ENIVRONMENT ASIA

Volume 14, No. 03, Month SEPTEMBER, Year 2021, Pages 62 - 70

Cost–benefit analysis of pm2.5 policy in korea

Kim Suhyoung and Loi Kok Chng

Abstract Download PDF

PM2.5 is one of the most harmful factors of air pollution in Korea, and its damage has been worsening year by year. The Korean government invested trillions of Korean won (KRW) to reduce the concentration of PM2.5; however, the in-depth economic analysis is required to tackle this issue. This study aimed to estimate the health impacts and economic benefi ts of PM2.5 reduction and examine the economic feasibility of the Korean government’s investment in PM2.5 reduction by conducting cost–benefi t analysis (CBA). To determine the economic value and analyze cost–benefi t relationship of the PM2.5 policy, the study used the benefi ts mapping and analysis program (BenMAP) and net present value (NPV). The BenMAP was used to estimate the health impacts of PM2.5 reduction and calculate economic benefi ts by transferring the estimated health impacts. The NPV was adopted to appraise the eff ectiveness of the Korean government’s PM2.5 policies. The results indicate that economic benefi ts ranged from USD 22 million to USD 79 million, and the NPV from USD 3.7 million to USD 20.3 million, depending on the level of reduction in PM2.5 concentration. This study shows the eff ectiveness of Korea’s air quality policy and the necessity of conducting economic evaluation of environmental policies.

Keywords

Particulate matter; Air quality policy; Cost–benefi t analysis; Benefi t mapping and analysis program

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