OECD Environment Working Papers

This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.


Possibilities and challenges in transfer and generalisation of monetary estimates for environmental and health benefits of regulating chemicals

This paper reviews and discusses existing methodologies for transferring and extrapolating the economic value of health and environmental impacts across chemicals, and identifies challenges with such value transfer and when it can be suitable. The value transfer methodologies describes can be used to estimate the economic benefits of chemical management regulatory frameworks as a whole, as well as in cost-benefit analyses (CBAs) of risk management measures for individual chemicals.

For economic valuation of mortality risks from chemicals, the OECD database of Stated Preference (SP) studies of Value of Statistical Life (VSL) , which should be continuously updated with new valuation studies, has a sufficient number of primary studies internationally to conduct value transfer using meta-analytic regressions. However, the empirical evidence on acute and chronic morbidity endpoints, especially concerning all costs components of chronic illnesses, seems to be scarce. The same is true for chemical-related environmental impacts, especially related to ecosystem services, for the multitude of chemicals. Thus, the main methodological and informational challenge for valid value transfer of environmental and health impacts from chemical regulations seems to be new primary valuation studies of morbidity and ecosystem services impacts caused by exposure to (groups of) chemicals.

These new primary valuation studies should be designed with value transfer in mind, and cover several countries, in order to extrapolate and generalise the economic values to evaluate international chemical regulations in CBAs. These new primary studies should ideally cover all relevant scales of the impacts, in order to develop generalised adjustment factors for differences in scale of the impacts between the study sites and the policy site. This would improve the spatial transfer of values. The same is true for the combination of Geographical Information System (GIS) data with existing primary studies of impacts at different scales. Furthermore, these new primary studies should be repeated over time in order to provide more information about how values for the relevant impacts change over time; as preferences, scarcity of the public good and the real income of the affected population change. This would improve temporal transfer.


Keywords: health benefits, exosystem services, chemicals regulations, value transfer, benefit transfer
JEL: Q53: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling; Q57: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Ecological Economics: Ecosystem Services; Biodiversity Conservation; Bioeconomics; Industrial Ecology; J17: Labor and Demographic Economics / Demographic Economics / Value of Life; Forgone Income; Q51: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Valuation of Environmental Effects
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