Bioethanol vehicle transport in Oslo as climate policy: what are the social economic costs resulting from acetaldehyde pollution effects?

Abstract

This paper describes the impact pathway approach for estimating an economic value of pollution effects of acetaldehyde (CH3CHO) associated with bioethanol vehicle transport in Oslo as a climate policy. The approach rests on results obtained in an innovative measurement campaign and by means of air pollution dispersion-models, followed by an impact assessment and economic valuation of the potential externalities. This makes a state-of-the-art methodological technique to reach greater knowledge on the economic costs of urban air quality impacts resulting as a side effect of climate change policy. The social economic costs estimated in this paper are then compared to likely social economic benefits (i.e. avoided social economic damage cost) of reduced nitrogen dioxide (NO2) and carbon dioxide-(CO2) emissions. The carcinogenic risk from long-term inhalation exposure to acetaldehyde emissions, leads in this paper to a moderate cost estimate associated with the combustion of bioethanol in vehicles in Oslo. Productivity and welfare loss is the dominant cost component, whereas the direct medical costs constitutes only a small part of the total social economic costs. The costs however, expect to be significantly lower than the combined economic benefits from reduced emissions of target compounds, such as carbon dioxide and nitrogen dioxide.