The “Impact Pathway Approach” – so called, “ExternE Methodology”

to Estimate Impacts and External Costs.Application in North Africa

Methodology, Limits, Exemplary Results

Philipp PREISS

IER, Universität Stuttgart

Aim of Methodology Basic principles - Impact Pathway Approach –Part 1: Quantification of Impacts Impacts IncludedBasic principles - Impact Pathway Approach –Part 2: Quantification of CostsAssessment of Climate ChangeExample Results – Uncertainty – Range of ResultsApplications of the ResultsSummary

Presentation Outline

Aim of the ExternE methodology:helps to take into account all externalities in a consistent way when making decisions

- Investment decisions

- Technology Assessment (subsidies, research support)

- Consumer decisions (e.g. by adjusting prices, by internalisation of external costs)

- Cost-benefit analyses, esp. for environmental and health regulation

- Green accounting

Basic principles1) Pressures, (e.g. emissions of substances to

environmental media) have to be estimated

2) Assessment of effects/impacts (e.g. health risk), of the pressures (e.g. emissions of pollutants)

relation between pressure and impact is in general not linear andimpacts depend on time and site of pressure

“Bottom-up approach” needed for the complex pathways: the ‘Impact Pathway Approach’ (IPA)

Impact Pathway Approach – Part 1

Physical Impacts

Transport andChemical

Transformation

Pollutant / NoiseEmission

Calculation ismade twice: with

and withoutproject!

Differences ofPhysical Impacts

Background Concentration of Prim. PM2.5 [µg/m3]

Additional Emission of 1000 t PPM2.5 in

Egypt

Delta Conc. of PPM2.5 [µg/m3]

Population Distribution

Population*Delta Conc. Accumulated Exposure

Quantification of Impacts and Costsrelation between pressure and impact

Concentration Response Function (CRF):

Example: Additional Years of Life Lost= 6.5 · 10-5 · Δconc. PPM2.5 ·Population

Number of Years of Life Lost [YOLL] due to 1000 ton emission of fine dust PPM2.5 in Egypt

in Egypt = 748in the Northern Hemisphere = 53

in Western Europe < 0.5

YOLL Years of Life Lost due to 1000 t PPM2.5

Impacts Included (I)Impact Cat. Pollutant / Burden Effects Human Health mortality

PM10 SO2, O3

Benzene, BaP, 1,3-butad., Diesel part., radioact.,HM Noise Accident risk

Reduction in life expectancy due to short and long time exposure Reduction in life expectancy due to short time exposure Reduction in life expectancy due to long time exposure Reduction in life expectancy due to long time exposure Fatality risk from traffic and workplace accidents

Human Health

PM10, O3, SO2 Respiratory hospital admissions

morbidity PM10, O3 Restricted activity days PM10, CO Congestive heart failure Benzene, BaP, 1,3-

butad., Diesel part.,radioact.

Cancer risk (non-fatal)

PM10 Cerebrovascular hospital admissions, cases of chronic bronchitis, cases of chronic cough in children, cough in asthmatics, lower respiratory symptoms

O3 Asthma attacks, symptom days Noise Myocardial infarction, angina pectoris, hypertension,

sleep disturbance Mercury Loss of IQ of children Accident risk Risk of injuries from traffic and workplace accidents

: PM2.5, PMco

Impacts Included (II)Impact Cat. Pollutant / Burden Effects

Building Material

SO2, Acid deposition Combustion particles

Ageing of galvanised steel, limestone, mortar, sand-stone, paint, rendering, and zinc for utilitarian buildings Soiling of buildings

Crops SO2 Yield change for wheat, barley, rye, oats, potato, sugar beet

O3 Yield change for wheat, barley, rye, oats, potato, rice, tobacco, sunflower seed

Acid deposition Increased need for liming N, S Fertilising effects Global Warming

CO2, CH4, N2O World-wide effects on mortality, morbidity, coastal impacts, agriculture, energy demand, and economic impacts due to temperature change and sea level rise

Amenity losses Noise Amenity losses due to noise exposure Ecosystems SO2, NOx, NH3 Eutrophication, Acidification Land Use Change

‘PDF’ of species

Impact Pathway Approach – Part 1

Differences of PhysicalImpacts

Transport andChemical

Transformation

Pollutant/NoiseEmission

Calculation ismade twice: with

and withoutproject!

Basic Approach of NEEDS/ExternE

Assessment of impacts is based on the (measured) preferences of the affected and

well-informed population

Basic principles - Impact Pathway Approach –Part 2: Quantification of Costs

Preferences are expressed, and

effects are transformed into monetary units:

- allows transfer of values, - units are conceivable, - direct use of results in CBA and for internalising via taxes possible.

(…however, e.g. ‘utility points’ would give the same ranking).

Impact Pathway Approach – Part 2Differences of Physical

Impacts

Transport andChemical

Transformation

MonetaryValuation

Pollutant/NoiseEmission

Calculation ismade twice: with

and withoutproject!

Monetary Valuation

Health end-points Euro per case / per YOLL

Increased mortality risk (infants) 3,000,000New cases of chronic bronchitis 200,000

Increased mortality risk - YOLLacute 60,000Life expectancy reduction - YOLLchronic 40,000

Respiratory hospital admissions 2,000Cardiac hospital admissions 2,000

Work loss days (WLD) 295netto Restricted activity days (netRADs) 130

Minor restricted activity days (MRAD) 38Lower respiratory symptoms 38

LRS excluding cough 38Cough days 38

Medication use / bronchodilator use 1

Concentration Response Function:Additional Years of Life Lost

= 6.5 · 10-5 · Δconc. PPM2.5 · Population

Quantified number of additional Years of Life Lost due to one year operation : 748 YOLL

Monetary value: 40000 Euro2005 per Year of Life Lost

Damage costs per year:748 YOLL * 40000 Euro per YOLL =

29.2 Million Euro2005

Quantification of Costs

Valuation methods for non-market goods

Stated Preferencesurveys

Indirect valuation

assesses costs or efforts that can be linked to the non-market good

• Hedonic Price Method• Averting Behavior Method• Travel Cost Method• Contingent Behavior Method• Past behaviour of publicdecision makers

Direct valuation

• Contingent Valuation Method (CVM)

• Attribute Based Choice Modeling (ABCM)

• Participatory approaches

• Surveys for preferences ofpublic decision makers

Revealed Preferencebehaviour (shown in the past)

Assessment of Climate Change

I. Marginal Damage Costs

Includes the following categories:• agriculture• forestry• sea level rise• cardiovascular and respiratory disorders related to cold and heat stress• malaria• dengue fever• schistosomiasis• diarrhoea• energy consumption• water resources and • unmanaged ecosystems

• Time horizon till 2300

Assessment of Climate ChangeI. Marginal Damage Costs"Average, 1% trimmed“, "1% PRTP“ , “World Average Equity Weighting”

0

5

10

15

20

25

2005 2015 2025 2035 2045Year of emission

Euro

per

ton

CO

2 Damage costsCO2 €2005

Assessment of Climate ChangeII. Marginal Avoidance Costs"500 ppm CO2 “, “technological progress“ , “certificates-emission dealing”

0

10

20

30

40

50

60

2005 2015 2025 2035 2045Year of emission

Euro

per

ton

CO

2 External costsCO2 - €2005

Some exemplary results of applying the ExternE tools EcoSenseWeb

The results of the ExternE research are the functions and tools that can be applied to answer individual questions!

Results of applying the tools depend on scenario, site, time and technology!

Possibly important effects that are not (yet) included:

• Visual intrusion

• Biodiversity loss (local, however included in Environmental Impact Study)

• Risk of nuclear proliferation and terrorism

• Risk aversion resp. treatment of Damocles risks

Quantified External Costs [Euro-Cent / kWh] of a Coal Fired Power Station (steam turbine)

0

1

2

3

4

Spain Italy UK

PolandGerm

any

France

Belgium

[Eur

o-C

ent /

kW

h] NMVOCPM10NOxSO2CO2eq

External Costs of Different Technologies [Euro-Cent / kWh] 19 Euro/t CO2, YOLLchronic = 40000 Euro

0

1

2

3

4

5

6

WECOffshore

Hydro PWR,reproc

PV sc-Si Naturalgas-CC

ORC-HKW

PAFC Lignite,IGCC

Coal,IGCC

Coal PFB

Exte

rnal

cos

ts [E

uro-

Cen

t / k

Wh]

Health impacts Crops Material Climate change

Sites in Germany;

2010 technologies!

0

1

2

3

4

5

6

WECOffshore

Hydro PWR,reproc

PV sc-Si Naturalgas-CC

ORC-HKW

PAFC Lignite,IGCC

Coal,IGCC

Coal PFB

Exte

rnal

Cos

ts[E

uro-

Cen

t / k

Wh]

Health impacts

Crops Material Climate change

External Costs of Power Stations [Euro-Cent / kWh]Assuming 50 Euro/t CO2

0

1

2

3

4

5

6

WECOffshore

Hydro PWR,reproc

PV sc-Si Naturalgas-CC

ORC-HKW

PAFC Lignite,IGCC

Coal,IGCC

Coal PFB

Exte

rnal

Cos

ts [E

uro-

Cen

t / k

Wh]

Health impacts Crops Material Climate change

Quantification of Externalities of Heat SupplyCB=condensing boiler, MFH=multi family house, OFM=one family house

0

1

2

3

4

Gas-CB OFH

Solar-Gas-CBOFH

Gas-CB MFH

Fuel oil-LTMFH

Wood chipsMFH

Exte

rnal

Cos

ts [E

uro

/ GJ]

Health others GHG

External Costs [Euro / ton] of EmissionResults Europe Results North Africa

05000

100001500020000250003000035000400004500050000

Nor

way

Net

herla

nds

EU

27

Mor

occo

Alg

eria

Tuni

sia

Liby

a

Egy

pt

[Eur

o pe

r ton

] NH3NOXPPMcoPPM25SO2

Applications of the IPA/ExternE Results

European Union:Energy: justification for promoting and subsidizing renewable energy; recommended cap on subsidies for renewables

Transport: cost-benefit analysis mandatory for all major infrastructure projects; planned to levy tolls according to infrastructure and external costs

Environmental Protection: Cost-benefit analysis for all recently implemented directives for Air Pollution Control:e.g. Non-Hazardeous Waste Incineration Directive, Large Combustion Plant Directive, National Emissions Ceilings Directive, DaughterDirectives to Air Quality Directive: ozone, CO and benzene

UN: cost-benefit analysis for the UN/ECE multi-pollutant multi-effect protocol

Summary• The ExternE methodology estimates effects of

technologies for energy conversion and assesses them based on preferences of the effected population for a large number of impact pathways.

• The methodology is already widely used for decision aid in the fields of energy conversion, transport and environmental protection.

• Gaps and uncertainties exist, however will be more and more reduced due to ongoing research (e.g. on dispersion models for Africa, pathways involving toxic substances, heavy metals, biodiversity, water and soil contamination…)

• More information ExternE: www.ExternE.info• Tool EcoSenseWeb:

www.EcoSenseWeb.ier.uni-stuttgart.de