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 Included Basic principles - Impact Pathway Approach – Part 2: Quantification of Costs Assessment of Climate Change Example Results – Uncertainty – Range of Results Applications of the Results Summary 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 principles 1)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 and  impacts depend on time and site of pressure  “Bottom-up approach” needed for the complex pathways: the ‘ I mpact P athway A pproach’ (IPA)

Impact Pathway Approach – Part 1 Physical Impacts Transport and Chemical Transformation Pollutant / Noise Emission Calculation is made twice: with and without project! Differences of Physical Impacts

Background Concentration of Prim. PM2.5 [µg/m 3 ] Additional Emission of 1000 t PPM2.5 in Egypt

Delta Conc. of PPM2.5 [µg/m 3 ]

Population Distribution

Population*Delta Conc.  Accumulated Exposure

Quantification of Impacts and Costs relation between pressure and impact Concentration Response Function (CRF): Example: Additional Years of Life Lost = 6.5 · ·  conc. PPM2.5 · Population Number of Years of Life Lost [YOLL] due to 1000 ton emission of fine dust PPM2.5 in Egypt in Egypt = 748 in the Northern Hemisphere = 53 in Western Europe < 0.5

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

Impacts Included (I) : PM 2.5, PM co

Impacts Included (II)

Impact Pathway Approach – Part 1 Differences of Physical Impacts Transport and Chemical Transformation Pollutant/Noise Emission Calculation is made twice: with and without project!

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 2 Differences of Physical Impacts Transport and Chemical Transformation Monetary Valuation Pollutant/Noise Emission Calculation is made twice: with and without project!

Monetary Valuation

Concentration Response Function: Additional Years of Life Lost = 6.5 · ·  conc. PPM2.5 · Population Quantified number of additional Years of Life Lost due to one year operation : 748 YOLL Monetary value: Euro 2005 per Year of Life Lost Damage costs per year: 748 YOLL * Euro per YOLL = 29.2 Million Euro 2005 Quantification of Costs

Valuation methods for non-market goods Stated Preference surveys 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 public decision makers Direct valuation Contingent Valuation Method (CVM) Attribute Based Choice Modeling (ABCM) Participatory approaches Surveys for preferences of public decision makers Revealed Preference behaviour (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 Change I. Marginal Damage Costs "Average, 1% trimmed“, "1% PRTP“, “World Average Equity Weighting”

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

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)

External Costs of Different Technologies [Euro-Cent / kWh] 19 Euro/t CO2, YOLL chronic = Euro Sites in Germany; 2010 technologies!

WEC Offshore HydroPWR, reproc PV sc-SiNatural gas-CC ORC- HKW PAFCLignite, IGCC Coal, IGCC Coal PFB External Costs [Euro-Cent / kWh] Health impacts CropsMaterialClimate change

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

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

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

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, Daughter Directives 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: Tool EcoSenseWeb: