Environmental Valuation and Compensation
| Author | Jamie Benidickson |
| Pages | 215-230 |
215
CH AP TER 10
ENVIRONMENTAL
VALUATION A ND
COMPENSATION
A. THE NATUR E OF ENVIRONMENTAL
DA M AGE
Environmental dam age and other losses suffered as a result of ongoing
pollution, accidents or spills, general degradation, or the over-exploita-
tion and mismanagement of resources may take many forms. Physical
contamination of a short- or long-term nature is an obvious example,
with or without destruction of plant and animal life, or biodiversity
loss. In severe situations it is also possible to imagine that contam ina-
tion will have per manently or irreversibly undermined the regenerative
capacity or resilience of the affected ecosystem. Losses here may al so
entail the reduction or elimin ation of what we are coming to appreci-
ate as ecological services such as water supply, climate stabilization,
nutrient cycling, or pollination. Insofar as human populations are con-
cerned, individual s may suffer adverse health effects, physical damage
to property, or economic losses, singly or in combination. On occasion
it is possible to speak of entire communities as the victim s of environ-
mental harm, ar ising, for example, from the contamination of food and
water supplies. Financial compensation might then focus on payments
to those — including the public — who have suffered losses or incurred
expenses a ssociated with remedy ing environmental damage or taking
measures to prevent the spread of such damage.1
1 For discuss ion of restoration, see Chapter 11.
ENVIRONMENTAL L AW
216
Many aspects of envi ronmental damage as just discussed fall out-
side the scope of compensation as generally understood in t he context
of tort claims. For purpose s of comparison it is worthwhile to review
that approach prior to examining alternative approaches to environ-
mental los ses:
Traditionally, the courts considere d the only measure of compen sa-
tion for damage to propert y to be the diminution in va lue caused by
the tortfeas or’s wrong, that is, the dif ference between the propert y
value before and after the occ urrence of damage. The cost of restoring
or repairing t he property, if considered at all, was simply regarded as
a means of determi ning the dimi nution of value. However, in many
cases, the d istinction is ir relevant. Where the cost of restor ation is
equal to or less th an the diminution of c apital value, the repair is
always recoverable, even if the pl aintiff does not act ually incur the
cost. Moreover, where the repairs fai l to restore the property to it s
original va lue, the plaintiff i s entitled to the cost of repai r and to an
additional sum to compen sate for the residual deficiency. However,
where the cost of restorin g the property is gre ater than the di minu-
tion of value the case s are divided as to which me asure of damage s
should be applied. Most case s follow the tradit ional approach so th at
the plaintif f is only entitled to da mages sufficient to compens ate for
a diminution of propert y value. However, damages wi ll be measured
according to the cost of repai r if restoration alone wil l make good
the plaintif f’s loss . . . . The latter approach will only be adopted if
the plaintif f actually intends to e ffect repairs and if t he cost of such
repairs is reasonable.2
As environmental losses are more fully appreciated in a context
that encompasses recogn ition of such principles as polluter pay, inter-
generational equity, and the values of biodiversity and ecological integ-
rity, attention has shifted from individualized claims to a more broadly
conceived framework for evaluating compensation. As seen in Br it-
ish Columbia v Canadian Forest Products Ltd3 (discussed later in thi s
chapter), the willingness of courts to ex plore new issues around the
valuation of environmental losses i ntroduces met hodological a nd evi-
dentiar y challenges.
2 LN Klar et al, R emedies in Tort, vol 4, loose-leaf (Toronto: Carswell, 1999–) at 27.
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