Scott Cole, Swedish Agricultural University Umeå

REMEDE - Resource Equivalency Methods for Assessing Environmental Damage in the EU

“How much is enough?” Determining adequate levels of environmental compensation for wind power impacts using equivalency analysis

Scott Cole, Swedish Agricultural University Umeå

Stockholm, Sweden 14 September 2009

REMEDE

REMEDE - Resource Equivalency Methods for Assessing Environmental Damage in the EU

REMEDE partners

Scott Cole, EnviroEconomics Sweden www.eesweden.com

Roadmap to Presentation

Why provide compensatory restoration for wind power?

Past examples of compensation for wind power

An improved approach for quantifying compensatory restoration – REMEDE’s “equivalency analysis”

Illustrative & hypothetical case study

Smøla wind farm & sea eagle collisions with turbines

Acknowledgement: Project funded by the Swedish EPA to study the use of equivalency analysis to compensate the public for resource loss

Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

Why Compensatory Restoration?

A required hierarchy within an EIA Avoid (don’t build it …)

Minimize (build it somewhere else; operational constraints)

Compensate (resource compensation for expected damage)

Not financial compensation

Voluntary decision by a wind power company Improve environmental performance of its product, i.e.,

offset wind power’s impacts on species/habitats


Environmental compensation for wind power

Montezuma, California (700 turbines)• Damage: bird mortality from turbine collision

• Compensation: purchased 10 hectares of land for bird habitat


What is wrong with environmental compensation for wind power

today ?1. Often based on political “negotiation”

2. Little to no connection between the size of damage and the environmental compensation (Smallwood, 2008)

Compensation based on “MW of electricity generated” or “rotor-swept area of turbine” … No correlation between bird impacts and these metrics (!)

A better way… Equivalency Analysis

provides a framework for measuring environmental loss & gain

Scales compensation so that the “punishment matches the crime”

Used in the US to address environmental damage from oil spills


EU-funded REMEDE Project2006-2006 www.envliability.eu

Resource Equivalency Methods for Assessing Environmental Damage in the EU (REMEDE)

Toolkit explaining equivalency analysis as a quantitative approach for developing compensation

The REMEDE Toolkit – 5 steps: Step 1: Initial evaluation Step 2: Measure environmental damage (debit) Step 3: Measure environmental gain from restoration

(credit) Step 4: Scale remediation Step 5: Monitoring and reporting



Environmental Metric: A currency for measuring Debits and Credits

Take, for example, bird impacts from wind turbines…

How do we measure the debit from turbine collisions and the credit from restoration?

Could use “money” … but let’s avoid that. Option #1: Count Birds (B)

Counts individual birds affected and counts them for 1 year

Option #2: Count Bird-Years (BY) Counts all years a bird would have lived … plus … all the

years its offspring would have lived (foregone production)


Environmental Metric: Illustrating Bird-years (BYs)

Count Birds (B) 3 dead birds found•Debit 3 birds lost

Count Bird-Years (BYs) 3 dead birds found, 3 yrs left to liveDebit DIRECT LOSS = 9 BYs

INDIRECT LOSS = 30 BYs

3 yrs

Same calculation on the “CREDIT” side …

5 yrs

Step 2: Quantify Debit (damage)


Resource or Service

(e.g., bird-years)

Time

Debit(interim loss)

Incident date

Baseline

Primary Restoration measures

Natural Recovery

Recovery

Step 3: Quantify credits (restoration)


TimeRestoration project begins

Per unit Credit(restoration gain)

Resource or Service

(e.g., bird-years)

Baseline

Trajectory of gains

Timing: Adjusting value of impacts

Debits and credits occur at different times

We use a discount factor to adjust the value of debits/credits to “today’s value” so we can add or compare them.

Analogy: exchange rates adjust “currency” value i.e., future impacts are worth less to us

Illustrative Case Study: Smøla

On-going data collection at Smøla regarding birds and turbines (focus on sea eagle)

When data collection is complete (2011), can be used in this compensation framework

Therefore, this study uses hypothetical data (for illustration only !)


Photo: Bjørn Iuell





How to quantify the debits and credits associated with sea eagle collisions with turbines?

Quantify debit from turbine collisions

Assume rate of sea eagle collisions continues until 2018 (56 collisions). Total Debit is:

Direct BYs lost (life expectancy without collision)

+Indirect BYs lost (production of offspring without collision)

=1,995 DBYs (in 2009 terms)

(see report for calculations)

3 questions to answer:1. What compensatory restoration projects create “DBYs”?2. How many “DBYs” do we get per unit of restoration?3. How many units do we need to ensure “equivalence”?


Q#1: What compensatory restoration projects create

“DBYs” ? Improve breeding success Build/enhance sea eagle nests

Improve breeding opportunities Purchase, restore, improve sea eagle habitat that is currently

threatened in Norway or perhaps in Eastern Europe Reduce mortality

Measures to prevent train collisions Measures to prevent lead poisoning of sea eagles Measures to prevent electrocution



Power line electrocution (sea eagle)Source: Norwegian Television Program “Ute i Naturen” (8 Sept. 2009)

Q#2: How many DBYs do we get from a project to reduce raptor electrocution from

power lines?Hypothetical restoration project assumes: Insulate utility poles to prevent electrocution Begin in 2012, benefits lasts until 2037 (25 yrs) leads to .01 fewer sea eagle deaths per year, per

pole (hypothetical guess !) Total Credit is:

Direct BYs gained (avoided electrocution)+

Indirect BYs gained (avoided production loss)=

6.18 DBYs (in 2009 terms) per pole over 25 yearsScott Cole, EnviroEconomics Sweden

www.eesweden.com

Q#2: How many units do we need?

We lose 1,995 DBYs from 2005-2018We gain 6.18 DBYs over 25 years for each pole we

retrofit

How many poles (units) do we need to retrofit to reach “equivalence” between debits and credits?

~320 poles (=1,995/6.18)

If we retrofit 320 poles we create the same number of DBYs that were lost from turbine collisionsScott Cole, EnviroEconomics Sweden

www.eesweden.com

What does this cost?

Data on costs is sparse and site-specific ….Costs should include at least:1. Cost of assessment

Research and data collection Equivalency analysis itself (written report)

2. Cost of restoration Materials and Labor for installation A report from Hungary indicates cost of restoration may

be 2,400 EURO per km of 20kV wire for insulation


Conclusions IEquivalency Analysis provides a quantitative

framework for determining how much compensation is enough

Easily adaptable to non-raptor species, marine environment, habitat fragmentation, etc

Not a means to justify a “bad” wind power project Be aware of cumulative impacts

Equivalency analysis fits well within the EIA process … but cumulative impacts from multiple wind projects should be addressed at the regional planning level


Conclusions IIEquivalency Analysis requires thoughtful data

collection to quantify debits/credits Avoid GIGO (Garbage In – Garbage Out) !Data needed to measure Debit:

What is age structure of birds that collide? How many birds have/will collide? What is impact of collisions on reproduction?

Data needed to measure Credit: Which utility poles contain the most dangerous designs? credit What is the extent of mortality at power lines? What is the age structure of electrocuted birds? What is effectiveness of retrofitting (% reduction in mortality)?


T H A N K S F O R

Y O U R A T T E N T I O N !

QUESTIONS ?

Scott Cole

[email protected]


Why is the future worth less? (the discount factor)

Equivalency analysis assumes humans are “impatient” when it comes to resources/services (we want it now!)

Which option is a greater loss of value to you? (1) A damaged wetland today or (2) A damaged wetland in 100 years from now? Most would say (1) is a greater loss, which implies a (positive) discount

rate

Which option is a greater gain in value to you? (1) A restored/remediated wetland today or (2) A restored/remediated wetland in 100 years from now. Again, most would say (1). If (2), there is no incentive to remediate

today ! If we wait 100 years, then the public is not really being compensated


Why power line retrofitting as a compensatory restoration

project? a natural link between power generation (wind) and

power distribution (power lines) that would facilitate cooperation in developing compensation credits.

the causes -- and prevention -- of bird electrocution are well-understood

literature indicates that electrocution is a more common cause of death than turbine collisions, suggests a potentially large pool of “bird-years” from which one can derive compensation credits.

Despite available technological solutions, very little progress has been made in reducing raptor electrocutionScott Cole, EnviroEconomics Sweden

www.eesweden.com

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Scott Cole, Swedish Agricultural University Umeå

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