Accounting for environmental impacts:

Supplementary Green Book guidance

Author: Helen Dunn

February 2012

Accounting for environmental impacts:

Supplementary Green Book guidance

Author: Helen Dunn

Editors: Victoria Harrison, Joanna Konings Series Editor: Joseph Lowe

February 2012

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Crown copyright 2012 You may re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit http://www.nationalarchives.gov.uk/doc/opengovernment-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or e-mail: psi@nationalarchives.gsi.gov.uk. Any queries regarding this publication should be sent to us at: public.enquiries@hm-treasury.gov.uk. ISBN 978-1-84532-942-6 PU1264

Contents
Page Chapter 1 Chapter 2 Chapter 3 Chapter 4 Annex A Introduction Identifying environmental effects Valuing non-market impacts on the environment Step by step guide to valuing environmental effects Sources for further information 3 5 7 13 21

1
Background

Introduction

1.1 HM Treasurys Green Book recommends Social Cost Benefit Analysis (SCBA) as a way of expressing the value of a proposal to UK society for policy appraisal purposes. 1.2 SCBA seeks to express the full costs and benefits of a proposal in monetary terms. However, it is not always straightforward to include effects on the environment within Cost Benefit Analysis because of the widespread absence of market prices. 1.3 The Green Book outlines techniques for valuing non-market effects 1 and this supplementary guidance covers the practical application of these techniques, specifically for valuation of environmental effects. 1.4 An important recommendation in this guidance is the use of the ecosystem services framework, which is outlined in more detail in the next chapter. Using this framework ensures that the full range of environmental impacts from a proposed policy or project is included in policy appraisal.

How to use this guidance

1.5 This guidance should be used for policies that are designed to have one or more specific environmental effects as well as policies with a different focus that may have impacts on the environment. 1.6 Chapter 2 is guidance on the ecosystem services framework and using this framework to identify environmental effects that need to be included in policy appraisal. 1.7 Chapter 3 is guidance on techniques for valuation of environmental effects including nonmarket approaches. 1.8 Chapter 4 is a step by step guide to using the principles in Chapters 2 and 3, as well as other resources, for valuing environmental effects in policy appraisal. This part of the guidance should be followed for all policies, using Chapters 2 and 3 as a reference. 1.9 The key steps are:

Identifying the aspects of the natural environment that will be affected by your policy or project and the changes in environmental effects or ecosystem services that could arise; Identifying legal and biophysical constraints, risks and opportunities to achieve positive outcomes for the natural environment alongside the meeting of policy aims; Taking forward a qualitative assessment to determine the range and nature of the environmental effects. Using an ecosystem services framework for assessment where there are multiple environmental effects; and

See annex 2 of the Green Book itself, or additional supplementary guidance on Stated Preference and other non market valuation techniques.

Quantifying and valuing the changes in ecosystem services: putting a monetary or other value on the costs and benefits of environmental effects focusing exclusively on the changes brought about by a policy or project.

1.10 For certain environmental effects, further guidance is available, including specific values for use in policy appraisal.

Greenhouse gases http://www.decc.gov.uk/en/content/cms/emissions/valuation/valuation.aspx Air quality http://www.defra.gov.uk/environment/quality/air/air-quality/economic/

1.11 Further sources of information are also provided in Annex A.

Identifying environmental effects

Importance of accounting for environmental effects

2.1 The publication of the UK National Ecosystem Assessment (NEA) in June 2011 has provided a robust case for accounting for the environment in decision making 1. The NEA is the first independent analysis of the UKs natural environment in terms of the benefits it provides to society and continuing economic prosperity. 2.2 Policies designed to deliver environmental improvements have been able to reduce levels of environmental pollution in air and water and provide important protection for wildlife sites. But these are not the only policies that effect on the environment, and despite significant statutory protection, environmental degradation of our natural environment is continuing. Opportunities for enhancement of the natural environment are being missed. 2.3 As well as the immediate direct and indirect effects of the policy or project on the environment, it is also important to understand the environmental effects over the lifetime of the policy or project. In extreme cases, a policy or project may not be able to achieve its aims due to environmental pressures worsening over the lifetime of the project. 2.4 The starting point when designing policies should therefore be to identify the full range of effects on the environment, so that these can be taken into account when comparing different options.

Taking an ecosystems approach

The natural environment
2.5 Although many aspects of our environment (air, water, landscape and marine) are protected from direct harm through regulation, growing pressures increase the need consider the environment as a functioning system and that provides the essential services that underpin the economic, social and personal well-being. 2.6 Apart from the things which we can sell (e.g. food and timber), the value of natural systems to society is largely unregistered by the free market, it is what economists refer to as an externality which means it may of ignored be unvalued in decision making and so be vulnerable to loss and degradation. 2.7 Social value will be better reflected in decision making by considering environmental service provision as an interconnected system.By looking at the natural environment as a system which provides services, it is easier to identify the full range of benefits the natural environment provides. 2.8 An ecosystems approach can, importantly, also lead to decisions which are better in terms of environmental sustainability by ensuring that our stocks of environmental assets and the services they provide are appropriately valued.

http://uknea.unep-wcmc.org/

2.9 Further resources for using an ecosystems approach in policy making can be found at: http://archive.defra.gov.uk/environment/policy/natural-environ/documents/nature-do-for-you.pdf 2.10 The use of an ecosystem services framework helps to incorporate in a systematic manner the value of services from our natural system into policy and decision-making. 2.11 Ecosystem services can be categorised as:

Provisioning: such as supply of food and fibre; Regulating: such as water and climate regulation; Cultural: such as landscapes and recreation, and Supporting: such as soil formation and habitats.

2.12 This framework offers a more comprehensive approach to understanding how policies effect on the wider environment.
Box 2.A: Ecosystem Services

Ecosystem services can be defined as services provided by the natural environment that benefit people. These benefits include:

Resources for basic survival, such as clean air and water; Contribution to good physical and mental health, for example through access to green spaces, both urban and rural, and genetic resources for medicines; Protection from hazards, through the regulation of our climate and water cycle; Support for a strong and healthy economy, through raw materials for industry and agriculture, or through tourism and recreation; and Social, cultural and educational benefits, and wellbeing and inspiration from interaction with nature.

2.13 For further information see Chapter 1 of An introductory guide to valuing ecosystem services at: http://archive.defra.gov.uk/environment/policy/natural-environ/documents/ecovaluing.pdf

3
Introduction

Valuing non-market impacts on the environment

3.1 This chapter is designed to be used as a reference alongside Annex 2 of the Green Book, providing supplementary guidance on the techniques that are specifically relevant to valuing non-market environmental effects. 3.2 As shown in more detail in Chapter 4, valuation is the final stage in any detailed assessment of the non-market effects of a policy, after describing effects in qualitative terms, and quantifying impacts where possible. 3.3 It is not always possible or proportionate to value every environmental effect in monetary terms. Where this is not feasible, these effects should be presented in quantified terms; and if this is not possible, there should be a qualitative assessment of the potential effects.

Total Economic Value (TEV) Framework

3.4 The value that we are trying to capture for the purposes of a policy appraisal is the total value of a marginal change in environmental effects or the underlying ecosystem services. 3.5 The Total Economic Value (TEV) framework is of use as it measures the total gain or loss in wellbeing from marginal changes in environmental effects, taking into account both use and non-use values. TEV is measured by the willingness to pay (WTP) for a marginal gain or willingness to accept (WTA) for a marginal loss, aggregated across the affected population. See Annex 2 of the Green Book for more on WTP and WTA. 3.6 The TEV framework set out in Chart 3.A shows the types of environmental values relevant to policy or project appraisal.

Chart 3.A: Total Economic Value (TEV) Framework

Source: Defra

3.7 Use value includes direct use, indirect use and option value. Non-use value comprises of bequest value, altruistic value and existence value. Consideration of all types of value in economic valuation techniques should ensure a more complete valuation.

TEV and valuation techniques

3.8 The Green Book outlines two main approaches to valuing non-market effects: stated preference and revealed preference 1. Below, some of the main methodologies are outlined, with examples of the type of environmental effect they can be used to value.

Revealed Preference methods

3.8.1 Revealed preference (RP) methods rely on data regarding individuals preferences for a marketable good which includes environmental attributes. These techniques rely on actual markets. Included in this approach are: market prices, averting behaviour, hedonic pricing, and travel cost method, and random utility modelling.

Market prices
3.8.2 These can be used to capture the value of goods and services that are traded e.g. the market value of forest products. Even where market prices are available, they may need to be adjusted to take account of distortions such as subsidies. Market prices can act as proxies for direct and indirect use values but do not capture non-use values; the price will be a minimum expression of the willingness to pay.

1 A GES discussion paper published in July 2011, Valuation techniques for social cost-benefit analysis also highlights subjective well-being approaches which attempt to measure peoples experiences rather than expose their preferences. See http://www.hmtreasury.gov.uk/d/green_book_valuationtechniques_250711.pdf for more detail.

Averting behaviour
3.8.3 This approach focuses on the price paid by individuals to mitigate against environmental effects. For instance, the cost of water filtration may be used as a proxy for the value of water pollution damages; or costs of buying pollution masks to protect against urban air pollution (although this will only represent part of the damage value).

Hedonic pricing
3.8.4 This assumes that environmental characteristics (e.g. a pleasant view or the negative amenity value of a nearby landfill site), as well as other property features, are reflected in property prices. The value of the environmental component can therefore be captured by modelling the effect of all possible influencing factors on the price of the property. Hedonic pricing can capture direct and indirect use value.

Travel cost method

3.8.5 This is a survey-based technique that uses the costs incurred by individuals taking a trip to a recreation site (e.g. travel costs, entry fees, opportunity cost of time) as a proxy for the recreational value of that site. It captures use value; visitors to the site may hold non-use values, but these cannot be assessed using this valuation method.

Random utility models

3.8.6 This is an extension of the travel cost method and is used to test the effect of changing the quality or quantity of an environmental characteristic at a particular site. Again, only direct use value can be captured.

Production function approach

3.8.7 This focuses on the relationship that may exist between a particular ecosystem service and the production of a market good. Environmental goods and services are considered as inputs to the production process and their value is inferred by considering the changes in production process of market goods that result from an environmental change. This approach is capable of capturing indirect use value.

Stated Preference methods

3.8.8 Stated preference (SP) methods use carefully structured questionnaires to elicit individuals preferences for a given change in a natural resource or environmental attribute. In principle, SP methods can be applied in a wide range of contexts and are the only methods that can estimate non-use values which can be a significant component of overall TEV for some natural resources. The main options in this approach are: contingent valuation and choice modelling.

Contingent valuation
3.8.9 This is a survey-style approach that constructs a hypothetical market via a questionnaire. Respondents answer questions regarding what they are willing to pay for a particular environmental change. Theoretically, contingent valuation can capture all elements of Total Economic Value, but in practice it may be very difficult to assess many different use and non-use values.

Choice modelling
3.8.10 This is a survey-style approach that focuses on the individual attributes of the ecosystem in question. For example, a lake may be described in terms of water quality, number of species etc. Participants are presented with different combinations of attributes and asked to choose their preferred combination or to rank the alternative combinations. Each combination of

attributes has a price associated with it and therefore the respondents reveal their WTP/WTA for each attribute. As with contingent valuation, choice modelling can capture all elements of TEV. 3.9 Chart 3.B shows how the stated preference and revealed preference techniques described above relate to the components of total economic value.
Chart 3.B: Valuation techniques related to Total Economic Value framework

Source: Defra

Obtaining values
3.10 The TEV framework above indicates the type of valuation approaches that are appropriate for a range of different non-market environmental effects. This can be a good starting point for consideration of how to obtain values for policy appraisal in practice. 3.11 The values themselves may be obtained through the use of existing information from previous studies. This process is known as value transfer (also commonly referred to as benefits transfer). Value transfer is the process by which economic values that have been generated in one context (the study site) are applied to another context (the policy site). This is a cost effective way of making greater use of environmental values in policy-making. 3.12 Defra has published guidelines designed to indicate whether value transfer is appropriate and to provide detailed support in selecting the most suitable evidence they are available at: http://www.defra.gov.uk/environment/natural/ecosystems-services/valuing-ecosystem-services/. 3.13 If it is not appropriate to perform value transfer, or if preliminary value transfer indicates that effects are substantial, then initiating a primary valuation may be required. Primary valuation studies can be costly and time consuming so should only be undertaken when proportionate. 3.14 In order to ensure that any new primary valuation work has the most opportunity to be used in policy appraisal more widely (i.e. used in value transfer exercises in the future), we recommend that the valuation work should take into account as part of the design, future uses.

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The Defra primary valuation protocol at http://archive.defra.gov.uk/environment/policy/naturalenviron/using/valuation/documents/annex1.pdf should be followed to contribute to the growing valuation evidence base and ensure that all the right information is presented as part of the final study report to maximise these opportunities.

Use of non-monetary and participatory techniques

3.15 It may be difficult to value all of the changes to ecosystem services that may result from a policy or project in monetary terms. Defra has published a guide on using participatory and deliberative techniques to support both monetary and non-monetary valuation of ecosystem services at: http://www.defra.gov.uk/environment/natural/ecosystems-services/valuingecosystem-services/. The guide is intended to assist in deciding when and which technique is most appropriate in particular circumstances. It also provides case study examples which show what some of these techniques look like in practice.

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4
Introduction

Step by step guide to valuing environmental effects

4.1 This step by step guide is designed to be used with the flowchart overleaf to identify and value non-market environmental effects from a programme or policy. 4.2 This guide should be used in conjunction with the Green Book (in particular Chapter 5 on appraising the options and Annex 2 on valuing non-market effects). It should help you to account for environmental effects in a policy appraisal and ensure the evidence base is fit for purpose. 4.3 Analysis of the costs of (or benefits of reductions in) carbon emissions are now routinely taken into account in policy development, and included in cost-benefit analysis. Potential significant costs and benefits can also arise from a wider set of environmental effects. 4.4 As a starting point, the wider environmental effects to consider include: Vulnerability to the predicted effects of climate change; Environmental and health effects of waste management; Effects on air quality; Landscape or townscape effects; Water pollution, levels of abstraction of water and exposure to flood risk; Biodiversity (the amount or variety of living species) and ecosystem quality; and The number of people exposed to noise or the levels to which they are exposed.

4.5 Where environmental effects could be significant and wide ranging, subsequent steps in the analysis are recommended including the use of an ecosystem services framework: please refer to Chapter 2 of this guidance.

Relevance to programmes, policies and projects

4.6 It is important to identify the environmental effects at an early stage of the policy or project development. This provides time for further more detailed analysis as required if the effects are considered significant (see detailed step by step guide below). It also allows consideration to be given on how to adapt options to mitigate against environmental risks or to consider options that might be able to enhance the environment alongside meeting the stated objectives.

Proportionality and transparency in analysis

4.7 The effort undertaken to value any effect on the natural environment should be proportionate to the level of costs and benefits being considered. The emphasis is placed on having a staged and proportionate approach. Hence the early stages focus on scoping work to identify what options have the potential to give rise to significant environmental effects. Where options are not expected to lead to significant environmental effects then further stages of

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analysis may not be appropriate. On the other hand, where environmental effects could be significant and wide ranging, further analysis is required. 4.8 The assessment of environmental effects should be presented in the main policy appraisal so that environmental costs and benefits can be compared to all the other costs and benefits of a policy option. Where possible, both qualitative and quantitative assessment should also be presented to provide evidence that underpins estimated environmental costs and benefits. Sensitivity analysis should also be presented that help to demonstrate the key assumptions and uncertainties that might affect the analysis of wider environmental effects. It is important to be clear and transparent about risks and evidence gaps.

Who needs to be involved in the assessment of environmental effects?

4.9 The linkages between a policy or project and the effects on the environment can be complex. Policy appraisal needs to develop the scientific evidence which forms the basis for valuing environmental effects in monetary terms. In practice, this may require integrated working between policy, science, economists and social research disciplines.

Detailed step by step guide

Step 1 Basic Scoping stage: Using the checklist, consider if the policy proposal has significant environmental effects
4.10 It is important to consider the effect of policy options on the environment from the outset. At an early stage in the policy appraisal process, make a preliminary assessment of the main environmental aspects that are likely to be affected using the wider environmental issues checklist (see Chart 4.A overleaf). 4.11 The checklist of questions will help you decide if your policy option will effect on the environment. Further information on this wider environmental issues checklist can be found at http://www.defra.gov.uk/corporate/about/how/policy-guidance/env-effect-guide/. By clicking on each question you can access further guidance that will help you appraise specific environmental effects and provide guidance for subsequent steps including valuing these effects, where possible. By following this process, you will have performed a preliminary assessment of the potential wider environmental effects. This information will help you to decide if the environmental effects are potentially significant. 4.12 If significant environmental effects are identified, further work is required to identify the importance to the overall policy decision, quantify and value the environmental effects and highlight key uncertainties and evidence gaps that require further investigation.

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Chart 4.A: Wider Environmental Checklist and Flow Chart

Source: Defra

Step 2: Detailed qualitative assessment to determine the range and nature of the environmental effects identified
4.13 Where the potential for significant environmental effects have been identified, this stage requires taking forward a more detailed qualitative assessment, building on the evidence collected in the scoping stage. 4.14 At this stage you should be able to identify the nature (quality or quantity) and direction of the change in the relevant environmental effects and identify the key uncertainties and evidence

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gaps see box below for an overview of what a detailed qualitative assessment might include. For each part of the qualitative assessment, uncertainties and gaps in knowledge should be identified. 4.15 When assessing wider environmental effects you should take a sufficiently broad view of the spatial scale and temporal nature of those effects. It is possible that the appropriate scale may differ from that first implied by the policy change. For example, the effect of a policy option on the environment may be at a local, national or international level or may be relevant across an entire ecosystem such as a watershed which does not conform to administrative boundaries.
Box 4.A: Qualitative assessment of the change

A qualitative assessment of the change will typically:

Describe the nature of the change change in quantity (e.g. emissions of particulate matter) or quality (e.g. river water quality); Describe the direction of the change an increase or decrease (quantity) or improvement or deterioration (quality); Describe the temporal nature of the change - a change that will occur immediately or gradually over time, for a limited period of time (e.g. effects during the construction phase of a project) or permanent; Describe the spatial nature of the change location(s) as to where the change will occur; and Describe the scale of the change an assessment of the significance of the change based on scientific and technical understanding of the policy good and the expected policy or project outcomes (e.g. whether marginal or non-marginal compared to baseline).

4.16 In cases where there are multiple environmental effects, affecting market and non-market values, the use of an ecosystem services framework is recommended (see step 3 below). 4.17 In cases where the significant environmental effects are limited to only one aspect, such as air quality or water quality, specific related guidance should be used to quantify and monetise the effect of that environmental effect where possible (go directly to step 4).

Step 3 Use of an ecosystem services framework: recommended where there are multiple environmental effects
4.18 A key tool that analysts can use in defining wider environmental effects is the ecosystem services framework. Use of this framework is particularly recommended where there are multiple environmental effects affecting both market and non market values. This can ensure that the entire range of environmental effects from a proposed policy or project is taken into account. 4.19 An initial checklist of ecosystem services can be seen overleaf. Policy options should be assessed against this initial checklist of ecosystem services. This methodology ensures that all ecosystem services are considered from the outset and the whole ecosystem is considered. A policy option may not affect the majority of ecosystem services and so the use of this framework is to identify which specific services are affected to take forward in terms of further appraisal.

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Chart 4.B: Initial checklist of ecosystem services for consideration

Source: An introductory guide to valuing ecosystem services

4.20 The preliminary qualitative assessment of the effects on ecosystem services should allow you to now prioritise quantification of effects on specific ecosystem services. Having established the spatial scale and nature of your project you need to consider if it effects on:

Protected habitat areas or species. Any existing environmental problems such as pollution, flooding, erosion. Any existing environmental commitments such as carbon or air pollution.

4.21 Priority ecosystem services may be determined by existing environmental restrictions, additional pressure on environmental problems and environmental risks. 4.22 Some relationships may be complex and scientific advice is likely to be required. Further detail and information can be found in Chapter 3 of An introductory guide to valuing ecosystem services at: http://archive.defra.gov.uk/environment/policy/naturalenviron/documents/eco-valuing.pdf

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Step 4: Quantifying and valuing environmental/ecosystem service effects

4.23 The previous steps have provided guidance on developing the qualitative assessment of wider environmental effects of a policy option where significant wider environmental effects have been identified then it is important to attempt to monetise these effects, where possible. This next step looks at how to quantify and value these effects, where possible. Chart 4.C below provides an illustration of the process to value environmental effects in policy appraisal. 4.24 Quantification of the change should measure the direction and magnitude of the change (and the profile over time) or provide a proxy measure of it. This should be informed by available scientific and technical evidence. This might include a measure of quantity change (e.g. change in carbon emissions or change in PM10 emissions), quality change (e.g. change in river water quality) or a probability of risk of occurrence (e.g. flood risk).
Chart 4.C: Valuation information required in policy appraisal

Source: Defra

4.25 By quantifying the environmental effects, it may then be possible to value these effects in monetary terms. Economic valuation is the process of ascertaining a value that people place on the change in the environmental good. 4.26 In many cases there is no market or price for that good. However, techniques for valuation of non market goods do exist for monetary valuation of changes in environmental/ecosystem service effects. The Total Economic Valuation Framework provides a useful framework for understanding whether values are use values (both direct and indirect) and non-use values. Refer to Chapter 3 for more detailed information. 4.27 It may not be possible to value all the changes to ecosystem services in monetary terms. Non-monetary and participatory valuation techniques can be used to contribute to a qualitative assessment and may be used to quantify changes that cannot be monetised. Participatory techniques such as Deliberative Monetary Valuation can also be used to determine monetary values, and may be particularly helpful where various forms of group discussion would help

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respondents understanding of complex environmental effects which are being valued, and/or the individual and societal choices to be made. 4.28 Valuing the environmental/ecosystem services effects using value transfer is a proportionate and effective use of existing evidence. Value transfer, also known as benefits transfer, is the process of taking evidence on economic values from one context (known as the study site) and transferring it to another context (known as the policy site). 4.29 Defra published (February 2010) Valuing environmental effects: guidelines for the use of value transfer at: http://www.defra.gov.uk/environment/natural/ecosystems-services/valuingecosystem-services/ which provides a step by step guide to valuing environmental effects using value transfer approaches. These guidelines provide help in selecting the most appropriate approach to value transfer and an appropriate level of effort. The guidelines also offer assistance in selecting the most suitable economic value evidence from the literature and practical assistance in applying the valuation evidence appropriately to the new policy appraisal context. See Annex A for links to various environmental valuation sources 4.30 Where there is no relevant valuation study available in the existing literature and the costbenefit analysis is seen to depend significantly on the magnitude of the environmental/ecosystem services effects, undertaking a primary valuation study may be justified. Primary valuation studies can be costly and time consuming so it is something that should be undertaken only when it is proportionate and appropriate. 4.31 It is unlikely to be possible to estimate all the economic values associated with changes in environmental/ecosystem services effects. Qualitative and quantitative information will therefore be required where there are valuation evidence gaps. You will need to consider how crucial these evidence gaps are and if further work needs to be undertaken. 4.32 The use of sensitivity analysis is an important part of the assessment to understand how estimated environmental costs and benefits are sensitive to different assumptions. As an aid in determining the level of significance of the wider environmental effects, switching analysis of a policy option could also be undertaken. This provides an indicator of the magnitude of the wider net environmental effects required, in order to switch a policy from one yielding overall net benefits to society to one yielding overall net costs to society (or vice versa).

Step 5: Reporting Stage

4.33 Where an initial assessment has identified there are no significant environmental effects, no further steps may be required apart from providing suitable evidence in the policy appraisal. 4.34 Where significant environmental effects are identified, further assessment using the ecosystem services framework is recommended. As far as possible, these environmental/ecosystem services effects should be quantified and valued. This assessment should be presented in the main policy appraisal so that environmental costs and benefits can be compared to all the other costs and benefits of a policy option. 4.35 Where possible, both qualitative and quantitative assessment should also be presented to provide evidence that underpins estimated environmental costs and benefits. 4.36 Sensitivity analysis should also be presented that help to demonstrate the key assumptions and uncertainties that might affect the analysis of wider environmental effects.

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Sources for further information

A.1 UK National Ecosystem Assessment, June 2011 at: http://uknea.unep-wcmc.org/. The NEA is the first independent analysis of the UKs natural environment in terms of the benefits it provides to society and continuing economic prosperity. It includes a detailed evidence base on economic values of different parts of the natural environment as well as evidence on other non monetary values. A.2 Resources for using an ecosystems approach in policy making (What nature can do for you?) at: http://www.defra.gov.uk/environment/natural/ecosystems-services/ A.3 An Introductory guide to valuing ecosystem services, Defra, December 2007 at: http://archive.defra.gov.uk/environment/policy/natural-environ/documents/eco-valuing.pdf A.4 Value transfer guidelines, Defra (February 2010) Valuing environmental effects: guidelines for the use of value transfer at: http://www.defra.gov.uk/environment/natural/ecosystemsservices/valuing-ecosystem-services/ A.5 For a non technical summary of practical tools for environmental valuation, see: http://archive.defra.gov.uk/environment/policy/natural-environ/using/valuation/documents/nontech-summary.pdf A.6 Environmental Valuation Reference Inventory at: https://www.evri.ca/Global/Splash.aspx A.7 Guide on using participatory and deliberative techniques to support both monetary and non-monetary valuation of ecosystem services, Defra (2011) at: http://www.defra.gov.uk/environment/natural/ecosystems-services/valuing-ecosystem-services/
Table 4.A: Sources for economic value evidence Environmental Effect General Description and link to guidance UK National Environmental Assessment (UK NEA), UNEP-WCMC June 2011provides a comprehensive overview of the state of the natural environment in the UK and the benefits provided to the economy and society: http://uknea.unep-wcmc.org/ The Environmental Valuation Reference Inventory (EVRI) is a comprehensive value transfer database supported by Defra and free to UK citizens (registration required): https://www.evri.ca/Global/Splash.aspx Interdepartmental Group on Costs and Benefits - Air Quality (IGCB(A)) Guidance: Contains the outline of the methodologies developed by the IGCB(A) and provision of the tools to aid their application. There are two broad approaches: the effect pathway approach including the use of damage costs for different pollutants and the abatement cost approach which is used where legally binding objectives are in danger of being breeched. http://www.defra.gov.uk/environment/quality/air/air-quality/economic/

Air quality

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Noise

Interdepartmental Group on Costs and Benefits Noise subject group (IGCB(N)) identification of four groups of effects of noise amenity, health, productivity and ecosystems: http://archive.defra.gov.uk/environment/quality/noise/igcb/publications/noisehea lthreport.htm Accounting for the Effects of Climate Change, HMT & Defra June 2009: http://archive.defra.gov.uk/environment/climate/documents/adaptationguidance.pdf Carbon Valuation in UK Policy Appraisal: a Revised Approach, DECC July 2009: http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/valuation/valuation. aspx Economic valuation of the benefits of ecosystem services delivered by the UK Biodiversity Action Plan: http://archive.defra.gov.uk/temp/sffsd0702-economic-valuation-uk-bap.pdf A study commissioned by Defra on the benefits of Sites of Special Scientific Interest in England and Wales: http://randd.defra.gov.uk/Default.aspx?Menu=Menu&Module=More&Location =None&ProjectID=17005&FromSearch=Y&Publisher=1&SearchText=0768&S ortString=ProjectCode&SortOrder=Asc&Paging=10#Description

Climate Change Adaptation Carbon

Biodiversity and ecosystem services

Flood risk management Appraisal of Flood and Coastal Erosion Risk Management http://www.defra.gov.uk/publications/files/pb13278-erosion-manage090619.pdf Flood and Coastal Erosion Risk Management Appraisal Guidance, (FCERM-AG), Environment Agency, March 2010: http://www.environment-agency.gov.uk/research/planning/116705.aspx Waste Water quality and Quantity http://www.defra.gov.uk/environment/waste/review/ UK Collaborative Research Programme on River Basin Planning Economics output: Report on guidance on the evidence required to justify disproportionate cost decisions under the Water Framework Directive Revised Summary Guidance, Jacobs, July 2007: http://www.wfdcrp.co.uk/pdf%5CP3%20revised%20final%20guidance.pdf Environment Agency, Ofwat and Water Companies (UK Water Industry Research) maintain guidance related to the cost benefit analysis done to support the Periodic Review of Water Prices. See relevant websites for details. Synthesis of the evidence on the positive benefits which green infrastructure brings to society, Forest Research, October 2010; and full critique of the current evidence, alongside a series of supporting evidence notes, and case studies, that detail examples of where green infrastructure has been successfully used to provide economic, social and environmental benefits Forest Research, October 2010: http://www.forestresearch.gov.uk/fr/INFD-8A9A2W Scoping study on agricultural landscape valuation, Swanwick, C, Hanley, N. and Termansen, M. October 2007: http://archive.defra.gov.uk/evidence/economics/foodfarm/reports/agrlandval/Mai nrep.pdf Scoping study into the use of recreational studies for economic valuation: http://randd.defra.gov.uk/Document.aspx?Document=100805NEE0906FinalRe port.pdf The Benefits of Inland Waterways, DEFRA and the Inland Waterways Advisory Council, March 2010 http://www.iwac.org.uk/downloads/research/OGorman_et_al_2010_The_Benefi ts_of_Inland_Waterways_Phase_1_2nd_Edition_March2010.pdf

Green Infrastructure

Landscape and Recreation

Inland Waterways

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