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was developed through the ExternE-Project (Externalities of Energy) in a collabo-
rative study between the European Commission and the U.S. Department of Energy.
The difference between IPA and the earlier used “top-down” damage assessment
methodologies (Hohmeyer, 1992; Friedrich and Voss, 1993) is that in IPA specific
emission data are used for individual locations. These data are computed with
pollution dispersion models, detailed information about receptors and dose–response
and exposure–response functions in order to calculate the physical impact of increas-
ing emissions. Finally, the impacts are valuated economically.
The principal steps are illustrated in Figure 4.6 and described as follows:

• Activity and emission: characterization of the relevant technologies and
3
the environmental burdens they cause (e.g., mg of SO per Nm emitted
2
by the considered process)
• Fate and transport: calculation of the increasing concentration in the
affected regions via atmospheric dispersion models and chemical reactions
(e.g., SO transport and transformation into sulfates)
2
• Receptor response and physical impact: characterization of the recep-
tors exposed to the incremental pollution, identification of suitable
dose–response and exposure–response functions and their linkage to given
estimated physical impacts (e.g., number of asthma cases due to increase
of sulfates)
• Monetization and cost accounting: economic valuation of the mentioned
impacts, determination of external costs that have not been internalized
by governmental regulations (e.g., multiplication of the monetary value
with the asthma incidents gives the damage costs).

Impact Assessment Valuation
Activity and Emissions

Fate and Transport

Receptor Response Change in Utility
and Physical Impact and Welfare Loss

Monetisation
and Cost Accounting

FIGURE 4.6 Illustration of the main steps of the IPA. (From European-Commission-DGXII,
ExternE — Externalities of Energy, ECSC-EC-EAEC, Brussels-Luxembourg, 1995.)

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