Risk-informed land-use planning in the Indian context: A social cost-benefit analysis

Abstract

Major chemical process accidents over the recent past decades have led to the formulation and enforcement of land-use planning (LUP) practices across many countries, so as to mitigate the public risk emanating from major chemical hazard installations. The present paper presents an approach to deciding land-use policy founded on integrated local risk-acceptance criteria and an attendant societal cost-benefit analysis. The application of the proposed approach is demonstrated by a case study of an example greenfield industrial facility for which the adjoining land is subject to strictures of LUP policy. The context is chosen to be that of India, which is an emergent economy that is beset with unique challenges for balancing land-use between agrarian and industrial use. The societal costs and benefits are computed employing macro-economic indicators; the former comprise opportunity cost of land restricted for development, while the benefit is comprised of the cumulative wealth generation due to economic development of the jurisdiction over the facility life time. The value of the benefit to cost ratio is found to be highest corresponding to a LUP based on a relatively relaxed risk acceptance criterion with As Low as Reasonably Practicable (ALARP) limits of 10−6–10−4/yr for public individual risk. The primary reason for this outcome is that, in comparison to a developed economy, land prices in India are relatively high vis-à-vis labour productivity and wages. This shifts the LUP choice towards the policy which involves least land-use restrictions against non-agrarian, commercial developments in the vicinity of major hazard installations. It is also demonstrated that if the per capita GDP values corresponded to those of developed economies, a LUP policy based on a more stringent risk acceptance criterion may be affordable for the society. An additional significant finding of the study is that the Value of Statistical Life of humans makes a relatively minor contribution to the societal cost-benefit analysis. Thus, its value as a determinant to LUP decision may be relatively limited. This essentially underscores the idea that the broader objective of LUP need be to simultaneously foster economic development and minimise human and other critical losses.