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    Royal Swedish cademy of Sciences

    Estimating the Cost of Noise Pollution in FranceAuthor(s): David Pearce, Jean-Philippe Barde and Jacques LambertSource: Ambio, Vol. 13, No. 1 (1984), pp. 27-28Published by: Springer on behalf of Royal Swedish Academy of SciencesStable URL: http://www.jstor.org/stable/4312978 .

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    woodfuel to

    the urban

    population on

    a

    rationaland

    plannedbasis,to

    conservethe

    soiland

    water

    resources

    especiallyaround

    towns),

    to provide

    industrialraw

    mate-

    rials,

    to generate

    export-income

    n

    foreign

    currenciesby

    exportingtimber,

    etc. But,

    forest

    plantations

    by

    themselves will not

    solve

    the woodfuel

    problems

    of

    the

    peasantry.

    A

    strategy

    hat sets out to alleviate

    the

    poorman'senergy crisis n the SADCC

    region

    should have

    three prongs to it:

    First,

    encourage

    agro-forestry, e

    give in-

    centives to the farmers to

    grow more

    of

    their

    own

    fuel on their own

    agricultural

    land and in

    woodlots

    on the common

    land aroundthe

    village, using

    a mix of

    short-rotation

    on-indigenous

    nergy

    trees

    (for

    fuel)

    and long-rotation

    indigenous

    trees for fruit,for

    fodder and for

    industrial

    purposes. This means

    providing

    echnical

    and

    financial

    assistance

    hrough agricultu-

    ralextension

    services,

    rather han

    forestry

    services.

    Second, while

    the present prac-

    tice of

    cooking

    on

    an open

    fire

    also fulfills

    certain

    social and cultural

    needs,

    it

    is

    an

    extremely

    nefficientway of

    using the heat

    generated by

    firewood;

    only

    a small

    per-

    centageof

    the total

    amount released dur-

    ing

    buming is actually

    used. In

    principle,

    there is

    great scope

    for saving

    firewood by

    using

    highly efficient

    stoves which have

    been

    speciallydesigned

    for the purpose.

    This may

    entail the mass

    production and

    mass

    dissemination at

    low

    subsidized

    prices

    of

    simple,

    efficient wood and

    char-

    coal

    stoves.

    This is a

    truly

    daunting task

    which

    requires

    considerable

    mobilization

    of

    manpower,

    material and

    financial re-

    sources.

    Third, the

    woodfuel

    problem

    should

    not be

    considered

    n a

    purely static

    fashion, as

    though

    there is

    no

    room for

    changing

    he

    patterns

    of

    energy

    consump-

    tion. If

    the

    material

    andcultural

    tandards

    of the rural and urban

    poor

    are

    -to be

    raised,they

    must

    have

    access, by

    stages, to

    modern

    fuels.

    Modern,

    non-petroleum

    based fuels, in

    particular

    hydro or coal

    generated

    electricity, or

    electricity pro-

    ducedby

    local

    producer

    gas

    units, will tru-

    ly

    revolutionize

    he

    peasant's life

    by pro-

    viding

    light for

    reading,

    and

    for

    produc-

    tion,

    distribution nd

    socio-economic ctiv-

    ities at

    night.

    This would

    be

    a

    great

    eap

    forward n

    the life of the rural

    poor in

    addition o

    preserving

    medicines, vaccines

    and

    foodstuffs

    through

    refrigeration.

    Large-scale

    rural electrification

    hould be

    pursued.

    Let's

    bring

    our

    attention back to the

    urban

    consumersof

    woodfuel

    who, as

    we

    argued

    earlier,

    both create and

    suffer rom

    the

    woodfuel

    crisis. Their

    crisis will

    also

    respond

    positively o

    the

    second and

    third

    prongs of

    the

    strategy

    outlined

    above.

    In

    addition,

    the

    option of

    providing

    charcoal

    to

    them

    throug

    controlled

    forest

    planta-

    tions

    and

    more

    modern,

    efficient

    large-

    scalemanufacturing

    annot be

    neglected.

    Ourpresent knowledgeof the woodfuel

    situation in SADCC

    countries is very

    sketchy. To make

    informed policy and

    strategy

    decisions, more detailed informa-

    tion

    from extensive and intensive field-

    work is needed. It is to

    be hoped that the

    SADCC countries will

    embark, without

    delay,

    on gathering his information

    as a

    necessary tep towardssolvingtheir

    wood-

    fuel crises.

    Retnncm and Notes

    1. Woodfuel means firewood

    fuelwood)

    and char-

    coal.

    2. SADCC stands for the SouthernAfricanDevelop-

    ment CoordinationConference

    omprisingAngola,

    Botswana,Lesotho, Malawi,

    Mozambique,

    Swazi-

    land,

    Tanzania,

    Zambia

    and Zimbabwe.

    3.

    The author s a consultant conomistand technical

    adviser o the SADCC EnergySectorTechnical

    nd

    AdministrativeUnit. The views expressed

    n this

    articleare entirely his own, and should not be at-

    tributed o the Unit he is working

    n.

    4. 1 GigaJoule= 1000

    million

    Joules

    = 0.034 metric onsof coalequivalent

    = 0.022 metric ons oil equivalent

    5.

    A Van Gelder and

    0

    Poulson The woodfuelsup-

    plyfrom reesoutside he forests n the highlands

    f

    Kenya ,The Beijer

    Institute,Stockholm,Sweden,

    1981.

    6. P O'Keefe Fuel for the People: Fuelwood n the

    Third

    World ,

    Ambio,

    Vol. 12 Number2, 1983.

    7. Author'saddress:

    do

    Beijer Institute,Royal Swed-

    ish

    Academy

    of

    Sciences,

    Box

    50005, S-

    10405

    Stockholm,Sweden.

    stimating t h o s t

    o

    o i s e

    ollution

    n

    r a n c e

    I~ ~

    I

    0~~~~~~~~

    22

    ab

    a -

    BYDAVID

    PEARCE,

    JEAN-PHILIPPE

    ARDE

    AND

    JACQUES

    AMBERT

    One of the

    many problems faced by

    en-

    vironmentalpolicy

    makers is the

    ranking

    of prioritieswithin

    any given environmen-

    tal budget. One can wonder if we are

    perhapsmost ignorant about those

    pollu-

    tants that may

    matter most.

    It is

    arguable,

    for example,

    that the continued preoc-

    cupationwith the human health effects of

    sulfur dioxide

    is misplaced, especially

    when evidence

    of that damage s compared

    either to damage rom drinking

    watercon-

    taminants r to

    the other formsof environ-

    mentaldamage

    rom SO2such as materials

    corrosionand acid rain. There s,

    however,

    one source of

    pollutionwhichhas received

    mountingattention:noise. It has been esti-

    mated that, in OECD countries,

    about 15

    percent

    of

    the

    population (ie

    100 million

    people) are exposed

    to noise levels above

    65

    decibels.

    It has been estimated that

    approximately55 percent of

    the popula-

    tion (400 million inhabitants)are

    exposed

    to a

    noise level

    of over 55 dB (1). Forecasts

    in

    several countries

    show that if stringent

    abatement policies are

    not

    implemented,

    this situationwill remain he same

    or even

    worsen (2).

    ABIO984

    27

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  • 8/19/2019 Estimating the Cost of Noise Pollution in France

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    Table 1.

    Traffic noise exposure and depreciation of

    property prices:

    France

    1980.

    (a)

    (b) (c)

    (d) (e)

    (f)

    Noise Number

    of Mean

    Value of (c)

    x

    0.4 %

    Depreciation

    Level

    Dwellings (1)

    Excess Housing

    (%) at 0.4%

    of

    dB

    (A) dB

    per Stock (3) house

    price

    (Leq

    scale)

    household (2) Francs

    x

    109 (e)

    x

    (d)

    Francs

    x 1

    09

    55-60 3 442

    128 2.5

    860.5

    1.0

    8 605

    60-65 2

    214 265 7.5

    553.6

    3.0

    16 608

    65-70 1 765

    117 12.5

    441.3 5.0

    22 065

    70-75

    709 709

    17.5 177.4 7.0

    12 418

    75+ 76939 22.5 19.2 9.0 1 728

    Total

    8 208 158

    2052.0

    61

    424

    Sources:

    1

    IRT (1982), p.lV.11.

    This comprises 44.2% of all

    dwellings.

    2

    Taking 55 dB (A) as

    the origin and 80 dB (A) as the maximum.

    3

    At an

    average of 250,000 1980

    F.Francs per dwelling.

    To assess the economic feasibility of

    traffic noise abatement requires a cost-ben-

    efit analysis. To date, however,

    we have

    had little idea about the magnitude

    of the

    noise problem in terms of monetized

    esti-

    mates of damage. This focus article reports

    a new estimate for France.

    HEDONIC RICETHEORY

    Substantial research efforts by economists

    have led to some considerable sophistica-

    tion of the idea that house prices

    will

    em-

    body a valuation of pollution damage.

    The basic idea of hedonic price theory is

    that the house is to be thought

    of as a

    bundle of characteristics, each of which

    generates benefits or liabilities

    to

    the

    occu-

    pier. The price of a house is then some

    composite of the prices of these

    character-

    istics such as proximity to the central area

    of a town, amenities, number

    of rooms,

    availability of garage space and the exter-

    nal environment within which

    the house

    exists. Any pollutant in that environment

    would then be thought of as

    a negative

    characteristic, carrying

    a

    negative price.

    Under

    certain conditions,

    it

    should be

    possible to estimate this price

    and to deter-

    mine how far it measures the

    occupier's

    willingness to pay for the avoidance

    or re-

    duction of pollution. Noise nuisance

    would

    be one such example.

    The detailed theoretical

    basis

    of

    the

    hedonic price approach is

    not

    reviewed

    here. Explicit statements are given

    in Free-

    man

    (3) and the specific application

    to traf-

    fic and airport noise is discussed in Nelson

    (4).

    For our purposes it is sufficient to note

    that the evidence, primarily

    from the

    USA, suggests that-for

    traffic

    noise-the

    fall

    in

    the price

    of a house

    due

    to a one

    decibel rise in the level of noise

    is

    about

    0.4

    percent. That is, for each

    1

    dB rise

    in

    the

    noise level, the price

    of

    a

    house would

    fall

    by 0.4 percent,

    all other things being

    equal. The empirical problems

    with

    this

    approach are formidable and

    the hedonic

    price approach

    is not

    without

    its theoreti-

    cal

    critics (5).

    For

    the

    current

    exercise,

    however, we are interested in seeing

    whether the measure of damage

    that

    such

    a

    price implies for a nation

    as a whole

    appears

    to

    be

    of

    the right

    order

    of

    mag-

    nitude.

    THECALCULATIONS

    France was chosen because

    of

    the availa-

    bility of a detailed

    and extensive analysis

    of automobile

    noise which, in turn, was

    related to dwellings.

    In effect, it has

    proved

    possible to estimate

    the numberof

    dwellings

    in France exposed

    to various

    levels

    of noise arising from

    automobile

    sources(6). The

    data are summarized n

    Table

    1.

    To arriveat the grand otal for deprecia-

    tion we

    assumethat depreciation

    s a con-

    stant inearfunction

    of house price so

    that

    the total is calculatedas:

    V =

    iy[Hi.

    (Ni

    - 55). Ph.D]

    where

    V is the total depreciation

    f the housing

    stock

    due to

    trafficnoise;

    H. is the number

    of houses

    n the 'th

    noise

    band;

    Ni

    is

    the upper imitof the 'th noise

    band;

    Ph

    is an

    average

    house

    price

    across

    all

    noise bands;

    D

    is

    the percentagedepreciation

    due

    to

    trafficnoise, takenhereto be 0.4%

    Table

    1

    shows that the

    value of

    V is 61.424

    billion 1980 French

    rancs.

    Now,

    the value of

    V shown s the depre-

    ciation

    on a housing tock:

    e it is a

    present

    valueof depreciation

    and hence, following

    the procedures

    for hedonic

    price theory,

    an

    approximation

    f the present

    value

    of

    the willingness o

    pay

    for

    reducing

    all

    traf-

    fic noise to 55 dBA.

    In

    fact, willingness

    o

    pay may be less

    than the depreciation

    sti-

    mate unless specific

    restrictions

    re

    placed

    on

    the

    assumptionsabout

    the demand

    for

    and

    supply

    of quiet (see

    Freeman,3).

    It

    is more relevant

    o express t as

    an annual

    loss. While t would be possible o extrapo-

    late the number

    of exposed households

    into the future, for

    simplicitywe calculate

    the annuityvalue of

    V

    assuming

    hat

    the

    same

    stock of households s

    exposed to the

    same levels of noise

    for the next ten years.

    Discussionof likely trends

    s to be found

    n

    the IRT report(7).

    The annuitized

    value is obtained by

    di-

    viding

    V by

    S=(I

    +

    r)n-I

    r

    By

    assumptionwe have

    set

    n

    =

    20

    and

    30.

    r is the discount rate

    which

    we set

    at 5

    percent

    n realterms.

    How far

    this accords

    with the rates of time preferenceof French

    householders s difficult

    o

    say.

    The use

    of

    5

    percent

    here is

    designed

    moreto reflect

    a

    normative discount

    rate

    for cost-benefit

    purposes 8).

    For n

    =

    20 and r

    =

    5,

    we have a value of S

    of 33.0659.

    The resulting annuitized

    value of V is

    given by V/S which is 1.85

    billion 1980

    French

    francs. For n

    =

    30,

    S

    =

    66.4388

    and

    V/S

    =

    0.92 billion 1980

    French francs.

    It is interesting

    to note that, in

    France,

    annual expenditures

    on traffic noise abate-

    ment are

    0.5 billion francs per

    year. which

    means

    that the damage cost

    of noise is

    about 4 times higher

    with n

    =

    20 and

    2

    times higher with n = 30.

    CONCLUSION

    This paper

    suggests that, using

    plausible

    results

    from hedonic price

    estimation as

    applied to road traffic

    noise, and according

    to the

    assumptions about

    time horizons

    and

    discount

    rates, the annual

    damage

    arising

    from traffic noise in France is some

    1

    to 2 billion French

    francs, or about 0.27

    to

    0.45 billion US

    dollars

    in

    1980 prices

    and

    at

    1980 exchange rates. Note

    that this

    is for traffic

    noise only. It excludes

    aircraft

    noise and workplace

    noise.

    It also excludes

    any noise impacts which are not likely to

    be perceived by

    house occupiers, notable

    among which may be cardiovascular

    dis-

    eases and other

    illnesses brought

    on

    through

    the impact of

    noise

    on

    human

    stress (9). We

    have deliberately

    not

    en-

    gaged in sensitivity

    analysis

    to

    allow

    for

    projections

    of

    noise exposure,

    different

    rates of

    depreciation and

    different origins

    for the

    point

    at

    which noise

    first affects

    house prices.

    All these

    modifications

    are

    possible.

    The

    aim has

    instead

    been one of

    providing

    a

    ballpark

    estimate

    for one

    of

    the

    most important pollutants-traffic

    noise. The estimation

    errors

    in the

    approach are greatly

    outweighed by

    the

    magnitude of the 4:1 and 2:1 benefit-cost

    ratio for French

    traffic noise abatement,

    indicating very

    high social

    rates

    of return

    for

    noise

    control.

    References

    and Notes

    1.

    OECD,

    Noise

    Abatemient

    Policies

    (OECD,

    Paris.

    1980).

    2. Ibid.

    3.

    A

    M Freeman.

    The Hedonic

    Pricc Approach

    to

    Measuring Demand

    for Neighbourhood

    Charac-

    teristics , in D

    Segal

    (cd),

    The Economics

    of

    Neighbourhood, (Academic

    Press. 1979).

    4.

    J

    Nelson,

    Economic

    Analysis

    of

    Transportatiotn

    Noise

    Managemant,

    (Ballinger.

    Cambridgc,

    Mass., 1978); J

    Nelson, Airports

    and Property

    Values:

    a

    Survey of

    Recent Evidence ,

    Journal

    of

    Transport Economics

    and

    PolicY,

    14,

    No. 1, Janu-

    ary 1980: J Nelson, 'Highwav

    Noise and

    Property

    Values:

    A Survey of Recent Evidence ,

    Journialof

    Transport

    Economics antid

    olicv,

    1982.

    5.

    K

    G Maler,

    Enironmental Economics.

    A Theo-

    retical Inquiry,

    (Johns

    Hopkins University

    Press.

    Baltimore.,

    1974).

    6. Institut

    de Recherches

    des Transports,

    L'impact

    du Bruit et de la

    Pollutionz emis

    par la Circulationl

    Automobile,

    IRT-CERNE, France,

    February

    1982.

    7.

    Ibid.

    8.

    D

    W Pearce and

    C A Nash, The

    Social Appraisal

    of Projects, (Macmillan,

    London,

    1981).

    9.

    op cit,

    1.

    10. The opinions expressed in this article are those of

    the authors and

    do not reflect the

    views which

    may

    be held by their

    respective institutions.

    11.

    The principal author,

    David W Pearcc,

    may be

    contacted

    at

    the

    Dept

    of

    Political

    Economy,

    Uni-

    versity College

    London, London University,

    Lon-

    don, England.

    28

    AMBIO

    VOL. 13

    NO. I

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