Authors: Jake Williams 1, Katy Bell 1, Rachael Morton 2, Mbathio Dieng 2


1 Faculty of Medicine and Health, School of Public Health, University of Sydney, Camperdown, NSW, Australia

2 NHMRC Clinical Trials Centre, University of Sydney, Camperdown, NSW, Australia



According to the World Health Organisation, climate change is humanity's biggest health threat. Healthcare is responsible for about 5% of all carbon dioxide emissions globally and 7% of all emissions in Australia. Countries respond to this crisis by committing to net-zero, low-carbon, and sustainable healthcare systems. In Australia, the Commonwealth Government’s National Health and Climate Strategy has helped advance this issue by including health system decarbonisation as one of its four core objectives.

But how can health economists contribute to the reduction of our carbon footprint?

There are many ways to decarbonise healthcare, such as preventing disease, addressing the social determinants of health, reducing overdiagnosis, and incorporating environmental impacts into economic evaluations and health technology assessments. Research in all of these areas is necessary, but most work by health economists has focused on methods to include environmental impacts in economic evaluations.

In a scoping review published in-press with Value in Health, researchers from the University of Sydney identified ten methods that could be used. These include converting environmental impacts to dollars or disability-adjusted life years and including them in a cost-effectiveness, cost-utility, or cost-benefit analysis; calculating an incremental carbon footprint effectiveness ratio or incremental carbon footprint cost ratio; incorporating impacts as one criteria of a multi-criteria decision analysis; and freely considering impacts during health technology assessment deliberation processes.

Currently, the predominant approach is to convert environmental impacts into monetary units and include them on the cost side of a cost-effectiveness or cost-utility analysis. Health economists may like this method as it internalises negative externalities back into the decision and integrates environmental impacts into existing economic methods. However, significant challenges may arise from the valuation of environmental impacts. The study identified a wide range of monetary conversion options, and these would need to be sufficiently high and accurate to influence cost-effectiveness decisions. Further work is needed to understand how this might change ICER estimates and what, if any, changes to cost-effectiveness thresholds might be needed.

Health economists from around the world, led by experts from Australia and New Zealand, are currently putting together a new International Health Economic Association (IHEA) Special Interest Group (SIG) on environmental sustainability and health economics, and these methods have been submitted to the recent Health Technology Assessment Policy and Methods Review Consultation.

Source: Photo by Iain Kennedy on Unsplash