Assessing the costs and benefits of MGP site remediation

Hardisty, Paul E.; Cassie, Stuart; Ellis, Jill; Wallace, Steve

Abstract
Economic analysis can be used to compare the real overall costs of pollution, including private costs (to the problem holder) and external costs (to society), and the benefits accruing from remediation. Full cost-benefit analysis (CBA), including explicit valuation of internal and external benefits of remediation, is applied to an ex-gasworks site in the UK. The site was used for coal gas production from the turn of the last century until the late 1950s. Deep migration of coal tar NAPL into the fractured bedrock aquifer underlying the site has resulted in dissolved phase groundwater impacts. Benefits of remediation at the site are expressed in part as the value of damage averted by taking a proposed action. Benefits include increased property value once the site is remediated, removal of blight effects on the value of surrounding property, protection of a nearby river, and protection of the underlying major aquifer and the public supply well situated nearby. CBA is used to compare a number of remedial approaches, each designed to achieve a different objective. The cost of each approach is then compared to the benefits which accrue from achieving the particular objective. What results is a simple table comparing the net benefit (discounted benefits minus discounted costs) of each remedial approach. Economics dictates that the remedial approach that maximizes human welfare (maximizes net benefit) should be chosen. An optimal remedial solution was identified for the site, and was agreed with the regulators. The results show the variability in cost-benefit ratio which can occur when comparing widely differing remedial objectives, and the economic implications associated with the use of on-site remedial techniques such as in situ chemical oxidation.

Key words: BCR, blight, contaminant, cost benefit analysis, ecology, gasworks, NAPL, NPV, property value, public water supply, receptors, remediation

Land Contamination & Reclamation, 14 (2), 352-356 (2006) 

DOI 10.2462/09670513.725

Updated: 29-Dec-2008