Contaminated Marine Sediments Assessment and Remediation (1989) / Chapter Skim
Currently Skimming:
Economic Considerations of Managing Contaminated Marine Sediments
Economic Considerations of Managing Contaminated Marine Sediments
Pages 291-310
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From page 291... ...
Thus, important tradeoffs are faced in the social decision concerning appropriate cleanup level. This paper discusses the application of economic analysis as input to the social decision process for managing contaminated marine sediments.
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From page 292... ...
Although the presence of contaminated sediments can impose a variety of losses, remedial actions typically are very costly and in many cases the cost increases rapidly as additional levels of remediation or treatment are sought. For example, remedial actions described or proposed for New Bedford Harbor (EBASCO Services, Inc., 1987~; the Hudson River (Mark Brown, New York State Department of Environmental Conservation, personal communication)
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From page 293... ...
The difficulties involved are underscored by the evolving state of the art for remedial action technologies; the formidable problems inherent in quantifying risks to human health and the environment (Lave, 1987~; the need to make remedial action decisions among multiple sites in the context of fund balancing; and the requirement under SARA that the public and potentially responsible parties be actively involved in the decision process. Clearly, site-specific factors are critical considerations in remediation decisions at a given location.
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From page 294... ...
GENERAL ECONOMIC CONSIDERATIONS As noted, contaminated marine sediments are widespread and can impose a number of public health and environmental costs, and in particular cases, these costs can be substantial. For example, New Bedford Harbor, an area heavily contaminated with PCBs, is the marine Superfund site that has been most carefully studied by economists.
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From page 295... ...
Difficulties inherent in measuring the full spectrum of damages make such an ideal approach beyond the reach of the state of the art in many cases. Nonetheless, in a number of instances some of the potential benefits from remediation can be quantified, and this information can be used as part of the decision process concerning proposed remedial actions.
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From page 296... ...
Further, the analysis must include the probability that damages would result, given failure of each alternative; the chance that further remedial action would be taken; and the cost of such action and maintenance costs at each point in time. Clearly, the data requirements for such an analysis impose a truly major research burden on scientists and others charged with assessing remedial action alternatives.
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From page 297... ...
The next section describes two general frameworks that have been used by economists to address such issues. ALTERNATIVE ECONOMIC FRAMEWORKS FOR ADDRESSING THE CONTAMINATED MARINE SEDIMENTS PROBLEM Benef it - Cos t Analys is Benefit-cost (B-C)
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From page 298... ...
A recreational fisherman's value for changes in catch rates, for example, can be measured in terms of willingness to travel longer distances to more remote sites, which have higher catch rates (Brown and Mendelsohn, 1984~. An example of the application of this related-market approach to the problem of contaminated marine sediments is provided by the economic damage assessment study of New Bedford Harbor PCBs.
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From page 299... ...
Note that willingness to pay in this context is based on actual or revealed behavior as reflected in the sales price of homes. This approach is particularly useful for valuing the effects of contaminated marine sediments and, in fact, was applied in the New Bedford Harbor PCB damage assessment study.
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(1985~. Valuing Public Health Risks Public health effects are a primary concern in assessing remedial actions, and SARA establishes a number of important health-related authorities to provide a better understanding of the health effects from exposure to toxic substances (Sec.
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From page 301... ...
Indeed in practice, the value of a statistical life determined from revealed preference studies tends to be significantly higher than the value determined from the human capital approach. For example, the EPA uses figures of $400,000 to $7 million as a range of reasonable values for a statistical life based on revealed preference .
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From page 302... ...
Correctly applied, C-E can be a powerful tool because it potentially allows decision makers to screen remedial action alternatives on the basis of a common measure. All else being equal, if remedial action alternative A is less expensive than B
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From page 303... ...
The alternatives may represent, for example, cleanup of various subareas within some particular contaminated site, such as the four subareas of New Bedford harbor discussed by Ikalainen and Allen (1988~. Additionally, some alternatives may represent subareas from differing contaminated sites, such as four subareas in New Bedford Harbor and two subareas in the Hudson River.
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From page 304... ...
Since contaminated sediment problems generally arise as a result of chronic releases over an extended period, the type B approach almost always will be the appropriate approach for measuring damages. For example, the economic damage assessment study of New Bedford harbor PCBs was a type B study, the first carried out under CERCLA (e.g., Freeman, 1987~.
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From page 305... ...
In most cases it will be very difficult and costly to prove that the results of a damage assessment carried out under the act are incorrect, especially for the type A approach, by virtue of the fact that it is intended to be simplified and based on minimal field observation. Hence, the rebuttable presumption provision of the CERCLA can have important implications for the effectiveness of the damage assessment regulations, in general, and especially for the type A approach.
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From page 306... ...
The CERCLA natural resource damage assessment regulations are relatively new and, in many respects, novel. How effective they will prove to be depends importantly upon on several factors, including how active states are in implementing this approach.
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From page 307... ...
However, determining whether these benefits are "commensurate" places a significant burden on scientists and economists. To do so the probability of failure for impermanent solutions must be determined, in addition to the consequences of failure considering the potential for, and costs of, any associated remedial action.
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From page 308... ...
The prospect of paying potentially very considerable sums for damages, assessment, and remediation actions creates a powerful incentive to reduce the amount and the toxicity of materials potentially spilled, as well as to handle more carefully and dispose of the materials that remain. Another unique, and very important characteristic of the act is that the natural resource damage assessment regulations carry the force of rebuttable presumption.
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From page 309... ...
1987. Measuring Damages to Coastal and Marine Natural Resources: Concepts and Data Relevant for CERCLA Type A Damage Assessments.
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From page 310... ...
1988. Oral statements presented at National Research Council Workshop on Contaminated Marine Sediments, Tampa, Fla., May.
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