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Whose Losses Count? Examining Some Claims About Aggregation Rules For Natural Resources Damages

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  • ALAN RANDALL

Abstract

Compensation for natural resources damage may be provided, in principle, by a payment equal to the value of damage, a compensating restoration project, or partial restoration plus a compensating payment. Applicable laws have a pronounced tilt toward restoration. When determining the value of damage, no welfare‐economic reason exists to count as an offsetting benefit any utility enjoyed by rubberneckers; nor should damages be excluded when incurred by those unaware of the injury, those whose motivations are thought “non‐economic,” those who are resource‐loving passive users, or those who are parentalistic altruists. Money compensation required on behalf of nonparentalistic altruists drops to zero as active users are fully compensated. However, if (for whatever reason) active users cannot sustain a claim for full compensation, nonparentalistic altruists will suffer compensable losses.

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  • Alan Randall, 1997. "Whose Losses Count? Examining Some Claims About Aggregation Rules For Natural Resources Damages," Contemporary Economic Policy, Western Economic Association International, vol. 15(4), pages 88-97, October.
    • Handle: RePEc:bla:coecpo:v:15:y:1997:i:4:p:88-97
    DOI: 10.1111/j.1465-7287.1997.tb00492.x
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    References listed on IDEAS

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    5. Unsworth, Robert E. & Bishop, Richard C., 1994. "Assessing natural resource damages using environmental annuities," Ecological Economics, Elsevier, vol. 11(1), pages 35-41, September.
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    Cited by:

    1. Nicholas E. Flores & Jennifer Thacher, 2002. "Money, Who Needs It? Natural Resource Damage Assessment," Contemporary Economic Policy, Western Economic Association International, vol. 20(2), pages 171-178, April.
    2. Kathleen Segerson, 1997. "Government Regulation And Compensation: Implications For Environmental Quality And Natural Resource Use," Contemporary Economic Policy, Western Economic Association International, vol. 15(4), pages 28-31, October.
    3. Amy W. Ando & Madhu Khanna, 2004. "Natural Resource Damage Assessment Methods: Lessons in Simplicity from State Trustees," Contemporary Economic Policy, Western Economic Association International, vol. 22(4), pages 504-519, October.

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