Abstract -

Determining the amount of restoration needed to compensate the public for injury to natural resources is central to estimating natural resource damages (NRDs). Formal restoration scaling methods have not considered environmental justice to date. The traditional approach equates the aggregate economic value of restoration to the aggregate value of injury without considering ethically relevant differences in the persons to whom the value attaches. This paper discusses the inclusion of environmental justice in formal restoration scaling models for injury to recreation resources. The approach incorporates the possibility that restoration can both compensate the public and effectuate a transfer from the resource rich to the resource poor, reducing inequality. It is shown that relatively minor deviations from current practice allow environmental justice to be incorporated in the computations by 1) modifying how recreation-demand data are used to estimate measures of individual well-being, and 2) generalizing the way the individual measures are added across people into an index of social welfare. Restoration is scaled when social welfare with the injury and restoration is equal to social welfare at baseline. The social benefit of reducing inequality is included in the benefits of restoration, which leads to a reduction in the physical amount of restoration needed to compensate the public relative to traditional scaling methods. A functional form for the social welfare index is specified that has a free parameter governing social sensitivity to unequal distribution of recreation resources. Indirect evidence on the likely range of this parameter shows that when environmental justice is formally considered, the unit value of restoration relative to the value of injury may be increased substantially over the traditional approach.