New ministry guidelines may increase the cost of diverting forests

The guidelines add new categories of costs that the project proponent is required to pay 

By DTE Staff
Last Updated: Wednesday 09 August 2017 | 06:09:34 AM

The project proponent pays compensation for diverting land for non-forest use to compensate the loss in ecosystem services (Credit: crustmania/Flickr)

The Ministry of Environment, Forests and Climate Change (MoEF&CC) has come up with new guidelines for diversion of forest land, with newly added costs, which is likely to make the process more costly.

The guidelines add 30 per cent of the net present value (NPV) of forests to the cost of diversion for "possession of forest land", and 50 per cent of NPV cost as "habitat fragmentation cost". Another 10 per cent of the forest’s net value is added as compensation for loss of animal husbandry productivity and soil moisture conservation costs.

The guideline submitted to the National Green Tribunal, will come into effect once the NPV of forests is revised. NPV is the amount paid by the project proponent for diverting land for non-forest use to compensate the loss in ecosystem services. This cost has not been revised, in spite of courts ordering it multiple times. The MoEF&CC is supposed to revise the value every three years.

The Indian Institute of Forest Management (IIFM) was assigned the responsibility of reassessing the value of forests. Its report in 2014 said that NPV was grossly underestimated and proposed NPV rate ranges from Rs 9.87 lakh to Rs 55.55 lakh per hectare. NPV is estimated for forests categorised into six eco-classes, or forest types, and three canopy cover density classes—very dense forest, moderately dense forest and open forest.

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IEP Resources:

Guidelines for conducting Cost Benefit Analysis for projects involving diversion of forest land under the provisions of the Forest (Conservation) Act, 1980

Judgement of the National Green Tribunal regarding diversion of forest areas for laying of Reliance Gas Pipeline, Maharashtra, 08/07/2016

Revision of rates of NPV applicable for different class/category of forests

Study on NPV calculations for diversion of forest land for mining purposes

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