Cutting emissions pays for itself from health savings

Savings from healthier air can make up for some or all of the cost of reducing carbon emissions, finds a new study from the Massachusetts Institute of Technology (MIT).

Cutting carbon emissions from sources like power plants and vehicles improve air quality and can in turn lower rates of asthma and other health problems caused by air pollution. Now, MIT researchers have actually quantified these benefits and found that savings on health care spending and other costs related to illness can be more than 10 times the cost of implementing policies aimed at reducing carbon emissions.

The MIT researchers compared the health benefits to the economic costs of three climate policies: a clean-energy standard, a transportation policy, and a cap-and-trade program. The three were designed to resemble proposed U.S. climate policies.

The researchers found that savings from avoided health problems could recoup just over a quarter of the costs to implement a transportation policy, but up to 10.5 times the cost of implementing a cap-and-trade program. The difference depended largely on the costs of the policies, because the savings themselves – in the form of avoided medical care and saved sick days – remained roughly constant.

For instance, savings from health benefits would dwarf the estimated 14 billion-dollar cost of a cap-and-trade programme. At the other end of the spectrum, a transportation policy with rigid fuel-economy requirements is the most expensive policy, costing more than 1 trillion dollars in 2006 dollars, with health benefits recouping only 26 per cent of those costs. The price tag of a clean energy standard fell between the costs of the two other policies, with associated health benefits just edging out costs, at 247 billion dollars versus 208 billion dollars.

“If cost-benefit analyses of climate policies don’t include the significant health benefits from healthier air, they dramatically underestimate the benefits of these policies,” concludes lead author Tammy Thompson, now at Colorado State University.


Photo credit: Kris Krüg, flickr/Creative Commons

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