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The European Journal of Health Economics

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01-12-2018 | Original Research

Tackling the chronic disease burden: are there co-benefits from climate policy measures?

Authors: Désirée Vandenberghe, Johan Albrecht

Published in: The European Journal of Health Economics | Issue 9/2018

Abstract

Each year, non-communicable diseases (NCDs) kill 40 million people worldwide and impose an estimated economic burden of $600 billion. Without effective policymaking, NCDs will continue to undermine health and economic systems globally. We propose that climate policy measures—such as carbon pricing—can yield significant health-related co-benefits aside from their intended greenhouse gas emission reduction. We simulate three carbon tax scenarios in the energy and food sector in Belgium and assess the resulting health-related co-benefits. These benefits originate from decreased exposure to two leading NCD risk factors: fine particulate matter and dietary regimes excessive in animal products. The carbon tax could prevent 42,300–78,800 Disability-Adjusted Life Years in Belgium, or save 0.6–1.1% of total health care expenditure and an additional 0.06–0.12% of Belgian GDP. We conclude that these health-related co-benefits should be included in the cost–benefit analysis of carbon pricing.

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The EU Air Quality Directive sets an annual limit value for PM_2.5 at 25 µg/m³. WHO AQG sets a guideline where the annual PM_2.5 mean should not exceed 10, or 25 µg/ m³ 24-h mean for more than 3 days a year [17].

Meat consumption per capita was based on FAOSTAT data and calculated using a trade balance approach: total production plus imports, minus exports; divided by total population [118]. Regions were constructed according to the World Fact book [119].

The recommended aspects were: (1) never smoking, (2) having a BMI lower than 30, (3) performing 3.5 h/week or more of physical activity, (4) adhering to healthy dietary principles (high intake of fruits, vegetables, and whole-grain bread and low meat consumption).

The energy-intensive industry sectors include oil refineries, steel works and production of iron, aluminum, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids, and bulk organic chemicals.

At the time of the adoption of the ETS Directive 2009, the average expected CO₂ price to apply during ETS was €30 per EU Allowance. That price assumption was built into the ETS Directive in 2009 and it was also applied as the basic premise for eligibility in the 2010 Carbon Leakage Decision and its update in 2011 [120].

The SSC in 2007 prices per tonne of CO₂e at 3% discount rate for 2020 is estimated at $43, equivalent to about €45 in 2015 prices.

Prices before and after the carbon tax for all fuel and food products in the analysis are illustrated in “Appendix A”.

The indirect utility function is a generalization of the PIGLOG (Price-Independent Generalized Log) demand system, meaning that demand is characterized by expenditure shares that are linear in the logarithm of total expenditure. The full mathematical expression of the indirect utility function can be consulted in “Appendix B”.

The full mathematical expression can be consulted in “Appendix B”.

The HBS does not contain the quantities of these foods sold, so no implicit prices could be calculated accordingly. Before 2014, a series of average prices was published on which the CPI is based. These prices, however, are not the exact average price that consumers pay; these prices were collected to create the CPI, not to measure average prices for consumers. Different product definitions can also lead to confusion. For us, to construct a reliable average price for each meat product, we focused on specific meat products for which a consistent measurement over time was available.

The fact that the majority of health gains lie with improvement in dietary composition rather than air pollution is illustrated in “Appendix F” which includes the tables for health and economic gains for the energy and food sector separately.

${\text{RR}} = \frac{\text{OR}}{{(1 - r) + (r.{\text{OR}})}}$, where ${\text{RR}}$ is relative risk, ${\text{OR}}$ is the odds ratio, and $P_{0}$ and $r$ is the mortality, incidence, or prevalence rate for the reference or non-exposed group.

Based on WHO data for total health expenditure in 2014 and the Health HICP from Eurostat [91, 121].

Belgium itself is not included in the HEDIC study, but by applying the average deviation between HEDIC and other studies for Germany and the Netherlands, we can approximate Belgian health care expenditure for CVD and cancer.

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Title: Tackling the chronic disease burden: are there co-benefits from climate policy measures?
Authors: Désirée Vandenberghe
Johan Albrecht
Publication date: 01-12-2018
Publisher: Springer Berlin Heidelberg
Published in: The European Journal of Health Economics / Issue 9/2018
Print ISSN: 1618-7598
Electronic ISSN: 1618-7601
DOI: https://doi.org/10.1007/s10198-018-0972-4

Keynote webinar | Spotlight on sleep in brain health

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Tackling the chronic disease burden: are there co-benefits from climate policy measures?

Abstract

Keynote webinar | Spotlight on sleep in brain health

Springer Medicine

Abstract

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