Development of a framework for the valuation of environmental impacts of a ship channel

Abstract

The aim of this study is to develop a framework that will aid in the valuation of the economic impacts of any Ship Channel. In this paper we consider the Sethusmaudram Ship Channel project as an example and try to predict the environmental damages that is causes We first look at the situation qualitatively and list the impact that the channel has on all possible sources. We also assess the damage caused by the canal in 2 distinct phases of its being – construction phase and operation phase. We also depict a broad framework that is used to understand the value of the environment and use this to understand its impact on plants and animals and in the case of oil spills. Next we look at oil spills in detail and develop a valuation model to simulate an oil spill in the case of a Non –Tank Vessel spilling oil. To develop the model we analyze previous oil spills, especially the Exxon Valdez oil spill and the Prestige oil spill to get an idea of the methodologies used. We then use the Willingness To Pay method to determine the value of the oil spill in the ship Channel. Finally we attempt to value the impact the channel has on the 2 main marine constituents Corals and Fisheries. For Corals we look at 2 specific benefits that they provide – fisheries and Biodiversity to assess its value. In the case of Bio-Diversity, we use the Benefit transfer method to determine its value. To value Fisheries, we look at it in 3 stages – pre-Channel, during construction and Post channel construction and develop a valuation for the fish reserves in each of these cases. Also, we look at the Socio-Economic impact that an impasse on fishing will do to the local fishermen. We finally take case of Shrimp farming in Tamil Nadu and asses the Ship channels impact on it by the means of an interview with a shrimp farmer.