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

The economic viability of any development project that involves diversion of forest land may now reduce with the environment ministry coming up with new cost benefit analysis guidelines. The new guidelines submitted to the National Green Tribunal (NGT) by the ministry comprise a number of new costs for diversion of forest land, including possession costs and habitat fragmentation costs. The enhanced cost of diverting forest land will come into effect only when the process of arriving at the net present value (NPV) of forests, as prescribed by the Supreme Court in 2008, is revised. The new guidelines, however, may highlight the steep environmental costs of diverting forests, say officials and help the ministry make a judicious decision. According to the new guidelines, the ecosystem service cost of diversion will be assessed based on the NPV formula.