ENVIRONMENTAL DAMAGE ASSESSEMENT

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ENVIRONMENTAL DAMAGE ASSESSEMENT
Giuseppe Di Marco and Angelo Maggiore APAT Italia
n National Agency for Environmental Protection
and Technical Services
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Outline of the Presentation

• Juridical framework for Environmental Damage
  Assessment
• (EDA) in Italy, EU and at International
  (Protocol) level
• EDA procedure
• Application status of EDA procedure
• Issues and problems related to EDA in water
  environment.

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Environmental Damage and environmental goods
ENVIRONMENTAL DAMAGE adverse effect induced onto
environmental goods by an anthropic activity
ENVIRONMENTAL GOODS natural resources (unitary or
integrated), and the services they provide to the
ecosystem (ecological services), or to humans
(private and public antrophic services).
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Liability Regime for Environmental Damage
D.Lgs. 152/06 At Italian level
Directive 2004/35/CE At EU level
Protocol on civil liability and compensation for
damage caused by the transboundary effects of
industrial accidents on transboundary waters to
the 1992 Convention on the protection and use of
transboundary watercourses and international
lakes and to the 1992 Convention on the
transboundary effects of industrial accidents At
International level
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Civil liability and environmental damage
EU Directive Environmental damage
Significant and measurable adverse effects on
these natural resources and/or their services
soil
protected species/habitat
water bodies
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Civil liability and environmental damage
EU DIRECTIVE STRICT LIABILITY significant
adverse effects caused by DANGEROUS
ACTIVITIES, UNLESS THE RESPONSIBLE PARTY
DEMONSTRATES NOT TO BE AT FAULT OR NEGLIGENT
EU DIRECTIVE FAULT-BASED LIABILITY significant
adverse effects on the conservation status of
protected habitats and species, caused by any
activity (general environmental liability) when
the responsible party has been at fault or
negligent
ITALIAN LEGISLATION extends the strict liability
to any activity and the fault-based liability to
any magnitude of adverse effects on any
environmental good, provided they are caused by
illicit activities
THERE ARE NO FINANCIAL LIABILITY LIMITS
NO MANDATORY FINANTIAL SECURITY
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Compensation by Remediation
The Italian legislation, in accordance with
Directive 2004/35/CE, states that compensation
for environmental damage can be achieved through
remediation
primary remediation MEASURES OF REINSTATEMENT
aiming at restoring natural resources, ecological
and public anthropic services to/toward baseline
condition
complementary remediation measures to compensate
the fact that primary remediation does not result
in full restoration (EX EQUIVALENCY APPROACHES)
compensatory remediation measures to compensate
for interim losses (EX RESPONSE MEASURES)
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Compensation by Patrimonial Equivalent
If the responsible party has carried out an
illicit activity and he/she has been at fault or
negligent and he/she does not remediate the
damage, Italian legislation provides that
compensation can be claimed for through a payment
in favour of the State of an amount of money
equal to the monetary value of environmental
damage
EU Directive 2004/35/CE does not propose any
monetary compensation for damage. Only expenses
the State undertakes for restoring the impaired
natural resources, and the public services
provided by them can be compensated.
The monetary value of environmental damage can
also be used to settle negotiated compensation
agreements between the State and the responsible
party, and to determine the extent of the
necessary complementary and compensatory remedial
measures
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Time limit of liability in Italy and in EU
30 years from the accident/emission/event
5 years from the date on which recovery measures
have been completed or the responsible party has
been identified
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Compensation for Environmental Damage the
Protocol
The Protocol states that the operator shall be
liable for damage to transboundary water caused
by an industrial accident (Art. 4 Strict
liability)
Moreover, where domestic law provides for a
fault-based liability regime, the Protocol
extends it to damage to transboundary water (Art.
5 fault-based liability).
These damages include damage to environmental
goods (Art. 2). The compensation of this kind of
damage consists in the payment of the cost of
measures of reinstatement, taken or to be
undertaken, and the cost of response measures
which have been taken. When measures of
reinstatement are not possible, complementary
remediation measures can be considered in order
to introduce the equivalent of damaged goods into
the transboundary waters
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Environmental Damage Assessment (EDA)
Complex multidisciplinary juridic, technical and
economic analysis
Damage determination
Damage quantification
Monetary valuation
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Damage Determination
Collection and analysis of information useful to
ascertain
Environmental damage
cause-effect link
Damage scenario
Effects

• Measurements/analyses
• Witnesses/photos
• Studies/investigations

• Source (kind of pollutant,
• discharge, illicit activity)
• Exposure pathways
• Targets

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Problems arising in damage determination

• Lack of data
• Difficult to gather further data because damage
• determination is usually carried out for events
  occurred 2
• years before
• contribution of other sources and natural
  fluctuations

The situation is different when dealing with
industrial accidents. In this case the damage
determination phase is implemented straight away
following the event and it is often facilitated
by the availability of ad-hoc environmental
emergency response plans.
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Damage quantification
Analytical measure of the Extent, Duration and
Severity of the damage in terms of
Adverse change with respect to baseline
(ALTERATION)
Loss of all services (TOTAL DESTRUCTION
Partial loss of anthropic/ecological services
(DETERIORATION)
Loss of one or more services (PARTIAL DESTRUCTION)
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Damage quantification, example
Increasing indicator Decreasing indicator
Alt (Iri-Ipi)/Iri Alt (Ipd-Ird)/Ipd
Det (Iri-Ipi)/(Iri-Lmin) Det (Ipd-Ird)/(Lmax-Ird)
Des1 if IpiltLmin or Ipi0 Des1 if IpdgtLmax
pollutant
Lmax
Max pollution limit
Lmax-Ird
Ipd
Indicator Present state
Ipd-Ird
Monitoring data Historical data Reference data
Unaffected areas
Ird
Baseline Indicator
Ipd
0
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Monetary valuation of environmental damage
Provides technical and economic elements useful
for determining the economic refund of the damage
itself (compensation by patrimonial equivalent)
It can be
Precise
Equitative
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Precise valuation
Components of Total Economic Value (TEV) Components of Total Economic Value (TEV)
Use value Direct use
Use value Indirect use
Non use (passive) Value Option use
Non use (passive) Value Bequest value
Non use (passive) Value Existence value
When the damage involves not marketable values
and it is possible to refer to primary remediation
TEV is estimated equal to
cost of primary remediation
cost of interim loss

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The cost of primary remediation
Expenses which are necessary to restore
deteriorated resources to baseline
Example
Cost of a hypothetical project to monitor,
control and contain, remediate and re-naturalize
all deteriorated natural resources, keeping into
account
extension (volume, surface, number of individuals
and species etc)

• unitary prize lists for these activities
• remediation costs relative to similar situations
  (benefit transfer)
• public works itemized prize lists
• market prizes for activities and supplies.

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Cost of Interim Loss
IT CAN BE MONETARILY VALUED BY
1. Compound legal interests accrued by the
primary remediation cost during the
unavailability period
2. Costs of measures of compensatory remediation,
providing, for a period as long as the
unavailability period, the same resources and
services (replacement costs). Ex expenses which
are necessary to set up and manage the
recreational services of a water body or a system
for supplying drinking water
3. Public defensive expenses for response
measures Ex expenses undertaken by the national
health service to cope with a salubrity
deterioration)
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Precise valuation
When a reference primary remediation cannot be
envisaged, it is possible to use other methods
indicated by economic theories

• Replacement costs
• Defensive expenses
• Revealed or stated (contingent valuation)
  preferences.

The results are not always agreed and hence too
weak and questionable to be used to claim for
compensation
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Equitative valuation
When there is no conceivable primary remediation,
the damage is often valuated in an equitative
rather then precise way

• Costs of some negative externalities which are
  not internalised by the activities that have
  caused the damage
• Ex omission of payments (taxes, insurances,
  concession fees etc)

2. Illicit profit
costs of the best available technologies, which,
if applied, would have avoided/limited
environmental damage
profit earned by the responsible party during the
illicit period.
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Application of the EDA procedure in Italy
(2000-2006)
During 2000-2006 period, APAT has applied EDA
procedure in more then 205 cases
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Damage determination problems in water environment

• The relevant complexity and spatio-temporal
  variability of the water
• environment
• The rapid transport of pollutants

• inadequate data sampling schemes
• not permanent adverse effects
• difficult to determine effects extent and
  severity
• uncertain baseline definition
• difficult to demonstrate cause-effect link
• difficult to estimate the necessary time for
  complete recovery to baseline.

Investigate immediately afterwards the accident
event, through inspections, suitable and prompt
sampling and measuring system
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The pollution capacity approach
Monetary valuation of water damage can be
referred to primary remediation costs of a volume
of water determined as a function of
pollutant load discharged
maximum permissible concentrations
Discharged pollutant load (kg)
Pollution capacity (m3)

Max. permissible conc. (kg/m3)
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Conclusions
APAT has developed a complex multidisciplinary
juridical, technical and economic analysis (the
Environmental Damage Assessment, EDA) capable of
providing a monetary valuation of not marketable
goods, like the environmental ones.
This assessment is useful to claim for monetary
compensation for environmental damage that is
both scientifically and legally defensible
The compensation of environmental damage to water
requires an adequate sampling and monitoring
system able of distinguishing the contribution to
deterioration attributable to the responsible
party, taking into account the relevant
spatio-temporal variability of the water
environment components and its extremely dynamic
nature.