1. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Kristina Fedorovica River Basin Management Department LEGMA, Latvia Case study on Benefit Analysis and Exemption Methodology (done by the SALACA project) TwinBasin Summit Rochehaut, 16-20.04.2007.

2. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 General approach Based on results of the CEA and the stakeholder consultation process it should be considered which measures are disproportionate costly In order to facilitate decision making cost benefit analysis has to be presented –compare costs of measures vs benefits (Cost-benefit analysis) –compare costs vs available financing –compare costs vs WTP (willingness to pay)

3. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 CBA and derogations CBA can be used to justify exemption decisions –justifying time exemption when reaching GES within the time scale would be disproportionate costly –justifying less stringent environmental objectives exemptions because the costs of measures are considered to be disproportionately expensive –justifying quality exemptions due to new modifications CBA can be used also to justify HMWB designation (not considered as exemption)

4. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 CBA Methodology Characterisation of scenarios –description of measures and their effects Identification of impacts of each (alternative) scenario –who will be affected by the measures –if the impact is direct or indirect –types of costs and benefits Qualitative/quantitative assessment of impacts –environmental, financial and economic costs and benefits

5. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Assessment of the costs Direct financial costs of measures –investment and operational costs Indirect costs –e.g. costs related to losses in economic production Induced costs (i.e. costs borne by other sectors of the economy) and wider socio- economic impact of measures –e.g. impact on employment Water and non-water related environmental and resource costs

6. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Assessment of the benefits Financial and economical benefits –e.g. cost savings to operators or productivity gains Water-related benefits from measures –benefits related to direct use of water goods and services (marketed and non-marketed) e.g. benefits to anglers or to commercial fishing benefits gained from improved navigation –benefits related to indirect use of water goods and services informal recreational benefits –benefits related to non-use value of water services

7. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Case Study Lake Burtnieks

8. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Problem definition The initial PoM indicated that GES is unlikely to be achieved by 2015 in the lake Burtnieks. –Initial PoM reduces external load of nutrients. The reason for this failure is eutrophication due to nutrient pollution, including internal prosphorous loading within the lake. Because of the shallow nature of the lake historically stored nutrients in the sediment are continually being released into the water column. These nutrients can and have caused algal blooms, which in turn have been known to cause juvenile fish kills in the lake.

9. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Alternative scenarios PoM (or policy options) that were considered for the lake, within the framework of a CBA and possible exemption application assessment Basic option: Initial PoM, which might lead to the “time” or “quality objective” exemption. First alternative: Initial PoM and the dredging of the lake sediments. Second alternative: Initial PoM and raising the water level in the lake (either temporarily or permanently). Third alternative: Initial PoM and introduction of bio-manipulation techniques to redress the balance in the lake ecosystem.

10. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Economic impacts of the eutrophication and benefits of reducing eutrophication for Lake Burtnieks

11. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 111 Environmental goods provided by the lake Value Damage to the lake caused by eutrophication Benefits of reducing eutrophication in the lake Healthy functioning of the lake ecosystem, preserving biodiversity (for its own benefit) Non-use Reduced biodiversity Damaged natural “functions” in the lake More diverse biota Increased non-use value of the lake (public satisfaction, preserving to the future) Supporting functioning of the connected ecosystems (small rivers, meadows) Indirect use No significant negative impacts have been identified Reduced impacts on connected ecosystems Impact assessment

12. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 112 Impact on direct uses Environmen tal goods provided by the lake Value Damage to the lake caused by eutrophication Benefits of reducing eutrophication in the lake Fishing Use Damage to fish resources, increased possibility of toxins in water Avoided costs for fish re- stocking measures. Increased commercial and recreational fishing in terms of increased fish catches, which would not have taken place before (optional benefits)** Angling Use Tourism Use Limitations for recreation and tourism activities: reduced visual and tactile qualities of water, algal bloom, loss of surface area due overgrowing by reeds)* Avoided costs for mitigation measures (e.g. reed cutting). Increased numbers of visitors and thus income from these activities for the local economy, which would not have taken place before ** Recreation Use *Only illustrative and is not the case for the Lake Burtnieks **Potential behefits that might arise in the future, not assosiated to the current damage

13. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 113 Environmental goods provided by the lake Value Damage to the lake caused by eutrophication Benefits of reducing eutrophication in the lake Value of the shoreline properties (located around the lake) Indirect use Reduced value of the shoreline properties* Avoided losses in property values* Increased value of properties (due to increase in water quality)** Regional development Indirect use Limitations for development in the area around the lake* Increased socio-economic activity in the area around the lake (originating from improvements in all components of TEV of the lake)* Impact on indirect uses *Only illustrative and is not the case for the Lake Burtnieks **Potential behefits that might arise in the future, not assosiated to the current damage

14. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Impact assessment In the case of Lake Burtnieks the current damage to direct uses has been assessed as not being very high and the most significant part of the potential benefits to reducing eutrophication is expected to be related to the non-use value of the lake.

15. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Assessment of the alternative options

16. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 116 Alternatives Criteria for analysis Option 1 Dredging the sediment Option 2 Raising the water level Option 3 Bio-manipulation Could this option ensure reaching GES Yes Yes, but there is a risk that it would not be reached by 2015 Are there any negative adverse environmental impacts Considered to be significant, but more research would be necessary to confirm the ignificance Unacceptable due to impacts on NATURA 2000 sites No negative impacts Assessment of scenarios

17. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 117 Costs* Option 1 Dredging of sediments Option 2 Raising the water level Option 3 Bio- manipulation Direct/ financial costs Very high (could run to $125 - $145 Million) Estimated to be very high considering the need for embankments and other engineering works. Considered to be of moderate Indirect/ economic costs Include temporary cessation of fishing in the lake, or parts of the lake during dredging Indirect costs on fishing activities downstream could be incurred as a result of the reduced flows downstream No costs Induced costs Induced costs arising from mitigation measures also might be involved The induced costs might be very significant due to damage to the economic value of the nature reserve and properties around the lake Assessment of scenarios *Only preliminary qualitative assessment has been carried out

18. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 118 Option 1 Dredging the sediment Option 2 Raising of water level Option 3 Bio- manipulation Benefits* (only preliminary qualitative assessment) The benefits arising from the reducing eutrophication might be offset by the negative adverse effect of the dredging on the lake ecosystem Avoided damage to water quality thus increased value of the environmental goods provided by the lake. However the economic cost of the current eutrophic conditions in the lake is not considered to be particularly high and relates mainly to the non-use value of the lake. Therefore there is significant uncertainty whether the benefit of this option would outweigh the total economic cost of it. Maximum possible benefits (as avoided damage to the total economic value of the lake) – the level of benefits might be similar to the benefits of Option 2 Assessment of scenarios

19. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 119 Alternatives Criteria for analysis Option 1 Dredging the sediment Option 2 Raising of water level Option 3 Bio- manipulation Acceptability to stakeholders Not investigated Not acceptable to the most stakeholders Not investigated Can this option be considered further No - due to obvious disproportion of costs No - due to unacceptable negative environmental (Natura 2000) and economic impact Yes - however a ‘time’ exemption would be required Assessment of scenarios

20. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 The current assessment suggests that with the help of bio-manipulation the lake could be converted back into a mesotrophic lake (Option3) However uncertainty remains about how long this process might take –Due to the fact that the quantity of phosphorus in the sediment is largely unknown –Due to the fact that it has not been possible to model how changes in the food chain would impact on the lake as a whole Time exemption (until 2021) is recommended. This would allow sufficient time to investigate the possible use of bio-manipulation further and to implement the measure in time to reach GES within the required period. Conclusions

21. LATVIJAS VIDES, ĢEOLOĢIJAS UN METEOROLOĢIJAS AĢENTŪRA © LVĢMA 2005 Thank you for your attention!