Author: Carol Adaire Jones

Publisher:

Published: 2013

Total Pages: 0

ISBN-13:

The basic measure of natural resource damages in USA environmental liability statutes is the cost of restoring the injured resources, plus compensation for the interim loss of resources from the time of injury until their full recovery. In contrast, until 1996, the international Convention Protocols addressing liability for accidental oil spills did not hold the responsible party liable for damages to natural resources, except to compensate for lost profits and earnings of commercial users of the resources. Recent developments, however, suggest international and USA laws are on paths toward convergence. In the 1996 regulations implementing the natural resource liability provisions of the USA Oil Pollution Act [OPA], natural resource damages are quantified as the costs of a Restoration Plan designed to return resources to baseline and to compensate for interim losses. The 1992 international Convention Protocols, which entered into force in May 1996, include the costs of resource "reinstatement" measures, though a clear definition of the scope of reinstatement has not yet been provided. A broad interpretation of "reinstatement", consistent with the restoration concepts in the OPA regulations, could provide an inclusive measure of damages for environmental harm. In section 2 of the paper, we discuss briefly the key features of the USA measure of damages. We then outline the international measure of damages and identify how it excludes losses incurred by members of the public -- for both market and non-market uses of resources. With this background, we present in section 3 an overview of key economic concepts for valuing the loss of public enjoyment of natural resources, which provides the analytic framework underlying the component of damages in USA law compensating for interim losses. In section 4, we briefly outline the OPA process for determining a restoration-based measure of damages, and in section 5 we outline approaches and methods for measuring the second component of the USA damage measure -- compensation for the interim loss of resources. The Appendix provides an example of the restoration-based approach from a recently settled mining waste case in Idaho.