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

2. 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. Outline of the Presentation APAT- Italian National Agency for Environmental Protection and Technical Services

3. Environmental Damage and environmental goods APAT- Italian National Agency for Environmental Protection and Technical Services 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. D.Lgs. 152/06 At Italian 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 Directive 2004/35/CE At EU level Liability Regime for Environmental Damage APAT- Italian National Agency for Environmental Protection and Technical Services

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

6. Civil liability and environmental damage APAT- Italian National Agency for Environmental Protection and Technical Services 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 The Italian legislation, in accordance with Directive 2004/35/CE, states that compensation for environmental damage can be achieved through remediation Compensation by 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 If the responsible party has carried out an illicit activity and he/she has been at fault or negligent and 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 Compensation by Patrimonial Equivalent 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. 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 APAT- Italian National Agency for Environmental Protection and Technical Services Time limit of liability in Italy and in EU

10. Compensation for Environmental Damage : the Protocol APAT- Italian National Agency for Environmental Protection and Technical Services The Protocol states that the operator shall be liable for damage to transboundary water caused by an industrial accident (Art. 4: Strict 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 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).

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

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 Effects Damage scenario 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 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. Problems arising in damage determination

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

15. APAT- Italian National Agency for Environmental Protection and Technical Services Damage quantification, example Increasing indicatorDecreasing indicator Alt = (Iri-Ipi)/IriAlt = (Ipd-Ird)/Ipd Det = (Iri-Ipi)/(Iri-Lmin)Det = (Ipd-Ird)/(Lmax-Ird) Des=1 if Ipi<Lmin or Ipi=0Des=1 if Ipd>Lmax [pollutant] Lmax Ipd Ird 0 Ipd Ipd-Ird Lmax-Ird Max pollution limit Indicator Present state Baseline Indicator Monitoring data Historical data Reference data Unaffected areas

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

17. Precise valuation APAT- Italian National Agency for Environmental Protection and Technical Services 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 Components of Total Economic Value (TEV) Use value Direct use Indirect use Non use (passive) Value Option use Bequest value Existence value cost of interim loss +

18. APAT- Italian National Agency for Environmental Protection and Technical Services Expenses which are necessary to restore deteriorated resources to baseline Cost of a hypothetical project to monitor, control and contain, remediate and re-naturalize all deteriorated natural resources, keeping into account: The cost of primary remediation Example : 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. extension (volume, surface, number of individuals and species etc);

19. APAT- Italian National Agency for Environmental Protection and Technical Services 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 Cost of Interim Loss 3. Public defensive expenses for response measures Ex: expenses undertaken by the national health service to cope with a salubrity deterioration) IT CAN BE MONETARILY VALUED BY:

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 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) Equitative valuation 2. Illicit profit When there is no conceivable primary remediation, the damage is often valuated in an equitative rather then precise way profit earned by the responsible party during the illicit period. costs of the best available technologies, which, if applied, would have avoided/limited environmental damage;

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 Investigate immediately afterwards the accident event, through inspections, suitable and prompt sampling and measuring system 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 the necessary time for complete recovery to baseline.

24. APAT- Italian National Agency for Environmental Protection and Technical Services The pollution capacity approach Pollution capacity (m 3 ) = Discharged pollutant load (kg) Max. permissible conc. (kg/m 3 ) 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

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.