Illness Cost of Air Pollution Technical Report

Executive Summary

June 2000

For several decades, the Ontario Medical Association has played a leadership role promoting improvements in air quality to prevent illness and premature death. This report builds on these initiatives and develops a quantitative foundation for estimating the health and economic damages caused by air pollution. Accompanying this report is a computer model (ICAP – Illness Costs of Air Pollution) which is based on the data presented in this report. ICAP provides forecasts of health and economic damages for expected or desired future air quality conditions in Ontario.

The main body of this report outlines the technical foundations for ICAP. Information requirements and uncertainties are reviewed. The results of an analysis of the Ontario Anti-Smog Action Plan are discussed. Eleven technical appendices deal in detail with various aspects of ICAP and the forecasting of health and economic damages due to air pollution.

The impacts of two pollutants (i.e., ozone and particulate matter) on human health are analyzed. Human health impacts are grouped into five broad categories, namely, premature mortality, hospital admissions, emergency room visits, doctor’s office visits and minor illnesses. Each broad illness category is further broken down into specific illness types for a total of 19 specific cardio-respiratory illnesses. For each illness type, the illness rate is forecast by age group (i.e., 0-17, 18-65, 65+).

Economic damages corresponding to these illnesses are forecast according to four discrete components, namely value of loss of life (i.e., increased risk of premature death), value of quality of life (i.e., increased pain and suffering from illness), health care costs and lost productivity (i.e., lost wages and time). Total economic damages are calculated by summing these damage components.

This information has been used to analyze the health and economic benefits of Ontario’s Anti-Smog Action Plan (ASAP). The benefits of the ASAP are compared to the expected damages if current air quality conditions remained the same (i.e., the status quo). As well, the benefits of advancing the date for the ASAP reduction targets from 2015 to 2010 are forecast. Health and economic damages associated with background levels of ozone have been deducted from these forecasts.

In the year 2000, Ontario is forecast to suffer in the order of 1,900 premature deaths, 9,800 hospital admissions, 13,000 emergency room visits and 46 million illnesses as a result of air pollution. (Forecasts of doctor’s office visits are not included due to the absence of supporting epidemiological studies.) If air quality conditions remain constant for the next 20 years (i.e., to the year 2020), these illnesses and deaths will increase substantially. This increase is due to an expanding population as well as an aging population which is at higher risk to air pollution impacts.

These health impacts involve about $10 billion in annual economic damages. Loss of life and pain and suffering account for about $4.1 and $4.8 billion of this total. Annual health care costs of air pollution are in the order of $600 million; lost productivity accounts for an additional $560 million in annual damages. These economic damages are expected to increase substantially over the next 20 years.

The ASAP will reduce health and economic damages by about 11% overall, compared to the status quo. The residual damages (i.e., those damages expected even with full implementation of the ASAP) in 2015 are substantial and in total are forecast to be in the order of $10.7 billion annually.

Advancing the target date for the ASAP from 2015 to 2010 will reduce somewhat the expected damages for the intervening years. Nonetheless, substantial residual damages are forecast. The benefits of the ASAP are largely attributable to emissions reduction measures in the U.S., not to initiatives in Ontario. If Ontario-only impacts of the ASAP are included, the avoided damages amount to about 4% of the total.

The potential for over- or underestimates is discussed at appropriate locations throughout the report. It is concluded that these estimates of health and economic damages are underestimates. Recommendations are included in the report with respect to future initiatives to use and improve ICAP for policy analysis.

This report was prepared for Dr. Ted Boadway, Director of Environmental Health Policy at the Ontario Medical Association. Dr. Boadway provided ongoing encouragement, support, direction and input to the study from its inception to completion. Michael Perley, Director of the Ontario Campaign for Action on Tobacco, and a consultant to the OMA, also provided ongoing and helpful input over the entire course of the study. Patricia Graham, Assistant to Dr. Boadway, played an invaluable role in facilitating and coordinating the flow of e-mails, reports, phone calls, meetings, etc. relating to the project.

This project was funded by the Walter and Gordon Duncan Foundation. Ms. Christine Lee, Executive Director of the Foundation maintained a keen and positive interest from start to finish.

The DSS project team involved a number of people with diverse backgrounds. Following is a list of the individuals involved and their responsibilities.

Dr. David Bates – Illness risk factors

Mrs. Soile Hämäläinen – Administration, report production and graphics

Mr. Ed Hanna – Project direction

Dr. Robin Hanvelt – Health economics

Dr. Kapil Khatter – Environmental health

Ms. Dianna Kopansky – Researcher

Dr. David McKeown – Environmental health

Mr. David Schneider – Health data analyst

Mr. Steve Spencer – Computer model design and programming

Dr. Peter Victor – Economic valuation

The project draws on data from diverse sources. Many people and organizations assisted in providing access to data. This list of sources is long but several sources deserve special mention. Dean Stinson-O’Gorman at Environment Canada is responsible for their Air Quality Valuation Model. He made available documentation and data related to their model. Dr. David Stieb at Health Canada provided helpful comments on some of the inputs included in ICAP. Jack Donnan at the Ontario Ministry of the Enviroment was helpful in identifying critical relevant information for Ontario.

Despite the many individuals and organizations who provided key inputs to this study, DSS accepts responsibility for the contents of this report.