Economic Valuation of Risk Management Measures

In order to provide guidance on managing contaminated sites, it is useful to provide a cost-benefit analysis of these management efforts.

Conducting an economic analysis of the impact of POPs (or other hazardous substance) contaminants is a challenging process. While common sense suggests that there may be many benefits from a remediation effort, the cause–effect relationships that link the removal of POPs contaminants to the ensuing human health and environmental benefits are not scientifically established. Data, especially site-specific information, tend to be scarce. Nonetheless, the application of accepted economic practices and the use of professional judgment enables us to make rough estimates and draw valuable conclusions in the limited data setting of the project.

Modifications to the standard Cost-Benefit Analysis process were necessary to overcome the data limitations. A modified approach was developed which calculates the minimum health benefits required to cover the cost of implementing proposed risk management scenarios for POPs hotspots.

This modified approach is presented in  both the training manual and the cost-benefit analysis tool. 

Note that in Canada and the USA that economic valuation of contaminated sites are not normally done. In these countries, decisions to remediate a site are done solely on the basis of  contaminants being above acceptable environmental standards.

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Source: Hatfield Consultants
Hatfield Consultants The World Bank funded by the Canadian POPs Trust Fund through the      
Canadian International Development Agency
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