Health-Related External Cost Assessment in Europe: Methodological Developments from ExternE to the 2013 Clean Air Policy Package

“Getting the prices right” through internalizing external costs is a guiding principle of environmental policy making, one recent example being the EU Clean Air Policy Package released at the end of 2013. It is supported by impact assessments, including monetary valuation of environmental and health damages. For over 20 years, related methodologies have been developed in Europe in the Externalities of Energy (ExternE) project series and follow-up activities. In this study, we aim at analyzing the main methodological developments over time from the 1990s until today with a focus on classical air pollution-induced human health damage costs. An up-to-date assessment including the latest European recommendations is also applied. Using a case from the energy sector, we identify major influencing parameters: differences in exposure modeling and related data lead to variations in damage costs of up to 21%; concerning risk assessment and monetary valuation, differences in assessing long-term exposure mortality risks together with assumptions on particle toxicity explain most of the observed changes in damage costs. These still debated influencing parameters deserve particular attention when damage costs are used to support environmental policy making.