KOCHI: The puritan ecologists may frown on the very idea that the total economic value of a forest could be determined in tangible monetary terms. For the puritan, forest and its ecology are beyond the mundane world of monetary transactions. Nevertheless, efforts are on to determine the value of the forests in monetary terms by taking into account the many merits of the forest ecosystem.
The 14th Finance Commission of India, which submitted its report in December 2014, has acknowledged the significance of the forest ecosystem as an economic entity by taking it as one of the parameters for devolution of central funds to state governments. According to well-known economist Dr K.K. George, the recommendation of the Financial Commission effective from April 2015 to March 2020 would bring an economic bonanza of over Rs 8,000 crore for Kerala.
A discussion on the need for the total economic value of forest ecology has assumed importance in the state with the revival of the controversial Athirappilly hydroelectric project by the state government. The project, opposed by the green activists, has also been under the scrutiny for its poor economics. The project as per the latest estimate costing '936 crore has been described an economic disaster for its complete ignorance of the total economic value of the forest.
According to Prof V.S. Vijayan, former chief of the Kerala State Biodiversity Board, the total economic value of the 136 hectares of land earmarked for the project is placed at Rs 500 crore. “The assessment of Rs 500 crore is based on the study conducted in this regard by the Bhopal-based Indian Institute of Forest Management,” he said.
The total economic value of the forest is arrived at by making an assessment of the tangible and intangible benefits accrued from the forest ecosystem on a perennial basis. “By using this methodology, the value of per hectare of land in Athirappilly is estimated at Rs 55 lakh,” he said. The value of wetland on both sides of the banks of the Chalakkudy River is placed at Rs 22.25 per hectare.
“If we take into account the overall benefits of this forest system in terms of holding back carbon dioxide, releasing oxygen and conserving many other ecologically sensitive species, the total economic value per year would be anywhere near Rs 500 crore,” he said.
The economics of the project is also questioned from another angle by N.S. Alexander, a former deputy drug controller and an RTI activist. According to him, the Kerala State Electricity Board will have to account the compensation for the 136 ha of land as well the reforestation in lieu of this 136 ha of the forestland in Athirappilly. The cost in this regard has not been mentioned in the project estimate, he said.
Mr Alexander also pointed out 14 hydroelectric projects with total installed capacity of 179.85 MW intending to generate 546.51 million units are languishing in various stages of incompletion. “If KSEB is serious about addressing the power problem in the state, it should give top priority to completing these projects within a strict time-frame,” he said.
The track record of KSEB for the completion of a hydroelectric project in the state is anywhere between 10 and 20 years. Given such a history, it would be impossible to accept Board’s claim of completing the Athirappilly project within four years, Mr Alexander said.
If the KSEB and the state government are interested in the long-term interest and welfare of the people, they should abandon such projects and focus on solar energy, nearly an untapped potential in the state, he added. “Finance minister T.M. Thomas Isaac should tell his colleague in the electricity ministry that the project is not only bad ecology but worse economics,” he said.
