Estimating the Economic Value of Public Health Benefits From Mitigation Projects With Limited Data: A Case Study of the Greater Dhaka Sustainable Urban Transport Corridor Project

Introduction:In 2011, the Asian Development Bank (ADB) conducted a prospective evaluation of a sustainable urban transport corridor project in the Greater Dhaka, Bangladesh which is being funded with the goal of reducing congestion and air pollution. The planned intervention was construction of a bus rapid transit (BRT) line with the concurrent replacement of some existing buses by compressed natural gas (CNG) buses. This type of transportation project is also a common approach to reducing greenhouse gas (GHG) emissions by cities, particularly in developing countries. Therefore, it presents a useful case study to illustrate our proposed methods for estimating the economic value of public health benefits resulting from carbon mitigation projects in a developing country setting. These methods can accommodate different levels of data availability and will support public health benefits assessments in different locations as well as for other types of carbon mitigation projects reducing air pollution, such as those in the energy sector.

Background:ADB evaluated six transportation corridors in the Greater Dhaka for urban development and mass-transit support potential, by assessing the economic benefits of travel-time and operating-cost savings, as well as increased land values. The net present value (NPV) of constructing the selected corridor was $71 million 2010 U.S. dollars (at 12% discount rate, evaluated over 30 years). We supported ABD by developing country-oriented methods to estimate the economic value of public health benefits for projects of this type and by applying these methods to data generated under ADB’s Greater Dhaka BRT project scenarios (namely, estimates of vehicle kilometers traveled [VKT] by several bus types under “with BRT” and “without BRT” conditions).

Methods:We followed an analytical framework for the health impact analysis that included four main components to estimate: (1) the change in primary (direct PM2.5 emissions) and secondary particulate emissions (SO2 and NOx leading to secondary sulfate and nitrate, respectively) from “without BRT” to “with BRT” conditions; (2) the reductions in ambient PM2.5 concentrations resulting from emission changes using an atmospheric dispersion model; (3) the improvements in health outcomes using suitable epidemiological relationships, population and mortality/morbidity incidence data; and (4) the economic value of avoided morbidity and mortality using unit values for adverse health outcomes. This methodological framework matches the main components of the detailed health impacts analyses typically conducted in the US and other developed countries, but uses simplifying assumptions, approximations, and modeling tools for the analysis. For example, to quantify emissions of air pollutants, we combined ADB’s VKT estimates with expert-based estimates PM2.5, SO2, and NOx emissions factors (for BRT and non-BRT buses and minibuses) that were deemed most appropriate for the country. Second, the PM2.5, SO2, and NOx emissions, along with meteorology data for the year 2006, were input into a simplified atmospheric dispersion model, ATMoS, which yielded concentration change estimates for primary and secondary PM2.5. Third, given that there were no suitable epidemiological relationships linking changes in ambient PM2.5 to morbidity and mortality for Bangladesh, we adjusted U.S.-based estimates for use in Bangladesh or used relationships estimated elsewhere in the region. Rather than looking at a wide spectrum of potential health impacts, we focused on estimating reductions in premature mortality in adults and children, and reductions in chronic bronchitis in adults. Finally, the valuation of reductions in premature mortality and chronic bronchitis relied on a benefit transfer approach. In an auxiliary analysis, we aslo quantified the change in specific GHG emissions (namely, CO2 and methane, CH4) resulting from the BRT project.

Results:We estimated benefits from the BRT line for each year from 2014 to 2044, reflecting gradual BRT phase-in and population growth in the study domain. Based on our assumptions, we estimated reductions in emissions of primary PM2.5 (~1,800 metric tons during 2014–2044) and SO2 and NOx (~4,400 and ~9,600 metric tons, respectively, during 2014–2044) that could lead to secondary PM2.5. The reduction of primary PM2.5 emissions as well as SO2 and NOx emissions led to reductions in overall ambient PM2.5 concentrations in Greater Dhaka ranging from 1.29E-05 to 1.01E+00 μg/m3, depending on the year of analysis. Combining the concentration reductions with the adjusted epidemiological relationships, incidence rates, and population estimates, we estimated 798 fewer premature deaths for adults over age 30, 55 fewer premature deaths for children under age 5, and 819 fewer cases of chronic bronchitis in adults over age 25. Using our valuation approach, the total undiscounted monetized benefits that we were able to quantify were $116 million (2010 U.S. dollars), with a present discounted value of $9.5 million (2010 U.S. dollars, discounted to 2010 using a 12 percent discount rate), which amounted to 13% of the project NPV. For GHG emissions, there was a net reduction of 434,000 metric tons of CO2 equivalents during 2014–2044 (due to reductions in CO2 and increases in CH4), implying a public health benefit of $21 per one metric ton of CO2 equivalents reduced.

Discussion:The results that we obtained are dependent on the available input data, our assumptions and the models used. First, for the current characterization of “with BRT” and “without BRT” emissions scenarios, we could not estimate all possible types of health benefits for all pollutants because epidemiological information on the relevant relationships than can be applied to Bangladesh is lacking. However, premature mortality, which was assessed in this study, is typically the most important health endpoint in benefits assessment. Note that it was not possible to estimate premature mortality benefits for people aged 5–30, which comprises more than half of the population in Bangladesh, because epidemiological evidence is lacking in this age group. Second, we assumed that the buses that would be removed from circulation as a result of the BRT project were large diesel buses and diesel minibuses. This assumption resulted in larger PM2.5 improvements than if CNG buses and CNG minibuses were removed, but in also in increased CH4 emissions under “with project” conditions. Third, while it was possible to analyze changes in bus counts associated with the project, there was little information on the impact of the BRT project on average vehicle speeds in the corridor or on the impact of the BRT project on vehicle types other than buses. It is unclear whether the change in vehicle speeds would increase or decrease the overall public health benefits estimate. Fourth, the BRT project does have an inspection and maintenance component, but information on this program was not detailed enough to enable estimation of its impact on emissions. Accounting for this program would likely have increased public health benefits. In sum, our results are illustrative and limited to the assumptions we made and approach we took. A full characterization of the air pollutant emissions profiles associated with the “without BRT” and “with BRT” conditions would refine these estimates

Conclusions: Carbon mitigation projects in the transport and energy sectors often affect air pollution, which has important economic and policy implications. The public health benefits of such projects could be large and could also materially affect a project’s net present value. We found that our estimate of public health benefits was approximately 13% of the project NPV that was based solely on economic benefits of travel-time and operating-cost savings. We believe that assessment of public health impacts can be a potentially game-changing factor in evaluating GHG mitigation strategies. Results of such health benefits assessments can also be communicated to the stakeholders and broader public, thereby increasing societal interest in and public acceptance of the GHG mitigation projects and programs.