External costs of PM2.5 pollution in Beijing, China: Uncertainty analysis of multiple health impacts and costs

Some cities in China are facing serious air pollution problems including high concentrations of particles, SO2 and NOx. Exposure to PM2.5, one of the primary air pollutants in many cities in China, is highly correlated with various adverse health impacts and ultimately represents a cost for society. The aim of this study is to assess health impacts and external costs related to PM2.5 pollution in Beijing, China with different baseline concentrations and valuation methods. The idea is to provide a reasonable estimate of the total health impacts and external cost due to PM2.5 pollution, as well as a quantification of the relevant uncertainty. PM2.5 concentrations were retrieved for the entire 2012 period in 16 districts of Beijing. The various PM2.5 related health impacts were identified and classified to avoid double counting. Exposure-response coefficients were then obtained from literature. Both the value of statistical life (VSL) and the amended human capital (AHC) approach were applied for external costs estimation, which could provide the upper and lower bound of the external costs due to PM2.5. To fully understand the uncertainty levels, the external cost distribution was determined via Monte Carlo simulation based on the uncertainty of the parameters such as PM2.5 concentration, exposure-response coefficients, and economic cost per case. The results showed that the external costs were equivalent to around 0.3% (AHC, China's guideline: C0 = 35 μg/m3) to 0.9% (VSL, WHO guideline: C0 = 10 μg/m3) of regional GDP depending on the valuation method and on the assumed baseline PM2.5 concentration (C0). Among all the health impacts, the economic loss due to premature deaths accounted for more than 80% of the overall external costs. The results of this study could help policymakers prioritizing the PM2.5 pollution control interventions and internalize the external costs through the application of economic policy instruments.