News & Insights

White paper explores economic assessment of natural resource damages for ground water

Groundwater Creek Flowing

In this white paper, Cardno Global Senior Principal Dr. Ted Tomasi identifies and discusses the issues arising in choosing among and implementing economic methods for quantifying NRDs for injury to ground water.

Ground water is a natural resource that may be subject to provisions of regulations that authorize recovery of natural resource damages (NRDs) caused by releases of hazardous chemicals into groundwater. Natural Resource Damage Assessment or NRDA is a process via which natural resource trustees determine the amount of NRDs parties responsible for the releases must pay for injuries from contaminant releases.

“[This discussion] is timely as concerns related to Perfloruoalkyl Substances (PFAS) have increased the likelihood of an upsurge in the pursuit of ground water NRDs.”

Ted highlights and explores two particular sources of challenge related to the scaling of ground water restoration:

  1. The proper specification of baseline, including the overarching institutional context of water management in the region of injuries; and
  2. The foundational role of services provided by injured resources and by the chosen form of compensation and the degree to which these match.

He demonstrates how NRDAs go awry when there is a mismatch between services lost and services provided in compensation and argues for an approach beyond simple “water-to-water” scaling of NRDs, based on a careful “service to service” accounting system for scaling. Such an accounting should include how institutions and public behaviors, and not just bio-physical considerations, govern both losses and gains. This approach helps match the suite of service losses on the injury side to the services gained from compensation, improving NRD outcomes.

view the white paper

Ted Tomasi is a Cardno Global Principal and a recognized expert in assessing environmental damages. He specializes in the valuation of natural resources and environmental change and the impact of uncertainty on the value and use of natural resources. He holds a PhD in Natural Resource Economics from the University of Michigan.