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Scott Cole, Swedish Agricultural University Umeå

“ How much is enough ?” Determining adequate levels of environmental compensation for wind power impacts using equivalency analysis. REMEDE. Scott Cole, Swedish Agricultural University Umeå

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Scott Cole, Swedish Agricultural University Umeå

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  1. “How much is enough?” Determining adequate levels of environmental compensation for wind power impacts using equivalency analysis REMEDE Scott Cole, Swedish Agricultural University Umeå Stockholm, Sweden 14 September 2009 REMEDE - Resource Equivalency Methods for Assessing Environmental Damage in the EU

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

  3. 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 www.eesweden.com

  4. 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 Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  5. Environmental compensation for wind power • Beinn an Tuirc, Scotland(46 turbines) • Damage: loss of eagle habitat from project’s “footprint” (roads, turbines, etc) • Compensation: purchased 250 hectares of grouse habitat – a food source for the eagle • Montezuma, California (700 turbines) • Damage: bird mortality from turbine collision • Compensation: purchased 10 hectares of land for bird habitat Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  6. What is wrong with environmental compensation for wind power today ? • Often based on political “negotiation” • 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 (!) Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  7. 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  8. 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  9. 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) Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  10. 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 live • Debit DIRECT LOSS = 9 BYs 3 yrs  INDIRECT LOSS = 30 BYs 5 yrs Same calculation on the “CREDIT” side … Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  11. Step 2: Quantify Debit (damage) Baseline Resource or Service (e.g., bird-years) Primary Restoration measures Debit (interim loss) Natural Recovery Incident date Recovery Time Scott Cole, EnviroEconomics Sweden www.eesweden.com

  12. Step 3: Quantify credits (restoration) Resource or Service (e.g., bird-years) Trajectory of gains Per unit Credit (restoration gain) Baseline Time Restoration project begins Scott Cole, EnviroEconomics Sweden www.eesweden.com

  13. 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

  14. 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  15. Illustrative Case Study: Smøla Scott Cole, EnviroEconomics Sweden www.eesweden.com

  16. Illustrative Case Study: Smøla How to quantify the debits and credits associated with sea eagle collisions with turbines? Scott Cole, EnviroEconomics Sweden www.eesweden.com

  17. Quantify debitfrom 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: • What compensatory restoration projects create “DBYs”? • How many “DBYs” do we get per unit of restoration? • How many units do we need to ensure “equivalence”? Scott Cole, EnviroEconomics Sweden www.eesweden.com

  18. 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  19. Power line electrocution (sea eagle)Source: Norwegian Television Program “Ute i Naturen” (8 Sept. 2009) Scott Cole, EnviroEconomics Sweden, Umeå, Sweden

  20. 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 years Scott Cole, EnviroEconomics Sweden www.eesweden.com

  21. Q#2: How many units do we need? We lose 1,995 DBYs from 2005-2018 We 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 collisions Scott Cole, EnviroEconomics Sweden www.eesweden.com

  22. What does this cost? Data on costs is sparse and site-specific …. Costs should include at least: • Cost of assessment • Research and data collection • Equivalency analysis itself (written report) • 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  23. Conclusions I Equivalency Analysis provides a quantitative framework for determining how much compensation is enough • Easily adaptable to non-raptor species, marine environment, habitat fragmentation, etc • Nota 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  24. Conclusions II Equivalency 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)? Scott Cole, EnviroEconomics Sweden www.eesweden.com

  25. 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 scott@eesweden.com Scott Cole, EnviroEconomics Sweden www.eesweden.com

  26. 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 Scott Cole, EnviroEconomics Sweden www.eesweden.com

  27. 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 electrocution Scott Cole, EnviroEconomics Sweden www.eesweden.com

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