I. INTRODUCTION 1

II. CBA IN CLIMATE CHANGE ANALYSIS 4
1. Climate Change CBA 5
2. T-D and B-U Approach 8
3. Climate Change Ancillary Benefits 12
4. Ancillary Benefits in GHG Policy Design 21
5. Why do we need to know benefit? 22
6. Main Factors in the Analysis 26

III. BOTTOM-UP IMPACT PATHWAY ANALYSIS 30
1. Mitigation Scenarios 35
2. Air Quality 39
3. Impact Endpoints 40
4. Valuation 52
5. Review of Previous Environmental Benefit Studies on Climate Change 54
5.1 U.S. Studies 56
5.2 TAF 62
5.3 ExternE 65
6. Policy Lessons from Previous Studies 71

IV. MODELING STRUCTURE OF ENVIRONMENTAL ESTIMATION IN KOREA 73
1. Korea in Climate Change Issue 73
2. Previous studies on climate change 73
3. Overview of Main Components 77
3.1 Emission Inventory and GHG mitigation scenarios 77
3.2 Air quality Module 83
3.3 Health Effect Analysis 86
3.4 Economic Valuation of Health Effect 88
3.5 Extrapolation of Results of Seoul area results to National Level 89
4. Suggestion for Model for Korean Environmental Benefits Estimation 89
5. Empirical Study: Kyonggi Province Air Control 93

V. CONCLUSION 95
BIBLIOGRAPHY 100
APPENDIX: GAMS PROGRAMM FOR KYDI 105