An integrated approach to climate change and regional air pollution can harvest considerable ancillary benefits in terms of environmental impacts and costs. This is because both problems are caused to a large extent by the same activity (fossil fuel combustion). Substantial ancillary benefits were found for regional air pollution (SO2, NOx VOC and particulate matter) of implementing the Kyoto Protocol (intended to control greenhouse gas emissions) in Europe. For instance, while three different scenarios on Kyoto implementation were found to reduce European CO2 emissions by 4-7%, they also reduced European emissions Of SO2 by 5-14% compared with a no Kyoto policies case. The magnitude of ancillary benefits depends on how flexible mechanisms and surplus emission allowances are used in meeting the Kyoto targets. The total cost savings for implementing current policies for regional air pollution of the Kyoto Protocol are of an order of 2.5-7 billion Euro. In all cases, this is in the order of half the costs of the climate policy (4-12 billion Euro). Using flexible mechanisms reduces emissions of air pollutants for Europe as a whole even further than domestic implementation (e.g. 10-14% versus 5% for SO2 emissions), but the reductions are shifted from Western Europe to Central and Eastern Europe and Russia. The use of surplus emission allowances to achieve the Kyoto targets decreases the ancillary benefits, in particular for the latter group of countries (e.g. unprotected area against acidification increases from 1.3 to 1.7 million ha). (c) 2004 Elsevier Ltd. All rights reserved.