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y reducing uncertainties
with respect to expected costs of hazardous risks and
assisting resource users in defining abatement strategies.
It can also help insurance companies not only to
determine financial risks and product premiums but
also to develop new products.
Liability regimes face some major constraints.
This results in ‘orphan liability’ cases or sites
affected by the accident. other problems relate to damage
generated by repetitive actions and negligence
that lead to significant cumulative damage (e.g. diffuse
pollution). In such cases, transaction costs for
assessing natural resource damage can be substantial.
The same is true for the task of apportioning responsibility
between individual polluters: conventional
liability rules may not apply if e.g. the individual
polluter’s share of the damage is not enough to trigger
liability. In such cases, it often makes sense for the
state to provide directly for the restoration of the
damage (see Chapter 9).
This balancing act
was rarely required because early regulations focused
on preventing hazardous situations i.e. urgent concerns
of human life and health. This is still the case for
some environmental fields with respect to well-known
hazards, e.g. carcinogenic substances, ambient air
quality standards for particulates.
The urgency of including costs and benefits in decision-making
has increased in recent years for several
reasons:
•
Where institutions are weak and
administrative capacities underdeveloped, identifying
and valuing ecosystem services can feed
information on development constraints and
opportunities into national and local planning
process. This can help raise awareness of the
need for better regulation (see Box 7.5);
• many countries now apply the precautionary
principle in relevant policy fields even where
environmental risks are not hazardous to human
life.
i.e. to
provide justification for possible regulation.
Stricter controls are often only accepted by
stakeholders and the general public if it is clearly
shown that the benefits outweigh the costs.
A biodiversity hot spot area in the municipality of
uMhlathuze was confronted with the classic
‘development versus conservation’ dilemma – with
the local municipality mostly in favour of development
as a result of the poor socio-economic
climate. uMhlathuze opted to undertake a Strategic
Catchment Assessment to highlight the ecosystem
services that the environment provided free of
charge to the municipality. The assessment
estimated the value of environmental services
provided by the catchment, e.g. nutrient cycling,
waste management and water regulation, at nearly
US$ 200 million per annum. Politicians known to
be ‘biodiversity averse’ reacted positively once
they realised the economic value of the ecosystem
services provided and identified management
actions to ensure the sustainable use of biodiversity
resources and sensitive ecosystems.
TEEB FoR NATIoNAL AND INTERNATIoNAL PoLICy MAKERS - ChAPTER 7: PAGE 10