The Central Pollution Control Board (CPCB) has released a draft report on Environmental Damage Cost Assessment (EDCA). The report, formulated in compliance with an order from the National Green Tribunal (NGT), proposes a methodology to assess the cost of environmental damage under various scenarios. The CPCB has invited stakeholders and the public to submit their comments and suggestions on the draft by August 17, 2025.
The EDCA methodology is a direct response to an NGT order dated December 2, 2021, which directed the Ministry of Environment, Forest and Climate Change (MoEF&CC) to create a framework that would eliminate subjectivity in determining environmental compensation. The objective is to ensure a uniform and transparent approach by statutory regulators in discharging their duties.
The proposed methodology is structured around a core equation: EDC = FPC + DC + AC Where:
- EDC is the total Environmental Damage Cost.
- FPC is the Fixed Penalty Cost.
- DC is the Damage Cost.
- AC is the Assessment Cost.
Remediation Cost (RC) for repairing environmental damage may be imposed over and above the EDC in cases of grave injury.
Key Components of the EDCA Framework
1. Damage Cost (DC): The framework distinguishes between two types of damage:
DC-I (Standard Damage Cost)
This applies to environmental damage that is visible and measurable on the ground, such as the release of quantifiable pollutants. The report uses the Value Transfer Method and other econometric techniques to assign a monetary value to these damages. For instance, the estimated cost of air pollution is calculated per kilogram of pollutants, with a single kilogram of PM2.5 emissions valued at approximately ₹2,463, and PM10 at ₹1,462. Water pollutants are also given specific values, with BOD costing ₹716 per kg and COD costing ₹515 per kg.
DC-II (Indirect Damage Cost)
This is for scenarios where direct, on-ground measurement of damage is not feasible. The cost is calculated based on factors like pollution potential, quantum of release, and the sensitivity of the affected area. This approach is applied to a wide range of non-compliance scenarios, including illegal extraction of groundwater, unauthorized disposal of hazardous waste, and non-compliance with rules for plastic, battery, and e-waste management.
2. Fixed Penalty Cost (FPC)
FPC is intended as an immediate fine for contraventions or non-compliance with provisions of the Air, Water, and Environment Protection Acts. It is calculated using a formula that takes into account several factors: FPC = (PI × S × LF × N × R)
- PI (Pollution Index): A score based on the industrial sector’s pollution potential, classifying industries into Red, Orange, Green, White, and Blue categories.
- S (Scale of Operation): A factor determined by the size of the company (Micro, Small, Medium, or Large).
- LF (Location Factor): A multiplier based on the vulnerability of the location, with higher values for areas near large populations, eco-sensitive zones, or critically polluted areas.
- N (Duration Factor): Represents the duration of the violation in days, with a minimum of 15 days and an upper limit of 240 days.
- R (Rupee Factor): A value between 250 and 500, which varies based on the type of contravention, such as whether it involves on-ground damage or is purely procedural.
The FPC will have a minimum limit of ₹10,000 and a maximum of ₹15,00,000 for most contraventions.
Public Consultation
The CPCB has made the draft report available on its website for public review. All stakeholders and the public can send their comments and suggestions to the email addresses anilranveer.cpcb@gov.in and ramandeep.cpcb@gov.in by the deadline of August 17, 2025.
This initiative marks a significant step towards creating a more objective, transparent, and deterrent-based approach to environmental law enforcement in India, aiming to ensure that the cost of environmental degradation is accurately and consistently borne by the responsible parties.