Design and Analysis of Emissions Levy for Costa Rica
Together with local Costa Rican experts, partners from Indiana University’s O’Neill School of Public and Environmental Affairs, and Climate Focus (prime contractor), Gnarly Tree Sustainability Institute assisted the country of Costa Rica with the design of a greenhouse gas emissions levy for mobile and stationary sources. The GTSI team led the initiative’s economic modelling efforts, which involved the development of a partial equilibrium model, including integration of the U.S. Environmental Protection Agency’s advanced Motor Vehicle Emission Simulator (MOVES) model, to assess the economic and environmental impacts of an emissions levy on carbon dioxide and local pollutants associated with stationary and mobile sources. In addition to leading the economic analysis of the levy, GTSI prepared technical inputs for public consultations, helped outline the corresponding consultation and capacity building program, and provided general research and administrative support. The team also developed training manuals for the economic model and the MOVES model of mobile emissions sources in addition to leading a capacity building workshop for 16 Costa Rica government employees and University of Costa Rica researchers in January 2019.
As part of this project, GTSI also developed a health co-benefits model that quantified and monetized the expected avoided cases of illnesses from reduced emissions of local air pollution due to the levy. The user-friendly model assesses multiple emission reduction scenarios concurrently, allows for the use of alternative relative risk functions, and enables several additional sensitivity analyses (used individually or in combination) to account for uncertainties in key assumptions.