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5. COSTS AND BENEFITS
Sectors and groups affected
17. For the purpose of the Directive, the obligations to avert and, where necessary, to remediate, significant damage falls upon the operator. The operator is the person who operates or controls the 'occupational activity' that causes a threat of damage or causes damage. The 'occupational activity' is defined quite widely, extending to any activity carried out in the course of economic activity, a business or undertaking, irrespective of its private or public, profit or non-profit character. This includes NGOs and the public sector as well as businesses.
18. The sectors most likely to be affected by environmental damage as defined in the directive are agriculture and land management, manufacturing, the waste and water industries, which are assessed together to account for over 70% of damage. In the public consultation, we include a range of companies and industry organisations including those representing agriculture, fisheries, chemicals, construction, manufacturing, energy, engineering, brewing and distilling, countryside and forestry, water and waste. We include also public authorities, NGOs and other groups which might wish to be aware or to disseminate information to others. Hence we aim to reach a spread of operators, public authorities and others who may potentially be affected or may be involved in advisory or supportive roles.
Approach to assessing costs and benefits
19. There are two main direct effects of the ELD expected that may give rise to costs to operators and benefits.
- The first is that operators may take 'anticipatory' action in response to changes in liability.
20. This would include any additional measures that operators take to assess and reduce the risks they run or to transfer risks for example by taking out insurance. A best estimate of £0.7m is made for these anticipatory measures There are likely to be benefits to the extent that environmental damage does not occur or is less severe as a result of any measures taken.
- The second is that additional action will be required in response to imminent threats and actual damage.
21. We have considered records of past environmental damage to assess how many and which cases of environmental incidents would have fallen within the scope of the ELD. We have then assessed what additional measures would have been required the likely costs of dealing with these cases. We estimate that up to 10 cases of environmental damage will result in additional works under ELD on average each year. Together these are estimated to lead to additional remedial costs of about £1.4m per annum in the early years after transposition. This estimate includes the costs of assessing damage, developing remedial measures and administering works as well as the substantive works themselves. We have also assessed the value of the environmental benefits which arise with an estimate of £2.3m.
22. Additionally there are likely to be costs associated with operators familiarising themselves with the new requirements. An estimate of £0.3m is made.
23. The methodology for assessing costs and benefits is contained in Annex 2 to the RIA.
24. In summary, the key figures from Table 7 (Annex 1) are as follows.
Costs to operators of |
| Familiarisation | 0.3m |
Voluntary steps | 0.7m |
Remediation | 1.4m |
| 2.4m |
Costs to authorities of |
| Set up | 0.2m |
Annual net of recovered costs | 0.2m |
| 0.4m |
Total costs £2.8m |
Value of benefits to the environment of |
| Voluntary action | 0.7m |
Remediation | 2.3m |
Total benefits | £3.0m |
Details of the costs and benefits can be found at Annex 1.
The methodology for assessing costs and benefits can be found in the Annex 2.
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