% PROt«
            The  Integrated Environmental Strategies  (IES)
            Cost-Benefit Analysis in  Seoul, South Korea
The objective of the IBS Program is to assess and
quantify the environmental and public health ben-
efits resulting from integrated measures to reduce
greenhouse gases (GHGs) and local air pollutants.
By analyzing and implementing integrated poli-
cies and measures, such as clean energy, energy
efficiency, and public transportation, IES partners
have an opportunity to make a positive  impact on
local air quality, public health, and the economy,
while at the same time reducing GHGs at the global
level. The IES Program seeks to enhance in-country
capacity to conduct co-benefits analysis and assists
with policy evaluation for integrated planning.
The IBS-South Korea Program was initiated in 1999
as a collaboration among the U.S. Environmental
Protection Agency  (EPA), the Republic of Korea's
Ministry of Environment, the Korea Environment
Institute (KEI), and the National Renewable En-
ergy Laboratory (NREL). The first project of the
IBS-South Korea Program (1999-2001) applied a
bottom-up impact analysis to evaluate the benefits
of integrated mitigation policies and measures in
Seoul. The second project (2003-2007), which is
overviewed in this fact sheet, evaluated the health
and GHG impacts of the Seoul Air Quality Manage-
ment Plan (SAQMP), compared those impacts to the
expected health and GHG impacts of selected GHG
reduction measures, and developed an alternate
scenario of integrated measures to cost effectively
attain local and global emission reduction targets.
KEI led the second IBS-South Korea project, titled
"Cost-Benefit Analysis of Integrated Environmental
Strategies for Air Quality Improvement  and Green-
house Gas Emissions." Daejin University conducted
the economic valuation and cost-benefit analyses.
Kangwon University also collaborated on portions
of the IES project by developing mitigation scenari-
os, performing air quality modeling, and identifying
concentration-response functions for the health
effects analysis.

The primary objective of the second IBS-South
Korea project was to deepen understanding among
Korean policymakers and the research community
of the advantages of an IES approach, the method-
ologies for conducting associated analyses, and the
benefits of the measures analyzed. Specific goals
included: 1) implementing a health benefits model
for Seoul; 2) developing co-benefits analyses and
evaluating the impacts of selected measures from
the SAQMP and select GHG reduction measures; 3)
developing an alternate suite of measures, identified
through optimization analysis, that cost effectively
meet GHG and local air pollution goals; 4) sup-
porting integrated policymaking by the Ministry of
Environment's Climate Change Team; 5) continuing
cooperation with the national outreach campaign
on air quality; and 6) continuing the presentation of
IES results in national and international forums.

The Seoul metropolitan area, including Incheon and
Kyonggi, represented the geographical scope of the
study. Scientists studied the following GHGs and
air pollutants:  carbon dioxide (CO2), methane (CH4),
sulfur oxides (SOX), nitrogen oxides (NOX), and
particulate matter (PM10). The sources of these GHGs
and air pollutants were limited to fuel sources (en-
ergy industry combustion, nonindustrial combustion,
manufacturing industry combustion, and mobile
sources). The IBS-South Korea team selected 2003 as
the base year and 2014 as the year used for estimat-
ing scenario impacts. EPA's Models-3/Community
Multiscale Air Quality (CMAQ) was used to measure
air quality, and EPA's Environmental Benefits Map-
ping and Analysis Program (BenMAP) was used to
                                                         *•  *• .

                                                     The emission reductions and associated economic
                                                     benefits for each scenario, based on a cost-benefit
                                                     analysis for estimated reductions in morbidity and
                                                     mortality, are displayed in Table 2.
                                                     The following integrated measures were found to
                                                     be the most cost-effective ways to reduce both air
                                                     pollutants and GHG emissions: 1) increasing the use
                                                     of low-NOx boilers; 2) promoting CNG intra-city bus
                                                     operation; and 3) switching fuels in industrial facili-
                                                     ties. Using integrated measures in the transportation
                                                     sector was found to be particularly effective in reduc-
                                                     ing both GHG and air pollutant levels. The findings
                                                     also indicate that cost savings (e.g., from reduced
                                                     fuel costs) can offset the installation cost of GHG re-
                                                     duction measures, and that air quality improvement
                                                     is closely related to the reduction in GHG emissions.

                                                     Policy Results
                                                     While some current SAQMP measures, such as
                                                     installing catalytic converters and employing de-
                                                     sulfurization facilities, are retrofit technologies
                                                     that will only reduce air pollutant levels, other
                                                     measures, such  as CNG intra-city bus operation
                                                     and district heating and cooling systems, are inte-
                                                     grated strategies that will reduce both air pollutants
                                                     and GHG emissions. IES efforts have increased the
                                                     interest in integrated strategies like these among
                                                     researchers and policymakers in Korea. Research
                                                     that includes additional GHGs and air pollutants,
                                                     as well as studies that include geographic regions
                                                     beyond Seoul, could reveal additional low-to-no-
                                                     cost opportunities for integrated planning in South
Table 2: Projected Emission Reductions and Associated Economic Benefits for Three Alternative Scenarios in 2014
calculate the expected impacts of the policies on
health endpoints (morbidity and mortality).
The study considered four scenarios: a Business
as Usual (BAU) scenario, the SAQMP scenario, a
GHG Mitigation scenario, and an IES scenario. The
SAQMP scenario focused on regulating industrial
sources (e.g., total allowable emissions system,
emission trading), area sources, onroad mobile
sources, and nonroad mobile sources. The GHG
scenario assumed a target GHG emission reduc-
tion of 10 percent by 2014 and included the most
cost-effective measures to meet that target. The
IES scenario included integrated measures deter-
mined to be the most cost-effective and to have the
maximum possible spread and emission reduction
potential. Examples of measures included in each
scenario are displayed in Table 1.
Table I: Examples of Policy Measures for Three Alternative
                       Examples of Measures
Total allowable emission systems for NOX, SOX, and PM,0
Accelerated vehicle retirement program
Low emission vehicles
Expansion of district heating systems
            Landfill gas for energy
            Spread of low-NOx boilers
            Promotion of compressed natural gas (CNG) intra-city buses
            Expansion of district heating systems
            Spread of low-NOx boilers
            Promotion of CNG intra-city buses
            Expansion of district heating and cooling systems
            Total allowable emissions systems for NOX, SOX, and PM,
            Accelerated vehicle retirement program

NOX (tons)

1 72,000
1 72,600
SOX (tons)

1 3,500

CO2 (tons)

Net Economic Benefit (Won) From Reductions in Premature
Mortality From Air Quality Improvements and GHG Emissions

90- 100 trillion
130 trillion
147 trillion
For More Information
Visit the IES Web site at  or e-mail .
                                                                                               I ntegrate
                  United States
                  Environmental Protection
                                                                                            EPA 430-F-08-009
                                                                                                 April 2009