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 10: Developments in Estimation of Damages to Crops

Onno Kuik, Kees Dorland and Frank A. Spaninks

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


Onno Kuik, Kees Dorland, Frank A. Spaninks and John F.M. Helming 10.1 INTRODUCTION Air pollution generally has a negative impact on crop yields. In Chapter 8 of this report the monetary value of the impact of ozone on crops in the Netherlands in 1994 was estimated at Euro 150 million. Chapter 8 used the methodology described in Markandya and Pavan (1999) and previously presented in Chapter 1. This methodology uses experimentally derived exposure–response functions that relate ambient concentrations of air pollutants to reductions in yield per unit area to calculate yield reductions. Yield reductions are then multiplied by fixed crop prices to arrive at the monetary damage estimate. We call this the simple multiplication method. For very small changes in air quality and consequently relatively small changes in yields, this procedure can be defended on the grounds that the changes will not result in any significant changes in prices or other variables that are relevant to the valuation. In the previous phase of the research presented in Markandya and Pavan (1999), however, damages are calculated for current levels of air quality relative to non-anthropocentric background levels. Such changes in air quality cannot be considered marginal. Nonmarginal changes in yields will have effects on market prices that may feed back into farmers’ supply decisions, choice of crops and cultivators, input use and so on. The simple multiplication approach ignores these economic adjustments. This section examines whether the use of an economic model to simulate market and farmers’ responses...

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