Given the pressure to meet the air quality goals, and the limited availability of funding to support
mitigation measures, the director is interested in studying the opportunities that may arise from considering the
reduction in GHG via carbon offsets, for example.

Recommendations to Improve ICAP Results for Policymaking

Some conclusions can be obtained from the policymakers meeting and mini-course, which both had active par-
ticipation. In the meeting, a participant raised questions about targeting those measures that have positive bene-
fits, in that some of them may occur without intervention. This suggests the need for a clearer understanding of
the barriers to those measures. A more accurate understanding of costs and benefits of the mitigation measures
would also help decisionmakers in designing integrated strategies. While  this is an old topic that has been the
center of a long-standing debate among engineers and economists, it is crucial in these kinds of analyses.

Another meeting participant suggested that the analysis to date overemphasizes Santiago, which influences
policy outcomes.  For example, residential wood burning in the south of Chile uses unsustainable fuel sources
and causes local air pollution. Addressing this situation would require different policies from the Santiago
situation. While data limitations were recognized, as energy data in the south are not disaggregated, data
availability should not distort policy development, and it was suggested that nationwide case studies should
be conducted.

It was also recommended that further analysis could compare the Santiago Decontamination Plan with an
integrated strategy, in terms of both expense and likely implementation speed.

In terms of affecting decisions actually being made, there is a much greater possibility of influencing policy-
makers in charge of the local pollution abatement plans, especially on Santiago's Decontamination Plan. These
local decisions are being made now. By showing the potential benefits of an integrated strategy, it is  possible to
affect the decisionmaking process, to consider both the local and global implications of the  decisions.
  Appendix C
                                                                                    IES Process Tools

                               APPENDIX  D
                           Analytical  Resources
This appendix provides additional information and guidance for IBS technical teams performing any one of
the four analytical steps included in the IBS methodological framework. The following sections are included:

• A Rough "Back-of-the-Envelope" Estimate of Co-Benefits (Dl)

• Tables (D2)

  • Table D-l Overview of Energy/Emissions Models used in IES.

  • Table D-2 Summary of Available Air Quality Models.

  • Table D-3 Summary of Health Effect Studies and Methodologies from Literature.

• Equations (D3)

  • For Health Effects Analysis:

    - Calculating the Health Effects of a Given Concentration of PM

    - Calculating the Change in Expected Number of Health Effects

  • For Economic Valuation Analysis:

    - Deriving the Value of a Statistical Life (VSL) using the Human Capital Approach (HCA).

    - Transferring willingness to pay (WTP) point values.

A Rough  "Back-of-the-Envelope"  Estimate of Co-Benefits (D1)

One approach to beginning a co-benefits project is to start with a simple calculation of co-benefits. Choose one
emissions reduction measure, and make a rough estimate of its  costs of implementation and its reductions in
emissions of local air pollutants and greenhouse gases (GHGs). These reductions in emissions can then be
translated into ambient air quality (concentration) improvements and reduced health impacts by making some
simple assumptions. For an initial calculation, the following assumptions can be used:

• The air is dispersed uniformly within a mixing volume over the metropolitan area.

• The pollutant is conservative; it is not created or destroyed chemically in the atmosphere (primary PM10
  can be a good application).

• All people in  the study region are exposed to the same concentration of pollutants.

• Mortality is the one health endpoint of importance.

Using these assumptions, a simple estimate of monetized health benefits can be made:

Health Benefits =

A Emissions  x  A Concentration  x  A Health Risk  x  Population  x   A Monetized Benefit
                A Emission      A Concentration                   A Avoided Health Incident

Note that A Health Risk is the risk for an individual and that (A Health Risk x Population) gives the total
number of avoided health incidents.

This calculation, which is rough at best, should be able to fit on one sheet of paper. Where information might
be missing, it is acceptable to use data from other studies conducted elsewhere, or to estimate a range of
plausible values.
  Appendix D
Analytical Resources

                               APPENDIX  D
                          Analytical  Resources
This simple calculation can be a foundation for organizing team discussions on two subjects:

1) How the analysis is relevant for policy decisions

  Having calculated the cost of the action, you now also have the estimated health benefits and the reduction
  of GHG emissions. The following questions can be discussed:

  • How can this information inform decision-making?

  • With this information estimated for several emissions reduction measures, how can those measures be
  compared against one another?

  • Once the study is completed, how might the end results be presented to decision-makers?

2) How this simple analysis can be improved through contributions oflES team members

  The following questions can be discussed:

  • Where are the greatest uncertainties in this simple calculation?

  • What are the most critical assumptions?

  • How can those assumptions and uncertainties be resolved by investigating particular aspects of the problem?

  • In what ways might the analysis be biased too low or too high?

  • Who has relevant data or methods at hand that can aid understanding of certain parts of the problem?

Tables (D2)

Table D-1 Overview of Energy/Emissions Models  used in IES
                                 Retired input Data
       Variables Adjusted
        Under Different     Result (Output)
        Policy Scenarios
  Energy and Power Evaluation Program—Model for Analysis of Energy Demand (ENPEP-MAED)

  For more information, see 
Bottom-up model that
projects future electricity
generation of power
plants within a study
region and calculates
corresponding future
GHG emissions based on
the Energy: Prospectiva
2000 Energy Report.


- Energy demand
estimates (considers
economic growth).

- Importance of different
generation modes (how
much energy is produced
by nuclear, hydroelectric
plants, etc.).

- Location of power plants,
dispatch (utilization of
each type of plant —
utilization factors).
- Efficiency of and fuel
used by each plant.
- Emissions factors.
- Increased use of
hydropower plants.

- Reduction in
electric energy
demand (increased
efficiency and
energy saving

- Fuel substitution
(increased use of
natural gas).


Only con-
cerned with
related to
(not other
related to

  Appendix D
Analytical Resources

                                   APPENDIX   D
                              Analytical  Resources
Table D-1 Overview of Energy/Emissions Models used in IES (continued)
   Model Description/IES     Emissions
     Projects Used In       Examined
Required Input Data
   Variables Adjusted
     Under Different
    Policy Scenarios
  Result (Output)
  MARKAL (Market Allocation Model)
  • China (Shanghai)

  For more information, see 
  Bottom-up model that
  depicts the evolution of a
  specific energy system at
  the national, regional,
  state or province, or
  community level over a
  period of 40 to 50 years.
S02       - Useful energy demand by
NOV       final devices.

          - Energy efficiency of device.

          - Data about energy and
          energy transportation tech-
          nologies, including life span.

          - Constraint of energy
  Long Range Energy Alternative Program (LEAP)
  • China (Beijing)           • Korea            • Brazil

  For more information, see 
                     - 30 energy demand
                     sectors with 22
                     energy carriers; 30
                     materials; 28
                     processes; and 173
                 No feedbacks
                 in model
                 impacts on
                 energy prices
                 and energy
Bottom-up model
that forecasts energy
consumption by sector
and projects national
energy demand by
summing sectoral
energy consumption.
Emission factors are
used to calculate total


- Demand characteristics
for each sector.

- Demographics and
population projections.

- Technology use.

- Emissions factors.

Efficiency improve-
ments in technolo-
gies used in each

- Energy
and GHG
by sector (in
1000 TCE).

-Annual TSP
and PM10 emis-
sions, by sector
(in kg).
Assumes that
relative patterns
of energy use in
each region of
analysis do not
change for any
reason other
than the impact
of energy poli-
cies in the reduc-
tion scenarios.
Table D-2 Summary of Available Air Quality Models
        Model Description/
        IES Projects Used In
Variables Adjusted
 Under Different
 Policy Scenarios
Result (Output)      Limitations
  Source Apportionment Method

  For more information, see 
Calculates the change in PM
concentrations due to changes in
primary pollutant emissions by:

- Estimating the fraction of PM2 5
concentrations in the study area
attributable to each primary pollutant.

- Using monitoring data combined
with current and future year
emission inventories for the various
primary pollutants.


Data on the relationship
between PM2.5 concen-
trations and primary
pollutants for the area
of study.

Future year
PM levels.

Assumes contri-
bution of each
primary pollutant
is constant over
time. Source
vary from region
to region.

  Appendix D
                              Analytical Resources

                                 APPENDIX  D
                             Analytical  Resources
Table D-2 Summary of Available Air Quality Models (continued)
        Model Description/
       IES Projects Used In
  r    as
  SofIA Model: Software de Impacto Atmosferico

  For more information, see 
  Projects air pollutant concentrations
  in the atmosphere in a 3-D volume
  covering the city and its suburbs
  using an Eulerian framework.

  Calculates changes in atmospheric
  pollutant concentrations between
  modeled scenarios.

  Covers a wide range of air pollution
  sources typical of urban areas,
  including transportation, residential,
  commercial and industrial sectors,
  open burning, and dust resuspension.
  Box Model

  For more information, see 
Energy demand
projections (based
on energy efficiency

Emissions projections
from power generation
(based on cleaner energy
resources — hydropower)

average con-
of selected
(PM10, NOX)
for baseline
and differ-
ence between
the scenarios
shows varia-
tion in con-
the study area
Can be bro-
ken down by
source type
(point, area,
and line
Cannot model
secondary air

Calculates the change in PM
concentrations by:

- Using an equation that describes
PM concentrations as a function of
daily air emissions and atmospheric

- Using ordinary least squares regres-
sion to estimate the relationship
between daily PM concentrations as a
function of daily concentrations of CO
and S02, and wind speed.
- Using these estimated coefficients,
multiplied with emission estimates,
to project the ratio of current and
future year levels of PM.
- Using these ratios to adjust
current year monitoring data.


-Ambient monitoring
data (hourly measure-
ments of CO, SO,, daily
measurements of PM10
and PM25).

- Surface meteorological
data (hourly wind speed,

average fall
and winter
daily concen-
tration of
PM10 and
ug/m^) until

Pollutant such as
ozone and sec-
ondary aerosols
are not modeled.

Very simplified
model may not be
as accurate as
other models.

  Appendix D
                                       Analytical Resources

                                     APPENDIX   D
                                Analytical  Resources
Table  D-2  Summary of Available Air Quality Models (continued)
         Model Description/
        IES Projects Used In
Model    Emissions
 Type     Examined
                                                         Variables Adjusted
                                                           Under Different
                                                          Policy Scenarios
Result (Output)      Limitations
  ATMOS/UR-BAT (Urban Branching Atmospheric Trajectory) Model
  • China (Shanghai)

  For more information, see 

                                                         - Geographical data
                                                         (high resolution map).

                                                         - Meteorological condi-
                                                         tions (vertical profiles of
                                                         temperature and wind
                                                         speed and precipitation

                                                         - Emissions data (with
                                                         location of sources).
                                            mean annual
                                            ambient pol-
                                            lutant con-
Multi-layered trajectory model that
computes the dispersion, concen-
tration, and deposition of pollutants
based on the idea of a new "puff"
being generated from each source
at set time intervals and placed in
the proper atmospheric vertical
layer according to source type and
hour of the day.

UR-BATis a modification ofATMOS
with a smaller spatial grid resolution
and more frequent puff releases.
ATMOS is used for larger scale stud-
ies, and can account for the contri-
butions of distant sources.  UR-BAT
is used for local pollutant sources.
  California Institute of Technology (CIT) Model
  • Brazil          • Mexico

  For more information, see 
                Only TSP and
                secondary partic-
                ulates) from fuel
                combustion and
                fugitive dusts
                from paved roads
                are considered.
                monitoring data
                are needed to
                assess modeling
  Studies the dynamics of pollutant       Eulerian
  transformation and transport in the      3-D photo-
  atmosphere. Calculates the distribu-     chemical
  tion of emissions in a region by solv-     grid
  ing equations of mass conservation.
  Considers emissions, chemical reac-
  tions, and the transport and deposi-
  tion of gases involved in the produc-
  tion of photochemical oxidants.
-Current air quality levels.

-Current emissions.

- Emission inventories.

- Meteorlogical data.
- Fuel consumption
estimates (by sector).
hourly con-
centrations of
0 PM
U3> nvl10'
I\IOX, S02, CO,
and other

For application
in the Sao Paulo
region, there was
a lack of surface
and upper-air

  Models-3/Community Multiscale Air Quality (CMAQ) Model
  • China (national assessment)

  For more information, see 
Evaluates the impact of air quality
management practices for multiple
pollutants at multiple scales and
helps scientists better understand
and simulate chemical and physical
interactions in the atmosphere.

3-D photo-


- Current emissions

- Future emission

- Meteorological data
generated by 3-D
meteorological models.

hourly con-
of 03, PM10,
t.o' X'
S02, and
some toxic
VOCs as
well as acid
and visibility
over selected
Requires signifi-
cant amount of
emissions and
input data and
could be very

  Appendix D
                                                                                         Analytical Resources

                                    APPENDIX   D
                               Analytical  Resources
Table D-2 Summary of Available Air Quality Models (continued)
         Model Description/
        IES Projects Used In
Result (Output)
  Industrial Source Complex 3 (ISC3) Model
  • China (Beijing)           • India

  For more information, see 
  Class of models that assume air pol-
  lutant concentrations from elevated,
  individual emissions sources are dis-
  tributed horizontally and vertically in
  a 3-dimensional "bell-shaped"
  Gaussian plume. The Gaussian dis-
  tribution functions require estimates
  of horizontal and vertical (y and z
  axes) dispersion coefficients.
                                 air pollutant
                Models primary pol-
                lutants only and
                generally assumes
                that pollutants are
                stable and do not
                chemically react or
                settle-out. Does not
                take into account
                complex meteoro-
                logical data and per-
                forms best in no-
                wind or constant
                wind conditions
                with flat topography.
  Urban Air Model (UAM)
  • Not currently in use for IES

  For more information, see 
Simulates cell-to-cell transport
(both horizontally and vertically)
to derive concentrations for 23
species of air pollutants. The
model incorporates a condensed
photochemical kinetics mechanism
for urban atmospheres.

3-D photo-


- Meteorological data.

- Terrain data.

- Emissions data.

- Carbon Bond IV

03 concentra-
tions over
lasting one
or two days.

Requires signifi-
cant amount of
emissions and
input data and
could be very
Has not yet been
applied and evalu-
ated for PM
  Appendix D
             Analytical Resources

                                 APPENDIX  D
                            Analytical  Resources
Table D-3 Summary of Health Effect Studies and Methodologies from Literature
. . . Relative Risk Country that
Health Endpoint Country Pollutant Measurement functional ^ 5Q ^3 ^^ thjg
increase Study
Mortality (premature)
Total non-accident
S. Korea
S. Korea
S. Korea
Daily average
Daily average
Daily average
S. Korea
S. Korea
S. Korea
  Asthma aggravation
                            S. Korea
Daily average
                                                                                         S. Korea
     Health Endpoint
                                            Pollutant   Measurement
                      Relative Risk
                      functions) or
                       Odds Ratio
                      functions) per
                        50 pg/m3
 Country that
Used this Study
Mortality (premature)
Popeetal (1995)
Krewski et al
Dockery etal
Woodruff etal
Schwartz et al
XuX etal (1994)
Xu Z et al
Zmirou etal
Zmirou etal
151 U.S. cities
6 U.S. cities
6 U.S. cities
86 U.S. cities
6 U.S. cities
Beijing, China
10 European
10 European
Annual median
Annual average
Annual average
Annual average
Daily average
Daily average
Daily average
Daily average
Daily average
i 	 ,

Argentina, China
1 The notation OR is used to indicate that an outcome is expressed as an odds ratio instead of relative risk. N/A is used to indicate that
 the outcomes reported in the study could not be converted to relative risk in a straight-forward way.

2 Values reported here for studies used by Argentina and Chile were calculated by converting the (3-coefficient reported in the country's
 IBS report to relative risk (RR) or an odds ratio (OR). Values for Korea are given as reported in their study. Values for China were taken
 from the original reference study, when available.
  Appendix D
                          Analytical Resources

                         APPENDIX D
                      Analytical Resources
Table D-3 Summary of Health Effect Studies and Methodologies from Literature
      Health Endpoint
Pollutant  I Measurement
Relative Risk
functions) or
 Odds Ratio   Country that
(logistic func-  Used this Study
 tions) per
 50 pg/m3
Hospital Admissions
Chronic Obstructive Pulmonary
Chronic Obstructive Pulmonary
All respiratory
All respiratory
Congestive Heart Failure
Ischemic Heart Failure
Sheppard etal
Word ley etal
Prescott et al
Schwartz (1997)
Word ley etal
Poloniecki etal
Schwartz &
Morris (1995)
Schwartz &
Morris (1995)
St. Paul,
20 U.S. cities
St. Paul,
20 U.S. cities
Seattle, USA
Edinburgh, UK
20 U.S. cities
Tucson, USA
London, UK
Detroit, USA
Detroit, USA
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Emergency Room Visits
Chronic Obstructive Pulmonary
Seattle, USA
Black Smoke,
S02, CO
Daily average
Daily average
 Chronic Morbidity
Chronic Bronchitis
Chronic Bronchitis
Chronic Bronchitis
Chronic Bronchitis
Abbey et al
Schwartz et al
Ma etal (1992)
Jin etal (2000)
53 U.S. cities
Benxi, China
Annual average
Annual average
 Appendix D
          Analytical Resources

                         APPENDIX  D
                     Analytical  Resources
Table D-3 Summary of Health Effect Studies and Methodologies from Literature
      Health Endpoint
                                    Pollutant  Measurement
                      Relative Risk
                      functions) or
               Functional   Odds Ratio   Country that
                Form   (logistic func-  Used this Study
                       tions) per
                       50 pg/m3
Acute Morbidity
Acute Bronchitis
Acute Bronchitis
Acute Bronchitis
Lower Respiratory Symptoms
Upper Respiratory Symptoms
Asthma Attacks
Asthma Attacks
Asthma Attacks
Asthma Attacks
Asthma Attacks
Asthma Attacks (children)
Asthma Attacks (children)
Asthma Attacks (children)
Shortness of Breath (children)
Any of 19 Respiratory Symptoms
Dockery et al
Dockery etal
Jin etal (2000)
Schwartz et al
Pope et al
Whittemore &
Korn (1980)
Hiltermann etal
Neukirch etal
Gielen etal
Ostro et al
6 U.S. cities
24 cities in USA
and Canada
Benxi, China
6 U.S. cities
Utah Valley,
Los Angeles,
Santiago, Chile
Wijkaan Zee,
Paris, France
Paris, France
Los Angeles,
Los Angeles,
Annual average
Annual average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
Daily average
 Appendix D
Analytical Resources

                         APPENDIX  D
                     Analytical  Resources
Table D-3 Summary of Health Effect Studies and Methodologies from Literature
      Health Endpoint
                                    Pollutant  Measurement
                      Relative Risk
                      functions) or
               Functional   Odds Ratio   Country that
                Form   (logistic func-  Used this Study
                       tions) per
                       50 pg/m3
:::;^;^^1«0JWi^:;;]: : : : : : : : : : : : : : : : : : : : : : : : : : : : : : : \&
Work Loss Days
Restricted Activity Days
Minor Restricted Activity Days
Ostro and
Daily average
Daily average
Daily average
Argentina, Chile
Argentina, Chile
Child Medical Visits
Child Medical Visits
Ostro et al
Xu XP et al
Santiago, Chile
Beijing, China
Daily average
Daily average
 Appendix D
Analytical Resources

                                 APPENDIX  D
                             Analytical  Resources
Equations (D3)
The following are equations that can be used to complete a variety of analytical steps within the IBS
methodological process.

Economic Valuation

Deriving the Value of a Statistical Life (VSL) using the Human Capital Approach (HCA)

This derivation requires calculating the present value of future earnings (PVFE) by applying the following
formula for each age range:
(1)    PVFEi = ^j> (alive)! • p(working)> • Income. •

       p (alive)/  is the probability of a person of age i to be alive at the age j,

       p (working)/  is the probability of a person of age i to be working at the age j,

       Income-  is the expected income of a person at the age j,

       g   is the growth rate of per capita income,

       r  is the discount rate, and

       T   is the expected retirement age3.

It is important to note that considering the probability of being employed is especially critical in developing
countries, where the unemployment rate is often higher than in developed economies.

Data for p(alive) come directly from the survival function (I) reported in  actuarial tables:
Income information is also generally available locally, but income per capita growth rate (g) and the discount
rate (r) are more difficult to assess locally, especially when dealing with the long-run.4 An average of the PVFE
for the relevant age range yields the corresponding VSL.
3 The HCA, while perhaps the only option for obtaining local values in a developing country setting, yields a poor second best estimate
 of WTP for mortality. It does not measure ex ante WTP and therefore in the strictest sense cannot really be used to arrive at a measure
 of VSL. It is, however, used to value averted deaths in the absence of better information. It is important to note that there are prob-
 lems with this approach since there are no values for unemployed or elderly people or children.

4 The choice of the discount rate is a controversial issue, especially when dealing with environmental costs that justify its inclusion in the
 sensitivity analysis (Portney and Weyant, 1999). Note that in the United States the discount rate used by public  agencies for benefit-cost
 analyses of public investments is 3 percent or 7 percent (set by Office of Management and Budget). In the European Union, a rate
 between 2 and 7 percent is recommended (EU 1999a and 1999b). In developing countries, higher rates are often used (for example, in
 Chile it is 10 percent, down from 12%).
  Appendix D
Analytical Resources

                               APPENDIX  D
                           Analytical  Resources
Transferring WTP Point Values

The generally accepted way to transfer WTP point values is by adjusting them by the ratio of per-capita income
according to the following formula:
(3)    WTP, = WTP, •  /^ncome,
          KP      tte  I
                      \ Income,
       k = health effect

       p = policy site

       s = study site

       Income is the per-capita income of each site

       € is the WTP income elasticity (generally assumed constant in time)
The two income figures must be expressed in the same units. The World Bank publishes estimates of national
gross domestic product (GDP) per capita adjusted for the purchasing power of the local currency in the local
economy.5 This purchasing power parity (PPP) GDP expresses all incomes in terms of what they can buy and
so avoids issues of currency exchange rates and interest rate fluctuations. The value of the elasticity is also
important because lower values imply that people with less income are willing to pay relatively more for
environmental goods than people with higher income (note that epsilon = 0 implies no adjustment at all).
In general, the elasticity is less than 1 (reflecting that WTP is not a luxury good, as one might think), with
a range of values from 0.466 to 2.3.7
5 For more information, visit the World Bank's International Comparison Program at .
6 Mrozek J.R. and L.O. Taylor. 2002. What determines the Value of Life? A Meta-Analysis.
7 Bowland B.J. and J.C Beghin. 2001. Robust Estimates.
  Appendix D
Analytical Resources

                                APPENDIX  E
                   Funding Tools  and Resources
This appendix provides valuable information about funding sources for environmental projects in developing
countries and about models that can be used to assist in finance and investment decisions. The information con-
tained in this appendix is not intended to be exhaustive and does not imply endorsement of any institution,
organization, or source of funding.


This section of the appendix contains brief descriptions of funding sources that are applicable to  environmental
projects in developing countries. These descriptions were accurate as of November 2004; the sources described
are subject to regular change, however, and the Web sites included here should be checked for the most recent
information. All references to dollars ($) indicate U.S. dollars, unless otherwise indicated.

Multilateral Development Banks and Institutions

A number of multilateral development banks (MDBs) provide financial support and professional advice for
economic and social development activities in developing countries. MDBs provide financing through long
term loans based on market rates, very long term loans with interest well below market rates (often termed
credits), and grants (mostly for technical assistance, advisory  services, or project preparation).

Other institutions and funds with more narrow memberships and areas of interest also have been established for
development purposes or have a development mandate. Additional entities of interest to developing countries
(not discussed in this appendix) include the European Investment Bank (EIB), International Fund for
Agricultural Development (IFAD), Islamic Development Bank (IDE), Nordic Development Fund (NDF),
Nordic Investment Bank (NIB), Corporation Andida de Fomento (CAF), Caribbean Development Bank (CDB),
Central American Bank for Economic Integration (CABEI), East African Development Bank (EADB), and
West African Development Bank (BOAD).


   The World Bank Group consists of five closely associated institutions:

   1. The International Bank for Reconstruction and Development (IBRD) focuses  on reducing poverty in
    middle income and credit-worthy poorer countries by providing loans linked to market rates, guarantees,
    and nonlending  services.

   2. The International Development Association (IDA) provides zero interest loans (credits) to the world's
    poorest countries, especially in the areas of primary education, basic health, and water supply and sanitation.

   3. The International Finance Corporation (IFC) furthers  economic development through the private sector.

   4. The Multilateral Investment Guarantee Agency (MIGA) provides  guarantees to foreign investors
    against losses caused by noncommercial risks such as expropriation, war, and civil disturbances.

   5. The International Centre for Settlement of Investment Disputes (ICSID) provides international
    facilities  for conciliation and arbitration of investment disputes.

The term "World Bank" refers specifically to the first two institutions listed—the IBRD and the IDA. The
following sections provide additional information on the World Bank and IFC only.

   World Bank

While the IBRD focuses on middle-income countries, and the IDA focuses on the poorest developing countries,
some countries are eligible for a blend of IBRD and IDA funds. Seven of the eight countries currently in the IES
  Appendix E
Funding Tools and Resources

                                 APPENDIX  E
                    Funding  Tools and  Resources
program are eligible for IBRD funding: Argentina, Brazil, Chile, China, Republic of Korea, Mexico, and the
Philippines. None of the current IBS countries is eligible solely for IDA funds. Although it is one of the poorest
developing countries, India is eligible for a blend of IBRD and IDA funds because of its relative credit-worthiness.

The financial services provided by the World Bank include lending instruments; cofinancing, trust funds, and
guarantees; and grants. Most investment projects use Specific Investment Loans (SILs) or Sector Investment
and Maintenance Loans (SIMs). Cofinancing refers to funding committed by an external official bilateral or
multilateral partner, an export credit agency, or a private source in the context of a specific Bank-funded project.
Trust funds enable the Bank, along with bilateral and multilateral donors, to mobilize funds for investment
operations, as well as debt relief, emergency reconstruction, and technical assistance. Guarantees promote
private financing in borrowing member countries by covering risks the private sector is not normally ready to
absorb or manage. Grants provide seed money for pilot projects with innovative approaches  and technologies.

The World Bank provides funding for three innovative efforts to reduce GHGs: the Prototype Carbon Fund
(PCF), the BioCarbon Fund, and the Community Development Carbon Fund (CDCF).

  International Finance Corporation (IFC)

The IFC is the largest multilateral source of debt and equity financing for private sector projects in the develop-
ing world. It has helped develop, structure, and implement a number of private equity funds designed to target
the environmental sector.

Described in the following sections are two IFC units of particular note in the context of IBS: the
Environmental Division of the Technical and Environment Department and the Small and Medium Enterprise

  Environmental Division

  The Environmental Division consists of three units:

  1. The Environmental and Social Review Unit, which reviews and monitors the impact of IFC investments.

  2. The Environmental Projects Unit, which develops innovative projects to address environmental concerns
    and serves  as IFC's implementing agency for the GEF.

  3. The Financial Markets Unit, which reviews, monitors, and provides technical assistance to financial
    intermediaries and conducts internal and external environmental training programs.

  Small and Medium Enterprise Department

  The Small and Medium Enterprise Department seeks to promote local small business growth in developing
  nations. This work is carried out by Project Development Facilities (PDFs) around the world and by the
  Department's Capacity Building Facility (CBF), in partnership with experienced external organizations and
  other World Bank Group partners.

  Through the PDFs, the IFC and its partners provide local entrepreneurs with technical assistance needed
  to build commercially viable businesses and to take other broader initiatives to develop sustainable and
  dynamic small and medium enterprises (SMEs). The facilities help SMEs attract necessary financing for
  their ventures, giving priority to projects with the potential to develop self-sustaining enterprises, generate
  employment,  increase skills, and stimulate export earnings. Nine PDFs are now in operation: the African
  Management  Services Company, Africa Project Development Facility, China Project Development Facility,
  Mekong Private Development Facility, Southeast Europe Enterprise Development, South Pacific Project
  Development Facility, North Africa Enterprise Development, South Asia Enterprise Development Facility,
  and Indonesia Enterprise Development Facility.
  Appendix E
Funding Tools and Resources

                                APPENDIX   E
                    Funding  Tools and  Resources

The African Development Bank Group is a multinational development bank supported by 77 nations. It
contains three institutions:

  1. The African Development Bank (ADB), whose principal functions are to:

    • Make loans and equity investments for the economic and social advancement of the member countries in

    • Provide technical assistance for the preparation and execution of development projects and programs.

    • Promote investment of public and private capital for development purposes.

    • Respond to requests for assistance in coordinating development policies and plans of the member
     countries in Africa.

The ADB also gives special attention to national and multinational projects and programs that promote regional
integration. The ADB's operations emphasize agriculture, public utilities, transport, industry, health, and educa-
tion. Its concerns cut across sectors, such as poverty reduction, environmental management, gender main-
streaming, and population activities. Most ADB financing is designed to support specific projects. The ADB
also provides program, sector, and policybased loans, however, to enhance national economic management.
The ADB lends at a variable lending rate calculated on the basis of the cost of funds which it borrows.

  2. The African Development Fund (ADF) provides development financing on concessional terms
    to low-income member countries that are unable to borrow on the nonconcessional terms of the ADB.
    Reducing poverty is the main aim of ADF development activities in borrowing countries. ADF finances
    projects, technical assistance, and studies.

  3. The Nigeria Trust Fund (NTF) provides below-market financing for projects of national or regional


The Asian Development Bank (ADB) aims to improve the welfare of the people of Asia and the Pacific, with a
particular focus on alleviating poverty. Its projects and programs cover a wide variety of sectors and emphasize
economic growth, human development, gender development, good governance, environmental protection,
private sector development, and regional cooperation.

The functions of the ADB are to:

  • Extend loans and equity investments to its developing country members.

  • Provide technical assistance for planning and executing development projects and programs and for
    advisory services.

  • Promote and facilitate investment of public and private capital for development.

  • Respond to requests for assistance in coordinating development policies and plans for its developing
    country members.

Most ADB loans are made to members with a higher level of economic development.

ADB also manages a number of special funds, including the Asian Development Fund (ADF), the Technical
Assistance Special Fund, and the Japan Special Fund. It channels grant financing, provided by bilateral donors,
to support technical assistance and soft components of loans.
  Appendix E
Funding Tools and Resources

                                  APPENDIX  E
                    Funding Tools  and  Resources
ADF is the major source of concessional funding within the ADB. It provides loans at below market rates to
member countries with a low per capita gross national product and limited debt-repayment capacity.

Although the vast majority of ADB financing goes to governments, direct assistance is provided to private
enterprises through equity investments and loans without government guarantees. In 2001-2002, ADB's
lending to the private sector totaled $145 million for four loans, and it approved four equity investments in
the private sector, totaling $35.5 million. ADB also provides credit guarantees, partial risk guarantees, and
commercial co-financing facilities.


The European Bank for Reconstruction and Development (EBRD) was established in 1991 to support the
development of a private sector in the countries of central and eastern Europe and the former Soviet Union. It
is the largest single investor in the region and invests primarily in private enterprises, usually with commercial

Investments in large projects, generally no smaller than 6 5 to 15 million, can include various types of loans,
equity, and guarantees. Among other criteria, the project must have good prospects for being profitable and
include significant equity contributions, in cash or in kind, from the project sponsor. The EBRD does not
subsidize projects, and its loans are based on current market rates.

Many projects  are too small to be funded directly by the EBRD. To give entrepreneurs and small firms greater
access to finance, the EBRD supports financial intermediaries, such as local commercial banks, microbusiness
banks, equity funds, and leasing facilities. Investment criteria are consistent with EBRD policy, but financial
intermediaries make independent decisions about which SMEs they fund.


The InterAmerican Development Bank Group (IDE Group) consists of the InterAmerican Development Bank
(IDE), the Multilateral Investment Fund (MIF),  and the InterAmerican Investment Corporation (IIC).

   The InterAmerican Development Bank

   The IDE provides loans and technical assistance using capital provided by its member countries, as well as
   resources obtained in world capital markets through bond issues. Most loans are at interest rates linked to the
   cost of resources in these capital markets. The two main objectives of the IDE, as set out in its institutional
   strategy, are 1) poverty reduction and social equity and 2) environmentally sustainable growth.

   The IDE only finances projects in Latin American and Caribbean countries that are members of the institu-
   tion. Entities eligible to borrow directly from the IDE include national, provincial, state, and municipal gov-
   ernmental; autonomous public institutions; and civil society organizations that have a government guarantee.

   Up to 5 percent of outstanding IDE loans and guarantees can directly finance private infrastructure projects with-
   out government guarantees. The projects are in such sectors as energy, transportation, sanitation, communica-
   tions, and capital markets development. Cofinancing from commercial banks and other investors can comple-
   ment IDE loans. The IDE also provides partial credit and political risk guarantees for private sector projects
   financed with private debt. Finally, the IDE's multi-sector loans to national financial institutions backed by gov-
   ernment guarantees finance credit programs for a range of businesses, including micro enterprises and SMEs.

   The IDE offers a broad set of programs oriented to sustainable development, including energy and the envi-
   ronment. One program of potential significance in the IES context is the Sustainable Markets for Sustainable
   Energy (SMSE) Program. The purpose of this program is to expedite the development of long-term markets
   for sustainable energy and urban transportation services in Latin America and the Caribbean. The SMSE
  Appendix E
Funding Tools and Resources

                                  APPENDIX  E
                    Funding Tools  and  Resources
  Program focuses on those services and technologies that are not curerently mature market participants,
  including end-use energy efficiency, nonconventional renewable energy, and sustainable urban transportation.
  The SMSE Program works with the IDE's operating departments to develop and integrate feasible sustainable
  energy and urban transportation projects into their pipeline activities. SMSE's activities include providing
  technical support in the development of such projects and working with donors to provide the funds necessary
  to define and develop such projects.

  Examples of the types of projects the SMSE Program develops include:

  • Fostering a market for energy efficiency and related services to industries in Latin American and Caribbean
    countries to reduce costs, improve product quality, and enhance product competitiveness.

  • Integrating energy-efficiency services into a competitive retail market for energy.

  • Nurturing the provision of offgrid renewable energy services to remote rural areas.

  • Encouraging the development of high-quality, clean public transportation services from private companies
    in municipal  and urban areas.

  The Multilateral Investment Fund

  The MIF is a $1.3 billion grant and investment facility with a general mandate to improve the climate for
  private sector growth in Latin America and the Caribbean. Special emphasis is placed on development of
  small enterprises that have $3 million to $5 million in sales and fewer than 100 employees. Since 1994, the
  MIF has approved 27 small business investment funds, three micro-finance investment funds,  and eight
  direct investments in financial intermediaries. Of particular note in the context of IES are the CleanTech
  Fund, E&Co, EcoEnterprises Fund, Latin American Clean Energy Services Fund (also referred to as the
  ESCO Fund), and North America Environmental Fund. While all of these funds are supported substantially
  (often primarily) by the MIF, they are described later in this appendix under private sources of funding.

  The Inter American Investment Corporation

  The IIC is a multilateral investment institution whose mandate is to promote the economic development of
  its Latin American and Caribbean member countries by financing private enterprises. It seeks to provide
  financing to companies that do not have access to medium or long-term financing from the capital and finan-
  cial markets. To fulfill its mission, the IIC provides long-term financing in the form of direct loans, direct
  equity or quasi-equity investments, lines of credit to local financial intermediaries for onlending in the form
  of smaller loans, agency lines of credit with local financial institutions for joint lending, investments in local
  and regional private equity funds, and guarantees for and investments in capital markets offerings.


The Global Environment Facility (GEF) helps developing countries fund projects and programs that protect the
global environment. GEF is the official financing mechanism for the United Nations Framework Convention on
Climate Change, the United Nations Framework Convention on Biological Diversity, the United Nations
Framework Convention on Combating Desertification, the Stockholm Convention on Persistent Organic
Pollutants (POPs), and the Montreal Protocol. It is a unique international collaborative effort that provides grant
and concessional  funding to address six global concerns: 1) biodiversity loss; 2) climate change; 3) degradation
of international waters; 4) ozone depletion; 5) land degradation; and 6) persistent organic pollutants. GEF  funds
the incremental costs associated with transforming  a project with national benefits into one with global benefits.

Established in 1991, the GEF has allocated $4 billion in grants and leveraged an additional $12 billion in co-
financing to support more than 1,000 projects in more than 140 developing countries and those with economies  in
transition. In August 2002, 32 donor countries pledged nearly $3 billion to fund the GEF for the next four years.
  Appendix E
Funding Tools and Resources

                                 APPENDIX   E
                    Funding  Tools  and  Resources
The GEF organizational structure includes the Assembly, the Council, a Secretariat, three Implementing
Agencies, and the Scientific and Technical Advisory Panel (STAP). The work program is implemented through
three Implementing Agencies—the United Nations Development Programme (UNDP), the United Nations
Environment Programme  (UNEP), and the World Bank—in a manner reflective of their different areas of expert-
ise and missions. UNDP plays the primary role in ensuring the development and management of capacity-build-
ing programs and technical assistance projects. UNEP plays the primary role in catalyzing the development of
scientific and technical analysis and in advancing environmental management in GEF financed activities. The
World Bank plays the primary role in ensuring the development and management of investment projects.

GEF operations are organized into the following three broad categories:

   1. Enabling activities: Projects that fulfill essential communications requirements of a treaty or convention,
     provide a basic and  essential level of information to enable policy and strategic decisions to be made, or
     assist planning that identifies priority activities within a country.

  2. Operational programs: Conceptually integrated sets of projects that achieve a global environmental
     objective in one of the six areas of concern previously identified. As of May 2000, there were 12 operational
     programs: four in biodiversity, four in climate change (specifically, Removal of Barriers to Energy
     Efficiency and Energy Conservation, Promoting the Adoption of Renewable Energy by Removing Barriers
     and Reducing Implementation Costs, Reducing the Long-Term Costs of Low  Greenhouse Gas Emitting
     Energy Technologies, and Promoting Environmentally Sustainable Transport), three in international waters,
     and one in Integrated Ecosystem Management.

  3. Short term response measures: Projects that yield short-term benefits at low cost but are not expected to
     yield significant strategic or programmatic benefits.

Funding options are organized into six categories:  1) full size projects, 2) medium sized projects, 3) enabling
activities, 4) project preparation and development facility, 5) small grants program, and 6) the SME program.
The SME is a partnership with the IFC, an affiliate of the World Bank, and is addressed in more detail earlier
in this appendix.

Although most GEF funding is directed to government agencies, any individual or group may propose a
project idea if:

  • The country in which the activities are to occur is eligible for funding.

  • The project reflects national or regional priorities and has the support of the country or countries involved.

  • The project improves the global environment or advances the prospect of reducing risks to it.

Country eligibility to receive funding is determined in two ways: 1) Developing countries that have ratified the
relevant treaty are eligible to propose biodiversity and climate change projects; 2) Other countries, primarily
those with economies in transition, are eligible if the country is a party to the appropriate treaty and is eligible
to borrow from the World Bank or receive technical assistance grants from UNDP.

Project ideas from proponents should be addressed to the government concerned, through the GEF Focal Point
within the government, and to one of the Implementing Agencies. The choice of agency to approach is up  to
the government and/or the project proponent, and proponents might wish to consult the GEF Focal Point first.
A list of country Focal Points and their contact information is available on the GEF Web site. GEF projects are
developed and implemented by one of the Implementing Agencies, in consultation with country governments.

Several existing projects engage private firms, private industries, and associations in one or more components
of the project. More than  12 climate change projects funded by the GEF involve participation of energy service
companies (ESCOs) for the delivery and maintenance of electricity in both grid and nongrid types of systems.
Seven rural energy projects make use of local electricity cooperatives, many of which are owned and managed
by small-scale entrepreneurs.
  Appendix E
Funding Tools and Resources

                                 APPENDIX   E
                    Funding  Tools  and  Resources
Additional information on funding, including eligibility criteria, procedures, and timeframes for project propos-
als, can be found on the GEF Web site.

Private Sector Sources

A number of private sector sources also invest in environmentally beneficial projects. Many of these sources
receive significant support from public institutions, such as MDBs.


The CleanTech Fund is a private equity fund conceived of and supported by the IDE. It targets clean technolo-
gy companies in Latin America for investment, including small-scale energy generation, energy-efficiency,
and water supply projects. It has a target capitalization of $20 million to $35 million and is dedicated to making
investments in SMEs in five main sectors, which have been identified as the most promising for development
in Latin America: 1) effluent, residue, and waste transformation; 2) recycling; 3) energy efficiency; 4)
renewable energy; and 5) transport efficiency.


E&Co is a U.S.-based group that provides business development services and seed capital to economically,
socially, and environmentally sustainable energy enterprises in developing countries. Its mission is to create
viable local enterprises that deliver affordable and clean energy to those in need. To date, the group has
supported more than 60 enterprises in Africa, Asia, and Latin America.

E&Co provides early stage investment ($25,000 to $250,000) in either loans or equity to enable entrepreneurs to
further develop their approach or begin implementation or construction of projects. Investments typically reflect
near market terms and conditions, but E&Co will tolerate a higher level of risk without seeking classic venture
capital returns. Projects must have the potential to be self sufficient and to attract private investment in the next
stages of the development cycle. Where appropriate, assistance is provided in identifying cofinanciers and/or
later stage funders and works with the sponsor in preparing and presenting submissions to these organizations.


The $10 million EcoEnterprises Fund offers venture capital to environmentally and socially responsible busi-
nesses in Latin America and the Caribbean. It also provides limited technical assistance funds to provide busi-
ness advisory services to prospective projects. The Fund invests in ventures at all stages of development with
sales revenues up to $3 million. Preference is given to businesses that are unable to secure financing from con-
ventional sources due to their small size, the innovative nature of their business, and/or the financial risks
involved. All ventures are required to have a nonprofit environmental and/or community organization as a col-
laborator. Involvement may take the form of equity interests, profit sharing, capital payments, fees, royalties, or
other arrangements. The nonprofit may also play an ongoing advisory role, such as providing environmental
monitoring and evaluation services. If necessary, the Fund will match prospective ventures with an appropriate
nonprofit partner.


The purpose of the $25 million to  $50 million Latin American Clean Energy Services Fund, which is sponsored
by FondElec Group, is to provide financing for innovative companies that  employ energy-efficiency measures
or utilize renewable energy for generating power. More specifically, the Fund  makes equity or quasiequity
investments in small innovative companies that offer energy  services to other  companies, providing access to
  Appendix E
Funding Tools and Resources

                                 APPENDIX  E
                    Funding Tools and Resources
financing and technical expertise to help them use energy efficient measures or renewable energy for generat-
ing power. The Fund targets potential investments in countries that have shown advances in energy efficiency
and renewable energy technology projects, such as Brazil and Mexico.


The North America Environmental Fund, L.P. (NAEF) is a $36 million private equities fund that promotes
the development of the  environmental industry in the United States, Canada, and Mexico. The NAEF targets
a broad spectrum of environmental opportunities in areas with potential growth, including air pollution
control, water treatment, remediation, recycling, hazardous and solid waste management, and power generation.

The Fund's focus is on the creation of environmental business opportunities that can produce superior financial
and strategic results for portfolio companies and investor partners. It seeks to make equity investments in either
U.S., Canadian or Mexican environmental companies, as well as joint ventures, strategic alliances, and technol-
ogy transfer opportunities among established environmental companies in the three countries.

The NAEF was jointly created by Nacional Financiera, S.N.C.—the largest development bank in Mexico; the
Overseas Economic Cooperation Fund, a quasi-governmental entity in Japan; and Ventana, a global private
equities firm.


Solar Development Group (SDG) is a source of capital and strategic business development support for
developing country enterprises in the  off grid solar energy service sector with potential for profitable growth.
Eligible companies include:

   • Retailers or distributors of solar home systems or other related products.

   • Renewable energy service companies, providing equipment on a fee-for-service basis.

   • Banks and leasing companies with consumer credit programs for photovoltaic solar systems.

   • System integrators.

   • Importers of solar products.

   • Local equipment assemblers and manufacturers of solar modules and system components.

The group consists of two entities:

   1. Solar Development Capital is a commercial private equity fund that seeks commercial rates of return. It
    makes debt and equity investments structured according to the financial need and cash flow capabilities of
    the company. Solar Development Capital encourages joint coinvestment with other parties and typically
    exits from its investments after a five- to seven-year period. The size of the investments generally range
    from $100,000 to $2 million.

   2. Solar Development Foundation is a nonprofit organization that provides support, ranging from $5,000
    to $100,000, to help companies prepare for substantial growth and attract future capital. These business
    development  services can be financed through low-interest loans and/or small grants.
  Appendix E
Funding Tools and Resources

                                 APPENDIX  E
                    Funding Tools  and Resources

This section of the appendix contains brief descriptions of seven models that can be used to analyze financial,
economic, and environmental features of potential investment projects. These models include:

  • Environmental Manual for Power Development

  • Energy and Environment Financial Analysis and Cost Evaluation System


  • ProForm

  • Renewable Energy Technologies Financial Model

  • RETScreen International


All the models are in the public domain and most are available for free. Most are also fairly user-friendly,
with a familiar spreadsheet-based (usually Excel-based) interface. These models can be helpful to a variety
of individuals and institutions interested in projects that contribute to pollution abatement, including project
developers, financiers, government agencies, international institutions, and donor agencies.

The basic concepts of project finance are common to most infrastructure projects. These include calculation
of various financial indicators such as net present value (NPV), internal rate of return (IRR), and cash flow
analysis. The models evaluated here are able to perform these functions and, to varying degrees, they also han-
dle issues specific to energy-related projects, such as calculation of fuel costs, transmission costs, possibilities
for fuel switching, and calculation of emissions. Some are also able to take into account risk and uncertainty.

Certain models better serve some of the diverse goals mentioned above than others. For example, the
Environmental Manual (EM) contains a database of the costs of several typical plants, including emission
control costs. Such information is often hard to find, which can be an obstacle to performing realistic project
evaluation. INFRISK is a specialized model that deals with risk and uncertainty analysis. It requires some
understanding of simulation techniques and perhaps is most useful for projects where a large element of
economic risk is present. RETScreen International is widely used among project partners who may be geo-
graphically dispersed. This model would be a useful tool for project managers and lenders who are interested
in oversight of a project from afar. Selected project information could also be placed in a more public domain
(such as a Web site) where interested stakeholders could view certain financial information. RETScreen is
a well supported software with extensive online help, special courses, and an online textbook available.

Environmental Manual  (EM) for  Power Development

The Environmental Manual (EM) for Power Development is a computerized tool that identifies environmental
and cost implications of projects in the areas of energy, transport, and non-power activities. It is both a database
for information on environmental and cost aspects of energy and transport technologies, as well as a tool  to
compare scenarios involving these technologies. It was developed in cooperation with the World Bank and
other donor agencies, especially for use in developing countries. The database contains cost information on
technologies and fuels in developing countries. It can be used to evaluate the environmental impacts of energy
projects, identify control options and suitable project alternatives and analyze the trade-offs between economic
and environmental costs. It can be run to compare single plants as well as entire electricity and transport
systems of a region or country.

Inputs: Energy demand,  supply options available, environmental standards, choice of emission control
       technologies (can make use of pre-defined EM datasets on costs of typical technologies).
  Appendix E
Funding Tools and Resources

                                 APPENDIX  E
                    Funding  Tools and  Resources
Outputs:  GHG and local air pollutant emissions, solid wastes, and land use changes by sector, and associated
         internal and external costs of projects. Includes fuel-cycle analysis. Results are presented graphically
         as well.

Software Requirements:  Windows 95 or higher. Currently EM version 1.4 is available; 2.0 is under development.

Additional information and free download are available at .

Energy and Environment Financial Analysis and Cost Evaluation System

The Energy and Environment Financial Analysis and Cost Evaluation System (E2/FINANCE) can assist in
evaluating the profitability of energy efficiency and process improvement projects such as pollution prevention
investments. Users can evaluate a single project or compare several project options. The system contains
detailed cost categories, and an online manual is available. For advanced analyses, E2/FINANCE allows for the
definition of variable operating costs and capital investments in multiple years.

Inputs:   Project lifetime, tax rates, operating costs, investment costs, inflation rate, escalation rate for costs,
         revenue data, energy service rate structure.

Outputs:  Cash flow report, profitability report including financial indicators like NPV, IRR, discounted pay-
         back, and a tax deduction report. The energy module also tracks annual operating and maintenance
         costs and energy consumption, allows for a fuel switching analysis, analysis of energy efficient
         retrofits, new equipment purchase comparisons, and rate schedule comparisons.

Software/Hardware Requirements:  Window 3.1 or Windows 95 (Pentium recommended for fast calculation),
                                5 MB disk space, 8 MB RAM.

Additional information and free download are available at .


INFRISK is a tool for computer risk analysis of infrastructure project finance transactions. It quantitatively
measures and  analyzes project risks and can also serve as a tool for raising awareness and building expertise in
the application of modern risk management techniques. Several sources of risk such as tariff structure, demand
forecasts, and the costs of a project can be analyzed. The exposure to a variety of market, credit, and perform-
ance risks can be examined from the perspective of key contracting parties such as the project developer, the
creditor, and the government.

Inputs:   Macroeconomic parameters (tax rate, depreciation rate, discount rate), construction costs (period,
         total costs, allocation of costs to periods), risk variables (for the revenue stream, operations and main-
         tenance costs, projected construction costs), debt capital information, and equity capital information.

Outputs:  Multi-period value-at-risk analysis for key decision variables like NPV, IRR, debt service coverage
         ratio and government tax revenues; deterministic scenario analysis; probabilistic simulation of out-
         comes. Two main types of output: simulation analysis and economic viability analysis. Charts are
         also available.

Software/Hardware Requirements:  Works in conjunction with Microsoft Excel 97 or higher. A Users Guide
                                is provided.

Additional information is available at . The model is available
for purchase from the World Bank InfoShop at .
  Appendix E
Funding Tools and Resources

                                  APPENDIX  E
                    Funding Tools  and  Resources
ProForm is a spreadsheet-based tool designed to support a basic assessment of the environmental and financial
impacts of renewable energy and energy efficiency projects. It can be used for renewable energy projects
(electricity generation or non-electric energy production) and efficiency projects that save electricity and/or
fossil fuels. It does not support engineering calculations of the energy production of a technology or expected
energy savings from energy efficiency technologies.

Inputs:    Basic performance and cost data for the technology to be installed, number of units expected to be
          installed in each year and data on baseline technology that will be displaced as a result of the project.
          Data on costs of fuel inputs and of fuel use and electricity generation. Also any data on carbon cred-
          its, grants, or tax credits associated with the project.

Outputs:  Basic financial indicators (IRR and NPV with and without revenues from carbon credits under vary-
          ing future scenarios), avoided emissions of CO2 and local air pollutants. Can construct a baseline for
          emissions over the lifetime of the project. Can also calculate NPV from a societal perspective.

Software Requirements:  Microsoft Excel Version 5.0 or higher. Proform V3.02 was released on 11/15/02.

Additional information and free download are available at .

Renewable Energy Technologies Financial Model

Renewable Energy Technologies Financial Model (RET Finance) is a simple model used to calculate the cost of
energy from renewable electricity generation technologies such as biomass, geothermal, solar, and wind. A RET
Finance analysis consists of assumptions selected by the user. Based on the data entered, a simulation is run, and
the results  are presented on the last step.  The data are stored to the database as the user proceeds from step to step.

Inputs:    Choice of technology, interest rate, loan period, tax rates, inflation rate, plant size and capacity
          factor, capital costs, debt and equity-related fees, annual fixed O&M costs, annual variable costs,
          prices, tariff structure.

Outputs:  Cash flow, nominal and real levelized cost of energy, IRR, debt service coverage ratio.

Software Requirements:  Requires Web access. The model is completely implemented online, and results  are
                       displayed on screen for printing.

Additional information and free download are available at .

RETScreen International

RETScreen International is a renewable energy project analysis software that is useful for decision support and
capacity building purposes. It can be used worldwide to evaluate energy production, life-cycle costs and GHG
emissions for various renewable technologies. The spreadsheet-based software provides a common platform for
various stakeholders to evaluate project proposals.

There are five key worksheets: the energy model, the sub-worksheet for the particular renewable being considered
(wind, small hydro, photovoltaic, solar air, biomass, solar water, passive solar, ground-source heat pumps), the cost
analysis, the GHG analysis, and the financial summary. The software also includes product, cost, and weather data-
bases, and  a detailed online user manual.  Workbook files can easily be shared among various project stakeholders,
reducing the time and costs required to reach a consensus. A special course is offered by certified RETScreen  train-
ers, including a distance learning module and an online textbook with detailed information on financial evaluation
of projects and case studies on different renewables.

Inputs:    Cost data, technology data, financial parameters such as interest rate,  depreciation rate, discount rate.
  Appendix E
Funding Tools and Resources

                               APPENDIX  E
                   Funding Tools and Resources
Outputs:  Financial indicators including IRR, simple payback, NPV, cash flows. Can also perform tax analysis
         and a Clean Development Mechanism-type analysis for an individual project. Annual energy produc-
         tion of the project, GHG reductions.

Software Requirements:  Microsoft Excel.

Additional information and free download are available at .

A variety of project finance models are available from, including a detailed standard project
finance model, as well as specially tailored models for co-generation, wind power generation, solar photovolta-
ic energy installation and biomass plants. The Web site provides a short primer on financial concepts. Models
and primer are also available in Spanish.

Inputs:   Cost and revenue data, technology costs, operating and maintenance, depreciation rate, inflation rate,
         tariff structure, fuel prices.

Outputs:  Balance sheets before and after dividend payout, NPV, IRR, payback term, cash flow, debt service
         coverage ratio, dividend payout, loan life coverage ratio. Graphs of key financial variables available.

Software/Hardware Requirements: Microsoft Excel.

Additional information and free download are available at .
  Appendix E
Funding Tools and Resources

                                 APPENDIX  F
                                     Case Studies
This appendix provides project descriptions for four IBS projects conducted in Argentina, Chile, China
(Shanghai), and South Korea. Included is information about the project history; team; methodology; results;
meetings and presentations; publications; results/outcomes; recognition; and conclusions.


History: Work on the U.S. Environmental Protection Agency's Integrated Environmental Strategies (IES) proj-
ect in Buenos Aires, Argentina was initiated in October 2000. The IES project attempts to quantify the health
benefits of PM reductions resulting from adoption of measures to improve air quality, especially focusing on
the transportation sector.  Secondarily, GHG reductions associated with these measures are quantified. Goals of
the project include the identification and assessment of potential win-win strategies and measures for mitigation
of air pollution and associated GHG emissions. The project also aims to raise awareness and technical capabili-
ties in analysis and implementation of integrated strategies among policymakers and researchers.

Team: The Argentine team working on the IES project was led by Dr. Fabian Gaioli of the Physics Department
of the Universidad Nacional del Sur and Coordinator of the Climate Change Unit in the Argentine Secretariat
of Environment and Sustainable Development, part of the Ministry of Social Development. He was appointed
to the Coordinator post in part due to his work on IES. Dr. Gaioli also designed the scenarios to be analyzed in
the project. Dr. Pablo Tarela of the Institute Nacional del Agua y el Ambiente and the University of Buenos
Aires is leading the work on air quality modeling and emission  factors. Dr. Mariana Conte Grand of
Universidad del CEMA is leading the economic analysis of air pollution health impacts.

Methodology: The Argentina IES study analyzes specific mitigation options in three scenarios (baseline,
mitigation, and integrated) considering the air pollutant and associated GHG abatement of the various options.
Specific options include compressed natural gas penetration, efficiency improvements and modal substitution
in the transport sector and increased building energy efficiency. The potential measures associated with each
scenario were estimated for the sectors considered. Air pollutant abatement was estimated for the period
2000-2012, using nitrogen oxides (NOX) and particulate matter (PM) as the reference pollutants for estimation
of air quality improvements.

Results: Several intermediate products have been released in the course of work on the Argentina IES project.
They include a report on emission factor determination for the Argentine vehicle fleet by Pablo Tarela in
December 2000 and updated in May 2001, a report outlining transportation mitigation measures and scenarios
developed by Fabian Gaioli in June 2001;  including also a part of Tarela's results; a report by Anna Sorenson,
Tomas Svensson, and Fabian Gaioli on electricity options in December 2001; a report on air quality modeling
of the Buenos Aires Metropolitan Area by Pablo Tarela and Elizabeth Perone in February 2002, and a report on
health effects and economic  valuation by Mariana Conte Grand on July 2002. The modeling report quantifies
pollutant distribution in the Buenos Aires Metropolitan Area in the period of analysis (from 2000 to 2012)
based on baseline, mitigation, and integrated scenarios. It includes input from the analysis of emissions and
energy in the transportation and electricity sectors undertaken as part of Gaioli's scenario development. Conte
Grand has undertaken the analysis of health impacts and economic valuation.

A final report was released in December 2002. It describes several scenarios that estimate reductions  in air
pollutants and associated GHGs resulting from implementation  of integrated measures and analyzes resulting
air pollution and health impacts. The transportation sector is developed in the most detail, followed by a
chapter on all other sectors. The following results were reported:

• For the  year 2010, an estimated 1,463-3,957 premature deaths were avoided due to the change in PM10

• For the  year 2010, the estimated social benefits of annual PM10 reductions range from US $88-895 million.

• The estimated reductions in annual CO2  emissions for the year 2010 are between 0.9-6.5 millions of metric
  tons of  CO2.
  Appendix F
Case Studies

                                  APPENDIX   F
                                     Case  Studies
Meetings and Presentations: Preliminary results of the IBS analysis were presented in several meetings. They have
been shared in three domestic workshops, the Buenos Aires city government's "Forum on the Buenos Aires Strategic
Transportation Plan 2010," the "First Meeting on Adaptation of the city of Buenos Aires and the Metropolitan Area
to Climate Change," and a seminar at the Secretariat of Sustainable Development and Environmental Policy. Each of
the workshops generated great  interest in the project and enthusiasm for further work.

In addition, some IES results  were shared with NGOs at the Foro del Buen Ayre. The project was also dis-
cussed in working groups assisting the Climate Change Unit and was used, among others, as a reference paper
by the "Pollution Management Project" of the Secretariat of Environment and Sustainable Development and
the World Bank, by "The Study on Environmental Criteria for Installation and Extension of Thermal Power
Plants in Argentina" of the National Electricity Regulation Entity, National Atomic Energy Commission and
Japan International Cooperation Agency, and by the "Air Monitoring Plan of Dock Sud Petrochemical Plants"
of the Secretariat of Environment and Sustainable Development and Japan International Cooperation Agency.

Members of the Argentine IES team have taken part in international presentations of the IES program at the
Fifth Conference of the Parties (COPS), the Sixth Conference of the Parties (COP6), and Intergovernmental
Panel on Climate Change (IPCC) workshops  in March/April 2000. They also participated in the Air and Waste
Management Association workshop in June 2001, the Mexico IES Workshop in August 2002 and the Brazilian
Health Benefits Model training in 2003.

In October 2002, the Argentine team held a policymakers' workshop to present the results of the IES analysis to
key in-country decisionmakers. The goal of the workshop was to disseminate results and obtain feedback on the
usefulness of co-control benefits analysis to assist in policy development of integrated policy options. One out-
come of the meeting was discussion of proposed follow-up activities for continuing the cooperation and analysis
of this initial pilot phase. Among the opportunities for continuing collaboration are improvements to the
analytical tools used in the first phase of the project, as well as identification of specific measures to analyze
and leveraging funds from other organizations which would lead to implementation of cost-effective measures.

Recognition: There are several indicators of increased attention to integrated measures which can be attributed
to the lES-Argentina program. The Secretariat of Sustainable Development and Environmental Policy has creat-
ed the following new programs: Biofuels, Environmental Urban Features of Climate Change, Alternative
Energies and Fuels and Rational Use of Energy and Efficiency. Two working teams have also been created with-
in the Secretariat, one focusing on the transport sector and the other concentrating on electricity generation. In
both cases, the teams were formed to strengthen the institutional capacity and integrated technical analysis being
conducted as part of the lES-Argentina program with respect to critical analysis of potential mitigation measures.

Conclusion: According to team members, the interdisciplinary nature of the IES policy analysis program in
Argentina enables experts from diverse areas to work together to develop focused policy advice for decision
makers. The project has enabled greater cooperation among many public entities, academic and private sector
institutions in areas such as energy, transportation and environment. Team members also believe that IES is a
useful tool in the process of adopting policies within the framework of the commitments taken by UNFCCC
parties. They expect final results of the project to greatly influence adoption of measures that both improve
local air quality and reduce associated  GHG emissions.
For more information contact:

Mariana Conte Grand
Universidad del CEMA
Phone: (5411)4314-2269 ar
Pablo Tarela
Universidad de Buenos Aires
Phone: (5411)4641-1261
  Appendix F
                                                                                        Case Studies

                                  APPENDIX   F
                                     Case  Studies

History: Work on the U.S. EPA's IBS program in Santiago, Chile, was initiated in March 1999. The goals of the
IBS effort in Chile are to aid government officials and other stakeholders in understanding the air pollution bene-
fits of clean energy technologies that reduce GHG emissions, to build support for implementation of GHG miti-
gation measures, and to build in-country capacity to conduct co-benefits analysis of GHG mitigation measures.

Team: The Chilean research team is based at P. Catholic University in Santiago. Dr. Luis Cifuentes leads the
team and coordinates the health effects analysis and economic valuation work for the project, while Dr. Hector
Jorquera coordinates the air quality analysis.  Several research assistants including Enzo Sauma, Felipe Soto,
Sandra Moreira, and Martin Guiloff work on energy and emission analysis and scenarios and health effects
analysis. Juan Pedro Searle from the National Environmental Commission (CONAMA) is the Chilean
government representative overseeing the project.

Methodology: IES work in Chile was conducted in two parts. The first analyzed the health impacts of
implementation of GHG mitigation scenarios interpolated for the metropolitan area of Santiago from
CONAMA's Climate Policy Scenario for 2000 to 2020, a national level study used to support national level
policy for GHG mitigation in Chile. The second part focused more specifically on analysis of mitigation
measures under consideration in the Santiago Decontamination Plan, the air quality management plan for the
city. Specific measures from the plan as well as a range of additional "integrated" measures that would both
reduce GHG emissions and improve air quality were analyzed for their impact on public health. This included
measures in the fuel  switching, building energy efficiency, and transport sectors.

Results: In October 2000, a report detailing anticipated benefits from adoption of GHG mitigation measures was
released. Results indicated social benefits of $6 to $42 per ton of carbon abated for 2010 and $18 to $103 for 2020.
In addition, for the period 2000 to 2020, an estimated 2,800 deaths would be avoided due to improved air quality.

A final report was later produced, as well as a report on analysis of specific measures. This work has contributed
to the establishment  of an integrated framework for GHG and air quality analysis in Chile and has applied that
framework to demonstrate significant potential for ancillary benefits from GHG mitigation measures.

Meetings and Presentations: Policymakers from the national and regional government bodies (CONAMA and
CONAMA RM) were briefed on the results of the study and the importance of integrated strategies in policy-
making at a workshop in October 2000. This workshop consisted of a seminar on the co-benefits of mitigating
air pollution and a discussion as part of a policymaker's roundtable. The meeting was significant in advancing
the knowledge and understanding of policymakers in Chile, at both the national and municipal level, of the
potential benefits of considering GHG emissions mitigation in local air quality policy development. This
meeting for policymakers was held back-to-back with a meeting of the World Bank's Latin America Clean
Air Initiative where  the Chile team and  representatives of CONAMA were given the opportunity to more
widely disseminate their methodology, analysis, and results to other municipal decisionmakers and experts
participating in the Clean Air Initiative program. Their presentation, "Integrated Strategies for Local and
Global Pollutant Control," was well received.

Results of the IES study were also presented in several international workshops. One of the more important
milestones for Chile  was the presentation of the preliminary interim report of the lES-Chile project at COPS in
Bonn, Germany, in November 1999 in a side event entitled "Public Health Benefits of Improving Air Quality
through Cleaner Energy Use." In March 2000, results were presented at the "Expert Workshop on Assessing
the Ancillary Benefits and Costs of Greenhouse Gas Mitigation Strategies" in Washington, DC. Finally, in
November 2000, the  results were presented at a side event at COP6 in The Hague. These presentations provided
an opportunity to disseminate results of the  Chile project to experts in the international climate community.

Dr. Cifuentes presented results of the IES project in a special experts meeting of the International Society
of Environmental Epidemiologists in September 2001 that brought international experts together to address
air pollution/GHGs and health impacts in developing countries. He also assisted in a special one-day side
  Appendix F
                                                                                        Case Studies

                                  APPENDIX   F
                                     Case  Studies
session at the meeting for energy and health experts from several Asian countries supported by USAID to begin
exploring IBS analytical models and how they can be applied to projects to analyze air pollution, health bene-
fits, and GHG mitigation benefits in those countries. Finally, Dr. Cifuentes participated in a scoping meeting
held in Hyderabad, India, in February 2002, as a health impacts expert to assist the Indian technical team as
they prepared their IBS-India workplan.

Dr. Hector Jorquera gave a presentation at the Air & Waste Management Association's International Urban
Infrastructure Forum on efforts by the Chilean research team to use the results of their study to affect
policymaking in June 2001.

As part of IBS project, the team in Chile developed an Analytica®-based Health Effects Analysis (HEA) valua-
tion model and user guide consisting of an exposure module, a health effects module, and a valuation module.
The HEA model is an integrated assessment model designed to evaluate the benefits or costs associated with
changes in atmospheric pollutant concentrations in a given location and time period. It allows comparison of a
base case and study case for a selected pollutant. Others in the international IES community are now benefit-
ting from the health effects modeling expertise that has been developed in Chile. The model has been "export-
ed" to other IES participants through technical exchange with team members in China and Brazil. Chile hosted
the Chinese health team in July 2001 for a two-week training period to familiarize them with use of the model
and to help modify it for use in Shanghai. During this time, Dr. Cifuentes also provided in-depth training and
technical assistance to the Shanghai team that enabled team members to conduct the valuation part of their
analysis, something that formerly had been a foreign concept and not well received.

Publications: Dr. Luis Cifuentes has collaborated with other health experts in the international IES community
on several publications including:

• Cifuentes, L. et al. 2001. Assessing the health benefits of urban air pollution reductions associated with
    climate change mitigation (2000-2020): Santiago, Sao Paulo, Mexico City, and New York. Environmental
    Health Perspectives 109(Supplement 3):419-25.

• Cifuentes, L. et al. 2001. Hidden health benefits of greenhouse gas mitigation. Science 293(5533):1257-1259.

The Science article received considerable attention by the Chilean and international press. Cifuentes appeared
on Spanish CNN and articles appeared in several newspapers.  Examples of newspaper articles include:

• "Air Pollution has a Deadly Effect," in El Mercurio.

• "UC Investigator has Calculated that in 2000, 500 Have Died Due to Air Pollution in Santiago," in La Tercera.

• "Air Pollution is a Direct Cause of Death," online at  .

• "Pollution:  Less is More," in BBC Mundo.

• "Study Reveals that a Decrease in Smog would Avoid 4,270 Deaths in Santiago," in La Tercera.

As a result of this media exposure, Dr. Cifuentes' stature as an expert on health impacts of air pollution
grew, particularly among the policymakers who called on him to provide  advice on how to respond to public
inquiries resulting from the media attention. The public pressure that these articles brought also raised this
issue to  a much higher level of importance among policymakers and  the public than it had previously held.

Dr. Hector Jorquera has also published articles related to his work on the  IES project. These include:

• Jorquera, H. 2002. Air quality at Santiago, Chile: a box modeling approach I-carbon monoxide, nitrogen
    oxides and sulfur dioxide. Atmospheric Environment (36) 315-330.

• Jorquera, H. 2002. Air quality at Santiago, Chile: a box modeling approach II-PM2 5, coarse and PM10
    particulate matter fractions. Atmospheric Environment (36) 331-334.
  Appendix F
                                                                                        Case Studies

                                  APPENDIX  F
                                     Case  Studies
Recognition: In large part due to the IBS project, the regional office of CONAMAhas recognized GHGs as
important pollutants to consider in the air quality planning process and is considering air quality/GHG measures
suggested by the IBS team in its revision of the Santiago Decontamination Plan. The regional CONAMA has also
acknowledged the significant capacity built at P. Catholic University in the course of the IBS project by awarding
Drs. Cifuentes and Jorquera a five-year contract as a "Center of Excellence" to continue air quality analysis.

On an individual level, Dr. Cifuentes received an award for his internationally and domestically recognized
IES work in Chile at the Earth Technology Forum in Washington, DC in March 2002.

Conclusion: Through the IES analysis, the transport sector was recognized as an area where significant
GHG and air quality benefits could be realized. This opportunity has generated a proposal to the GEF (Global
Environment Facility) for funding to support GHG emission reductions from vehicles in Santiago through
promoting a long-term modal shift to more efficient, less polluting forms of transportation.  Specific objectives
include reducing private car use and promoting public transportation through road pricing measures, encourag-
ing replacement of old buses with cleaner low-emission buses, increasing the use of bicycles and other non-
emitting modes of transportation, and laying the groundwork for more energy efficient travel patterns through
land-use changes such as redistribution of education and shopping facilities. A preliminary version of this
proposal has been accepted, and the full proposal is under consideration.

The lES-Chile  program has made significant progress in raising awareness of the benefits of an integrated
approach to air quality planning and the health benefits associated with controlling GHG emissions among
Chilean policymakers. Measures that address GHGs are now being considered in the revision of the Santiago
Decontamination Plan.  Significant research capacity has also been built within the team at P. Catholic
University, as illustrated by the recognition of the value of the HEA model not only in the Chilean analysis but
as a tool that can be applied around the world. The award of the five-year contract to P. Catholic University is
an acknowledgment by the regional government of both the technical expertise the IES team has and the
valuable contribution their research has made to the policy process.


History: The goal of the U.S. EPA's IES project in China is to "quantify the benefits, including reductions of
GHGs, of energy and transport programs  designed to reduce air pollution and protect public health  in China."
This program began as an assessment of energy options and health impacts in three major Chinese cities, of
which Shanghai was the first. This local study concept was originally supported by the U.S. EPA through a
partnership with the World Resources Institute (WRI) and China Council of International Cooperation on
Environment and Development (CCICED) in early 1999. The work was conducted in consultation with
China's State Environmental Protection Agency (SEPA).

In April 1999, EPA's Administrator signed a series of Statements of Intent with the Minister of SEPA. One of
these expanded the ongoing WRI-CCICED project into a broader, national assessment by creating a partnership to
"assess benefits of programs to reduce  air pollution and protect public health in China." The completed Shanghai
work will be replicated in Beijing (initiated in 2001) and broadened to produce a national level assessment.

Team: There are two technical teams for the lES-Shanghai program. Work on energy analysis, pollutant
mitigation options, and air quality modeling is conducted by the Shanghai Academy of Environmental Sciences
(SAES) under the leadership of Dr. Changhong Chen. The analysis of air pollution health impacts and the
valuation of those impacts is conducted by Fudan University (formerly Shanghai Medical University) under
the leadership of Professor Bingheng Chen. Technical support and coordination  for both in-country teams was
provided by Collin Green of the National Renewable Energy Laboratory (NREL).

Methodology:  The Shanghai IES project follows the general approach of prior IES studies in other  countries.
Energy utilization scenarios through 2020 were developed by the Shanghai team. Consequent pollutant emis-
sions levels were calculated using MARKAL. The source emissions were translated into air pollution exposure
  Appendix F
                                                                                       Case Studies

                                  APPENDIX   F
                                     Case  Studies
levels via the University of Iowa's ATMOS model. An earlier Industrial Source Complex (ISC)-type model for
air dispersion was also used and developed by the SAES team, but the final study results use ATMOS output.
The model estimated ambient pollutant concentrations and PM1Q.

The PM10 levels were subsequently used to estimate health impacts. Professor Chen and her health effects team
assessed the health impacts associated with each of the energy options. The magnitude of health impacts in
relation to the energy-related air pollutants (SO2, NO2, and PM10) was calculated using both a health-based
risk assessment approach and percentage increases of mortality or morbidity per unit increase of air pollutant
concentration. The calculation of results was made faster and easier by using the health benefits APHEBA
model developed Dr Luis Cifuentes' (lES-Chile) and coded in Analytica®. Concentration response (C-R) values
from Chinese epidemiological studies, where available, were used in the model to estimate the magnitude of
health impacts in Shanghai.

Results: The lES-Shanghai study evaluated six scenarios (a "business as usual" base case and five energy
and air pollution control) and projected emissions reductions and health benefits through 2020. GHG and air
pollution reduction actions in the scenarios include efficiency improvements in industrial coal use, switching
to natural gas, SO2, and NOX targets, and a carbon tax. Depending on which are implemented, these actions
would reduce annual CO2 emissions by 9 million to 47 million metric tons in 2010  and 14 million to
73 million metric tons in 2020 over the base case scenario. Results suggest social benefits of approximately
$13 to $20 per ton of CO2 abated in 2010 and $23  to $40 per ton of CO2 abated in 2020 (year 2000 dollars
were used). In addition, the health team evaluated the ancillary benefits through the reduction of air pollution
levels from various energy scenarios. The study indicates that 647 to 5,472 premature deaths would be averted
in 2010 through improvements in air quality from the different scenarios. In 2020, this figure would range from
1,265 to 11,130 averted deaths,  depending on the scenario.
 EE Coal
 EE Coal, Nat Gas Fuel Switch
 Plus S02 Targets
 Plus NO Targets
 Plus C02 Tax
Meetings and Presentations: Results from the Shanghai analysis have been presented at numerous domestic and
international meetings. Preliminary results and the lES-China methodology were presented and discussed at the
International Conference on Environmental and Occupational Disease in Lucknow, India, in November 2000.
An overview presentation on the lES-China project (including plans for the Shanghai and Beijing analyses) was
given by Professor He Kebin of Tsinghua University. Professor Bingheng Chen also participated in the discus-
sion and provided more details on the Shanghai analysis. More substantial results, with a focus on health effects,
were presented by Haidong Kan at the September 2001 International Society for Environmental Epidemiology
(ISEE) Annual Meeting in Garmisch, Germany. More recently, Bingheng Chen presented health effects results
at the WHO/China Ministry of Health Symposium on Chemical Safety in Beijing, China, in July 2002.
  Appendix F
                                                                                        Case Studies

                                  APPENDIX  F
                                     Case Studies
Final results of the Shanghai IBS analysis were presented to and discussed by key decisionmakers at a one-day
policymakers' workshop in Shanghai in February 2002. Participants included two divisions of China's SEPA,
the Shanghai Environmental Protection Bureau, Shanghai Center for Disease Control, and the Shanghai
Economic Development Bureau. This was the first time many of these health experts and policymakers had
seen a quantifiable linkage between energy policies and health benefits. According to participants, the roundtable
provided an excellent opportunity for relevant decisionmakers at both the local and national levels to meet.

In March 2002, Changhong Chen presented the final energy, environment, health, and economic results of the
lES-Shanghai project at a Wilson Center international symposium in Washington, DC. Most recently, Professor
Bingheng Chen presented a paper on "Integrated Assessment on Health Impact & Energy Options—A Case
Study in Shanghai" at the International Pacific Research Center's (IPRC) "Air Pollution as Climate Forcing"
workshop in Honolulu, Hawai'i, on April 29, 2002.

Publications: Results from the Shanghai IES analysis have been published both in English and Chinese.
Articles have been written and published by the two teams independently and jointly. Major publications
stemming from this work include:

• Changhong Chen, et al. 2002. Reduction of emission from energy systems under implementing atmospheric
    pollutant emissions control. Energy Research and Information.

• Changhong Chen, et al. September 2002. Energy structure adjustment and air pollutant emission; MARKAL
    model  application. Shanghai Environmental Science.

• Bingheng Chen, et al. 2001.  Methodology on the health risk assessment of ambient air pollution.  Journal of
    Environment and Health.

• Bingheng Chen, et al. 2002.  Quantitative evaluation of the impact of air sulfur dioxide on human health in the
    urban districts of Shanghai. Journal of Environment and Health.

• Bingheng Chen, et al. September 2002. Quantitative impacts of ambient air nitrogen oxides on human health
    in Shanghai. Shanghai Environmental Science.

Most recently Haidong Kan, Bingheng Chen, and Changhong Chen submitted an article to Shanghai
Environmental Science for publication titled "Assessment on the Health Impact on Residents in Shanghai
due to Improvements in Energy Efficiency and Structure." Haidong Kan and Bingheng Chen also submitted an
article for publication in the same journal titled "The Impact of Long-Term Exposure to Air Particulate Matter
on Years of Life Lost of Residents in Shanghai." Several other publications on the Shanghai study  for both
Chinese and international publications are also in progress.

Outcomes:  One of the goals of the IES program is to influence policies that emphasize co-benefits from
reducing both GHGs and air pollutants. To this extent, the Shanghai study has already had an impact on
policymaking in China. During the final stages of the  lES-Shanghai project, the study team was  commissioned
by the municipal government to prepare background reports for the air quality portion of Shanghai's 10th five-
year plan. At the February 2002 policy-makers workshop, representatives from both SEPA and the  Shanghai
Environmental Protection Bureau confirmed the IES study influenced the development of this five-year plan.
Specifically, the lES-Shanghai work identified particulate control as a high priority, influenced the setting of
five-year goals for SO2, NOX and PM10, and identified specific technologies and fuel mix goals for the
Shanghai energy system. In addition, municipal officials credited the IES work for improving coordination
between energy, environment, and public health organizations in Shanghai.

Conclusion: The lES-Shanghai project has demonstrated connections between energy policies, GHG
reductions,  and ancillary health benefits  in China. These connections have raised awareness among health,
environment, and policy experts in China on the interplay between these issues. Local air quality policy
decisions in Shanghai have already been influenced by this work.
  Appendix F
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                                 APPENDIX  F
                                     Case Studies
The next stage of work will be a similar study in Beijing, China, and a national study encompassing the entire
country. The Beijing study will follow the same general methodology, though specific modeling tools have not
been decided on. Energy utilization will likely be projected using LEAP 2000, and air quality will probably be
mapped using the ISC model. As the lES-China program completes the Beijing study and a national analysis,
Chinese policymakers will become more familiar with the myriad health benefits that can result from integrated
strategies. This should have a tremendous impact on shaping measures to reduce GHG emissions and improve
energy efficiency throughout China.


History: The U.S. EPA's IES study in South Korea was initiated in February 1999. The study applies a
bottom-up impact analysis approach to  assess and quantify the ancillary environmental and public health
benefits resulting from GHG mitigation policies and measures in the metropolitan area of Seoul, South Korea.
In addition, the lES-South Korea project will help provide policy recommendations for climate change and air
quality programs and build in-country capacity to conduct co-benefits analysis of GHG mitigation measures.

Team: The lead institution for IES work in Korea is the Korea Environment Institute (KEI), which is affiliated
with the Korean Ministry of Environment (MOE). The principal investigator is Jeong Im Park, of KEI. Yong
Gun Kim leads the energy and policy analyses, Nan Kyung Moon and Sung Woo Jeon lead the emissions
analysis, Nan Kyung Moon leads the air quality analysis, Jeong Im Park leads the health effects analysis, and
Professor Yong Chul Shin of Daejin University conducts the  economic valuation and cost-benefit analyses. In
addition, Sang In Kang serves as a project advisor.

Methodology: The initial phase (1999 to 2001) of the IES project focused on estimation and assessment of
health benefits resulting from modest GHG reduction (5 to 15 percent GHG reductions  from the baseline by
2020) measures in the Seoul metropolitan area. The initial mitigation measures considered were derived for
Seoul from a report by the Korean Ministry of Commerce, Industry, and Energy (MOCIE) on "no regrets"
GHG mitigation options. These no or low-cost measures are primarily focused on energy efficiency and use
of compressed natural gas for vehicles.  More aggressive GHG reduction scenarios that include fuel substitution
outside of the transportation sector would likely generate greater air pollution health benefits. This study
utilizes directly emitted PM10 as the indicator pollutant, which Korean researchers estimate leads to about
50 percent of total air pollution health impacts in  Seoul.

Results: The initial  assessment found that implementing GHG mitigation measures in Seoul between 2000
and 2020 would, on average, result in ancillary benefits of $22 per ton of carbon mitigated, a significant figure
given the very low costs of GHG mitigation measures considered. It was also estimated that these GHG
reduction measures  for South Korea's energy sector could avoid 40 to 120 premature deaths per year and
2,800 to 8,400 cases of asthma and other respiratory diseases per year. The value is considered conservative
due to limitations in the study, which tended to underestimate benefits since only PM10 was accounted for.

Meetings and Presentations: Results of the initial study have been presented in multiple venues. In March
2000, Korean researchers presented these results in an IPCC  Expert Workshop on Assessing the Ancillary
Benefits and Costs of Greenhouse Gas  Mitigation Strategies in Washington, DC. A final project report that
covered a discussion of the methodology employed, scenarios developed, air quality analysis, health impacts
analysis, and valuation and a summary  of the outcome of the policymakers meeting was issued in September
2000. In October 2000, a policymaker review workshop was conducted in Seoul. In December 2000, a final
synthesis report of the project was issued. South Korea also participated in a COP6 side-event on IES in
November 2000. Dr. Shim presented a review of the project and a detailed summary of the air quality
analysis model and  results for the project at the Air & Waste  Management Association's International Urban
Infrastructure Forum in June 2001. A presentation on the program was also made at the annual meeting of the
International Society of Ecological Economics (ISEE) in September 2001. Articles on the IES program and
the results for South Korea were published in an ISEE book as well as the Asian Environmental Newsletter.
South Korea also participated in the U.S. EPA's IES Program Workshop on "International Air Pollution and
Energy/Climate Policy Collaboration, conducted as part of the 12th  Conference of the ISEA & 14th Conference
  Appendix F
                                                                                       Case Studies

                                  APPENDIX  F
                                     Case  Studies
of the ISEE, held at the University of British Columbia in Vancouver, Canada from August 11-15, 2002. In
November 2002, South Korea presented at the U.S. EPA's and China's Energy Research Institute-sponsored
Economic and Environmental Modeling Workshop in Beijing, and at the MOE-sponsored Policymakers
Workshop in Seoul. Finally, in 2003, South Korea Participated in the U.S. EPA's IES Program's 3rd Annual
Forum on Air Pollution and Public Health: Symposium Topic: Socio-Economic Factors and Air Pollution
Health Effects, in Perth, Australia, as well as the BAQ Conference, where it presented "Carbon Tax Versus Air
Pollution Tax: Which is More Effective in Controlling Air Pollution and Climate Change in Korean Context?"
South Korea also participated in an IES side workshop at the 2003 BAQ Conference.

Recognition: IES work has inspired increased interest in the ancillary benefits associated with GHG mitigation
among researchers  and policymakers in South Korea. Government officials from MOCIE, MOE, and the South
Korean legislature attended the policymaker workshop. The consensus was that the results of this project were
very useful for policy making for  both air quality management at the local level and GHG mitigation at the
national level. Government officials noted that the project demonstrated the potential for real, positive  econom-
ic and social ancillary benefits from mitigation scenarios and commended the project's efforts to provide these
estimates. Policymakers also  saw  the potential to use results from the study to develop cost-effective integrated
strategies to address both local air quality and GHG emissions.

Based on initial interest in results from the Seoul IES study, MOE funded KEI to conduct a national level study
using the IES methodology developed by the initial project for Seoul. A report of the results from this study was
released in July 2001. The national study concluded that the health benefits associated with GHG mitigation
measures were considerably greater than those found in the original Seoul study. The national ancillary benefits
study has generated interest and lively debate within the Korean policy community. The U.S. Embassy in Korea
put out a summary  of this discussion that further  increased Korean government dialogue on the  subject.

MOE designated air quality as its priority theme for 2002. Air quality has become an important issue in Korea, and
the government has begun to take remedial action. The arrival of the World Cup soccer matches in summer 2002
has further prompted the government to improve air quality. Korea's largest environmental NGO, the Korea
Federation of Environmental Movements, currently has a national public outreach campaign on air quality under-
way. A major Korean daily newspaper is a partner in the campaign and has published two dozen articles on air
quality, sometimes drawing a link to climate policy. Dr. Joh is a member of the campaign's steering committee and
participated in a national seminar under the campaign where he presented results from the IES study in April 2002.

Conclusion: Several indicators of change may be attributed in part to the lES-South Korea program. For
instance, the South Korean government has expressed a keen interest in climate change issues, and lawmakers
are very interested  in the issue of  ancillary benefits of climate change mitigation actions. The legislature has
recently established a special  committee on climate change in Congress to  investigate policy matters related to
climate change issues in greater detail  as well. There has also been a change in the level and intensity of the
debates on climate  change, South  Korean participation, and  actions to mitigate GHG emissions, which has been
fueled by the estimates of health benefits of GHG mitigation options developed under the IES project and
national level foliowup on project.

The second phase of the lES-South Korea study  began in 2003. Its objective was to advance the project toward
better informing the South Korean public and policymakers, as well as the research community, of the IES
methodology and results. The team intends to accomplish this by:

• Developing co-benefits analyses of specific policy options based on the Seoul Air Quality Management Plan
  to help inform policymakers.

• Considering development of specific national policy options based on the national ancillary benefits report.

• Participating in the U.S.  EPA-sponsored economic and environmental modeling workshops in Beijing, with
  particular  involvement in the session on co-benefits modeling.

• Continuing cooperation with the national outreach campaign on air quality.

• Continuing presentation  of IES results in national and international forums.
  Appendix F
                                                                                        Case Studies