Optimal Global Cost-Benefit Analysis — Policies that save lives

Lara Aleluia Reis, Laurent Drouet, Massimo Tavoni

Optimal Global Cost-Benefit Analysis — Policies that save lives

Abstract

Climate change and air pollution (AP) are two major environmental problems. The interaction between them, calls for complex frameworks that can support decision makers. We propose a comprehensive optimal modelling framework that internalizes the impacts of AP on human mortality and crops under a climate target, taking into account the temperature increases due to air pollution policies and allowing for optimal end-of-pipe and technology sifts investment in the different energy sectors. We found that the internalization of the air pollution impacts strongly reduces premature mortality. Moreover action of air pollution alleviates the climate mitigation costs, in terms of total welfare.

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