LowEmissionAsphalt-136pg-WhitePaper-May2023

P a g e | 16 Damage Function Approach What economists and environmental scientists have begun to focus upon is the notion of a damage function approach to air quality and public transportation. In the United States, we spend about $65 billion 25 a year on air quality, but that equates to only 0.20% of gross domestic product (GDP) and far less than one-tenth the estimated economic costs of poor air quality, primarily health and productivity losses. 26 Regulations have cut air pollution by twenty percent (20%) 27 since the 1970’s, yet the number of Americans exposed continues to rise due to urbanization. Today, over 40% 28 of us (>150 million Americans) live in counties with unacceptable levels of ozone contaminations that exceed National Ambient Air Quality Standards (NAAQS) . NAAQS sets limits on atmospheric concentration of six (6) so-called “criteria” pollutants that cause smog, acid rain, and other health hazards. The transportation sector is the primary contributor for four of the six pollutants including particulate matter (PM), Ozone (O 3 ), NO 2 , and carbon monoxide (CO). Balancing industry sector contributions to the economy and their respective environmental impact is a generational challenge . Road systems are both necessary and costly to both budgets. Materials substitutions are only making slow developmental progress and materials recycling faces realizable carbon savings hurdles, so they are unlikely to have enough impact. 29 Use phase technologies 30 and market-based carbon (offsetting) instruments (MBI) 31 may be the only viable solutions to this growing economic- environmental disequilibrium in paving construction and the broader transportation industry. 25 Carnegie Mellon University. 26 World Economic Forum; Federal Reserve Board. 27 EPA. 28 EPA Our Nation’s Air: Status and Trends report 2019; American Lung Association. 29 National Asphalt Pavement Association (NAPA): The Road Forward, A Vision for Net Zero Emissions for the Asphalt Pavement Industry , www.asphaltpavement.org/climate . 30 use phase technologies are product enhancements or complements that provide polluters with environmental offsets to reduce or eliminate their own product environmental externalities e.g., carbon emissions. 31 In environmental law and policy, MBIs are market-based financial instruments that provide polluters with environmental offsets to reduce or eliminate their own product environmental externalities e.g., carbon emissions. In the United States, we only spend 0.2% of GDP on air quality vs. economic damage of 2%. .