Ecosystems and Sustainable

Development
 5.2 Pollution Losses Computation for Properties
Air, water and soil pollution damage properties owned by community
surrounding the source of emitted pollution. For example: Air
pollution has negative impact on the value of housing buildings,
commercial buildings, farms (productivity of farms) and livestock.

Pollution losses computation for properties provides the

Environmental Impact assessment (EIA) team with the information
needed to make proper decisions regarding pollution prevention and
mitigation.
 5.2 Pollution Losses Computation for Properties

There are two methods to evaluate property damages

caused by air pollution.

These methods are:

5.2.1 The Market Price Method

5.2.2 The Technical Coefficient Method
 5.2.1 The Market Price Method
This method is meant to compute the value of damaged
property as an asset by using the market price of replacing the
damaged asset by another new one.
Problem (4):
• A chairperson of a complex is planning to transfer his complex into a
smart green complex.
• To obtain the required information for this purpose; he asked the
financial department to compute the current value of air pollution
damages. The following data were available:
1. Damaged properties:
Assets Damage percent Market price Depreciated period
1. Conventional homes 20% LE 12,500,000 10 y
2. Manufacturing Build 14% LE8, 600,000 6y
3. Public and commercial 12% LE 9,300,000 8y
4. Schools 13% LE18, 200,000 5y

Annual depreciation is 4% for all buildings;

Straight line method.

Required: Compute the air pollution damage value for the above
mentioned properties.
 Answer

Computation of Depreciation:
Depreciation of Conventional Homes:
= 12,500,000 x 4% X 10 Y= 5,000,000
Depreciation of Manufacturing Buildings:
= 8,600,000 x 4% x 6 Y= 2,064,000
Depreciation of Public and Commercial buildingss:
= 9,300,000 x 4 % x 8 Y= 2,976,000
Depreciation of Schools:
= 18,200,000 x 4 % x 5 Y= 3,640,000
1. Compute market price of damaged assets after depreciation:
Damaged Assets Market price Depreciation Market price After Depreciation
1. Conventional homes LE 12,500,000 5,000,000 7,500,000
2. Manuf. Build LE 8, 600, 00 2,064,000 6,536,000
3. Public and com. LE 9,300,000 2,976,000 6,324,000
4. Schools LE 18,200,000 3,640,000 14,360,000
 2. Compute damage value of assets:

Damaged Assets Market price After Damage percent Air pollution damage
Depr. value

1. Conventional homes LE 7,500,000 20% 1,500,000

2. Manuf. Build LE 6,536,000 14% 915,040
3. Public and Com. LE 6,324,000 12% 758,880
4. Schools LE 14,560,000 13% 1,892,800

Total Air pollution damage value 5,066,720

 Remark
Air pollution damage value = Market price after depreciation x % Damage
 5.2.2 The Technical Coefficient Method

 Technical coefficient method is based on many factors or

coefficients to evaluate air pollution damage.

 This method measures many values to compute the global value of

properties damage value.

 It is reliable for the valuation of agricultural, industrial and

ecosystem damage losses.
Problem (2):
• A petrochemical plant is emitting substances that pollute air with
SO2, CO2 and NO2, in addition to emitted particulates and waste-
water which pollutes water. These pollutants cause damage to
surrounded agricultural area and livestock.
• The petrochemical company is planning to develop an Environmental
Management System to prevent the emission of these pollutants.
• So, the company decided to compute property damages value caused
by its plant operation. The following data were obtained to develop
this valuation:
Damaged properties Total Quantity
Agricultural Area 120 Feddan
Livestock 15,000

Other information:
1. Productivity of agricultural area decreased by 30% as a result of
air pollution (Market price of total crops is L.E 16,000,000).
2. Water pollution impacted the growing of trees in the surrounding
farm, damaged trees value is equal to L.E 2,100,000.
3. There are human damages for the agricultural workers of L.E
48,000.
Required: Compute the total air and water pollution damage value.
 Answer
Damage caused by Air and water pollution emissions value is computed as
follows:
Decrease in productivity of Agricultural Area:
= 16,000,000 (Total crops value) x 30%
= L.E 4,800,000
Water pollution damage value = L.E 2,100,000
Human damage value of the Agricultural workers = L.E 48,000

Therefore, total damage value:

= 4,800,000 + 2,100,000 + 48,000
= L.E 6,948,000
End of Lecture (6)