ENVIRONMENTAL DAMAGE ASSESSEMENT

1. ENVIRONMENTAL DAMAGE ASSESSEMENT Giuseppe Di Marco and Angelo Maggiore APAT Italian National Agency for Environmental Protection and Technical Services

2. APAT- Italian National Agency for Environmental Protection and Technical Services Outline of the Presentation • Juridical framework for Environmental Damage Assessment • (EDA) in Italy, EU and at International (Protocol) level; • EDA procedure; • Application status of EDA procedure; • Issues and problems related to EDA in water environment.

3. APAT- Italian National Agency for Environmental Protection and Technical Services Environmental Damageand environmental goods ENVIRONMENTAL DAMAGE adverse effect induced onto environmental goods by an anthropic activity ENVIRONMENTAL GOODS natural resources (unitary or integrated), and the services they provide to the ecosystem (ecological services), or to humans (private and public antrophic services).

4. APAT- Italian National Agency for Environmental Protection and Technical Services Liability Regime forEnvironmental Damage D.Lgs. 152/06 At Italian level Directive 2004/35/CE At EU level Protocol on civil liability and compensation for damage caused by the transboundary effects of industrial accidents on transboundary waters to the 1992 Convention on the protection and use of transboundary watercourses and international lakes and to the 1992 Convention on the transboundary effects of industrial accidents At International level

5. APAT- Italian National Agency for Environmental Protection and Technical Services Civil liability and environmental damage EU Directive: Environmental damage Significant and measurable adverse effects on these natural resources and/or their services soil protected species/habitat water bodies

6. APAT- Italian National Agency for Environmental Protection and Technical Services Civil liability andenvironmental damage EU DIRECTIVE:STRICT LIABILITY significant adverse effects caused by DANGEROUS ACTIVITIES, UNLESS THE RESPONSIBLE PARTY DEMONSTRATES NOT TO BE AT FAULT OR NEGLIGENT EU DIRECTIVE:FAULT-BASED LIABILITY significant adverse effects on the conservation status of protected habitats and species, caused by any activity (general environmental liability) when the responsible party has been at fault or negligent ITALIAN LEGISLATION extends the strict liability to any activity and the fault-based liability to any magnitude of adverse effects on any environmental good, provided they are caused by illicit activities THERE ARE NO FINANCIAL LIABILITY LIMITS NO MANDATORY FINANTIAL SECURITY

7. APAT- Italian National Agency for Environmental Protection and Technical Services Compensationby Remediation The Italian legislation, in accordance with Directive 2004/35/CE, states that compensation for environmental damage can be achieved through remediation primary remediation “MEASURES OF REINSTATEMENT” aiming at restoring natural resources, ecological and public anthropic services to/toward baseline condition complementary remediation measures to compensate the fact that primary remediation does not result in full restoration (EX: EQUIVALENCY APPROACHES) compensatory remediation measures to compensate for interim losses (EX: RESPONSE MEASURES)

8. APAT- Italian National Agency for Environmental Protection and Technical Services Compensationby Patrimonial Equivalent If the responsible party has carried out an illicit activity and he/she has been at fault or negligentand he/she does not remediate the damage, Italian legislation provides that compensation can be claimed for through a payment in favour of the State of an amount of money equal to the monetary value of environmental damage EU Directive 2004/35/CE does not propose any monetary compensation for damage. Only expenses the State undertakes for restoring the impaired natural resources, and the public services provided by them can be compensated. The monetary value of environmental damage can also be used to settle negotiated compensation agreements between the State and the responsible party, and to determine the extent of the necessary complementary and compensatory remedial measures

9. APAT- Italian National Agency for Environmental Protection and Technical Services Time limit of liability in Italy and in EU 30 years from the accident/emission/event 5 years from the date on which recovery measures have been completed or the responsible party has been identified

10. APAT- Italian National Agency for Environmental Protection and Technical Services Compensation forEnvironmental Damage: the Protocol The Protocol states that the operator shall be liable for damage to transboundary water caused by an industrial accident (Art. 4: Strict liability) Moreover, where domestic law provides for a fault-based liability regime, the Protocol extends it to damage to transboundary water (Art. 5: fault-based liability). These damages include damage to environmental goods (Art. 2). The compensation of this kind of damage consists in the payment of the cost of measures of reinstatement, taken or to be undertaken, and the cost of response measures which have been taken. When measures of reinstatement are not possible, complementary remediation measures can be considered in order to introduce the equivalent of damaged goods into the transboundary waters

11. APAT- Italian National Agency for Environmental Protection and Technical Services Environmental Damage Assessment (EDA) Complex multidisciplinary juridic, technical and economic analysis Damage determination Damage quantification Monetary valuation

12. APAT- Italian National Agency for Environmental Protection and Technical Services Damage Determination Collection and analysis of information useful to ascertain: Environmental damage cause-effect link Damage scenario Effects • Measurements/analyses; • Witnesses/photos; • Studies/investigations; • Source (kind of pollutant, • discharge, illicit activity); • Exposure pathways; • Targets

13. APAT- Italian National Agency for Environmental Protection and Technical Services Problems arising in damage determination • Lack of data; • Difficult to gather further data because damage • determination is usually carried out for events occurred ~2 • years before; • contribution of other sources and natural fluctuations The situation is different when dealing with industrial accidents. In this case the damage determination phase is implemented straight away following the event and it is often facilitated by the availability of ad-hoc environmental emergency response plans.

14. APAT- Italian National Agency for Environmental Protection and Technical Services Damage quantification Analytical measure of the Extent, Duration and Severity of the damage in terms of: Adverse change with respect to baseline (ALTERATION) Loss of all services (TOTAL DESTRUCTION Partial loss of anthropic/ecological services (DETERIORATION) Loss of one or more services (PARTIAL DESTRUCTION)

15. APAT- Italian National Agency for Environmental Protection and Technical Services Damage quantification, example [pollutant] Lmax Max pollution limit Lmax-Ird Ipd Indicator Present state Ipd-Ird Monitoring data Historical data Reference data Unaffected areas Ird Baseline Indicator Ipd 0

16. APAT- Italian National Agency for Environmental Protection and Technical Services Monetary valuation of environmental damage Provides technical and economic elements useful for determining the economic refund of the damage itself (compensation by patrimonial equivalent) It can be Precise Equitative

17. APAT- Italian National Agency for Environmental Protection and Technical Services Precise valuation When the damage involves not marketable values and it is possible to refer to primary remediation TEV is estimated equal to: cost of primary remediation cost of interim loss +

18. APAT- Italian National Agency for Environmental Protection and Technical Services The cost of primary remediation Expenses which are necessary to restore deteriorated resources to baseline Example: Cost of a hypothetical project to monitor, control and contain, remediate and re-naturalize all deteriorated natural resources, keeping into account: extension (volume, surface, number of individuals and species etc); • unitary prize lists for these activities: • remediation costs relative to similar situations (benefit transfer); • public works itemized prize lists; • market prizes for activities and supplies.

19. APAT- Italian National Agency for Environmental Protection and Technical Services Cost of Interim Loss IT CAN BE MONETARILY VALUED BY: 1. Compound legal interests accrued by the primary remediation cost during the unavailability period 2. Costs of measures of compensatory remediation, providing, for a period as long as the unavailability period, the same resources and services (replacement costs). Ex: expenses which are necessary to set up and manage the recreational services of a water body or a system for supplying drinking water 3. Public defensive expenses for response measures Ex: expenses undertaken by the national health service to cope with a salubrity deterioration)

20. APAT- Italian National Agency for Environmental Protection and Technical Services Precise valuation When a reference primary remediation cannot be envisaged, it is possible to use other methods indicated by economic theories • Replacement costs; • Defensive expenses; • Revealed or stated (contingent valuation) preferences. The results are not always agreed and hence too weak and questionable to be used to claim for compensation

21. APAT- Italian National Agency for Environmental Protection and Technical Services Equitative valuation When there is no conceivable primary remediation, the damage is often valuated in an equitative rather then precise way • Costs of some negative externalities which are not internalised by the activities that have caused the damage: • Ex: omission of payments (taxes, insurances, concession fees etc) 2. Illicit profit costs of the best available technologies, which, if applied, would have avoided/limited environmental damage; profit earned by the responsible party during the illicit period.

22. APAT- Italian National Agency for Environmental Protection and Technical Services Application of the EDA procedure in Italy (2000-2006) During 2000-2006 period, APAT has applied EDA procedure in more then 205 cases

23. APAT- Italian National Agency for Environmental Protection and Technical Services Damage determination problems in water environment • The relevant complexity and spatio-temporal variability of the water • environment • The rapid transport of pollutants • inadequate data sampling schemes; • not permanent adverse effects; • difficult to determine effects extent and severity; • uncertain baseline definition; • difficult to demonstrate cause-effect link; • difficult to estimate thenecessary time for complete recovery to baseline. Investigate immediately afterwards the accident event, through inspections, suitable and prompt sampling and measuring system

24. APAT- Italian National Agency for Environmental Protection and Technical Services The pollution capacity approach Monetary valuation of water damage can be referred to primary remediation costs of a volume of water determined as a function of: pollutant load discharged maximum permissible concentrations Discharged pollutant load (kg) Pollution capacity (m3) = Max. permissible conc. (kg/m3)

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