WHOSE LOSSES COUNT? EXAMINING SOME CLAIMS ABOUT AGGREGATION RULES FOR NATURAL RESOURCES DAMAGES

Alan Randall

Contemporary Economic Policy, 1997, vol. 15, issue 4, 88-97

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.

Date: 1997
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