Economic Impact of the lack of Odour Management

  The aim of this study was to assess the cost of not regulating odour emissions. For that we have specified a domain in the Spanish region of Euskadi situated in the North of Spain. To perform this analysis, two factors have been considered: 1) The decrease in the property value affected by odour impact and 2) The economic impact on public health.

   To assess the cost of depreciation of odour-affected properties, a list of Activities Potentially Generating Odour Impact (APGOIs) was selected in the Basque Country. With this data, buffers were generated for different areas of odour nuisance, classifying them as serious, moderate and slight. Subsequently, the number of properties with the potential to be affected by odour impact was calculated. This analysis took into account the price per m2 of each municipality in Euskadi. The results showed that the total cost of depreciation of the value of the properties affected by odour impact was 778 and 1164 million euros for areas affected by serious and moderate odour impact, respectively.

 

Carlos Nietzsche Diaz, Cyntia Izquierdo, Ainhoa Antón, Rebecca Kavanagh*, Idoia Marmol

Ambiente et Odora SL, Uribitarte, 6, planta baja, Bilbao, Spain.

 

   Competing interests: The author has declared that no competing interests exist.

   Academic editor:  Carlos N. Díaz

   Content quality: This paper has not been peer-reviewed.

   Citation: Carlos Nietzsche Diaz, Cyntia Izquierdo, Ainhoa Antón, Rebecca Kavanagh, Idoia Marmol, 2021, Economic Impact of the lack of Odour Management, 9th IWA Odour& VOC/Air Emission Conference, Bilbao, Spain, www.olores.org.

   Copyright: 2021 Olores.org. Open Content  Creative Commons license. It is allowed to download, reuse, reprint, modify, distribute, and / or copy articles in olores.org website, as long as the original authors and source are cited. No permission is required from the authors or the publishers.

   ISBN: 978-84-09-37032-0

   Keyword: Odour, Economic Impact, Cost, Property, Depreciation, odour management, Public Health.

 

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Abstract

   The aim of this study was to assess the cost of not regulating odour emissions. For that we have specified a domain in the Spanish region of Euskadi situated in the North of Spain. To perform this analysis, two factors have been considered: 1) The decrease in the property value affected by odour impact and 2) The economic impact on public health.

   To assess the cost of depreciation of odour-affected properties, a list of Activities Potentially Generating Odour Impact (APGOIs) was selected in the Basque Country. With this data, buffers were generated for different areas of odour nuisance, classifying them as serious, moderate and slight. Subsequently, the number of properties with the potential to be affected by odour impact was calculated. This analysis took into account the price per m2 of each municipality in Euskadi. The results showed that the total cost of depreciation of the value of the properties affected by odour impact was 778 and 1164 million euros for areas affected by serious and moderate odour impact, respectively.

   The health costs of odour pollution have been assessed in terms of health effects of odour pollution, such as bronchitis, hoarseness, eye irritation, fever, joint and muscle pain. The results show that total health care cost of odour impact in the Euskadi was 174,2 millions of euro.

 

 1. Introduction

   Every three years, the International Commission on Biological Effects of Noise (ICBEN) organises a conference where several studies on health effects of noise are presented. Nowadays, the proceedings of these several hundreds of studies focused on the health impact of noise are public and available for everyone in their website. Usually these conferences are structured in some important health effects such as noise-induced hearing loss, non-auditory health effects of noise, Effects of noise on cognition, performance and behaviour, and effects of noise on sleep.

   Unfortunately, there is no such an organisation for the case of odour and health effects. There are, however, a few studies dealing with the health effects of odour impact (Shustermann et al. 1991, Steinheider et. al. 1993, Schiffmann et. al. 1995, Dalton et al. 1997, Deane 1997, Steinheider B. 1999, Miedema et al 2000, Sucker et. al. 2001, van Harreveld et. al. 2002, Dalton 2003, Baldwin et al. 2004, Schiffmann et al 2004, Rethage et. a. 2007, Aatamila et. al 2011, Heaney et al. 2011, Oiamo et. al. 2015, Ragoobar et. al. 2016, Government of Alberta 2017, Cantuaria et al. 2017, Helene et al. 2020). The most frequently reported problems in these studies include eye, nose, and throat irritation, headache, nausea, diarrhoea, cough, chest tightness, palpitations, shortness of breath, stress and drowsiness. These health effects have an impact in the national health systems, however, to our knowledge, the economical cost of this impact to the health system has not been evaluated yet.

   The value of houses located near smelly industrial facilities such as water treatment plants, landfills or large scale animal farms is usually lower than that of similar houses located in areas with no odour impact. These variations in the cost of the properties usually happens when outdoor recreation possibilities are restricted due to odour impact. Restrictions in children playing outside, people sitting in their garden and enjoying barbecues or family meetings are likely to reduce the value of the properties nearby. Also, when the smell is especially noticeable, residents might be reluctant to open their windows for ventilation, resulting thus in sick building syndrome.

   There are some studies that estimate the external cost of odour pollution and nuisance using hedonic pricing methods for property values (Nelson et. al. 1992, Palmquist et. al. 1997, Saphores et al. 2005, Eyckmans et. al. 2011). These studies usually focus in one specific Activity Potentially Generating Odour Impact (APGOI) and/or an specific geographical area.

   The aim of this study is to calculate the economic cost of the odour impact due to 1) the depreciation of property value and 2) the impact on the health system.

 

 2. Methodology

   Data for Industrial activities in Europe is available through different sources. Directive 2010/75/EU of the European Parliament and the Council on industrial emissions (the Industrial Emissions Directive or IED) is the main EU instrument regulating pollutant emissions from industrial installations.

   The IED ensures public access to permit applications, permits and the results of the monitoring of releases. An interesting tool of the IED is the EPER register that is publicly available and updated every year. The interesting point of this register is that it is publicly available. Every industrial activity under the IED in Europe is indexed, and more importantly, geo-referenced. To date, this public register lists a total of around 400.000 industrial activities of all Europe.

   In order to handle less data and so, be able to work more efficiently with the computational resources available, only activities located in Euskadi were studied.
In total, 2373 industrial activities from this highly industrialised region of Spain were studied. These activities are those under the scope of the IED, but there are many other industrial activities not considered in this study, such as mining activities, small foundries, small farms, small bakeries, etc. to name some of the usual APGOIs. These non-IED activities are not considered in this study, mainly due to the difficulty of finding information on the location of these plants.

   Of all the IED activities considered, not all these industries emit odours. The next step was to select from the set of IED Industries, the subset of APGOIs. In order to do so, a list of APGOIs under the IED (IED APGOIs) was made.

   There are many lists of APGOIs available in several regulations around the world such as the UK H4 horizontal Guideline, or the Colombian Resolution 1541, to name a couple. In this study, the Catalonian Draft Bill against odour pollution was taken as reference. This Draft Bill was never passed as a law, however it has been widely used in Spain as a reference for odour consultancy companies. Furthermore, this draft Bill is based on previous regulations existing in the Netherlands and in the UK H4 Horizontal Guideline, so in our experience it was an acceptable starting point.

   Of all IED industrial activities analysed, only 170 were considered to be APGOIs. The following figure shows the location of these IED APGOIs in the Basque Country.

 62 Euskadi APGEMOs

Figure 1. Location of APGOIs in the Basque Country

   The next step was to determine the odour impact of these IED APGOIs. For this purpose, they were classified using the draft Bill, which classifies activities according to their offensiveness as serious, moderate or slight. Each group has been assigned severe and moderate odour impact distances as follows.

Table 1: Classification of activities according to their offensiveness, stablishing severe and moderate odour impact distances.

Activity  

Emission target value

(98th percentile of hourly averages over
one year)

 Area of influence of odour impact
Severe Impact   Moderate Impact
 “Very Annoying” 3 ouE/m3 300 m   600 m
 “Annoying” 5 ouE/m3 200 m 400 m
 “Slightly Annoying” 7 ouE/m3 100 m  200 m

 

   The best way to calculate the areas of severe and moderate impact for each of these 170 APGOIs is by measuring odour emission rates, emission highs, temperatures, air flows, etc and modelling the impact with the use of mathematical algorithms that consider the influence of meteorology, topography and land use in the dispersion of odours. In this case, none of these tools were used.

   An arbitrary, but conservative, buffer of impact was selected. The criteria taken into account for setting the distance of these “areas of influence” were based on the offensiveness of the odours emitted. Distances taken were conservative enough to ensure that odour impact was happening.

   As way to simplify this study, IED APGOIs were geo-referenced as points. This approach has limitations in that, these plants were treated as point sources of specific emissions and not as areas. In this way, a single point source, usually located at the entrance to the activity, has been treated as a single source. For example, for an oil refinery with several sources of odour release that usually impacts up to a few kms, we simplified it as being only one point and calculate the area of moderate odour impact as being 600 m.

   Circular buffers of different extensions were carried out, depending on if the area of impact was severe or moderate. The following figures show some details of these buffers.

62 render  62 render zoom 
Figures 2 and 3. Represent a detail of some areas of odour impact of IED APGOIs. Severe impact in purple and moderate impact in blue.  

 

   Once the area of influence of odour in the area was located, the next step was to calculate the population affected by this impact. In order to carry out this analysis, statistical data were obtained from local websites on housing pricing Eustat and Etxebide.

   Data analysed from these geodatabases were 1) census of inhabitants, 2) area of the municipalities, 3) price per m2, and 4) number of people per dwelling.

62 density Figure 4. Inhabitants by municipality in the Basque Country.

 

   Figure 4 shows the number of inhabitants per municipality in the area under study.

   Unfortunately, geodatabases used do not have the exact location and extension of urban areas inside municipalities. At this point, the decision was taken to distribute the number of dwellings evenly over the area of the municipality.

   This approach assumes that the houses are evenly distributed. That is not entirely correct, as there are urban areas with a higher density of houses and rural areas with a lower density of housings.

   As mentioned in the introduction, the value of these houses will decrease if they are affected by odour impact. Several studies (Nelson et. al. 1992, Palmquist et. al. 1997, Saphores et al. 2005, Eyckmans et. al. 2011) have estimated the decrease in the value of houses affected by odour impact. These studies are based on hedonic pricing methods and usually focus in one specific APGOI. To our knowledge, there are no studies involving several APGOIs.

   Eyckmans et. al. 2011 studied the external cost caused by odour from an animal waste processing facility in Flanders by using odour measures based on field measurements. The results showed that houses subject to moderate and severe odour nuisance sold at a discount of about 5% and 12% respectively compared to houses without odour nuisance.

   In this study, we took these results obtained by Eyckmans et. al. and used them to calculate the overall decrease in the property values of the houses affected by odour impact.

   In order to calculate the economic impact on health, the approach was similar. In this case the study, among the many studies on this issue presented at the introduction, the one of Aatamila et. al 2011 was taken as reference. The aim of that study was to assess odour-associated self-reported physical symptoms among residents living near waste treatment centres. The study was conducted in the surroundings of five large-scale Finnish waste treatment centres with composting plants. The residents who were classified as ‘‘annoyed of the odour’’ reported significant symptoms as follows: unusual shortness of breath, eye irritation, hoarseness/dry throat, toothache, unusual tiredness, fever/shivering, joint pain and muscular pain.

   The reason to select this study was due to the profound statistical analysis of the significance of symptoms as compared with a control population.

   In order to monetise the health symptoms associated with odour impact, the following formula was used:

 Value of symptom  =  population exposed  x  proportion with symptom  x  Disability Weight  x  health value

   This formula is widely used in the literature. For example, this approach is followed in the Report on Environmental Noise: Valuing impacts on: sleep disturbance, annoyance, hypertension, productivity and quiet areas carried out in 2014 by the UK Department for Environment Food & Rural Affairs.

   The Disability Weight (DW) ranges from no disability (0) to extreme disability (1). DWs have been obtained from different sources. When a DW did not appear in the literature, a conservative number has been used.

   The estimation of the health value is carried out by calculating the value of a life year (VOLY). There is some debate in the literature on what the most appropriate value should be. For the purpose of this report, a value of 68,822 € has been used. This is a very conservative value. For example, according to the recent Cost-benefit Analysis of the Air Quality Package for Europe (EMRC 2014), adjusted to 2014 prices, another good estimation of the health value using the Eurostat GDP deflator, is 110,987 €.

 

 3. Results

   A set of different results are shown for each of the three provinces of Euskadi: Bizkaia, Gipuzkoa and Araba. Also the total result will be presented.

   The total area affected by severe and moderate odour impact of IED APGOIs was 25.8 and 90 km2, respectively.

   The original value of the houses located in severe and moderate impact areas was of 6,480 and 23,600 millions of euro. Because of the existence of these APGOIs, these households are sold at discounted prices as compared with similar residences located in non impacted areas. The total discounted prices of the value of the properties was 778 and 1,164 million euros for houses located in severe and moderate impact areas.

Table 2: Estimated discounted prices of homes and inhabitants affected by odours on the 3 provinces.

     Discounted price (Millions €)   Number of Inhabitants affected
Severe Moderate  Severe Moderate
BIZKAIA 355 548 17,946 65,876
GUIPUZKOA 327 481 6,372 23,078
ARABA 95 135 937 3,548
TOTAL 778 1,164 25,254 92,501

   The total cost of the lost of the properties value is 1,942 millions of euros.

62 provinces 62 provinces inhabitants
Figure 5 and 6. Graphical representation of the percentaje of home discounted prices and inhabitants affected by odours on the 3 provinces.

   A total of 25,300 inhabitants lived in an area of severe odour impact and 92,900 inhabitants lived in an area affected by moderate odour impact.

   In order to monetise the health symptoms associated with odour impact, the following formula was used:

Value of symptom  =  population exposed  x  proportion with symptom  x  Disability Weight  x  health value

   In order to calculate the proportion of population with symptoms, several steps were carried out. First the total number of people affected by a symptom was taken and the occurrence of this symptom in people with/without odour annoyance was compared. For example, of a total of 1126 people interviewed, 892 did not have odour impact and 234 did perceive odour annoyance. 120 people of the the 892 (13.4%) who did not have odour impact, reported fever/shivering, and 51 people out of the 235 citizens (21.8%) who reported odour annoyance, suffered fever/shivering. In conclusion, fever/shivering was reported 8,34% more times in people that were impacted by odours.

   In this study 51 out of 1126 people were impacted by odours (5%). The increased occurrence of fever/shivering in population with no odour impact will be thus of 5% x 8.34% = 0.38%.

   Table 3: Results obtained of heath system cost of the odour impact.

  Proportion of total that had odour annoyance Difference in proportion Disability Weight Cost of severe impact (Millions €)  Cost of moderate impact (Millions €)
Unusual shortness of breath 0.04 0.09 0.01 0.1 0.3
Eye irritation 0.12 0.14 0.01 0.3 1.0
Hoarseness/dry throat 0.13 0.14 0.01 0.3 1.2
Toothache 0.05 0.07 0.06 0.3 1.2
Unusual tiredness 0.09 0.13 0.01 0.2 0.8
Fever/shivering 0.05 8.34 0.05 32.9 120.8
Joint pain 0.13 0.11 0.06 1.4 5.3
Muscular pain 0.13 0.13 0.06 1.6 6.0
Total       37.2 137

 

   The excess cost of symptoms caused by odours on people is 37.2 million euros in the severe area of influence and 137 million euros in the moderate area of influence. 

62 symptoms

Figure 7. Graphical representation of the results of cost of the odour impact on the health system in the Basque Country.

   The total cost of the odour impact on the health system is 174.2 millions of euro.

 

 4. Discussion

   The methodology carried out in this study could be used for larger areas. In fact, data from the whole Europe was collected, as this was the initial aim. Unfortunately, there was a need for a larger computational capacity to handle the GIS data at this scale. That is why a smaller area was taken, in order to be able to work with the data.

   The area of study for this paper was selected to be the Basque country, but this methodology could be used in any other area of Europe.

   This study was based on the limited publicly available data. A list of suggestions to further improve these results is the following:

  1. This study considered only IED APGOIs. Non-IED APGOIs may also have a significant odour impact.
  2. It is a very conservative assumption that odours come from only one point source. For further studies to include all emission areas.
  3. This approach assumes the economic impact on the value of properties nearby of all IED APGOIs is similar to that of an animal waste processing in Flanders. For further studies it is suggested to combine other results.
  4. This approach assumes that the houses are evenly distributed. However, there are urban areas with a higher density of houses and rural areas with a lower density of housings. This is a limitation of this study that could be overcomed with better GIS data.
  5. An arbitrary, but conservative, buffer of impact was selected. A better approach would be to use dispersion modelling.

 

 5. Conclusions

   This study have been carried out in the Basque Country, but the methodology could be carried out potentially in the whole Europe, thanks to public data availability.

   This study shows that the impact of odour emissions emitted by industry on the devaluation of housing and on the health of the population has a very high economic impact. In the Basque Country alone, the devaluation of housing is 1,942 millions of euros. The impact on the health of the population is around 174.2 millions of euro. In total the cost is around 2,120 millions of Euro.

   Due to to the significant conservative approaches taken in this study, this figure is probably much higher.

   These numbers justify any economic investment in industrial filtration systems and are key to monetise the lack of odour regulations in this region of Spain.

 

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