A2.8 Atmospheric pollution can have significant effects on health, quality of life, economic activity and the functioning of ecosystems. Three approaches can be used for valuation:24
1. if impacts are likely to be less than £50 million and do not affect compliance with legal limits then a "damage cost" approach is appropriate. This involves multiplying emissions changes by pre-calculated unit costs, described further below. This is often used to value the consequences of changes in pollution e.g. on health, crops and buildings.
2. if impacts are greater than £50 million then the "impact pathway" approach should be considered. This involves bespoke modelling specific to the intervention.
3. an "abatement cost" approach should be used in the limited instances where a proposal could affect compliance with legal limits. This involves estimating the least costly way of mitigating the impact of the proposal to ensure continued compliance with legal obligations.
A2.9 Damage costs are a relatively simple way to value changes in air pollution, as full modelling can be resource intensive. Damage costs are estimates of the societal cost of a change in emissions of different pollutants. This approach is appropriate for small air quality impacts (below £50 million) provided the proposal does not affect areas likely to breach legal air quality limits. Damage costs are calculated per year and should be multiplied by the number of years to which they apply. Full guidance and the latest damage cost estimates are available from DEFRA.
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24 Please contact IGCB@defra.gsi.gov.uk to discuss the most appropriate approach.