An investment or development incurs both costs and benefits. Investors are naturally interested in the benefits. However, the costs often only consider the direct costs associated with an investment. Regrettably, the environmental costs are not always taken into account by investors. The environment encompasses the physical environment (air, land, and water), nature, and the human environment, including public health. An environmental impact assessment (EIA) evaluates the environmental consequences and costs of an investment prior to a government decision regarding the investment. EIAs are mandatory in Europe, the United States, and numerous other countries for large projects. On Curaçao, EIAs are not yet mandatory. In Dutch, an EIA is known as a "Milieu Effect Rapportage" (MER). In Spanish, an EIA is referred to as an “Evaluación de Impacto Ambiental" (EIA).
Purpose of the EIA
The primary objective of the Environmental Impact Assessment (EIA) is to explicitly elucidate the environmental consequences and associated costs of an investment. By doing so, it facilitates a responsible balancing of environmental impacts and economic interests. The EIA’s purpose is not to compel decision-makers to select the option with the minimal environmental damage. Rather, its objective is to ensure that all relevant costs are fully identified and considered in the decision-making process.
Environmental costs
The environmental consequences and associated costs are evident from the outset but can also have a more concealed nature. In the physical environment, examples include air pollution, soil pollution, and water pollution. Regarding nature, examples include habitat loss on land, habitat fragmentation on land, and habitat decline in the sea, such as coral reefs. Nature is an integral component of the tourist product and possesses economic value. Consequently, the decline of nature incurs costs that, in many cases, can be quantified financially. Expressing the consequences in monetary terms is increasingly prevalent.
In terms of human consequences, examples include nuisance caused by increased traffic at a specific location, noise pollution, the loss of recreational opportunities, and diseases resulting from pollution. For instance, the consequences in the recent past of neighborhoods affected by refinery smoke and the subsequent illnesses of residents due to seawater pollution from sewage discharges into the sea. Human consequences can also be expressed in monetary terms, such as the costs associated with work incapacity or increased public health expenses. In light of these considerations, it is imperative to anticipate also the consequences of climate change.
MER Procedures
An Environmental Impact Assessment (EIA) must adhere to legal procedures to ensure impartiality. This is particularly important when dealing with significant interests. All stakeholders must be confident that an EIA will be conducted impartially. Procedurally, an EIA establishes a mechanism for the responsible party to cover the costs of the assessment, which can be the investor. Additionally, an EIA includes a consultation process with interested parties, such as local residents. Furthermore, the environmental impact of the development investment should be monitored after its realization.
Alternative and mitigating measures
The Environmental Impact Assessment (EIA) not only maps the environmental impact and associated costs but also provides the opportunity for identifying alternatives to the project, or specific project components, and adopting mitigating measures to reduce the environmental impact. Consequently, the project design can be adjusted at an early stage to minimize certain environmental effects. Adjustments made later are typically more costly or even impossible. Through consultation rounds, measures can also be taken at an early stage that consider the preferences of stakeholders.
Conclusion
An Environmental Impact Assessment (EIA) is a comprehensive study that entails associated costs. However, the absence of a MER (Mitigation and Remediation Plan) may result in the omission of certain costs associated with the physical environment, nature, and human impact from a development project. Consequently, decisions may be made that lead to higher social costs than the project’s anticipated benefits.
In Curaçao, the Environmental Impact Assessment (EIA) is not mandatory. As previously mentioned, the primary objective of the EIA is to explicitly disclose all project costs within the framework of sound decision-making, including potentially concealed costs. Failure to achieve this objective may result in societal costs exceeding the benefits of an investment project. Ultimately, society will bear the financial burden of this outcome, which is undesirable. In countries that approach development with seriousness, an EIA is legally mandated for substantial projects. It remains to be seen when Curaçao will adopt this practice. Fortunately, several Curaçaoan companies have voluntarily conducted MERs on large projects.
ENVIRONMENTAL IMPACT ASSESSMENT (EIA)