Law and economics of environmental damage assessment

Given the limitations of traditional tools to remedy and prevent the harm to natural resources, environmental liability provisions started to be increasingly introduced to address pollution caused by events such as oil spills and toxic leakages, in addition to regulations, administrative and criminal sanctions. The past decades have seen an unprecedented development of environmental economic scholarship to inform not only ex ante benefit-cost analyses for policies and projects, but also the ex-post valuation of environmental accidents. Starting from the 1970s, new techniques to value the damage beyond market-based losses have been proposed and gradually finetuned. However, an emerging tendency in the law is represented by the restoration-based compensation of environmental damage that seems to avoid the contentious and more time-consuming use of methods designed for non-use values (e.g., stated preference). This thesis wants to provide a snapshot of the existing gap between liability laws, on the one hand, and the economic scholarship, on the other. The specific research question is whether remedies for environmental damage at the international, regional and national levels are providing polluters with optimal care incentives to minimise the environmental costs of accidents while, at the same time, ensuring cost-effective restoration. Some best practices emerged at some levels of the law and in some countries, but many challenges remain. They mainly relate to the notion of environmental damage, the role of the economic valuation in the law and the judicial practice, the multiple levels and branches of law intertwined in one single polluting event and the private interests of all parties involved in the environmental damage assessment. Despite this complexity and trying to abstract from details, this research puts forward a novel theory of remedies for environmental damage that wishes to provide a smart solution to attain more efficient deterrence and adequate remediation.