High-level lobbying from the Environmental Industries Commission’s (EIC) Transport Pollution Control Working Group surrounding the Air Quality Strategy has included a high-level meeting and submitting to Defra accurate cost figures to inform the Strategy’s cost/benefit analysis of diesel particulate traps. These revised EIC figures showed that the Strategy had rejected a crucial measure for improving air quality on the basis of a cost/benefit analysis that had over-estimated the cost of diesel particulate traps by more than double.
Particulate traps have led to reductions of well over 90 per cent of the most intractable of air pollutants: fine particles, which are increasingly recognised as a major health hazard. Indeed the recent Air Quality Strategy Review concluded that particulate emissions reduced life expectancy in the UK by 8 months in 2005 at a cost of £9.1-21.4 billion p.a.
Over the last fifty years the Government in Britain has introduced progressively more stringent measures to reduce air pollution and in 2005 Defra evaluated the impacts of the first Air Quality Strategy published in 1997. This concluded that air quality had improved considerably in the UK, with an estimated reduction of some 4000 premature deaths and 3500 hospital admissions annually.
Since the Air Quality Strategy was first published the scientific understanding of the impacts of air pollution on health and the wider environment has improved. This has placed further pressure on Government throughout Europe to take firm steps to curb emissions.
The Government, therefore, decided to consult on a range of further measures to secure improvements in air pollution and a consultation document detailing them was published in April this year.
The Review of the Air Quality Strategy covered two broad areas:
- A review of the strategic framework of air quality targets and timetables
- A review of specific additional measures to reduce emissions from the different major sources of air pollution
As in many environmental areas, measures to secure further improvements in air quality has been bedevilled by tensions between the aim of reducing air pollution and the perceived economic consequences.
Despite the perceived economic consequences, it has always proved difficult to assign costs to damages from air pollution. For example, there are considerable questions about the evaluation of health impacts and placing costs on lives lost or health impaired. Furthermore, the Review noted that even the estimation of the costs of the necessary technological progress to achieve air quality is not easy.
In order to combat this, the recent Review assessed and graded additional measures for achieving air quality objectives with a “traffic light” system. It was hoped that this would ensure that the full costs and benefits of the measures proposed were transparent and subject to scrutiny.
Among the proposals that come out as ‘green’ and cost beneficial, are tighter European vehicle emissions standards for new cars, incentives and emissions reduction legislation from small combustion plant and ships. However those that are assessed as cost negative include retrofitting emissions control equipment to vehicles and the London Low Emission Zone.
EIC believes that assessing the benefits of a particular measure with the costs it entails is a helpful part of the policy analysis. However, EIC has expressed considerable concern that the costs appear to have been exaggerated whilst the benefits have been underestimated.
For example, in the Review the costs of retrofitting particulate traps to diesel vehicles were considered to exceed the benefits. This is despite the fact that many studies have shown that this is a cost effective means of reducing health impacts of fine particulate pollution.
EIC believes that this is because the costs used to reach this conclusion are for small volume, early stage technology and do not represent a mature and volume market. Similarly, the analysis does not appear to have taken account of the full potential of the technology.
At a recent meeting with Defra it was confirmed to EIC that the costs outlined in the Air Quality Strategy of retrofitting diesel particulate traps are resource costs and not list price. This implies that the costs do not include any transfers (i.e. taxes/subsidies) and are the costs that the producers of technology face when they manufacture the equipment.
By miscalculating the costs of diesel trap retrofit programmes the Review has provided ammunition for Government Ministers to cancel a publicly supported diesel retrofit scheme. This will have detrimental long-term consequences for air quality and for the industry upon which Government depends for solutions to future air pollution problems. To avoid these miscalculations EIC believes better dialogue between Government and the technology providers in developing cost benefit analysis is crucial. The premature publication of cost benefit analysis without industry consultation has led to a potentially detrimental miscalculation.
To prevent the final Strategy concluding that retrofitting pollution control technology to vehicles is not cost effective, EIC has submitted accurate cost information to Defra. Using an average of cost information submitted to EIC confidentially the Transport Working Group has provided Defra with accurate costs for both particulate traps for a small/medium HGVs (rigid) and particulate traps for a large HGVs (articulated) - these are less than half the amount Defra’s Air Quality Strategy estimated diesel particulate traps to cost.
EIC hopes that these accurate figures will make up for the lack of industry consultation on the original cost benefit analysis and lead to the Strategy concluding that retrofitting diesel particulate traps is not only beneficial for air quality but also cost effective.
Despite welcoming the Government’s commitment to improving air quality, EIC has expressed disappointment that the analysis has not been followed through with a more ambitious set of targets, especially given the technological progress that has been made since 1997 in emissions control technology.
Markets for environmental technologies only appear when there is a clear framework of regulation to ensure that these solutions will be needed. Therefore, as a signal of its determination to improve air quality, EIC believes that the Government should set a clear and long term strategic framework of air quality targets. Technologies to achieve air quality objectives will only appear if there is confidence in the business community that there will be markets for them.
Looking further into the future the Review concluded that solutions that address both air quality and climate change concerns will be crucial. However, the Review fails to take up these conclusions and suggest a framework of long-term targets. For example, tackling ground-level ozone will need further action on NOx emissions - the technology for this can be developed but long-term signals are needed to attract investment.
Overall EIC believes that the review is a helpful step towards improved air quality in the UK. However, more ambitious objectives, set over longer time frames, are essential if the technology solutions required are to emerge. Furthermore, it is crucial that the environment industries are involved, both in setting the strategic framework of air quality objectives and in assessing costs and benefits of new measures.
Environmental Industries Commission (EIC)
EIC was launched in 1995 to give the UK’s environmental technology and services industry a strong and effective voice with Government. With over 300 Member companies, EIC has grown to be the largest trade association in Europe for the environmental technology and services (ETS) industry. It enjoys the support of leading politicians from all three major parties, as well as industrialists, trade union leaders, environmentalists and academics.