What role for the precautionary principle in socio-economic analysis? Prof. Mikael Skou Andersen, Aarhus University (DK)

Transcription

1 What role for the precautionary principle in socio-economic analysis? Prof. Mikael Skou Andersen, Aarhus University (DK)

2 Outline of presentation precautionary principle the special case of lead SEA/CBA as risk analysis how to account for the benefits

3 Principles of EU environmental policy Precaution Prevention Polluter-pays TFEU art Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage as a priority be rectified at source and that the polluter should pay

4 Weak precautionary principle Rio declaration, principle 15 (1992) In order to protect the environment, the precautionary approachshall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certaintyshall not be used as a reason for postponing cost-effectivemeasures to prevent environmental degradation Adopted by 172 countries incl. USA cost-effective vs. lack of scientific certainty?

5 Strong precautionary principle Wingspread statement (1998) When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause-and-effect relationships are not fully established scientifically. In this context the proponent of an activity, rather than the public, should bear the burden of proof Proposed by group of scientists burden-of-proof is reversed

6 Precautionary principle in EU law Commission communication COM (2000)1 on the precautionary principle: The precautionary principle applies where scientific evidence is insufficient, inconclusive or uncertain and preliminary scientific evaluationindicates that there are reasonable grounds for concern that the potentially dangerous effects on the environment, human animal or plant health may be inconsistent with the high level of protection chosen by the EU

7 EU case law on precaution: Sweden vs. Commission T-229/04 the existence of solid evidence, which while not resolving scientific uncertainty, may reasonably raise doubtsas to the safety of a substance, when interpreted in combination with the precautionary principle (paraquat case)

8 The myth in the absence of scientific proof precaution is merely a bad excuse for regulation will be costly, does not stand a costbenefit test will damage national competitiveness and economic welfare

9 Socio-economic analysis Origin: US flood control act (1936) Addressing floods and economic crisis Roosevelt s New Deal: orderly process Revival: regulatory impact analysis (1981) Addressing safety, health and environment Reagan s deregulation agenda: CBA European Union Structural funds have requirement for CBA WFD art. 4: proportionality clause

10 Will CBA get the answers right? Costs of measures are usually fairly straight-forward to quantify and monetize Benefitsof measures will depend on assessment of the risk in question do we need proof? Need to quantify relations between cause and effect Need to value and monetize key impacts Criticque from Ackerman and Heinzerling (2005) If today s methods of CBA had been applied in the past, would it have given its blessings to the early regulations which now look so successful in retrospect? No: The technique would have gotten the answer wrong

11 Boundary between our knowledge and lack of knowledge Research and development Knowledge Lack of knowledge From: Poul Harremöes

12 Some facts rigorous scientific evidence can only be established ex-post for reason of meritocracy a lot of research tends to be biased towards established issues and problems shortage of funding for adressing public concerns for health and environment

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14 Case of Lead (Pb) Highly Toxic Acute effects -> Saturnism Accumulates in bones brain Liver Many chronic health impacts Neurodevelopment (children) Anemia (Adults) Biomarkers Pb in blood (short term exp.) Pb in urine (short term exp.) Pb in bones (long term exp.)

15 CHILDRENS IQ-LOSS Lead (Pb) accumulation in body Age Dependent Biokinetic Model ADBM accounts for long term conditions Specifies the contribution to Pb blood from inhalation 3 ug/dl 2,5 2 1,5 1 0,5 Pb air - 3 Pb air - 2 Pb air - 1 Pb blood / Pb air dependent of age dependent of exposure time Day of exposure (day 0 = birth) L A U

16 REDUCED LIFETIME EARNINGS Cognitive impairments reduce income by 2-3% per IQ-point lost External costs for Pb: 1.5/gram (r=1.4%) (Schwartz 1993; Grosse et al. 2002; Pizzol et. al., 2010) 1 gram of Pb per liter petrol up to 1985 imply annual social costs of 4-6 % of GDP in EU

17 IMPACT PATHWAY APPROACH Externe (2005) Methodology FOCUS ON STEPS MODELS Local scale (MWCP as emission source) Quantification of Emission Modeling of Increment in Air Concentration Atmospheric model Exposed population Long term conditions Danish conditions Concentration- Response Function Monetary Evaluation of Impacts Bio-kinetic model IQ loss / Pb blood function monetary value of IQ point

18 Why lead is a special case Belongs to small number of well-studied environmental hazards No-threshold for impact on childrens IQ has been thoroughly documented Strong evidence finally triggered regulation, but only after 50 years of controversy...careful inspection of the early evidence presented in 1925likely to suggest need for ban also within a CBA-framework

19 Boundary between our knowledge and lack of knowledge Research and development Knowledge Lack of knowledge From: Poul Harremöes

20 Implications Scientific evidence remains insufficient, inconclusive or uncertain in most cases Useful with mandatory element of risk analysis in socio-economic assessments and CBA Preliminary scientific evaluation may indicate some potential magnitudeof the priority impacts Consider scientific evidence as well as proof

21 Nitrate as a candidate for precaution Precaution has triggered regulation, based on WHO guide value of 50 mgno 3 /liter Well-studied environmental hazard, but only 1-2 cohorte studies available Uncertainty regarding health impacts prevail Possible threshold for health impacts of nitrate is not well understood why 50 mg? Which number for the benefits of avoided impacts to be used in SEA/CBA?

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23 Nitrate mortality and morbidity State of the art Ingestion of nitrate may inhibit nitrosamines (NOC) that cause increased frequency of cancer in all animal species tested Biologically plausible mechanism to suggest bladder cancer 65-70% of nitrate consumed is detected in bladder within 24 hours Risk quantification on basis of epidemiological literature Iowa health study (cohorte of women; Weyer et al 2001) & Slovakian nitrate study (Gulis et. al. 2002) Bladder cancer incidence (>55 years) per mgno 3 /l Colorectal cancer inc. (>55 years) per mgno 3 /l Non-Hodgkins leukemia (>55 years) 0.03 per mgno 3 /l Ovarian cancer (F >55 years) per mgno 3 /l Which threshold for no-effect? WHO maximum: 50 mgno 3 /l Past EU guide level 25 mgno 3 /l

24 External costs of nitrogen (DK) External costs DKK 2006 pr. kg total-n Health: nitrate in drinking water: N-loss DKK 2006 pr. kg total-n Mineral fertilizer, loamy soil 4.19 Organic fertilizer, loamy soil 4.19 Mineral fertilizer, sandy soil Organic fertilizer, sandy soil Environment: sight-depth: Mineral fertilizer 0.63 Organic fertilizer 0.63 Climate: N 2 O-N: Mineral fertilizer 2.90 Organic fertilizer 2.30 Sum of external costs: Mineral fertilizer, loamy soil 7.72 Organic fertilizer, loamy soil 7.12 Mineral fertilizer, sandy soil Organic fertilizer, sandy soil 44.83

25 Climate case: risk analysis (Stern) Robust climate Sensitive climate Out of pocket 5 % 7 % Welfare economic 11 % 14 % Loss in GDP annually, cf. Stern-report Corrected for inequality 17 % 20 %

26 Air pollution Source: EEA, 2011

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28 Externalities in EU policies Sicco Mansholt letter in response to Club of Rome report (1972) Water Framework Directive (2000) art. 4: proportionality of costs and benefits Eurovignette Directive (2011) HGV km-charge based on air pollution costs Commission guidelines for state aid for environmental protection (2008/C82) 161: aid amount in support for renewable energy

29 What role for precautionary principle? Socio-economic assessment (incl. CBA) is a tool that can provide decision-support to increase social welfare. It provides information to decision-makers. Despite the uncertainties involved, a careful screening of the potential impacts (risk analysis) often provides an improved understanding of the potential magnitude of the priority impacts. The precautionary principle places the burden of proof on the proponents of the activities in question, not on socio-economic analysis or the victims of pollution. A high level of protection is emphasised in TFEU.

30 Thank you for your attention!