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- Report n°4: How Much to Spend for the Protection of Health and Environment
Report n°4: How Much to Spend for the Protection of Health and Environment
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Table of contents
- Conclusions
Conclusions
I have presented an introduction to the IPA methodology of ExternE and some typical results for the health impacts and damage cost per kg of pollutant. In view of the large uncertainties the reader may wonder whether it is meaningful to use them as basis for decisions. The first reply is that even a threefold uncertainty is better than infinite uncertainty. Second, in many cases the benefits are either so much larger or so much smaller than the costs that the implication for a decision is clear even in the face of uncertainty. Third, if in the other cases the decisions are made without a significant bias in favor of either costs or benefits, some of the resulting decisions will err on the side of costs, others on the side of benefits. Rabl, Spadaro & van der Zwaan [2005] have examined the consequences of such unbiased errors and found a very reassuring result: the extra social cost incurred because of uncertain damage costs is remarkably small, less than 10 to 20% in most cases even if the damage costs are in error by a factor three. But without any knowledge of the damage costs, the extra social cost (compared to the minimal social cost that one would incur with perfect knowledge) could be very large.
One of the implications of this result is that one should not, in the name of the precautionary principle, inflate the estimates of environmental damages. There is yet another reason why such inflation should be avoided, namely the'poverty kills' phenomenon that I have already mentioned above. As shown by Keeney [1995], an expenditure for the protection of public health in excess of about $5 to 12 million per saved life is actually counterproductive because it induces a greater loss of life elsewhere in the economy.
Of course, in many if not most environmental decisions the quantified costs and benefits are not the only criterion. The other criteria should be taken into account by means of an MCA (multicriteria analysis), preferably with involvement of the stakeholders. So the ground rule of the framework I have presented is: quantify as much as possible, then use MCA for any remaining impacts that are too uncertain or defy quantification entirely. The advantage of monetary valuation is that it greatly simplifies the MCA by combining a large number of different environmental impact categories, thereby avoiding an unmanageably large number of criteria. This approach has been successfully demonstrated in the recent SusTools project [Rabl et al 2004a], by organizing workshops with stakeholders concerned about the results of a case study on the impacts of nitrogen fertilizer and a case study on waste treatment [for a detailed report on waste treatment, see Zoughaib & Rabl 2004].
Of course, much more work is needed to render the framework more complete and more reliable. Damage costs need to be calculated for additional pollutants, for other sites and, in some cases for other pathways (e.g. seafood or dermal contact) and the existing estimates should be improved.