cleanup standards for particular cleanup sites from 10-6 (i.e., the estimated health risk is one additional cancer out of 1 million persons exposed over 70 years) to 10-4 (i.e., the estimated health risk is one additional cancer out of 10,000 persons exposed over 70 years). Accepting the higher health risk would significantly lower cleanup costs. The fundamental policy issue is the following: What level of contamination represents an acceptable risk?

Valuation and Natural Resource Damages

Superfund and other federal environmental programs (Olson, 1989) authorize states and the federal government, among others, to sue (as "natural resources trustees") polluters for damages for natural resources destroyed or injured by hazardous substance releases and oil spills. Superfund also requires federal regulations to be developed for assessing the value of injured or destroyed natural resources. Any natural resource damage assessments conducted by trustees and following the regulations adopted by the U.S. Department of the Interior receive a rebuttable presumption of accuracy. Trustees may use other valuation techniques, but the damage assessment would not enjoy a rebuttable presumption of correctness.

The Department of the Interior adopted its natural resource damage assessment regulations in 1986 and 1987 (Copple, 1995). The damage assessment regulations were invalidated in part in federal court in 1989. Among other things, the court ruled that damages recovered by trustees should not be limited to the lesser of (1) the cost of restoring or replacing the equivalent of the injured resource or (2) the lost use value of the resource. However, the court did sustain the use of the contingent valuation method in natural resource damage assessment. Amendments to Department of the Interior regulations on damage assessment regulations are pending.


A fundamental environmental policy issue is whether pollution control or other environmental regulations are health-based or technology-based. Health-based regulations begin with the premise that once a desired level of environmental quality has been determined, polluting activities will be regulated to whatever extent necessary to accomplish the specified environmental quality. Thus the resulting pollution control requirements are established (1) without regard to the availability of pollution control technology to accomplish the specified environmental standard and (2) without regard to the economic costs imposed on polluting entities. The health-based approach is favored by those placing a high priority on environmental protection. Critics, however, contend that health-based environmental standards disregard the economic cost of environmental controls

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