Benefit Cost Analysis
Cumulative Impact Assessment
Although relatively recent, environmental impact analyses are often used in decision making processes. Most notably, NEPA provides a framework for this assessment. In Indiana, IEPA provides guidance for the assessment of environmental impacts of state actions. Projects conducted in Indiana by different agencies are evaluated by different methods.
Several federal agencies conform to the Economic and Environmental Principles for Water and Related Land Resources Implementation Studies. These principles were established pursuant to the Water Resources Planning Act of 1965.47 The principles are intended to ensure consistent planning in the evaluation of water and related land resources implementation studies. Federal agencies adhering to these principles in the formulation and evaluation of their water resource projects include:
The principles and guidelines (P&G) were established to help agencies meet NEPA requirements. The P&G states that "a plan recommending Federal action is to be the alternative plan with the greatest net economic benefit consistent with protecting the Nation's environment, unless the Secretary of a department or head of an independent agency grants an exception to this rule."48
A requirement of the P&G is the preparation of a national economic development (NED) plan. This account as well as three other accounts are established to evaluate effects of alternative actions.49 Procedures for an NED are outlined in the P&G for several activities including: (1) municipal and industrial water supply; (2) agricultural floodwater, erosion, and sediment reduction; (3) agricultural drainage; (4) agricultural irrigation; (5) urban flood damage reduction; (6) power (hydropower); (7) transportation (inland navigation); (8) transportation (deep draft navigation); (9) recreation; and (10) commercial fishing. The NED account shows effects on the national economy. Generally, beneficial effects in the NED are increased in the economic value of the national output of goods and services from the plan. Adverse effects in the NED account are the opportunity cost of resources used in implementing a plan.50
Flood control projects in Indiana are required to include estimates of the benefits and costs associated with the activities proposed to carry out this purpose. For example, the Department of Natural Resources is required to make recommendations to the Natural Resources Commission on the creation of "multiple purpose flood control reservoirs" and include in the recommendations "[e]stimates of costs and benefits."51 Also, one basis for a landowner to remonstrate against the construction of a regulated drain is that the "costs, damages, and expenses of the drain will exceed the benefits that will result to the owners of all land benefited."52
The Indiana Conservancy Act53 requires a positive benefit cost ratio at critical stages in the creation and development of a conservancy district. For most types of district, the court must find a district "offers benefits in excess of costs and damages" before approving its establishment. Before approving a district plan proposed by an existing district, the court must generally determine the "estimated benefits to be received in the district will exceed the estimated costs and damages of the plan."54
Construction activities in a floodway are generally subject to the permitting requirements of the Flood Control Act.55 During the permit review process, the Department of Natural Resources must consider several aspects of a proposed project. Among these considerations are the "cumulative effects of the structure, obstruction, deposit, or excavation."56 Guidelines for the assessment of cumulative effects have not been developed by the DNR.
The U.S. Environmental Protection Agency is seeking to establish indexes for monitoring various environmental conditions. Probably the most well known index is the air pollution index. Another example is the Index of Biotic Integrity which combines several factors describing fish community structure, incidence of pathology, population sizes, and other characteristics proposed by the EPA to assess the quality of streams.57
Another familiar index created by the EPA is the Toxics Release Inventory (TRI). The TRI is published annually by the EPA to distribute information on selected chemicals discharged by businesses and industries. The TRI was established in response to the passage of the Emergency Planning and Community Right-to-Know Act of 1986 (or Title III of the Superfund Amendments and Reauthorization Act (SARA)). Generally, the TRI is a mechanism to be used as a source for public information on industrial discharges of a hazardous nature. The inventory presents the amount of chemicals processed and discharged in a simplified form. In this form, the data can also be used to monitor the effectiveness of regulatory programs, assist decision makers, and note environmental conditions. In particular, the TRI can be used to rank the designated facilities by the amount of harmful chemicals discharged and to enforce standards for chemical discharges.58
Recently, the TRI indicated that the State of Indiana had dropped to eleventh in the ranking of the nation's polluters. An article released in the GARY POST TRIBUNE credited Inland Steel with this improvement. The steel company "reduced its toxic emissions by more than 10 million pounds, the fourth largest reduction in the nation. Inland accounted for 55 percent of the state's 18 million pound reduction in toxic releases." Most of the company's reduction in waste was accomplished through recycling slag, dust, and sludge which use to be disposed in an on-site landfill. Now the waste is turned into concrete and briquettes.59
Indiana Trophic State Index (TSI) assigns "eutrophy points" for different concetrations of ten common water quality parameters. The total of all these points for a particular lake is that lake's TSI. The potential TSI range is 0 to 75; going from highest to lowest quality of water. The TSI is used to implement the Indiana Lake Classification System and Management Plan which is administered by the Indiana Department of Environmental Management.60 IDEM has been working with the Environmental Protection Agency to establish a unified method to evaluate the biologial integrity of Indiana rivers and streams using the fish communities living within the various waterbodies. The Index of Biotic Integrity is being calculated specifically for Indiana to better understand the cumulative effect of impacts on Indiana waterbodies.61