Incentivising environmentally considerate construction
My project recently received an environmental advisory letter, from the Environment Protection Authority (EPA), for tracking mud from the site on to a public road. There was no fine and no complaints from any of the local stakeholders, however the senior leadership team seemed disproportionately upset about the incident. After a bit of digging, I found out this was the project’s second advisory letter. When a project receives three or more advisory letters or has a serious breach of license, a project may be issued an infringement notice. These notices sit on the parent companies’ records and will count against them when a company is reviewed at the tender stage.
In the UK the local council or environment agency (EA) issue permits governing the operation of equipment and activities that could pollute or affect the current water cycle[1]. The permit issuing body and charges for each type of permit are mostly governed by the administrative burden on the council or EA who are assessing and issuing the permit[2]. In NSW, Australia, the Environment protection authority (EPA) is the single point of authority for issuing environmental protection licences (EPL) to the contractors carrying out the construction. In 2015, the EPA revised the way they issue licences to industry and construction sites to better incentivise environmental compliance and reduce the administrative burden for both the EPA and the clients. Each project has a single licence issued from the EPA that governs all types of emissions from noise to stormwater discharge. There are two types of scaling that change the cost and level of scrutiny the project receives.
Risked-based licencing – the EPA risk assessed the proposed construction activity, potential impact on the local environment, and management history of the contractor. This risk level (1-3) sets the level of oversight from the EPA, and the cost to the contractor of the licence. This provides an incentive to the various construction parties to maintain compliant behaviour to reduce their costs, administrative burden and levels of audit and scrutiny from the regulatory bodies.
Load-based licencing – this scales the cost of the licence proportionally to the limits on the pollution loads, thereby incentivising contractors to keep their noise, dust emissions and other pollutants[3] as low as possible, not just at the legal maximums. This also allows a project to calculate its own most cost-effective commitment as well as the offset between different pollutants on their scheme. It has also launched a scheme to allow large contractors to trade emissions between different projects on their portfolio.
My project has tried to take advantage of the ability to offset different types of emissions by committing to a water treatment regime that has very low analyte levels to compensate for some of the noise and dust impacts on the local community. This has backfired on the project’s bottom line. Land contamination means the water treatment plant is consuming filters and ion exchangers at ten times the rate initially estimated and costing four times the operational budget. Due to the pressure to uphold the EPA commitments, the reputation of the company, and avoid a further advisory letter, the project is spending money to treat water to a higher clarity level than the EPA minimums, and for very limited environmental benefit. Arguably the environmental cost (CO2 equivalent) of manufacturing and transporting the filters is more harmful to the global environment than the higher analyte levels in the storm water treatment.
I’d be interested if anyone has examples where environmentally considerate construction is incentivised successfully or unsuccessfully beyond fines and cost per unit emissions/discharge.
[1] https://www.designingbuildings.co.uk/wiki/Environmental_permit_for_construction
[2] https://www.gov.uk/government/publications/environmental-permitting-charges-guidance/environmental-permitting-charges-guidance
[3] https://legislation.nsw.gov.au/view/html/inforce/current/sl-2009-0211#sch.1
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The joy of rules based systems in an adversarial setting! It all sounded so sensible until someone let in the idea that tradeoff was sensible rather than just a commercial opportunity. Presumably there is no flexibility post agreemnt to revisit the intial trade off in light of new evidence (ground truth) and strike a more sensible balance. DO you have in mind a better model that you can describe?
Interesting that the letters get recorded against the company and stay on some sort of record, these seems like a good system – I wonder if a similar system is in operation in the UK?
From my own Ph 2 experience Natural resources Wales (read the environment agency for the rest of the UK) issued the A465 dueling project with several notifications, conducted on site inspections and even directly named the project director and construction managers in failing to implement proper water management processes. I saw little evidence to suggest this was ever meaningfully addressed by the main contractor I worked for who (in my opinion) will not take any action until they are forced to (through the project being temporarily shut down or fined). The letters and notifications received seem to have had little impact. Despite knowing of water courses being contaminated with silt, when I left the project, to save on running costs the silt-busters on most sections were not even turned on, and I don’t think they ever will be!