§ Mr. TynanTo ask the Secretary of State for Environment, Food and Rural Affairs how her Department models the external costs of energy-related activities in the UK. [R] [178320]
§ Mr. MorleyThere are several types of external costs that are usually associated with energy activities, including impacts on noise, health, buildings, crops, ecosystems and global warming. The most important externalities of energy activity in the UK are attached to emissions to air, including emissions of CO2 and of local pollutants.
The DTI UK Energy Model is the most comprehensive source of forecasts of CO2 emissions from energy use. The UK National Atmospheric Emissions Inventory (NAEI), which is funded by Defra and Devolved Administrations, annually compiles estimates of emissions to the atmosphere from UK sources such as cars, trucks, power stations and industrial plants. Estimates of emissions of pollutants to air are a fundamental input to the air quality modelling work that the Department carries out to assess ambient concentrations of important air pollutants and to estimate their health and other impacts.
Valuation of non-market impacts is a challenging but important element of appraisal, and should be attempted wherever feasible. However valuation techniques are constantly being refined and considerable uncertainty typically characterises monetary estimates of the marginal damage costs associated to emissions of various pollutants.
A Government Economic Service working paper 'Estimating the Social Cost of Carbon Emissions' suggested a range of illustrative estimate for the global damage cost of carbon emissions. These figures are currently being reviewed by an interdepartmental group on the social cost of carbon which is expected to report by the end of the year.
The Department of Health's Committee on the Medical Effects of Air Pollutants (COMEAP) advises on how to quantify the health impacts associated with changes in local pollutant emissions, including PM 10, 1426W NOx, SO2 and ozone. Currently there is no UK agreed monetary value that can be used for the reduction in risk of deaths brought forward by air pollution due to a lack of empirical evidence in the field. However, Defra has recently published a study which attempts to generate a theoretical range of monetary values for health benefits and is considering the feasibility of recommending a range of values to monetise the health impacts associated with air pollution for use in policy appraisal.
The Government also follow with interest the work of ExternE, a major EU-funded research study on the external cost of energy.