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The transitioning from an environmental risk assessment application to an ERM application is possible through adding an ERM guidelines/rules engine, which provides recommendations for action items/policy formulation based on a comparison of the results from the risk assessment engine with the system defined threshold values. The associated rules and recommendations, for the cases when the computed values go beyond the defined threshold values, are built into the system. Such a system would fall into the category of a “knowledge based system”, which can provide spatial and non-spatial data display, analysis, and results interpretation functionality.


Figure 1 Figure 1: A typical architecture for a components-based environmental risk management application
Three examples of the GIS software ERM applications, which use this basic system framework, besides having other specific functionality for the intended purposes, would be discussed as a part of this paper. These include:

1. An environmental sustainability threat scenario modeling application for government policy formulation
2. A multiple-source industrial pollution/contamination modeling application for portfolio risk management by the real estate and insurance sector
3. A catastrophic modeling application for the emergency preparedness and response planning by a city administrator

An environmental sustainability threat scenario modeling application for government policy formulation

Building of a highway into a fragile hilly environment, excessive draining out of ground water, deforestation for housing infrastructure development – these are just some of the human actions aimed at meeting the short-terms needs. Caused by the changes in demographics and socio-economic profiles of a region, these may create long-term environmental degradation. Using a knowledge-based GIS software application, a set of scenarios can be simulated to visualize the long-term implications of planned human actions, based on which alternate actions can be planned – for example, a change in alignment of a highway to shift it away from a fragile ecosystem or envisaging water harvesting option for a region.

Such a system would allow the users to develop possible scenarios using GIS and graphical icons (as indicated in figure 2). For example, a symbol of a polluting industry planned can be placed at a user defined locations on a given regional map, showing the terrain, rivers, soil, vegetation, population, employment, infrastructure, land-use and wild life attributes, and to evaluate the different aspects of the environmental risk, for a set of industry locations scenarios.

It can help in developing a prior understanding of the potential risks and for arriving at the best possible alternatives, within the given constraints. There actions could be a combination of human actions taking place in that region; for example, establishment of an industry zone, growing of cash crops, clearing of some forest area to build the industry & houses. These entire situation involves a complex set of multiple actions over a wide geographic region, so there would a need for the system to be able to analyze & manage the environmental risks posed by the combination of these actions.


Figure 2: Schematic diagram showing a sample catchments area under consideration and some of the “variables” to be used for scenario analysis, indicated through graphical icons
While the potential hazards are very clearly defined in this case, there is a need to develop the following “analysis engines” in the ERM system to work out a long-term environmental impact scenario (a simplified approach has been suggested for analysis of each factor):

1. Hydrological impact: Using the surface water, ground water, soil, and vegetation/crop input data, and the water life cycle approach, a series or a surface/ground water availability map for the for the region can be drawn, showing the spatial as well as temporal variation. For example, with establishment of an industrial zone, the water balance situation would change, depending upon the water needs of the industry and the increased population, and the extent of deforestation done for this purpose
2. Demographic/economic shifts: The industry could create new employment; some people may shift from the agriculture industry to jobs. This region could attract people from far away regions with less economic opportunities
3. Growth in built-up/infrastructure environment: There would be a need for new infrastructure to support the sudden changes; for example – new houses, roads, utilities
4. Impact on wild life: The wildlife in this region would get impacted, and there would be a need for defining protected areas. Impact on wildlife may impact the tourism potential of an area, which would further impact the economic factors in the region
5. Air, water and soil pollution impact: This is linked to the nature and magnitude of the pollutants dispersed by the industry (based on the nature of chemicals/gases released and their prior treatment, the source and the sink locations), growth of population in that region, extent of deforestation, and the shift to growing of cash crops which may affect the land fertility. Again, the overall impact of the pollution is linked to the tourism potential of the area, and to the health conditions of the local inhabitants. There would be an expected change in all these aspects over time, and the long-term demographic, economic and ecological scenario could be quite different from the short-term ones.

Such a scenario simulation and analysis application could help in having a visual presentation of the possible situations, and planning suitable actions and alternatives, both in term of the specific locations (spatial) and the time factor (temporal) associated with such actions. This is possible through developing a GIS software application, with the data and analysis engine components, as indicated above, and the use of experts’ opinion on developing a set of meaningful scenarios. The results obtained from this type of system can be used for preparing effective policy recommendations and guidelines for maintaining the long-term environmental sustainability of a specific region, while keeping the regional growth and development needs in mind.

A multiple-source industrial pollution/contamination modeling application for portfolio risk management by the real estate and insurance sector

Environmental risk insurance is increasing being used in real estate development projects. It allows the potential real estate sellers or buyers to eliminate or reduce the uncertainty associated with the possible contamination or damage to the property, covered under such custom-made insurance policies. The users of such insurance cover could be real estate developers, contractors, buyers or financial institutions providing real estate loans. These customized insurance packages could help in covering the expenses for the cleaning/reconstruction of the affected sites, and can help in mitigating the risks associated with the project management of the real estate development projects.

Having an effective, ERM insurance cover could significantly increases the chances of the success of a real estate deal, wherein there is some possibility of some environmental risks. Some examples of such real estate transactions would include the deals involving asbestos industries, steel mills, petrol pumps, or a real estate portfolio comprising of properties at least some of which are exposed to an environmental pollution or contamination risk from some hazardous source present in the neighborhood of such properties.