Environmental appraisal of projects

Job ThomasRoll No. 8, Semester-5, MBA (PT)

School of Management Studies, Cochin University of Science and TechnologyCochin, Kerala, INDIA, PIN 682022, Email: job_thomas@yahoo.com

Introduction Environmental appraisal is the process of assessment of environmental effect or consequences of a proposed project. Environmental appraisal of project consists of two key components:

1. Environmental report for approval or clearance2. Sustainable growth of the firm

Any project requires environmental clearance for approval or licensing. The approach accounting for the consideration beyond mere legal clearance is also appreciated in the present scenario. The environmental appraisal of projects are carried out by following approaches, namely,:-

1. Feasibility approacha. Reactive approach b. Proactive approach

Feasibility approachIn this approach, minimum environmental standards prescribed in the county are to be met. For international companies, beyond environmental standards, company aims at achieving environmental certification such as ISO 14000 (general industries) or LEED certification (building or construction industries) There are two feasibility approaches, namely, reactive approach and proactive approach.

Reactive approachEnvironmental impact assessment is carried out for the sole purpose of getting environmental clearance.

Proactive approachEnvironmental impact assessment is used as a tool to improve planning process, cost effective, carbon credits, safety of work-place etc.

LEGAL REQUIREMENTSGovernment of India permits to carry out a project if and only if it satisfies or confirms to ‘Environmental Protection Act (1986).’ The clearance from GoI is mandatory for new projects as well as expansion or modernisation of existing projects. Environmental Impact assessment notification published in 2006 declares the partial decentralization by implementing EIA agency and

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environmental expert committee at central and state level. The expert committee evaluates the appraisal report by personal visit and public notification. The regulatory authority gives the clearance within 105 days of receipt of final EIA. The biannual compliance report of EIA of project is expected to submit to the authority for post clearance monitoring.

Environmental Impact Assessment (EIA) stagesScreening: Screening determines the requirement of the project to be assessed for EIA.

Scoping: Scoping identifies the key issues and its impacts.

Impact Analysis: Impact analysis identifies likely environmental and social impact.

Mitigation: Mitigation recommends the actions to be taken to reduce the potential adverse environmental consequences.

Reporting: Reporting presents the results of EIA.

Review: Review examines the adequacy and effectiveness of EIA.

BEYOND LEGAL REQUIREMENTSThe major aspects or significance of the environmental appraisal of the project other than legal requirements are

1. Meeting higher standards2. Carbon financing

Meeting higher standardsThe popular methods of meeting higher standards are

a. ISO 14000 certificationb. Green Project rating (GRP)c. Global Reporting Initiative (GRI)d. Indian Green Building Council Certification e. LEED rating

ISO 14000 provides environmental management standards to help organisations to minimize the negative impact of their projects to environment. In 2000, there were about 257 Indian companies certified with ISO 14000, it is increased to 2016 companies in 2006. The economic benefits of ISO 14000 certification aimed modification in production plant are reduction in waste, innovations in process management etc.

Green rating Project (GRP) is constituted by Centre for Science and Environment (CSE), GoI. GRP is an initiative to rate the industrial units on the basis of environment friendliness. According to the environmental friendliness approaches implemented, industrial units are classified into five categories in the GREEN LEAF SCALE. The reputation is the incentives for GRP.

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The mission of Global reporting Initiative (GRI) is to make sustainable reporting standard practice for all organisations. GRI initiate in participate, communicate and report the sustainable development practices initiative. Only 13 companies from India take the advantages of GRI in 2011.

The certification from Indian Green Building Council is another approach of meeting higher standards. Green buildings use less energy, water and natural resources, creates less waste and is healthier compared to standard buildings

Leadership in Energy and Environmental Design (LEED) certification is based on six domains

(1) Sustainable site(2) Water efficiency(3) Energy and atmosphere(4) Material and resources(5) Indoor environment quality(6) Innovative in operations

In LEED certification procedure, the building is certified in four categories namely, ‘CERTIFICATION’, ‘SILVER’, ‘GOLD’, and ‘PLATINUM’.

Carbon financingThe problem of global-warming and climate change lead to initiation of concept of carbon financing. Kyoto Protocol (2005) gives the opportunity for carbon trading. The developing countries produce carbon equivalent less than the prescribed limit, the balance amount of carbon equivalent can be sold to developed country to compensate the overproduction beyond the prescribed limit.

Significance of environmental appraisal of project1. Environmental appraisal provides true account of real cost and benefit of the project.

Quantification of environmental impacts in the approval procedure will help to offset future market failure and penalising the schemes with environmental costs. It helps to promote environmental benefits

2. Environmental appraisal provides the adjustment factor to allow environmental depreciation in the computation of national accounts like GNP, GDP etc. The adjusted GNP or GDP is more accurate indicator of country’s development.

3. Environmental assessment helps to develop environmental policies through green pricing. In developed countries size of environmental cost and benefits is also accounted in valuation of taxes, subsidies, user charges etc.

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