International Review of Waste Management Policy - Department of ...

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� We have used two ‘sets’ of unit damage costs, broadly corresponding to ‘low’
and ‘high’ unit damage costs. We have chosen these since they appear to be
the most appropriate to use for an Ireland-specific study:
• the first set uses the lowest of the four Ireland-specific figures (the four
figures are based on differing methodological approaches) for NH3,
VOCs, SOx, NOx and PM2.5 from the Clean Air for Europe (CAFÉ)
programme, and the standard figures from the Benefits Table (BeTa)
database for the remaining non-GHGs. 1195 The figures are given in year
2000 prices, so they are inflated to 2009 prices. Low damage costs for
carbon monoxide are taken from a Danish study. 1196 For carbon
dioxide, the 2009 value as outlined in an ESRI Working paper outlining
a methodology for the incorporating of GHG emission costs into
economic appraisal in Ireland is used, although we do have a number
of concerns about the approach, and whether it genuinely represents a
social cost of carbon. 1197 Damage costs for CH4 and N2O are calculated
by multiplying this figure by their respective Global Warming Potentials
(GWPs) of 21 and 310.
• the second set uses the highest of the four Ireland-specific figures for
NH3, VOCs, SOx NOx and PM2.5 from the Clean Air for Europe (CAFÉ)
programme, and the standard figures from the Benefits Table (BeTa)
database for the remaining non-GHGs. The figures are given in year
2000 prices, so they are inflated to 2009 prices. High damage costs for
carbon monoxide are taken from the same Danish study as the low
costs. For carbon dioxide the high values from the Benefits Table
(BeTa) database are used, and converted to 2009 prices. 1198 Damage
1195 M. Holland and P. Watkiss (2002) Benefits Table Database: Estimates of the Marginal External
Costs of Air Pollution in Europe, Database Prepared for European Commission DG Environment; AEAT
Environment (2005) Damages per tonne Emission of PM2.5, NH3, SO2, NOx and VOCs from Each EU25
Member State (excluding Cyprus) and Surrounding Seas, Report to DG Environment of the European
Commission, March 2005. the Clean Air for Europe programme did not derive estimates for the
remaining non-GHGs.
1196 COWI (2002) Valuation of External Costs of Air Pollution – Phase 1 Report (TRIP). The Danish
Environmental Research Programme.
1197 Tol and Lyons (2008) Incorporating GHG Emission Costs in the Economic Appraisal of Projects
Supported by State Development Agencies. ESRI Working Paper No. 247. Our concerns about the
applicability of this approach include whether the futures market, which has been subject to some
considerable volatility, provides a reasonable indication of the social cost. While this market would
represent the opportunity cost of having to import additional allowances, which could reasonably be
considered a private cost, it does not necessarily follow that this equates to the social cost. Of the two
variants, the model-based price at least accords with an IPPC concentration scenario, while the
assumption of holding the price at the latest available futures price does not seem to us to be a
credible way of representing the social cost of carbon out to 2030 (and beyond). Furthermore, there is
no indication as to whether the carbon prices shown in Table 3 of the paper are in real or nominal
terms.
1198 There is no single published GDP deflator for Ireland covering the period from 2000 to 2009, but
we have determined the correct index based on the GDP deflator for 2003 to 2007 as detailed in the
International Review of Waste Policy: Annexes