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The role of compensation in siting hazardous facilities

Author

Listed:
  • Howard Kunreuther

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania)

  • Doug Easterling

    (University of Colorado, Boulder, Colorado)

Abstract

Empirical evidence indicates that compensation can prove effective in gaining public acceptance for siting facilities on the benign end of the spectrum (e.g., landfills, prisons), but is subject to serious limitations when it comes to facilities that the public regards as particularly risky or of questionable legitimacy such as nuclear waste repositories. These facilities require creative mitigation measures such as independent inspections of the facility and local shutdown power. Even then they may be viewed as too risky to be acceptable with or without compensation. This article proposes a two-stage siting process which recognizes the importance of regulations and safety standards (Stage 1) while employing a voluntary process with compensation to address concerns with equity and efficiency (Stage 2).

Suggested Citation

  • Howard Kunreuther & Doug Easterling, 1996. "The role of compensation in siting hazardous facilities," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 15(4), pages 601-622.
    • Handle: RePEc:wly:jpamgt:v:15:y:1996:i:4:p:601-622
    DOI: 10.1002/(SICI)1520-6688(199623)15:4<601::AID-PAM6>3.0.CO;2-L
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    References listed on IDEAS

    as
    1. Douglas Easterling, 1992. "Fair rules for siting a high-level nuclear waste repository," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(3), pages 442-475.
    2. Howard Kunreuther & Kevin Fitzgerald & Thomas D. Aarts, 1993. "Siting Noxious Facilities: A Test of the Facility Siting Credo," Risk Analysis, John Wiley & Sons, vol. 13(3), pages 301-318, June.
    3. Elster, Jon, 1991. "Local justice : How institutions allocate scarce goods and necessary burdens," European Economic Review, Elsevier, vol. 35(2-3), pages 273-291, April.
    4. Kunreuther, Howard & Easterling, Douglas, 1990. "Are Risk-Benefit Tradeoffs Possible in Siting Hazardous Facilities?," American Economic Review, American Economic Association, vol. 80(2), pages 252-256, May.
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