11.8.1.5 Avoidance of air-pollution control costs

As pointed out above, the co-benefits from CO₂ mitigation on air pollution impacts have been found to be largest in developing countries, where air pollutants are often emitted without stringent emission control legislation. Most industrialized countries, however, enforce comprehensive legal frameworks to safeguard local air quality, and these frameworks include source-specific performance standards, national or sectoral emission caps, and ambient air quality criteria.

An increasing number of studies demonstrate significant savings from GHG mitigation strategies on the compliance costs for such air quality legislation. When there are source-specific performance standards, fewer plants burning fossil fuels also imply fewer air pollution control devices. If overall emissions in a country are capped, for example through national emission ceilings in the European Union, or by the obligations of the Gothenburg Protocol of the Convention on Long-range Transboundary Air Pollution, the lower consumption of carbonaceous fuels also reduces the costs for complying with such emission ceilings. This is particularly important since, in these conditions, countries can avoid implementing more expensive air pollution control measures. A similar situation applies when there are legal systems requiring compliance with ambient air quality standards. Carbon mitigation strategies that reduce the levels of polluting activities alleviate control requirements for the remaining sources.

Several studies consistently demonstrate the significance of such cost savings for different countries. Syri et al. (2001) found that low-carbon strategies could reduce air pollution control costs for complying with the EU national emission ceilings in 2010 by 10 to 20%, depending on the extent to which flexible mechanisms of the Kyoto protocol are applied. For the long-term perspective until 2100, van Harmelen et al. (2002) found air pollution (SO₂ and NO_x) control costs without climate policy objectives to be comparable or, in some periods, even higher than the total costs of an integrated strategy that also includes CO₂ mitigation.

The impact of flexible mechanisms on cost savings has been further explored by van Vuuren et al. (2006) for Western European countries. If the Kyoto obligations were to be implemented through domestic action alone, CO₂ mitigation measures amounting to 17 billion US$ per year would allow savings on air pollution control costs of 9.4 billion US$ per year. By contrast, if these countries reached compliance by buying permits for 4 billion US$ per year from outside and implemented domestic measures amounting to 1.4 billion US$ per year, air pollution control costs would decline by 2.4 billion US$ per year in these countries. At the same time, the other European countries selling permits (for 4.3 billion US$ per year) would save an additional 0.7 billion US$ per year on their own air pollution control costs due to the additional carbon mitigation measures.

A study of the United States by EIA (1998) estimated that, for a 31% reduction in CO₂ emissions, the associated decline in SO₂ emissions would be so large that the prices for SO₂ allowances will be driven to zero. Burtraw et al. (2003) calculated, for a 7 US$/tCO₂ carbon tax, savings of 1–2 US$/tCO₂. Their finding was that these savings would be generated by reduced investments in SO₂ and NO_x abatement in order to comply with emission caps.

These cost savings are immediate, they do not depend on controversial judgments on the monetary value of mortality risks, and they can be directly harvested by the actors who need to invest in mitigation measures. They therefore add an important component to a comprehensive assessment of the co-benefits of mitigation strategies. While these cost savings predominantly emerge at present in industrialized countries with elaborate air quality regulations, they will gain increasing importance in developing countries as the latter also progressively implement action to achieve sustainable levels of local air quality.