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Natural Resource Damage Assessment: Methods and Cases

Natural Resource Damage Assessment: Methods and Cases

Table 1.13 Injured

Table 1.13 Injured Resources Type of resource injured Number of cases Groundwater 32 Surface water 51 Wetland 42 Fish 36 Wildlife 32 Recreation and/or cultural 23 Air and/or other resources 26 Any resources reported a 83 a The right-hand column sums to much more than 83 because only 25 cases involved injury to a single resource. The trustees reported that an NRDA had been performed on the entire injury for only 33 of the 88 cases in our sample. Injury assessments were performed for the 32 cases submitted by New Jersey, but the agency did not consider those assessments to have been NRDAs. Tables 1.14 through 1.17 give information about the 33 assessments. These tables apply only to those cases that were reported to have been the subject of an NRDA, and information for these tables was not provided for even all of those cases. Trustee agencies reported hiring a consultant to assistant with the damage assessment process for 10 of the 33 cases for which they gave NRDA information. This may contribute to the fact (seen in Table 1.14) that the cost to trustees of conducting an NRDA varies tremendously. While most cases cost less than $10,000 to assess, several assessments in the data bear price tags in the millions; though the median assessment cost is only $30,000, the average is $643,000. Estimated damages (Table 1.15) were similarly quite diverse. While some estimates are lower than $10,000, there are enough estimates in excess of 10 million to pull the mean damage estimate up to 40 million and the median to over one million. Trustees were asked which of a range of assessment methods were used by their staff, the staff of other trustees, and any consultants in the process of estimating the damages associated with the case at hand. Note that the methods listed in Tables 1.16 and 1.17 are defined and described in the Appendix to Chapter 1. The single most commonly-used method was habitat equivalency analysis (HEA), while a few methods (factor-income analysis, hedonic analysis, Department of Interior (DOI) Type A models, NOAA compensation formulas, and conjoint analysis/contingent ranking) were not reported to have been used for any of the cases in our sample. Many cases were reported to have been assessed using a tool of the trustee’s own design or some unspecified method that was not among those we listed. This feature of the data captures everything from New Jersey’s method for assessing groundwater damage (Ando and Khanna, 2004) to back-of-the-envelope analysis based on applied professional judgment. 10

Table 1.14 Cost to Trustee of Performing NRDA Cost ($) Number of cases 0 - $10,000 10 $10,001 - $100,000 7 $100,001 - $1,000,000 3 $1,000,001+ 3 Any cost reported 23 Table 1.15 Damage Estimates from NRDA Estimated damages ($) Number of cases 0 – 10,000 2 10,001 - 100,000 3 100,001 - 1,000,000 5 1,000,001 – 10,000,000 8 10,000,001 + 3 Any estimate reported 21 Table 1.16 NRDA Methods Used by Different Agents Number of cases in which method was used by: Reporting Another Consultant to At least one trustee trustee trustee trustees or consultant Own valuation tool, other 27 3 1 29 Benefit transfer 5 3 2 9 Appraisal method, market price analysis 5 0 6 11 Travel cost, averting behavior analysis 3 1 6 13 Contingent valuation 1 0 4 5 Habitat equivalency analysis 8 10 3 15 Type A model; NOAA formula; factor income , hedonic, or conjoint analysis 0 0 0 0 Table 1.17 NRDA Methods Used for Varied Types of Injured Resources Number of cases in which method was used and the following resource was among those injured: Ground Surface Wetland Air, Fish, Recreation, water water other wildlife cultural Own valuation tool, other 18 16 8 6 13 2 Benefit transfer 4 8 4 3 6 5 Appraisal method, market price analysis 5 7 2 5 4 2 Travel cost, averting behavior analysis 5 7 5 6 6 5 Contingent valuation 5 5 3 3 3 2 Habitat equivalency analysis 7 11 8 6 11 3 11

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