Working Paper

Costs and benefits of China 5/V and 6/VI standards in Guangdong Province

The ICCT conducted a cost-benefit analysis of the introduction of stringent new vehicle emissions and fuel-quality standards in Guangdong Province. The analysis estimates future emissions, health and climate impacts, and costs.

The results show that early implementation of the China 5/V emissions standards and ultralow sulfur fuel standards in Guangdong will yield immediate emissions reductions from the motor vehicle fleet. These emissions reductions will lead to improvements in public health from reduced air pollution exposure and lower climate pollutant emissions. Using standard cost-benefit methodologies, we estimate that the overall value of these benefits will outweigh the total costs of the standards by 1.4 billion RMB in 2015 alone. These estimates should be considered conservative, since the health impacts estimates only consider premature mortalities from primary PM2.5 emissions and do not yet model morbidities or exposure to secondary PM or other pollutants including ozone. Our results strongly support the early implementation of the China 5/V standards in Guangdong.

However, our results also demonstrate that with the expected continued dramatic rise in motor vehicle population in Guangdong, the China 5/V standards will not be sufficient to achieve long-term emissions reductions in the province. Introduction of China 6/VI standards will be necessary if emissions from motor vehicles are to continue to decline through 2030. Furthermore, the China 6/VI standards are cost-effective, consistent with results in other regions implementing advanced tailpipe emission standards around the world. Conservatively estimated, in 2030 the benefits of the China 6/VI standards outweigh costs by a factor of 2.5 to 1 (even higher farther into the future). Under this scenario, premature mortalities from air pollution exposure in Guangdong will be reduced by 45% compared to the 2010 level.

[Revised, December 2014]