Environmental Impact Guidance
Step 4: Assign a monetary value to the change in emissions.
It is recommended that you place a monetary value on your emissions because this makes it easier to compare the costs or benefits of emissions directly with other policy impacts, and to include these impacts alongside others when making a final decision on how best to implement the policy.
All greenhouse gas emissions add to the greenhouse effect and make global warming more severe. Each tonne of emissions can be seen as adding to the damage that will be caused by global warming. By estimating the cost of this damage we can obtain a range of estimates of the costs to society of each additional tonne emitted. Similarly, assigning a monetary value to a reduction in emissions as a result of policy takes account of the benefit of the damage avoided from those emissions.
The UK government currently recommends a range for each tonne of carbon emitted of £35 to £140. To monetise the change in emissions, multiply the tonnes of carbon equivalent saved/emitted each year as a result of your policy by the figures £35 and £140 to give you the lower and higher bounds of the value of the changes in carbon emissions. A review of these figures is ongoing.
| John's policy results in a total increase in emissions of 955 tonnes of carbon equivalent. He has already determined that the increase in emissions of all three pollutants is likely to be spread roughly equally over the next ten years. He therefore assigns 95.5 tonnes of carbon to each year, and multiplies this by £35 and then by £140 to produce a range of the costs of this increase in emissions of £3.3k to £13.4k each year. |
Page last modified: 16 November 2004
Page Published: 16 November 2004