Exxon paid nearly a billion dollars in damages into a wildlife conservation fund following the 1989 Valdez disaster, roughly a quarter of the company's entire tab for the spill.
"What BP might pay could be much higher," said Linwood Pendleton, director of the Ocean and Coastal Policy program at Duke University's Nicholas Institute. ...
[I didn't know he had moved to Duke (actually at the marine lab in Beaufort). Dang: just what North Carolina needs, n+1 environmental economists (sarc).]
Fortunately, the government has a system in place to put a dollar figure on dead wildlife.
I'm 100% sure I don't like the government's system.
For example, if BP's oil spill kills 400 brown pelicans, wildlife experts will then look to replace 400 brown pelicans, said Roger Helm, head of environmental quality at the U.S. Fish and Wildlife Service.They may do this, said Helm, by finding another colony of brown pelicans along the Gulf Coast that is threatened by predators - say, rats.
Wildlife experts will then calculate how much money it will cost to kill enough rats in order to permit the pelican population to survive, and to grow by 400. That dollar figure will be billed to BP will get, said Helm.
"Wildlife experts" will calculate how much money it will cost? Yikes. I wouldn't let any wildlife experts around my MS Excel, no offense (none taken). This is known as the replacement cost method and it likely understates the economic benefits lost due to the spill. Ecosytem Valuation (as well as most environmental economists, I'd wager) says that it should be used only as a last resort.
This approach can be used to calculate the cost of replacing plants and beaches as well.
If the spill makes three acres of wetlands unproductive, then the government will create three acres of wetlands elsewhere in the Gulf with a series of dams and dredging. If a beach is inaccessible for fishermen, then BP will have to pay to build a boardwalk so a nearby beach can be used instead.Duke's Pendleton said that's a key reason BP may pay more than Exxon. ...
This is a much more systematic approach to putting a dollar figure on damaged wildlife than anything that went on after the Exxon Valdez spill.
Back then, the government made its calculation by tallying up all the dead animals and asking regular people how much they would pay to keep them alive, according to Thomas Campbell, one of the government's lead attorneys during the Valdez spill and now a partner at the law firm Pillsbury. The total came to over $3 billion. Exxon, rather than going to court, settled for a billion dollars.
And, as we all know, regular people are stupid! Here is a link to the study that developed the Exxon Valdez damage estimate using the contingent valuation method (CVM),http://mpra.ub.uni-muenchen.de/6984/. The summary paper was published by Environmental and Resource Economics.
The replacement cost method won't capture existence values lost due to the spill, lost fishing trips or the time I've wasted this past month blogging about it. The CVM can. Also, while "systematic" might be a good thing, won't finding a good substitute for each and every thing damaged be a very complicated matter?
