Select Committee on Public Accounts Thirty-Fourth Report


THIRTY-FOURTH REPORT


The Committee of Public Accounts has agreed to the following Report:

POLICY DEVELOPMENT: IMPROVING AIR QUALITY

INTRODUCTION AND LIST OF CONCLUSIONS AND RECOMMENDATIONS

1. The Environment Act 1995 requires the Department for Environment, Food and Rural Affairs (before June 2001, the Department for the Environment, Transport and the Regions) to prepare, publish and keep under review a strategy for air quality. An initial strategy was published in March 1997 and a second strategy (the Strategy) was published in January 2000. In September 2001 the Department published consultation proposals for updating the January 2000 Strategy.[1]

2. The Strategy's purpose is to provide the best practicable protection to human health against the risks posed by air pollution whilst taking into account the costs and benefits of improving air quality. It covers eight pollutants produced from various sources including road transport, industry and electricity generation (Figure 1). For each of these pollutants it sets standards, which define the levels at which pollutants are thought to avoid significant risks to health, and objectives, which specify the actual levels at which the Department is seeking to reduce the concentration of each pollutant by a particular date. The Strategy does not itself include proposals for additional national action to improve air quality. However, it imposes requirements on local authorities to act in areas of high pollution.[2]

Figure 1: Effects and sources of the eight pollutants covered by the Strategy

PollutantPrincipal health effects Main Sources
BenzeneHigher risk of leukaemia Combustion and distribution of petrol.
1,3-butadieneCancer of the lymphoid system Combustion of petrol.
Carbon MonoxideReduction of oxygen-carrying capability of the blood Incomplete combustion of fuels containing carbon, principally in road transport.
LeadVarious effects including damage to the nervous system Mostly petrol vehicles; industry may contribute to lead emissions in some areas.
Nitrogen DioxideAdverse impact on lung function All fuel combustion; road transport accounts for around half of UK emissions.
OzoneIrritation to eyes and nose Effect of sunlight on other emissions, such as emissions from motor vehicles.
ParticlesAdverse impacts on the respiratory system Sources include vehicle exhausts, sulphate and nitrate emissions and construction work.
Sulphur DioxideConstriction of the airways The burning of coal and heavy oils.

3. On the basis of a Report by the Comptroller and Auditor General,[3] we took evidence from the Department for Environment, Food and Rural Affairs (the Department) about the policy making processes used to develop the Strategy. Considerable progress has already been made over recent years to improve air quality, and current policies are expected to produce further improvements. Further reductions in air pollution may involve substantial costs; for example, recent analysis by the Department estimated costs of up to £1 billion for further control measures for just one pollutant. Sound analysis is therefore required as the basis for any decisions to introduce new control measures.[4] Three main conclusions and recommendations emerge:

  • The Department should address the most important gaps in its knowledge of the health effects of air pollution. Rigorous assessment of the costs and benefits of action to improve air quality is made difficult by considerable uncertainties and gaps in the evidence on the health effects of air pollution. The Department should review its research programme, working closely with other departments with interests in this area, to establish how best to address the most important gaps in its knowledge, such as which sizes of particles are the most dangerous and whether there is a safe "threshold" concentration below which ozone has no effect.

  • The Department should put in place contingency plans to enable it to meet its air quality targets should air quality trends differ from its forecasts. The Department has established good arrangements for monitoring progress towards meeting its air quality objectives through its network of monitoring sites and publication of the results. However, air quality is affected by uncertain factors such as the weather or the level of economic activity. In its September 2001 consultation paper the Department provided additional information on the potential impact of such uncertainties but it should also address the further action that might be required if actual air quality is materially different from its forecasts.

  • The Department should review with local authorities the experience gained in implementing the Strategy to date. Local authorities are responsible for assessing local air quality, and, if appropriate, taking action to improve it. Hence they have an important role in implementing the Strategy. The Department should consult local authorities about the implementation of the Strategy to date, and in particular on whether the Department is providing sufficient support and assistance to enable local authorities to tackle their challenging task.

4. Other important conclusions and recommendations are as follows:

On the justification for imposing costs on industry and consumers

      (i)  The Department's current approach to assessing whether the benefits of proposed further improvements to air quality justify the costs is carried out for individual pollutants in isolation and therefore omits the possibility that measures to reduce the level of one pollutant may reduce or increase the level of other pollutants. Further, there is no composite or aggregate assessment of the costs and benefits of the Strategy as a whole, or assessment of which measures are most cost-effective. The Department should extend its analyses to address such matters in future reviews of the Strategy. (paragraph 12)

      (ii)  Placing financial values on the benefits from improving air quality so that they can be used in a cost-benefit calculation is clearly a complex task, particularly placing values on human lives. This question goes wider than the Department's work on assessing the benefits of air quality improvements. The Department should therefore co-ordinate its further research in this area with that of other departments who have to estimate the impact of policies on human health, and on other factors such as the benefits to industry. (paragraph 13)

On addressing the imprecision and uncertainty affecting the Department's analyses

      (iii)  There is a risk that unreliable forecasts of future emissions, economic activity and weather patterns produce unreliable estimates of future air quality, on the basis of which the Department then sets air quality objectives intended to reduce the impact of poor air quality on human health (where these impacts may themselves be uncertain). Measures to improve air quality can be costly. The Department should therefore enhance its forecasting methods by seeking to reduce unreliability in the main components of the model as far as possible, and by giving greater profile to the inherent uncertainties within its forecasts in determining the objectives to be set for air quality improvements. (paragraph 18)

On implementation and review

      (iv)  The Department plans to carry out an evaluation of the efficacy of different policy instruments for improving air quality. This evaluation should be completed before the review of the Strategy objectives for nitrogen dioxide and for the protection of ecosystems, which is planned for later in 2002. (paragraph 31)

      (v)  Many local authorities required to assess air quality in their areas lack the necessary expertise within their environmental departments. It is unrealistic to expect small local authorities in particular to be able to carry out the complex economic and scientific analyses required. The Department should consider increasing assistance to local authorities, for example through establishing a designated centre of excellence to which they could refer for advice, and which might share knowledge and experience across local authorities carrying out essentially similar tasks. (paragraph 32)

      (vi)  The Department should develop the work of its Interdepartmental Group to include: monitoring of proposed policy changes by other departments potentially affecting air quality, to ensure that it is consulted about such proposals while they are still at an early stage of development, and so that it can provide timely advice on the likely impact on air quality; and pollution issues dealt with by other Units within the Department such as climate change caused by carbon dioxide emissions. (paragraph 33)

THE JUSTIFICATION FOR IMPOSING COSTS ON INDUSTRY AND CONSUMERS

5. The Department believed that significant advances in air quality had been made and the problems today were quite different from the smogs of the 1950s. The long term trend in air pollution over the last decade remained downward due to actions already taken, such as the fitting of catalysers to cars.[5]

6. In developing the Strategy and setting air quality objectives the Department sought to take into account both the costs and benefits of improving air quality. It had established an Interdepartmental Group on Costs and Benefits to bring together officials from departments whose policies have an impact on air quality. In January 1999 the Group published an interim report explaining its analysis and setting out its preliminary results. The report concluded that both the benefits and costs of further improvements to air quality would be large, but the report was unable to quantify either fully. As a result, this work had limited influence on the Strategy.[6]

7. The purpose of the Strategy was to design policies which took account of the costs and benefits of proposed measures to avoid burdening industry and other emitters of pollution disproportionately to the benefits that might accrue. Doing so was not always straightforward as both costs and benefits were subject to uncertainties. In the Strategy, and in the September 2001 consultation paper, the Department had tried to maintain a reasonable balance. The September 2001 consultation paper, for example, had analysed the effects of possible measures to control transport and industrial emissions, and set the potential costs against the potential benefits, expressed where possible in monetary terms. The paper estimated that for particles, the annual cost of further measures to reduce emissions would be between £0.785 billion and £1.115 billion, with benefits valued at a broadly similar amount.[7]

8. A sub-group of the Department of Health's Committee on the Health Effects of Pollution reported in 1998 that air pollution from ozone, sulphur dioxide and particles brought forward up to 24,000 deaths a year and contributed to the causes of a similar number of hospital admissions. Within this total, however, the estimates of the number of deaths brought forward by ozone pollution varied between 700 and 12,500 because of uncertainty as to whether there was a level below which ozone had no effect on health. And the estimates for the effects of particles considered only the acute (short term) effects of particles, whereas the Department believed that the chronic (long term) effects of particles might be significantly greater. It was not known how particles killed people, nor was it known which sizes of particle were the most damaging. Information on the health effects of exposure to nitrogen dioxide and carbon monoxide was also insufficiently reliable to be quantified.[8]

9. The Department did not know by how much the 24,000 deaths had been brought forward. For those affected, the impact of pollution on lifespan was more likely to be a matter of days or weeks than months or years. In total this effect represented between 2,500 and 5,000 life years lost annually.[9]

10. There were also significant problems in putting a financial value on the benefits from improving air quality, for use in cost-benefit calculations. The Department of Health's ad hoc Group on the Economic Appraisal of the Health Effects of Air Pollution estimated that the value of reducing the risk of a death brought forward was between £2,600 to £1.4 million a year, depending on the circumstance of the premature death. An interdepartmental research project was under way to narrow the range of this figure and the results were expected towards the end of 2002. The work was focusing both on the ages of those affected and the value to be placed on reducing the risk of death. There was some indication from the health research that the elderly were most affected by air pollution, but there was also the possibility that some groups in other age ranges might be more susceptible.[10]

11. The Department's work on cost-benefit appraisal for the Strategy focused on four out of the eight pollutants, due to limitations in the evidence available for some pollutants and because the targets for some other pollutants were likely be achieved without the need for additional measures. However, this approach, which considers pollutants in isolation, ignored the possibility that measures to reduce the level of one pollutant might reduce or even increase the level of other pollutants. It was too difficult to determine whether mixtures of pollutants had a greater effect than single pollutants on their own, although the Department felt that intuitively this result might be expected. The potential for a pollutant to enter the human body from another source, for example from water, also needed to be considered in assessing the costs and benefits of controlling air pollution. Assessments of costs and benefits had included effects other than health effects, such as the benefits to industry of cleaner air.[11]

Conclusions

12. The Department's current approach to assessing whether the benefits of proposed further improvements to air quality justify the costs is carried out for individual pollutants in isolation and therefore omits the possibility that measures to reduce the level of one pollutant may reduce or increase the level of other pollutants. Further, there is no composite or aggregate assessment of the costs and benefits of the Strategy as a whole, or assessment of which measures are most cost-effective. The Department should extend its analyses to address such matters in future reviews of the Strategy.

13. Placing financial values on the benefits from improving air quality so that they can be used in a cost-benefit calculation is clearly a complex task, particularly placing values on human lives. This question goes wider than the Department's work on assessing the benefits of air quality improvements. The Department should therefore co-ordinate its further research in this area with that of other departments who have to estimate the impact of policies on human health, and on other factors such as the benefits to industry.

THE IMPRECISION AND UNCERTAINTY AFFECTING THE DEPARTMENT'S ANALYSES

14. To assess the practicality and the incremental cost and benefits of any objectives set for air quality, the Department commissioned forecasts of the likely impact of current economic and technological trends, and existing and planned policies on future air quality. It contracted AEA Technology to design and operate computer models to make the forecasts.[12]

15. In using such models there is scope for the output of the models to be wrong as a result of errors or mistakes in computer programming, the estimation and simplification involved in modelling complex physical processes, and the impact of causal variables such as the weather, whose exact nature cannot be predicted precisely in advance. AEA Technology has estimated that its forecasts of emissions, on which the models were based, are subject to measurement errors of plus or minus 40 per cent, and forecasts of air quality were likely to be subject to a broadly similar degree of uncertainty. However, in contrast to some other countries, the Department has not graded its emissions estimates to convey to policy makers and others the main areas of uncertainty.[13]

16. The Department has constantly reviewed the modelling and the inputs to it. For example, it updated the National Atmospheric Emissions Inventory each year, and in October 2001 had looked at new emissions factors for road transport. It was also monitoring air quality on a daily basis, checking actual data against the forecasts, and running the model for earlier periods to check the model's output against historic data. The Department noted that there was evidence that the uncertainties in the air quality forecasts were about the same or slightly bigger than the uncertainties in the emissions forecast.[14]

17. Actual air quality in the future may well differ from forecast levels because of the impact of uncertain factors such as the weather or the level of economic activity. In developing the Strategy, the Department considered only the "best-estimate" of future air quality, and did not undertake any sensitivity analysis to consider and respond to the potential uncertainty of the forecasts. In its September 2001 consultation paper it tried to improve its treatment of uncertainties by providing a range of forecasts taking into account uncertainties in emissions data and in the weather.[15]

Conclusion

18. There is a risk that unreliable forecasts of future emissions, economic activity and weather patterns produce unreliable estimates of future air quality, on the basis of which the Department then sets air quality objectives intended to reduce the impact of poor air quality on human health (where these impacts may themselves be uncertain). Measures to improve air quality can be costly. The Department should therefore enhance its forecasting methods by seeking to reduce unreliability in the main components of the model as far as possible, and by giving greater profile to the inherent uncertainties within its forecasts in determining the objectives to be set for air quality improvements.

IMPLEMENTATION AND REVIEW

19. Under the Environment Act 1995 the Department is obliged to keep the Strategy under review. To monitor air quality, it established a network of over 100 air quality monitoring sites, and commissioned AEA Technology and the National Physical Laboratory to assess and control the accuracy and reliability of the results reported by the network. It also intends to review the Strategy on a pollutant by pollutant basis, and to evaluate the efficacy of different policy mechanisms in practice. In September 2001 the Department published for consultation the results of its first review, which covered particles, benzene and carbon monoxide, and proposed adding a ninth pollutant, polycyclic aromatic hydrocarbons.[16] The Department plans further reviews to be undertaken during 2002 covering nitrogen dioxide and objectives for the protection of ecosystems.[17]

20. The Department received recommendations on a standard for polycyclic aromatic hydrocarbons from its expert panel in 1999. The panel also recommended that the standard for 1,3-butadiene should be reviewed five years after it was set in 1994. The Department needed time to consult on the panel's recommendations as there were complex issues involving difficult science. The Department wanted to respond proportionately rather than just quickly. The review of 1,3-butadiene had now been completed.[18]

21. Local authorities are required to review and assess air quality in their areas for seven of eight pollutants covered by the Strategy. Where a local authority concludes that the air quality objectives are unlikely to be achieved without additional local action, it is required to designate the area as an "Air Quality Management Area". It must then develop and implement an action plan to improve air quality in the area. Actions include traffic management and enforcement of vehicle emission standards.[19]

22. The Department felt that local authorities had made significant progress in recent years. An initial deadline for local authorities of the end of 1999 to complete their assessments of air quality had been extended in recognition of the technical challenge. By early 2001 around 70 per cent of authorities had completed the process and this proportion had since risen to 96 per cent.[20]

23. A survey of local authorities in 1999 identified the lack of expertise as potentially their single biggest problem in improving air quality. The Department helped authorities with guidance, help desks and external technical advice, and was being consulted on their action plans. It was in touch with those authorities which had not completed their assessments, and had agreed work programmes with them. If any authorities failed to take action the Department had reserve powers under the Environment Act 1995, but did not expect use of these to be necessary. The Department did not rank authorities in terms of the extent to which they applied best practice in the management of air quality.[21]

24. One possible action available to local authorities was to issue fixed penalties to owners of vehicles failing emission tests, but regulations were needed to give local authorities this power. Draft regulations had been issued for consultation in October 2001. The Department was considering the responses and intended to lay the regulations once this process was complete. The proposed penalty structure included a basic penalty of £60, rising to £90 if the penalty was not paid within 28 days. The penalty would be reduced to £30 in certain circumstances, for example where the motorist rectified the fault within 14 days.[22]

25. The Department did not know the cost implications for each local authority of acquiring expertise to develop air quality management plans because it did not know yet what plans were needed. It had, however, provided £2.5 million for local authorities to spend on their air quality management duties, although final decisions on such expenditure were a matter for each local authority. The Department had also made available £2.5 million in supplementary credit approvals for the purchase of monitoring equipment and modelling software.[23]

26. One of the Department's guiding principles in developing the Strategy was that it should comply with the European Union Air Quality Daughter Directive. Individual policy instruments, for example decisions affecting the manufacturing and sale of vehicles, might also be influenced by Europe because of their implications for the Single Market. The Department had worked very closely with Transport colleagues in providing the environmental case for European standards for vehicle manufacturing. On ozone in particular, it was working with other European Union member states, and in the last two years had concluded two international agreements to reduce European emissions of the ozone producing substances.[24]

27. The first air quality standards in the Strategy were adopted in 1994, and covered eight pollutants, whereas the European Union Air Quality Daughter Directive covered twelve pollutants. The Department confirmed that the Directive was not more rigorous than UK objectives. The additional pollutants were chiefly metals produced by industrial plant, which were regulated by the Environment Agency.[25]

28. Air quality is affected by policy instruments operating in many different sectors of the economy, for example road transport, industry, power stations, and domestic heating, some of which are the responsibility of other government departments. During the development of the Strategy the Department established a special group—the Interdepartmental Group—to liaise with other government departments and the devolved administrations in Scotland, Wales and Northern Ireland.[26]

29. The Department intended to retain the Interdepartmental Group in order to influence and monitor action by other departments. Other departments' policies were expected to have regard to the Strategy's objectives where possible, and other departments were expected to consult the Department on matters affecting the Strategy. For example, the Department had engaged with the Department of Transport, Local Government and the Regions on transport matters such as the recent decision about Terminal 5 at Heathrow. It had drawn attention to obligations under the Air Quality Directives and to the Planning Inspector's recommendation that BAA[27] should be required to produce and keep under review an action plan showing how it intended to minimise emissions from Heathrow.[28]

30. The Department was also responsible for other environmental issues linked to air quality, such as indoor air quality, radioactivity and climate change caused by carbon dioxide emissions. These issues were dealt with by other Units within the Department, which were separate from its Air Quality team. They were, however, all within the Department's Directorate for Environmental Protection. The Department also had a team of scientists and economists to look at these issues together with the Department of Health and other departments.[29]

Conclusions

31. The Department plans to carry out an evaluation of the efficacy of different policy instruments for improving air quality. This evaluation should be completed before the review of the Strategy objectives for nitrogen dioxide and for the protection of ecosystems, which is planned for later in 2002.

32. Many local authorities required to assess air quality in their areas lack the necessary expertise within their environmental departments. It is unrealistic to expect small local authorities in particular to be able to carry out the complex economic and scientific analyses required. The Department should consider increasing assistance to local authorities, for example through establishing a designated centre of excellence to which they could refer for advice, and which might share knowledge and experience across local authorities carrying out essentially similar tasks.

33. The Department should develop the work of its Interdepartmental Group to include: monitoring of proposed policy changes by other departments potentially affecting air quality, to ensure that it is consulted about such proposals while they are still at an early stage of development, and so that it can provide timely advice on the likely impact on air quality; and pollution issues dealt with by other Units within the Department such as climate change caused by carbon dioxide emissions.


1   C&AG's Report, paras 1.1-1.5 Back

2   ibid, paras 3, 7, and Appendix 2 Back

3   C&AG's Report, Policy Development: Improving Air Quality (HC 232, Session 2001-02) Back

4   Q51 Back

5   Qs 3, 10, 17, 32 Back

6   C&AG's Report, paras 3.2, 3.19, 3.21 Back

7   Qs 13-14, 48-51 Back

8   C&AG's Report, paras 2.13-2.15 and Figure 10; Qs 7-8, 23-28, 55 Back

9   Qs 115-116, 127 Back

10   C&AG's Report, para 3.22; Qs 80-81  Back

11   C&AG's Report, paras 3.20-3.23; Qs 58, 81, 82, 147 Back

12   C&AG's Report, paras 3.4-3.5 Back

13   ibid, paras 3.6, 3.16, and Figure 12; Q44  Back

14   Qs 38-47, 148 Back

15   C&AG's Report, para 3.15; Qs 11-12 Back

16   A group of chemicals, produced mainly by motor vehicles, which can cause cancer. Back

17   C&AG's Report, paras 7, 24, 4.22-4.23 Back

18   ibid, 2.11; Qs 35-36 Back

19   C&AG's Report, paras 4.4-4.6 Back

20   Q15 Back

21   C&AG's Report, para 4.7; Qs 15, 16, 88-91 Back

22   C&AG's Report, para 4.6; Qs 107-110; Ev 17 Back

23   Qs 102-105, 149; Ev 17 Back

24   C&AG's Report, para 1.8; Qs 10, 85 Back

25   C&AG's Report, para 2.11; Q33 Back

26   C&AG's Report, para 1.9, Figures 5 and 6; Q73 Back

27   Formerly the British Airport Authority Back

28   C&AG's Report, para 4.14; Qs 73-74 Back

29   Qs 64-70 Back


 
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