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English summary
Under normal circumstances socio-economic analyses of projects and
initiatives within the environmental field involve assessing both the
costs and the benefits. It is, however, difficult to assess the benefits of
environmental policy. It requires that an economic valuation of environmental
goods has taken place, and that this economic valuation
has been carried out in such a way that it makes sense to systematise
their significance on this basis.
In this project it has been investigated whether it is possible to identify
externality adders to describe the value of environmental goods.
Externality adders have been used in the analyses of the environmental
policy in the 1990's presented by e.g. the Danish Ministry of
Finance and the Danish Economic Council. At the Danish Ministry of
the Environment externality adders have been used correspondingly
in analyses and project evaluations performed by e.g. external advisers.
With this preliminary project about externality adders it has been our
desire to carry out a quality assessment of the used economic valuations.
Furthermore it has been a desire to estimate whether it is possible
to transfer externality adders from studies abroad or at EU level
to be used in Denmark, so-called "benefit transfer".
The report presents both a general introduction to the issue of economic
valuation, including the methods developed in the literature to
perform economic valuation, as well as a more thorough assessment
of the externality adders and economic valuations, which are available
in the various environmental topics. The report is in the nature
of a survey of the available externality adders and the methodological
problems linked to these.
The report shows that especially in the air pollution field attempts to
valuate the damages on a number of different emissions exist. These
economic valuations have been made specifically for Denmark during
the pan-European research project ExternE. The air pollution
emission externality adders are relevant far beyond the sphere of air
pollution itself, and in particular for the waste sector where recycling
must be assessed against the damages of incineration and the emissions
connected to this. When examining the applied externality adders
for air pollution emissions a methodological inconsistency with
regard to the underlying valuation of the price of a statistical life is
evident. Such inconsistencies have been avoided in the latest benefit
tables published by the European Commission (Benefit tables; BETA)
but these prices are in need for adjustment to Danish price levels and
for an update of several other underlying costs.
In other fields e.g. regarding the aquatic environment and chemicals
no research or work exists which currently makes it possible to specify
the externality adders with validity for Denmark. It would imply
application of the multiple-pathway method, which is developed
within ExternE, and moreover carrying through a number of original
economic valuation studies in Denmark.
The issue climate change presents particular difficulties with regard
to economic valuations because of the inherent uncertainties concerning
the level of damages deriving from greenhouse gases.. The
most authoritative judgement, which takes the greatest possible
number of surveys into consideration, is regarded to come from the
international Intergovernmental Panel on Climate Change (IPCC)
whose members - with substantial reservations - estimate that the
damages of CO2 emission in the near future are found to be in the
interval of US$ 5 to 125 per tons of carbon.
The report reviews the international literature concerning economic
valuation of nature goods and eco-systems. This literature is very
comprehensive and in recent years several Danish studies have been
carried out especially regarding the value of forests in the vicinity of
urban areas. The results of the valuation surveys vary, however, and
the foreign surveys are ambiguous too. As the preferences are not
similar among citizens in Denmark and abroad it is difficult to conclude
with validity for Denmark from the results of the international
studies. It would require a rather comprehensive calibration of the
results, and while such methods are at the cutting edge of international
research within benefit transfer, they are not yet able to generate
robust results. The authors of this report have not seen the possibility
for indicating valid methods for benefit transfer.
The report concludes with suggestions for further research. In the
short term it is necessary for the damages for air pollution emissions
to be updated and calculated accurately on the basis of Danish data
and prices. Furthermore there is a possibility to extend the number of
externality adders to a number of other fields, but this will imply a
longer-term effort where both original Danish economic valuation
studies must be carried out and where these are linked to scientific
data by use of the multiple-pathway method. In this connection it
will be necessary to clarify a number of key issues including the underlying
externality adder for statistical life in socio-economic analyses.
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