An evaluation of the air quality strategy.

Government policies need to be evaluated, in order to inform the ongoing development of future policy. This study, ‘An Evaluation of the Air Quality Strategy’, has evaluated selected air quality policies over a period of major change, from 1990 onwards, and assessed their cost effectiveness in achieving air quality improvements. The study has also assessed the costs and benefits of these policies, to provide information on which policies have been successful and which have not. Finally, the study has evaluated how closely the actual out-turns of policies match the anticipated effect, to help inform future appraisals. The study has not considered all air quality policies, in all sectors. Tackling all of these would have been too broad a remit. Instead the study has evaluated the two most important sectors – road transport and electricity generation. The consideration of other sectors, particularly industry and the domestic sector, is one of the priorities identified for future research. Within the two sectors, the evaluation has focused on specific legislative policies, rather than broader measures. It has also excluded specific policies aimed at reducing CO2, as these have been evaluated in other studies. The study has assessed the estimated out-turn that would have occurred in the absence of the policies. This is referred to as the ‘no abatement’ scenario (also called the ‘without policies’ or ‘counterfactual’ scenario). For each sector, the study has then evaluated the estimated effect of policies against this ‘no abatement’ scenario in terms of: • The emissions reductions achieved by the policies; • The progress towards the UK/European Union (EU) air quality objectives/limit values; • The benefits of the policies in terms of physical effects and monetary valuation; • The costs of policies, as anticipated in Government appraisal before the legislation was implemented (‘ex-ante’), and the actual cost out-turn after introduction (‘ex-post’). The results of the analysis are presented for the evaluation period from 1990 – 2001. However, the benefits of the existing policies extend beyond this period, and so we have extended the analysis over a projected period from 2002 – 20101 . For the road transport sector, the study has primarily assessed European command and control policies affecting vehicle emissions and fuel quality, but has also included national initiatives using duty differentials. The policies include unleaded petrol, successive controls on the sulphur content of diesel and petrol, and successive Euro standards (from Euro I to IV). These policies have been introduced sequentially through the study period. For the electricity supply industry (ESI), the study has considered a much wider number of policies, including European command and control policies, international protocols, national environmental policy and market-based instruments (e.g. renewable subsidies). These policies do not follow a sequential order. Moreover, since 1990, the UK electricity sector has undergone a radical restructuring and liberalisation, which has had a major role in reducing air pollution and helping to meet environmental legislation and commitments. The combination of energy and environmental policy have led to a number of ‘convergences’, which have led to the actual out-turn seen in the sector, for example in respect to increased use of natural gas as a fuel. The study has evaluated the costs and benefits of all air quality improvements in the ESI, and then assessed the proportion of these that could be allocated to air quality policy The results of the study are presented below2 , for each of the key evaluation questions raised. The benefits are presented relative to the expected out-turn in that year, rather than the benefits relative to 1990 conditions: for example, the benefits in 2001 are the difference between the actual out-turn in 2001 and the estimated out-turn ‘without policies’ in 2001. We stress that the expected out-turn ‘without policies’ has been estimated for each of two sectors separately.3 Where appropriate, the results from the two sectors are combined to give an aggregated analysis. Note the analysis assumes that all current policies in other sectors are in place