Green Accounting in Europe

Green Accounting in Europe

A Comparative Study, Volume 2

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Anil Markandya and Marialuisa Tamborra

Using spatially desegregated data on measures of pollution to derive economic damage estimates, the main purpose of the book is to gauge the environmental damage sustained as a result of economic activities and to offer an insight into how the information generated can be used in conjunction with conventional economic accounts. The first few chapters review recent developments in both green accounting and pathway analysis. The book goes on to evaluate the progress made in estimating dose response functions and valuing environmental damages. The authors discuss the methodology used for the estimation of damages caused by ambient air pollution and the cost of defensive expenditures. They also present the results of the analysis and draw important policy conclusions for environmental accounting, particularly in the EU.

Chapter 3: Developments in Pathway Analysis

Paul Watkiss, Mike Holland and Katie King

Subjects: economics and finance, environmental economics, environment, environmental economics


Paul Watkiss, Mike Holland and Katie King INTRODUCTION There have been a number of developments in the impact pathway analysis, pioneered by the ExternE and Green Accounting research projects, since the last phase of GARP was completed. Some relate to methodological issues, such as a significant increase in the number of effects that are quantifiable, or the description of uncertainty. Others relate not to strict methodological developments, but (for example) to a growing acceptance of the methodology as being sufficiently robust to be useful for informing policy. This chapter highlights the following major developments: ● ● ● ● ● ● ● increased acceptance of the methodology; increase in the range of pollutants and effects that can be considered; updating exposure–response functions; treatment of uncertainty; improved modelling and reporting of air quality; attribution of damages to economic sectors; quantification of year on year changes in damages. 3.2 ACCEPTANCE OF THE METHODOLOGY: APPLICATION IN POLICY ANALYSIS The methodology used in GARP is closely linked to that of the European Commission ExternE Project. The methodological outputs of the two studies, taken together, have now been used in a variety of policy applications, covering environmental quality objectives, emission limits and the energy sector. These include: ● ● economic evaluation of a draft directive on waste incineration (AEA Technology, IER, ARMINES, Electrowatt, 1996); economic evaluation of ambient air quality limits for SO2, NO2, fine particles and lead (Instituut voor Milieuvraagstukken (IVM) 34 Developments in pathway analysis 35 ● ● ● ● ● ● ● ● ● ● ● ● (Institute for Environmental Studies), Norsk Institutt for Luftforskning (NILU) (Norwegian...

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