Source: Yugipedia Effect damage (効果ダメージ Kōka Damēji), often colloquially referred to as burn damage, is damage inflicted by means other than battle. Examples of cards that cause effect damage are "Poison Mummy", "Ookazi", and "Ceasefire".
Not all means of decreasing LP are damage. Paying LP for a cost, card effects that cause a player to lose LP without using the word damage (such as "Soul Charge"), or changing a player's LP to a specific value (such as "Life Equalizer") are not damage.
While piercingbattle damage is inflicted due to a card effect, it is battle damage rather than effect damage (as its name makes clear).