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Natural Resource Damage Assessment: Methods and Cases

Natural Resource Damage Assessment: Methods and Cases

Survey Response

Survey Response Instructions The survey has two components. When you have finished filling out all forms, please put them in the enclosed self-addressed pre-stamped envelope and return them to us via U.S. mail. We would appreciate receipt of your responses within four weeks of the date on the cover letter. 1) Please fill out the one-page “Survey of State Natural Resource Damages (NRD) Programs”. There is only a single copy of this in the survey packet. 2) For each NRD case your office handled from 1995 to the present, please fill out one “NRD Case Information Form”. We are only interested in cases that were active during this time period. This excludes cases that were settled prior to calendar year 1995. We have included a number of copies of this form in your survey packet. If necessary, you may make more copies, contact us to have more forms sent to you, or request that we send you the electronic file for you to use in your response effort. There is extra space on the back of each case information form that you can use if the space provided for any particular question is too small for your answer. You may also attach descriptive material from other documents if that facilitates your response. Note that for unsettled cases, most of page 2 of the form does not need to be answered. For cases that have not yet been the target of a NRD assessment, the second half of page 1 should also be left blank. If you wish to seek our assistance in filling out the case information forms for a large number of cases, or if you have any questions about the survey, please contact one of the people listed below: Prof. Amy W. Ando Department of Agricultural and Consumer Economics University of Illinois at Urbana-Champaign 326 Mumford Hall, 1301 W. Gregory Drive Urbana, IL 61801 amyando@uiuc.edu, (217) 333-5130 Prof. Madhu Khanna Department of Agricultural and Consumer Economics University of Illinois at Urbana-Champaign 326 Mumford Hall, 1301 W. Gregory Drive Urbana, IL 61801 khanna2@uiuc.edu, (217) 333-5176 18

NRD: Natural resource damages. Guide to Terms and Acronyms Used in the Survey NRDA: Natural resource damage assessment. This process may or may not be done in formal compliance with federal regulations. OPA: Oil Pollution Act of 1990. CERCLA: Comprehensive Environmental Response, Compensation and Liability Act. Pre-assessment screen: First step in the process of pursuing a NRD claim, during which the trustee determines whether a hazardous substance release may have caused injury to a natural resource whic h is likely to warrant pursuit of damages recovery. In the Oil Pollution Act regulations, this would simply be referred to as preassessment. NRDA methods listed in the Case Information Form: Own valuation tool: This refers to any formal damage-assessment tool (such as a lookup table, decision tree, or computer program) you might have described in question 6 on the cover page of this survey. Benefits transfer: This approach could more generally be named “value transfer.” It is a practical valuation alternative when direct survey data concerning the resource in question are unavailable. This valuation method relies on approaches for "transferring" existing studies, value estimates, and willingness to pay function to the damage estimation problem at hand. The “unit value method” described in the CERCLA regulations is a particular kind of benefits transfer. DOI Type A computer models: The Department of the Interior has developed two computer models that are approved for use in Type A “simplified” assessments. They are the Natural Resource Damage Assessment Model for Coastal and Marine Environments (NRDAM/CME) and the Natural Resource Damage Assessment Model for Great Lakes Environments (NRDAM/GLE). NOAA compensation formulas: The National Oceanic and Atmospheric Administration included a compensation formula in its Oil Pollution Act regulations on 1/7/94; that formula was for use in assessing the damages from small oil spills in estuarine and marine environments. Variants of that formula can be derived using the NRDAM/CME. Appraisal method: This method measures compensable value, to the extent possible, in accordance with the applicable sections of the "Uniform Appraisal Standards for Federal Land Acquisition." The measure of compensable value under this method will be the difference between the with- and without-injury appraisal value determined by the comparable sales approach as described in the Uniform Appraisal Standards. Factor income analysis (a.k.a. "reverse value added" methodology): If the injured resources are inputs to a production process, which has as an output a product with a well-defined market price, this method can be used to determine the economic rent associated with the use of resources in the production process. Market price analysis: If the natural resources are traded in the market, and if the market for the resources (or the services provided by the resources) is reasonably competitive, the diminution in the market price of the injured resources, or the lost services, can be used to determine the compensable value of the injured resources. 19

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