Mainstreaming the global environment and economic valuation of ecosystem goods and services
for strengthening Environmental Impact Assessment in Iran
Abstract:
Economic development in the past decades has imposed a lot of pressure on the global environment
and as a result the environment of many countries, including Iran, has faced irreparable damages.
Therefore, it is essential to consider the environmental impacts of plans and development projects.
This is important because the performance of any activity at macro levels needs to address
environmental issues, which, from the economics perspective are key for sustainable development.
However, insufficient effectiveness of qualitative methods for evaluation in recent years has given
rise to quantification methods of Environmental Impact Assessment worldwide. To date, no clear
instructions have been presented about combining economic valuation and Environmental Impact
Assessment, but there are some sparse experiences in this field applied by World Bank and Asian
development bank. As these two concepts could be integrated for additional synergy, we decided to
study the EIA process in Iran, trying to use economic valuation methods and assessing ecosystem
goods and services. For this purpose from all EIA reports that existed in the Department of
Environment from 2001 to 2012, 100 samples were selected randomly and the following criteria were
studied: total project budget, most important pollutions, impacts of the project, the most important
environmental factors resulted from the project implementation, quantitative estimation of impacts in
both phases of the project (construction and operation), estimation of cost of losses due to project
implementation. Then among 100 verified reports, six reports (to avoid repetition) which had
quantified impacts were selected. At the next stage the most important negative project impacts were
determined, and related ecosystem services which damaged were identified. Finally, through a
comparison between the EIA process and the economic valuation of ecosystem goods and services,
an integrated model has been proposed.
Key words: Economic development, sustainable development, Environmental Impact Assessment,
ecosystem goods and services
Initiation
Today, the world requires efficient tools for environmental protection to move from traditional
environmental management approaches to modern approaches. Environmental Impact Assessment
(EIA) prior to implementation of projects is one the most important tools of environmental protection.
But since most assessment methods are qualitative, the assessors often do not assess monetary losses
resulting from the impacts of development on the environment. That is, losses imposed on ecosystem
services by land use changes or pollutions are somehow overlooked. In a few cases, which costs and
benefits are analyzed, this is only limited to costs and benefits in a real market, and since ecosystem
services often lack a real market, the values of such services and losses imposed on them do not take
into consideration in cost-benefit analyses. Fortunately, according to notes1 and 2 of Clause 192 of 5th
Economic, Social and Cultural Development Plan Law of Iran, necessity of incorporating ecosystem
services and biological resources as well as the inflicted losses into development processes has been
certified in recent years. Hence, some major activities were carried out by Department of the
Environment of Iran (DOE) for economic valuation of ecosystem goods and services including:
economic valuation of 16 sites protected by DOE, evaluation of costs and environmental losses
resulting from development plans to 9 ecologically sensitive areas (ongoing), preparation and
formulation of 5 guidelines of economic valuation in various categories, and evaluation of ecosystem
goods and services in two international wetlands (ongoing) (Mirzaei et al, 2008). On the other hand,
environmental assessment (EI) as a powerful means to achieve sustainable development in Iran found
its legal status in 1995. Since then, while the legal position of environmental assessment was
stabilized, the number of projects requiring EI reached from 7 to 33 (2006), which increased to 51
such projects (Fifth Development Plan Law) in compliance with latest Acts of the Supreme Council of
Environment (approved by the cabinet in 2012). But, although there are some synergies between EIA
and economic valuation of environmental resources, no measure has been taken to combine these two
processes. The present paper shows that there is a good potential to use parts of EIA process in order
to quantify environmental losses in Iranian Rials. In addition, evaluation of ecosystem goods and
services could help improve EIA.
Materials and methods
In this paper, two methods were used to provide a pattern for using ecosystem goods and services in
EIA and its procedures:
1. Comparative study of EIA and economic valuation of the environment as well as identification of
common steps
By focusing on these two processes, some common steps are found, which can form the basis of their
combination. In fact, if prediction and identification of dominant impacts of the projects include
quantitative estimates of changes made to ecosystem services as a result of development, the output of
this part can feed input information for valuating ecosystem services. Many factors such as short time,
limited budget, unavailability of the data and ecological complexities has made assessments to be
further based on qualitative information (Mobaraghaei, 2011).
2. Examination of EIA reports in DOE
From 1995 to 2011, 1382 EIA reports were received by DOE, of which 1171 reports were explored
the Assessment Committee and decisions were made about them (Fig.1) (Rahamti, 2012).
Figure1. The number of EIA reports by project type (1998-2012) (Rahamti, 2012).
In the next stage, among 400 EIA reports between 2002 and 2012, 100 reports of various categories
were selected and explored by cluster sampling. The studies suggested that none of the reports
evaluated losses from the project options and they only predicted potential and actual hazards of
projects. Few reports estimated pollution levels of a project quantitatively, which is the basis of this
research. It was also inferred that EIA processes in Iran face the following gaps and challenges:
Lack of necessary inhibition power and performance bond in laws and regulations, qualitative
assessment criteria, relies on assessor's options, inadequate knowledge of experts about environmental
assessment, the insignificance of SEA, ignorance of land use planning, unavailability of basic
required information, high costs of assessments.
Finally, in order to avoid repetition, 6 reports were selected out of total 100 analyzed reports, which
estimated quantitative impacts of pollution (Table 1). For any project has numerous consequences
and impacts, efforts were made to examine their most important impacts. For this purpose, the most
important negative effects and consequences ecosystem services of a project were extracted. As these
studies indicate, assessment reports performed in Iran has been relied on qualitative research, which
facilitated the process.
Table1. Use of Valuation of ecosystem goods and services in the EIA process (proposed in this paper)
No
Project
Budget
Quantitative
Negative
Damaged
.
Type
Analysis
Estimation of impacts
Impacts
ecosystem services
Of project
Utilization
Construction
Phase
phase
1
Steel
industries

- Solid wastes
(480kg/day)
- Wastewater
(45kg/day)
- Noise
pollution in a
noisy day in
fresh air
Thermal
pollution of
water
Change in lifecycle
of materials
Habitat generation
- Dust per ton
(20-40pounds)
(120dB/day)
- Solid wastes
(640kg/day)
- Total need for
water: 3m3/year
Air pollution
Solid wastes
Effluents and
sanitary
wastewater
Noise pollution
Changes in
atmospheric gases
Dust pollution
Solid wastes
2
3
Petro
chemistry
Power
plants
-

- Sanitary
wastewater (600
m3/day)
- Solid wastes
(2500kg/day)
- Wastewater
(31.2 m3/day)
- Solid wastes
(480kg/day)
- Sanitary
wastewater (6-8
m3/day)
- Total output
gases from
power plant
activities (17501850ton/year)
- Human
wastewater (1315m3/day)
- 85-90 dB noise
reduction
4
Industrial
towns

-
Air pollution
Noise pollution
Sanitary
wastewater
Solid wastes
-
Air pollution
6
Refinery
Tourism

Waste and fertilizer
treatment
Residues
Waste and fertilizer
treatment
Noise pollution
Waste and fertilizer
treatment
Changes in
atmospheric gases
Habitat generation
Destruction of
plant and animal
habitats
Short term
impact in
landscapes
Long term
impact in
landscapes
Air pollution

- 85-90 dB noise
reduction
Waste and fertilizer
treatment
Changes in
atmospheric gases
Waste and fertilizer
treatment
Waste and fertilizer
treatment
Waste and fertilizer
treatment
Changes in
atmospheric gases
Noise pollution
Air pollution
5
Waste and fertilizer
treatment
Waste and fertilizer
treatment
Aesthetic
information
Outdoor Recreation
Changes in
atmospheric gases
Water pollution
Self-purification
and water treatment
Noise pollution
Waste and fertilizer
treatment
Soil pollution
Soil maintenance
Residues
Waste and fertilizer
treatment
Genetic sources
Genetic sources
Destruction of
annuals in
construction phase
Destruction of
animal habitat in
utilization phase
Discussion and conclusions:
Considering the results obtained from comparative studies, the following proposed pattern is
recommended to promote environmental impact assessment in Iran:
Figure2- The proposed pattern to use of ecosystem goods and services in the EIA process
Suggestions:
- Creation of a professional data bank of national environmental economy by DOE
- Determination projects requiring economic valuation
- Addition of a clause of economic assessment to environmental assessment
- Preparation and formulation of detailed guidelines of economic valuation
- Preparation and formulation of tax laws on pollution and how to compensate the losses
- Quantification of impacts in EIA reports
- Accurate and quantitative measurement of pollutants created as a result of development plans
- Periodic and continuous evaluation of environmental costs and damages with respect to discount
and inflation rate
- Determination of more obvious negative impacts
- Mandatory cost-benefit test for all projects
- A full inventory of ecosystem goods and services in EIA reports
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