Defra
New Approaches to Evaluating and Quantifying the Benefits of Chemicals Regulation
Final Report
April 2006
Entec UK Limited
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Dr Jane Stratford
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Defra
Ashdown House
123 Victoria Street
London SW1E 6DE
Main Contributors
Oliver Warwick
Andrew Marsh-Patrick
Ian Spencer
Mark Watson
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Oliver Warwick (signature above)
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Mark Watson/Michael Sorensen
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Entec UK Limited
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h:\projects\em-260\14000 projects\14955 benefits of chems regs\c client\reports\final report\final (client reviewed and amended) report\bens of chems reg final report - april 06.doc(auto filename)
Defra
New Approaches to Evaluating and Quantifying the Benefits of Chemicals Regulation
Final Report
April 2006
Entec UK Limited
Document Revisions (Delete if N/A)
No. / Details / Date1 / Un-reviewed draft / 20/03/06
2 / Draft final (reviewed by Entec) / 22/03/06
3 / Final (reviewed by Defra) / 27/04/06
Draft Final
v
Executive Summary
This report describes a study to develop a novel approach to evaluate and quantify the benefits of regulating chemicals.
The objectives of the study were to:
• Identify two substances of concern, based on historical evidence, to use as case-studies and collect evidence establishing a link between the substance and effects reported in the environment and effects on human health (for humans exposed though the environment).
• Quantify (and where possible monetise) the link between the substances hazardous characteristics and the effects reported in the environment and effects on human health.
• To develop a generic model to estimate the potential costs of not implementing future chemicals legislation.
The study developed a single approach to evaluating the benefits of chemicals regulation. This approach is based on extrapolating effects from previously predicted no effect levels and relating these to possible environmental impacts. The impacts are then used to derive the benefit from these impacts being avoided. In order to assess the benefit of regulations, a limited scenario in which restrictions on the production and use of a substance have been imposed, is compared to a scenario prior to restriction and the net benefit is calculated.
The objectives were met by:
• Selecting two substances for which validated and peer-reviewed data was already available.
• Using existing data on their predicted environmental concentrations (PEC) and predicted no effect concentrations and no effect concentrations (PNEC and NEL, respectively)
• Developing a theoretical worst-case concentration-response relationship for environmental effects and effects on human health (for humans exposed though the environment).
• Developing sets of impacts from effects for each environmental compartment
• Using existing studies, developing valuations for environmental impacts
• Developing a modular model capable of estimating the benefits of regulations on substances. The model can be used to compare the benefits of regulations as a result of changes to production and use volumes and emissions and resultant changes to predicted environmental concentrations for each environmental compartment.
Results from running the model with the two example substances estimated the benefit of imposing risk reduction measures could be £39.3 million per year for trichloroethylene and £20 million per year for diphenyl ether pentabromo derivative.
The model developed may be used to determine the relative benefits of imposing regulations by comparing two scenarios for a substance. The transparency of the model allows PEC and PNEC data to be entered regardless of source. Moreover, the values used to derive impacts and valuations of benefit may be easily changed or refined, should better or more appropriate data become available.
The model developed in this study may assist Defra (and other chemicals regulators) with decisions on prioritising substances for regulation. For example, under the coming REACH legislation, the model could act as a tool to assist Defra in the identification of substances of concern that will derive the most benefit from restriction and aid in prioritisation of substances for further action.
Glossary
Abbreviation / Full Text /Defra / Department for Environment Food and Rural Affairs
EA / Environment Agency
ELV / Emission Limit Value
EPA / Environmental Protection Agency
EQS / Environmental Quality Standard
FWR / Fish Wildlife and Recreation
GQA / General Quality Assessment
IPPC / Integrated Pollution Prevention and Control
NEL / No Effect Level
NoAEL / No Adverse Effect Level
PEC / Predicted Environmental Concentration
PNEC / Predicted No Effect Concentration
RCR / Risk Characterisation Ratio
TGD / Technical Guidance Document (EC 2003)
UK / United Kingdom
WTP / Willingness To Pay
Contents Ensure right hand page (odd number)
1. Introduction 1
1.1 Background 1
1.2 Scope of work 3
1.2.1 Selection of chemicals 3
1.3 Need, drivers and stakeholders 4
1.4 Chemical regulations 5
1.5 Approach 6
1.5.1 Outline approach 6
1.5.2 Risk assessment 8
1.5.3 Data 1: Effect and no-effect concentrations 9
1.5.4 Data 2: PEC generation existing data and modelling 15
1.5.5 Spatial and temporal scales 16
1.5.6 Calculation of valuations 17
1.5.7 Scenarios and assessing benefits of regulation 18
2. Methodology 20
2.1 Exposure, effects and environmental impacts 20
2.1.1 Selection of data – ESR and other sources 20
2.1.2 Selection of chemicals 20
2.1.3 Definition of effects levels (categories) 20
2.1.4 Predicted Environmental Concentrations 22
2.1.5 Generating impacts from effects 22
2.1.6 Scaling of impacts and standardisation 27
2.1.7 Assumptions 29
2.2 Economic valuation of benefit 31
2.2.1 Economic valuation of impacts: environment and human health 31
2.2.2 Freshwater angling – data and assumptions 38
2.2.3 Estuarine Angling – data and assumptions 39
2.2.4 Water Based Leisure – data and assumptions 40
2.2.5 Non Use (water quality) – data and assumptions 41
2.2.6 Crops – data and assumptions 41
2.2.7 Secondary poisoning effects on wild animals and plants – data and assumptions 42
2.2.8 Human Health (Mortality & Morbidity) – data and assumptions 43
2.3 Model 46
2.3.1 Basis 46
2.3.2 Linkages 47
2.3.3 Rational 53
2.3.4 Scenario definition 54
2.3.5 Data – ESR RA and EUSES 55
2.3.6 Usage 57
2.3.7 Assumptions 58
2.3.8 Sensitivity 58
2.3.9 Populating the model and example substances 59
3. Results 65
3.1 Working the model 65
3.2 Chemicals – findings 69
3.2.1 Trichloroethylene 71
3.2.2 PentaBDE 72
3.3 Sensitivity 73
4. Conclusions & Recommendations 75
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Table 1.1 Assessment factors to derive the PNEC aquatic (general) 10
Table 1.2 Assessment factors to derive the PNEC aquatic (from TGD) 11
Table 2.1 Effects categories and corresponding risk characterisation ratio bands for determining environment impacts 21
Table 2.2 Effects categories and corresponding risk characterisation ratio bands for determining impacts human health via the environment 21
Table 2.3 Determining impact from effects for the environment: Freshwater fisheries 22
Table 2.4 Environmental compartments considered in EU risk assessments and representation in this study. 23
Table 2.5 Surface water: freshwater 25
Table 2.6 Human health effects and impacts considered in EU risk assessments and representation in this study for humans via the environment 25
Table 2.7 Acute toxicity estimate for human health 26
Table 2.8 Characterisation of the UK Environment 28
Table 2.9 Characterisation of the local environment for this study 29
Table 2.10 Validity assessment for benefit transfer 33
Table 2.11 Uncertainties within the economic module of the model 58
Table 2.12 Shortlist of substances that pose a risk to the environment 60
Table 2.13 Trichloroethylene production and use tonnages 62
Table 2.14 Assumed effect of regulation on tonnages and emissions for trichloroethylene 62
Table 2.15 Trichloroethylene EUSES inputs 63
Table 2.16 Penta BDE EUSES inputs 64
Table 3.1 EUSES PEC values for tricholoethylene baseline scenario 66
Table 3.2 EUSES PEC values for tricholoethylene regulated scenario 67
Table 3.3 EUSES PEC values for pentaBDE baseline scenario 68
Table 3.4 EUSES PEC values for pentaBDE regulated scenario 68
Table 3.5 PNEC values for tricholoethylene 69
Table 3.6 PNEC values for pentaBDE 69
Table A1 Validity assessment for benefit transfer 1
Figure 1.1 Theoretical concentration-effect curve for the derivation of effect levels from PNEC values 13
Figure 1.1 Theoretical concentration-effect curve for the derivation of effect levels from PNEC values 14
Figure 2.1 total economic value of land and aquatic environmental quality 35
Figure 2.2 Total economic value human health impacts 37
Figure 2.3 Model input data for scenario definition 48
Figure 2.4 Model input data for risk characterisation impacts 49
Figure 2.5 Flow diagram 1 for benefits valuation 50
Figure 2.6: Flow diagram 2 for benefits valuation 51
Figure 2.7 Flow diagram for benefits to the environment 52
Figure 2.8 Flow diagram for benefits to health via the environment 53
Figure 2.9 User input for scenario definition 54
Figure 2.10 User input of Predicted Environmental Concentration (PEC) data 55
Figure 2.11 Example of PEC values from EUSES 57
Figure 3.1 Scenario Benefits Results (by environmental compartment) 71
Figure 3.2 Scenario Benefits Results (by chemical use category) 71
Figure 3.3 Scenario Benefits Results (by environmental compartment) 72
Figure 3.4 Scenario Benefits Results (by chemical use category) 72
Appendix A Economic Valuations
Appendix B Connection of impact levels in valuation studies and dose response work
Appendix C Dose Response Model Benefits Assessment Formulas
Appendix D Impact and Benefits Tables
h:\projects\em-260\14000 projects\14955 benefits of chems regs\c client\reports\final report\final (client reviewed and amended) report\bens of chems reg final report - april 06.doc / April 200614955 / © Entec
Additional Info 1 / / Additional Info 2
Draft Final
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1. Introduction
1.1 Background
In the UK, a hierarchy of legislation exists that is aimed at regulating the production, marketing and use, disposal and release into the environment of dangerous chemicals. Enforcement of this legislation is carried out by various executives and agencies of government; compliance is evaluated by approval of chemical products, assessing predicted and monitored exposure levels of chemicals released into the environment, and evaluating these levels against guidance and standards on permitted emission rates and environmental concentrations.
The level at which the environment is protected is generally determined by the comparison of exposure levels with levels at which effects on ecosystems and humans are predicted to occur. This is done either through a process of risk assessment (i.e. assessing the likelihood of harm occurring) or by comparison of environmental levels with standards or guideline values. By limiting environmental exposure to concentrations below those at which harm may be caused is assumed to afford adequate protection. The benefit to both humans and the environment is therefore avoidance of harm or at least the extent of harm being limited to a level that is deemed to be acceptable. Although protection from harm and the reduction of the environmental burden of chemicals is the goal for most legislation, there is generally no obligation within the legislation to quantify the economic cost of impact or the benefit of avoiding environmental impact. There is however, an increasing need to demonstrate the economic value or benefit of regulation. As both the marketing and use of chemicals and the environmental release of chemicals are regulated on a substance specific basis[1], there is a need to prioritise the regulation of chemicals. Balancing the cost of regulation with the associated benefit that regulation brings may assist this.
There are a number of potential difficulties with attempting to assesses and evaluate the economic benefit that regulation of chemicals brings:
• Firstly, the relevant regulatory frameworks or regimes are introduced to prevent undesirable effects on the environment resulting from exposure to a particular chemical. Therefore, threshold levels (so called no–(adverse) effect levels) that should not be exceeded are developed and these levels are intended to ensure environmental impacts are limited. There is however no direct linking of increasing environmental concentration with the magnitude of impact on the environment above the no adverse effect level.[2]
• Secondly, as there are a number of chemicals released into the environment it is difficult to attribute environmental impacts to any particular chemical with any level of certainty. That is unless it is a situation in which only one chemical is released or in depth studies of environmental fate demonstrate that a single chemical is responsible for effects and/or where a chemical has specific effects (i.e. mode of action) that can only be attributed to that chemical.
• Thirdly, until recently, the environment has not been subject to economic market valuations. That is say that the environment (or particular parts of it) does not have a specific value and therefore the cost of reducing this resource is not linked to a value that can easily be quantified in terms of monetary valuation.
One possible approach to assessing the benefit of chemical regulations is to focus on chemicals that have been severely restricted or banned as a result of specific observed impacts in the environment. This way, environmental impacts can be attributed to a specific chemical and the quantity of impact related to concentrations in the environment (if these have been measured). The difficulty of applying valuations to impacts remains, but the specific effect limits impact to particular parts of the environment. This is a historical approach to assessing the benefits of regulating chemicals as it relies on empirical data on impact and environmental concentrations. Once the chemical has been withdrawn or its use restricted, the benefit of prohibition, in terms of avoided impact and environmental recovery, can be valuated.
There are merits in the historical approach, since it addresses a situation where impacts are known and can be attributed to a single chemical, and the regulation has effectively withdrawn the chemical from use so that further input to the environment has stopped at some point in time.[3]. This situation only exists for a notably small number of chemicals however and it is therefore not applicable to the regulation of chemicals generally. This is largely because the effects and impact of chemicals on the environment are not specific and cannot be attributed to specific chemicals. Furthermore, most chemicals are not subject to restriction that effectively removes emission to the environment, but rather regulations limit emissions and therefore concentration in environmental media that will not, in theory, cause effects (and therefore impacts).