Policy Analysis ExerciseEPA Grant Number: U914977
Title: Policy Analysis Exercise
Investigators: Wright, Gillian A.
Institution: Harvard University
EPA Project Officer: Lee, Sonja
Project Period: January 1, 1996 through January 1, 1998
Project Amount: $68,000
RFA: STAR Graduate Fellowships (1996) RFA Text | Recipients Lists
Research Category: Academic Fellowships , Economics and Decision Sciences , Fellowship - Economics
The objective of this research project is to undertake a study of commercial and industrial land values since the passage of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), establishing the Superfund, and the Superfund Amendments and Reauthorization Act of 1986. I would like to address the question of CERCLA's effect as an incentive to prevent hazardous waste pollution. The provision of retroactive liability for damages caused by actions that were legal at the time they occurred appears to create an incentive for proactive pollution prevention on the part of commercial/industrial entities. It also has proliferated litigation challenging these liabilities. That proliferation has sparked recent discussion of whether the resources spent in litigation might not be better used for site cleanup.
With CERCLA in place, theoretically, businesses should have an incentive to proactively prevent hazardous waste pollution, and businesses that undertake such practices should be rewarded by the market with higher land values for their unpolluted (or less polluted) sites. To test the hypothesis that the value of unpolluted land is related to the cost of cleaning up similar polluted land, I propose two comparisons: (1) a cross-sectional analysis of the value of sites not listed as Superfund sites, but that are potentially polluted compared to the value of similar Superfund sites (matching sites based on size, situation, purpose, amenities, etc.); (2) a time-series analysis examining the value of sites not known to be polluted since the implementation of strict pollution reporting requirements under the Resource Conservation and Recovery Act of 1976 and the Toxic Substances Control Act of 1976. Preferably, these sites should have been adapted for commercial or industrial use since the passage of these laws.