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Paying for Permanence: An Economic Analysis of EPA's Cleanup Decisions at Superfund Sites

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  • Shreekant Gupta
  • George Van Houtven
  • Maureen Cropper

Abstract

We analyze EPA's cleanup decisions at over 100 Superfund sites and examine whether and how EPA trades off the cost against the permanence of cleanup. EPA's decisions reveal both a preference for permanent solutions and an aversion to cost. For example, EPA prefers incinerating soils to isolating and containing them in place, but not at any price. At larger sites EPA appears willing to accept additional costs of as much as $40 million to incinerate. With regard to environmental equity, we find little evidence that EPA's cost-permanence tradeoff is affected by socioeconomic characteristics in the communities surrounding the sites.

Suggested Citation

  • Shreekant Gupta & George Van Houtven & Maureen Cropper, 1996. "Paying for Permanence: An Economic Analysis of EPA's Cleanup Decisions at Superfund Sites," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 563-582, Autumn.
    • Handle: RePEc:rje:randje:v:27:y:1996:i:autumn:p:563-582
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    Cited by:

    1. Stavins, Robert N., 2003. "Experience with market-based environmental policy instruments," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 9, pages 355-435, Elsevier.
    2. Anna Alberini & David Austin, 2002. "Accidents Waiting to Happen: Liability Policy and Toxic Pollution Releases," The Review of Economics and Statistics, MIT Press, vol. 84(4), pages 729-741, November.
    3. Anna Alberini & Stefania Tonin & Margherita Turvani & Aline Chiabai, 2007. "Paying for permanence: Public preferences for contaminated site cleanup," Journal of Risk and Uncertainty, Springer, vol. 34(2), pages 155-178, April.
    4. Stavins, Robert, 2003. "Market-Based Environmental Policies: What Can We Learn from U.S. Experience and Related Research?," Working Paper Series rwp03-031, Harvard University, John F. Kennedy School of Government.
    5. Turaga, Rama Mohana R. & Noonan, Douglas & Bostrom, Ann, 2011. "Hot spots regulation and environmental justice," Ecological Economics, Elsevier, vol. 70(7), pages 1395-1405, May.
    6. Alberini, Anna & Austin, David, 1999. "On and Off the Liability Bandwagon: Explaining State Adoptions of Strict Liability in Hazardous Waste Programs," Journal of Regulatory Economics, Springer, vol. 15(1), pages 41-63, January.
    7. Ralph Mastromonaco, 2014. "Hazardous Waste Hits Hollywood: Superfund and Housing Prices in Los Angeles," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(2), pages 207-230, October.
    8. Anna Alberini, 2017. "Measuring the economic value of the effects of chemicals on ecological systems and human health," OECD Environment Working Papers 116, OECD Publishing.
    9. Jacob LaRiviere & Matthew McMahon & Justin Roush, 2019. "Second-Best Prioritization of Environmental Cleanups," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(4), pages 1225-1249, April.
    10. Robert P. Berrens & Alok K. Bohara & Amy Baker & Ken Baker, 1999. "Revealed preferences of a state bureau: Case of New Mexico's underground storage tank program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(2), pages 303-326.
    11. Sigman, Hilary, 2001. "The Pace of Progress at Superfund Sites: Policy Goals and Interest Group Influence," Journal of Law and Economics, University of Chicago Press, vol. 44(1), pages 315-344, April.
    12. Revesz, Richard & Stavins, Robert, 2004. "Environmental Law and Policy," Working Paper Series rwp04-023, Harvard University, John F. Kennedy School of Government.
    13. Adam Eckerd & Andrew Keeler, 2012. "Going green together? Brownfield remediation and environmental justice," Policy Sciences, Springer;Society of Policy Sciences, vol. 45(4), pages 293-314, December.
    14. Wen, Zongguo & Chen, Jining, 2008. "A cost-benefit analysis for the economic growth in China," Ecological Economics, Elsevier, vol. 65(2), pages 356-366, April.
    15. Garber, Steven & Hammitt, James K., 1998. "Risk Premiums for Environmental Liability: Does Superfund Increase the Cost of Capital?," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 267-294, November.
    16. Pingo Wang & Alok Bohara & Robert Berrens & Kishore Gawande, 1998. "A risk-based environmental Kuznets curve for US hazardous waste sites," Applied Economics Letters, Taylor & Francis Journals, vol. 5(12), pages 761-763.
    17. Gamper-Rabindran, Shanti & Timmins, Christopher, 2013. "Does cleanup of hazardous waste sites raise housing values? Evidence of spatially localized benefits," Journal of Environmental Economics and Management, Elsevier, vol. 65(3), pages 345-360.
    18. Gawande, Kishore & Berrens, Robert P. & Bohara, Alok K., 2001. "A consumption-based theory of the environmental Kuznets curve," Ecological Economics, Elsevier, vol. 37(1), pages 101-112, April.
    19. Gawande, Kishore & Bohara, Alok K. & Berrens, Robert P. & Wang, Pingo, 2000. "Internal migration and the environmental Kuznets curve for US hazardous waste sites," Ecological Economics, Elsevier, vol. 33(1), pages 151-166, April.
    20. Sigman, Hilary, 1998. "Liability Funding and Superfund Clean-Up Remedies," Journal of Environmental Economics and Management, Elsevier, vol. 35(3), pages 205-224, May.
    21. Andrew B. Whitford, 2007. "Competing Explanations for Bureaucratic Preferences," Journal of Theoretical Politics, , vol. 19(3), pages 219-247, July.
    22. Lappi, Pauli, 2018. "Optimal clean-up of polluted sites," Resource and Energy Economics, Elsevier, vol. 54(C), pages 53-68.
    23. Julio Videras & Christopher Bordoni, 2006. "Ethnic heterogeneity and the enforcement of environmental regulation," Review of Social Economy, Taylor & Francis Journals, vol. 64(4), pages 539-562.
    24. James T. Hamilton & W. Kip Viscusi, 1999. "How costly is “clean”? An analysis of the benefits and costs of Superfund site remediations," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 18(1), pages 2-27.

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