Environmental quality indexing of large industrial development alternatives using AHP

Abstract

Two industrial development alternatives have been proposed for the East Coast of Iceland in order to strengthen its socio-economic basis. The favoured option is to build a large aluminium smelter, which requires massive hydropower development in the nearby highlands. Another viable option is the construction of a 6-million-ton oil refinery, following the planned exploitation of the Timan Pechora oil reserves in the Russian Arctic. A third “fictitious” alternative could be general development of existing regional industry and new knowledge-based industries, development of ecotourism, establishment of national parks, accompanied by infrastructure improvement (roads, tunnels, communications, schools, etc.). The three alternatives will have different environmental consequences. The controversial hydropower plant for the smelter requires a large water reservoir as well as considerable land disturbance in this unique mountain territory, considered to be the largest uninhabited wilderness in Western Europe. The aluminium smelter and the oil refinery will give rise to substantial increase of the greenhouse gas (GHG) emissions of the country (about 20%). Then there is potential environmental risk associated with the refinery regarding oil spills at sea, which could have disastrous impact on the fisheries industry. However, the oil refinery does not require any hydropower development, which is a positive factor. Finally, the third alternative could be defined as a “green” solution whereby the detrimental environmental consequences of the two industrial solutions are mostly avoided. In order to compare the three alternatives in an orderly manner, the analytic hierarchy process methodology of Saaty was applied to calculate the environmental quality index of each alternative, which is defined as a weighted sum of selected environmental and socio-economic factors. These factors are evaluated on a comparison basis, applying the AHP methodology, and the weights in the quality index summation are estimated in the same manner. Six persons with different backgrounds were asked to fill in the comparison matrices in order to reduce bias in the evaluation. The final results show that the two industrial alternatives come out poorly, i.e. with low quality indices, whereas the third pseudo-alternative, i.e. general development, with a considerably higher quality index, is certainly worth a further study.