Environmental Valuation: Past Due

Environmental Valuation: Past Due

By: Ian Kaplan, Associate

Two recent events should bring attention to the unsolved problem of environmental valuation—whether, and how, we put a price tag on environmental damage.[1]

On October 9, 2013, in Sierra Club v. Bostick, the 10th Circuit denied an injunction to block ongoing construction of the Keystone XL Pipeline.[2] The Army Corps of Engineers, with minimal discussion, issued permits allowing the pipeline to cross bodies of water over 2,000 times; the plaintiffs claim the Corps violated NEPA, the Clean Water Act, and the Administrative Procedure Act.[3] The district court previously denied the injunction on several grounds.[4] The appellate court focused on whether the environmental harms claimed by Sierra Club outweighed the hundreds of thousands of dollars per day Keystone was losing due to delay.[5] The trial court had found that they did not; it described the environmental harms as solely “loss of waters of the United States of less than one acre.”[6] The 10th Circuit considered this evaluation to be wholly within the trial court’s discretion and refused to consider the many other kinds of environmental harm alleged by Sierra Club.[7] In effect—at least for purposes of preliminary injunctions—judges are free to give environmental damage as little weight as they wish.

Around October 18th, a YouTube video surfaced showing a pair of Boy Scout troop leaders toppling an ancient rock formation—a “goblin”—in Goblin State Park, Utah.[8] Glenn Taylor and Dave Hall claim to have been concerned that the rock would fall on someone, although their video appears largely gleeful.[9] Condemnation was widespread, and the Boy Scouts quickly removed the pair from their posts.[10] A local district attorney is considering charges,[11] and descriptions of the potential penalties imply he will take advantage of Utah’s “criminal mischief” statute.[12] The law scales the penalties for criminal mischief by the damage done: for damages over $5,000, a judge may impose a fine of up to $10,000 and between 1 and 15 years in prison. For damages under $500, penalties are limited to a $1,000 fine and 6 months in jail.[13] Much of the outcome of the case thus turns on how valuable a particular 170-million-year-old rock formation is determined to be.

Environmental valuation has a long and thorough history of academic study.[14] Most work, however, is aimed at policymakers and regulators; little has made its way to courts.[15] The most common measure applied in courts is the cost of cleanup or restoration; however in many circumstances, like the Utah goblin case, restoration is essentially impossible.[16] “Use” values, such as measurements of tourism and recreation, likewise have little bearing on many circumstances.[17] Whatever the value of wilderness cleared to lay a pipeline may be, it is not well measured by how much money people spend to visit it. Valuing the destruction of a single goblin in Goblin Valley in “use” terms may present even greater difficulties. Current academic literature favors “contingency” studies and other methods in which people are surveyed to determine how they value natural resources.[18] These techniques face many complications and controversies, and courts are ill equipped to conduct and evaluate sociological research.[19]

Despite these difficulties, several federal statutes, notably CERCLA and the Oil Pollution Act, mandate environmental valuation by government agencies, and extensive regulations have been developed for performing Natural Resource Damage Assessments.[20] Some states have adopted guidelines for valuation in various circumstances, with particular examples as reference points.[21] Regardless of the method chosen, it is clear that the lack of an ideal way for courts to value environmental damage is not a reason to use no method at all. The events of the Goblin Valley case might well have been avoided had our legal culture assigned reasonably clear monetary value to natural landscapes. The fact that Glenn Taylor and Dave Hall felt perfectly comfortable posting their video to YouTube suggests that they did not realize they were causing “damage” at all, and it seems unlikely they would have similarly destroyed a piece of valuable man-made property. The 10th Circuit’s ruling that an implausible measure of the damage caused by a large pipeline was virtually non-reviewable demonstrates the danger of courts operating without standards in this area. It is time, by statute or by common law, for environmental valuation to develop a reliable legal standard.

[1] Phillipe Sands and Richard Stuart, Valuation of Environmental Damage – US and International Law Approaches, 5 Review of European Community and International Environmental Law 290, 290 (Dec. 1996).
[2] Sierra Club v. Bostick, No. 12-6201, slip op. at 3 (10th Cir. Oct. 9, 2013).
[3] Id. at 4; Martinez, J., dissenting, at 5.
[4] Id. at 4.
[5] Id. at 7.
[6] Id. at 9.
[7] Id. At 19.
[8] Matt Hamilton, Utah Men Under Criminal Investigation for Toppling Ancient Rock, L.A. Times, Oct. 18, 2013, www.latimes.com/nation/nationnow/la-na-nn-goblin-rock-formation-topple-20131018,0,5625737.story.
[9] Id.
[10] Matt Pearce, Boy Scouts Kick Out Utah Leaders Who Destroyed Rock Formation, L.A. Times, Oct. 21, 2013, www.latimes.com/nation/nationnow/la-na-nn-utah-ancient-rock-formation-boy-scouts-20131021,0,2509588.story.
[11] Eyder Peralta, Scout Leader Who Toppled Ancient Rock May Face Charges, NPR, Oct. 18, 2013, http://www.npr.org/blogs/thetwo-way/2013/10/18/237103122/scout-leaders-who-toppled-ancient-rock-may-face-charges.
[12] Id.; Utah Code Ann. § 76-6-106 (West 2012).
[13] Utah Code Ann. § 76-6-106 (West 2012); Utah State Courts, Criminal Penalties, https://www.utcourts.gov/howto/criminallaw/penalties.asp#Felonies (last visited Oct. 27, 2013).
[14] See Wictor L. Adamowicz, What’s it Worth? An Examination of Historical and Future Trends in Environmental Valuation, 48 Australian Journal of Agricultural and Resource Economics 419 (2004), available at http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8489.2004.00258.x/full for an introduction to the field.
[15] Id. at 425.
[16] Sands at 292.
[17] Id. at 294.
[18] Adamowicz at 423.
[19] See generally J.A. Hausman, Contingent Valuation: A Critical Assessment (1993).
[20] U.S. EPA, Natural Resource Damage Assessment, http://www.epa.gov/superfund/programs/nrd/nrda2.htm (last visited Oct. 27, 2013).
[21] Sands at 294.

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