Wednesday, April 14, 2010

The importance of regional environmental impact statements

Peter Firminger drew my attention to a story posted on Wollombi Valley Against Gas Extraction (WAGE) by Graeme Gibson.

I have spoken before about the environmental wars raging across New England. I have also discussed the way in which they create patterns of winners and losers, without adequate compensation being paid to those adversely affected. Mining royalties, for example, have recently been the only revenue growth area for the Sydney Government, yielding it revenue while many of the costs are bourne locally.

I am cautious about commenting on local issues where I do not know the details. I am also aware of the NIMBY (not in my backyard) principle. However, in this case Graeme made a broader comment that I think is of considerable importance.

At present, EIS's are project specific. However, where you get a number of projects, individual EIS's can be a very inadequate tool for measuring aggregate effects. The reason for this lies in what economists call externalities, the presence of costs and benefits extending beyond the project that are not always easily captured or measures.

A good project specific EIS will try to at least recognise and assess these. However, where you have multiple projects, external costs and benefits can compound in ways that may go unrecognised. Take a road system as an example. If traffic effects are considered serially on a project by project basis, then the total costs may never be recognised properly.

In his post, Graeme states:

A community deputation to Minister for Mineral Resources, Ian Macdonald on 23rd March, 2010, proposed that before there was any further mineral development of the Hunter Valley, that the NSW Government require a full Environmental Study of all current, future and cumulative impacts of coal mining, coal seam gas exploration/extraction, hot rock power stations and Defence Forces activity. The full submission can be found at (189kb PDF)

This idea of a regional EIS strikes me as very sensible in circumstances where multiple projects are known. To my mind, it is the only way of fully assessing total impacts.

Of course, all such studies are subject to weaknesses. Further, they may make development more difficult, a not inconsiderable objection. But without them, aggregate effects simply cannot be assessed properly.      

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