Natural Resource Damage Assessment: Methods and Cases

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gives a histogram of the claims made in cases that used the Washington state compensation schedule method. These claims are mostly moderate in size. While few exceed $25,000 (though the largest case involved a claim for over a million dollars), almost none are lower than $100. Figure 2.5 provides a scatter-plot of the value of NRD claimed against the volume of the spill in each of the cases for which the compensation schedule was used. The biggest cases were dropped from the graph in order to make the rest easier to display. While the claims do tend to be larger when the spill is bigger, the schedule is complex enough that the correlation between these two values is not perfect. For all 209 cases in the data set the correlation coefficient is 0.94, but when the largest five spills are dropped the correlation coefficient drops to 0.80. The Washington compensation schedule has many desirable features. It is inexpensive and easy to use, since it is designed to produce an estimate of damages using little more information than the type and volume of oil released and the location of the spill. Given its simplicity, this assessment method has a surprising amount of spill specificity, since the factors used to scale damages are calculated separately for each of a very large number of different geographic regions within the state. Many of the parameters used in the method were developed with the input of a knowledgeable scientific advisory board. The damage assessment formulas discussed above yield damage estimates that increase with the magnitude of the spill, proxies for the magnitude of the injury (e.g. vulnerability of different habitat types to mechanical injury and acute toxicity) and the length of time the injury is likely to persist. Damage estimates are likely to be higher in cases where the injured resources are of relatively great value. There are many places in the schedules where judgments of relative values are implicitly being made; four examples can be readily identified. First, spill vulnerability scores are higher in marine and estuarine areas if species of special importance (such as those thought to be endangered) are likely to have been affected. Second, spill vulnerability scores are higher in freshwater areas if the water system in question is important for benefits such as municipal water supply, recreation, or wildlife habitat. These scores are also higher if the water system is relatively pristine. Pristine water systems may actually be better able to recover from a spill than systems that are already highly degraded; this element of the SVS for freshwater spills seems to act as a measure of variation in the value of what is being injured. Third, the index of recreation vulnerability includes factors relevant to the social value of the damaged resource, since recreation vulnerability is a function of how many people participate in recreational activities in the area affected by a spill. Fourth, spill vulnerability scores are higher for freshwater wetlands that are important (for example, those that harbor endangered species) or unusual. However, there is no unified, transparent mechanism through which the value to society of damaged resources is brought into the calculations; many features of the assessment schedules seem to impose arbitrary and possibly undesirable structures on the damages that are assessed. For example, the multipliers used to adjust monetary damages to lie between $1 and $50 are arbitrary; there is no a priori reason that the monetary damages caused per gallon of oil spilled in each of the four types of receiving environments should adhere to the same numerical range. In general, placing a cap on the amount of damages assessed may reduce incentives to prevent the most harmful oil spills. Also, in the marine and Columbia River compensation schedules, 34
% of All Cases 35 30 25 20 15 10 5 0 5 cases 57 cases 40 cases $0-$100 $101-$500 $501-$1,000 $1,001-$5,000 $5,001-$25,000 $25,001+ Figure 2.4 Damages in Washington Cases, 1991-2001 NRD $ Billed 35 65 cases Source: Data from Washington Department of Ecology – OPA Division NRD Claim ($1000) 70 60 50 40 30 20 10 0 28 cases 14 cases 0 1000 2000 3000 4000 5000 6000 Volume of Spill (gallons) Figure 2.5 Value of Claim by Gallons Spilled in WA State, 1991-2001 Source: Data from Washington Department of Ecology – OPA Division. Note the five largest spills have been removed from the graph to improve readability.
Page 1 and 2: WMRC Reports Waste Management and R
Page 3 and 4: RR-108 Natural Resource Damage Asse
Page 5 and 6: Acknowledgments Funding was provide
Page 7 and 8: Chapter 1: Tables and Figures Table
Page 9 and 10: staff of agencies that are just beg
Page 11 and 12: All: 64 Nevada Division of Environm
Page 13 and 14: Table 1.5 Number of Cases Settled b
Page 15 and 16: Table 1.9 Number of Potentially Res
Page 17 and 18: Table 1.14 Cost to Trustee of Perfo
Page 19 and 20: Mean Settlement (million $) 90 80 7
Page 21 and 22: V. Conclusions Trustees have had re
Page 23 and 24: Appendix: Materials in Information-
Page 25 and 26: NRD: Natural resource damages. Guid
Page 27 and 28: Survey of State Natural Resource Da
Page 29 and 30: 19) Has this case been settled? (Ch
Page 31 and 32: I. Introduction Chapter 2 Simplifie
Page 33 and 34: Number of Spills 1,000 800 600 400
Page 35 and 36: damages not quantifiable at reasona
Page 37 and 38: (b) Columbia River Estuary: Bird, f
Page 39: Example of the Washington method in
Page 43 and 44: preventing excessive expenditures o
Page 45 and 46: Example of the Florida formula in u
Page 47 and 48: damages to natural resources at con
Page 49 and 50: discharge on receptors studied in t
Page 51 and 52: Information for this calculation is
Page 53 and 54: ased funding for the program was pr
Page 55 and 56: a spill occurs in a high income are
Page 57 and 58: References Cozine, M. H. 1999. “N
Page 59 and 60: Chapter 3: Tables and Figures Table
Page 61 and 62: This chapter will examine the exten
Page 63 and 64: Comprehensive Environmental Respons
Page 65 and 66: Output price P0 C D S0 is the suppl
Page 67 and 68: Travel-cost analysis can be used fo
Page 69 and 70: area B and computing willingness to
Page 71 and 72: Table 3.1: Summary of Studies Estim
Page 73 and 74: Schultz and Lindsay (1990) estimate
Page 75 and 76: Table 3.3: Using Benefits Transfer
Page 77 and 78: Number of Cases 30 25 20 15 10 5 0
Page 79 and 80: Table 3.4 Groundwater Case Studies
Page 81 and 82: and overall protection of the resou
Page 83 and 84: References Abdalla, C. W. 1991. “
Page 85 and 86: Nielson, E. G. and L.K. Lee. Octobe
Page 87 and 88: United States, adjoining shorelines
Page 89 and 90: Once there is a “release” of a
Page 91 and 92:
1997). Second, there can be no reco
Page 93 and 94:
settlement of NRD claim prior to an
Page 95 and 96:
egulations divide the assessment pr
Page 97 and 98:
Damages: The trustees calculated th
Page 99 and 100:
The State hired consultants (ARCADI
Page 101 and 102:
C. Lake Barre/Texaco Site: The site
Page 103 and 104:
would be inefficient and unnecessar
Page 105 and 106:
Damages: The U.S. Coast Guard requi
Page 107 and 108:
Creek and the cultural importance o
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