Anna Alberini (University of Maryland and Fondazione Eni Enrico Mattei) Alberto Longo (Università di Venezia Ca’ Foscari and Fondazione Eni Enrico Mattei) Stefania Tonin (Istituto Universitario di Architettura di Venezia) Francesco Trombetta (Istituto Universitario di Architettura di Venezia) Margherita Turvani (Istituto Universitario di Architettura di Venezia)
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We examine different market-based mechanisms and other incentives intended to promote the environmental remediation and reuse of brownfields. Policies that encourage cleanup and re-use of brownfields offer real estate developers reductions in regulatory burden, relief from liability for future cleanups once certain mitigation standards are met, and/or financial support for regeneration of brownfields. We use conjoint choice experiments—a stated preference approach—to assess the responses of real estate developers to different mixes of these incentives. Our survey instrument was administered in person to a sample of developers and real estate professionals randomly intercepted at the Marché International des Professionnels de l’Immobilier (MIPIM) in Cannes, France, in March 2002. Conditional and random-coefficient logit models of the responses to the choice questions indicate that developers find sites with contamination problems less attractive than others, and that they value liability relief. This confirms our expectation that contaminated sites are less desirable because of the associated cleanup costs, but refutes earlier claims that liability does not matter. Our developers are not deterred by prior contamination, once it has been cleaned up, suggesting that “contamination stigma” is not very important, and appreciate fast-track review of development and remediation plans, direct financial incentives, and flexible (negotiable) cleanup standards. Developers with prior experience with contaminated sites are more responsive to the policies than are nexperienced developers, especially for subsidies. Inexperienced developers are more responsive to liability relief and regulatory relief than they are to subsidies. Similar considerations hold true for larger developers.
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Paper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number
2003.7.
Find related papers by JEL classification: Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy R38 - Urban, Rural, and Regional Economics - - Production Analysis and Firm Location - - - Government Policies; Regulatory Policies
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