DEFRA have recently issued guidance on the monetisation of greenhouse gases. This is to be adopted within STAG Appraisal. This monetised value should be reported separately in the Environment Part 2 AST. The monetised benefits should not be included in the TEE analysis, which is meant to show only economic impacts.
Full details of the DEFRA methodology can be found here but this section provides the information required to apply the DEFRA methodology in a manner appropriate to Transport. The primary issue is that 2002 is currently used as the price base year and values have been adjusted to reflect this.
The first stage is, as has been usual practice, to calculate the Greenhouse Gas impact of the option being examined. The unit of account is t CO2 rather than t C. Table 7.2 gives the conversion factors between other gases and CO2. For example, 1 t Methane is equivalent to 21 t CO2.
Full details of the DEFRA methodology can be found here but this section provides the information required to apply the DEFRA methodology in a manner appropriate to Transport. The primary issue is that 2002 is currently used as the price base year and values have been adjusted to reflect this.
The first stage is, as has been usual practice, to calculate the Greenhouse Gas impact of the option being examined. The unit of account is t CO2 rather than t C. Table 7.2 gives the conversion factors between other gases and CO2. For example, 1 t Methane is equivalent to 21 t CO2.
Table 7.2 - Greenhouse gas conversion factors
|
Greenhouse Gas |
Global Warming Potential |
| Carbon Dioxide (CO2) | 1 |
| Methane (CH4) | 21 |
| Nitrous oxide (N2O) | 310 |
| HFC-134a | 1,300 |
| HFC-143a | 3,800 |
| Sulphur hexafluoride (SF6) | 23,900 |
| Carbon Dioxide as Carbon | 3.67 |
It is possible in a transport context that estimates are produced in terms of Carbon equivalent. As detailed in the final row of table 7.2 t C should be multiplied by 3.67 to produce t CO2. Practitioners should note that, when estimating the cost of one tonne of CO2 from one tonne of carbon, the cost of carbon should be divided by 3.67.
The current base valuation of the Shadow Price of Carbon is £25.50 t CO2 in 2007 (in 2007 prices). The growth rate is 2% per year. The figure to be applied in STAG is £22.41 in 2007 (in 2002 prices).
Note again that these figures are in t CO2 (tons carbon dioxide equivalent).
Values of the SPC moving forward are provided for convenience in Table 7.3
Table 7.3 - Shadow price of Carbon
|
Year |
SPC (CO2 Equivalent) (2007 prices) |
SPC (CO2 Equivalent) (2002 prices) |
Year |
SPC (CO2 Equivalent) (2007 prices) |
SPC (CO2 Equivalent) (2002 prices) |
|
|
2007 |
25.50 |
22.41 |
2044 |
53.06 |
46.62 |
|
|
2008 |
26.01 |
22.85 |
2045 |
54.12 |
47.55 |
|
|
2009 |
26.53 |
23.31 |
2046 |
55.20 |
48.50 |
|
|
2010 |
27.06 |
23.78 |
2047 |
56.31 |
49.47 |
|
|
2011 |
27.60 |
24.25 |
2048 |
57.43 |
50.46 |
|
|
2012 |
28.15 |
24.74 |
2049 |
58.58 |
51.47 |
|
|
2013 |
28.72 |
25.23 |
2050 |
59.75 |
52.50 |
|
|
2014 |
29.29 |
25.74 |
2051 |
60.95 |
53.55 |
|
|
2015 |
29.88 |
26.25 |
2052 |
62.17 |
54.62 |
|
|
2016 |
30.47 |
26.78 |
2053 |
63.41 |
55.71 |
|
|
2017 |
31.08 |
27.31 |
2054 |
64.68 |
56.83 |
|
|
2018 |
31.71 |
27.86 |
2055 |
65.97 |
57.96 |
|
|
2019 |
32.34 |
28.42 |
2056 |
67.29 |
59.12 |
|
|
2020 |
32.99 |
28.98 |
2057 |
68.64 |
60.31 |
|
|
2021 |
33.65 |
29.56 |
2058 |
70.01 |
61.51 |
|
|
2022 |
34.32 |
30.16 |
2059 |
71.41 |
62.74 |
|
|
2023 |
35.01 |
30.76 |
2060 |
72.84 |
64.00 |
|
|
2024 |
35.71 |
31.37 |
2061 |
74.29 |
65.28 |
|
|
2025 |
36.42 |
32.00 |
2062 |
75.78 |
66.58 |
|
|
2026 |
37.15 |
32.64 |
2063 |
77.29 |
67.92 |
|
|
2027 |
37.89 |
33.29 |
2064 |
78.84 |
69.27 |
|
|
2028 |
38.65 |
33.96 |
2065 |
80.42 |
70.66 |
|
|
2029 |
39.42 |
34.64 |
2066 |
82.03 |
72.07 |
|
|
2030 |
40.21 |
35.33 |
2067 |
83.67 |
73.51 |
|
|
2031 |
41.02 |
36.04 |
2068 |
85.34 |
74.98 |
|
|
2032 |
41.84 |
36.76 |
2069 |
87.05 |
76.48 |
|
|
2033 |
42.67 |
37.49 |
2070 |
88.79 |
78.01 |
|
|
2034 |
43.53 |
38.24 |
2071 |
90.56 |
79.57 |
|
|
2035 |
44.40 |
39.01 |
2072 |
92.37 |
81.16 |
|
|
2036 |
45.28 |
39.79 |
2073 |
94.22 |
82.79 |
|
|
2037 |
46.19 |
40.58 |
2074 |
96.11 |
84.44 |
|
|
2038 |
47.11 |
41.40 |
2075 |
98.03 |
86.13 |
|
|
2039 |
48.06 |
42.22 |
2076 |
99.99 |
87.86 |
|
|
2040 |
49.02 |
43.07 |
2077 |
101.99 |
89.61 |
|
|
2041 |
50.00 |
43.93 |
2078 |
104.03 |
91.40 |
|
|
2042 |
51.00 |
44.81 |
2079 |
106.11 |
93.23 |
|
|
2043 |
52.02 |
45.70 |
2080 |
108.23 |
95.08 |
As an example, a t Carbon Equivalent emitted in 2020 has a value of £28.98. The total monetised value of CO2 should be calculated by discounting the monetised value for each scheme year (over a 60 year appraisal period) in the standard way. A worksheet is provided for this purpose that may be useful, see Section 17.5.
Practitioners may also want to know the amount of CO2e emitted per litre of fuel consumed. These are given below in Table 7.4. These figures are assumed to change over time as the proportion of bioethanol blend in the UK market increases; average car values change over time to reflect the change in proportion of vehicles in the UK fleet using diesel. Note that the values given are grams of CO2e, and not tonnes.
Table 7.4 - CO2 Emissions from fuel
|
Year |
Emissions from petrol/bioethanol blend (gCO2e/l) |
Emissions from diesel/biodiesel blend (gCO2e/l) |
Emissions from average car (gCO2e/l) |
| 2002-2007 | 2303.18 | 2631.94 | 2380.44 |
| 2008 | 2271.51 | 2595.75 | 2362.30 |
| 2009 | 2254.22 | 2576.01 | 2347.54 |
| 2010 | 2236.02 | 2555.16 | 2334.95 |
| 2011 | 2234.08 | 2553.00 | 2336.13 |
| 2012 | 2232.17 | 2550.80 | 2337.32 |
| 2013 | 2230.26 | 2548.59 | 2341.68 |
| 2014 | 2228.31 | 2546.39 | 2342.82 |
| 2015 | 2226.41 | 2544.23 | 2344.00 |
| 2016 | 2224.50 | 2542.03 | 2348.34 |
| 2017 | 2222.59 | 2539.82 | 2349.48 |
| 2018 | 2220.64 | 2537.62 | 2347.43 |
| 2019 | 2218.74 | 2535.42 | 2348.58 |
| 2020 | 2216.83 | 2533.25 | 2349.73 |
| 2021 | 2216.83 | 2533.25 | 2349.73 |
| 2022 | 2216.83 | 2533.25 | 2349.73 |
| 2023 | 2216.83 | 2533.25 | 2352.89 |
| 2024 | 2216.83 | 2533.25 | 2352.89 |
| 2025 and onwards | 2216.83 | 2533.25 | 2352.89 |
