Cost-Benefit Analysis of Phasing Down Mercury
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ATSDR FDepartment REVISED REPORT JUNE 2018 Costs and benefits of Australia phasing down mercury Report prepared for the Department of the Environment and Energy Marsden Jacob Associates Financial & Economic Consultants ABN 66 663 324 657 ACN 072 233 204 Internet: http://www.marsdenjacob.com.au E-mail: [email protected] Melbourne office: Postal address: Level 3, 683 Burke Road, Camberwell Victoria 3124 AUSTRALIA Telephone: +61 3 9882 1600 Facsimile: +61 3 9882 1300 Perth office: Level 1, 220 St Georges Terrace, Perth Western Australia, 6000 AUSTRALIA Telephone: +61 8 9324 1785 Facsimile: +61 8 9322 7936 Sydney office: Rod Carr Telephone: +61 418 765 393 Authors: Alex Marsden, Elizabeth O’Brien, Peter Kinrade [email protected] This report has been prepared in accordance with the scope of services described in the contract or agreement between Marsden Jacob Associates Pty Ltd ACN 072 233 204 (Marsden Jacob) and the Client. Any findings, conclusions or recommendations only apply to the aforementioned circumstances and no greater reliance should be assumed or drawn by the Client. Furthermore, the report has been prepared solely for use by the Client and Marsden Jacob Associates accepts no responsibility for its use by other parties. Copyright © Marsden Jacob Associates Pty Ltd 2018 MARSDEN JACOB ASSOCIATES CONTENTS Page Key points ............................................................................................................................. i Executive summary ................................................................................................................ i Summary of changes between the 2015 and 2017 analyses ...................................................................... vi 1. Introduction .................................................................................................................. 1 1.1 Ratifying the Minamata Convention ............................................................................................ 2 1.2 Key obligations of the convention................................................................................................. 3 1.3 Project approach and scope ......................................................................................................... 4 2. Cost–benefit analysis ..................................................................................................... 9 2.1 Cost–benefit analysis overview .................................................................................................... 9 2.2 Sensitivity analysis ..................................................................................................................... 11 2.3 Likely impact on consumers ....................................................................................................... 15 3. Regulatory burden analysis .......................................................................................... 17 3.1 Regulatory burden costs, by industry .......................................................................................... 17 3.2 Regulatory burden summary and conclusions ............................................................................. 21 4. Government costs ....................................................................................................... 23 4.1 Affected agencies ....................................................................................................................... 23 4.2 Costs ......................................................................................................................................... 24 4.3 Conclusion ................................................................................................................................. 30 5. Industry costs .............................................................................................................. 31 5.1 Industries with potential air emissions ........................................................................................ 33 5.2 Sugarcane growers ..................................................................................................................... 41 5.3 Dental sector .............................................................................................................................. 51 5.4 Lighting sector ...........................................................................................................................59 5.5 Waste and recycling sector ......................................................................................................... 67 5.6 Oil and gas production............................................................................................................... 68 6. Health and environmental outcomes ............................................................................ 73 6.1 Overview .................................................................................................................................... 73 6.2 Approach ................................................................................................................................... 73 6.3 Environmental benefits .............................................................................................................. 74 6.4 Health benefits of phasing down mercury ................................................................................... 81 6.5 Quantifying reductions in the amount of mercury emitted ......................................................... 88 6.6 Workplace safety benefits .......................................................................................................... 91 Appendix A: Details of the options considered ...................................................................... 93 Appendix B: Risks and uncertainties .................................................................................... 96 Appendix C: Cost–benefit analysis and regulatory burden measurement framework ............. 101 Appendix D: Industry consultation ...................................................................................... 105 Acronyms and abbreviations ............................................................................................. 108 Department of the Environment Costs and benefits of ratifying the Minamata Convention on Mercury MARSDEN JACOB ASSOCIATES LIST OF TABLES Page Table 1: Options 2, 3 and 5—average annual regulatory costs to business, variance from business as usual ($ million) ........ iv Table 2: Impact from each of the four Minamata Convention articles to the key industry impacts ....................................... v Table 3: Summary of costs and benefits ............................................................................................................................. 7 Table 4: Cost–benefit analysis results for options 2, 3 and 5 (values in $ million) ................................................................ 10 Table 5: Sensitivity analysis showing the NPV for each option ($ million) .......................................................................... 11 Table 6: Assumptions applied to key variables in most likely, best and worst-case outcomes ............................................ 11 Table 7: Cost–benefit analysis results for options 2, 3 and 5 (values in $ million) ................................................................ 13 Table 8: Regulatory burden estimate for the sugarcane industry....................................................................................... 18 Table 9: Average annual regulatory costs to business compared to business as usual for options 2, 3 and 5 ($ million) ...... 21 Table 10: Government impacts, by article of the Minamata Convention ............................................................................ 28 Table 11: Summary of government costs .......................................................................................................................... 30 Table 12: Industry impacts, by article of the Minamata Convention .................................................................................. 32 Table 13: Estimated air emissions of mercury and compounds from coal-fired generators, 2015–16 (kilograms) ................ 36 Table 14: Summary of costs and benefits of phase-out of Shirtan Liquid Fungicide ........................................................... 46 Table 15: Present value results for industries associated with canegrowers ....................................................................... 49 Table 16: Estimated numbers of dental practices and installations of amalgam separators required ................................. 56 Table 17: Net impacts on the dental industry ($ million) .................................................................................................... 59 Table 18: Mercury vapour light stocks, Australia, 2016 ...................................................................................................... 61 Table 19: Replacement costs for legacy lighting, per luminaire ......................................................................................... 66 Table 20: Summary of results for the lighting sector ($ million) ......................................................................................... 67 Table 21: Mercury concentrations in sediments of Albany, Western Australia ................................................................... 76 Table 22: Mercury