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HAZARD COMPENSATION AND INCENTIVE SYSTEMS: AN ECONOMIC 154 PERSPECTIVE original typesetting files. Page breaks are true to the original; line lengths, word breaks, heading styles, and other typesetting-specific formatting, however, cannot be About this PDF file: This new digital representation of the original work has been recomposed from XML files created from the original paper book, not from the retained, and some typographic errors may have been accidentally inserted. Please use the print version of this publication as the authoritative version for attribution. Gray Rocks Power Plant Environmental opposition halted construction of Gray Rocks Power Plant, a coal-fired plant in Wyoming, because of the potential damage to the surrounding environment. The suit was settled when the utility company agreed to set up a $7.5-million trust fund to preserve a stretch of the Platte River, the habitat of several species of migratory birds (Lave and Romer, 1983). The coal plant was completed in 1981 and is fully operational today. LNG Facility in Wilhelmshaven The Federal Republic of Germany provided an additional subsidy for the construction of a recreational facility because of the adverse affects that a liquefied natural gas plant in Wilhelmshaven were expected to have on the tourist industry in the area (Kunreuther et al., 1983). Stage 2: Living With the Site An important consideration in a community's decision to accept a site is the impact that the facility will have on future property values and economic development. Residents may be concerned that the presence of a waste disposal facility would discourage others from wanting to live in their community, causing the market price of property to fall and leading to an erosion of the community's tax base. Willingness on the part of the facility's developer to compensate residents forced to sell their houses below market value may allay such economic fears. This arrangement has not been widely implemented, however. One reason may be the difficulty of determining what a fair market price would be in the absence of a waste disposal facility. Regular inspections can be imposed to ensure that a plant is complying with regulations and specific standards. Before a community embraces a new technological disposal facility, residents generally want to be assured that the plant will be forced to meet these regulations or be shut down. The following examples illustrate this type of monitoring and control arrangement in practice. Antonelli Corporation The Antonelli Corporation in Providence, Rhode Island, constructed a facility to treat and store electroplating materials. The corporation allowed annual monitoring inspections by the citizens and city officials, and provided additional fire-fighting equipment to deal with any accident (Sanderson, 1984). Wes-Con, Inc. In negotiation with residents, Wes-Con, Inc., the developer of hazardous materials disposal facilities in Idaho, informally agreed to shut down the facilities permanently if there was ever a fire.
