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No. 441: Unit Costs of Air Emissions in Vietnam for Energy System Modelling

Brandt, J., Christensen, J.H., Jensen, S.S., Im. U. 2021. Unit costs of air emissions in Vietnam for energy system modelling. Aarhus University, DCE – Danish Centre for Environment and Energy, 44 pp. Scientific Report No. 441. http://dce2.au.dk/pub/SR441.pdf

Summary

Background and aim

The present report provides a specific technical input to capacity building and technical assistance in Vietnam.

Aarhus University has performed model calculations with a chemistry transport model (DEHM) and an integrated modelling system for estimation of external costs of air pollution for health effects (EVA-system) for Vietnam. It is the first time that the EVA-system has been applied for Vietnam. The purpose is to calculate unit costs of air pollution for emission sectors in Vietnam and on the basis of these calculations deliver input to energy system modelling in Vietnam. Unit costs are health related external costs of air pollution per kg emission of air pollutants.

The external costs (also known as externalities) refer to the economic concept of uncompensated social or environmental effects. For example, when people buy fuel for a car, they pay the market price of that fuel, but not for the derived, non-market costs of burning that fuel, such as air pollution.

The Danish company Energy Modelling Lab will integrate the unit costs of air pollution into an energy system model in order to model different scenarios for energy system optimization which accounts for air pollution costs.

Methodology

EVA-system

Aarhus University has developed a model system for economic valuation of air pollution (EVA-system). The EVA-system is able to estimate the external costs of health effects of air pollution, and hence the unit costs of air pollution to be used as input in energy system optimization.

The EVA-system is based on the impact-pathway method. It can calculate all-cause acute and chronic mortality and morbidity based on exposure-response functions for health effects of air pollution.

Based on information of the spatial and temporal variation of emissions from different emission sectors, air quality models are used to estimate air quality concentrations. Human exposure is calculated based on population data, and using exposure-response functions, the health effects of air pollution are estimated. Based on economic valuation of the different health endpoints the total external costs of air pollution can be calculated as well as the external costs related to different emission sectors. The unit costs, that is, the health effect costs per one unit of emission emitted can be calculated by dividing the aggregate cost for a specific emission sector with the emission emitted of that sector. Unit costs may be expressed as euros per kg emission.

External costs of air pollution are country specific and to adjust the costs to Vietnamese conditions we used the OECD benefit transfer methodology to transform costs of mortality and morbidity from one country to another. Data to adjust for difference in income per capita and relative price differences have been obtained from The World Bank for 2016 as standard costs for health effects represent 2016 prices in the EVA-system. This implies that costs of health effects in Vietnam are estimated to be 9.7% of the standard costs of health effects in the EVA-system for Denmark. This means that the OECD benefit transfer factor is 0.097.

DEHM model

In the present application of the EVA-system for Vietnam the regional air quality model, DEHM has been used. Aarhus University has developed the DEHM model. DEHM (Danish Eulerian Hemispheric Model) is a three-dimensional, offline, large-scale, Eulerian, atmospheric CTM (chemistry-transport model) with zooming capability (with 2-way nested grids of higher resolution) developed to study long-range transport of air pollution in the Northern Hemisphere. The model is routinely used for operational air pollution forecasting, for describing transport and fluxes of CO2, transport of persistent organic pollutants (POPs) and impacts from climate change on future air pollution levels. DEHM has lately been evaluated in several model inter-comparisons and applied in model ensemble studies. DEHM is also used routinely as a part of the Danish Air Quality Monitoring Program (both for Denmark and Greenland) and is further a part of the European Copernicus Atmospheric Monitoring Service (CAMS), delivering operational input to the ensemble air pollution forecasts for Europe.

DEHM includes capability for two-way nested domains to obtain higher resolution. The mother domain covers most of the Northern Hemisphere with a resolution of 150 km×150 km in a horizontal grid. Further sub-domains can be setup covering areas of interest with a higher resolution. For Vietnam we have setup the model with three domains, where the inner domain covers the country with a 16.67 km x 16.67 km grid resolution.

DEHM also has a tagging capability that enables calculation of the concentration contribution of each emission sector and hence the costs of air pollution from each emission sector.

Emission dataset from 2010

The DEHM model requires emissions of SO2 (sulphur dioxide), CO (carbon monoxide), NOx (nitric oxides), NMVOC (non-methane volatile organic compounds), NH3 (ammonia) and PPM2.5 (primary emitted particles less than 2.5 µm in diameter).

We have identified the global emission dataset - HTAP_v2 emissions – as the emission dataset with the highest quality for Asia and Vietnam, which is considered to be the best available emission data for this region, and there is not a newer complete dataset available. This dataset was used as the standard emission inventory in a model inter-comparison study where a total of 14 chemical transport models (CTMs) participated in the first topic of the Model Inter-Comparison Study for Asia (MICS-Asia) phase III.

Meteorological data

Meteorological data from 2019 is calculated using the meteorological model (WRF - Weather Research and Forecasting model), setup on the same domains as DEHM.

As the emission dataset is from 2010 then calculated concentrations and associated health effects will also represent conditions in 2010.

Comparison with other studies

We have conducted a smaller summary/literature review of existing studies in Vietnam/Southeast Asia with modelling of health impacts of air pollution, and compared our findings with these studies where possible.

Main findings

Total costs of air pollution in Vietnam

Total costs of all air pollution in Vietnam due to domestic and foreign emission sources are estimated to 43 billion euro based on emissions from 2010 (and 2016 prices for health costs). About half of these costs are from domestic emission sources and about half are from foreign emission sources.

Total costs of Vietnamese emissions

The total costs of emissions in Vietnam to health effects in Vietnam are approx. 17 billion euro. Approx. 57% of the costs are related to emissions of PPM2.5 and the rest of the costs are related to emissions of NOx, SOx, NH3 and NMVOC.

The residential emission sector (SNAP02) contributes by far with the largest costs which in Vietnam includes a lot of emissions from use of biomass for cooking and also heating. International bodies have standardised reporting on emissions in the so-called SNAP categories. SNAP stands for Selected Nomenclature for Air Pollution.

The total costs of emissions from Vietnam in Vietnam and beyond are approx. 47 billion euro indicating that Vietnamese emissions also have a large health impact abroad as air pollution is transported over large distances. Similarly, Vietnam is also affected by emissions from neighbouring countries and beyond. In total 37% of all costs from Vietnamese emissions fall within Vietnam and 63% outside Vietnam.

Health effects of air pollution

The number of annual premature deaths in Vietnam due to all air pollution due to domestic and foreign emission sources is estimated to approx. 179,000 based on emissions from 2010 with the EVA-system. 

The number of annual premature deaths in Vietnam due to emissions in Vietnam is estimated to approx. 83,000. The population of Vietnam was approx. 89 mill. in 2010. Emissions in Vietnam cause an additional approx. 142,000 annual premature deaths outside Vietnam, hence the total number of annual premature deaths due to emissions in Vietnam is approx. 224,000.

Main results

The main purpose of the present study is to estimate unit costs of air pollution for Vietnam.

Table 1 summarizes the unit costs for each emission sector and for each of the pollutants of Vietnamese emissions. The unit costs are given for Vietnamese emission under two assumptions. ‘Vietnam only’ which means that only costs within Vietnam is included in the unit costs whereas ‘total in Vietnam and abroad’ also include costs that falls outside Vietnam due to Vietnamese emissions.

Residential emissions (SNAP02) and road transport emissions (SNAP07) have the highest unit costs.

Comparison with other studies

We have compared our findings where relevant and possible with identified selected studies from Vietnam/Southeast Asia within air quality and health impacts and related external impacts of air pollution.

A study by WHO states that Vietnam's annual population weighted mean concentration of PM2.5 is 30 µg/m3 in 2012, which exceeds the recommended guideline of 10 µg/m3 by the WHO and the limit value of European Union of 25 µg/m3. Annual mean concentration of PM2.5 in Vietnam is approx. three times higher than levels in Denmark. In our study, we calculated a population weighted mean of 29 µg/m3 for PM2.5 for Vietnam for 2010, which is close to what WHO estimates for 2012.

In our study we estimate the number of premature deaths due to all air pollution in Vietnam due to domestic and foreign emission sources to approx. 179,000. This is substantially higher that WHO (2018) that estimates approx. 60,000. In Denmark, estimation of premature death due to air pollution has been carried out every year for a number of years with the EVA-system. The most recent estimate for 2019 is 4,600 premature deaths due to all air pollution in Denmark due to domestic and foreign emission sources. Denmark has a population of 5.8 mill. and Vietnam 96.5 mill. If we extrapolate the number of premature deaths in Denmark to Vietnam using population data, we would expect approx. 77,000 premature deaths in Vietnam. We calculate approx. 179,000 with the EVA-system for Vietnam or more than twice as much. This is reasonable as concentration levels of PM2.5 in Vietnam are about three times higher than in Denmark and PM2.5 dominates the number of premature deaths.

The Word Bank has estimated the Gross Domestic Product (GDP) of Vietnam in 2016 (Purchasing Power Parity (PPP) adjusted) to 634 billion USD equivalent to 513 billion euro (World Bank, 2016). We use a price level of 2016 level as the standard health costs represent 2016. We estimate the total external costs to approx. 43 billion euros due to all air pollution due to domestic and foreign emission sources (2016 prices with emissions from 2010). This is approx. 8% of GDP and roughly 50% higher compared to other studies for Vietnam (4.5-5.6%).

Uncertainty assessment

We have carried out a structural overview of the uncertainties in the different parts of the EVA-system, and how it may affect the calculated unit costs of air pollution for Vietnam. Overall we assess the calculated unit costs of air pollution for Vietnam to be best available with medium uncertainty.