The cost of carrying out an environmental impact assessment can be a significant part of the planning and design cost of a development project. Notoriously, the EIA costs are difficult to predict at the outset of the project. This uncertainty is mainly due to an initial lack of knowledge of the environmental baseline conditions on the development site. As the project progresses, site knowledge increases gradually and new costs may emerge while some risks may reduce. Particularly in the current economic climate, there is a need to have a clear understanding of the costs and the risks of the environmental impact assessment at an early stage in the project.
The first step to effective cost management of an environmental impact assessment is to carry out a thorough EIA scoping study. The outcome of the EIA scoping study should be a clear understanding of the basic site characteristics and the likely environmental risks and sensitivities. It should also provide a clear programme on how to address the issues that have been identified in the further environmental impact assessment.
Following a carefully undertaken EIA scoping study, uncertainties remain. These uncertainties are however much more manageable. For instance, during the EIA scoping study it was identified that no important archaeological features have been recorded in the wider area around a site. The following step that is proposed is to carry out a geophysical site survey. Depending on the outcome of the survey there may be a requirement to carry out an intrusive investigation in the form of an excavation.
There are three uncertainties that will determine the final cost for archaeological work as part of the environmental impact assessment. Firstly there is the uncertainty about the exact cost to carry out the geophysical survey. The error margin on this should be relatively small as it is a fairly defined activity. The second uncertainty relates to whether or not the results of the survey indicate the need of further work. This is a yes or no issue, where the uncertainty relates to the chance that further work is required. Finally, the third piece of uncertainty relates to the cost of the intrusive investigation should this be required.
A system that is based on the Monte Carlo cost forecasting system is ideally suited to deal with these kind of uncertainties. The outcome of the Monte Carlo cost forecasting system is typically a series of potential project costs together with the probability that each of these costs will not be exceeded. Thus, employing a combination of a rigorous EIA scoping study and the use of the Monte Carlo cost forecasting methodology are essential tools in the effective cost management of environmental impact assessments.
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