Contingent Valuation to Determine Individual Preferences
Cumulative Impact Assessment
Indicators for Lake Superior
Florida's Coastal Indicators
Reform of Indiana Environmental Policy Act
Under the Oil Pollution Act of 1990, the President, acting through the Secretary of Commerce, is required to issue regulations for assessing damages to or destruction of natural resources resulting from the discharge of oil covered under this law. The National Oceanic Atmospheric Administration in the process of developing damage procedures to ensure the recovery of restoration costs as well as the diminution in value of affected resources, established the Contingent Valuation Panel of economic experts to evaluate the use of the contingent valuation method in determining values of objects that cannot be estimated by traditional market transactions.69
Ultimately, the panel set forth several guidelines for a contingent valuation survey to assure reliable and useful results. Among these guidelines is a survey method which is conservative in design and seeks the individual's willingness to pay for restoration of a resource (rather than compensation for degradation). The question which asks for the amount an individual is willing to pay should be posed within the survey in the format of a vote on a referendum. Questions should reveal a persons understanding of the situation, the policies and programs proposed, and their budgetary constraints.
Although recognizing the inconsistencies that can result from contingent valuation surveys, the panel concluded that contingent valuation studies developed correctly can produce information on values of non market resources. The contingent valuation procedure can be used as a "starting point of a judicial process of damage assessment, including lost passive-use values" if the suggested guidelines are followed.
One methodology for the assessment of cumulative impacts was developed in cooperation with the Argonne National Laboratory in Illinois. The study looks at multiple hydropower projects and a systematic process to determine the cumulative impacts of the combination of multiple projects.70
According to the study, a cumulative impact assessment is conducted in three phases: (1) analysis; (2) evaluation; and (3) documentation. During the analysis phase, ecological data is objectively collected and organized in matrices to calculate the relative levels of cumulative impact on specific components of the environment. Often, the analysis phase results in large volumes of information that is often incompatible for correlation or meaningful determinations by decision makers. The evaluation phase is more subjective; however, the projects are reviewed according to maximum cumulative impact criteria to identify a combination of projects. The documentation phase results in a summary of the potential environmental impacts of each recommended project configuration.
During the analysis phase of the process, resources of interest are identified as "target resources." Usually, target resources are species, related groups of species, physical characteristics, or human values. Several target resources may be involved in the assessment. One example of a target resource is salmon. Components are identified for each target resource. The components are factors that are related to the well-being or quality of the resource when impacted. The list of components does not have to be exhaustive. Components should be included that are potentially affected by the projects and that are independent of one another. To use the example of salmon, the components of this target resource could be spawning success, turbine mortality, sediment delivery, and riparian habitat.
To calculate impacts, component impact values are combined to produce an overall impact value for the specific project on the target resource. A standardized scale can be used to numerically rate the level of impact of each project on each component of a target resource. The methodology used suggests a scale of 0 to 4 (no impact to very high impact). For example, data reviewed to determine the impact of each project on spawning success include the reduction of river discharge, the maximum level of dissolved solids, and the average water temperature. These individual factors are rated on a standardized scale. The individual values are then combined to produce one component impact value of each project.
The mathematical process using matrix algebra results in a set of impact totals. The impact totals are then compared to a set of criteria established as guidance for acceptable levels of cumulative impacts. These criteria might be established by an advisory group or an agency prior to the assessment on a case by case basis. The results of the calculations could also be combined with a benefit cost assessment. The alternative projects could be ranked according to total impact, benefit, and cost.
An example of where indicators have been employed comprehensively to monitor ecosystem health objectives is the Binational Program to Restore and Protect the Lake Superior Basin. In 1989, the International Joint Commission recommended to Canada and the United States that Lake Superior receive designation as a "demonstration area where no point source of any persistent, toxic substance will be permitted." In response, the Binational Program for Lake Superior was established. The Superior Work Group (comprised of representatives from government environmental and natural resource agencies) and the Lake Superior Binational Forum were created to implement to the Binational Program.71
One of the three stated purposes of the Binational Program is to "facilitate progress towards a set of quantitative ecosystem indicators by which the health of the Lake Superior basin ecosystem, including its physical, biotic, and cultural elements, can be measured." The Great Lakes Water Quality Agreement specifies ecosystem health indicators for Lake Superior. Although the Agreement is very specific and provides a clear target for the objectives, the Agreement focuses on two species, Lake Trout and Diporeia hoyi. These species will serve to monitor the open lake water but will not aid in determining the cause of degradation. Indicators representative of diverse habitats both aquatic and terrestrial were explored.
The Superior Work proceeded with establishing principles for indicator selection prior to choosing potential indicators. The principles include:
(1) Population size: numbers of nests, breeding pairs, females, or individuals.
(2) Reproductive potential: egg and clutch size.
(3) Productivity: hatching and fledging success.
(4) Age structure: the number of individuals in each age class.
(5) Contaminant levels in wildlife.
(6) Species representation at tropic levels.
(7) Abundance and saturation of niches.
Following this step the work group identified potential indicators for each of the program's objectives to be consistent with the principles outlined above.
Another example of the use of indicators comes from the Florida Coastal Management Program. The program uses indicators to provide a comprehensive perspective of important environmental, growth, management, economic, and social values associated with the coast. Indicators will assist Florida with evaluating progress in protecting its coastal areas, provide a basis for making strategic decisions about program sand financial resources, and provide information about coastal issues and problems to other decision makers and the general public.72
A workshop was convened to identify the critical, strategic issues facing Florida's coastal future over the next 25 years. The issues provided a framework for the development of the indicators. The nine strategic issues resulting from the discussions include:
Using this input as a foundation, the individual indicators where researched, documented, and selected totaling 98 indicators for the program. A definition of an indicator and an index were determined. A series of standards was created to ensure consistent quality of the indicator system. Selection criteria includes "essential" criteria which an indicator must meet, and "preferable" criteria which an indicator should meet.
A 1995 law review note73 discussed the history of the Indiana Environmental Policy Act and reflected upon its limited range of applicability and enforcement. "Indiana's Environmental Policy Act falls woefully short of meetings its stated purposes." The author recommends reforming IEPA to apply to state licensing actions, to define its terminology, and to specify its provisions are subject to "judicial review."74 In the latter instance, the author urges direct review by the courts rather than through the administrative orders and procedures act (IC 4-21.5) as with other agency actions, because "the purposes and intent of IEPA would be better advanced" and direct access would not be unusual, California and Washington being referenced as states providing for direct review.75