Project

Appraisal &
Finance ENVIRONMENTA
L APPRAISAL OF
PROJECTS
By :
Dr. Madhu Iyengar
Topics Covered

1. Environmental Appraisal
2. Meaning of Environment and Pollution,
3. Pollution Created by Different Industries,
4. Methods of Preventing Pollution,
5. Environmental Regulations in India,
6. Environmental Impact Assessment for Projects.
Environmental Project Appraisal

Environmental Project Appraisal is the term used to describe the assessment of the
environmental consequences of proposed programs, or projects.
The objective of environmental appraisal is to determine and evaluate the environmental
implications of proposed programs, or projects.
Environmental Parameters consist of components of environment and can be grouped
into major components.
o Terrestrial - Ecology Aquatic Fisheries Eutrophication Aquatic Weeds Species Diversity Endangered
Species Forest Wildlife Species Diversity Endangered Species
o Groundwater Physico-Chemical Land Erosion and Siltation Backwater Effect Bank Stability Drainage Soil
characteristics Regional Hydrology Recharge Water Table Water Pollution Surface Water Atmosphere •
Regional Hydrology • Silt Load • Water Pollution • Air Pollution • Dust Pollution • Noise Pollution
o Socio-Economic Human Interest Aesthetic Diseases Sanitation Nutrition Land Loss Crop Production
Aquaculture Irrigation Navigation Flood Control Transport Re-settlement Employment Agro-Industrial
Health • Landscape • Recreation
Meaning of Environment

An ecosystem is a functional unit of nature where organisms interact with each
other and their surrounding.
There are many external forces, substances or conditions which effect the living
organism some way or the other.
These factors effecting the living organisms are collectively referred to as the
Environment.
Environment around us acts in many ways to benefit mankind some of which are
fixation of CO2 , release of Oxygen and pollination by various biotic and abiotic
agents. Anthrosphere is the part of the environment made or modified by humans
beings and is used for their activities like; factories, transport vehicles,
infrastructure etc.
Meaning of Pollution

The term Pollution refers to introduction of harmful material into the environment
leading to its degradation.
The advancement and development taking place today in the anthrosphere too,
cause pollution, resulting in environmental degradation through depletion of
resources such as air , water and soil, destruction of ecosystems and the extinction
of wild life.
The largest areas of concern at present are the loss of rain forests, air pollution,
smog, ozone depletion, and damage to marine life.
Pollution Created by Different Industries

Industrial Activities are source of air, water, spoil, and noise pollution as they
result into emitting harmful gases into the stratosphere, and releasing hurtful
chemicals into water bodies oozing into the soil over time.
The following are the different types of pollution caused by the industries
resulting notable damage to the environment:
Air Pollution
o Sulphur dioxide released by Power Plants by burning of fuels like coal, petrol and diesel
o Automobile and Transport industry contributing to emission of Carbon monoxide ,
hydrocarbons , nitrous oxides.
o Methyl-iso-cyanate (MIC), a poisonous gas released in the environment (air) by Pesticide
Plants that significantly and disastrously impact the quality of air
Pollution created by Different Industries (Continued)

Air Pollution (Continued)

o Synthetic Rubber, Cement, Metallurgical, Chemical Plants, Petroleum refineries, Paper Pulp,
Sugar, Cotton Mills hugely contribute to air pollution through the release of carbon particles,
metallic dust, tars , resins, aerosols, solid oxides, nitrates, and sulphates, Sulphur, nitrogen and
oxygen compounds, chlorine , fluorine and radioactive substances
o Refrigeration Industry uses CFC (Chlorofluorocarbons) causing depletion of the ozone layer
in stratosphere letting harmful Ultra violet rays from Sun to adversely impact the biotic
components of the environment.
o Agricultural Processes contribute to air pollution releasing dust from field burning etc.
o Construction industry to release dust contributing to Air Pollution.
Pollution created by Different Industries (Continued)

Water Pollution
Water pollution refers to the contamination of water bodies, usually as a result of
human activities for instance Industries releasing industrial wastes into water
bodies. Water bodies include lakes, rivers, oceans, aquifers and groundwater.
Water pollution results when contaminants are introduced into the natural
environment. Major source of water pollution are:
o Industrial wastes & sewages from Industries like Petro-Chemical, Fertilizer, Tanneries, Steel,
Distilleries, Synthetic Material, Drugs, Fibres, Plastic.
o Oil, human waste etc. from Transportation Industry (Shipping, road, Air, rail)
Environmental Appraisal of Projects

Radioactive Pollution
o Radiation from radioactive materials hazardous to health of all the living forms.
o Atomic explosions and Atomic reactors are the source of large quantities of radioactive
material found in the ecosystem.
Methods of Preventing Pollution

Preventing Air Pollution:

Desirable and harmless air quality standards have to be established
Adequate legislation to compel control of pollutants at source
Source control disallowing emission of pollutants into the air
Abatement rendering the emission harmless
Utilization of positive cranckcase ventilation valve and catalytic converter by public to reduce
exhaust emissions
PUC Certification
Industry to use electrostatic precipitators to reduce smoke and dust
Using chemical methods like Differential solubility of gases in water by using scrubbers and by
filtration or absorption through activated carbon
Use unleaded petrol , CNG ( Compressed Natural Gas), mixed fuel containing methanol
Methods of Preventing Pollution (Continued)

Preventing Water Pollution:

Stabilization of ecosystem-reducing waste input , harvesting and removal
of biomass , trapping of nutrients , fish management and aeration
Reutilization and recycling of waste- to generate cheaper fuel gas and
electricity
Physical removal of pollutants- absorption, electrodialysis , reverse
osmosis ( desalinate brackish water, purification of sewage effluents) and
ion exchange
CSIR’s techniques – removal of ammonia, mercury , phenolics and
sodium salts for re use of water after decolourization
Methods of Preventing Pollution (Continued)

Precautions against radioactive leakage

The radioactive waste is normally disposed in landfilling by digging deep pits in
desert areas or sea bottom and capped by concrete to avoid contamination.
Environmental Regulations in India

The Environment (Protection) Act was enacted in 1986 with the objective of

providing for the protection and improvement of the environment. It empowers
the Central Government to establish authorities [under section 3(3)] charged with
the mandate of preventing environmental pollution in all its forms and to tackle
specific environmental problems that are peculiar to different parts of the country.
The Act was last amended in 1991. EIA was made statutory in 1994.
Environmental Regulations in India (Continued)

The Water (Prevention and Control of Pollution) Act was enacted in 1974 to
provide for the prevention and control of water pollution, and for the maintaining
or restoring of wholesomeness of water in the country. The Act was amended in
1988. The Water (Prevention and Control of Pollution) Cess Act was enacted in
1977, to provide for the levy and collection of a cess on water consumed by
persons operating and carrying on certain types of industrial activities. This cess is
collected with a view to augment the resources of the Central Board and the State
Boards for the prevention and control of water pollution constituted under the
Water (Prevention and Control of Pollution) Act, 1974. The Act was last amended
in 2003.
Environmental Regulations in India (Continued)

The Air (Prevention and Control of Pollution) Act was enacted in 1981 and

amended in 1987 to provide for the prevention, control and abatement of air
pollution in India.
The Noise Pollution (Regulation and Control) Rules, 2000 under The
Environment (Protection) Act - The increasing ambient noise levels in public
places from various sources, inter-alia, industrial activity, construction activity,
generator sets, loud speakers, public address systems, music systems, vehicular
horns and other mechanical devices have deleterious effects on human health and
the psychological well being of the people; it is considered necessary to regulate
and control noise producing and generating sources with the objective of
maintaining the ambient air quality standards in respect of noise;
Environmental Regulations in India (Continued)

Functions of the Central Pollution Control Board of India at the National Level
Advise the Central Government on any matter concerning prevention and control
of water and air pollution and improvement of the quality of air.
Plan and cause to be executed a nation-wide program for the prevention, control
or abatement of water and air pollution;
Co-ordinate the activities of the State Board and resolve disputes among them;
Provide technical assistance and guidance to the State Boards, carry out and
sponsor investigation and research relating to problems of water and air pollution,
and for their prevention, control or abatement;
Plan and organise training of persons engaged in programme on the prevention,
control or abatement of water and air pollution;
Environmental Regulations in India (Continued)

Functions of the Central Pollution Control Board of India at the National Level
 Organise through mass media, a comprehensive mass awareness programme on the
prevention, control or abatement of water and air pollution;
 Collect, compile and publish technical and statistical data relating to water and air
pollution and the measures devised for their effective prevention, control or abatement;
 Prepare manuals, codes and guidelines relating to treatment and disposal of sewage and
trade effluents as well as for stack gas cleaning devices, stacks and ducts;
 Disseminate information in respect of matters relating to water and air pollution and their
prevention and control;
 Lay down, modify or annul, in consultation with the State Governments concerned, the
standards for stream or well, and lay down standards for the quality of air; and
 Perform such other function as may be prescribed by the Government of India.
Environmental Regulations in India (Continued)

As per the policy decision of the Government of India, the CPCB has delegated its
powers and functions under the Water (Prevention and Control of Pollution) Act,
1974, the Water (Prevention and Control of Pollution) Cess Act, 1977 and the Air
(Prevention and Control of Pollution) Act, 1981 with respect to Union Territories
to respective local administrations.
CPCB along with its counterparts State Pollution Control Boards (SPCBs) are
responsible for implementation of legislations relating to prevention and control
of environmental pollution.
Environmental Regulations in India (Continued)

Functions of the Central Board and State Boards for the Union Territories
Advise the Governments of Union Territories with respect to the suitability of any premises or
location for carrying on any industry which is likely to pollute a stream or well or cause air pollution;
Lay down standards for treatment of sewage and trade effluents and for emissions from automobiles,
industrial plants, and any other polluting source;
Evolve efficient methods for disposal of sewage and trade effluents on land;develop reliable and
economically viable methods of treatment of sewage, trade effluent and air pollution control
equipment;
 Identify any area or areas within Union Territories as air pollution control area or areas to be notified
under the Air (Prevention and Control of Pollution) Act, 1981;
Assess the quality of ambient water and air, and inspect wastewater treatment installations, air
pollution control equipment, industrial plants or manufacturing process to evaluate their performance
and to take steps for the prevention, control and abatement of air and water pollution.
Environmental Regulations in India (Continued)

EIA Notification 2006:

Projects seeking environment clearance have been divided into 2 categories-
Category A-All major projects such as river valley, nuclear , thermal power,
mining etc. require EIA study and clearance from Central Govt.
Category B- Clearance is accorded by State Environmental Impact Assessment
Authority(SEIAA) on appraisal and recommendation by State Level Expert
Appraisal Committee( SEAC). Category B1 are those that will require EIA study
and B2 which do not require EIA study.
Environmental Regulations in India

EIA Notification 2009:

o Proponent/Applicant has to make public terms of the environmental clearance obtained and
copies to be given to Panchayat, Local Bodies
o Self certification as to no further pollution load , waste generation, water requirement
o In the absence of a duly constituted SEAC/SEIAA Category B project will be treated as
Category A
o In case of >50% production expansion Project holding of Public constitution shall be essential
o Irrigation projects not involving submergence or inter state domain will be treated as Category
B project
o Clearance under Category A required for Biomass fuelled Thermal Power Plant> 50 MW
o Any project located within 10 km from Wildlife protected areas, critically polluted areas , eco
sensitive regions or interstate / international boundaries will be treated as Category A
Environmental Impact Assessment for Projects

Introduction:
In recent years in most Capitalistic countries lenders are disinclined to ask for
guarantees in the form of the plant itself since the responsibility for possible
environmental damage derives from the ownership or actual control of the Project.
 Due Diligence reports contain inter alia comments / opinions on the Project’s
vulnerability if harmful events were to occur and arrive at the maximum possible
loss( MPL) as regards the plant in that eventuality.
Also safety aspects are studied by simulating various emergency scenarios to
assess the probability of catastrophic events and their impact in terms of damage
to structures and the surrounding environment. Environment Impact Assessment
(EIA) may need to be carried out if the probability of such occurrence is high.
Environmental Impact Assessment for Projects (Cont.)

Environment impact is any alteration of environmental conditions or creation of a

new set of environmental conditions- adverse or beneficial- caused or induced by
the Project under consideration.
The impact depends on the nature ,scale, and location of the Project and it
includes the effect on the natural resource base ( quality of air, water, noise ,
biological) and socio- economic components of the environment management.
Inter – alia EIA involves mainly:
o Identification of environmental components likely to be impacted and the sources of impact
o Prediction of the extent of impact
o Evaluation of impacts to see whether they need to be mitigated
o Mitigation
o Submission of action report
 Environmental Impact Assessment for Projects (Cont.)
General procedure for EIA
Consideration of Description of
Project screening Scoping
Alternatives Project/Developme
(1) (2)
(3) nt Action (4)

Defining the Main: Identification, Public

EIS Presentation
Environmental Prediction, Evaluation, Consultation &
Mitigation (6) (8)
baseline (5) Participation (7)

Review Decision making Monitoring Auditing

(9) (10) (11) (12)
Environmental Impact Assessment for Projects (Cont.)

EIA methods:
Adhoc
Checklist
Matrix
Mathematical matrices
Computer aided EIA
Modeling
References

PROJECTS: Planning, Analysis, Financing, Implementation, and

Review, 6th e - Chandra, Prasanna. Tata Mc-Graw Hill Pvt. Ltd – 2006
Thank You