The German Environment Agency has published its handbook on the evaluation of environmental damage – the “Methodological Convention for the Assessment of Environmental Costs” – since 2007. We provide standard cost rates for various kinds of environmental damage based on sound scientific evidence and transparency regarding the methods and data we use.
Why was this undertaken?
We believe that evaluating environmental damage and expressing it in monetary terms (i.e., as cost rates) helps in making environmental damage comprehensible to decision makers in business and policy. It facilitates discussions about the costs and benefits of environmental protection measures and thus contributes to environmental policy making. However, it should be clear that expressing environmental damage in monetary terms is meant to supplement the information on the biophysical damage, not to replace it.
What was the scope?
We use a number of methods – from market prices to replacement costs and willingness to pay – to provide cost rates for different kinds of damage, including: greenhouse gases, air pollutants, noise, electricity and heat generation and transport. In 2019 we plan to publish cost rates for certain damage to ecosystems, GHG in agriculture, nitrogen and phosphorus, and certain construction materials. More cost rates will be added in the future as solid evaluation methods and data become available. The scope of the damage considered depends on the dimension: for greenhouse gases we consider global damages, while for air pollution we consider only national damage and for noise only local damage.
What was the role of the Government?
The Ministry of the Environment supports and finances the research for the “Methodological Convention on the Assessment of Environmental Costs” since 2003 and uses our cost rates in its impact assessments. Currently, it uses the cost rate for greenhouse gases (180 EUR2016/t CO2) in its impact assessment of the Climate Protection Plan 2050.
What were the results?
We provide cost rates for damage caused by the emission of greenhouse gases, air pollutants and noise, and use these to derive cost rates for electricity generation, heat generation, and transport. During 2019 we plan to publish cost rates for damage to ecosystems, nitrogen and phosphorus emissions, production of construction materials and greenhouse gas emissions in agriculture. Overall, our work is restricted to those kinds of environmental damage where solid scientific evaluation methods as well as reliable data exist.
As mentioned above, we plan to publish additional cost rates in 2019. In 2020, research commences on the next edition of the handbook (Methodological Convention 4.0), in order to provide cost rates that always reflect the latest scientific results.
The German Environment Agency will continue to use the cost rates in all projects and publications that include the calculation of environmental damage costs, while the Ministry of the Environment will use the cost rates in its impact assessments.
The ‘Methodological Convention 3.0 for the Assessment of Environmental Costs Cost Rates’ report is available here.
‘Despite the progress made on environmental damage costs in recent years, there is still a lot of work to do, both in terms of methods and of data. Anyone working in the field or interested in discussing methods and data sources, please feel free to get in contact with us!’