7.2.2.6 A Partial Taxonomy

A variety of effects may result from GHG policies that are secondary to the reduction in GHG emissions. Existing studies have identified mortality and morbidity benefits associated with collateral reductions in particulates, nitrogen oxides (NO_x), and sulphur dioxide (SO₂) from power plants and mobile sources as a major source of ancillary benefits. Reduced private vehicle use and substitution of mass transit will reduce air pollution and congestion and may also reduce transportation-related fatalities from accidents, although the size of this effect and the degree to which it counts as an ancillary benefit are unclear.⁶ Substitution to mass transit may also involve additional costs, in terms of the opportunity cost of time, and these ancillary impacts may also need to be considered. Additional areas that might be considered include improvements in ecosystem health (for instance, from reduction in nitrate deposition to estuaries), visibility improvements, reduced materials damages, and reduced crop damages.

At the same time, there may be ancillary costs of GHG mitigation, such as an increase in indoor air pollution associated with a switch from electricity to household energy sources (such as wood or lignite) or greater reliance on nuclear power with its attendant externalities. In developing countries pollution may rise if electrification slows as a result of policy-induced increases in electricity prices relative to other fuels (Markandya, 1994). A related cost stems from forgoing the benefits of electrification, which include increased productive efficiency and emergence of new technologies, to increases in literacy (Schurr, 1984). Table 7.1 offers an illustrative set of examples of ancillary benefits (+) and costs (–). Under certain conditions, some of these observed impacts do not necessarily count as externalities from the standpoint of economic efficiency, depending on whether the market or institutions fail to account for these impacts in the incentives they provide for individual behaviour.

Table 7.1: Ancillary Impacts
Ancillary Impact	Expected sign
Reduction in particle pollution when fossil fuel use is reduced	(+)
Increases in urban air pollution when diesel vehicles are introduced to substitute gasoline	(–)
Increased availability of recreational sites when reforestation programmes are introduced	(+)
Increases in household air pollution relative to a baseline when electrification rates are reduced	(–)
Increases in technological efficiency when new technologies are adopted and unit costs fall	(+)
Increases in welfare with a shift to carbon taxation and a reduction in unemployment	(+)
Reductions in road-use related mortality when a shift from private to public transport takes place	(+)
Reductions in congestion with a shift from private to public transport	(+)
Decreases in employment when energy technologies that substitute the use of local fuels are introduced	(–)
Increases in employment that result from GHG projects in which there is an excess need for labour	(+)
Decline in employment because of decreased economic activity resulting from costs associated with GHG projects	(–)
Savings in household time in poor rural households when fuel wood use is replaced by biogas energy	(+)

A taxonomy of the main externalities linked with the public health impacts of air pollution, which was developed in the social cost of electricity studies and is likely to be relevant to ancillary benefit estimation, is provided in Table 7.2.

Table 7.2: A Sample of externalities assessed in studies of electricity generation
	Health		Materials	Crops	Forests		Amenitya	Ecosystems
	Mortality	Morbidity			Timber	Other
PM10	AM	AM	AM	NE	NE	NE	AM	NE
SO2b	AM	AM	AM	AM	AM	AP	AM	AP
NOxb	AM	AM	AM	AM	AM	NA	NE	AP
Ozone	AM	AM	AM	AM	NA	NA	NE	NE
Mercury and other heavy metals	NA	NA	NE	NE	NE	NE	NE	?
Routine operationsc	AM	AM	NE	NE	NE	NE	NE	NE
Water pollutantsd	NE	NE	NE	NE	NE	NE		AP
Noise	NE	NA	NE	NE	NE	NE	AM	NE
AM, assessed in monetary terms, at least in some studies. AP, assessed in physical terms and possibly partly in monetary terms. NA, not assessed, although they may be important. NE, no effect of significance is anticipated. a Effects of particulate matter less than 10 microns (PM10), NOx, and SO2 on amenity arise with respect to visibility. In previous studies these have not been found to be significant in Europe, although they are important in the USA. b SO2 and NOx include acid-deposition impacts. c Routine operations generate externalities through mining accidents, transport accidents, power-generation accidents, construction and dismantling accidents, and occupational health impacts. All these involve mortality and morbidity effects and are externalities to the extent that labour markets do not allow individuals to choose employment with different combinations of risk and reward. d Water pollution effects include impacts of mining (including solid wastes) on ground and surface water, power-plant emissions to water bodies, and acid deposition and its impacts on lakes and rivers (partly quantified). Source: Developed from Markandya and Pavan (1999).

IPCC Homepage