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Compensating for environmental damages

Author

Listed:
  • Pascal Gastineau

    (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Emmanuelle Taugourdeau

Abstract

This paper examines a situation where a decision-maker determines the appropriate compensation that should be implemented for a given ecological damage. The compensation can be either or both in monetary and environmental units to meet three goals: i) minimization of the cost associated with the compensation, ii) no aggregate welfare loss, iii) minimal environmental compensation requirement. The findings suggest that -in some cases - providing both monetary and environmental compensation can be the cost-minimizing option. Minimal compensation constraints can increase total compensation costs but reduce individual gains and losses relative to the initial situation that arise from heterogeneous tradeoffs between income and environmental quality

Suggested Citation

  • Pascal Gastineau & Emmanuelle Taugourdeau, 2013. "Compensating for environmental damages," Working Papers hal-04141197, HAL.
    • Handle: RePEc:hal:wpaper:hal-04141197
    Note: View the original document on HAL open archive server: https://hal.science/hal-04141197
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    References listed on IDEAS

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    1. Dunford, Richard W. & Ginn, Thomas C. & Desvousges, William H., 2004. "The use of habitat equivalency analysis in natural resource damage assessments," Ecological Economics, Elsevier, vol. 48(1), pages 49-70, January.
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    4. Udo Ebert, 2003. "Environmental Goods and the Distribution of Income," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(4), pages 435-459, August.
    5. 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.
    6. Medin, Hege & Nyborg, Karine & Bateman, Ian, 2001. "The assumption of equal marginal utility of income: how much does it matter?," Ecological Economics, Elsevier, vol. 36(3), pages 397-411, March.
    7. Scott G. Cole, 2013. "Equity over efficiency: a problem of credibility in scaling resource-based compensation?," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(1), pages 93-117, March.
    8. Zafonte, Matthew & Hampton, Steve, 2007. "Exploring welfare implications of resource equivalency analysis in natural resource damage assessments," Ecological Economics, Elsevier, vol. 61(1), pages 134-145, February.
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    10. Jack L. Knetsch, 2007. "Biased Valuations, Damage Assessments, and Policy Choices: The Choice of Measure Matters," Research in Law and Economics, in: Research in Law and Economics, pages 345-358, Emerald Group Publishing Limited.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Gastineau, Pascal & Mossay, Pascal & Taugourdeau, Emmanuelle, 2021. "Ecological compensation: How much and where?," Ecological Economics, Elsevier, vol. 190(C).
    2. Kyriazi, Zacharoula & Lejano, Raul & Maes, Frank & Degraer, Steven, 2015. "Bargaining a net gain compensation agreement between a marine renewable energy developer and a marine protected area manager," Marine Policy, Elsevier, vol. 60(C), pages 40-48.
    3. Kermagoret, Charlène & Levrel, Harold & Carlier, Antoine & Dachary-Bernard, Jeanne, 2016. "Individual preferences regarding environmental offset and welfare compensation: a choice experiment application to an offshore wind farm project," Ecological Economics, Elsevier, vol. 129(C), pages 230-240.

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    More about this item

    Keywords

    Environmental Damage; Compensation; Welfare; Inequity;
    All these keywords.

    JEL classification:

    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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