scope:

Scope of Work

The purpose of this report is to describe approaches for assessing natural resource damages in the context of their application to cases involving releases of hazardous substances. Most of these assessment approaches have been applied in the past primarily to cases involving natural resource damage caused by oil spills. This report identifies the differences between applying these assessment approaches to cases involving oil and cases involving hazardous substances; and examines the extent of these differences and their implications for the development of comprehensive CERCLA assessment' of damages regulations.

This project goal is ambitious given the absence of consensus on what constitutes CERCLA damages and the complexity of the various available assessment methods. The field of assessing and valuing damage to natural resources is still in the formative stage. It is best, therefore, to take the results and findings here as a step toward the development of effective assessment damages approaches. The report is intended to point to the directions which assessment methods must move in order to adequately address hazardous substance releases.

The focus of this report is on the application of existing assessment methods to natural resource damage resulting from releases of hazardous substances. The report does not dwell upon the explanation of assessment methods or the theories which underly them. These are mentioned only when critical to the evaluation of existing methods in the context of hazardous substance spills. These items have been extensively treated elsewhere. For example, an examination on how the existing methods work is provided by a concurrent research project conducted by the Research Planning Institute for the American Petroleum Institute. Also, there is extensive literature on the economic principles underlying most of the valuation methodologies. In particular, Freeman's Benefits of Environmental Improvement (1976) is a comprehensive treatment of resource valuation concepts and methods. For a less technical presentation of resource valuation, see Yang, Dower and Menefee's The Use of Economic Analysis in Valuing Natural Resource Damage (1984).

Among the many assessment approaches, only some have been applied in the context of recovering damages. However, other approaches may be potentially useful for assessing damages. Typically, these approaches are employed only in academic research. They tend to be more sophisticated, but also more expensive to conduct. This report focuses primarily on assessment approaches that have been used in judicial proceedings. This scope follows from the orientation of the paper towards the application of procedures for the assessment of damages, rather than their theoretical development. Discussion of the research oriented methods can be found in the toxicology, population biology, and economics literature.