Modelling the health related benefits of environmental policies - a CGE analysis for the eu countries with gem-e3

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2.5.2. Production function

The calibration of the production function is completely similar as in the
standard GEM-E3 model. The parameter γ is given by the ratio between the workings
days lost or gained due to the change in air pollution and the number of working days in
the reference equilibrium, so it is zero by definition in the base year 1995. For the
determination of the impact of air pollution on the number of working days the reader is
referred to Section A.2 of the Appendix.

2.5.3. The costs of air pollution from ExternE

ExternE (1996, 1998, 2000) presents estimates for the total damage of air
pollution, including the mortality, morbidity and non-health related impacts,
representing the marginal willingness to pay (MWTP) for a reduction in air pollution.
The study also provides information about the share of these three components. This is
summarized in Table 1^5,6.

Table 1: The total damage of air pollution and the damage related to
mortality, morbidity and non-health impacts

Source: ExternE (1996, 1998, 2000)

a units of ambient concentration: μg∕m³ for PM₂.₅, PM₁₀, nitrates, sulphates, SO₂; 6h ppb for O₃

⁵ The Appendix gives more detailed information about the derivation of the health damage costs.

⁶ All monetary values in the paper are given in ECU in prices of 1995.

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