Integrated assessment models which are used in Europe to account for the external costs of air pollution as a support for policy-making and cost-benefit analysis have in order to cope with complexity resorted to simplifications of the non-linear dynamics of atmospheric sciences. In this paper we explore the possible significance of such simplifications by reviewing the improvements that result from applying a state-of-the-art atmospheric model for regional transport and non-linear chemical transformations of air pollutants to the impact-pathway approach of the ExternE-method. The more rigorous approach results in lower damage costs per unit of NOx and allows for an improved assessment of ozone formation.
air pollution; externalities and non-linearity
Main Research Area:
European Association of Environmental and Resource Economists 16th Annual Conference, 2008