OSPR - NRDA - Resource Valuation

by Steve Hampton and Matt Zafonte
Updated August, 2005

Graphic showing Resource Equivalency Analysis

When an oil spill or other pollution event occurs, the public may be entitled to compensatory restoration. This does not refer to attempts to clean up the impacted site and restore it to its pre-spill condition; that is primary restoration. Compensatory restoration is additional restoration that compensates the public for the interim lost ecological services between the time of the incident and full recovery to pre-spill conditions.

While there are a variety of economic methods that may be used to calculate resource damages, Resource Equivalency Analysis (REA), also known as Habitat Equivalency Analysis (HEA) is the most common method used in NRDA cases nationwide. This method was developed in the early 1990s and became the recommended approach in the Oil Pollution Act of 1990 (OPA 90) regulations promulgated by NOAA in 1996. Since then, REA has been endorsed by the courts on two occasions. Here, we provide a brief synopsis of that method, as well as links and references to more detailed descriptions and articles about REA.

REA, we first seek to quantify the injury in terms of degree (% of baseline injured), duration (years until recovery), and size (# of acres, stream miles, birds, etc.). A trajectory estimating the recovery to baseline is also estimated. The injury may be described in terms of lost acre-years or stream mile-years or bird-years of lost ecological services. We then seek to quantify the benefits of a restoration project in similar terms: degree of benefit (e.g., % services per unit area), duration of the project, and trajectory of the benefits over time. With this information, we "scale" the size of the project until the benefit of the project is equal to the injury. The final step is to cost out the project. This cost becomes the measure of damages.



Michael Anderson
Email: Michael.Anderson@wildlife.ca.gov
Phone: (916) 375-6672

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