Conference Agenda

As an air pollutant, surface ozone reduces agricultural yields and harms human health. While the control of precursor emissions has improved attainment of air quality standards during the last decades, climate change may increase ozone burdens (climate penalty). This paper analyses the economic and welfare effects of ozone exposure in Austria, contrasting a medium and high greenhouse gas (GHG) emission scenario. The economic assessment is conducted in a computable general equilibrium (CGE) model, capturing ozone impacts on agricultural yields and health and the national emission control costs on ozone precursors. We find that in 2050, ozone exposure of the population and cropland is substantially higher in a high, compared to a medium GHG emission scenario. This is attributable to both, an increase in average temperatures and a chemical penalty emerging from elevated methane abundances, facilitating higher ozone background levels. Comparing the costs and benefits, we find that in 2030, emission control costs in a medium GHG emission scenario exceed the benefits of associated reductions of the ozone burden. However, by 2050, the benefits significantly outweigh the costs. This shift is due to higher absolute emission control costs in 2030, while the benefits of emission controls become more pronounced by 2050. While we find distinct and negative effects on agricultural yields, health effects dominate the welfare effects across all scenarios, increasing climate-induced fatalities by up to 30%. Since ozone is a short-lived gas, national emission controls show clear benefits: when Austrian ozone precursor emissions follow a more stringent path within a high global GHG emission scenario, benefits clearly exceed costs. These results encourage unilateral action as a means to reduce local air pollution in the short term, challenging the common notion that GHG emission abatement is a purely public good.