REMEDE D13 Toolkit 310708 -...

Microsoft Word - REMEDE_D13_Toolkit_310708Damage in the EU
Deliverable 13: Toolkit for Performing Resource Equivalency Analysis to Assess and Scale Environmental Damage in the European
Union Due date of deliverable: 30 April 2007 Actual submission date: 31 July 2008
Start date of project: 01/05/06 Duration: 26 months
Lead contractor organisations for this deliverable: Stratus Consulting, Ghent University, Economics for the Environment Consultancy Ltd and Jonathan Cox Associates
Version 5
Project co-funded by the European Commission within the Sixth Framework Programme (2002-2006)
Dissemination Level
PP Restricted to other programme participants (including the Commission Services)
RE Restricted to a group specified by the consortium (including the Commission Services)
CO Confidential, only for members of the consortium (including the Commission Services)
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Deliverable 13: Toolkit for Performing Resource Equivalency Analysis to Assess and Scale Environmental Damage in the European Union
REMEDE ii July 2008
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NAME OF THE INDIVIDUAL
Josh Lipton Kate LeJeune Jan-Bart Calewaert Ece Ozdemiroglu Jonathan Cox Scott Cole Bengt Kristrom Pere Riera
Ece Ozdemiroglu Ian Dickie Edward Brans Harry Aiking Colin Janssen
Ece Ozdemiroglu
Environment Consultancy Ltd
• Autonomous University of Barcelona
• Pels Rijcken & Droogleever Fortuijn N.V.
• Vrije Universiteit Amsterdam, Institute for Environmental Studies
• Ghent University
• Economics for the Environment Consultancy Ltd
DATE April 2008 May 2008 July 2008 Acknowledgements Amongst many others, the study team would like to thank
• Patrizia Poggi (DG Research, project officer), Alexandra Vakrou (DG ENV) and Guiliana Torta (DG ENV)
• Hannes Descamps (Flemish Government, International Environmental Policy Division) Belgium
• Prof Frank Maes and Prof An Cliquet (University of Ghent, Faculty of Law, research group International Public Law)
• Edward Lockhart Mummery (Department for Environment, Food and Rural Affairs) UK
The opinions and mistakes remain those of the authors.
REMEDE receives research funding from the 6 th Framework Programme of the European
Commission. This report reflects the authors’ views alone. The Community is not liable for any use that may be made of the information contained therein.
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Toolkit for Performing Resource Equivalency Analysis to Assess and Scale Environmental
Damage in the European Union
Authors1
Joshua Lipton and Dr. Katherine LeJeune, Stratus Consulting Inc., Colorado, USA
Jan-Bart Calewaert, Laboratory of Environmental Toxicology and Aquatic Ecology, Ghent University, Gent, Belgium
Ece Ozdemiroglu, eftec, London, UK
Contributing authors
Scott Cole, Swedish University, Sweden
Pere Riera, Autonomous University of Barcelona, Barcelona, Spain
Edward Brans, Pels Rijcken & Droogleever Fortuijn N.V.
July 2008
1 Main authors contributed to the main sections of the Toolkit and the overall presentation of the Toolkit. Contributing Authors provided specific information and minor text contributions for the Toolkit or were involved in writing the annexes. Each annex also has a separate authorship page detailing the authors of the specific annex.
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LIST OF TABLES ................................................................................................. X
INTRODUCTION TO RESOURCE EQUIVALENCY METHODS TO ASSESS AND SCALE ENVIRONMENTAL DAMAGE IN THE EU ...................................................................... 1
1 INTRODUCTION ........................................................................................... 3
1.3 WHAT IS THE STRUCTURE OF THE TOOLKIT? ............................................................. 5
1.4 HOW SHOULD THE TOOLKIT BE USED? ................................................................... 8
1.5 WHAT IS NOT IN THE TOOLKIT? .......................................................................... 8
1.6 WHEN CAN THE TOOLKIT BE OF USE? .................................................................... 9
2 OVERVIEW OF EQUIVALENCY ANALYSIS ............................................................ 10
2.1 DEBIT AND CREDIT ..................................................................................... 13
2.2 VARIABLES IN EQUIVALENCY ANALYSES ................................................................. 14
2.3 ITERATIVE NATURE OF THE EQUIVALENCY ANALYSIS APPROACH ......................................... 16
2.4 FIVE STEPS IN AN EQUIVALENCY ANALYSIS .............................................................. 16
2.5 LEVEL OF EFFORT ..................................................................................... 18
3 STRUCTURING AN EQUIVALENCY ANALYSIS ACCORDING TO THE APPROPRIATE LEGAL FRAMEWORK .................................................................................................... 19
3.1 THE ENVIRONMENTAL LIABILITY DIRECTIVE (ELD) ..................................................... 19
3.2 HABITATS AND WILD BIRDS DIRECTIVES (H&WBD) ................................................... 21
3.3 WATER FRAMEWORK DIRECTIVE (WFD) ............................................................... 22
3.4 ENVIRONMENTAL IMPACT ASSESSMENT AND STRATEGIC ENVIRONMENT ASSESSMENT DIRECTIVES (EIAD- SEAD) 23
PART II OF THE TOOLKIT: REMEDE TOOLKIT TO RESOURCE EQUIVALENCY METHODS TO ASSESS AND SCALE ENVIRONMENTAL DAMAGE IN THE EU ............................................ 25
1 STEP 1: INITIAL EVALUATION ......................................................................... 29
1.1 DESCRIPTION OF THE INCIDENT ........................................................................ 32
1.1.1 Nature of the incident ........................................................................ 33
1.1.2 Identification of relevant Directives ....................................................... 34
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1.3 PRELIMINARY IDENTIFICATION AND DESCRIPTION OF AFFECTED LOCATIONS, ENVIRONMENTS, HABITATS AND SPECIES 39
1.4 PRELIMINARY IDENTIFICATION OF POTENTIAL NATURE, DEGREE, AND SPATIAL AND TEMPORAL EXTENT OF ENVIRONMENTAL DAMAGE ........................................................................................ 40
1.5 PRELIMINARY IDENTIFICATION OF POTENTIALLY AFFECTED SERVICES .................................... 40
1.6 PRELIMINARY IDENTIFICATION OF SOCIAL, ECONOMIC, AND TRANSBOUNDARY ISSUES .................... 43
1.7 PRELIMINARY REMEDIATION PLANNING ................................................................. 43
1.8 INITIATING AND DETERMINING THE APPROPRIATE SCALE OF THE ASSESSMENT ........................... 46
2 STEP 2: DETERMINING & QUANTIFYING DAMAGE (THE DEBIT) ................................ 49
2.1 IDENTIFYING DAMAGED RESOURCES, HABITATS AND SERVICES .......................................... 53
2.1.1 Describe the nature of the ‘stressor’ ...................................................... 55
2.1.2 Exposure evaluation ........................................................................... 57
2.1.2.2 Severity ........................................................................................... 57
2.1.3.2 Levels of organisation ........................................................................... 59
2.1.4 Conceptual model of exposed and affected resources and habitats ................. 61
2.1.5 Damage determination ....................................................................... 61
2.1.6 Types of impacts to natural resources and their services ............................. 65
2.2 DETERMINING CAUSES OF DAMAGE ..................................................................... 73
2.3 QUANTIFYING DAMAGE ................................................................................ 74
2.3.2.3 Use of models .................................................................................... 81
2.4 CALCULATING INTERIM LOSS AND TOTAL DEBITS ........................................................ 83
2.4.1 Calculating the total debit .................................................................. 84
2.4.1.1 Habitat equivalency analysis ................................................................... 84
2.4.1.2 Resource equivalency analysis ................................................................. 86
2.4.1.3 Value equivalency analysis ..................................................................... 87
2.4.2 Determining the benefits of primary remediation ...................................... 90
2.4.3 Determining recovery rates .................................................................. 90
2.4.4 Consideration of collateral damage ........................................................ 91
2.5 ILLUSTRATIVE EXAMPLES OF DEBIT CALCULATIONS...................................................... 91
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2.5.1 Habitat equivalency analysis ................................................................ 91
2.5.2 Resource equivalency analysis .............................................................. 92
2.5.3 Value equivalency analysis ................................................................... 93
3 STEP 3: DETERMINING & QUANTIFYING GAINS FROM REMEDIATION (THE CREDITS) ...... 97
3.1 IDENTIFYING AND EVALUATING POTENTIAL REMEDIATION OPTIONS ..................................... 100
3.1.1 Typology of potential remediation options .............................................. 101
3.1.1.1 Habitat restoration and re-creation ........................................................ 102
3.1.1.2 Habitat fragmentation and isolation – Article 10 (Habitats Directive) measures ..... 103
3.1.1.3 Habitat designation/protection ............................................................. 103
3.1.1.5 Multiple species compensation and remediation .......................................... 106
3.1.1.6 Guidance on ex ante compensation for damage to Natura 2000 Sites ................. 107
3.1.2 Evaluation criteria for remediation options ............................................. 108
3.1.3 Remediation project descriptions ......................................................... 112
3.1.4 Evaluating potential project benefits .................................................... 112
3.1.4.1 Geographic proximity ......................................................................... 113
3.1.4.3 Other ecological, cultural, economic, sociological issues ............................... 114
3.1.4.4 Use of value equivalency analysis, VEA .................................................... 114
3.1.4.5 Translation of ecological services to human services .................................... 114
3.1.4.6 When is VEA appropriate? .................................................................... 115
3.1.4.7 Value-to-Cost Approach ...................................................................... 115
3.2.2 Determine recovery curves ................................................................. 117
3.3 DEALING WITH UNCERTAINTY AND VARIABLE OUTCOMES OF AN EQUIVALENCY ANALYSIS................ 118
3.3.1 Sources of uncertainty ....................................................................... 118
3.3.2 Describing, analysing and incorporating uncertainty .................................. 119
4 STEP 4: SCALING THE COMPLEMENTARY AND COMPENSATORY REMEDIATION ACTIONS 123
4.1 CALCULATING PER UNIT GAINS (CREDITS) ............................................................. 128
4.1.1 Per unit credits: conceptual approach with a non-monetary metric (HEA, REA) . 128
4.1.2 Per unit credits: Conceptual approach with a monetary metric (VEA) ............. 129
4.2 SCALING REMEDIATION ................................................................................ 131
4.2.2 Scaling remediation under a value-to-cost framework ................................ 133
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4.2.3 Illustrative example – scaling remediation with a non-monetary metric (HEA or REA) 133
4.2.4 Illustrative example – scaling remediation with a monetary metric (VEA) ........ 136
4.3 ESTIMATING COSTS OF REMEDIATION OPTIONS ........................................................ 138
4.3.1 Remediation cost components ............................................................. 139
4.3.2 Estimating remediation costs .............................................................. 141
4.4 CONSIDERATION OF DISPROPORTIONAL COSTS ......................................................... 142
5 STEP 5: MONITORING AND REPORTING ........................................................... 147
5.1 REMEDIATION PLANNING AND IMPLEMENTATION ....................................................... 149
5.2 MONITORING THE REMEDIATION SUCCESS ............................................................. 150
5.3 REPORTING ........................................................................................... 151
PART III OF THE TOOLKIT: ANNEXES .................................................................... 158
ANNEX 1. ENVIRONMENTAL LIABILITY DIRECTIVE (ELD) ............................................. 158
ANNEX 2. ENVIRONMENTAL QUALITY STANDARDS IN EU MEMBER STATES ...................... 158
ANNEX 3. REMEDIATION ALTERNATIVES ................................................................ 158
ANNEX 4. ECONOMIC THEORY OF ENVIRONMENTAL COMPENSATION ............................ 158
ANNEX 5. DISCOUNTING .................................................................................... 158
ANNEX 7. ENVIRONMENTAL LIABILITY AND RESOURCE EQUIVALENCY LITERATURE .......... 158
PART IV OF THE TOOLKIT: CASE STUDY ILLUSTRATION OF TOOLKIT METHODS .............. 159
VISTULA RIVER CROSSING BY THE YAMAL - EUROPE GAS PIPELINE (POLAND) .................. 162
Parts III and IV are listed here but presented in separate documents.
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Figure 2.Equivalency analysis-balancing the losses and gains...........................................9
Figure 3. The five steps of resource equivalency method ..............................................17
Figure 4. Liability regime and damages covered by the Environmental Liability Directive (ELD) (adapted from Descamps, 2005) .............................................................................20
Figure 5. Key steps in Environmental Risk Assessment (from Le Roy et al., 2006.) ................59
Figure 6.Illustratuion of cumulative interim losses……………………………………………………………………. 80
Figure 7.Quantifying anticipated improvements from compensatory remediation ............... 111
List of Tables
Table 1: The Four-Part Structure of the Toolkit ........................................................... 7
Table 2: Resource Categories and Potential Baseline or Damaged Services ....................... 417
Table 3: Illustrated example of DEBIT calculations using a non-monetary metric ............... 926
Table 4: Illustrative example of DEBIT calculations using a monetary metric ......................89
Table 5: Example evaluation criteria for selecting remediation options .......................... 1091
Table 6: Illustrated example of PER UNIT CREDIT calculations using a non-monetary metric 1356
Table 7: Illustrative example of PER UNIT CREDIT calculations - a monetary metric ......... 13829
Table 8: Important cost components when estimating remediation cost ......................... 1401
Table 9: Indicative cost estimates for UK Biodiversity Action Plans…………………………………………133
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Box 1: Hierarchy of preferred remediation scaling approaches identified in Annex II of the Environmental Liability Directive (ELD) ....................................................................13
Box 2: Environmental damage and the Environmental Liability Directive (ELD) .................. 351
Box 3: Examples of sources of routine monitoring data and information .......................... 362
Box 4: Ecosystem services ....................................................................................38
Box 5: The ELD and Genetically Modified Organisms (GMOs) ......................................... 560
Box 6: Environmental stressors in the context of the ELD ............................................ 571
Box 7: Defining affected populations and levels of organisation .................................... 604
Box 8: Environmental Risk Assessment (ERA) ............................................................ 626
Box 9: Human Health vs. Ecological Risk Assessment ....................................................58
Box 10: Ecological Risk Assessment and damage determination .......................................59
Box 11: Environmental standards in the EU ...............................................................62
Box 12: Environmental Liability and Determining Baseline Conditions ...............................73
Box 13: Illustrative data sources across the EU to assist with determination of baseline conditions (before-after data) ...............................................................................74
Box 14: Models for baseline determination in the EU ....................................................76
Box 15: Present Value Multiplier.............................................................................80
Box 17: The Precautionary Principle ..................................................................... 1213
Box 18: Framework for Post-Remediation Monitoring ................................................. 152
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BAP Biodiversity Action Plan
CBA Cost Benefit Analysis
CIRCA Communication and Information Resource Centre Administrator
CLC Corine Land Cover
DOENI Department of the Environment in Northern Ireland
DRD Deliberate Release Directive
DLV Discounted Loss Value
EAMN European Aquatic Modelling Network
EC CHM European Community Biodiversity Clearing House Mechanism
ECB European Chemicals Bureau
EEA European Environment Agency
EIA Environmental Impact Assessment
EIONET European Environment Information and Observation Network
ELD Environmental Liability Directive
EQS Environmental Quality Standards
ERA Ecological Risk Assessment
ERA Environmental Risk Assessment
ETC/BD European Topic Centre on Biological Diversity
EUNIS European Nature Information System
EV Equivalent Variation
FCS Favourable Conservation Status
GIS Geographical Information Systems
GMO Genetically Modified Organism
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GQA General Quality Assessment
HD Habitats Directive
MAC Maximum Allowable Concentrations
MEA Millennium Ecosystem Assessment
NOAA National Ocean and Atmospheric Administration (USA)
OECD Organisation for Economic Cooperation and Development
PAHs Polycyclic Aromatic Hydrocarbons
PEC Probable Effect Concentration
REA Resource Equivalency Analysis
REMEDE Resource Equivalency Methods for Assessing Environmental Damage in the EU
ROD Reporting Obligations Database
RSPB The Royal Society for the Protection of Birds (UK)
SAC Special Areas of Conservation
SE Scottish Executive (UK)
SERIS State of the Environment Reporting Information System
SPA Special Protection Areas
STAR Standardisation of River Classifications
TEC Threshold Effect Concentration
TEV Total Economic Value
VEA Value Equivalency Analysis
VOCs Volatile Organic Compounds
VLIZ Flemish Marine Institute
WAG Welsh Assembly Government
WBD Wild Birds Directive
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WFD Water Framework Directive
WTA Willingness To Accept (Compensation)
WTP Willingness To Pay
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Glossary
• Baseline: the condition at the time of the damage of the natural resources and
services that would have existed had the environmental damage not occurred. A
flat baseline does not take into account trends, seasonality or cyclicality in the
resource condition. A dynamic baseline does attempt to account for trends in the
resource condition (without the damage) to the extent possible with the available
information.
• Compensatory remediation: any action taken to compensate for interim losses of
natural resources and/or services that occur from the date of damage until primary
(and/or complementary) remediation has achieved its full effect, i.e. baseline
conditions are reached;
• Complementary remediation: any remedial measure taken to supplement primary
remediation, when the latter is not sufficient in fully restoring the damaged natural
resources and/or services back to baseline conditions;
• Compounding: refers to the adjustment needed to bring historic impacts up to
present value. Thus, compounding is the temporal opposite to discounting (which
adjusts future impacts back to present value). Compound value is estimated by
multiplying the actual value in a given year with the compound factor which is
(1+r)t where r is the compound rate, or the annual rate of appreciation and t is the
year.
• Discounting: refers to the adjustment needed to bring future impacts back to
present value. Thus, discounting is the temporal opposite to compounding (which
adjusts past impacts up to present value). Discounted (or present) value is
estimated by multiplying the actual value in a given year with the discount factor
which is 1/(1+r)t where r is the discount rate, or the annual rate of decline and t is
the year.
• Ecosystem (natural resource) services: are the functions performed by a natural
resource for the benefit of another natural resource and/or the public. Examples
include provision of food, protection from predation, water purification, habitat
provision, carbon and nutrient cycling, cultural and recreation services and so on.
• Ex ante damage: refers to damage that occurs with prior knowledge, mostly due to
human activities or projects that are known to cause such damages. In the context
of this Toolkit, such planned activities or project most likely take place in
accordance with the provisions of Article 6 of the Habitats Directive; Wild Birds
Directive and Environmental Impact Assessment Directive and imminent damage in
the context of Environmental Liability Directive. Resource equivalency approaches
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can be applied both to assess potential damage and select mitigation and
compensation options.
• Ex post damages are accidental damages that where not foreseen, and hence the
damage can only be assessed after taking place. Resource equivalency approaches
can be applied both to assess damage and select remediation in the case of the
Environmental Liability Directive.
• Habitat Equivalency Analysis (HEA) is used to scale damages (debits) and the
benefits of remediation (credits) using units of habitat. The principal concept
underlying the method is that the public can be compensated for losses of habitat
resources through habitat replacement projects providing additional resources of
the same type. For example, the impacts of a given incident are calculated in
terms of discounted-hectare-years that describe the aerial extent of harm over
time. Remediation credits also are calculated in terms of discounted-hectare-years
that describe the ecological services that will accrue during and following
remediation. Recent advances in HEA enable treatment of partial service losses,
impacts from multiple stressors, and inclusion of scalars that reflect differential
productivity or scarcity of different habitat types.
• Interim losses: are losses which during the time between the damage occurring and
the resource and/or service recovering back to baseline. Where such recovery is
not possible interim losses occur into perpetuity. Longer recovery times and more
significant environmental damage lead to greater interim losses.
• Primary remediation: any remedial measure which returns the damaged natural
resources and/or impaired services to, or towards, baseline condition. In contrast
to complementary and compensatory remediation, primary remediation does not
remediate for interim loss and therefore does not require scaling. It is primarily a
scientific decision about how best to speed the recovery of a damaged resource.
The amount of primary remediation provided is an important consideration in
scaling complementary and compensatory remediation because it may reduce the
size of the interim loss.
• Resource Equivalency Analysis (REA) is used to scale debits and credits through
resource-specific units other than habitat area (e.g. numbers or biomass of fish).
Recently, REA has also been applied to water damages, where remediation is scaled
in terms of groundwater and surface water volume or flow.
• Resource equivalency methods: methods used to determine the type and amount
of remediation needed to make the public whole for past, current, and anticipated
future losses related to an incident. Equivalency analyses take into account the
chemical, physical, biological and, sometimes, social and economic, nature of an
environmental impact and remediation options. Three main approaches to resource
equivalence commonly are applied: service-to-service (mainly habitat equivalency
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to-value (mainly value equivalency analysis) approaches. The objective of each of
these methods is to determine the appropriate amount of complementary and/or
compensatory remediation necessary to fully compensate the public for an
environmental damage.
• Scaling Remediation. Determining the size of the compensatory remediation to
ensure that the resource/service provided equals the value of the interim loss from
the damage. This value is based on a discounted flow of resources/services/values.
Remediation can be scaled using monetary or non-monetary metrics.
• Substitutability. The notion that individuals are willing to trade-off less of one
good (a damaged resource) for more of another good (remediation of that resource
in the future or another resource of equal quality). This is a key assumption
underlying economic compensation in general and resource equivalency analysis
specifically. Importantly, the concept may not apply to extremely rare resources
(e.g., endangered species).
• Total Economic Value (TEV). The total economic value reflects the use humans
make of the natural environment (both through actual markets or informally) and
also the value they may attribute to it unrelated to their current or future use. In
other words, TEV consists of use values and non-use values (see also Annex 6).
• Value Equivalency Analysis (VEA) is implemented in situations where remediation
of similar habitats or resources is either infeasible or undesirable and hence
monetary units are needed to ensure equivalency. There are two variations to VEA.
The first is the value-to-cost approach which equates the value of the interim loss
to the cost of the proposed remediation action. This approach is used when the
valuation of the lost services/resources is practicable, but the value of the
replacement natural resources and services cannot be performed at a reasonable
cost. Most frequently used when smaller impacts to human use services are
affected. The second is value-to-value approach which equates the value of the
interim loss to the value of the proposed remediation action. Value-to-value scaling
can be applied to the variety of situations that are not well-suited for other
approaches. For example, in instances where (a) proposed remediation projects
provide different natural resources, habitats, or services other than those
damaged; (b) organism numbers, habitat area, or important services (as defined by
ecosystem experts or the general public) cannot be measured accurately in damage
or remediation cases; or (c) differences between damage losses and remediation
gains are more important than similarities that could potentially be compared
directly between remediation and damage.
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INTRODUCTION TO RESOURCE EQUIVALENCY METHODS TO ASSESS AND SCALE ENVIRONMENTAL DAMAGE IN THE EU
Photo of open-pit mine at Aznalcollár, Spain ( Joshua Lipton)
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1 Introduction
In this Section, we introduce the purpose and contents of the Toolkit and suggest ways
in which the Toolkit can most effectively be used.
1.1 The purpose of this document
This document has been prepared as part of the REMEDE project (Resource
Equivalency Methods for Assessing Environmental Damage in the EU). Its purpose is to
provide users with an overview of resource equivalency methods in the context of the
Environmental Liability Directive (ELD), Habitats and Wild Birds Directives (H&WBD)
and Environmental Impact Assessment Directive (EIAD). The Toolkit outlines analytical
steps that can be used to assess and remediate different types of environmental
damages and incidents covered by these Directives.
The Toolkit will assist the reader in answering two fundamental questions:
• How are losses of or damages to natural resources or services2 assessed and
quantified?
• How much complementary and compensatory remediation is needed to make the
public whole for those losses or damages?
The Toolkit does not, and cannot, contain universally-applicable answers to these
questions. Neither does it offer best practice guidance that will suit all possible
scenarios. The wide range of environmental resources and incidents that can cause
damage under the relevant Directives, as well as the complexity of the issues raised,
prevents the Toolkit from being universally-applicable. The ‘right’ approach
necessarily will be context-dependent. However, the Toolkit does provide users with a
set of approaches that can be applied to a wide array of incidents and settings.
The Toolkit describes and illustrates the state-of-the-art resource equivalency tools
and establishes criteria to select appropriate tools to fit a given case. However, this
document on its own is not sufficient to answer the above questions: information
(e.g., ecological and economic data) and analysis from other sources will also be
required. Finally, resource equivalency analysis is only one input to the process of
deciding how remediation should most fairly and feasibly proceed. There may be other
considerations that Competent Authorities, operators or other stakeholders may wish
to take into account at a given damage site. These site-specific considerations may
also be taken into account in any negotiation toward a final remediation agreement to
2 We define “resources” and “services” below in Section 2 “Overview of Equivalency Analysis.”
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offset environmental damage. The Toolkit offers a common framework for all parties
to work together.
1.2 Who is this Toolkit for?
The Toolkit is for those charged with the task of assessing damage covered by the EL,
H&WB or EIA Directives, including Competent Authorities and operators. However, it
could also be useful for other stakeholders in illustrating the level and scope of
equivalency analyses that may be required.
The Toolkit is intended to meet the needs of users with varying levels of expertise. At
each step of equivalency analysis, the Toolkit indicates what kind of data and level of
expertise are necessary. The users are encouraged to seek further expertise where
necessary.
Before applying the methods discussed in this Toolkit to an actual damage event, the
reader may benefit from reviewing three related documents (available at
www.envliability.eu) that were created in the process of developing this Toolkit:
• REMEDE Deliverable 5: Legal Analysis (Brans, 2007). This document provides a
review of the legal requirements for environmental damage remediation under
the four relevant EU Directives. Because the starting point for this Toolkit is that
environmental damage has been caused or is expected to be caused and
remediation is required, it may prove useful to first review the legal
requirements to determine whether a particular incident may proceed to this
stage. It is in that respect to be noted that there are (legal) differences between
the four relevant EU Directives. These differences may have an impact on the
nature and extent of the remediation measures to be taken, the goals to be
achieved with these measures and the time at which these measures may be
implemented.
• REMEDE Deliverable 6a: Review Report on Resource Equivalence Methods and
Applications in the US (LeJeune and Lipton, 2007). This document provides a
context for the use of resource equivalency methods in Europe by summarising
the state of the art in the US, where resource equivalency methods have been
applied to environmental damage and remediation since the early 1990s. The
purpose of this document is to provide a methodological overview of what you
will find in this Toolkit. It also provides a useful summary of past experience with
these methods.
• REMEDE Deliverable 6b: Use of Resource Equivalency Methods in
Environmental Damage Assessment in the EU With Respect to the Habitats,
Wild Birds and EIA Directives (Cox, 2007). This document investigates the
mitigation policies and compensation framework currently practised in the EU
REMEDE July 2008 5
under the Habitats, Wild Birds, and EIA Directives. While researchers and policy-
makers in Europe generally do not recognise resource equivalency methods by
name, the general compensation principles bear resemblance to the overall
objective of this Toolkit. This document will give Toolkit users an understanding
of how remediation issues are being approached within Member States prior to
implementation of the ELD.
The Toolkit consists four parts (Figure 1):
• Part I provides an overview of the central concepts of resource equivalency
methods. This is a useful starting point for those who have limited time and are
seeking a basic understanding of resource equivalency.
• Part II describes in detail the five steps that apply to any resource equivalency
method. The five steps are displayed in the roadmap to resource equivalency that
appears at the start of each Section showing the user which step the Section
refers to. Part II also contains relevant technical and EU-specific information as
well as references to additional information sources – mostly presented in
separate text boxes.
• Part III focuses in on a select number of issues discussed in Part II for which some
users may require a more detailed explanation. It contains detailed stand-alone
documents on a range of relevant topics including discounting, economic theory
of environmental compensation, and environmental quality standards in the EU.
It also contains the full text of the Environmental Liability Directive that is the
main focus of the Toolkit.
• Part IV provides the list of case studies undertaken as part of the REMEDE project
and a summary of their main characteristics and findings. Actual and hypothetical
damage incidents within the EU were used as the basis to illustrate the methods
provided in this Toolkit. These case studies were also used to revise and improve
the Toolkit in light of the case study development efforts. While some major case
studies go through all the steps of the Toolkit, smaller cases focus on key
concepts or actions that are important to consider. Each case study is presented
as a stand-alone document.
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Figure 1: Outline of the REMEDE Toolkit
Table 1 expands this basic overview and provides a more detailed description of the
contents of each Part of the Toolkit.
PART I: INTRODUCTION
PART II: THE FIVE STEP METHOD FOR RESOURCE EQUIVALENCY
MAIN STEPS IN RESOURCE EQUIVALENCY METHODS TO ASSESS DAMAGE AND SCALE REMEDIATION
PART III: ANNEXES
PART IV: CASE STUDY INVESTIGATIONS
CASE STUDIES REPORTS AND SYNTHESIS
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PART I
EQUIVALENCY
2. Overview of equivalency Analysis
− Debit and credit − Five steps in an equivalency analysis
3. Structuring an equivalency analysis
− Determining appropriate framework
− Roadmap to Toolkit
Step 3: Determining and quantifying gains from remediation (the credits)
Step 4: Scaling the complementary and compensatory remediation
Step 5: Monitoring and reporting
Annex 1 Environmental Liability Directive (ELD)
Annex 2 Environmental quality standards in EU Member States
Annex 3 Remediation alternatives
Annex 5 Discounting
Annex 7 Environmental liability and resource equivalency literature
− Vistula River crossing (Poland)
− Chronic mining pollution (Czech Republic)
− Donana mining tailings spill (Spain)
− Forest fires in the Bages- Berguedà Region (Spain)
− Tank collapse & chemical release (Sweden)
− Airbus facility expansion within Mühlenberger Loch (Germany)
− River Itchen water abstraction (UK)
− Coastal defence and marine habitats (UK)
− Compensation in the form of habitat banking (Germany)
REMEDE July 2008 8
1.4 How should the Toolkit be used?
The Toolkit should be used as a resource that provides background information,
alternative methodological approaches and suggestions, supporting technical
information, and a coherent step-wise process to conducting resource equivalency
analyses. The Toolkit should not be used, however, as formal guidance or interpreted
as a set of prescribed methods that must be applied in each case. Rather, the specifics
of individual incidents and other case-specific situations should be reflected when
applying the methods outlined in the Toolkit.
The main text of the Toolkit describes the five steps of a resource equivalency
analysis. The description of each step includes technical information from US
experiences, accompanied by information about the EU legal and policy context that
will help the reader adapt the technical information to the case at hand. The text is
intentionally short and concise to facilitate understanding of the general concepts
from beginning to end. However, certain topics may require either clarification or
additional information.
In addition to the above four-part structure, the Toolkit also contains:
• A glossary with definitions and explanations of essential terms related to resource
equivalency analyses.
• Text boxes to illustrate difficult concepts and summaries of focal points,
summaries of some of the methodological aspects, and information on general
concepts, EU-specific issues, or technical background materials.
• Two simple illustrative examples are included in Part II to demonstrate key
elements and methodological aspects: one represents the use of a non-monetary
metric and the other a monetary metric.
1.5 What is not in the Toolkit?
The Toolkit cannot be used to answer the following questions in the context of ELD or
the other relevant Directives:
• Is the damage deemed ‘significant’ and/or have threshold criteria of the ELD,
as defined in Article 2, been met? Determining whether damage to natural
resources and/or natural resource services is “significant”, is a legal and policy
decision to be addressed by individual Member States in particular cases. The
Toolkit’s purpose is to help guide an equivalency analysis if it is required.
• How much primary remediation should be undertaken? The determination of
how much primary remediation to pursue is a policy, ecological, and engineering
REMEDE July 2008 9
question that is not part of resource equivalency framework. The quantity of
primary remediation undertaken, however, is an important input to the resource
equivalency framework.
conditions3 is a site- and resource-specific, empirical (and sometimes legal) issue.
The Toolkit contains guidance on alternative approaches to quantifying baseline
conditions. However, it does not provide information or recommendations
regarding specific baseline levels or trends for different natural resources or
locations.
Finally, issues relating to the wider implementation of the ELD (e.g., legal
transposition, financial guarantees, etc.) and other relevant Directives are not covered
in this Toolkit.
1.6 When can the Toolkit be of use?
The methods described in the Toolkit can be applied in three different types of
damage scenarios: (a) expected damage, as in the context of the Habitats, Wild Birds
and EIA Directives; (b) significant imminent threat of damage in the context of the
ELD; or (c) after damage has occurred and has been deemed significant in the context
of the ELD.
This means that the Toolkit can be useful in situations involving both ex ante (cases (a)
and (b), above) and ex post [case (c)].
• Ex ante damage refers to damage that is known to occur in the future and where
the assessment is undertaken prior to such damage. Such planned activities or
projects most likely take place in accordance with the provisions of Article 6 of
the Habitats Directive.
• Ex post damage refers to damages that have already occurred.
It should be noted that the Environmental Liability Directive (ELD) contains the
minimum requirements for a liability regime focused on the prevention and
remediation of damage to protected natural resources. Member States have the option
of maintaining or adopting more stringent legislation and/or specific requirements.
3 The Environmental Liability Directive (ELD) defines the baseline condition as ‘the condition at the time of the damage of the natural resources and services that would have existed had the environmental damage not occurred, estimated on the basis of the best information available’.
REMEDE July 2008 10
When natural resources are damaged by
releases of hazardous chemicals, physical
destruction of the environment, or
biological agents, actions can be
undertaken to remediate the resources and
to compensate the public for the loss of
those resources during the time that the
resources are impaired. Equivalency
and amount of complementary and/or
compensatory remediation needed to make
up for losses related to an incident
(LeJeune and Lipton, 2007). The
conceptual approach of balancing losses with gains is shown in Figure 2.
Losses related to damaged resources can include the quantity of the resource itself
(e.g., wildlife populations), or a service normally provided by the resource (e.g.,
ecological functions or recreational uses). Examples of losses include: loss of
organisms, such as fish, birds or other wildlife; loss of biodiversity; loss of habitat;
contamination that reduces the health, viability, or diversity of organisms; loss of
ecosystem functions that contribute to ecological integrity or other services that the
public values (such as shoreline protection, flood control, nutrient cycling, water
pollutant attenuation and habitat provision); and loss of use and non-use values placed
on the resources by individuals such as fishing, wildlife viewing or other recreational
opportunities, and existence and option values (See Annex 6: Economic Valuation
Techniques).
Environmental damage can be compensated for through primary, complementary and
compensatory remediation. Primary remediation4 entails actions to reduce or
remediate environmental harms caused by an incident conducted at the site of the
incident. Primary remediation generally involves actions such as removal, or clean up,
of spilled materials, or actions to reduce ongoing discharges of chemicals. Following
implementation of primary remediation actions, the damaged natural resources may or
may not return to the pre-incident, or baseline, condition (depending on the nature of
the incident and the primary remediation actions). The return might be rapid or
gradual, depending on the severity of the damage and intensity of the primary
remediation actions. In some cases, ecosystem recovery after primary remediation
may never reach baseline conditions.
4 Note that primary remediation is not the concern of the Toolkit but is described here for completeness.
Losses Gains (from environmental damage) (from remediation)
Figure 2: Equivalency analyses –
REMEDE July 2008 11
Complementary remediation is needed when recovery after primary remediation will
not restore natural resources or services back to baseline conditions. Complementary
remediation can be done either at the site of the incident by improving or creating
alternative (to the damaged ones) resources or services or at an alternative site by
improving natural resources/services of the same or comparable kind. This means that
in some cases, there may be a need to provide enhanced resources or services
elsewhere, to offset a long-term loss expected at the site of the incident.
Complementary remediation can also be appropriate ex ante in order to offset
resources expected to be lost as a result of planned land use or development, e.g. in
the context of H&WB and EIA Directives where such measures are confusingly called
‘compensatory remediation’ measures.
Compensatory remediation is needed to compensate for losses from the time that
damage occurred until recovery to baseline conditions. Such losses are called the
‘interim losses’. During the interim loss period, natural resources and the services they
provide are diminished or lost. This loss can be offset through remediation of a type
and amount of natural resources equivalent to the type and amount lost during the
interim period. In such cases, the amount of resources or services lost is calculated in
terms of both the quantity of resource loss (e.g., hectares of habitat, fish population
reductions) and the duration of the loss.
Equivalency analyses are methods and approaches that are used to determine the
type and amount of resources and services that are lost over time as a result of an
environmental damage, and the type and amount of actions that are needed to offset
Compensatory and complementary
Complementary and compensatory remediation refers to actions designed to compensate for different components of total damages. Complementary remediation refers to actions taken to restore natural resources to baseline conditions. Compensatory remediation refers to actions taken to compensate for interim losses from the time that damages started until baseline conditions are achieved.
Compensatory measures of the
Habitats Directive
It is Important to note that the ‘compensatory measures’ of the Habitats Directive are not the same as the ‘compensatory remediation measures’ of the ELD. The two terms do not have the same meaning and focus on different types of remediation measures (or at least have different objectives). The purpose of the compensatory measures mentioned in the Habitats Directive is to provide a similar level of natural resources and services at an alternative site, or at a part of the original site not impacted by the project concerned. Therefore, the ‘compensatory measures’ of the Habitats Directive are more comparable with the ‘complementary remediation measures’ of the ELD (see also Sections 3.2 and 3.1.1.6 and Annex 3).
REMEDE July 2008 12
the loss. Equivalency analyses take into account the chemical, physical, biological and,
sometimes, social and economic, nature of an environmental impact and remediation
options.
There are several types of equivalency analyses, and depending on the type of
analysis, losses and desired remediation benefits can be expressed in monetary terms
instead of units of resources or services (see Box 1). In this Toolkit, we focus on
Habitat Equivalency Analysis (HEA) (also known as service-to-service), in which losses
are expressed in terms of habitat and are offset by remediation of similar habitat, and
Resource Equivalency Analysis (REA)(also known as resource-to-resource), in which
losses are expressed in terms of resource units (such as numbers of fish or birds).
Background and overview of these methodological approaches is contained in REMEDE
Deliverable D6a, Review Report on Resource Equivalence Methods and Applications
(LeJeune and Lipton, 2007).
Generally, a HEA or REA includes estimation of the loss in terms of a quantity of
resource or service over time (the ‘debit’), estimation of the quantity of resource or
service gain produced by a remediation project (the ‘credit’), and ‘scaling’ of
complementary and compensatory remediation projects (but not primary remediation)
to ensure that the total anticipated gain is approximately equal to the calculated loss.
The type of environmental damage and opportunities for remediation influence the
choice of a specific equivalency approach and measure of debit and credit.
The Environmental Liability Directive (ELD) articulates a preference for the use of
resource-to-resource or service-to-service scaling approaches such as HEA and REA
(see Annex 1: ELD). Nevertheless, approaches using monetary (economic value) units
such as value-to-value and value-to-cost might be needed when resource-to-resource
or service-to-service approaches are not feasible. Conceptually similar to HEA and
REA, the premise of Value Equivalency Analysis (VEA) is that natural resources
provide benefits to the public through the provision of services that can be measured
and compensated for following damage. These VEA approaches are discussed in
Sections 2.4.1.3, 2.5.3 and 3.1.4.4 of Part II of the Toolkit; additional background
information can be found in LeJeune and Lipton (2007) and Annexes 4 (Economic
Theory of Environmental Compensation), 5 (Discounting) and 6 (Economic Valuation
Techniques).
REMEDE July 2008 13
Box 1: Hierarchy of preferred remediation scaling approaches identified in Annex
II of the Environmental Liability Directive (ELD)
The ELD provides some level of flexibility for the operators, amongst others, the implementation of intervention versus natural recovery for primary remediation and the type and location of actions. However, the ELD imposes important constraints related to the hierarchy of the scaling methodologies to be used:
‘When determining the scale of complementary and compensatory remedial measures, the use of resource-to-resource or service-to-service equivalence approaches shall be considered first. Under these approaches, actions that provide natural resources and/or services of the same type, quality and quantity as those damaged shall be considered first. Where this is not possible, then alternative natural resources and/or services shall be provided. For example, a reduction in quality could be offset by an increase in the quantity of remedial measures.’ (Article 1.2.2 of Annex II of the ELD)
‘If it is not possible to use the first choice resource-to-resource or service-to-service equivalence approaches, then alternative valuation techniques shall be used. The competent authority may prescribe the method, for example monetary valuation, to determine the extent of the necessary complementary and compensatory remedial measures. If valuation of the lost resources and/or services is practicable, but valuation of the replacement natural resources and/or services cannot be performed within a reasonable time-frame or at a reasonable cost, then the competent authority may choose remedial measures whose cost is equivalent to the estimated monetary value of the lost natural resources and/or services.’ (Article 1.2.3 of Annex II of the Toolkit).
The monetary valuation referred to in Article 1.2.3 implies value-to-value approaches while remedial measures whose cost is equivalent to the estimated monetary value of the lost resources and/or services refers to value-to-cost approaches.
In summary, the ELD imposes the following hierarchy for resource equivalency approaches to assessing complementary and compensatory remediation:
1. Resource-to-resource / service-to-service methods
2.1 Debit and credit
In an equivalency analysis, the debit is an expression of the quantity of loss suffered
as a result of an environmental damage. The debit is often multi-dimensional, since an
environmental damage can have adverse impacts on many species, habitats,
ecosystem functions, and human use and non-use values. In addition, the spatial and
temporal extent of the damage and degree of the damage can vary depending on how
damage is measured.
Typically in a HEA or REA, one or more measures are defined to serve as indices of
keystone resources or services that were damaged. In choosing the measures of debit
(typically called ‘metrics’), an assumption is made that remediation that addresses the
chosen metrics will collaterally benefit aspects of the debit that were not specifically
REMEDE July 2008 14
treated in the equivalency analysis. The choice of and use of metrics is discussed
further in Part II Section 2.3.1 of the Toolkit.
The credit in an equivalency analysis is the amount of resource or service benefit that
will be gained through complementary and compensatory remediation. The number,
type and size of projects are scaled so that the expected amount of benefit generated
approximately equals the debit, quantified in terms of the same metric used to
quantify the debit.
Ensuring equivalency (scaling) between the debit and credit is conceptually quite
simple:
• quantify the losses (total debits) caused by the damage;
• determine the amount of benefit expected per unit of remediation (per unit
credits); and
• divide the total debit by the per-unit credit to yield the total amount of
remediation needed.
However, in practice, ecosystem functions are complex, and understanding and
quantifying the impact of a foreseen or unforeseen incident on species, habitats
and/or ecosystem functions can be difficult. In addition, quantifying the benefit that
will be provided over time through remediation projects can be technically
challenging. Therefore, quantifying the debit and credit typically requires expertise
and professional judgment on the part of the equivalency analysis team. Such a team
might include biologists, ecologists, toxicologists, chemists, hydrologists, economists,
recreation managers, and other environmental specialists whose knowledge is relevant
to the type of resources and services damaged.
2.2 Variables in equivalency analyses
The information and input parameters required to conduct a HEA or REA include:
• Start year. A start year must be specified for both the debit and the credit side
of the model. On the debit side, the start year is the year in which losses began
(or are expected to begin), or the year in which the calculation of losses begins.
On the credit side, this is the year in which remediation benefits are expected to
begin.
• End year. An end year can be specified if appropriate. On the debit side, the end
year is the year in which losses stop – either the resources recover naturally or
recover as a result of primary remediation actions. Sometimes there is no
expected end year because resources are not expected to recover5. On the credit
5 If harm accrues into perpetuity, operators must pay for it. However, because a positive discount rate typically is used, ‘perpetuity’ often can be approximated by a timeframe of 50 or 75 years (depending on the discount rate used).
REMEDE July 2008 15
side, this is the last year in which the credit from the remediation project is
summed. For some remediation projects, benefit is expected to accrue for the
foreseeable future, but in other cases, project lifespan may be quite limited.
• Base year. This is the year used for present value calculations. The base year is
typically selected as the year in which the analysis is conducted.
• Spatial extent. On the debit side of an equivalency analysis, this is the area over
which losses have occurred. On the credit side, spatial extent is an expression of
the unit area to be remediated. The unit of measure for the credits must be the
same as on the debit side to enable equivalency calculations.
• Degree of service loss. For a HEA, this is the degree of resource or service loss
within the spatial extent of damage relative to baseline conditions. Loss can vary
from 0% (no loss) to 100% loss (complete loss). The degree of loss can vary over
time (as can baseline conditions), and if resource conditions improve over time,
the degree of loss can be reduced to 0%. For a REA, the degree of loss can be
expressed in terms of numbers of individuals lost, changes in taxonomic diversity,
population reductions, loss of reproductive output or viability (including lost
lifespan or reduced number of young), or other metrics of resource impairment.
For a VEA, the degree of loss is expressed in monetary terms reflecting the
economic value of the loss, i.e. individuals’ willingness to pay to avoid (or
prevent) the loss or willingness to accept compensation to tolerate the loss.
• Service gain. This is the amount of benefit expected to derive from
implementation of a remediation project. Once a project is implemented,
benefits begin to accrue, but full services might not be expected until some time
in the future. Service gain could be 100% if an entirely new habitat is created
that functions at baseline levels, or it could be some percentage of baseline if
actions merely enhance the services of habitat that already exists. As with debit
calculations, the amount of service gain is estimated relative to baseline
conditions. Service gains and losses should be quantified using the same metrics.
• Baseline conditions. Baseline conditions are the conditions that would have
existed if a damaging incident had not occurred. The full description of baseline
conditions in the ELD is also used in the resource equivalency analysis.
• Metric. The ‘metric’ is simply the unit of measurement of the service loss and
gain and can be any unit so long as it is defensible in the context in hand and can
be used both for measuring the loss (debit) and the gain (credit).
• Damage or recovery trajectory. A description of the time course of service loss
or gain (reflecting the degradation or recovery rate).
• Discount (or compound) rate. To make past, current and future losses and gains
comparable, the quantities of resources or services from past or future years are
discounted to present-day terms (‘present value’) (See Annex 5 (Discounting) for
a more detailed discussion). It is general practice to use the same rate for
REMEDE July 2008 16
discounting and compounding. There is no single correct rate but analysis should
use the official Government guidance in the relevant Member State.
2.3 Iterative nature of the equivalency analysis approach
Selecting an equivalency method, loss and gain metrics, and appropriate remediation
alternatives often can be an iterative process. The analyst (or analyst team) might
initially select one equivalency approach, and later, when more information is
available about the nature of the loss or opportunities for remediation, might decide
that another equivalency method is more likely to allow scaling of an appropriate
amount or type of credit.
Likewise, selecting a metric or metrics to quantify loss and gain, and deciding upon
credible and logically consistent approaches to describing loss and gain trajectories,
service losses and gains anticipated, and baseline conditions can also be iterative.
2.4 Five steps in an equivalency analysis
In general, conducting an equivalency analysis will entail five fundamental steps, as
described below and in Figure 3.
Step 1: Initial evaluation. This step is performed to determine whether an
equivalency analysis should be conducted and, if so, the appropriate scale and content
of the analysis (see Toolkit Part II, Section 1).
Step 2: Determining and Quantifying Damage (the debit). In this step, damaged
resources, habitats and/or services are identified and quantified relative to baseline
conditions. The causes of damage are determined. Finally, the benefits of primary
remediation are determined and the total debit is quantified (see Toolkit Part II,
Section 2).
Step 3: Determining and Quantifying the Benefits of Remediation (the credit).
Credits are determined by identifying and evaluating potential remediation
alternatives and by calculating the benefits that will be gained by implementing
complementary or compensatory remediation projects (see Toolkit Part II, Section 3).
Step 4: Scaling Complementary and Compensatory Remediation. The final step in
the equivalency analysis, per se, is determining the scale or quantity of the
remediation project(s) to implement. Scaling is performed so that, over time, the
discounted flow of services from the remediation projects (credits) is equal to that
lost in the impacted area (debits) (see Toolkit Part II, Section 4).
REMEDE July 2008 17
Step 5: Monitoring and reporting. After the equivalency analysis is performed and
remediation projects are selected and scaled, a remediation plan is prepared that
includes project goals, implementation details, engineering plans and designs, and
biological plans and designs. The remediation plan also includes procedures and
schedules for monitoring the recovery of resources and services following
implementation, and evaluating the project’s success (see Toolkit Part II, Section 5).
Figure 3: The five steps of resource equivalency method
Monitoring and Reporting
Scaling Complementary and Compensatory Remediation
• Scaling to calculate the amount of remediation required to compensate for the total debit by dividing the total debit by per-unit credit
• Ensuring equivalency between debits and credits
Determining and Quantifying the Benefits of Remediation (the credit)
• Identifying and evaluating remediation options
• Calculating service gains (per-unit credits) of remediation options
Initial Evaluation
• Identifying damaged resources, habitats and services • Determining causes of damage • Quantifying damage
• Calculating interim loss and total debits
REMEDE July 2008 18
2.5 Level of Effort
Different levels of assessment may be undertaken in an equivalency analysis. The
determination of the appropriate level of detail that should be undertaken typically
will be a function of:
• The severity of the incident;
• The degree, extent and duration of damage;
• The availability of data;
• The degree of precision required for the specific case; and
• Other factors that may be considered by the Competent Authority.
In cases where the spatial and temporal extent and degree of damage are small, and
where resources will rapidly return to baseline condition (with or without primary
remediation), resource equivalency analyses may be undertaken with a limited amount
of effort. Such small scale assessments may rely on readily available existing data,
models, or simplifying assumptions or formulas.
Where the damage is more complex, likely to cause cascading or persistent adverse
effects, cannot be addressed through primary remediation or simply cannot be
addressed quickly, more detailed, comprehensive analyses might be needed.
Comprehensive assessments may require data collection and analysis, including design
and implementation of field or laboratory studies to understand the extent of the
damage, or feasibility studies to select appropriate remediation projects or methods.
REMEDE July 2008 19
3 Structuring an Equivalency Analysis According to the Appropriate Legal Framework
The Toolkit can be useful when assessing and remediating different types of
environmental damage and incidents covered by the Environmental Liability Directive
(ELD) and related Directives such as the Habitats and Wild Birds Directives (H&WBD),
Water Framework Directive (WFD), and the Environmental Impact Assessment /
Strategic Environment Assessment Directives (EIAD-SEAD). The appropriate framework
and Directive should be identified to ensure that the activity that caused the incident
is covered and to ensure that the appropriate evaluation criteria are applied to
assessing the incident and performing the remediation scaling. In some cases, more
than one Directive might apply, depending on the nature of the damage. In such cases,
no directive holds a particular priority a priori. Hence, all directives should be taken
into account.
Structuring an equivalency analysis according to the appropriate framework should be
one of the first things to take into consideration. In fact, this activity forms part of
Step 1, as described in Section 1.1.2 (Part II). Below, we briefly discuss the main aims
and coverage of these directives based on the REMEDE Legal Analysis (Deliverable 5)
(Brans, 2007).
3.1 The Environmental Liability Directive (ELD)
The main objective of the ELD is to provide a common framework for remediating (and
preventing) environmental damage in the European Union (the ELD and its annexes can
be found in Annex 1). The ELD imposes both strict- or fault-based liability, depending
on the type of activity involved, for damage to the species and habitats covered by the
Wild Birds and Habitats Directives, for contamination of land, and for damage to
waters covered by the Water Framework Directive. Strict liability means that the
operator is liable for the damage and loss caused by the operator’s acts and omissions
regardless of culpability (whether he was at fault or acted negligently is irrelevant).
Operators who undertake an activity listed in Annex III of the ELD can be held strictly
liable for these three types of harm mentioned above. Fault-based liability means
that an operator can only be held liable for the damage and loss caused by the
operator’s acts and omissions when at fault or negligent. Operators of non-listed
occupational activities can only be held liable for damage to the species and natural
habitats covered by the Wild Birds and Habitats Directives, and not for damage to the
REMEDE July 2008 20
waters covered by the Water Framework Directive or for the contamination of land,
and only when at fault or negligent. This is illustrated in Figure 46.
The ELD provides several situations that allow Member States to exempt operators
from liability. It also should be noted that Member States have certain flexibility with
regard to the implementation of the ELD in their national laws and may decide to
adopt more stringent rules. Examples include situations in which:
• Environmental damage falls within the scope of a number of listed international
civil liability conventions (e.g. the 1992 International Convention on Civil Liability
of Oil Pollution Damage) provided the specific convention is in force in the
Member State concerned;
• An operator proves that the damage was caused by a third party and occurred
despite the fact that appropriate safety measures were in place, or if an operator
proves that the damage resulted from compliance with a compulsory order or
instruction from a public authority; or
• An operator demonstrates that he was not at fault or negligent, and that the
environmental damage resulted from an emission or event expressly authorised
by and fully in accordance with the conditions of an authorisation, or was not
considered likely to cause environmental damage according to the state of
scientific and technical knowledge at the time the emission was released or the
activity took place.
Other occupational Activities
Activities
Strict
Fault
Protected species and habitats
Covered damage
species (as in ELD and HD).
Figure 4: Liability regime and damages covered by ELD
Source: Adapted from Descamps, 2005.
The ELD addresses environmental damage to natural resources in three categories: (a)
damage to protected species and habitats; (b) damage to water; and (c) damage to
6 Note that the Figure shows the liability regime as presented in the ELD. This is a minimum requirement and individual Member States may implement a stricter regime with extended coverage.
REMEDE July 2008 21
land. The ELD defines ‘damage' as a measurable adverse change in a natural resource
or measurable impairment of a natural resource service which may occur directly or
indirectly. Under the terms of the Directive, environmental damage is then defined as:
• Damage to species and natural habitats protected at Community level by the 1979
Wild Birds Directive (WBD) or by the 1992 Habitats Directive (HD) where damage
means ‘significant adverse effects on reaching or maintaining the favourable
conservation status’;
• Damage to the waters covered by the Water Framework Directive (WFD) where
damage means ‘significant adverse affects on the ecological, chemical and/or
quantitative status and/or ecological potential’; and
• Contamination of the land which creates a significant risk of human health being
adversely affected as a result of the direct or indirect introduction in, on or under
land of e.g. substances.
Annex II of the ELD provides a ‘common framework in order to choose the most
appropriate measures to ensure the remedying of environmental damage’.
Accordingly, a reasonable range of remediation options - each consisting of a primary,
and if necessary a complementary and compensatory component - should be
developed. The Competent Authority then evaluates the various options and selects
the most appropriate approach (which may consist of a single option or a combination
of actions) on the basis of a set of criteria (see also Part II of Toolkit Section 3.1.2).
As mentioned in Section 1.6 of Part I, the ELD contains the minimum requirements for
a liability regime focused on the prevention and remediation of damage to protected
natural resource. Member States have the option of maintaining or adopting more
stringent legislation.
3.2 Habitats and Wild Birds Directives (H&WBD)
The main objective of both the Wild Birds and Habitats Directives is the conservation
of biodiversity. In that respect Member States have to take, among other measures,
appropriate steps to avoid the deterioration of natural habitats in Natura 2000 sites.
They must also avoid the deterioration of the habitats of species and the disturbance
of the species, for which these sites have been designated.
Both Directives are of relevance for the environmental liability regime that is imposed
by the ELD, because they (1) contain important concepts and terminology that the ELD
refers to (e.g. the term ‘favourable conservation status’), and (2) contain information
about the biodiversity elements that are covered by the ELD, i.e. protected species
and habitats.
The Habitats Directive also has importance in the context of remediation, since
Articles 6(3) and (4) of the Habitats Directive might result in situations where Member
REMEDE July 2008 22
States have to remediate, on an ex ante basis, the environmental damage that is
caused by the plan or project to be realized and that may have significant effects on
Natura 2000 sites. The Habitats Directive ensures, by means of a preliminary
examination - a kind of environmental impact assessment - that a plan or project
likely to have a significant effect on a Natura 2000 site is authorised only when it will
not adversely affect the integrity of that site. However, adverse effects on the
integrity of sites are permitted under certain circumstances and only if Member states
take ‘all compensatory measures necessary to ensure that the overall coherence of
Natura 2000 is protected’ (Article 6(4)).
As mentioned before, ‘compensatory measures’ of the Habitats Directive are not the
same as the ‘compensatory remediation measures’ of the ELD. The two terms do not
have the same meaning and focus on different types of remediation measures (or at
least have different objectives). The purpose of the compensatory measures
mentioned in the Habitats Directive is to provide a similar level of natural resources
and services at an alternative site, or at a part of the original site not impacted by the
project concerned. Therefore, the ‘compensatory measures’ of the Habitats Directive
are more comparable with the ‘complementary remediation measures’ of the ELD (see
also Annex 1).
Guidance from the EU Commission (European Commission, 2007) stipulates that the
results of the compensatory measures of the HD need to be operational at the same
time as the damage is caused. Hence, no interim losses will be suffered (and have to
be compensated for). However, under certain conditions Member States are allowed to
take compensatory measures simultaneously to the realization of the project. In that
case interim losses will be suffered. One way to compensate for such interim losses is
to ‘overcompensate’ for the damage caused (e.g. the creation of a larger habitat than
the one that is lost). Given the objectives of the Wild Birds and Habitats Directives,
i.e. primarily nature protection and conservation, the extra compensatory measures to
be taken, do not aim - at least not directly - at compensating the interim loss of
services to humans suffered due to the fact that the compensatory measures were not
in place before the Natura 2000 site was damaged. This is an important difference
with the ELD, which clearly stipulates that such losses are to be taken into account
(see Article 2(13) and paragraph 1(d) of Annex II).
3.3 Water Framework Directive (WFD)
The WFD establishes a framework for water policy in the EU based on the principle of
integrated river basin management. As for the Wild Birds and Habitats Directives, the
Water Framework Directive (WFD) is important in the context of environmental
liability and remediation approaches because of three main reasons:
REMEDE July 2008 23
1. The scope and extent of coverage provided by the ELD when it comes to water
resources is determined by the WFD. In short, the ELD only covers damage to
waters that are covered by the WFD. The WFD applies to all water resources in the
EU, including inland surface waters, transitional waters, coastal waters (up to 1
nautical mile) and groundwater.
2. The ELD uses concepts from the WFD to describe the damage and set thresholds
that trigger the liability regime (e.g. ‘ecological, chemical or quantitative status
and/or ecological potential’). The ELD refers to the WFD for a full understanding of
these terms and concepts (e.g. the definition of ecological status and ecological
potential).
3. The WFD requires Member States to establish “programmes for the monitoring of
water status in order to establish a coherent and comprehensive overview of water
status within each river basin district” (Article 8(1)). As they are developed, these
monitoring programmes will generate data for the determination of baseline
conditions for ELD assessments.
The Environmental Impact Assessment Directive (EIAD) requires that Member States
ensure that projects likely to have significant effects on the environment because of
their nature, size and location, etc. are subject to development consents and an
assessment of their environmental effects. The objective of an EIA is to identify and
describe the environmental impacts of projects and to assess whether prevention or
mitigation is appropriate.
As part of the EIA procedure, the developer is required to submit a description of the
measures envisaged to prevent, reduce and where possible offset any significant
adverse effects to the environment. Although it is not entirely clear what the
objectives are of the measures to offset any significant adverse effects on the
environment of a certain project in the context of the EIAD, the REMEDE Toolkit is
likely to be of useful when determining the nature and extent of the compensatory
measures to be taken. In addition, projects subject to an EIA may also require an
assessment pursuant to the Habitats Directive. In these cases, the guidance related to
the Habitats Directive might contain some relevant elements.
Nevertheless, Member States might provide more detailed conditions that need to be
fulfilled when identifying the necessary compensatory measures. In the Netherlands
for example, under certain conditions the anticipated loss of protected natural habitat
is to be compensated by the recreation of a new habitat of comparable proportion and
with functions comparable to those of the original site. In addition, there is a
preference for re-creating the new site as closely as possible to the impacted site.
REMEDE July 2008 24
Also the more recently enacted Directive 2001/42/EC on the Assessment of the Effects
of Certain Plans and Programmes on the Environment (SEA) requires that under certain
conditions an environmental assessment is to be undertaken. The Directive stipulates
that the assessment report should identify, describe and evaluate the likely significant
effect on the environment of a plan or programme and the reasonable alternatives.
Annex I to the Directive specifies that the report should provide information regarding
the measures envisaged to reduce and as fully as possible offset significant effects on
the environment of implementing the plan or programme. It does not provide much
clarity on the objectives of the measures envisaged to offset the likely significant
effects on the environment of a certain plan or programme, nor on how the extent of
the measures is to be determined. Also in this case, there is the possibility that
Member States may find it useful to follow some of the approaches described in the
Toolkit.
REMEDE July 2008 25
PART II of the Toolkit: REMEDE TOOLKIT
TO RESOURCE EQUIVALENCY METHODS TO ASSESS AND SCALE ENVIRONMENTAL DAMAGE IN THE EU
Isle of Mull, Scotland (© Ece Ozdemiroglu)
REMEDE July 2008 26
REMEDE July 2008 27
This Part of the Toolkit describes the five fundamental steps to be undertaken when
performing resource equivalency analysis. These steps are presented as a generalised
logical process to be followed, rather than a fixed protocol. It is emphasised that
individual incidents can vary considerably. As a result, case-specific modifications to
the steps described here may be appropriate and the process we describe should not
be viewed as absolute and universal to all situations.
The Toolkit Roadmap showing the five fundamental steps are repeated at the start of
each step indicating where the Section is on the Roadmap by highlighting the relevant
step.
REMEDE July 2008

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