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Valuing environmental health for informed policy-making

Abstract Background: Monetized environmental health impact assessments help to better evaluate the environmental burden of a wide range of economic activities. Apart from the limitations and uncertainties in physical and biological science used in such assessments, assumptions taken from economic valuation may also substantially influence subsequent policy-making considerations. Aim: This study attempts to demonstrate the impact of normative policy assumptions on quantified external costs using a case study of recently discussed variants of future coal mining and use of extracted coal in electricity and heat generation in the Czech Republic. Methods: A bottom-up impact-pathway approach is used for quantification of external costs. Several policy perspectives are elaborated for aggregating impacts that differ in geographic coverage and in how valuation of quantified impacts is adjusted in a particular perspective. Results: We find that the fraction of monetized external impacts taken into policy-making considerations may vary according to choice of decision perspective up to a factor of 10. Conclusion: At present there are virtually no hard rules for defining geographical boundaries or adjusting values for a summation of monetized environmental impacts. We, however, stress that any rigorous external cost assessment should, for instance in a separate calculation, take account of impacts occurring beyond country borders.