Economic perspectives on oil spill damage assessment

Abstract

Oil and petrochemical spills frequently result in damage in publicly-owned natural resources such as birds, fish, and beaches. Presently over half of the American States and the Federal Government have provisions in law that permit recovery from the polluter for such damages to natural resources. The objectives of these statutes are two-fold: (1) to provide compensation to the victims for their losses, and (2) to provide incentives for greater care on the part of those who transport petroleum products.

The measurement of natural resource damages in economic terms is a difficult and controversial task. This paper provides insights into the strengths and limitations of several techniques of valuation that have been proposed or are currently being used. Additionally, the paper provides several research suggestions to specialists in the biological and physical science communities regarding where their further efforts are most likely to be helpful in bridging the gaps that now exist in conducting accurate assessments of natural resource damages resulting from oil spills.