Environmental Impacts Assessment - Stage 4

01  Prepare a plan for monetising impacts, including spatial and temporal trends 

In this step, you will develop a plan for monetising impacts using standardised natural capital or ecosystem accounting for the air quality impacts of greatest concern (see Environmental Impact Assessment Guidance, Stage 2 and Stage 3). Your economic analysis will include impacts of air pollutants on provisioning services such as crop yield and timber production, regulating services such as controlling greenhouse gas emissions and provision of clean water, and cultural services such as impacts on recreational fishing, appreciation of biodiversity, and tourism.  

First, become familiar with the concepts of ‘natural capital’ and the UN system of Environmental-Economic Accounting (SEEA) used, for example, by the Convention on Biological Diversity and NCAVES and MAIA projects. This ecosystem accounting approach breaks down nature into assets (or resources) such as stocks of clean air, water, soil and living things, and the flows from the ecosystem service to benefits for humans that can be valued in monetary terms. Analysis is conducted spatially using the following key ‘accounts’, explained using the rainwater filtration ecosystem service provided by forests as an example:

• The area of each ecosystem (‘Ecosystem Extent’ or ‘Asset’), which for forests is the measured area in hectares.
• The condition of these ecosystem assets at points in time (‘Ecosystem Condition’), which for forests assesses quality, using indicators such as soil depth and nutrition status.
• The supply of ecosystem services provided by the ecosystem assets (‘Ecosystem Service Flow’), with a monetisable service of forests being water filtration.
• The use of those ecosystem service assets (‘Ecosystem Service Use’), which for forests would be the supply of clean water, reducing the need for expensive water treatment.
• The stocks and changes in stocks of the ecosystem assets (‘Monetary Ecosystem Assets’), where changes refers to degradation (e.g. by air pollution effects on water filtration by forests) or improvement in supply. Such changes can be valued in monetary terms.

You can find more information on how to apply Natural Capital Accounts within one country in a webinar piloting the approach for the USA. You should also familiarise yourself with an example from the UK where an ecosystem services accounting approach has been used to monetise impacts of air pollutants (Jones et al., 2012), as this study is referred to several times in the following steps.  

In developing your ecosystem accounting approach, it will be helpful to establish collaborative links with experts within or nearby to your jurisdiction that use natural capital accounting for monetising the ecosystem services of greatest relevance to your jurisdiction. Collaborative links should also be established with colleagues monitoring air quality, conducting source attribution modelling and multi-sector scenario analysis in decision support modelling. 

02 Collate pollutant data as spatial and temporal trends

Collate a time series of the air pollution concentration and deposition data required for assessments of impacts on the environment from your air quality monitoring network (see Stage 4, Step 5 of the Air Quality Monitoring Guidance). If available, collate data such as hourly ozone (O3) concentrations, hourly meteorological data, and information on wet and dry deposition of nitrogen and sulfur, including nitrogen oxides (NOx), ammonia (NH3) and ammonium (NH4+).  Ideally you would need 5 – 10 years of data, but longer time series would be better. If needed due to time constraints, focus on the rural areas where results from Stage 2 and Stage 3 indicated that significant impacts are expected.

If insufficient monitoring data is available, you could also use modelled or monitored data for your jurisdiction from sources such as:

• EMEP: The co-operative Programme for Monitoring and Evaluation of the Long-range Transmission of Air Pollutants in Europe provides gridded modelled data for signatory countries of the LRTAP Convention for gaseous air pollutants, aerosols, wet and dry deposition.  
• TOAR Data Portal: The Tropospheric Ozone Assessment Report is ‘The Home of Tropospheric Ozone Data’. It aims to provide access to surface ozone, satellite and aircraft monitored data from around the world in one portal.  
• AERONET: The AErosol RObotic NETwork provides globally distributed observations of spectral aerosol optical Depth (AOD), inversion products, and precipitable water in diverse aerosol regimes.

Data on global patterns and trends in nitrogen deposition (Zhu et al., 2025) and sulfur compounds in air and precipitation (Aas et al., 2019) are available by following the links in these two scientific papers.  

For each pollutant, decide on a baseline year or average of 3 – 5 base years, to compare effects and trends against. If possible, these years should be the same for all pollutants. If only a short time series of data is available, this data can still be used to assess current impacts, without reference to a base year(s). For rural areas without any monitored data, consider using modelled grid square data from regional or global studies, such as those listed above. Link with ‘Source Attribution’ modellers to identify geographical areas where air pollution is produced locally, results from long-range transport or is a mixture of both.  . 

03 Monetise ozone impacts on crop yield

In this step, you will quantify and value the impacts of tropospheric ozone on crop yield as the pollutant could be negatively impacting on food supply within your jurisdiction, as indicated in global studies (Mills et al., 2018). The latter modelled the Phytotoxic Ozone Dose (PODy) absorbed by crops, and predicted that globally, tropospheric ozone pollution reduces the yield of staple food crops by 12.4% (soybean), 7.1% (wheat), 4.4% (rice) and 6.1% (maize), amounting to a total of 227 million tonnes (Tg) of lost yield. Within some countries, yield losses due to ozone can be much higher than these global averages. For example, the Mills et al., 2018, study indicated that wheat yield losses in the five highest wheat producing states of India are predicted to be in the range 15 - 20% (mean 16.5%), with potentially large implications for food supply.  

It is recommended that you use the flux-based (PODy-based) approach originally developed for application by signatories to the LRTAP Convention (from North America, West and East Europe). This approach was used at the global scale in the Mills et al., 2018 study cited in the previous paragraph, and has been used to model impacts at the national scale in non-LRTAP countries such as those in Sub-Saharan Africa (Sharps et al., 2021), India (Pandey et al., 2023) and China (Wang et al., 2024, Li et al., 2025), with the Chinese studies using nationally relevant modifications of the parameterisation for PODy.  

In Stage 5, Step 2 of the Environmental Impact Assessment Guidance, a method is described for developing local parameterisations for PODy from ozone exposure experiments conducted in your jurisdiction. In the meantime, for this Stage (4), it is recommended that you use the flux-based approaches described in Chapter 3 of the LRTAP Convention’s Modelling and Mapping Manual and the web-based DO3SE model to determine PODy values for crops of greatest relevance to your jurisdiction. Several climatic-zone specific DO3SE parametrisations are available - choose the ones for the climatic zone that best suits your environmental conditions/biogeographic region. You should ideally use locally available spatial data on crop distribution, crop yield, and irrigation usage in your modelling.

If you do not have sufficient local input data available to model PODy, there is an alternative flux-based assessment approach available in the Modelling and Mapping Manual that has fewer inputs and a simpler parameterisation. Designed for use in large scale integrated assessment modelling, you would determine the POD3IAM values for wheat. To expand your analysis to other crops of relevance to your jurisdiction, estimate impacts on yield by linking POD3IAM values for wheat with concentration-based response relationships for crop-specific time intervals, using the approach described by Mills et al., 2018.  If you don’t have sufficient hourly data to determine either PODy or POD3IAM, you could consider using modelled grid square values for your jurisdiction available from Sharps et al., 2020.  

To estimate economic losses due to ozone pollution, use crop yield prices that are appropriate to your jurisdiction and are ideally averaged over a 5-year period to reduce the impact of annual price fluctuations. Visualise impacts in maps showing where the effects are predicted to be greatest and show trends over time graphically. Where possible, validate your findings by comparing impacts determined using monitored ozone data from rural sites where crops are grown, with modelled grid square values determined for the same growing seasons.  

04 Identify measures that the agricultural sector could take to reduce impacts of ozone 

In this step, you will use the agricultural sector as a case study for exploring ways to reduce the negative impacts of ozone on crops. You will develop a plan for farming in your jurisdiction that (i) reduces emissions of some of the chemicals (precursors) that lead to ozone formation and other greenhouse gases (GHG), and (ii) reduces the sensitivity of crops to ozone pollution (see WMO, 2023). This is best achieved in collaboration with colleagues in the agricultural sector to ensure that the chosen policies and measures are appropriate and are likely to be taken up by farmers.

As around 40% of global methane (CH4, a precursor of ozone formation and GHG) emissions are from agriculture, controls on agricultural CH4 emissions would significantly reduce ozone pollution. Controlling both CH4 and O3 would also have co-benefits for global warming as both are short lived climate pollutants (SLCPs). Consider which agricultural practices are the largest emitters of CH4 in your jurisdiction and which controls could be implemented. Keep in mind that, globally, 30% of agriculturally sourced CH4 is from livestock, 11% from agricultural soils (primarily from rice production), 3.4% from manure management and 0.5% from agricultural waste burning (Van Dingenen et al., 2018). Also consider the emissions of other ozone precursors (e.g. nitrogen oxides, Volatile Organic Compounds) resulting from use of fossil fuels on farms.  

Develop a plan for implementing whole-farm CH₄ management practices that are appropriate for different scales of farming. Examples of improvements that could be used include improving animal diet (both in terms of quantity and quality), keeping animals in good health, better manure management, CH₄ capture for use as biogas, direct dry seeding of rice, improved rice straw management, and use of intermittent irrigation rather than continuous flooding for rice production (for more details, see CCAC Agriculture Hub, Nisbet et al., 2020 and the CCAC Global Methane Assessment). In addition to these CH4 measures, develop a plan to reduce other ozone precursor emissions by reducing fossil fuel use on farms, by, for example, deployment of electric vehicles and use of energy from renewable sources inside farm buildings.

As well as considering how to protect crops by reducing ozone formation, develop a plan for reducing the impacts of current ozone on crop yield by changing crop management practices (see Mills et al., 2018, WMO, 2023). This could include: selection of ozone tolerant varieties of crops, developing a crop breeding programme that includes ozone tolerance as a desired trait, and use of chemical protectants (currently at the experimental stage). 

05 Monetise impacts of ozone, nitrogen and sulfur deposition on timber harvests and net annual increment

Familiarise yourself with IPCC methodology and data sources for timber harvests and forest carbon sequestration, as used in Chapter 7, WGII of the IPCC Sixth Assessment Report, by OECD, and the methodology described in Karlsson et al., 2025.

Use the data collected in Stage 3 to conduct a spatial analysis of net annual increment losses and gains from ozone, nitrogen and sulfur deposition. For ozone, you may find it useful to review the finescale POD1-based analysis conducted for Asian forests in De Marco et al., 2020, and an alternative approach used for tropical forests (Cheesman et al., 2023) . You may need to conduct additional measurements of the bulk deposition of nitrogen and sulfur in forested areas as described in Part XIV of the LRTAP Convention ICP Forests’ manual. Examples of spatial analysis of impacts of SO2 (acidification) and nitrogen deposition on forests are provided in Hruska et al., 2023, and Schulte-Uebbing et al., 2021, respectively.  

Visualise impacts in maps showing where the effects are predicted to be greatest and show trends graphically. Determine the economic value of impacts in terms of provisioning services (value of timber) and regulating services (tonnes of CO2 absorbed). For ozone, validate modelled predictions by comparing PODy values determined using monitored ozone data from forested sites (linking with Air Quality Monitoring Guidance Stage 4, Step 5) with those predicted for modelled grid square values. 

06 Monetise impacts on the appreciation of biodiversity

Focussing on areas in your jurisdiction that are protected for nature and/or considered areas of outstanding natural beauty, in this step you will use established approaches to value changes in biodiversity resulting from ozone, sulfur and nitrogen deposition. Useful background information on global trends in loss in biodiversity and associated ecosystem services can be found in Pereira et al., 2024. An example of valuing air quality impacts on appreciation of biodiversity is provided in Jones et al., 2012.

Using the data and maps from Step 5 of Stage 3, identify the areas where critical levels and loads for ozone, sulfur and nitrogen deposition are exceeded and overlay these with areas that are protected for nature and/or are important for socio-economic development and tourism because of their natural beauty. Providing a monetary value for impacts on biodiversity involves a degree of uncertainty. Two commonly used approaches are:  

(i) Value the impacts on recreational enabling services in areas where the biophysical characteristics and qualities of ecosystems encourage people to visit areas and enjoy the environment. These impacts can be valued via the cost of travel to the site, expenditures by the consumer at the site, or the simulated exchange value (NCAVES and MAIA, 2022).  

(ii) Assign a value to an ecosystem or area of natural beauty by surveying the public’s ‘willingness to pay’ to avoid loss or damage to the ecosystems likely to be impacted. Examples of using this approach in Germany (Möller et al., 2025), Europe (see chapter 3 of JRC 2021) and China (Ma et al., 2021) are provided in the resources. In your analysis, aim to provide a valuation for biodiversity and a separate valuation of the individual and combined impacts of air pollution on that resource.  

07 Monetise the impacts of sulfur and nitrogen deposition on freshwater fish and clean water provision

Following on from the analysis in the previous step, apply monetisation approaches to value impacts of sulfur and nitrogen pollution on aquatic ecosystems in areas where the critical loads for acidification and eutrophication are exceeded. For background information, see a description of methodological approaches in O’Dea et al., 2017, regional spatial and temporal analysis of N deposition to surface waters in Europe and North America (NIVA, 2022, and a national valuation of impacts in Jones et al., 2012.

To conduct your analysis, use the spatial data collated in Stage 3, Step 6 of the Environmental Impact Assessment Guidance, and NCAVES and MAIA methods for valuing effects on wild fish and aquaculture. Benefit transfer methods may be needed as described in Melstrom et al., 2022. Then consider how changes in water quality resulting from nitrogen and sulfur deposition are impacting clean water provision. You will need to value how the pollutants impact ecosystem contributions to the flow of water, its purification and supply to users, with examples provided in Kauffman, 2019, and Chapter 5 of JRC 2022. It is important to note that separation of effects of air pollution on water quality from other sources of excess nutrients such as agricultural run-off and sewage spills may require multivariate statistical analysis and may be associated with uncertainty.  

08 Monetise the costs associated with impacts of pollution haze on tourism and transport systems

Pollution haze reduces an individual’s enjoyment of the natural environment as described in a systematic review by Eusebio et al., 2020. Two effects that can be valued are:  

(i) Reductions in the likelihood of visiting sites because of reductions in visibility and dulling of the colours of distant landscape features (e.g. US National Parks and monitoring of protected visual environments, IMPROVE algorithm and data).  

(ii) The effects of haze on transport systems, causing air and road travel delays, with additional business and social economic effects that could also be valued (see example from India: Confederation of Indian Industries, 2021). Health impacts of haze forming pollutants are considered separately in the AQMx Health Impact Assessment Guidance.  

Using spatial data from Stage 3 of the Environmental Impact Assessment Guidance, overlay results from analysis of impacts of air pollution on visibility with the locations of tourist attractions in your jurisdiction, including those of cultural and natural interest. In consultation with economists, determine the value of national and international tourism in these areas. Use an approach suitable for your jurisdiction to determine by how much ‘pollution haze’ is impacting on destination choices and expenditure made by tourists. Examples from China are provided for consideration (Wu et al., 2023 and Xiao et al., 2024). Analyse trends over time against a base year or averaged base years.  

As well as consideration of impacts on tourists’ appreciation of areas of natural and cultural interest, you could also consider the impacts on their travel experiences as pollution haze severely disrupts air traffic by, for example, reducing visibility for pilots, reducing runway capacity, increasing airborne holding time and increasing the need for flight diversions (see Gan et al., 2026 and Chen et al., 2023). Increases in road traffic accidents and road transport delays have also been reported during periods of dense pollution haze (Wang et al., 2023), also impacting on the experience of tourists. You may wish to extend your analysis to include monetization of the additional social and economic consequences of haze impacts on air and road transport systems in your jurisdiction (see example for India).   

09 Inform policy makers of impacts on natural accounting, including scenario analyses

In this step, the analyses conducted in steps 3 – 8 are brought together to produce an overall economic budget for impacts of air pollution on natural capital in your jurisdiction. Effects can be visualised by overlaying maps showing where and by how much each ecosystem service studied is being impacted by air pollution. Examples of approaches for presenting results include webinars (e.g. for the USA), reports (e.g. for South-East Asia (IIASA, 2023) and for the UK, Jones et al., 2012) and websites (e.g. EEA, here and here).

Using the ecosystem accounting approach, provide an overview of the combined impacts of air quality on ecosystem condition, ecosystem physical and monetary flow accounts, and changes in stocks in ecosystem assets using methods identified in Step 1. Predict changes in impacts, including economic consequences for selected policy scenarios, in collaboration with colleagues working on Decision Support and Source Attribution modelling.  

Use your economic assessments, maps and trends graphs to develop bespoke policies aimed at reducing impacts in your jurisdiction, such as establishing air quality standards or targets that are specific to your concerns (see how the EU and LRTAP Convention developed effects-based air quality standards). Liaise with policy makers working on Legal Framework and Policy Design and modellers in Decision Support to determine what changes in emissions are needed to achieve the standards or targets you have set. Communicate your results as indicated for Stage 2, Step 8 of the Environmental Impact Assessment Guidance.