Topical paper 5: Policy options for resource efficiency as ...ec.europa.eu/environment/enveco/resource_efficiency/pdf/TP5.pdf · - An analysis of historical improvements (Topical

European Commission

Directorate-General Environment

Topical paper 5: Policy options for resource

efficiency as input for modelling

Date 12 August 2013

Author(s) Arnold Tukker, Olga Ivanova (TNO)

Copy no. 1

No. of copies 1

Number of pages 76

Number of appendices 0

Study name Assessment of Scenarios and Options towards a Resource Efficient Europe

Study number ENV/F.1/ETU/2011/0044

Disclaimer: The information contained in this report does not necessarily represent

the position or opinion of the European Commission.

Policy options for resource efficiency as input for modelling (ENV/F.1/ETU/2011/0044 Resource

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Contents

1 Introduction .............................................................................................................. 4

2 Policy instruments in relation to modelling and improvement scenarios ......... 6 2.1 Introduction ................................................................................................................ 6 2.2 Policy instruments – a classification and introduction ............................................... 6 2.2.1 Introduction ................................................................................................................ 6 2.2.2 Administrative instruments ........................................................................................ 6 2.2.3 Financial instruments ................................................................................................. 8 2.2.4 Informative instruments ............................................................................................. 8 2.2.5 Combining instruments .............................................................................................. 9 2.2.6 Impact on implementation rates .............................................................................. 10 2.3 Modelling in the project: EXIOMOD combined with LCA/LCC ................................ 11 2.4 Improvement options considered in the project: exogeneous input to EXIOMOD .. 13

3 Policy instrument mixes to be included in the modelling ................................. 14 3.1 Introduction .............................................................................................................. 14 3.2 Financial instruments ............................................................................................... 15 3.2.1 Introduction .............................................................................................................. 15 3.2.2 Inclusion of externalities of air emissions ................................................................ 16 3.2.3 Environmental tax reform: budget-neutral shift of taxes from labor to resources ... 17 3.3 Regulatory and informative instruments supporting specific improvement options 20 3.3.1 Introduction and building blocks for administrative cost assessment ...................... 20 3.3.2 Design for deconstruction ........................................................................................ 24 3.3.3 Increase durability and service life of products ....................................................... 27 3.3.4 Increase recycling of waste at end of life................................................................. 29 3.3.5 Increase renovation rate .......................................................................................... 37 3.3.6 Increase use of recycled material ............................................................................ 39 3.3.7 Intensify use of buildings ......................................................................................... 42 3.3.8 Reduce land used by the built environment (intensification) ................................... 45 3.3.9 Reduce construction waste arising .......................................................................... 47 3.3.10 Select materials with low impact .............................................................................. 49 3.3.11 Use construction materials more efficiently ............................................................. 55

4 Summary and conclusions ................................................................................... 56 4.1 Introduction .............................................................................................................. 56 4.2 Financial instruments ............................................................................................... 57 4.3 Technical building blocks: technical improvement options facilitated by

administrative and informative instruments ............................................................. 58

5 Annex 1: Calculation of externalities in an input-output framework ............... 63

6 Annex 2: Comments received and response ...................................................... 69

7 References ............................................................................................................. 72


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Backgrounds of the project: Assessment of Scenarios and Options towards a Resource Efficient Europe

The Europe 2020 Strategy, endorsed by the European Council in June 2010, establishes

resource efficiency as one of its fundamental flagship initiatives for ensuring the smart,

sustainable and inclusive growth of Europe. In support of the Flagship, the Commission has

placed a contract with TNO, CML, PE and AAU/SEC for a project with the following aims. It

should identify inefficient use of resources across different sectors and policy area’s at

meso- and macro level and then quantitatively asses potentials and socio-economic and

environmental effects of efficiency improvements, both from singular as system wide

changes, up to 2050. The Built environment is focus area. The core methodology is a hybrid

modelling approach: identifying improvement options, their costs and improvement potential

at micro/meso level, and to feed them into a macro-model (EXIOMOD) to assess economy-

wide impacts of improvement scenarios. Stakeholder engagement via workshops is an

important part of the project. The project started in January 2012 and will end in December

2013.

To inform stakeholders, during the project some 8-10 ‘Topical papers’ will be written. The

aim is to get feedback on crucial elements of the scenario modelling with stakeholders. This

document is forms one of the topical papers.


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1 Introduction

This topical paper describes the policy instruments that need to be in place to

support the technical improvement options presented in Topical Paper 4 of the

project ‘Assessment of Scenarios and Options towards a Resource Efficient

Europe’.

The project concentrates on resource efficiency in the built environment. Within built

environment, it focuses on:

Residential buildings (existing and new);

Utility buildings. The primary attention in this sub-category is on offices and

retail buildings, which make up 50% of the floor space of utility buildings.

Results will be extrapolated to similar buildings such as schools, hotels and

hospitals. No special attention is given to industrial buildings since this is

less than 10% of utility buildings stock and very diverse;

Infrastructure. By far dominant is road infrastructure and transport, so that

only this type of infrastructure will be included.

In terms of resources, the main focus of the project is materials and land use.

Energy use and water use of residential buildings and utility buildings will be

covered too. We exclude appliances and furniture used in residential and utility

buidlings. We also exclude road transport and vehicles as such.

A baseline scenario and improvement scenarios will be quantitatively modelled, with

regard to economic and environmental and resource impacts. The modelling will be

done for a time horizon until 2030. In the approach all environmental and resource

impacts which normally are covered by LCA will be included. The project team will

look at cradle-to-grave, economy-wide impacts and where possible and relevant,

differentiation by (clusters of ) member state will be made, for example for

‘restricted use phase’ the structure of housing stock, climate zone etc.

The overall structure of the project is given in Figure 1.1. The essence of the project

is a hybrid modelling approach, in which bottom-up Life cycle costing and Life cycle

impact data are fed into a macro-economic model that then calculates economy-

wide economic and environmental effects for Europe. The modelling is informed by:

- An analysis of historical improvements (Topical paper 1, related to Task

3.1). This paper can inform the baseline scenario, i.e. the improvements

that can be expected if just historical trends are extrapolated

- A (bottom-up) analysis of technical improvement potentials (Topical paper 2

and 4, Task 3.2). These two papers provide detailed input into the

improvement scenarios and the macro-economic and environmental

modelling.

- An analysis of policy instruments and mixes that support the improvement

scenarios and themselves can be input to the macro-economic and

environmental modelling (this topical paper 5).

In chapter 2 we will first present a classification of policy instruments, and then

present the modelling approach and the potential improvement options to consider.

In chapter 3 we will then present which policy instruments will be directly used in


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modelling, and which policy instruments we will consider as essential for realising

the technical improvement options.

Figure 1.1: Main steps in the project


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2 Policy instruments in relation to modelling and improvement scenarios

2.1 Introduction

In this chapter we first provide an introduction to policy instruments, with regard to

their classification and impacts. We then discuss in brief the foreseen modelling

approach and explain why assessment of the impacts financial instruments can be

directly included in the model. We then present the technical improvement options

for which implementation is depending on deployment of other instruments, most

notably administrative and informative instruments. This then forms the basis of a

detailed analysis of policy instruments in chapter 3:

- A specification of (mainly) financial instruments for inclusion in the

modelling exercise as such;

- A specification of supportive policies that are required to ensure a broad

implementation of the technical improvement options central in the

modelled scenarios.

2.2 Policy instruments – a classification and introduction

2.2.1 Introduction

Sustainability policy instruments in general and product related instruments in

specific have been classified using various principles. An often used way of

classifying product policy instruments is to the degree of authoritative force

involved: administrative, financial and informative (see table 2.1 below). This

classification is probably one of the most widely used in the literature that describes

the working mechanisms and effects of policy instruments (e.g. Gupta et al., 2007;

Sorrell, 2001; OECD, 2007). Further, it is also possible to differentiate between

policy instruments in terms of their mandatory or voluntary character. The former

category refers to instruments with a clear binding character (e.g. laws), whereas

the latter is framed by normative non-compulsory requirements or commitments

(e.g. an environmental agreement between industry and a government).

2.2.2 Administrative instruments

Administrative instruments in general require the use of specific technologies (a

technology standard) that have a good performance with regard to resource-

efficiency or emissions, or set standards with regard to resource-efficiency or

pollution output as such (a performance standard). Examples could be standards

with regard to a minimum recycled content in products, or energy performance

standards for products.. Mandatory instruments have various advantages (Gupta et

al., 2007; Goulder and Parry, 2008):

o if stringent enough, there is significant certainty that emission levels or

reduction of resource use will be realized;

o they work well in cases where information barriers, or high price

elasticities, prevent businesses or consumers to react on price signals

o particularly in the case of technology standards, enforcement is

relatively easy (e.g. a specific device such as a catalyst needs to be

present)


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Table 2.1 Categorisation of policy instruments and tools

Policy instruments

Mandatory instruments Voluntary instruments

Administrative

Bans, licenses, requirement on EHS information, EPR, recycling and recovery quotas, material and quality requirements, emission levels, chemicals regulation

Responsible Care and similar initiatives, Product-oriented environmental management systems (POEMS), application of product standards, product panels, EMS, functionality panels, agreements between government and industry

Financial Deposit-refund systems, taxes and charges, liability rules

Green public procurement, technology procurement, R&D investments

Informative Requirement on EHS information, emission registers, material and quality requirements, chemicals regulation on information for professional and private users, energy labelling, marketing regulations

Eco-labelling ISO type I, EPDs, green claims, energy labelling, organic labelling of food, certification schemes of e.g. hotels, consumer advice, consumer campaigns, education

Source: (Mont and Dalhammar, 2006)

Administrative mandatory instruments however also have clear disadvantages.

o they are in essence static and do not provide polluters with the

incentive(s) to go ‘beyound compliance’.

o Authorities need to have a significant body of knowledge about

improvement potentials and their related costs to set standards at the

right level. This can not always be expected to be the case.

o The regulator and regulated often have opposed interests. It is not

always easy to mobilize the creativity and knowledge of the parties that

will be regulated and to foster optimal solutions found via a joint search

process.

o Usually all firms or all products have to meet the same single standard.

At the same time for some firms or products it may be relatively cost-

effective to meet the standard (or to go beyond it), where for other

firms/products it is relatively expensive. The results is that the overall

environmental improvement will be realised at higher costs than

necessary.

o A technology standard deprives firms from the possibility to seek

alternative, more cost effective ways to meet emission or resource

efficiency goals. A performance standard does give this level of

freedom, but can be more difficult to enforce.

Voluntary administrative instruments like voluntary agreements often do better in

mobilizing the knowledge and creativity of business. However, there is a clear

danger that voluntary agreements do not set meaningful goals. The most successful

programs all include clear targets, a baseline scenario, third party involvement in

design and review and formal provisions for monitoring (Gupta et al., 2007).


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2.2.3 Financial instruments

Financial instruments include emission taxes, tradable emission allowances, and

subsidies for pollution abatement. It is often argued that financial instruments,

particularly tradable emission allowances, have the advantage that a common price

is set for marginal abatement costs across a sector. Abatement then will take place

in that situation where the marginal costs are lowest, implying a potentially high

cost-effectiveness. At the same time, financial instruments also have limitations

(e.g. Goulder and Parry, 2008, Gupta et al., 2007):

Taxes and subsidies have limited impact when demand is inelastic, and unlike

is the case with administrative instruments it is hence not certain that specific

emission targets are met.

Taxes may have negative distributional effects: low incomes may be hit

relatively hard

Taxes often are politically unpopular and hence difficult to implement1.

Subsidies as an instrument for stimulating pollution abatement are seen as inferior

to taxation (Goulder and Parry, 2008). Subsidies and making available capital

however can be critical to overcoming the barriers to the penetration of new

technologies (Gupta et al., 2007). Particularly if the aim of the financial instrument is

to foster diffusion of new (product) technologies, it should be applied for a long time

horizon.

Financial instruments that have played an important role in the resource and waste

field include deposit schemes. A fee is levied upfront when selling a product, for its

end of life treatment. This fee is handled by an intermediate company responsible

for collection and end of life treatment in the form of recycling. In this way, a user

can deposit its end of life product for free while there are enough finances to pay for

recycling. Such financial schemes have been used in support of recycling of

automotive waste, packaging waste, etc.

2.2.4 Informative instruments

Information instruments, including public disclosure requirements, may affect

environmental quality by promoting better-informed choices and lead to support for

government policy. When firms or consumers lack the necessary information about

the environmental consequences of their actions, they may act inefficiently. At the

same time, there is only limited evidence that the provision of information alone can

achieve emissions reductions or support resource efficiency (Gupta et al., 2007). It

can however improve the effectiveness of other policies. An example is for instance

that information about environmental performance of products may enhance the

price elasticity of the product, which can make differentiated taxation more effective.

1 Another consideration is that financial instruments need a relatively mature institutional

governmental context, that can handle such taxation systems. One can assume that in Europe this

condition is fulfilled.


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2.2.5 Combining instruments

As for combinations of policy instruments, a smart design of a policy package can

produce a sum that is more than its parts. Positive synergies are for instance at

stake in the following situations:

1. Informative instruments in virtually all cases can support the working of

administrative instruments (creating awareness about rule) and financial

instruments (creating a higher willingness to buy or use the ‘green’ product or

service and by this, enhancing price elasticity of this product or service).

2. When monitoring and compliance costs are high, sometimes an additional

instrument can be developed that helps reducing such costs (e.g. a

mandatory bookkeeping system)

3. Usually there is a pool of products or production technologies on the market,

with different environmental and resource-efficiency performances. Here,

‘hard’ administrative instruments can ensure a minimum performance

standard, while softer informative instruments, tax exemptions, GPP can be

used to award the ‘top end’ in a market (see figure 2.1). This can create a

market dynamics by which gradually the average product or process

performance improves over time (see figure 2.2).

4. In some cases improvement of environmental or resource-efficiency

performance needs a co-ordinated change in a full value chain. In that case,

policy mixes can be applied where each instruments addresses a different

actors (e.g. labelling addressing producers of products, information

campaigns addressing consumers, GPP implemented by authorities)

5. The problem of how to realise more radical change needs probably the most

attention. A systemic view and the use of sophisticated policy mixes are

needed to overcome the ‘lock in’s’ that both industries as consumers face

preventing them often to realise more than incremental changes. Examples

are e.g. the high sunk costs in specific industries (e.g. the chemical industry

which cannot shift quickly to producing other chemicals) or life patterns of

consumers (simply having work and house apart, making commuting an

essential element of life). Initially one may consider R and D support to make

breakthrough technologies cheaper, stimulating front runners, embarking on

joint learning by doing approaches, whereas later on more stringent

instruments such as minimum performance standards or financial incentives

can be considered.

The literature review also gives clear indications when instruments do not work

effectively together:

1. Administrative standards and financial instruments (the administrative

instrument determines already in full what action a regulated company has to

take, and the financial instrument does not add value)

2. Administrative standards and negotiated agreements (unless used in

sequence – in principle the negotiated agreement is aimed at, but

administrative standards are to be applied should the negotiated agreement

fail to reach its objective).

3. Financial instruments and negotiated agreements (idem)

4. Duplication of informative instruments (most notably proliferation of product

labels) leading to confusion about environmental performance of products

5. Duplication of policies and instruments at different administrative levels

(leading to incoherent demands by different administrative levels)


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Figure 2.1: Push and pull interventions addressing the full pool of products in a

specific market with different sustainability performance (from a presentation of Bob

Ryder, DEFRA, Prague, October 2008)

Figure 2.2: Market penetration of cold appliances with different energy performance

labels over time in the EU (Munasinghe et al., 2009)

2.2.6 Impact on implementation rates

Form the above one can see that particularly mandatory and voluntary instruments

serve different purposes and have a different character. Mandatory administrative

instruments are a ‘stick’ punishing the laggards on the market, by banning products

and processes with the lowest performance. By the very nature of the instrument,

they need an assessment if the majority of producers can comply with them without

excessive costs. Particularly if one wants to realise true radical changes, these

usually are not the instruments one uses in the initial stages of the change process:

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the level of change aimed at simply is too big2. A clear advantage of mandatory

administrative instruments is obviously that if the instrument is well designed and

well enforced, 100% compliance can be expected.

Instruments stimulating the top end of the market and rewarding industries that

really try to change the market need different support. This must come by nature

from softer instruments like labelling, GPP, tax incentives, etc. Often such

instruments are perceived as weak and ineffective. Unfortunately structural

assessments and comprehensive monitoring of the effects of such softer measures

lack (cf.Golden et al., 2010)3. Having said this, practice shows however that such

instruments can have significant impact (TNO and BIO IS, 2012):

Voluntary certification of sustainable forestry, refleced by the Forest

Stewardship Council (FSC) and the Programme for the Endorsement of

Forest Certification schemes (PEFC), in 2010 covered around 91 Mio ha of

the around 120 Mio ha of forests in Europe (75%)

Utz Certified, Max Havelaar, and similar voluntary certification schemes for

sustainable coffee reached in 10 years a current market penetration of

around 50% in the Netherlands

All PVC producers in Europe have signed up to the VinylPlus voluntary

agreement and its predecessors, which stipulate very stringent emission

limits, the ban of harmful stabilisers based on lead, and significant targets

with regard to post-consumer PVC recycling.

Factors contributing to this success were in the case of PVC the public pressure n

the PVC industry, and in the case of forestry and coffee a smart targeting of the

certification scheme on key actors in the chain like retailers and coffee roasters who

wanted to avoid reputation damage, in combination with the relatively low technical

implementation costs of the scheme (TNO and BIO IS, 2012). Hence, we feel that

the cases above lead to a fairly robust conclusion that labelling if enhanced by

GPP, voluntary agreements with powerful actors in the chain, tax exemptions, and

information campaigns can be a successful means of market transformation.

2.3 Modelling in the project: EXIOMOD combined with LCA/LCC

This project will model the impacts of improvement options and policy instruments

with a hybrid modelling approach. This approach is schematized in Figure 2.1. It

combines three modelling approaches by integrating elements of Life Cycle

Assessment (LCA) and Material and substance Flow Analysis (MFA) approaches

into the EXIOMOD CGE model, based on the EXIOBASE Supply and Use Tables.

Besides EXIOBASE, we will make use of the EU buildings stock database from

2 At best one can agree with industry on a long-term system of setting progressively more stringent

standards, so that industry gradually can adjust itself to change. The EU regulations on emission

standards for cars and trucks are a clear example of this. 3 For instance, he EU Ecolabel website provides just information on the number of licences, but

does not give information on which fraction of the number of products on the EU market in a

specific category, or which fraction of the value sold on the market, is covered by an EU Ecolabel.

Both the European Data Centre on Natural Resources and Products as the work of the EEA on

SCP Indicators recognise the value of such monitoring, but are unable to provide indicators or

quantitative information on market penetration. And finally, the (large) FP6 and FP7 studies on

SCP and policy instruments listed in Box 3.1 in chapter 3 usually did not do quantitative analyses,

despite the significant resources such projects had available.


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IMPRO Building study, based on a unique inventory of building and infrastructure

stock from all over Europe. This study defines building models that are the most

“representative” buildings for the EU-25, analyses the life cycle impacts of the

different building models and identifies the environmental hotspots. A simplified

version of this dataset will be incorporated into EXIOMOD model in order to

facilitate the link between the detailed changes in the housing and infrastructure

stock and their more aggregate economic, social and environmental impacts. We

propose to simplify the database such that buildings will be differentiated according

to their energy efficiency classes in order to facilitate comparison between EU

members.

It can thus be used to evaluate the macroeconomic and sectorial impact of

alternative scenarios and gives information on, among others, resource use and

labour inputs by industry or by consumption category. The high level of sectorial

detail in EXIOMOD (130 sectors) allows for concentrating the attention on key and

potentially promising economic activities such as green technologies.

Figure 2.1. Schematic representation of the hybrid assessment framework

The Computable General Equilibrium (CGE) framework is the basis of EXIOMOD.

The principles of this model are extensively describedin Topical Paper 3. The

essence of the model is assessing how aggregate agents make decisions drive by

optimization of maximization of utility or minimization of costs. Currently CGE

models are not capable of including the macro-economic responses to softer

incentives like information provision, cultural elements,This simply is since CGE

models are based on theories and statistical information with regard to financial

incentives (via price elasticities). We hence need to model improvement options

and policy instruments in a differentiated way:

Financial instruments. Financial instruments, particularly taxes and

subsidies can be implemented and endogenized in the model itself. For

instance, one can simulate the impacts of a resource tax or a subsidy on

resource-efficient products or technologies. This will change prices and with

the elasticities in the model one then can assess to what extent such price

changes will lead to different buying or investment behaviour. The model in

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- Environment

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related to resource

efficiency options


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essence hence calculates what how financial instruments influence the

technology and product mix used in society.

Technical improvement options and supportive administrative and

informative instruments. It is possible to use the CGE model too to

calculate the macro-economic impacts of bottom-up improvement

scenarios: pre-defined technical improvements that will improve resource-

efficiency with regard to buildings, utilities, and infrastructure. These

technical improvement scenarios are however exogenuously formulated,

i.e. not determined by the model, but imposed on the model. The technical

improvement costs and – benefits of these options are input to the model.

But next to this, it obviously also has to be assessed which administrative

and informative instruments will support implementation of these technical

improvement options. The costs of such administrative and informative

instruments for business and authorities as well can be included in the

modelling.

We must hence do a separate analysis which instruments are needed to have such

options implementated and imposed on the model. This then requires

- An overview of the list of improvement options considered, and their

implementation costs and benefits (which is the subject of topical paper 4);

- An analysis of instruments supporting implementing such options, including

an indication of (administrative) costs to be made for authorities and

businesses if these are significant compared to costs of technical

implementation (which is the subject of this report)n.

In the next section we hence discuss in brief the technological improvement options

considered in the exogenuous improvement scenarios, before discussing in chapter

3 the specific policy packages required.

2.4 Improvement options considered in the project: exogeneous input to

EXIOMOD

The technical improvement options have been selected in a number of steps. First,

Topical paper 2 has identified a number of main strategies for realising resource-

efficiency in the Built environment. These options have been discussed in a

stakeholder workshop for the project on 12 September 2012, in which the

stakeholders via a moderated process came up with an own list. These lists largely

overlapped, and led to a consolidated list of improvement strategies that are central

in Topical paper 4, which elaborates the environmental and cost implications at

micro-level for these options. It is for these clusters of improvement options that this

Topical paper 5 will have to identify the most appropriate supportive policies:

Design for deconstruction

Increase durability and service life of products

Increase recycling of waste at end of life

Increase renovation rate

Increase use of recycled material

Intensify use of buildings

Reduce land used by the built environment (intensification)

Reduce construction waste arising

Select materials with low impact

Use construction materials more efficiently


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3 Policy instrument mixes to be included in the modelling

3.1 Introduction

There is no shortage of reviews of policy instruments related to resource-efficiency

and similar topics that can be used as a basis for such an analysis, see Box 3.14.

Box 3.1: Studies inventorying and/or evaluating the effectiveness of policy instruments

FP6-funded studies on SCP, in particular SCOPE2 (Sustainable Consumption Policy Effectiveness Evaluation; Lorek et al, 2009; Tukker et al., 2009) and ASCEE (Assessing the potential of various instruments for sustainable consumption practices and greening of the market;(Rubik et al, 2009), and SCORE (Sustainable Consumption Research Exchanges; Tukker et al., 2008)

FP7-funded studies on SCP (e.g. EUPOPP: Adell et al., 2010, etc)

FP7 studies on reduction of energy use from a consumption perspective (BARENERGY and Changing Behaviour)

European Environment Agency studies: SCP country fact sheets Europe and Resource Efficiency in Europe (with country fact sheets) (http://scp.eionet.europa.eu/facts/factsheets_scp, accessed 20 December 2012)

OECD work on SCP and product policy, with reviews on policies for SCP and eco-innovation (e.g. OECD, 2011)

Studies at the Member State level, such as the 4E approach developed by DEFRA (DEFRA, 2010, SCR, 2006)

Other studies such as the ones commissioned by the EC and German Ministry of the Environment e.g. IOW for environmental product policy for the EC, GTZ/CSCP study on SCP and Resource efficiency, (GTZ, 2006; 2008), etc

European Environment Agency (2011a). Resource Efficiency in Europe. Polices and Approaches in 31 EEA member and co-operating countries. EEA, Copenhagen, Denmark

IPTS (2012): Analysis of the future application of product policy instruments in the EU, IPTS, Sevilla, Spain

A large number of impact assessments on policy proposals put forward by the EU

Based on the analysis in chapter 2, we discern two types of policy instruments:

financial instruments that will be endogenuously modelled (i.e. are part of the

modelling), and instruments that are needed to support implementation of

improvement scenarios. In this chapter we will discuss the policy instruments and

mixes, discerning these two categories. The analysis will be done as follows:

Endogenuously modelled improvement options: policy instruments part of the

modelling (taxes and subsidies)

As indicated, only taxes and subsidies directly related to products and production

processes normally are included in modelling with CGE and similar models. A

specific problem for this project is that the EU has no mandate to implement

financial instruments; this is the prerogative or the Member states. In view of the

analysis in chapter 2, we propose to analyse however the following financial

instruments as a part of the modelling (discussed in more detail in section 3.2):

a) The database underlying EXIOMOD, EXIOBASE, includes an assessment

of external costs related to emissions. We can relatively easily include in

4 A general weakness of many of the studies listed is however that they usually are inventories,

and only give limited empirically based information on the effectiveness and cost implications of

the instruments.


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one of the improvement scenarios the assumption that these external costs

are added as costs to the production processes at stake, and analyse the

implications on economic output, emissions, and resource extractions.

b) Using the literature mentioned in Box 3.1, we further can evaluate which EU

member states have implemented financial instruments to support resource

efficiency, and include some of the most promising ones in the modelling

exercise.

Exogenuously modelled improvement options: policy instruments as boundary

conditions to ensure implementation

As indicated, the policy instruments under this category have for the modelling

exercise a different function than the instruments included in section 3.2. The

analysis here is only partially used in the modelling exercise itself5. Rather, it is to

analyse which policy instruments the EU and Member states would have to deploy

to make plausible that the technical improvement scenarios indeed will be

implemented, a point clearly echoed during the stakeholder meeting on 12

September 2012 part of this project. We have addressed this point as follows:

Take this list of improvement options and their estimated technical

implementation potential from Topical paper 4 as a starting point. Include

the technical implementation costs assessed in Topical paper 4 in

modelling.

Analyse for each improvement option, which policies are needed to support

the implementation levels of these options suggested in Topical Paper 4.

Indicate on the basis of the available evidence (using the literature in Box

3.1) what is the most effective policy mix and, analyse the additional

administrative costs for authorites and societal actors6.

Use the technical implementation costs and the administrative

implementation costs as input to modelling.

3.2 Financial instruments

3.2.1 Introduction

One of the main problems identified in the Roadmap for a Resource Efficient

Europe (COM 2011a, p2) is that ‘“our economic system still encourages the

inefficient use of resources by pricing some below true costs”. This makes the

assessment of the impact of financial instruments very relevant – since if resources

would be prices more appropriately, this could help realising the goals of this

Roadmap. We will consider two types of simulations reflecting improved price

incentives:

5 Distelmann et al. (2010) for instance state in their extensive MaRess modelling report: “An

analysis of specific characteristics of such [informative] instruments is nearly impossible because

the empirical information about its direct impacts is missing. Therefore, it is not possible to model

these instruments. 6 Administrative costs are costs other than investments in technical hardware. An example related

to the Industrial Emissions Directive: investment in e.g. emission reduction technologies are seen

as technical implementation costs. The costs made by companies for applying for permits and any

required reporting and monitoring to authorities are seen as administrative costs for industry. The

costs for managing a permitting system and enforcement are seen as administrative costs for

authorities.


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1. EXIOPOL and EXIOMOD have calculated the external costs related to all

emissions included in the database. We simply can add these costs as ‘real

costs’ to the various sectors creating them, as a part of a scenario.

2. We further can model a generic budget neutral shift of taxes from labor to

resource use, and simulate the impacts on resource use. The difference

with 1) is that the tax has no clear relation with environmental damage

created by use of the resource.

The approach is explained further in the next two sub-sections.

3.2.2 Inclusion of externalities of air emissions

The EXIOPOL database, EXIOBASE, covers 129 economic sectors per country,

and also includes for these sectors data for around 40 emissions to air, water use,

land use and primary resource extraction.

In the EXIOPOL project the external costs for the 40 air emissions have been

estimated. External costs for other possible impacts (e.g. of emissions to water and

resource extraction) were not calculated7. For all these emissions, external costs

have been estimated, specified by type of emission, sector of emission

(differentiation between stack hight which influences distribution of pollutants), and

if the emission source is in rural or urban areas (influences the number of

receptors), and country (which influences the affected population density and how

emissions are distributed over Europe). This method was developed by the Institute

of Energy Research (IER) of the University of Stuttgart, one of the leading institutes

in externality research. For the first time, there is now a method that allows

calculating external costs in relation to air emissions in an EE IO format, which

specifies such emissions only in a limited way temporarily (per year) and

geographically (per country, and hence additionally, if the emissions take place in

rural or urban environments). This method hence now allows calculating the

externalities by sector by country. We summarize the method for calculating

external costs of emissions in more detail in Annex 1 to this report. The results of

the EXIOPOL project suggest show that the total external costs from the 40 emitted

substances are dominated by substances causing respiratory effects (VOC, PM2.5)

and greenhouse gases. .

One of the simulations we now easily can do with the EXIOMOD model the

following: that the sectors that create external costs, would be taxed for this amount

of external costs. The level of the tax will vary between the sectors and correspond

to the level of economic damage per one unit of output by the sector. While not

primarily a financial measure aimed at resource-efficiency improvements, it is

interesting to see what influence such an internalisation of externalities would have

in terms of changes in resource use.

7 For water this is due to lack of consistent global data on emissions to water, which hence not are

included in EXIOBASE. For resources there is a fundamental debate among resource economists

if resource extraction creates externalities. One school suggests that (future) scarcity one way or

another will be included in market prices, implying no external costs are at stake. Another school

suggests that market imperfections imply the price of resources do not reflect future scarcity and

that hence prices under-estimate real costs of resource use (cf. Müller et al, 2010).


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Internalisation of external costs will be implemented under the assumption of

budget neutrality. We will assume that additional tax revenues are used by the

governments either as investments into mitigation of environmental damages of

GHG emissions and pollution or as additional costs for covering the damages

associated with GHG emissions and pollution to vatious sectors and actors in the

economy.

3.2.3 Environmental tax reform: budget-neutral shift of taxes from labor to

resources

The inclusion of the specific externalties as calculated in EXIOPOL is in fact an

example of the broader ongoing discussion on a potential Environmental Tax

Reform (ETR). Such an ETR aims at shifting the tax burden from labour towards

environment or property which is seen as less detrimental to growth, assuming

budgetary neutrality (e.g. EEA, 2005; 2006, and 2011b). ETR is a prominent

agenda topic for the EC and other international organisations, such as the OECD

(2010). For instance, in their review of the EU Sustainable Development Strategy

the Council of Ministers stated8:

“Member States should consider further steps to shift taxation from labour to

resource and energy consumption and/or pollution, to contribute to the EU goals of

increasing employment and reducing negative environmental impacts in a cost-

effective way.”

ETR until now has been mainly researched, analysed and/or applied in the area of

energy use and emissions (e.g. EEA, 2011b). Taxation with the aim of supporting

resource-efficiency is still infrequently applied.Table 3.1 gives some examples of

latter from EU27 countries. A recent review of the EEA Topic Centre on SCP

(2012:13) gives four argumens in favour of resource taxation:

Reduction of import dependency and promotion of efficiency;

Compensating for external effects not reflected in resource prices;

Compensating for lack of intertemporal allocation (i.e. ensuring future

generations still have access to resources)

Simulations suggesting that a shift from income to resource taxes

encourages employment and economic growth on the long run (e.g. Groth

and Schou, 2007)

Problems with ETR, as with many forms of taxation, is that social and political

acceptability is usually low. Social concerns however may easily be addressed by

targeted subsidies to those most vulnerable or by applying progressive tax regimes

for e.g. energy that avoid a relatively high burden on poor households. A point of

attention is that taxation is the prerogative of Member States, rather than the EC. A

specific problem with ETR that shifts taxes to energy and resource use is the

danger of ‘leaking’, i.e. that European companies will end up paying more for their

energy and resources and thus may be compelled to move abroad, or that imports

made with untaxed resources and energy may substitute domestic production.

8 Para 23, Review of the SD Strategy, Council of Ministers, 9 June 2006).


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Border tax adjustments in theory can level this playing field, but have a large

number of problems of its own9.

Different forms of resource taxes can be thought of – a general, global resource tax

(any extraction of any material faces a same tax rate per ton, with a border tax

adjustment for imports from countries that do not yet tax extraction); an extraction

tax (based on used material content, used extraction, or used and unused

extraction); a material input tax (levied on any materials from both domestic and

foreign sources entering domestic production for the first time); a consumption tax

(based on the amounts of non-renewable resources embodied in final consumption

products). The EEA Topic Centre on SCP (2012) found that the consumption-based

tax is least preferable, given the immense complexity of the required detailed

assessment of materials embodied in products for final consumption. The other tax

forms (particularly an extraction tax) are less problematic, but to create a level

playing field they need to be complemented with some form of Border tax

adjustment for building products that can easily be imported and exported.

Fortunately the low value per ton and hence relatively high transport costs imply

that building materials usually are not transported internationally in large volumes.

Some authors further suggest that taxing natural resource output or use is a

‘second-best’ policy, only to be applied where monitoring of emissions (that cause

the ultimate damage that should be controlled) is impractible or where efficient and

just property right regimes (that should ensure fair access to and use of resources)

cannot be established (Söderholm, 2011). More in general one sees that

environmental taxes, while applied in many countries, usually have a low share in

overall tax revenue, e.g. around 6.4 % of total taxes or around 2.4% of the EU GDP

(Eurostat, 2011, p24; OECD, 2010). A clear understanding how revenues from ETR

are used, and that this ultimately may give more societal benefits as existing forms

of taxation, is essential to overcome this acceptability gap. This is particularly true

for sectors who face a higher direct tax burden due to such tax reform and who

would like to understand how their competitiveness is affected or how other tax

reliefs may compensate them (e.g. Aidt, 2010). The type of modelling foreseen in

this project would be an example of such an analysis.

Such specific assessments of the impacts of an ETR in the field of energy and

emissions are plenty, but are few and far between in the field of resources.

Exceptions are the following:

In the German MaRess10

project, the consultancy GwS assessed a.o. the

impacts of a building resource tax in Germany. It was assumed that in 2012

a tax of 2 Euro per ton of extracted and imported building materials would

be introduced, rising with 5% per year to 4.80 Euro in 2030. This would

9 BTAs have been discussed as complement to the European Emission Trading Scheme (ETS).

Compatibility with WTO rules and impact on trade relations, however, are an issue. And compared

to a BTA based on embedded carbon or energy use, a border tax compensating for an EU tax on

resources in general would create additional complexities. One then has to assess the

(externalities per) specific amount of resources embodied in the (life cycle) of imported materials,

semi-finished goods, and final products, which is far mor complicated as the already complex issue

of assessing carbon embodied in trade with a reasonable uncertainty (e.g. Peters et al., 2012;

Tukker and Dietzenbacher, 2013) 10 MaRess is the abbreviation of Material Efficiency and Resource Conservation, a 3 year German

research program on resource-efficiency led by Wuppertal Institute with support of some 30 other

research institutes and industries, finalised in 2010.


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reduce the consumption of non metallic minerals by 15.5% and total

domestic extraction by 9.7%.

In the so-called PETRE project, the following findings were calculated with

GwS’s GINFORS model11

. A tax reform at EU level that would put a 5% tax

on energy and resources in 2010 and up to 15% in 2020, would lead to 5%

less material consumption in 2020, particularly for construction minerals

and ores (Barker et al., 2011; compare EEA, 2011b).

With regard to the tax level that is chosen, the following can be observed. In

energy- and emission related ETR studies often a pre-determined emission

reduction goal is set, and then the model runs are used to analyse at which level of

taxation the goal is met12

. The scarce examples where resource taxations have

been modelled, simply seem to have used tax levels that have been set in a

relatively intituitive way. They also all seem to have used the simple principle of a

general resource tax on material input (i.e. materials are taxed irrespectively if they

are mined abroad or imported, but there is no BTA for resources embodied in

product imports assumed). Given the lack of formal resource use reduction targets,

modellers tended to chose not too extreme tax reform levels resulting in still

meaningful changes in resource use compared to a baseline scenario.

We propose such an in essence ‘trial and adjust’ approach as well in this project,

and focus it strictly on building materials. We suggest using the taxations applied in

the German MaRess project as initial input (i.e. 2 Euro per ton of extracted building

materials, rising to 4.80 Euro in 2030). These taxation levels are in the same ranges

as the aggregates tax in Czech Republic, Italy, Sweden and United Kingdom which

range from from about 0.1 €/t to 2.4 €/t (EEA, 2008). They hence seem a good

starting point in the simulations13

.

Also here we will assume budget neutrality. We will assume that additional tax

revenues are used by the govenrments to reduce tax on labor.

11 In 2007, the Anglo-German Foundation (AGF) commissioned the Resource productivity,

environmental tax reform and sustainable growth in Europe' (petre) project. Its aim was to assess

the impacts of a large scale ETR in Europe designed to achieve the EU’s 2020 Greenhouse

reduction targets. See www.petre.org.uk or Ekins and Speck (2011). 12 See for instance EEA (2011b) and Ekins and Speck (2011): the goal was to reach 20%

reduction in GHG emissions by 2020 as also adopted by the EC. Using this goal a carbon tax rate

was calculated that realised this target, and after that economic impacts under different tax

recycling scenarios were assessed. 13 It further could be interesting to look at the additional impacts of a landfill tax – a report using the

UK as case shows that a combination of an aggregate tax and landfill tax makes recycling of

construction and demolition waste financially attractive. Macro-economic models, even as detailed

as EXIOMOD, have a poor representation of the waste management system however. We hence

are hesitant to commit to modelling the impacts of a landfill tax with the model. See:

http://ec.europa.eu/environment/enveco/taxation/pdf/report_phasing_out_env_harmful_subsidies.p

df,

http://ec.europa.eu/environment/enveco/taxation/pdf/report_phasing_out_env_harmful_subsidies.pdf

http://ec.europa.eu/environment/enveco/taxation/pdf/report_phasing_out_env_harmful_subsidies.pdf


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Table 3.1: Examples of resource related financial instruments applied by EU

member states (EEA, 2008 and 2011a; ETC SCP, 2012)

Country Name Minerals covered

Czech Republic Quarrying charge Tax on aggregates like

sand, gravel, stone

Cyprus Payments for mineral

extraction

Quarrying charge

Denmark Payments for mineral

extraction

Raw material tax on a

variety of building

minerals like gravel,

sand, clay, etc.

Estonia Mineral extraction tax See Denmark

France Extraction of Aggregates Tax on aggregates like

sand, gravel, stone

Latvia Natural resource tax Tax on a variety of

materials like lime,

cement, sand ,rock

gypsum, etc.

Sweden Natural gravel tax Tax on extraction of

natural gravel

UK Aggregate levy Tax on extraction of

aggregates like sand,

gravel, stone

3.3 Regulatory and informative instruments supporting specific

improvement options

3.3.1 Introduction and building blocks for administrative cost assessment

Topical paper 4 defines clusters of improvement options that will be input to

economic modelling. It is not a given that such improvement options will be realised

just like that – in most cases supportive policies are required. In the next sections

we analyse such supportive policies in this chapter, for each of the main cluster of

improvement options:

1. Design for deconstruction

2. Increase durability and service life of products

3. Increase recycling of waste at end of life

4. Increase renovation rate

5. Increase use of recycled material

6. Intensify use of buildings

7. Reduce land used by the built environment (intensification)

8. Reduce construction waste arising

9. Select materials with low impact

10. Use construction materials more efficiently

In Topical paper 4 under these main headers more specific improvement options

have been indicated. An important consideration for selection of such illustrative

improvement options was the time horizon of the study (2030 with qualitative

assessments up to 2050). Givent the long life times of buildings and infrastructure

not all improvement options that have impact on the very long term will show up as


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visible improvements in this study. The most obvious one is design for

deconstruction. On the long run, it obviously has advantages that buildings are

designed in such a way that not only materials, but the individual components can

be re-used. But buildings designed and built now will have a life time of more than

50 (usually 100 or more) years. The benefit of design for deconstruction in terms of

less material use will only become visible after this time period. In Topical Paper 4

in order to ensure that LCA modelling can be undertaken with some certainty

options were selected that already could have benefits within the time horizon of

2030. In TP6 a qualitative assessment will be undertaken on technical improvement

options and accompanying policy measures in the 2050 time perspective, which will

assess how the set of top 10 technical improvement options with the assumed

highest impact would change, what the likely impacts would be and what policy

meaures would be needed to implement these technical improvement options.

As indicated in section 2.2.6 it is difficult to give precise estimates of to what extent

policies will lead to uptake of improvement options. Administrative mandatory

instruments usually lead to 100% uptake, but typically are applied to cut off

processes and products with the lowest sustainability performance from the market.

Over the time horizon of this study – 20 years and more – it simply is difficult to

estimate to what extent there is political will and societal endorsement for

progressive, strong mandatory measures that could lead to 100% uptake of the

options that are technically feasible. Having said this, section 2.2.6 also indicates

that voluntary instruments usually applied for the market top end can lead to

compliance rates of over 70%, as in the case of forests certified with FSC an PECF

logos. As for the scenarios to be built in Topical Paper 6, we feel hence the best

approach is to use a maximum uptake scenario in which the technically maximum

feasible improvement rates are reached, supported with the instruments mentioned

here, and an ‘in between scenario’ that assumes that for instance where we

propose voluntary instruments at best 50% uptake is realised. More specific levels

of uptake will be discussed in Topical Paper 6.

Topical paper 4 already gives the actual costs and benefits of measures, that will be

input to the economic modelling. As indicated, the aim of policies is to support

implementation of such measures and the policies as such will not be input to the

modelling. The aim is to make plausible that with a specific policy package the

measure will indeed be implemented. The only additional factor that can be

modelled are the administrative costs for industry and government related to such

measures. As already indicated in section 2, we define administrative costs all costs

made by companies and government other than investment in technical hardware

to meet a policy target. For instance, investment in emission reduction reduction

technologies are seen as technical implementation costs. But the costs made for

companies for e.g. applying for permits and reporting to authorities are seen as

administrative costs for industry, The costs for setting up a permitting system and

enforcing it form administrative costs for government.

Both an assessment of technical costs of improvement options (done in Topical

Paper 4) and an assessment of administrative costs of policies that stimulate such

improvement options is relevant. We hence made below a quantitative inventory of

typical administrative costs related to specific policy instruments, as given in

existing EU Impact assessments. We review administrative costs related to

instruments such as ecolabelling, Green public procurement, permitting, etc. which


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also will be the building blocks of policy packages further discussed in chapter 3 for

specific improvement options. This section hence provides basic building blocks for

the administrativc cost assessments in the next sections.

Green Public Procurement (GPP) schemes

The impact assessment on GPP concluded the following with regard to

administrative costs14

:

Start up administrative and organisation costs for authorities: 223-295 Euro

per 1000 inhabitants for a period of 2-6 years. These costs are not

permanent, but mainly for changing procurement practices. These costs

would enable a comprehensive GPP practice for the authorities involved.

For Europe as a whole (500 Mio people) implementing GPP in general

hence would require a once off investment of some 100 to 150 Mio Euro.

Public procurement in the field of built environment is only a limited part of

this – on the basis of a quick scan of Tenders Electronics Daily, that

contains all public tenders in Europe, we would suggest allocating half of

such costs to to procurement in built environment would be a gross

overestimation. To be at the safe side, we however will assume that half of

these costs (50-75 Mio Euro) are needed to implement GPP practices

related to built environment in the EU27.

Administrative costs for companies: will not change. Companies wil simply

have to respond to a different set of procurement criteria. Also, there is no

reason to assume SMEs will be disadvantaged. It is however important that

GPP criteria will not differ between procurement authorities or Member

states, since otherwise firms would need to prove complicance with

different sets of criteria and hence additional administrative costs.

EU Ecolabel

The Impact assessment on the EU Ecolabel scheme made the following

administrative cost estimates1516

Criteria development: 25.000 Euro for the regulator and 25.000 Euro for

stakeholders. The impact assessments estimated costs for criteria

development likely to be in the range of 25.000 Euro excluding overheads

and travel,which are another 25.000 Euro, roughly divided 50-50% between

o Authorities for criteria development (25.000 Euro), assuming

underlying studies are available. Otherwise several 100.000 Euro

may be needed for additional studies.

o Stakeholders for participating in ad-hoc working groups (25.000

Euro)

Tests: 1,000-10.000 Euro per product application. Costs of tests for

Industry for applying for an ecolabel are likely to be in the range of 1,000 to

14 Commission staff working document accompanying the Communication from the Commision to

the European Parliament, the Council, the European Econmic and Social Committee and the

Committee of the Regions. Public Procurement for a Better Environment. Impact Assessment

{COM(2008) 400 final} {SEC(2008) 2125 and 2126} 15 Commission staff working document accompanying the Proposal for a Regulation of the

European Parliament and of the Council on a Community Ecolabel scheme. Impact Assessment

{COM(2008) 401 final} {SEC(2008) 2119} 16 For fees, these depend on the ‘competent body’, i.e. the ecolabel organisation in the country

where application takes place. See http://ec.europa.eu/environment/ecolabel/how-to-apply-for-eu-

ecolabel.html


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10,000 Euro. There is likely to be an overlap with testing needs ofr the

Ecodesign Directive of 20-30%

Application fee: up to 1200 Euro (lower for SMEs and micro enterprises)

Licence fee: up to 1500 Euro per year (lower for SMEs and micro-

enterprises)

EU Ecodesign directive

Various impact assessments estimate the administrative burden for bringing large

electrical and electronic products under the Ecodesign directive as follows17

:

0.5 Mio Euro: setting up a legal framework (EU)18

0.25-0.5 Mio Euro/annum: surveillance/enforcement costs, based on some

50-100 model tests per year (EU member states);

Up to 2000 Euro per model duty testing (Industry). Total costs for initial

market transformation will depend on depend the amount of types/models

on the market (e.g. 10 Mio Euro with 5000 models). Subsequent annual

costs depend on the catalogue life of a model; if models are replaced e.g.

every 4 years this will be in this example around 2.5 Mio Euro.

Such costs however are deemed negligible for products like directional and LED

lamps, tumble driers, water pumps, air conditioners and comfort fans, large fans

125W-500kW), washing machines, and dishwashers19

. Industry was already

obliged for such products to provide efficiency, performance or conformity data for

similar parameters as required by the Ecodesign Direcitve on a regular basis, and

bringing such products under the Ecodesign directive then does not imply additional

costs. Since the Ecodesign directive is a Regulation directly applicable in Member

states, there will be no costs for transposing rules in national legislation. While there

may be some additional costs for surveillance testing and performance, for these

products this is not deemed significant since some form of surveillance testing is

already done.

Permit systems

The impact assessment of the Recast of the IPCC directive (SEC(2007) (2007)

1679, p154 and further; which lead to the replacement of the IPCC directive by the

Industrial Emissions Directive) gives an extensive analysis of costs of direct

regulation via permitting. It found hower that validated data were extremely hard to

come by. Below we give estimates of a permit system, divided in once-off costs for

authorities and operators when a new permitting system is put into place, costs for

permit revisions, and annual management / maintenance costs as well as any

reporting costs. These costs are for new permitting systems in situations where a

permitting system does not yet exist. Obviously, for industries already subject to a

permitting regime no additional costs for operators and authorities are at stake20

.

17 Impact assessment on the voluntary ecodesign scheme for imaging equipment {COM(2013) 23

final} {SWD(2013) 14 final}; idem for Set top boxes, {COM(2012) 684 final} {SWD(2012) 392 final} 18 Since the Ecodesign directive works directly, it avoids that member states have to put effort in

transposing this into own regulation. 19 Impact assessment of SWD(2012)419 (LED lamps and directional lights), SWD(2012)289

(Household tumble driers), SWD(2012) 35 final (Air conditioners and comfort fans), SEC(2011)

384 fina (large fans); SEC(2010)1354 (Household washing machines); SEC(2010) 1356

(Dishwashers) 20 These estimates are for around 2007, but with the low inflation in Europe current costs may at

best be 10% higher wich is well within the uncertainty range of such cost estimates.


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Once off cost to authorities

Minerals €4.300 – 21.000

Energy €4.900 – 21.000

Metals €4.300 – 11.300

Chemicals €6.500 – 29.100

Agriculture €2.700 – 7.500

Waste €4.900 – 17.800

Other €4.300 – 16.200

The costs above are for new permits for companies not yet subject to a permitting

regime. Permit renewals / reconsiderations are assumed to be 50% of these costs.

Obviously, for industries already subject to a permitting regime no additional costs

are at stake.

Once off cost to operators

The Impact Assessment estimates pure administrative costs to operators on 50% of

those of authorities. . However, for assessing the best way of compliance (i.e.

analysing impacts, analysing which BAT to apply) an extra factor 3-4 costs may be

needed, i.e. resulting in total administrative costs of 200% of those of authorities in

case of application for a new permit (i.e. 2 times the costs listed above under

authorities).

Costs for a permit revision will be 50% of this. They are 50% of the costs for

revision made by authorities if no assessment of emissions or BAT (i.e. 25% of the

costst listed above under authorities).

Annual costs to authorities and operators

Next to once-off costs, there are annual administrative costs to authorities, which in

the impact assessment on the recast of the IPCC Directive are estimated on 4000-

6000 Euro per annum per installation.

The annual monitoring and reporting costs per installation for operators are

assumed to be in the same order of magnitude.

Costs for reporting obligations of Member states to the Commission

Next to this, in this specific case there are reporting obligations for EU Member

states to the Commission about emission values and implementation reports (every

3 years). Costs for this were estimated at 670000 Euro for some 52000 installations

under the Directive, or some 15 Euro per installation (5 Euro per installation per

year).

3.3.2 Design for deconstruction

Description of the option

Maximum resource efficiency can be obtained from materials at end of life if they

can be recovered in the most efficient way. Design for deconstruction means that

materials can be easily separated at the end of life, so ensuring that there are no

barriers to recycling the material into the highest value solutions rather than

downcycling or landfill for example.


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Topical paper 4 considers however one specific form of design for deconstruction,

i.e:

Change from adhesive fixing to magnetic fixing of flooring

The advantage of this type of flooring is that it avoids using VOC containing

adhesives and maintains a healthier environment. This type of flooring is offered in

the form of tiles, particularly for operators of utility buildings. Potential advantages

from a resource-efficiency perspective are:

It is possible just to renew parts of the flooring subject to a high level of

wear and tear, rather than a full floor;

if flooring is renewed for reasons of fashion or a need to refurbish a space,

before the flooring is worn out, the old tiles can be used again in another

context.21

Supportive policy alternatives

The change from adhesive fixing to magnetic fixing of flooring is a classical example

of sustainable product innovation. As reflected by figure 2.1, typical policy packages

to make product mixes on the market more sustainable are:

Regulatory – obligatory: setting minimum standards for the low end of the

market. This would require implementation of the equivalent of an

Ecodesign directive or Energy performance requirement directive that sets

minimum resource performance standards for products.

Regulatory and informative– voluntary: creating incentives that reward the

top sustainability best performing processes and products (‘top runners’).

As reflected by figure 2.1, this typically implies the application of

ecolabelling and GPP.

Discussion of policy alternatives

The change from adhesive fixing to magnetic fixing of flooring is a quite new

invention and tha vast majority of the flooring products on the market still rely on

adhesive fixing. Strong regulatory instruments like setting minimum standards are

mostly applied in a situation where the majority of the market already has moved to

production of good performing products, and where a situation exists where

‘laggards’ have to be given an incentive to improve products with a very low

sustainability performance. This is not the situation in the current flooring market; it

hence seems at this stage not yet appropriatet to formulate e.g. a ban on offering

flooring that has to be fixed with adhesives.

The strategy hence has to be to create awareness in the market for this better

solution, and to award the ‘top runners’ in the market applying this already. This

then in due time can create a situation on the market where the more hard

regulartory approach can be applied, that would prescribe magnetic fixing as a

minimum standard for flooring products22

. In a study on product policy for DG JRC

21 http://www.interfaceflor.co.uk/web/Products/iobac_installation/what_is_iobac 22 The only clear argument to invervene in the market now is if adhesives used would cause health

and environmental problems. Then the Limitations Directive for Dangerous Substances and

Preparations 76/769/EEC could be used to ban specific flooring adhesives from the market, like for

instance has been done with dichloromethane containing paint removers. It is however unclear I

this instrument could enforce application of magnetic fixing – adhesives that have no or very


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IPTS, TNO and BIO IS (2012) suggested to apply the typical ‘top runner’ product

policy mix to encourage use of flooring tiles based on magnetic fixing:

Ecolabels that include a preference for magnetic fixed flooring

GPP criteria that include a preference for magnetic fixed flooring and tiles

over carpets. Since public and semi-public authorities are an important

player in managing and maintaining utility buildings (public offices, schools,

hospitals, etc.), this instrument will cover a significant part of the flooring

market. Such GPP criteria already exist for hard/stone flooring and could be

developed as well for textile flooring23

As for administrative burdens, the following can be said on this using the general

cost analysis provided in section 3.3.1

Ecolabels that include a critertion that awards non-adhesive fixing for

flooring: in principle the following administrative costs could be at stake

o Criteria development:

25.000 Euro for the regulator per product group

25.000 Euro for stakeholders per product group.

o Tests, application and licence fee:

1,000-10.000 Euro for testing plus 1200 Euro application

fee per product brand, once-off.

1500 Euro license fee per annum

In this case however it implies adding a very simple criterion to already

existing ecolabels, so the costs for criteria development are likely to be

over-estimated. The same applies for testing: this is not needed to prove

that a flooring uses magnetic rather than adhesive fixing. Further, in the

next section we also propose ecolabels as a means to promote flooring

longevity. Since a license fee only needs to be paid once, we can neglect

the fees in this section. Overall this leads to negligible additional

administrative costs for authorities and industry.

GPP for building for deconstruction:

o at the side of operators / industry, there are probably no additional

administrative burdens. They have to make a bid in a public

procurement procedure anyway, and this process will not change.

o For authorities, these have to learn how to deal with new GPP

criteria. In general the costs for this are one-off, i.e. a learning

exercise for public authorities. This is estimated on 200-300 Euro

per 1000 inhabitants, or some 100-150 Mio Euro for Europe as a

whole (500 Mio people). It has to be noted that this concerns costs

for more thant one GPP area, so for the area of buildings we would

estimate this at most to be half of this (50-75 Mio Euro one-off

investment for having implementing all GPP procedures relevant

for built environment).

limited health and environmental impacts most probably cannot be banned under the criteria used

in that directive. 23 http://ec.europa.eu/environment/gpp/pdf/hard_floor_coverings_GPP_product_sheet.pdf.

Accessed 18 april 2013


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Suggested policy alternative and cost implications

On the basis of the above, we would suggest on the short term to support magnetic

fixing of floorings via the instruments of ecolabelling and GPP. Costs for adjusting

ecolabel criteria are assumed to be marginal, as are the testing and verification

costs. Since in the next section we also propose ecolabels as a means to promote

longevity and we calculate costs for license fees there, we neglect them in this

section to avoid double-countinng. Costs for adjustment of routines in GPP will be

one-off, in the order of magnitude of 50-75 Mio Euro EU wide. Adjustment at the

industry/operator side will be limited, since they still have to apply for permits and

projects as usual. Since building projects are usually not standard, we cannot see

that this new demand will bring major additional administrative burdens for industry

– there may be implications with regard to building costs, but that is not related to

the regulatory burden as such.

In a later stage, when the use of magnetically fixed flooring becomes more

widespread, the EU could consider to set a minimum standard based on resource-

efficiency criteria via the Ecodesign directive.

3.3.3 Increase durability and service life of products


The impact of materials that need regular replacement (e.g. road surfaces, paint

and carpets) can be reduced by increasing their service life and by improving

replacement processes to maximise recycling and reduce waste.. Illustrative

examples included in TP4 are24

:

Flooring: Increase durability of carpets from 7 to 9 years through reducing

pile depth and fibre technology.

Paint: increase typical durability of paint from 5 to 6 years.

Road Asphalt: double the durability of existing high-friction surfacing with

hot asphalt (4 year service life) by swapping to cold asphalt (8 year service

life).


It has to be noted that technically the three examples for which durability can be

enhanced are quite different. The markets related to these options are also quite

different:

Carpets are relevant for actors owning or renting offices and houses

Paint is mainly relevant for owners of offices, houses, and infrastructure

Asphalt is mainly relevant for managers of road infrastructure, usually

authorities.

24 Often when stimulating life time extension of products “fashion” must also be accounted for as,

items may not only be replaced because they wear out. This is for instance the case for clothes

and electronical equipment, This factor is less relevant for the products discussed here, particularly

road asphalt. House painting is a major job that usually only is done when for technical reasons a

new paint layer is required. The same applies for flooring – changing it is a major job only done

when really needed. Probably the main reason for flooring to be removed before its end of life is

when a new tenant takes over a house or office and has a different taste as the old one, or if the

new tenant simply wants to use the opportunity of having an empty space to start with new flooring

that still has a full service life ahead.


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Particularly for carpets and paint it is difficult for a producer to make transparent that

they offer a product with a longer life span. Users hence are not encouraged to buy

the highest quality product even if that is cost effective, since they have no or no

impartial means of verifying the higher product quality. They hence stay unaware of

this benefit. For asphalt, this problem is less pronounced since professional

managers of road infrastructure usually are acquainted with at least the cost

advantages of different road maintenance options. Unawareness of the

environmental benefits of using cold mix asphalt on high friction road surfaces may

still play a role though.

To overcome these problems, the following instruments could be used to stimulate

diffusion of these options. For paint and carpets, the main problem is to make

benefits of higher quality transparent. One could further consider minimum

standards. This then leads for paint and carpets to the following potential

instruments:

‘Ecodesign’ alike regulations that sets minimum standards with regard to

the quality or average life time of carpets and paint

Ecolabels that include criteria with regard to long life times of carpets and

paints, so that this benefit is made transparent to buyers

Green public procurement in relation to the Ecolabel criteria, which can

promote use of such long life products in market dominated by public

authorities.

For asphalt, one would need a relatively simple awareness campaign of say 1 Mio

Euro that makes the environmental advantages of cold asphalt clear to road

managers. Since road managers almost in all cases are public authorities,

implementation then can take place via asking for cold asphalt solutions in

procurement procedures.


For carpets, we do not see easily how their increased durability can be stimulated

via a regulatory approach. This would imply implementing the equivalent of the

Ecodesign directive, but then focused on durability of products. The life time

extensions suggested in TP4 are relatively limited, implying that apparently the

quality of average carpet and paints on the market is already relatively good. It

seems hence more logical to support producers of higher than average quality

products by making the advantages of such products transparent in an impartial

way. In a report for IPTS the application of GPP and Ecolabelling focused on

product life guarantees and recycled content was proposed (TNO and BIO IS,

2012). A similar analysis holds for paints.

Ecolabels for carpets and paints






fee per product brand, once-off.


GPP for carpets and paint


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o At the side of operators / industry, there are probably no additional


procurement procedure anyway, and this processs will not change.

o For authorities, these have to learn how to deal with new GPP

criteria. As indicated in section 3.3.1, in general the costs for this

are once-off, i.e. a learning exercise for public authorities. This is

estimated on 200-300 Euro per 1000 inhabitants, or some 100-150

Mio Euro for Europe as a whole. It has to be noted that this concern

costs for more than one GPP area, so for the area of built

environment which includes carpets and paints we would estimate

this at most on half of this (50-75 Mio Euro once off investment).

As indicated, the diffusion of the use of cold asphalt would mainly need a relatively

straightforward awareness campaign focusing on environmental benefits across

road management authorities. Road management authorities then can where

relevant adjust their procurement criteria for maintenance and building of road

segments suitable for cold asphalt. The costs for this adjustment of procurement

criteria are assumed to be included in the 50-75 Mio Euro mentioned already

above.


On the basis of the above, we would suggest to:

Stimulate diffusion of long-life carpet and paint via GPP and Ecolabelling.

Stimulate diffusion of long-life asphalt via GPP.

These measures would also enhance awareness of environmental benefits, since

Ecolabelling and GPP criteria make these explicit.

Costs for the EU would be at most 50.000 Euro for GPP and Ecolabel criteria

adjustment. Government administrative costs for implementing GPP already were

included in the policy package discussed in section 3.3.1. Costs for industry will

depend on the number of licenses that will be asked for and the number of products

for which tests are needed. At this stage only Ecolabel licences have been given for

hard floor coverings. It concerns 17 licences to companies covering over 500

products25

. Let us assume that in case of a very successful scheme for carpets and

paints 200 companies would apply, with 10 product lines each this would result in

the following industry costs using maximum license and application fees and

average testing fees.:

- Per annum: 200 * 10 * 1500 Euro for licenses = 3 Mio Euro

- Once off: 200 times 1200 Euro application fee plus 5000 Euro testing fees

for 10 product lines = 12.5 Mio Euro

As indicated above the costs for implementing GPP procedures for built

environment as a whole are estimated on 50-75 Mio Euro for the EU27. Additionally

an awareness campaign for the advantage of cold asphalt of 1 Mio will be

budgeted.

3.3.4 Increase recycling of waste at end of life

25 http://www.eco-label.com/default.htm, accessed 20 March 2013


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Recycling material at end of life makes secondary material available, which can

offset primary material. It also avoids applying waste management options that are

lower placed in the waste hierarchy, such as incineration and landfill. These

measures are predominantly focussed on changes to existing demolition and

recycling practice to increase recycling, rather than on changes to new product

design, specification and the construction process, which will have benefits longer

into the future. Illustrative examples in Topical Paper 4 include:

1. Recycle road asphalt back into roads instead of landfilling.

2. Recycle concrete and soil instead of landfilling.

3. Recycle PVC at end of life instead of landfilling/energy recovery.

4. Recycle float glass at end of life instead of landfilling.

5. Recycle carpet at end of life instead of landfilling.

6. Recycle plasterboard at end of life instead of landfilling.


The total amount of construction and demolition waste in the EU is estimated at

some 460 Mio tonnes per annum (BIO IS, 2011). The six example materials are

quite different, but the support mechanisms to increase recycling are quite similar. It

further has to be noted that the starting positions between materials and countries

are not the same. Some countries already have high levels of recycling including

recycling of building and construction waste, where other countries still mainly are

‘landfill states’. The European Topic Centre on Sustainable Consumption and

Production (ETC-SCP) reviewed data on this for EU member states for the period

2005-2006 (Figure 3.2; ETC SCP, 2011). The technical problems with regard to

recycling also differ significantly between materials (compare also BIO IS, 2011):

1. Asphalt recycling is in fact a proven technique; the European Asphalt

Pavement Association claims already 85% reuse and recycling in Europe

(EAPA, 2012)26

2. Concrete is made out of sand, aggregates and cement. Recycling of

concrete as such is physically impossible: the cement used in concrete has

reacted during cement production and can never be recovered and never

can fulfil the functionality of cement anymore (WBCSD, 2009). Concrete

hence usually is crushed, resulting into a secondary aggregate. This

secondary aggregate then can used for road foundation, but also as

aggregated in the concrete production, (c.f. figure 3.3)

3. Recycling of particularly post-consumer PVC is not easy due to differences

in formulation, potential contamination, etc. As a response to the intense

discussions on environmental aspects of PVC which took place particularly

in the 1990s, the European PVC industry arranged a number of voluntary

commitments to make the PVC chain more sustainable. The latest is the

VinylPlus (2012) voluntary agreement, which amongst others sets a

800.000 ton target for PVC recycling by 2020 (which was 60.000 tonnes in

2000, and 260.000 tons in 2010). It also phases out problematic additives

like lead based stabilisers27

.

26 BIO IS (2011) comes to similar numbers for the 14 Member states for which they could assess

asphalt waste arisings and asphalt recycling numbers. 27 This number obviously needs to be compared with PVC waste arisings. This study is not the

place to update earlier (quite old) estimates. A series of studies done for the EU around 2000

projected PVC waste arising between 4-6 Million tonnes in 2010 (AEA, 2000; Prognos, 2000). This


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4. Flat glass counted at 9.5 Mt for 25% of European production, being second

after packaging glass. Most of this volume is used for building and

construction (75-85%). Due to the long life time in buildings, it counts

however for just 5% of the 25.8 Mton of waste glass generation in the EU27

(IPTS, 2011). Recycling of waste glas into flat glass manufacturing requires

high cullet quality because the majority of products are colourless and do

not allow impurities. Flat glass producers hence mainly recycle their own

production waste, and the cutting waste of processing companies. Quality

control protocol mechanisms hence are required to stimulate recycling of

flat gass cullets as flat glass (e.g. WRAP, 2008). Using such approaches,

now 80% of flat glass in the Netherlands is reprocessed (VNG, 2011). It

seems however this recycling currently mainly works when glass is

replaced in existing buildings. Recycling from end of life building and

construction waste would clearly require that glass is removed before

demolition takes place.

5. The examples of flooring producers Desso and Interface flor have

developed well-thought business circular models to ensure an optimized

recycling of flooring. These companies for instance prefer offering tiles

rather than carpets (allowing change of single tiles instead of a carpet for a

whole room), experiment with leasing concepts, and develop processes

allowing for minimizing material use and maximizing the use of recycled

content28

.

Figure 3.1: Recycling rates of construction and demolition waste as % and tonnes

per capita (taken from ETC SCP, 2011)

coincides fairly well with PVC consumption data for 2006-2008 of some 6-7 Mio tonnes (BIO IS,

2011) 28 http://www.interfaceflor.nl/webapp/wcs/stores/media/NL_Biosfera_2011.pdf, Accessed 20 March

2013


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Figure 3.3: Recycled aggregate use as % of total use (WBSCD, 2009). Note that

this chart does not show recycling rates of the waste flow, but shows which fraction

of aggregates put in use are from secondary origin.

6. Plasterboard, that mainly consists of gypsum, often itself is already made

from secondary raw materials, most notably from flue gas desulphurization

plants or other synthetic gypsum. Next to this, mined gypsum is used.

Plasterboard can be recycled into secondary gypsum, but particularly for

gypsum demolition waste contamination forms a problem (BIO IS, 2011).

Like in the case of glass, quality control standards are relevant to stimulate

this recycling (WRAP, 2011), next to source separation, and improvement

of manufacturing processes allowing for higher impurity tolerances.

.

Due to the technical specifics of each waste stream, inevitably some tailor made

policies and support mechanisms may be needed. In this, the question at stake is to

what extent targets should be set at the level of C&D waste as a whole or as

material specific targets. The first approach is for instance followed in the End of

Life Vehicles Directive and has the advantage that it leaves it to actors in the

building and construction chain to select materials that can be easiest recycled. The

second approach is followed in the Packaging Directive that sets recycling targets

for different packaging materials, taking into account the ease and complexity of

recycling. In general a generic target leaves most freedom to focus on materials

that can be easiest recycled. Setting targets for specific materials or products can

be beneficial if it concerns materials with high (potential) impacts in the waste stage

or for which recycling can have high benefits29

. The reviews of ETC SCP (2011),

BIO IS (2011) and TNO and BIO IS (2012) show however that the following

instrument mixes are required for high levels of recycling of C&D waste (see also

Figure 3.1 for instruments applied in various EU member states):

Source separation mandates, i.e. the requirement to separate waste into

different recyclable fractions. This would for instance have to include the

29 For instance, for this reason there has been significant pressure to recycle PVC, leading to

signficiant and successful voluntary initiatives of the PVC industry.


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mandate to remove PVC windows and other major PVC components as

well as glass before actually demolishing a building – if these materials

would have to be separated from C&D waste this would lead to a material

of a quality that would be unsuitable for recycling. ETC SCP (2011)

concludes this is a ‘strong driver [for recycling] in countries without the use

of a landfill tax’

Landfill taxes and landfill bans (seen by ETC SCP (2011) as a strong driver

for recycling)

Re-use and recycling targets, either as legal requirement (compare the

70% target in the EU EU Waste Framework Directive) or as voluntary

agreement (compare the aforementioned VinylPlus commitment)

Quality standards for secondary raw materials used as input for primary

processes, where relevant in combination with certification schemes

Ecolabels and GPP criteria that include targets with regard to recycled

contants of new products

Table 3.1: Recycling rates of C&D waste and policy instruments applied in EEA

member countries (ETC SCP, 2011)


In its report ‘Europe as a Recycling Society’ ETC-SCP (2011) noted that there is a

large difference between countries in recycling rates, also for building and

construction waste. Countries like Denmark, Germany and the Netherlands have

high recycling amounts per capita of concrete, bricks, tiles and asphalt. This can be

explained by the implementation of the policy packages described above and

summarized in Table 3.1.


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We hence suggest that a combination of source separation mandates, quality

standards for secondary raw materials, (voluntary or mandatory) recycling targets in

combination with ecolabels and GPP criteria that reward use of recycled materials

will be an effective package to boost recycling of the waste flows discussed. We

further would suggest that landfill taxes may be preferred over landfill bans in

countries where a recycling infrastructure for a specific material still has to be built

up – bans create problems when no alternative outlets are yet available. Member

states have to put in place already quite some of such measures to comply with the

Directive 2008/98/EC on waste (Waste Framework Directive). Amongst others, the

Directive sets a target for Member states to prepare for 70% re-use, recycling and

other recovery of construction and demolition waste for which e.g. source

separation mandates are inevitable. The Directive requires that Member States

adopt waste management plans and waste prevention programmes. The UK Impact

assessment estimated for the UK around 40 Mio Pounds once off administrative

transition costs, plus 2 Mio pound annually for 10 years30

. This is somewhat over 1

Euro per UK citizen. The EU impact assessment on the Waste Framework Directive

of 2004 did not quantify such costs31

. With the maturity of waste management

practices differing highly between EU Member states extrapolation of the UK figures

to Europe is probably not appropriate, but if we would do so, this would suggest

transition costs in the order of magnitude of 500 Mio Euro. It has to be noted that

this is less than 1% of even just the management costs of municipal and hazardous

waste identified in the EU Impact Assessment of 75 bio Euro per year. And with

construction and demolition waste being some 460 Mio (BIO IS, 2011) of the 3 bio

tonnes of solid waste arisings in the EU per year32

, one could argue this waste

stream should at most be allocated 20% or 100 Mio Euro of the 500 Mio Euro

transition costs.

While hence the EU wide administrative costs for implementing a high level of

management of construction and demolition waste could be in the order of

magnitude of 100 Mio Euro, it has to be noted that the Waste Framework Directive

requires that such transition costs must be made anyway. It is difficult to see that

additional administrative costs will occur for implementing at national level more

stringent source separation mandates, quality standards for recycled products and

recycling targets than required by the Directive. We hence set the administrative

costs for ‘beyound compliance’ recycling levels compared to the demands in the

Waste Framework Directive to zero.

For additional supportive measures such as developing ecolabel and GPP criteria, it

has to be noted that their costs are discussed in section 3.3.6, so that we do not

repeat this discussion here.


Table 3.1 indicates that for many EU member states there is still significant room for

improvement for stimulation of recycling of different fractions of construction and

30 http://www.legislation.gov.uk/uksi/2011/988/impacts (accessed 20 March 2013) 31 http://ec.europa.eu/environment/waste/pdf/ia_waste.pdf (accessed 20 March 2013) 32 http://ec.europa.eu/environment/waste/, accessed 20 March 2013. This percentage is lower than

some other estimates, but as shown clearly in the BIO IS (2011) report data on C&D waste

arisings are very uncertain, even when provided by official institutes. BIO IS made their estimate

using various approaches and comparing various sources so we feel it is probably one of the

better numbers to use.


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demolition waste. Reports of ETC SCP (2011) and BIO IS (2011) make a clear case

on the basis of examples from countries with high recycling rates that the following

policy package needs to be implemented. Table 3.2 gives for each of the specific

waste streams in this section how these instruments could be further tailored to the

material:.:

1. Source separation mandates

2. Quality standards for secondary raw materials used as input for primary

processes, where relevant in combination with certification schemes

3. Re-use and recycling targets, either as legal requirement (compare the

70% target in the EU EU Waste Framework Directive) or as voluntary

agreement (compare the aforementioned VinylPlus commitment)

4. Landfill taxes and landfill bansSuch landfill taxes would be up to 100 Euro

per ton to make alternatives like recycling and incineration more

attractive33

.

5. Ecolabels and GPP criteria that include targets with regard to recycled

contents of new products

Since the first four of these measures already have to be put in place by Member

states to comply with the 70% re-use and recycling target provided in the Waste

Framework Directive, we assume no additional costs. There is further a clear need

for the EU to enforce such targets on Member states. Despite the emphasis on

applying the waste hierarchy virtually al Commission documents, even for municipal

solid waste only 10 EU member realised less than 50% landfill in 2009 – 10

Member states till landfilled more than 80% of their municipal solid waste34

. BIO IS

(2011) concluded in their study that statistics for C&D waste were very uncertain,

but that also for C&D waste no more than 46% recycling takes place in the EU27 on

average in 2009.

Ecolabels and GPP criteria that can encourage an enhanced recycled content of

primary materials will be discussed as improvement option in section 3.3.6. Costs

are hence not included here.

33 Unfortunately in macro-economic models the waste management system usually is poorly

represented, even in detailed models like EXIOMOD. It is hence not very well possible to model

the impacts of landfill taxes, as opposed to resource taxes. 34 http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Municipal_waste_statistics

(accessed 18 April 2013)


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Table 3.2: Function of policy instruments in enhancing recycling of specific C&D waste streams (own analysis and ETC SCP, 2011; BIO IS, 2011; TNO

and BIO IS, 2012)

Waste \ Instrument Source separation Quality standards and

certification Re-use and recycling targets Landfill taxes and bans Ecolabels and GPP

Road asphalt Since road asphalt often is removed without becoming mixed with other waste components, source separation is less relevant

Asphalt industry has adopted strict guidelines to ensure good quality end material (BIO IS)

Can help enhancing recycling rates beyond the 85% currently realised

Make landfill unattractive or impossible as alternative

Via procurement road authorities can ensure 100% road-to-road recycling of asphalt (currently 85%)

Concrete and soil Essential to get stony fraction apart

Essential to ensure primary product quality

Strong driver in combination with landfill taxes and –bans (ETC SCP, 2011)


Crushed concrete is often used as road foundation and fillings, which can be stimulated by public procurement by road authorities

PVC Essential to obtain waste PVC products apart from other fractions


Voluntary agreement VinylPlus 2012 was instrumental to stimulate PVC recycling


Ecolabels with recycled content standard can enhance markets for recycled PVC

Float glass Essential to obtain waste float glass apart from other fractions. Needs removal of glass before the building is demolished




Ecolabels with recycled content standards can enhance markets for recycled glass

Carpet Essential to obtain waste carpet apart from other fractions



Ecolabels with recycled content standards can enhance markets for recycled carpet

Plasterboard Essential to obtain waste plasterboard apart from other fractions




Ecolabels with recycled content standards can enhance markets for recycled gypsum from plasterboard


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3.3.5 Increase renovation rate


There is already an assumed renovation of the existing stock, which, as shown by

the IMPRO-Building study, will result in reductions in operational energy

consumption and a net reduction in resource consumption. In general, energy

efficiency measures have not been included within this study as they are already

addressed by legislation. However, increasing the renovation rate above that

predicted by current policy is considered to be a valid improvement option. The

rationale is that when more is renovated, the life time of buildings is expanded, and

less new construction has to take place. It further obviously helps if renovation is

done in a resource-efficient manner, but the big gains are made by demolishing less

buildings in the first place.

Increase rate of take-up of renovation.


Policy instruments related to renovation of buildings have been extensively studied

in the context of reducing the energy use of housing (e.g. Annunziata et al., 2013).

The impact assessmed of the recast of the EU Energy Performance of Buildings

Directive (EPBD) mentions the following instruments (SEC(2008) 2864)

1. Member States have to set up minimum energy performance requirements

for new buildings and for large existing ones that undergo major renovation.

2. Member States have to introduce an energy performance certification

scheme that provides information on the energy needs of a building and on

what can be improved.

3. Member States shall establish a system for inspection of medium- and

large-size heating and air-conditioning systems at regular intervals so that

their energy performance can be monitored and optimized.

The impact assessment of the recast of the EPBD then sets out to analyse the pro’s

and con’s of specific variations of such measures, such as a potential exemption of

buildings below a certain size of point 1 above. The IMPRO Building studies of DG

JRC IPTS played an important role in underpinning policy alternatives (Uilhein and

Eder, 2010 and 2008; Nemry et al, 2008). These studies showed for instance that

when roofs or windows have to be replaced outside major renovation cycles, it is

cost-effective to do so complying with the highest energy efficiency standards.

However, when we would replace these building elements before they are at their

end of life, the additional costs do not outweigh energy cost savings.

The impact assessment ultimately chose instrument variants with low or moderate

administrative costs, that would be clearly offset by energy savings realised.

It is however not these kind of instruments aiming at improved energy-efficiency

that need to be evaluated in our case. In our case we are interested in realising

resource-efficiency gains by renovating buildings rather than demolishing them –

which is a different goal than energy efficiency improvement. We would argue that

this requires more a policy mindset aimed at stimulating longevity of buildings and a


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preference of building renovation over demolition and new construction, rather than

that complicated policies have to be developed realise this. The following policies

can support renovation instead of demolition and new contstruction:

In the design and planning phase of creating new buildings, provisions

should be taken for ensuring a long life in the first place. Authorities could

use the powers they have in the context of spatial planning and building

permitting to ensure the following (compare section 3.3.8):

o Ensure that new buildings fit well in their environment

o Ensure that new buildings are of excellent structural quality

o Ensure that new buildings are flexible enough to be adjusted with a

minor effort for new purposes..

Redevelopment of quarters of cities is usually planned by local authorities.

They should consider a maximum level of renovation where possible, rather

than demolition and reconstruction

In case of public buildings becoming obsolete, authorities should

investigate a renovation alternative first before deciding on a demolition and

new construction alternative

Incentives for private owners to consider renovation of buildings rather than

demolition and redevelopment. Usually a permit is required for demolition

and/or redevelopment, and authorities could for instance include new

criteria in their evaluation that favour renovation over redevelopment

options. Another incentive would be providing financial stimuli that

encourage renovation, such as subsidies or bringing renovation activities

under a low VAT regime.


The policy options above require no new instruments. Rather, authorities are asked

to use the instruments they apply anyway in spatial planning and built environment,

in such a way that renovation is stimulated over demolition and new construction.

This is much more a question of political will to do so, than there is a need to

develop and apply new instruments. Some additional costs could be spent on

awareness raising and providing inspiring best practices of successful renovation

programmes.

It is hence difficult to see that such a policy would create high administrative costs.

Both authorities and operators still work according to available spatial planning,

building permitting, and demolition permitting regimes. Authorities however simply

will have to apply criteria that favour renovation over demolition.

The exemption would be the application of financial instruments. Since financial

instruments are the mandate of EU member states rather than the EC, it is difficult

to see how the EU would lead policies in this field. It is further likely that if member

states would decide upon e.g. tax exemptions for renovation, they would (have to)

recoup this loss in tax revenue by making other taxes higher. We hence assume

that overall this measure will end up being cost-neutral for administrations (but not

necessarily for industry and consumers). .


The policy options above require in most cases no new instruments. Rather,

authorities are asked to use the instruments they apply anyway in spatial planning


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and built environment, in such a way that renovation is stimulated over demolition

and new construction. This is much more a question of political will to do so, as that

there is a need to develop and apply new instruments. The main additional activity

that is suggested, is to embark on a program of awareness raising and sharing best

practices. For this purpose, a few major network projects under e.g. Horizon 2020,

JPI Urban Europe, and/or the EIT Smart cities probably will do. With the costs of an

average FP7 network project a few million Euro’s, we cannot see that a budget of

more than 10 Mio Euro would be required.

In sum, we hence recommend the use of existing instruments like spatial planning,

building permits, renovation plans of city quarters, decision making about public

buildings, and demolition/redevelopment permits to stimulate renovation over

demolition and redevelopment. Since existing instruments are used, apart from the

10 Mio dissemination and awareness raising costs no additional administrative

costs are foreseen.

3.3.6 Increase use of recycled material


Increasing the recycled content of construction materials and products typically

lowers environmental impacts as recycling processes are generally less energy and

resource intensive than primary production routes. However, increasing recycled

content will only lead to macro-level environmental benefits if there is a source of

scrap not already used as a high-value product for the European construction

sector. For this reason, an option has been included to mine existing landfills,

providing a new source of metals and inert fill material that is currently not used.

Use recycled construction and demolition (C&D) waste in road base and

building fill35

.

Use stockpiled fly ash / pulverised fuel Ash (PFA) to replace cement in

concrete applications or as grout/aggregate

Mine landfills and use as a source of secondary materials and energy.


Increasing the recycled content in unbound applications, cement, and from existing

landfills could be stimulated in various ways. First, one obviously could approach

this from the waste management perspective: setting up rules that limit treatment

options like landfill, and by this stimulate recycling. These options however are

already discussed in section 3.3.4. We concentrate here on additional policies that

can help to enhance the recycled content of materials like unbound applications

(e.g. road base and building fill) and concrete applications. The use of materials

from existing landfills is a special case of recycling of C&D waste. In essence C&D

waste that has been landfilled in the past is extracted from the landfill, and then

processed as regular C&D waste. We build our analysis on various literature

sources, including a recent analysis done for DG ENV (BIO IS, 2009).

In general, enhancing the use of recycled material can be stimulated as follows

Regulatory – obligatory:

35 Unbound applications are applications where crushed materials, are used without further binding

agent, such as crushed C&D waste as road foundation.


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o implementing the equivalent of an Ecodesign directive for building

materials, requiring for instance a minimum requirement a specific

secondary material content.

o Implementing quality standards for secondary construction

materials

o Using the instrument of building permitting to require a minimum

amount of recycled materials content.

Regulatory – voluntary: Government and government related agencies like

housing co-operations responsible for a significant part of construction in

any country. Government actors are almost fully responsible for road

construction. Green Public Procurement hence can be a powerful approach

to stimulate the use of building materials with a high recycled content.

Informative – voluntary: creating an ecolabel with criteria that include the

level of recycled content of aggregates or unbound building materials. Mining of landfills is unlike the other options no proven technology and hence would need probably support in terms of R&D co-funding.


As indicated stimulation of recycling usually is mainly done via the policy

instruments already discussed in section 3.3.4: source separation mandates,

banning landfill and incineration as management options, implementing landfill

taxes, etc. The policies discussed in this section mainly focus on enhancing the

recycled content of products, by a.o. using stockpiled waste.

Use of recycled construction and demolition (C&D) waste in road base and building

fill

Use of recycled construction and demolition waste in road base and building fill is

common practice in countries that already have developed management schemes

for end of life C&D waste. It appears to be the easiest way of recycling such waste.

With the main alternative waste management route being landfill, usually policy

instruments already discussed in section 3.3.4 like source separation mandates,

landfill bans, landfill taxes, etc. are sufficient to divert this waste stream for recycling

(e.g. ETC/SCP, 2011). Of course countries in which this recycling is not yet

common practice, installations for separating C&D waste into stony and other

fractions and crushing the stony fraction have to be put in place. This are however

straightforward and readily available technologies already applied in decades in EU

members states with high C&D waste recycling rates.

The use of C&D waste as road base could in principle be enhanced by GPP, since

authorities are usually responsible for road construction. The costs for implementing

GPP in built environment in general have been estimated on 50-75 Mio Euro in

general in former sections.

Additional costs may be at stake if totally new performance standard tests have to

be developed, particularly with regard to leaching of hazardous components from

recycled waste. For instance, to support the recycling of building materials in the

Netherlands in the 1990s, it was found necessary to ensure that leaching

characteristics of secondary building materials would not be worse than for of

primary materials. Development of the tests as such required a program of several

million Euros. For surveillance/enforcement testing as such, we refer to the above.


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Use of stockpiled PFA in cement

An important issue to consider is that the whole current set of products made with

current cement formulas has been subject to the stringent material and building

standards that exist in the building industry36

. The same applies, to a lesser extent,

for unbound aggregates. At this stage it hence seems rather far-reaching to use

regulatory, obligatory instruments to stimulate the use of recycled materials in

building products.

Having said this, the use of materials like fly as has secondary raw materials in

cement production is already common practice. The industry has already been

capable of developing cement mixes that comply with regular product standards

based on secondary raw material input – they do so since using secondary raw

materials can result in considerable cost gains. Just making the information about

recycled material content available should not be a major administrative burden-

indeed, this should probably be easier as the more complex conformity testing that

e.g. suppliers of electrical and electronic goods would have to do for their products.

This results in the following analysis of administrative costs.

Ecolabels for cement with recycled content






fee per product brand, once-off. As indicated this is

probably over-estimated for cement, since it implies simply

making transparent which amount of secondary materials

is used.


GPP for the use of cement with a specific level of recycled content

o At the side of operators / industry, there are probably no additional


procurement procedure anyway, and this processs will not change.

o For authorities, The costs for implementing GPP in built

environment in general have been estimated on 50-75 Mio Euro in

general in former sections.

.

Mining of landfills

This is a fundamentally different options as the former ones, in which waste is

readily available. One of the most prominent cases is the Remo site near

Houthalen-Helchteren in Belgium, exploited by the Group Machiels and a

consortium of Flemish knowledge institutes. The experiment got support of the

European Funds for Regional Development next to the Flemish Instituut voor

Wetenschap en Technologie (IWT) of several million Euro in total37

. Unlike the

options mentioned above, however, landfill mining is not yet common practice.

Minutes of a workshop of the Public Flemish Waste Society (OVAM) suggest that

36 WBCSD/IEA (2009) use exactly this argument not to consider novel cement types in their

cement roadmap for 2050 37 http://elfm.eu/CTCInfo.aspx


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plans have to be developed on a case by case basis due to the differen

characteristics of old landfills, and that economic viability is not a given (cf. Jones et

al. 2012)38

.

Enhanced Landfill Mining hence seems at this stage still an experimental option.

The most relevant policy option here is to support the concept with R&D funding,

and particularly to evaluate the conditions under which it becomes viable for market

parties.


On the basis of the above, the most important conclusion is that the instruments

already proposed in section 3.3.4 should be applied to block treatment options like

landfill and incineration. Since authorities are a dominant player in housing

construction and road construction, additionally the instruments of GPP and

ecolabelling could be used to stimulate enhancment of recycled material content.

Costs for adjustment of routines in GPP will be one-off, and overlap with costs for

GPP implementation mentioned earlier in section 3.3.3.

In order to support Enhanced Landfill Mining various co-funded research projects

and pilots are suggested. The investment provided by the Belgian IWT of some 2.5

Mio Euro can be suggested as a benchmark, where probably half a dozen of such

projects should be suffient to create a proof of concept after which is should be

clear if it can be taken up by the market.

3.3.7 Intensify use of buildings


The same building can provide the same function for more people, or provide more

functions, or provide the same function in less space, or be adaptable to other

functions at end of life. This reduces resource use. It can also help to reduce

impacts in the use stage as there is less space to heat and cool.

Reduce typical size of new housing (per dwelling) and offices (per

occupant).


With regard to residential buildings, intensification of use via regulatory instruments

may be experienced as a too strong intervention in consumer rights and –freedom

(c.f. Jackson, 2009; Tukker et al., 2008). Indirect ‘nudging’ approaches seem much

more viable and acceptable (e.g. Thaler and Sunstein, 2008). We also see that in

practice that it is high real estate costs that force people to entensify use of

residential buildings, simply since they cannot afford buying or renting a lot of

38

http://www.ovam.be/jahia/Jahia/cache/offonce/pid/176?actionReq=actionPubDetail&fileItem=2682


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square meters39

. ‘Living small’ enforced by regulatory instruments – in essence

applying instruments that aim at rationing or maximizing consumptive use in

Western societies seems only acceptable in the following contexts:

Severe supply shortages, .e.g in the case of food during WWII, or available

housing space in many European countries after WWII

Allocation schemes and –rules for social housing, i.e. that state supported

housing of a certain size can only be provided to families of a certain size

(and maximum income).

It also would be quite drastic approach – if enforced strictly, people would have to

move houses in case of changes in family size, which e.g. can occur in case of

children leaving houses, passing away of family members, or divorces. A form of a

gradually enhanced taxation of people who ‘live big’ hence may be a better

alternative – this is on the one hand not too disruptive for the people involved, while

clearly providing an incentive to adjust housing size to family size within a

reasonable time.

It furher has to be noticed that existing policies that have a negative impact on

residential mobility also can be a reason why household size does not match with

the size of the house. Such policies could include (compare OECD, 2011):

High transaction costs including sales taxes on houses for moving to

another house40

Too generous social housing policies that allowed people to rent relatively

cheap relatively big houses when they still had a low income, but that do

not create an incentive to move to a new house in case of changes in family

composition, or rise in income

For offices, regulating space may be more acceptable. It is not uncommon for

countries these days to regulate e.g. the number of parking places per work place

to stimulate public transport. With authorities usually being a major player on the

office market, GPP could also be considered – indeed, the EU currently is

developing GPP criteria for office buildings.


Residential buildings

So, while probably in practice hypothetical, it is probably not costly would one like to

implement regulations that intensify the use of buildings. It would require

development of a general regulation indicating that a houses above a certain

amount of m2, or with more than a number of bedrooms, only can be sold to or

rented to families of a certain size41

. Making such a regulation probably at most

39 This is one of the reasons for the relatively low DMC of Japan compared to European countries

and particularly the US: real estate is so expensive, that Japanese citizens simply do with smaller

(and hence less resource demanding) houses. 40 Or: a housing tax based on historical buying value rather than actual house value – with prices

risen significantly in the last decades, this is an incentive to stay in the house once bought rather

than moving to one of more appropriate size. 41 It has to be noted that Eurostat in fact has norms for just the opposite. If for a family of a certain

size less than a specific number of bedrooms are available (roughly one per single person of over

18 years, plus one per couple, plus one per family), the house in question is regarded as

‘overcrowded’. See

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:Overcrowding_rate

(accessed 20.03.2013)


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would take a person-year or two per EU member state, so at most 54 person-years

which equals depending on the staff level, even at salaries of 100.000 Euro per

year would be some 4 Mio Euro or around a 1 cent per European once off. Basic

control and enforcement can be done with limited to no extra costs, since in all

countries in the EU citizens are registered including their living address in basic

population administration. This, in combination with basic real estate registrations

that are available as well in any EU member state, should already allow for basic

enforcement and checks. Additional checks via existing infrastructures for building

inspection would complete this picture.

A softer approach would be to tax people who have more than a specific number of

bedrooms or square meters available in relation to family size. Virtually all EU

member states have either city taxes, general taxes or service taxes (e.g. waste

collection, water provision) that are related to houses and their occupancy. The

proposed system would require differentiated taxation that depends on family

number and housing size. Also here we cannot see how this can lead to high

administrative burdens, since the taxes are levied anyway. The basis for taxation –

particularly if the number of rooms is taken as a departure point rather than the

amount of square meters – would be relatively simple, compared to e.g. taxation

systems based on the (present) value of the house, etc.

Reducing impediments for residential mobility may further be needed to create a

better fit between house size and needs for that size. Since this usually implies

deregulation rather than new regulation (cf. OECD, 2011), it is assumed that such

simplifications will lower and in any case not raise administrative costs.

Office buildings

Space regulation for offices may be slightly more acceptable than for residential

buildings, but still seems a difficult area for policy. Space regulation would certify a

specific office when built for a number of working places. Such a certification would

have to be renewed or made when a regulatory approach is pursued. As a very first

estimate we use the effort required to bring industrial installations under the

Industrial Emissions Directive, typically some €4.300 – 16.200 for ‘Other

installations’. Since here it is a simple issue of measuring size, we think such costs

are probably over-estimated; for the operator they certainly will be much less as

earlier estimated for industrial installations. In a study for Ecolabel criteria for offices

Circe et al. (2011) estimate the number of offices in the EU27 around 1.870.000

related to some 6.5 billion M3, of which 2/3 consists offices of over 1000 m3.

Hence, even modest costs of 1000 Euro for the regulator and 1000 Euro for the

operator would lead to some 4 bio Euro costs. With rental prices at least 200

Euro/m3 (5 times higher in Paris and London; e.g. BNP Paribas, 2012) these one

off costs of less than 1 Euro per m3 would be a fraction of the rental price. It would

however be conceivable that for small offices an exemption may be desirable to

avoid comparatively high burdens.

GPP criteria for sustainable offices are in fact currently developed by the EU42

Intensive use of offices is currently not a criterion. It seems a relatively

straightforward and low-cost effort to add such criteria related to space per

employee to the current GPP criteria. One could even argue that GPP as

42 See the draft Ecolabel and GPP criteria at

http://susproc.jrc.ec.europa.eu/buildings/stakeholders.html


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instrument is not needed. Authorities simply could have internal standards for using

the offices they build or rent as efficiently as possible. .


To conclude, intensifying the use of buildings is probably problematic for residential

buildings since particularly regulation would intervene in a way with consumer

choice that is broadly seen as not acceptable. Taxing low-density use maybe more

acceptable. It seems that both options could be implemented with no or marginal

additional administrative costs given existing regulatory and taxation schemes in

place. Reducing impediments for residential mobility implies deregulation rather

than regulation and hence is assumed not to rise administrative costs.

In the area of offices, GPP criteria can be expanded with criteria for density of use

of buildings with hardly additional costs to the GPP currently under development at

EU level. Since GPP by definition implies purchases or rentals by authorities, smart

planning would make GPP superfluous. Regulating the amount of office space

allowed per person may be acceptable. This probably can be done for an average

once off costs that is less than a 1% of office space rental in even cheap European

cities. For small offices a closer analysis is desirable since in that case

administrative costs could be relatively high compared to office rent. .

3.3.8 Reduce land used by the built environment (intensification)


Increasing density, i.e. moving from suburban to urban densities, will have benefits

not just in land use but also by reducing materials and energy. For example, urban

dwellers typically have smaller homes and make greater use of public transport.

Probably one of the most cited examples of such a development is the spatial

planning pursued in Curitiba, Brazil. Then Mayor Ivo Arzua asked for urban design

proposals in 1964. This request led to a response of architect Jaime Lerner, who

later became mayor. He suggested strict controls on urban sprawl, concentrating

high rise buildings next to 5 main roads that form a star converting to the city centre

and that have exclusive express bus lanes, lower density developments farther from

these roads to reduce traffic, a reduction of traffic in the downtown area, etc. Today,

Curitiba is considered one of the best examples of urban planning worldwide with

as suggested benefits a reduction of travel needs, energy needs and resource

needs (e.g. von Weizsäcker et al., 1997). While probably an important improvement

option, it may not be easy to model this in a “bottom up” assessment.

Increase density of new housing developments.


The Curitiba example makes crystal clear that urban planning and spatial planning

policies are key to increase city densities. Spatial planning systems allow for

instance for zoning, and specify which types of buildings can be built in a specific

zone (e.g. industrial, utility, or residential; maximum building hight, etc.).


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The European Union has no formal authority for spatial planning, although it has

released a non-binding document in 1999 that was called the European Spatial

Development Perspective (ESDP) and that was signed by the ministers responsible

for regional planning in the EU member states.

Since spatial planning is still the prerogative of Member states, planning systems

diverge between Member states. Oxley et al (2009) give a recent review of planning

systems for the UK, France, Spain, Netherlands, Germany and Ireland. In all cases

national governments set more or less stringent national policies, guidelinese or

codes, that are translated by regions into strategies and at the level of local

governments into spatial plans, local development frameworks, land use plans or

master plans. These, in turn, then form boundary conditions for permitting specific

building and construction projects, infrastructure development, etc.


It seems relatively straightforward to use such existing planning systems to ensure

that regional and city planning is directed towards density increase. We don’t see

many other effective policy alternatives to realise the same goal. We feel further

that the costs of implementing a spatial policy that is directed towards higher

density land use in principle should not have additional administrative costs:

Virtually all EU member states already have some kind of a planning

system in place, and regions and cities make already on a regular basis

spatial plans.

In virtually all EU member states permit systems for building and

infrastructure development are already in place, that require some form of

evaluation against a spatial plan.

It is hence simply a matter of using such spatial planning systems deliberately to

ensure intensification of land use in built environment. This may require some

adaptation and learning with regard to new policy practices, but we cannot see how

this can entail major additional costs to the administrative approaches already in

place. To give an example, the so-called ESPON43

programme, that aims to provide

European practitioners with best practice examples and to support policy

development in relation to the broad aim of territorial cohesion and a harmonious

development of the European territory, is run for a costs of around 47 Million Euro

(10 ct per EU citizen) over a time span of 6 years. Even if at EU level a program

aimed just at the narrow topic of land use intensification would be launched of this

size, we hence talk about negligible administrative costs.


The suggested policy alternative is hence simple: use existing planning systems in

such way that permitting for infrastructure development and building and

construction is done in the interest of intensifying land use in built environment.

Since all instruments in principle are already in place and in use, no real additional

costs are to be expected. Even if one would argue that such a novel policy would

need some support in terms of research and dissemination of best practice, the

example of ESPON shows this can be done without major costs. It would be an

extreme scenarios to assume that a support program on the narrow theme of land

43 European Observation Network for Territorial Development and Cohesion


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use intensification would need the same budget as the broad ESPON program, but

even if this were the case, we talk about a budget of some 10 ct per EU citizen over

5-6 years or less than 10 Mio Euro a year.

3.3.9 Reduce construction waste arising

In the UK, where the issue of construction waste has been examined carefully, at

least 10% of construction materials are shown to be wasted during the construction

process (BRE, 2008). Reducing the amount of waste produced and increasing the

amount of this waste that is recycled would reduce the need for unnecessary

manufacturing and waste disposal.

Reduce amount of waste from construction.

Note that this section only discusses waste from construction. Recycling of waste

from demolition is discussed in section 3.3.4.


In principle, wasting constructing materials is a financial loss for operators. So they

should be interested in not wasting such material. It further has to be noted that the

amount of construction waste arisings in most countries is dwarfed by demolition

waste volume, which typically counts for 80-90% of the construction and demolition

waste (BIO IS, 2009). Policy efforts hence currently mainly focus on demolition

waste (see section 3.3.4) rather than construction waste44

.

It is difficult to see how via regulatory policy instruments a reduction of construction

waste arising can be realised. Both at EU as well as at national level there is a long

history in improving the management of specific waste streams. However,

regulatory instruments like for instance the EU Packaging Directive, the ELV

Directive and WEEE Directives focus on setting recycling and re-use targets, and

not waste prevention target. Also the EU Waste Framework Directive has set an

objective in terms of recycling and recovery only: 70% of this waste material must

be recycled and/or recovered by 2020 in all Member States.

Recycling and re-use targets require a proper monitoring of how much waste arises

and how this waste is treated. This is relatively easy. Setting prevention targets is

more complicated. For this, one needs to establish a proper historical baseline to

which one can compare construction waste generation. But construction waste

generation in a given year also will depend on how much new buildings are built, of

what size, of what type, etc. To assess if construction waste volumes really became

lower, one hast to compare the construction waste arising in a given year with the

historical baseline volumes, corrected with factors like number of new buildings

built, etc. We see hence that if reduction targets are set, they usually take the form

of voluntary agreements.

44 A measaure for instance taken in Norway, see

http://www.cowi.com/menu/service/WaterandEnvironment/Solidwastemanagement/Documents/EN

%20-%20Article,%20Ideas%20for%20waste%20prevention.pdf. Also the BIO IS (2009) report on

building waste prevention predominantly focuses on demolition waste.


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Waste reduction in construction is best supported by improving management

practices on site (e.g. Formoso et al, 2002) or prefabrication, which helps to

construct large building elements in an industrial setting, rather than the ‘ad-hoc

factory’ that a building place usually is. In line with the conclusions of a study for the

Nordic Council of Ministers (Bakas et al, 2011) and findings of a review of best

practices in 5 major EU Member States of Bio Intelligence Services (2009) for the

EU, we hence see the following approach and instruments:

Development of guidelines for construction waste prevention (e.g.

guidelines developed by the UK Waste & Resources Action Program

(WRAP) for buildings and infrastructure supported by a Net Waste Tool for

assessing the economic impact of options45

; Guidelines of the German

Sustainable Building Council, etc.)

education and training and awareness programs, and development of

guidelines, that help companies to apply best practice;

including them in building codes or –standards;

using them as criteria in Green public procurement of buildings and

infrastructure46


To conclude, we see in this area at best a role for voluntary target setting next to

guideline development and –consolidation, next to education and

training/awareness programs. Guidelines in turn could be included in certification

procedures equivalent to ISO 9001 on quality management, such as the BREEAM

certification for sustainable buildings, etc., and using the instrument of GPP to

stimulate the use of such guidelines further. The Norden study of Bakas et al (2011)

judged the costs for ‘implementation’ and ‘bureaucracy’ as neutral, while significant

savings for building firms were expected. It is indeed difficult to perceive developing

for instance a good EU best practice guideline using existing examples would

require a project of more than a 100.000 Euro, maybe various factors more if this is

accompanied by the development of self-help tools, educational programs, etc.

Dissemination can take place via regular educational systems and education

trajectories that relevant personnel in the building and construction sector follows

anyway. Adding the application of such a ‘best practice guideline’ as a requirement

in the usually complex public procurement procedures for building and infrastructure

projects hardly can be seen as a cost factor.


In sum, we suggest to develop a best practice guideline document for construction

waste prevention, and to disseminate this via regular educational trajectories for the

building and construction sector, and demanding use of such guidelines in public

procurement procedures. The administrative costs for this are marginal and of a

size that they can be neglected in the modelling exercise.

45 see http://www.wrap.org.uk/ 46 See http://ec.europa.eu/environment/gpp/pdf/toolkit/construction_GPP_product_sheet.pdf. Note

that waste prevention targets are not part of the current EU GPP criteria for construction


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3.3.10 Select materials with low impact


Materials have different properties, different impacts and can fulfil different

functions. The environmental impact of a building is to an important extent

estimated based on the environmental impact of building products and components

used to construct the building. Hence it is important to assess the environmental

impact of building products and components while also taking account of the

functions of these building products and components. Cement made with secondary

raw materials and secondary energy clearly has lower life cycle impacts as cement

with primary materials and energy, while both cements types can have the same

technical performance characteristics. The use of FSC certified wood has

environmental advantages over non-certified wood. And so on. It is however of

eminent importance that such evaluations at material or product level should only

be done between materials and products with the same technical functionality in the

building as a whole. In other cases (e.g. constructing with wood instead of cement)

the whole construction will be different, and it is only possible to make a good

functional comparison at the level of the building as a whole. We argue hence that

information systems are needed at both levels: an information system that allows

architects and contractors to design buildings as a whole with the lowest

environmental impact, and after this, to select within the specific categories of

building components and materials with the same functionality the components and

materials with the lowest impacts. Indeed, it is only possible to assess impacts at

the level of constructions as a whole if information on the impacts of components

and materials used is available.

We therefore discuss here both policy instruments focusing at reducing impacts of

the building as a whole, as instruments that stimulate the use of materials with low

impacts. For the latter, the following cases will be used as examples.

1. Use timber construction instead of masonry

2. Increased production of products with lower impact, decreased production

of higher impact products

3. Road asphalt: Reduce energy consumption of asphalt laying by moving

from hot mix to warm mix asphalt


Building products and -materials

The second and third examples above (increased production of products with low

impacts and road asphalt) are examples of improvement options at the building

material level. If one would do the selection of materials with low impact at the level

of building and construction products or -materials, the following instrument mix can

be considered (TNO and BIO IS, 2012):

voluntary instruments such as ecolabels (to make transparent what the best

performing products are)

GPP (to strengthen the market for such products),


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maybe in combination with a mandatory minum standard akin set by the

Ecodesign Directive, to ban the most low-performing products from the

market.

In their study ‘Analysis of the future application of product policy instruments in the

EU’ TNO and BIO IS (2012) found that this mix is already being applied or can be

applied on groups such as (compare also VHK, 2012)

cement, plaster and mortar (Japan and Australia have for instance labels

for cement with high contents of recycled materials)47

;

floor and wall covering (the EU e.g. already developed ecolabel criteria for

wooden floor coverings (Decision 2010/18/EC); textile flooring (Decision

2009/967/EC) and ecolabel and GPP criteria for hard floor coverings48

)

sanitary ware and tapware (considered for inclusion in the workplan for the

Ecodesign directive, while the EU elaborates Ecolabel and GPP criteria for

toilets and shower heads)

wooden building products such as doors and panels (there are GPP criteria

for wood panels requiring use of sustainably harvested wood – to be proven

via e.g. Forest Stewardship Council (FSC) and the Programme for the

Endorsement of Forest Certification schemes (PEFC))49

windows (being evaluated for inclusion in the 2012-2014 Work Programme

of the Ecodesign Directive, and for which already GPP criteria have been

developed50

).

More in general, the construction industry has adopted a specific approach in

communicating data on life cycle impacts of building products in the form of

Environmental Produc Declarations (EPDs). In order to avoid a patchwork of

national approaches, the EU arranged a mandate was arranged for CEN (via TC

350) to create European EPD standards for the assessment of the sustainability

performance of construction works and of construction products. Standard

EN15804 was published in February 2012 providing core rules for construction

product EPD. The European Construction Products Regulation includes basic

requirements for construction works (BWRs) with regard to Hygiene, Health and

Environment (BWR 3) and the Sustainable Use of Natural Resource (BWR 7) which

are however formulated in generic terms and will need to be further developed (see

Box 3.1). Environmental Product Declarations are further not mandatory under the

CPR, as was clarified by an answer of the Commission on questions of

MEP.Essaya in early 2013 (box 3.2)

47 This label is awarded by the Australian Environmental Labelling Association, see:

http://www.geca.org.au/uploads/6/0/3/8/6038751/epd_-_icl.pdf. Accessed 2 January 2013 48 http://ec.europa.eu/environment/gpp/pdf/hard_floor_coverings_GPP_product_sheet.pdf.

Accessed 14 November 2011 49 See: http://ec.europa.eu/environment/gpp/second_set_en.htm (accessed 12 March 2013). For

wooden panels various other demands are set, such as e.g. formaldehyde content. 50 http://ec.europa.eu/environment/gpp/pdf/windows_GPP_%20product_sheet.pdf. Accessed 23

March 2013


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Box 3.1: Basic Works Requirements as formulated in the CPR 3. Hygiene, health and the environment The construction works must be designed and built in such a way that they will, throughout their life cycle, not be a threat to the hygiene or health and safety of workers, occupants or neighbours, nor have an exceedingly high impact, over their entire life cycle, on the environmental quality or on the climate during their construction, use and demolition, in particular as a result of any of the following: (a) the giving-off of toxic gas; (b) the emissions of dangerous substances, volatile organic compounds (VOC), greenhouse gases or

dangerous particles into indoor or outdoor air; (c) the emission of dangerous radiation; (d) the release of dangerous substances into ground water, marine waters, surface waters or soil; (e) the release of dangerous substances into drinking water or substances which have an otherwise

negative impact on drinking water; (f) faulty discharge of waste water, emission of flue gases or faulty disposal of solid or liquid waste; (g) dampness in parts of the construction works or on surfaces within the construction works. 7: Sustainable use of natural resources The construction works must be designed, built and demolished in such a way that the use of natural resources is sustainable and in particular ensure the following: (a) reuse or recyclability of the construction works, their materials and parts after demolition; (b) durability of the construction works;

1. (c) use of environmentally compatible raw and secondary materials in the construction works

Box 3.2: Clarification of the Commission on EPDs Question of MEP Essayah (1 February 2013)

51

(…) The new Construction Products Regulation does not, however, directly answer the question whether environmental product declarations for construction products are mandatory or not. Recital 56 stipulates that ‘For the assessment of the sustainable use of resources and of the impact of construction works on the environment Environmental Product Declarations should be used when available’. What this wording might mean is that any refusal by the industry to draw up declarations could render the entire system unworkable. Annex I, point 7, by contrast, does lay down a requirement to use environment-friendly building materials, but does not say how compliance is to be ascertained. One way to do so would be to call explicitly for the EN standards to be observed. The vagueness of the regulation is an inconsistency to the extent that the object of converting the Construction Products Directive into a regulation was to impose binding obligations on the Member States, for instance as regards CE marking. In the light of the foregoing, what does the Commission think about the vague approach evident in the regulation? Does it consider environmental product declarations for construction products to be mandatory? If the declarations are not mandatory, how will the Commission provide other binding means to make Member States reduce the considerable environmental impact already resulting from construction? Answer of the Commission (22 March 2013)

52

The Construction Products Regulation (CPR)(1) aims at facilitating the marketing of construction products in the EU by laying down appropriate requirements. It does not make environmental product declarations compulsory in all Member States and cannot be used as the legal basis to impose such an obligation. Member States are responsible for regulating the satisfaction of the Basic Work Requirements (BWR) as defined in Annex I to the CPR within their own territory. Hence, product manufacturers intending to market their products only in those Member States which do not regulate the sustainable use of natural resources (BWR 7), are not obliged to make a declaration on the performance of their products in relation to this requirement. This is in line with Article 6(3)c of the CPR which requires manufacturers to declare ‘at least one of the essential characteristics of the construction product’. Therefore, imposing an obligatory environmental performance declaration for all Member States would require the Commission to propose new legislation and submit it to the European Parliament and the Council

51 http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+WQ+E-2013-

001104+0+DOC+XML+V0//EN&language=NL 52 http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2013-

001104&language=NL


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Buildings and infrastructures as a whole

As already indicated, evaluating the performance of building and construction

products as such is not enough – their integrated use in the building of a specific

functionality determines overall life cycle impacts. The example of using a

lightweight timber construction instead of heavyweight masonry is a clear case

where the assessment needs to be done at building level.

There are various certification schemes available, ranging from Cradle 2 Cradle

(developed by McDonough and Braungart), LEED (US), BREEAM (UK), HQE

(France) and DGNB (Germany) with scopes varying from a focus predominantly on

energy or materials to an integrated sustainability assessment (Force Technology,

2012). Most assessment schemes require quantitative information, but usually that

information only is used for a small part of the overall determiniation of scores.

Further development of harmonised data is needed to tackle this problem. It is

however also clear that applying quantitative life cycle assessment approaches at

building level would become a complex exercise for the average architect or

building firm.

A promising development is hence to link environmental information about materials

and products provided via e.g. EPDs to a so-called system for Building Information

Modelling (BIM). Wikipedia defines BIM as ‘Building information modeling (BIM) is a

process involving the generation and management of digital representations of

physical and functional characteristics of a facility. The resulting building information

models become shared knowledge resources to support decision-making about a

facility from earliest conceptual stages, through design and construction, through its

operational life and eventual demolition.’ BIM can be seen as a form of computer

aided design (CAD) and allows actors involved in the design and construction

process to use the same data and design platform to create e.g. 3D geometrical

models that also give insight in relevant performance characteristics (for example U

values, fire classification). Since BIM program makes use of an inventory of building

and construction materials and –products, a very logical thought is to add

environmental life cycle information about such products and materials, which then

allows calculating environmental performance of a design created via BIM. An

example is a study of the Norwegian Stattbyg (2009), that used BIM to calculate life

cycle carbon emissions of buildings with BIM.

Such methods for assessing performance at building level can then be used to

stimulate use of low impact materials and the creation of low impact buildings via:

setting criteria in procurement contracts

setting minimum standards for building performance, similar to the EU

Directive of Energy Performance of Buildings 2010/31/EU focusing on

energy performance


Building products and -materials

As indicated above, for a number of building products already Ecolabel and related

GPP criteria apply. The Work plan for the Ecodesign Directive also mentions a

variety of building products considered to be included under this directive.

Expanding this to a broader set of building products as now considered will again


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entail the relatively low administrative costs already discussed for ecolabels, GPP

and the Ecodesign directive discussed in section 3.2:

Ecolabel, per product

Criteria development:

o 25.000 Euro for the regulator per product group

o 25.000 Euro for stakeholders per product group.

Tests, application and licence fee:

o 1,000-10.000 Euro for testing plus 1200 Euro application fee per

product brand, once-off. This is for building products probably an

overestimate, since for such products EPDs have to be made

anway.

o 1500 Euro license fee per annum

Assuming some 50 building product catregories consisting of some 10 specific

product brands each would be brought under the Ecolabel, by some 100 companies

(i.e. 500 products by 100 companies), which is compared to the current number of

labels a very if not extremely large number, this would entail the following costs:

- 1.25 Mio Euro for criteria development (Government)

- 1.25 Mio Euro for criteria development (Industry)

- 60 Mio Euro application fees (Industry)

- 75 Mio Euro license fees (Industry, per annum). Testing fees are neglected given the overlap with EPD.

GPP, per product

At the side of operators / industry, there are probably no additional

administrative burdens. They have to make a bid in a public procurement

procedure anyway, and this processs will not change.

For authorities, these have to learn how to deal with new GPP criteria.

Section 3.3 suggestes costs of 200-300 Euro per 1000 inhabitants, or some

100-150 Mio Euro for Europe as a whole, but this is obviously for all GPP

procedures. Also here we would hardly see additional costs compared to

those already discussed in section 3.3.2.

Minimum standard, per product

0.5 Mio Euro: setting up a legal framework (EU)53

0.25-0.5 Mio Euro/annum: surveillance/enforcement costs, based on some

50-100 model tests per year (EU member states);

Testing fees: see under Ecolabels

Assuming this rather stringent instrument would be applied on the 50 most crucial

building products (which is, for instance, much more than the number of products

now under the Ecodesign Directive), this would imply:

- 50 Mio for criterion development (government)

- 25-50 Mio Euro enforcement costs (government)

53 Since the Ecodesign directive works directly, it avoids that member states have to put effort in

transposing this into own regulation.


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Industry testing costs probably can be neglected, given the implementation of

Environmental Product Declarations that give this information anyway.

Buildings as a whole

Setting up a broad environmental performance testing system at building level

seems however another matter in terms of complexity and costs. For instance, CEN

had to develop some 30 new standards to support the implementation of the EU

Energy Performance of Buildings Directive (EPBD) – requiring probably some 5 TC

secretaries for 2-3 years, 5-10 meetings of committees of dozens of people per

standard which could probably total at 15 person years for the secretariat plus a

roughly 1 person year per standard in meeting times – some 40-50 person years in

total, up to 4 million Euro, excluding overheads like travel. The development of BIM

systems that include environmental information for building products must be

estimated on an effort of creating a major Life cycle inventory database – we

estimate this equal to the updates of the Eco-Invent LCA database which roughly

generate a revenue an estimated 2-4 million Euro. Such an LCA database in fact

does nothing more and less as validating and cross-checking data supplied by 3rd

parties, and storing it in a harmonized format. This costs does not hence include the

effort of industry to generate environmental information, a topic prominently

discussed during the 7 May 2013 stakeholder meeting. Representatives present

however were not able to come up with a rough estimate of costs. If data generation

is organised as separate projects with external dedicated verification, costs could

be high. The food and packagind industry however, that has a much longer

experience with sharing environmental information and LCA data, now generates

such data very much in the same way as financial information as a part of normal

operations, and use their regular financial auditors to certify the accounting system

rather than the data for each individual product. After all, most companies must

already have systems for activity based costing available that allows to allocate all

their costs to the products they make. Transforming this to basic insights into how

much energy, materials, etc. – all of which already available in financial terms – is

related to the construction of a specific product hence should not entail excessive

costs. We feel hence very uncertain about potential costs. Reliable estimates are

difficult to provide on this point. We propose hence to use a sensitivity analysis in

the modelling exercise where we assume around 100 or 200 Million Euro once-off

costs for generating data.

Various (voluntary) certification and evaluation schemes exist and are operational

for utility buildings including retail, offices, eduction, healthcare, industrial and also

multi-residential buildings, of which BREEAM and LEED are among the best known.

Such schemes can play a role in public procurement, and in some countries qualify

for tax reductions. Given the diversity of schemes, there is a need for further

alignment which will be complicated due to the differences in interest. It is difficult to

make precise estimates, but it is not unrealistic that an investment of various

dozens of millions of Euros is needed before a reasonably harmonized system of

environmental performance of buildings at EU level is created. Given the volume of

the building sector in Europe, such costs are however relatively small.

Next to this there is a potential costs for owners and purchasers of buildings to

certify it – estimated by various sources at something between 15 and 40.000 Euro


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for a 10.000 m2 building54

. The certification has to be renewed every 1-5 years. At

200-600 Euro rent per m2 (BNP Paribas, 2012), costs of certification may hence be

up to 1% of the value of the building in unfavourable cases. It is however likely that

by the assessment and preparation the operator of the building will find ways to

save costs, so that the net impact on costs could be lower.

Once such performance testing at building level is operational – which it is in

practice, though not in a harmonized form, this information can be used to set

specifications in contracting and procurement procedures. For this, we would

assume marginal additional costs since the complex procurement procedures in

built environment have to be organised in any case.


To summarize, we suggest to use the existing system of EPDs, ecolabelling, GPP

and where relevant minimimum legal standards to improve environmental

performance of building materials and products. For environmental performance at

building level, for the near future existing certification schemes can be used, in

future to be likely informed by a system of environmental performance information

generated via BIM. For costs we refer to the section above.

3.3.11 Use construction materials more efficiently


Produce the same type of product with less material, e.g. by making the product

thinner, hollow, using voids, etc. This option resembles to some extent the former

one – select materials with low impact. However, under that improvement option it

is about using different materials, and also ensuring that the use of such different

materials still makes sense if environmental impacts are measured at the building

level. In the improvement option discussed here, this problem is less of an issue –

we look at identical materials with the same performance, that just have been more

smartly designed. Replacing a product with a similar, more resource-efficient one

always will result in efficiency gains, without the chance on negative repercussions

or trade-offs at building level.

Produce more resource efficient products.

Supportive policy alternatives, discussion and cost implications

This improvement option is in fact a specific case of what has been described in the

former section under the header of ‘Building products and –materials’. Since we

look at building- and construction material alternatives that have identical

performance, but by smarter design have lower impacts, there can by definition not

be a trade off at building level. The analysis of which supportive policy instruments

are most appropriate and which administrative costs this entails is identical to the

one already given in the former section for building products and materials.

54 http://greenbuildingmanager.wordpress.com/2011/02/01/how-much-does-it-cost-leed-ebom-and-

breeam-in-use/; http://www.inbuilt.co.uk/media/406565/breeamvsleed.pdf


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4 Summary and conclusions

4.1 Introduction

This topical paper describes the policy instruments that need to be in place to

support the simulation modelling in the project ‘Assessment of Scenarios and

Options towards a Resource Efficient Europe’. The essence of the project is a

hybrid modelling approach, in which bottom-up Life cycle costing and Life cycle

impact data are fed into a macro-economic model that then calculates economy-

wide economic and environmental effects for Europe. Ppolicy instruments can play

two roles in the modelling in this project.

1. First, some policy instruments, such as particularly financial instruments,

can be input to modelling itself. This is since macro-economic models in

essence indicate how investments and demand of goods by actors are

influenced by prices. Financial instruments influence such prices and hence

can be directly taken into account by the model.

2. Second, other policy instruments (such as informative instruments and to a

lesser extent regulatory instruments) needs to be included in macro-

economic models in a different way. The main problem is that how actors

react on informative instruments (and to a lesser extent regulatory

instruments) is not endogenised in such models55

. Rather, it will mainly be

the bottom-up analysis from topical paper 2 and 4 that will inform the

modelling. This will work as follows:

a. The technical improvement scenarios will be built up using the

technical improvement options from Topical Paper 4 as building

blocks. The modelling will calculate the macro-economic

implications of costs and environmental benefits at micro-level.

b. As however also commented during a stakeholder meeting in the

project, implementation of technical improvement options need

supportive policies. It hence must be analysed, which is the goal of

this Topical paper, which supportive policies are most appropriate.

If such policies entail additional compliance costs for business and

implementation costs for authorities that are non-marginal (e.g.

compared to implementation costs of the technical improvements) ,

these costs can be included in the macro-economic modelling as

well.

So unlike the case for financial instruments, informative and regulartory instruments

will not be input to modelling. Rather, it will be the other way around: a technical

improvement scenario is modelled, and it must be analysed which policies are

needed to have these technical improvements implemented. The costs of such

technical improvements and (if significant) the costs of deployment of instruments

then can be input to modelling. In the next 2 sections we review the findings with

regard to the aforementioned two types of instruments and the way how they will be

used in the modelling exercise. How the building blocks presented in this report and

Topical Paper 4 are combined to scenarios is discussed in a follow-up Topical

Paper 6. This topical paper also will have to set up the base;ine scenario with the

55 For regulatory instruments this probably is something less problematic – in case of a compliance

rate of 100%, in the modelling one can assume full implementation of the goals of the instrument.


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trends in energy system of the EU27 and individual member states.. Next to a

baseline scenario, we can for instance imagine that one scenario will be developed

that implement just the technical improvement options and related policy

instruments, without tax adjustments; that another scenario will add tax

adjustments; and that a third scenario will include tax adjustments plus

internalisation of externalities.

4.2 Financial instruments

Building block 1: inclusion of external costs related to air emissions

The EXIOPOL database, EXIOBASE, covers 129 economic sectors per country,

and also includes for these sectors around 40 emissions to air, land use, water use

and primary resource extraction. It is this database that underlies the EXIOMOD

model that we use in the project. For all the air emissions in EXIOBASE, external

costs have been estimated, specified by type of emission, sector of emission

(differentiation between stack hight which influences distribution of pollutants), and

if the emission source is in rural or urban areas (influences the number of

receptors), and country (which influences the affected population density and how

emissions are distributed over Europe). We now have a simple building block that

can be included in the model simulations: i.e. that the sectors that create external

costs, would be taxed for this amount of external costs. The level of the tax will

hence vary between the sectors and correspond to the level of economic damage

per one unit of output by the sector.

Building block 2: environmental tax reform (ETR)

ETR until now has been mainly researched, analysed and/or applied in the area of

energy use and emissions (e.g. EEA, 2011). Taxation with the aim of supporting

resource-efficiency is still infrequently applied. With regard to the tax level that is

chosen, the following can be observed. In energy- and emission related ETR

studies often a pre-determined emission reduction goal is set, and then the model

runs are used to analyse at which level of taxation the goal is met56

. The scarce

examples where resource taxations have been modelled, simply seem to have used

tax levels that have been set in a relatively intituitive way.

We propose to use in our project tax levels that have been applied in other projects

earlier, most notably the German MaRess as initial input (i.e. 2 Euro per ton of

extracted building materials, rising to 4.80 Euro per ton in 2030). These taxation

levels are in the same ranges as the aggregates tax in Czech Republic, Italy,

Sweden and United Kingdom which range from from about 0.1 €/t to 2.4 €/t (EEA,

2008). They hence seem a good starting point in the simulations. If responses in the

simulations are low, we can experiment with higher tax rates, e.g. of up to 30-40%

of the price of aggregates. .

In both cases, the internalisation of external costs and tax reform will be

impelemented under the assumption of budget neutrality. We will assume that

additional tax revenues are used by the governments either as investments into

56 See for instance EEA (2011) and Ekins and Speck (2011): the goal was to reach 20% reduction

in GHG emissions by 2020 as also adopted by the EC. Using this goal a carbon tax rate was

calculated that realised this target, and after that economic impacts under different tax recycling

scenarios were assessed.


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mitigation of environmental damages of GHG emissions and pollution or as

additional costs for covering the damages associated with GHG emissions and

pollution to vatious sectors and actors in the economy.

4.3 Technical building blocks: technical improvement options facilitated by

administrative and informative instruments

In Topical Paper 4, the following technical improvement options have been

considered:

1. Design for deconstruction

2. Increase durability and service life of products

3. Increase recycling of waste at end of life

4. Increase renovation rate

5. Increase use of recycled material

6. Intensify use of buildings

7. Reduce land used by the built environment (intensification)

8. Reduce construction waste arising

9. Select materials with low impact

10. Use construction materials more efficiently

We have analysed which policy instruments must be deployed to implement these

options, and made an estimate of the administrative costs for government and

industry, divided in once-off transition costs and annual costs, these instruments

would create. The technical implementation costs of the measures are discussed in

Topical paper 4.

The analysis is summarized in Table 4.1. We reviewed around two dozen EU

Impact assessments focusing on technical measures to get an idea about the

relevance of administrative costs compared to technical compliance costs. We used

the information on administrative costs found in these Impact assessments, most

notably from the Industrial Emissions Directive, the Waste Framework Directive,

Ecodesign directive, the EU Ecolabel, and the GPP program, to estimate unit costs

of different administrative measures, and then made estimates how this could

translate to the policies considered in this paper. We refer to Table 4.1 and the

more detailed explanation in chapter 3. The main cost elements include:

The impact assessment on the EU GPP scheme estimates the one off

learning and implementation costs for procurement authorities in Europe on

some 200-300 Euro per 1000 inhabitants, or some 100-150 Mio Euro for

Europe as a whole (500 Mio people). As an upper limit, we estimated that

the building and construction sector at most can be allocated half of these

costs. With procurement in the building sector often tailor made, one could

even make the case that adding GPP criteria probably will not add to the

administrative burden, it just requires including using different critiera.

Under ‘Reduce land use by built environment’ we have included a

supportive dissemination and research program, which based on the

example of the ESPON program is allocated 50 Mio Euro. This probably is

a significant overestimation, since ESPON has a much broader scope as

intensifying land use. It is likely that if the EU would launch a supportive

dissemination and research program for resource-efficiency in the built


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environment, a program of the size of ESPON would be appropriate to

facilitate all policies considered in this document.

The last big cost item is related to policies that support selection of

materials with low impact, both at material level and building level. Costs for

development of a harmonized assessement system of buildings at EU level

will be seizable since many existing schemes need to be aligned. The

prospect of having Building Information Management systems that include

environmental data is appealing, but requires a major development budget

for creating a standardized database, etc. A particular uncertainty are the

potential costs for industry to generate the type of data needed to create

LCI databases and environmental product declarations. This can be

particularly costly if data generation and – verification is done on a case by

case or project by project basis. If companies generate this information very

much like they generate financial accounts, and have the accouting system

verified by auditors, this is much less costly. After all, most companies must

already have systems for activity based costing available that allows to

allocate all their costs to the products they make. Transforming this to basic

insights into how much energy, materials, etc. – all of which already

available in financial terms – is related to the construction of a specific

product hence should not entail excessive costs. Reliable estimates are

difficult to provide on this point. We propose hence to use a sensitivity

analysis in the modelling exercise where we assume around 100 or 200

Million Euro once-off costs for generating data. The implementation of

minimum standards via a kind of Ecodesign directive and labels via the

Ecolabelling directive can be costly if many product groups, specific product

brands, and companies are involved and these economies of scale do not

lead to lower costs for e.g Ecolabel licenses.

There are however also policies where we estimate their implementation will entail

negligible administrative costs. Member states already have to implement the EU

Waste Framework Directive, including its target of 70% construction and demolition

waste recycling. This implies that Member states have to develop the suggested

policy package for the “’Increased recycling rate at end of life” in any case. It is not

conceivable that more stringent targets will entail more administrative costs. Also

intensifying land use or the increase of renovation largely can be done with existing

instruments – applied with simply a different mindset.

Overall, our analysis seems to confirm the impression that on average

administrative costs are small compared to technical improvement options. While

we applied in most cases upper limit cost estimates, for all suggested policy

package combined the once off implementation costs would be less than 300 Mio

Euro and the annual costs less than 100 Mio Euro, mainly by assuming a very high

application rate for Ecolabels while using maximum license fees. For smaller

companies license fees are various factors lower, and it is also likely that if the EU

Ecolabel will become such an overwhelming success license fees can drop. Even

under these worst case assumptions, the costs we calculated are a fraction of the

turnover of the European building and construction industry, and a fraction for the

costs of managing the 460 Mio ton of building and construction waste arising every

year in Europe. It is hence not surprising that we have found hardly any macro-

economic modelling exercises on environmental policies, where next to the


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technical implementation costs also the administrative costs were taken into

account.

In this project, we hence propose to do some initial model runs with the cost

estimates provided in Table 4.1. Depending on the fact if they influence the

modelling outcome it will be decided if administrative costs should be part of the

scenarios.


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Table 4.1: Summary of improvement options, supportive policies, and related administrative costs

No Improvement option Policies proposed Administrative costs (Mio Euro) Explanation (see details in chapter 3)

Government Business

Once off Per annum Once off Per Annum

1 Design for deconstruction (case focused on magnetic adhesive flooring)

Green public procurement Ecolabelling In due time: minimum standards via e.g. the Ecodeisgn directive

62,5 0 Total GPP implementation costs estimated at 100-150 Mio Euro once off in Europe. Efforts in de building sector may at most be half of this. Industry does not face different practices as regular producement procedures so no additional administrative costs assumed. Ecolabel costs already included under 2

2 Increase durability and service life of products

Green public procurement p.m. 0 GPP implementation costs already accounted for under 1). See further explanation under 1.

(cases: asphalt, paint, flooring)

Including durability criteria in Ecolabels for paint and flooring; awareness campaign for using warm mix asphalt

1,01 12,4 3 Criteria development at EU level at 25kEuro per product for 2 products. For business, we assume 200 companies applying, with 10 product lines each, with annually 1500 Euro ecolabel license fee and once off 6200 Euro application and testing fees.

In due time: minimum standards via e.g. the Ecodeisgn directive Not feasible on the short term

3 Increase recycling at end of life - Asphalt - Concrete - PVC - Float glass - Carpet - Plasterboard

More stringent versions of policies already required under the WFD to realise 70% recycling of C&D waste. It concerns mandatory administrative and financial instruments like: source separation; quality standards for secondary raw materials; re-use and recycling targets; landfill taxes This may require enhancement and subsequent enforcement of the 70% goal buy the EC

p.m. p.m p.m p.m Rough estimates of WFD implementation indicate some 500 Mio Euro administrative costs EU wide, of which some 100 Mio Euro could be allocated to C&D waste. These costs have to be made anyway, and it is not clear to see that implementing more stringent targets at national level would entail additional costs since the instruments are the same.

Adjusting Ecolabels and GPP criteria to include recycled content p.m. p.m p.m p.m Is already discussed under 5

4 Increase renovation rate Use existing policies to stimulate renovation rather than demolition: - Spatial planning directed on the long term use of buildings - Focus on renovation in redevelopment plans of city quarters and public buildings - More stringent evaluation criteria for getting demolition permits

p.m. p.m p.m p.m The policy options require in no new instruments. Rather, authorities are asked to use the instruments they apply anyway in spatial planning and built environment, in such a way that renovation is stimulated over demolition and new construction.

Awareness campaign and best practice exchange 10 Similar to 3-4 network projects under EU FP7 or JPI Urban Europe

5 Increase use of recycled material (C&D waste, fly ash, landfill mining)

Developing or ajdusting Ecolabel and GPP criteria so that they include demands for recycled content

0,01 12,4 3 Criteria development at EU level at 25 kEuro per product (cement and aggregates). Inclusion of more products hardly adds to costs. For business, we assume 200 companies applying, with 10 product lines each, with annually 1500 Euro ecolabel license fees and once off 6200 Euro application and testing fees.

Green public procurement p.m. p.m p.m p.m GPP implementation costs already accounted for under 1). See further explanation under 1.

In due time: minimum standards via e.g. the Ecodeisgn directive Questionable if this still is needed if the measures under 3) on increasing recycling rates are implemented.

R&D support for landfill mining 2.5 Landill mining is still in an experimental stage. Some interesting initiatives are currently co-funded by EFRO and national subsidy schemes. Some major Horizon 2020 projects suggested

6 Intensify use of buildings Residential: allocation legislation that relates housing size to family size

p.m. p.m p.m p.m Politically probably not feasible; otherwise administrative costs around 1 ct per EU citizen


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No Improvement option Policies proposed Administrative costs (Mio Euro) Explanation (see details in chapter 3)

Government Business

Once off Per annum Once off Per Annum

Residential: gratually adjusting housing taxes on the basis of relation beteen family size and housing size (number of room)

p.m. p.m p.m p.m Countries have already complex housing taxing systems that are regularly updated; apart from difficult to estimate transition costs no annual costs can be foreseen.

Offices: regulating maximum space per employee p.m. p.m p.m p.m Politically questionable, otherwise administrative costs of less as 1% of office rental prices at stake. For small offices this may be higher.

Offices, government: planning to use offices as efficient as possible.

p.m. p.m p.m p.m Implies planning at authorities about the use of their own office space, which happens anyway

7 Reduce land used by the built environment

Use exsisting spatial planning and building permit systems to support development of compact cities and dense land use.

p.m. p.m p.m p.m No additional administrative costs since existing instruments are used

Implement a supportive dissemination and research program (compare ESPON)

50 This is probably a high-end estimate since it reflects the costs of ESPON, a knowledge development program much broader as needed in this case.

8 Reduce construction waste arising

Development of guidelines for construction waste minimization 1 p.m p.m p.m Assumes a major project at EU level to consolidate best practice documents from member states and make some educational web-based tools available.

Education and training p.m. p.m p.m p.m Costs difficult to estimate. It must be assumed that industry employees will have education and training to catch up with best practice on a regular basis

Making guidelines mandatory in building codes p.m. p.m p.m p.m Is a very simple administrative adjustment

Use guidelines as criteria in procurement procedures p.m. p.m p.m p.m Is a very simple addition in what usually are very complicated procurement procedures and -documents

9 Select low impact material

a: Material level Ecolabel criteria 1,25 61,25 75 Based on the extreme assumption that 50 building product categories with 10 product lines each made by 100 different companies (i.e. 50.000 applications) would be at stake, and that they all have to pay the highest fees under the EU ecolabel scheme (1500 Euro/pa license and 1200 Euro application fees once off. Testing costs neglected due to existing EPDs. Next to this 25 k costs for authorities and industry for criteria development per specific product.

GPP p.m. p.m p.m p.m GPP implementation costs already accounted for under 1). See further explanation under 1.

Minimum legal standard 50 25-50 Based on the assumption 100 product groups would be regulated, which is much more as now under the Ecodesign Directive.

b: Building level A few dozen CEN standards 2 2 A similar number of standards had to be developed for the EPB Directive. Secretarial and meeting costs estimated at 4 Mio Euro, here split 50-50% between government and industry

Development of an LCA-alike database that is compatible with BIM systems

4 PM Costs estimated on the basis of major LCA database development projects. PM post for industry costs of data generation of 100-200 Mio to be included as sensitivity analysis

Development of a harmonized assessment system at EU level 6 6 Not clear, but this can easily become a long process and discussion, supported by significant research projects. Here set on 3 times the costs of developing CEN standards.

Assessement and certification costs Between 10 and 40 k for a 10.000 m2 building, to be renewed any 5 years. Is normally below 1% of annual renting costs. Absolute costs cannot be estimated since it is not clear for how many buildings BREEAM and LEED alike certifications would be done.

10 Use construction materials more efficiently

p.m. p.m p.m p.m Identical to option 9.a: more efficient production of construction materials leads to materials with lower impacts.

TOTAL 190,27 0 94,05 81


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5 Annex 1: Calculation of externalities in an input-output framework

The calculation of external cost factors for use in an EE IO context has been the

contribution of Wolf Müller and colleagues in the EXIOPOL project. Their

methodology has been described extensively in EXIOPOL deliverable DIII.I.b, and

we refer for details to that document (Müller et al, 2010). Here, a summary of the

approach is given. The essence of externality calculations is to analyse the damage

done to third parties by industrial activities, e.g. in the form of health effects,

mortality, loss of agricultural production, or damage due to sea level rise. Using

princples such as damage costs or willingness to pay to avoid such damage, a

monetary value can be attached to this damage.

Externality researchers usually calculate external costs using a time and spatially

explicit context. One takes a specific industrial plant, looks at the emissions

generated, calculates the dispersion into the environment, and how many people for

instance are affected57

. Since EE IO tables give only economic transactions and

resource extractions and emissions by sector and country for a specific year, this

implies that the usual temporal and spatial specification is not matched. Müller et al.

(2010) tried to overcome this problem in essence by differentiating as much as

possible between the main differences in temporal and spatial characteristics of

emissions from specific industries in specific countries (see figure A1.1). Such

elements include (summarized from Müller et al., 2010):

Figure A1.1: Approach for calculating external costs for use in an IO-framework.

Chapter numbers refer to chapters in EXIOPOL deliverable DIII.I.b

57 An externality analysis that had to help the siting of a power plant for Copenhagen not

surprisingly found that it best could be situated sout-east of the city, and not west of the city, since

then the prevailing easerly winds would disperse most pollution over the Balticr rather than the

city.


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1. Regarding the height of release of stationary sources, the size of the stack

was defined as the relevant reference value to identify the height at which

substances are emitted. To facilitate the analysis, the stack heights were

classified in four groups:

a. low stack: stack height of the emissions source is below 20m

b. medium stack: stack heights of the emission source is between

20m and 100m

c. high stack: stack heights above 100m

d. transport activities: mobile emission sources with very low height of

emissions

For the classification of emissions according to the height of the emission

source two different information sources have been applied. One important

source of information was from Pregger and Friedrich (2009) who provided

a table of 34 different plant types and their respective stack heights. For the

classification of the emissions of the EE SUT sectors, the emission-

weighted average values were applied. The other major source for

classifying the height of the emissions from different sectors was provided

by the European Monitoring and Evaluation Programme EMEP. Here,

effective anthropogenic emissions were distributed along vertical layers

according to the SNAP classification of sectors Simpson et al. (2003). For

industry sectors not covered by these sources, stack heights were

estimated based on expert judgements, internal discussions and personal

communications.

2. Regarding spatial differentiation, a distinction in urban and non-urban

emission sources was made. Usually no data was available for the

classification of these emissions according to the share of urban and non-

urban sources of emissions for any of the sectors. As a consequence,

these shares had to be approximated for all sectors. Once again, expert

judgements and internal discussions were a major source for the

estimations.

As a next step, external cost values were calculated using such generic temporal

and spatial characteristics by substance emitted by sector. The following approach

was followed here:

- First, country and sector specific approaches for estimating the country-specific

external cost values for 41 pollutants covered in the EE SUT were developed.

Two approaches were used here:

o For the classical airborne pollutants and a number of heavy metals,

results calculated with the EcoSenseWeb model (EU funded project

NEEDS, see Preiss et al., 2008) were included (see Table A1.1). With

the EcoSenseWeb model country-specific values for the EU-27

Member States plus Switzerland, Norway, Russia and Turkey. These

country-specific values allow for a differentiation with respect to the

height of the release of the substances. Table A1.2-A1.4 give related

damage cost factors.

o For other air emissions covered by the EE SUT framework, the LCIA

methodology of IMPACT2002+ has been applied (see Figure A1.2 and

Table A1.5). This methodology allows for the estimation of general

external cost values via damage factors for impacts on human health


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(by IMPACT 2002+ expressed in DALYs’s), the ecosystem (which

IMPACT 2002+ expresses in PDF*m²*yr) and climate changes

(expressed as GWP). The monetary valuation of these damage factors

is given in Table A1.6 and was also based on results for the EU-27

from NEEDS.

o Note that for non-EU countries no dispersion modelling and impact

assessments were available. As an approximation, for the 16 additional

non-EU countries, the dispersion of pollutants and concentration-

response-functions have been assumed to be similar to those applied

for the EU-27. Thus, PPP-adjusted monetary values of the average EU-

27 results have been applied for these non-EU countries. It has to be

noted that the difference in WTP based on PPP-adjustment is more

important than the difference in dispersion modelling within Europe.

- Second, differences in the resulting external cost values for emissions of

particulate matter (PPM2.5 and PPMcoarse) in urban (highly populated) and rural

(less populated) areas have been estimated. The estimated factors represent

differences in the impacts of these particles on human health which are highly

dependant on the affected population, i.e. the population density around the

source. The estimations have been accomplished applying the EcoSenseWeb

model for sources in Germany and Spain, representing countries with high and

low levels of population densities. The results have been generalised to be

applicable for the EU-27 Member States as well as the 16 non-EU countries of

the EE SUT, see Table A1.7. Like above, the EU27 values were extrapolated to

the 16 non EU countries using PPP factors.

Table A1.1: Substances covered by the estimations of the NEEDS project (Preiss et

al., 2008)

Pollutant EcoCat

PPMcoarse Air

PPM2.5 Air

NOX Air

SOX Air

NH3 Air

NMVOC Air

Pb Air

Cd Air

Hg Air

As Air

Cr Air

Ni Air

Dioxins Air


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Table A1.2: Damage factors for human health impacts on Northern Hemispheric

scale (NEEDS project, Preiss et al., 2008)

pollutant

Damage

factor

[Euro per

tonne]

NH3 2.7

NMVOC 357.5

NOx 131.0

PPMcoarse 2.1

PPM2.5 157.7

SO2 278.2

Table A1.3: Mortality and morbidity effects of certain airborne pollutants per tonne

of emitted pollutant in EU-27

physical impact unit NH3 NMVOC NOx PPMcoarse PPM2.5 SO2

Increased mortality risk - infants YOLL 1.24E-03 4.42E-05 8.63E-04 1.22E-03 3.45E-03 8.88E-04

Life expectancy reduction – YOLLchronic –

total YOLL 1.63E-01 6.26E-03 8.92E-02 1.22E-03 4.14E-01 1.03E-01

Total mortality YOLL 1.64E-01 6.31E-03 9.00E-02 2.43E-03 4.17E-01 1.04E-01

Chronic bronchitis cases 4.21E-03 1.50E-04 2.93E-03 4.13E-03 1.17E-02 3.02E-03

Respiratory hospital admissions – total cases 1.57E-03 6.27E-04 1.63E-03 1.56E-03 4.43E-03 1.06E-03

Cardiac hospital admissions – total cases 9.82E-04 3.50E-05 6.84E-04 9.64E-04 2.73E-03 7.04E-04

Medication use / Bronchodilator use –

children cases 9.12E-02 3.25E-03 6.35E-02 8.95E-02 2.54E-01 6.54E-02

Medication use / Bronchodilator use –

asthmatic adults cases 7.13E-01 7.81E-01 1.20E+00 7.26E-01 2.06E+00 4.17E-01

net Restricted Activity Days (netRAD) – total days 2.38E+00 8.21E-02 1.29E+00 0.00E+00 6.04E+00 1.50E+00

Work Loss Days (WLD) – adults days 3.45E+00 1.19E-01 1.87E+00 0.00E+00 8.76E+00 2.18E+00

Minor Restricted Activity Days (MRAD) –

adults days 9.09E+00 2.44E+00 6.91E+00 0.00E+00 2.32E+01 5.47E+00

Lower Respiratory Symptoms – adults days 7.33E+00 2.61E-01 5.11E+00 7.20E+00 2.04E+01 5.26E+00

Lower Respiratory Symptoms – children days 4.69E+00 6.84E-01 3.75E+00 4.62E+00 1.31E+01 3.30E+00

Cough days – children * days -1.05E-

01 3.00E+00 2.73E+00 0.00E+00 0.00E+00

-4.49E-

01

Total morbidity DALY 1.03E-01 4.44E-03 7.18E-02 9.76E-02 2.85E-01 7.32E-02

*Note: The effects for cough days are caused by ozone only. NH3 and SO2 reduce the

formation of ozone and thus show negative signs with respect to cough days. For the other

physical impacts these effects are offset by the impacts of primary particulate matter.


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Table A1.4 Damage factors for crop yield losses and damages to materials per

tonne of emitted pollutant for the EU-27

Pollutant

Low stack (below

20m) Medium stack (20-10m)

High stack (above

100m)

Crops Materials Crops Materials Crops Materials

SOX air -45.00 287.00 -45.00 287.00 -27.00 231.00

NOX air 328.00 70.00 328.00 70.00 180.00 71.00

NMVOC air 189.00 0.00 189.00 0.00 189.00 0.00

NH3 air -183.00 0.00 -183.00 0.00 -183.00 0.00

Figure A1.2: Overall scheme of the IMPACT2002+ framework (Jolliet et al, 2003)


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Table A1.5: Substances analysed applying the LCIA methodology

Pollutant PollutantName EcoCat

CH4 methane air

CO carbon monoxide Air

CO2 carbon dioxide air

N2O nitrous oxide air

TSP particulate matter/dust air

Cu copper and derived solid or gaseous compounds air

Se selenium and derived solid or gaseous comp. air

Zn zinc and derived solid or gaseous compounds air

HCH hexachlorocyclohexane air

PCP pentachlorophenol air

HCB hexachlorobenzene air

PAH polycyclic aromatic hydrocarbons air

Benzo(b) benzo(b)flouranthene air

Benzo(k) benzo(k)flouranthene air

Benzo(a) benzo(a)pyrene air

Indeno indeno(1,2,3-c,d)pyrene air

aldrin aldrin air

chlordane chlordane air

chlordec chlordecone air

DDT ddt air

dieldrin dieldrin air

endrin endrin air

heptachlor heptachlor air

mirex mirex air

toxaphene toxaphene air

HeBrBi hexabromobiphenyl air

PCBs polychlorinated biphenyls air

parrafins short-chained chlorinated parrafins air

Table A1.6 : Monetary valuation factors for EU-27 Member States (IMPACT 2002+

end points, see figure A1.2)

Impact Ecosystem Quality Human Health Climate Change

Euros 0.47 €2000 / PDF*m²*yr 40,000 €2000 / DALY 21 €2000 / tCO2eq

Table A1.7: Average mark-up factors for urban areas for PPM2.5 and PPMcoarse with

respect to stack height to be applied for the EU-27 Member States

Pollutant

Stack height

PPM2.5 PPMcoarse

low stack height (below 20m) 2.18 3.88

medium stack height (20m-100m) 1.03 1.24


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6 Annex 2: Comments received and response

A draft of this report was discussed in a stakeholder meeting on 7 May 2013. During

the meeting various comments were made on the two Topical papers subject to the

workshop, which were summarized in minutes of the workshop and a reflection

document that indicated the way how comments would be dealt with. Apart from

this, some stakeholders provided additional written comments after the workshop.

In this annex we summarise these comments in the left colum of the table below,

and give our response on how we dealt with the comment in the right column.

Who/What Comment (during workshop) Response

Option 3:

improved

recycling

(section

3.3.4)

The most fundamental comment was

that setting criteria at the level of

materials rather than products might

hinder competition

Policies currently set targets for CDW in

general, so this comment is already

honoured. We clarified this now better in

describing Option 3.

Option 4:

Increase

renovation

rate

(section

3.3.5)

One additional instrument was

suggested, i.e. financial stimuli for

renovation, such as subsidies or tax

exemptions

We could not find references that indicated

quantitative information on effectiveness

Option 9:

Select low

impact

materials

(section

3.3.10)

Energy mix used by the housing

sector is changing over time (more

renewable energy) hence

environmental effects will also

change over time

This is a difficult point. We can only to a

certain extent estimate general technical

changes in other sectors towards the future

in the macro-economic modelling. We will

see if we can adjust the energy mixes,

though. It is more a comment to take into

account in setting up the baseline scenario

in TP6 on scenarios rather than TP5

Point 9 led to the discussion how to

do assessments at the building level.

A future where EPDs in the field of

building materials are abundant and

can be used with a BIM-alike

sustainability assessment was

envisaged. A problem at this stage is

that costs for EPDs are still high. The

building industry however could go

through the same process as

industries in the food and drink

sector. This sector by now has highly

standardised ways of creating EPDs.

These procedures are checked by

auditors and occasionally the EPD of

a product is controlled. This is hence

a verification of the system, very

much like financial auditing, rather

than a very expensive review of each

and every EPD. The costs of several

This issue of the costs of a good EPD/LCA

database for specific products of specific

producers has been mentioned at various

moments during the workshop. The costs

for setting up and maintaining a database

such as Eco-invent can be estimated with a

reasonable level of certainty. The real

problem is the estimate of costs to be made

by industry to provide primary inventory

data. As the example of the food and drink

industry indicates, systems can be

implemented with very different cost levels.

We looked a bit better at the food and drink

industry but did not find a way to make

reliable estimates. We therefore added a

high end cost estimate for data inventory on

the basis of our experience with doing

LCAs with primary data, and peer-review

procedures, i.e. an estimate of 100 to 200

Mio Euro for the costs of data inventory for


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million Euro for setting up a

European EPD database was seen

as reasonable. The group however

did not manage to give a reliable

estimate of what costs would be at

stake for industry – relatively limited

additional costs since many data are

gathered in any case, or even up to

figures in the region of 100 Million

Euro or more if an expensive, third

party certified and case-by-case

cross check of EPDs is pursued

EPDs.

Several

stakeholde

rs

Several stakeholders have

expressed doubt about the

effectiveness of soft instruments like

ecolabel and GPP to ensure that the

technical improvement options are

actually implemented.

The list of instruments considered also

includes ‘hard’ instruments such as

regulation, Examples are Minimum

standards for the Ecodesign directive,

regulation of maximum space per

employee, mandatory use of construction

waste minimization guidelines in building

codes, minimum legal standards for

impacts of materials and buildings, etc. We

refer to the summary table 4.1. We would

argue these are quite hard and tough

measures. It is politically probably not easy

to get them applied, but if applied these

certainly will lead to market transformations

Comment (after workshop) Response

BIBM Furthermore, reaction to the policies

proposed, BIBM stands up against

the use of Ecolabel for building

products. An ecolabel for individual

construction products cannot

guarantee adequate, sustainable

performance. It is building design and

the combinations of different

products which are decisive.

Therefore, the sustainability

assessment of buildings should be

done at the building level, based on

the CEN standards covering the

environmental (mandated by the

European Commission), economic

and social performance of buildings

(CEN/TC 350). Labels (ecolabels

etc.) may only target end-products. In

the case of works, whole life-cycle

assessment at the building level

should be used rather than labels

being applied to intermediate

construction products.

This discussion if it makes sense to

evaluate buildings only at building levels

and not building products at product level

came up various times during the project.

We agree that it is dangerous to compare

different building products or materials at

the product or material level when the use

of such products of materials has trade-offs

at building level. Hence, evaluation at

building level always is relevant to get a

complete picture. Having said this, this

does not make evaluations at product or

material level fully irrelevant. There are

competing products and materials on the

market, that have exactly the same

function, without that their use has

implications at the building level. A clear

example is cement made with primary

materials and cement made with secondary

materials, that conforms with the same

technical performance standards. Cement

made with secondary materials usually has

a lower life cycle impact as cement made


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with primary materials. It hence makes

sense here to develop an EPD, or an

ecolabel, at the level of the product.

Incidentally, Australia already has such a

certification system for cement. We hence

cannot honor the comment in this absolute

form. We clarified this point now much more

elaborated in the section on Option 9.

Glassforeur

ope

Comments on TP4 only: concern that

glass recycling takes mainly place in

case of replacement of windows, not

when buildings are demolished.

In TP5 more cautiously formulated now.

EAPA Comments on mainly TP4 Some minor improvements in table 4.1 TP5

Eurima Comments on TP4 only -


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