Select Committee on Northern Ireland Affairs Appendices to the Minutes of Evidence




  1.  The next regular review of Minerals Planning Guidance Note 6 "Guidelines for Aggregates Provision in England" published in April 1994 (MPG6) is to start in 1998. Also the Chancellor of the Exchequer has said he is considering bringing forward proposals for an environmental tax or levy on surface mineral extraction in his 1998 budget. To inform the review and the Chancellor's considerations reliable information is needed on the environmental costs and benefits of the main sources of supply of aggregates, (which is by far the largest element of surface mineral extraction in the UK). The purpose of this project is to provide that information.

  2.  The main alternatives to traditional land-won sources of primary aggregates are recycled and secondary materials, marine dredged sand and gravel, and (in principle) seaborne supplies fro distant coastal superquarries. The winning and working of aggregates from each of these sources has physical effects caused by either extraction, processing or transport and they include visual disamenity, traffic nuisance, noise, vibration, dust and ground water pollution. These effects impose costs (which in the case of landscape impacts may be permanent) but they can also create benefits, for example, the benefits of recreational after-use and the creation of new wildlife habitats.

  3.  Many of the costs of primary aggregates extraction have been internalised by regulation (such as the conditions imposed by, or the scope for voluntary agreements available in, the planning system) or by the voluntary introduction by the industry of improved working, restoration and aftercare practices. However, for all sources of supply, including secondary and recycled materials, there remain both costs and benefits which are external, ie gains and losses of human wellbeing which are not already allowed for in the price of the aggregate. This project will focus on the identification and valuation of these external costs and benefits.

  4.  Substantial relevant research has been undertaken by DOE and this is listed at Annex A. The research into the environmental effects of surface mineral working has identified the most significant types of effect, the potential consequences and the options for mitigation of these effects, where necessary. The extent to which these may be covered by planning conditions or other regulatory control has generally been identified and some indications are given of the costs of mitigation measures, which may or may not be subject to regulatory control. Where benefits are obtainable, these are also identified. In addition a significant volume of research on the restoration of mineral workings indicates that benefits can result from mineral extraction operations.

  5.  Less is known about the environmental effects of recycling and secondary operations. A separate project, currently at tender, on the Environmental Effects of Recycling and Secondary Aggregates Operations, is intended to identify these more precisely and to lead to the production of good practice guidance to minimise the environmental effects and ensure that suitable sites are chosen. At an early stage that project will "identify, and where possible quantify, and rank in terms of their significance for planning and pollution control, the main environmental effects of recycling and secondary aggregates operations and examine the way they vary with scale of operation and location".

  6.  Little work has been done on the valuation of environmental costs and benefits. Externalities are difficult to measure, let alone value, even though techniques such as contingent valuation, hedonic pricing, and dose-response have become more sophisticated over time. Externalities may be expected to vary according to the type of mineral, the location of the site, and the method of extraction but are unlikely to vary systematically with output. (For example, given enough time a hard rock quarry might damage the landscape just as much whether one or 1,000 tonnes are extracted each day.)


  7.  This project is intended to provide, and implement, a methodology that seeks to overcome these difficulties by assessing the appropriateness of previous valuation research (including research based on studies from other countries). The methodology will have to cover the selection of an appropriate sample of sites on the basis of which a representative set of estimates can be obtained. The project will also provide an assessment of the applicability of these results to other surface minerals, identifying whether there are likely to be significant differences in the environmental effects and whether further research may be needed to measure those differences.


  8.  Although MPG6 relates to England it will be necessary to consider potential wider sources of aggregate supply from Wales, Scotland and elsewhere.

  9.  The range of sources covered will be land-won, including distant superquarries (of which there is one in Scotland, others further afield, eg Norway) and recycled and secondary materials, and marine dredged sand and gravel.

  10.  The relevant costs and benefits of extraction, transport and processing will be covered. It will be assumed that end-use effects are not relevant to this project since the externalities of end uses will not be systematically related to the source of the aggregate. The research will need to take into account those effects which are remote form the point of extraction or operation eg effects associated with wharves, rail depots, and processing plants (eg crushing and screening) in or en route for market areas.



  11.  The aim of the project is as follows:

    —  to identify, evaluate and, wherever possible, value the environmental costs and benefits associated with the main sources of supply of aggregates for the UK construction industry.


  12.  The objectives of the project are as follows:

    (a)  to identify the environmental effects associated with each main source of supply of aggregates;

    (b)  to establish the main factors determining the systematic variation in the environmental effects identified at (a);

    (c)  to identify those environmental costs and benefits which are external (ie have not been internalised by regulation and planning controls);

    (d)  to develop an appropriate methodological framework for valuing the external costs and benefits identified above and use it to carry out, as far as possible, a valuation of them including undertaking the field work and/or other primary research required to provide valid data for this purpose; and

    (e)  to assess the applicability of these results to other surface minerals, identifying where there are likely to be significant differences in the environmental effects and where further research may be needed.


  13.  The deliverables are as follows.

Output 1

  14.  A report collating all existing information on environmental effects associated with the different sources of supply (including information from the project on the Environmental Effects of Recycling and Secondary Aggregates Operations); the factors determining variations in the effects, the extent to which the environmental effects have been internalised; and an identification of the present externalities.

Output 2

  15.  A report reviewing and assessing existing and possible new techniques for valuing environmental impacts and assessing their appropriateness for this project and proposing a valuation methodology. The report should also cover the sample selection procedures to be used in the valuation exercise to be carried out.

Output 3

  16.  Using the proposed valuation methodology, a report on the results of the valuation of external effects associated with alternative sources of supply including a clear statement of the reliability and limitations of the valuations. This will include a set of monetary estimates for the different environmental effects of extracting, transporting and processing aggregates from each source, broken down by the most significant factors identified in Objective (b), and clear identification of those effects that cannot be valued in monetary terms. The report should also include an assessment of how applicable these estimates might be to other surface minerals (ie excluding minerals extracted by deep-shaft mining, well-extraction or liquid pumping).

Output 4

  17.  A final report incorporating the interim reports and summarising the main results.

Output 5

  18.  The organisation and conduct of a seminar to disseminate the research results. Seminar invitations will be issued to a list of approximately 50 organisations and individuals to be agreed between the Department and the Contractor. The contractor will be responsible for the whole of the organisation of the seminar including the procurement of related accommodation and catering services unless it is expressly agreed in advance with the Department that certain responsibilities (and their attendant costs) will be assumed by the Department.


  19.  It is expected that the successful team will include expertise in state of the art valuation of environmental costs and benefits. This will need to be combined with an understanding of the aggregates industry and aggregates planning, and therefore it is likely that the team will need to comprise two or more organisations.


  20.  Day to day management of the project will be the responsibility of the respective Nominated Officers for DOE and the Contractor.

  21.  The project will be advised by a Steering Group. Membership of this will be determined by DOE in due course but it will probably include representatives of central and local government, appropriate sectors of industry, and other organisations relevant to the study. A membership of up to 15 is likely. The group will meet at least four times during the course of the project and these meetings will include:

    (a)  an introductory meeting to discuss the proposed programme of work for the project; and

    (b)  a meeting to discuss the reports referred to under Outputs 1 to 4 inclusive. The final meeting will also agree the arrangements for the seminar. (Output 5.)

  The Contractor will also be asked to attend an inception meeting shortly after the start of the project to discuss the scope of, and programme of work for, the project.

  22.  Concise monthly progress reports will be sent to DOE's Nominated Officer within two weeks of the end of each month except in months where draft or final reports are submitted.


  23.  The Contractor will produce and circulate, when requested, sufficient copies of draft reports for the Steering Group (about 15 copies).

  24.  The reports under Outputs 1, 2 and 3 will be prepared to an adequate standard for review by the Department and the Steering Group (eg typed and ring-bound format; black and white illustrations acceptable).

  25.  The Final Report will be produced in draft form for review by the Department and Steering Group not less than four weeks before the contract end date. They will be in typed and ring-bound format, with illustrations as intended for inclusion in the final published versions. The Contractor will amend the Draft Final Report as instructed by the Department's Nominated Officer. Following any necessary amendments, the report will be produced by the Contractor unbound in a form directly suitable for high quality reproduction. The exact format shall be agreed with the Department before the format and content are finalised. The main body of the final report will be preceded by a freestanding Executive Summary of 4-8 pages length. The length of the Final Report is likely to be in the region of 70-100 pages. The Contractor will deliver 100 copies of the Final Report to the Department by the contract end date.

  26.  Copyright of all reports and the information they contain rests with the Crown. None of the research may be published without the prior consent of the Department. Detailed arrangements for publication of the Final Report will be discussed with the Contractor during the course of the research. If the Stationery Office or the Department decline to publish the results, the Contractor may be required to publish.

  27.  Any information supplied by the Department to the Contractor in document or other form during the project must be returned no later than one month after the end of the contract period. A copy set of any presentation materials used in the reports and at the seminar (eg slides and overhead projection transparencies) will be required for DOE's retention, and copyright of these will be transferred to the Department. The Contractor will not use the information from this research for any purpose other than to meet the terms of the contract, without the Department's prior consent.


  28.  The Department expects the contract to begin in September 1997 and be of six months duration. It would like the results of Outputs 1 to 3, inclusive, to be available by 16 January 1998.

July 1997

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