LSI 2010 NRD Santa Fe final conference binder 072110.pdf

William H. Desvousges of W. H. Desvousges & Associates Speaker 27: 8
services provided by these parcels of land are representative of the type of services
lost at the former facility site.
Costs
Furthermore, their compensation approach is flawed. Natural resource
damages calculations are not typically based on the cost of land, particularly without
identifying a specific piece of property. The Plaintiffs make no proposal for a specific
restoration project, much less one that shows evidence that the services provided by
the compensatory restoration project would be of the same type and quality as those
that were lost at the injured site.
In addition, the Plaintiff’s expert does not consider cost effectiveness in his
assessment. He uses an average cost of purchasing land. Instead, he should choose
the most cost effective alternative for providing compensation. If two pieces of land
provide the same groundwater recharge benefits, it would be most efficient to purchase
the least cost alternative. Why would a piece of land with a water view be purchased
for compensation, if it provides the same groundwater protection as a piece of land with
a view of the town landfill? Using an average cost overestimates the cost of providing
compensation.
SUMMARY
This case provides and example of an injured site that does not result in any
natural resource damages because there have been no lost services. 1 The loss in
natural resource services to the public is the basis for quantifying potential natural
resource damages. The damages provide compensation to the public for loss of these
services during the period of injury. This compensation is not in lieu of primary
restoration of the site but instead makes the public whole for any losses that may have
occurred as a result of injury. Without service losses, there is no basis for assessing
damages. In this case, the Plaintiff’s expert uses injury as the basis for his
assessment. He makes no attempt to identify any services that may have been
affected by the injury and instead assumes a 100 percent loss for the resource. This
1 Under cross examination at trial, the Plaintiff’s expert agreed that if there is no loss in services,
there are no damages.
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Law Seminars International | Natural Resource Damages | 07/16/10 in Santa Fe, NM