A whole-economy model of the health co-benefits of strategies to reduce greenhouse gas emissions in the UK

BackgroundThe UK Government has set specific targets for greenhouse gas emissions to lower the risk of dangerous climate change. Previous research has shown that important health co-benefits could result from strategies targeting the domains of transport, built environment, and agriculture. This study assesses the full general equilibrium economy-wide macroeconomic effects of health co-benefits from three similar UK strategies to meet locally specific 2030 greenhouse gas emission targets.MethodsEconomy-wide effects of health co-benefits were modelled with a dynamic extension of the widely used International Food Policy Research Institute standard computable general equilibrium model for 2011–30. Four forms of economic agents are modelled: firms (who combine resource inputs to maximise profits), consumers (who consume and save to maximise their welfare), government, and foreign agents. The method consists of simulation of three greenhouse gas policy scenarios and a counterfactual do-nothing scenario. Basic health co-benefits (years lived with disability [YLD] and years of life lost [YLL]) were measured for a range of illnesses, on the basis of the comparative risk assessment approach. Combined with incidence numbers and prevalence trends, these basic YLD (morbidity) and YLL (mortality) co-benefits were used to calculate dynamic sequences of demographic and labour market effects on population and productive labour supply, and public budget implications for averted health-care costs and increased social security transfers (including benefit payments for working-age individuals and pension payments for old-age individuals). These economic shocks were subsequently imposed on the computable general equilibrium model and used to measure the combined macroeconomic effect of health co-benefits. The method for measuring averted health-care costs was published in The Lancet in 2012. Three scenarios were modelled: active travel (transport sector; health co-benefits of an assumed transformation of urban transport behaviour to reduce motorised transportation and increase walking [2·5-times] and cycling [8·0-times] in urban England and Wales); healthy diet (food and agriculture sector; health co-benefits of an assumed UK-wide 30% reduction in consumption of dietary saturated fat); and household energy (household energy sector; health co-benefits of an assumed UK-wide improvement in home insulation and ventilation, including reduced household energy use, improved indoor temperature, and associated changes in indoor pollutants).FindingsFor all scenarios, the macroeconomic effects of health co-benefits are positive. Overall, substantial savings on health-care costs represent the main contributing factor. Increased labour supplies also contribute positively, whereas increased social security transfers (due to larger working-age and old-age population segments) detract. The largest potential cumulative gross domestic product gains from health co-benefits are associated with the active travel scenario (around £19 billion), in which increased physical activity averts large-scale and long-term chronic disease burdens and health-system costs. The healthy diet scenario also leads to important potential gains (around £5 billion), whereas the full potential health co-benefits from the household energy scenario will not be realised until beyond 2030. Three economic sensitivity analyses were undertaken to test the sensitivity of results to variations in assumptions concerning: the substitutability of labour for other factors of production; the effectiveness of the interventions; and changes in the discount rate (the present value of the economic effects). Overall, the core results can be considered relatively robust to changes in these three factors.InterpretationStrategies to reduce greenhouse gas emissions and improve health are likely to result in substantial and increasing positive contributions to the economy. This effect might offset some economic costs and thereby allow such strategies to be seen more favourably, especially in times of economic austerity.FundingDepartment of Health Policy Research Programme.