Nuclear Energy Agency Online Bulletin

December 2001

Nuclear development news

Joint IEA/NEA Workshop on Energy Policy and Externalities: The Life Cycle Analysis Approach

The NEA and the International Energy Agency (IEA) held a joint workshop on "Energy Policy and Externalities: The Life Cycle Analysis Approach" on 15-16 November 2001. Papers presented at the workshop covered the following areas: a methodology for assessing external cost (based upon the "ExternE" project); the issues related to external cost estimates and life cycle analysis (LCA) of coal, oil, gas, nuclear and renewable energy sources; and comparisons between the technologies used in electricity generation and transportation. A round table discussion examined the uses and relevance of life cycle analysis and external costs in policy making.

Some 60 senior experts from NEA Member countries and international organisations participated in the meeting. The workshop was chaired by Dr. David Pearce, professor of Environmental Economics at Imperial College London, who also gave the opening keynote address. In summarising the workshop, Dr. Pearce stressed the need to distinguish between the damage done (impact) by an energy or transport system, as identified through the LCA approach, and policy-relevant externalities, i.e. the cost associated with damages (or benefits) that are not internalised in the price paid by consumers. He emphasised issues to be addressed in further research, such as the relevance of discounting in the very long term, risk aversion and its valuation, and the value of ecosystem biodiversity. Finally, he underlined the essential role of policy makers in decision making, irrespective of the outcomes of scientific and economic analyses.

The two agencies will reflect upon the outcomes and recommendations of the workshop in their programmes of work and joint activities. Papers and presentations will be posted on the IEA and NEA websites. The NEA will publish the proceedings, which will be distributed free of charge.

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