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 12: Valuation of Water

Gianluca Crapanzano, Marcella Pavan and Alistair Hunt

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

Extract

Gianluca Crapanzano, Marcella Pavan and Alistair Hunt 12.1 INTRODUCTION The purpose of this study is to establish linkages between sources of environmental damage and concentration levels or load of pollutants, thereby enabling the identification of contributions to damage on a sectoral and geographical basis. This approach is, in principle, suitable for water pollution but its application appears more problematic in the case of water than with atmospheric pollution. In this chapter we first develop a possible framework for the estimation of damages caused by water pollution. This uses, as a willingness-to-pay (WTP) proxy, the share of expenditure on water treatment that can be attributed to each industrial sector and to households on the basis of the relative contribution to water pollution by each sector. Whilst making the link between source and damage, this approach has not yet yielded monetary values since data on water treatment expenditure are scarce. We then present an initial exercise in the valuation of one type of damage using WTP techniques as a case study for the type of work which could be developed in the future (that is, the case of angling in the UK). Although synthesis of these two approaches is clearly possible we present them as separate elements in this chapter since we do not yet have sufficient country data to implement this synthesis. In both approaches, the application is best carried out at the river catchment level in order to consider all the aspects influencing water quality in a...

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