Contaminated Sediments in Ports and Waterways Cleanup Strategies and Technologies (1997) / Chapter Skim
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Appendix D: Using Cost-Benefit Analysis in the Management of Contaminated Sediments
Appendix D: Using Cost-Benefit Analysis in the Management of Contaminated Sediments
Pages 239-256
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From page 239... ...
The third section examines the components of costs and benefits and how they are computed. This section concentrates solely on the concepts of costs and benefits, leaving aside complex issues, such as uncertainty, that arise in practical applications.
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On the other hand, the decision not to dredge a harbor may deprive society of scarce navigation services. Many other trade-offs must be made in choosing tactics and strategies for managing contaminated marine sediments.
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, which reflects more than 50 years of experience in the application of cost-benefit analysis to the allocation of water resources. The Principles and Guidelines applies the broad language of cost-benefit analysis to the specific tasks of evaluating water resource projects.
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These cost and benefit schedules show how a decision maker can choose the optimal level of contaminant removal. At point A in Figure D-1, the difference between costs and benefits is at a maximum value for the entire graph.
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That is, society is devoting additional resources to removing contaminants but not getting commensurate value. At point B, for example, costs just equal benefits; there would be no net gain from contaminant removal because the gains (measured by the height of the benefit schedule)
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. Many of the problems inherent in measuring benefits of the marine environment could be resolved through a systematic effort, which might involve gathering simple data on how people spend their time and money -- facts that are needed to measure economic values.
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Calculating the projected economic gains and losses, and distributing this information to the participants in the decision-making process, should help determine the best use of resources. Over time, there will be significant
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Putting aside the complexities for now, there are really only three kinds of costs involved in the management of contaminated sediments: • dollar costs of remediation and cleanup (dredging, sediment transport, ex situ and in situ treatment, land acquisition, capping, etc.) • dollar costs of foregone port services as a consequence of capacity con straints and channel restrictions • environmental costs (in dollars)
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The best-quantified aspect is the damage to natural resources, which is roughly equivalent to the economic losses incurred as a consequence of injury to natural resources. In the case of contaminated marine sediments, damages are caused by the presence or resuspension of contaminants, which may alter the benthic ecology, change patterns of food availability for particular species of fish, or injure commercially or recreationally valuable species throughout the food chain.
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concerning contaminated marine sediments. Social costs include all the usual private costs as well as costs not typically thought of as private.
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Society can register concern for future generations by preserving resources or providing productive capital for the future. Humans demonstrate concern for the natural environment by protecting it, even when this effort requires giving up control over resources that could be consumed or used for production.
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But navigation services cannot then also be a benefit of dredging; that would be double counting. In the same way, the fore gone value of recreational fishing could be considered a cost of dredging but then could not be counted as a benefit of natural restoration.
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The net benefits of dredging are −$1 million cost of dredging B The net benefits of natural restoration are $5 million benefits from fishing −$2 million value of lost navigation B − A = 3 − (−1)
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The bait shop operator may suffer, but someone else benefits as a consequence of the redirected spending of the recreational angler. The redirected spending represents a transfer, not a net increase or decrease in social benefits.
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There is a wealth of work on natural resource damages in the context of Superfund, as amended, and the Oil Pollution Act of 1990, but the issue in the present context is more about the lack of understanding of the kinds of services that are lost and how they can be valued monetarily than it is about legalities. Kopp and Smith (1993)
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. There are two additional components of environmental costs: health costs and ecological costs.
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But many controversial projects involve maintenance dredging. Dredged sediments now have to meet biological criteria, which depend on density but not on the dispersion of toxic materials.
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1983. Economic and Environmental Principles and Guidelines for Water and Related Land Resources Implementation Studies.
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