LOST RECREATION AND AMENITIES

25 Pages·2003·0.2 MB·English

LOST RECREATION AND AMENITIES: THE ERIKA SPILL

PERSPECTIVES

F. BONNIEUX and P. RAINELLI

Abstract
Among the different socioeconomic impacts resulting from an oil spill, non-commercial
effects represent an important share, especially when the disaster happens on a highly
populated area. The Amoco Cadiz case, which offers a good example of a comprehensive
economic damage assessment, demonstrates that fact. Nevertheless non-commercial losses,
such as recreation and amenity losses are rarely estimated. Concerning damage caused by
the Erika wrecking, this type of damage did concerned a quite short period of time but a
highly populated shoreline close to an urbanized area, those of Nantes. For the residents,
the lost of amenity is a major component of the whole damage. Residents were disturbed by
the accident, through their leisure activities, mainly fishing on foot, a very popular activity
on this coastline.
Two surveys of the coastal inhabitants affected by the pollution and the inhabitants of
Nantes are used to evaluate the oil spill effects on fishing on foot in the six months
following the shipwreck. The majority of interviewees gave up this activity. In three-
quarters of the cases, other outdoor recreational activities, especially hiking, replaced
fishing on foot. Losses suffered by the inhabitants who gave up fishing on foot with no other
replacement activity are evaluated based on the economic surplus generated by this
activity in a normal period. For those who gave up, but took up another outdoor activities,
the losses are obtained by comparing the surpluses of these two activities.
A summary of specific data collected from the affected population following the oil spill
and data from other surveys estimates damage at nearly 100 million euros, which is around
the same as the clean up and restoration costs. This finding shows the extent of the loss of
amenities, a category that could be called an “orphan” since this damage provides no
entitlement to compensation. This evaluation hence helps build awareness of the magnitude
of the loss of amenities in the total social costs of oil spills.
Resumen
Entre los distintos impactos socioeconómicos producidos por una marea negra, los efectos
no comerciales representan una parte importante, particularmente cuando el desastre se
produce en una zona altamente poblada. El caso del Amoco Cadiz que es un buen ejemplo
de evaluación de daños económicos así lo demuestra. Sin embargo, las pérdidas no
económicas como las pérdidas recreativas o de amenidades, raramente se estiman. Los
daños relacionados con el naufragio del Erika fueron bastante limitados en el tiempo pero
afectaron a una costa muy poblada y cercana a una aglomeración importante, la de
Nantes. Las pérdidas de amenidad para la población local representaron entre la totalidad
de los daños sufridos una proporción mayor que en el caso de otras mareas negras. Los
esfuerzos de evaluación abarcan en prioridad los perjuicios sufridos por los habitantes en
su ocio, en especial en el marisqueo, actividad para la que hay mucha afición en esa costa.
Dos encuestas llevadas a cabo entre la población de la costa afectada por la
contaminación y entre la de Nantes, permitieron medir los efectos de la marea negra sobre
el marisqueo durante el semestre que siguió al naufragio. La mayoría de los pescadores
abandonó esa actividad. En tres de cada cuatro casos, otras actividades de recreo, los
paseos sobre todo, sustituyeron al marisqueo. Las pérdidas de los pescadores que dejaron
este tipo de pesca sin que otra actividad la sustituyera, se valoran basándose en el
excedente económico debido a esa actividad en un periodo normal. Para los que dejaron
esa forma de pescar y que se dedicaron a otra actividad, los daños se valoran al comparar
los excedentes de sendas actividades.
La síntesis de los datos específicos registrados después de la marea negra entre la
población afectada y de los datos de otras encuestas desemboca en una evaluación de los
daños que avecina los 100 millones de euros, valorándose en otro tanto los gastos de
limpieza y de restauración. Este resultado muestra la importancia de las pérdidas de
amenidad, categoría que puede calificarse de « huérfana » en la medida en que esos daños
no dan derecho a indemnización. Esta evaluación ayuda a tomar conciencia de la
importancia de las pérdidas de amenidad en el conjunto de los costes sociales de las
mareas negras.
LOST RECREATION AND AMENITIES: THE ERIKA SPILL

PERSPECTIVES

F. BONNIEUX and P. RAINELLI (INRA-RENNES)

Introduction

Oil pollution arises from natural oil seeps, emissions, spillages or effluents during the
production and transportation of crude oil, from the refining and petrochemical industries
and also from illegal discharges from ships. Riverine inputs of oil constitute a significant
part of the overall load of oil entering the maritime area. The majority of accidental spills
involve less than 1 ton of oil and larger spills resulting from tankers accidents represent
about 3 % of the total loads. But these accidents have a considerable impact upon the
public opinion, because of the way they occur and the types of damages they provoke.
Beyond the monetary damages suffered by the professionals, mainly in tourism and
fishing, these disasters witness the increasing integration of the ecosystem in economic
mechanisms. Moreover, the oil spill is felt as an attack on symbolic values giving reactions
of anger and frustration.
In evaluating the socio-economic impacts of an oil spill we have to consider these three
aspects: monetary damages, ecological losses and the attack on symbolic values through
the amenity losses. In this paper we focused on this latter point in an attempt to determine
how people were disrupted in their daily and leisure activities by the Erika oil spill.
The first section is a general presentation about major oil spills and the problems to assess
the social costs. Due to the importance of the studies undertaken the Amoco Cadiz case is
of particular interest. In consequence some information concerning the importance of the
damages which occurred, is given.
The second section deals with the Erika oil spill and presents the recreational activities of
the residents;
The third section is an attempt to value the losses of amenity of the residents through the
practice of a very popular leisure, fishing on foot using travel cost and contingent valuation
method.
1 ERIKA and PRESTIGE OIL SPILL IN RETROSPECT

In a first point we give an overview about the major oil spills and which framework use to
value the social damages. In the second point the Amoco Cadiz case is developed.

1.1. General framework: oil spill disasters and social assessment

The sinking of the Erika in December 1999 caused the spill of thousands of tons of thick
oil into the Atlantic Ocean staining hundreds kilometres of beaches and killing thousands
of birds, a catastrophe reminiscent of the historic spill of the Amoco Cadiz’ off the coast of
Brittany in 1978. This disaster is in line with dozens of oil spill in the world during the last
35 years. Table 1 recapitulates the major oil spills, which occurred since the Torrey Canion
in 1967.

Table 1. Major oil spills
Ship name Year Location Oil lost
(tonnes)
Atlantic Empress 1979 off Tobago, West Indies
287,000
ABT Summer 1991 700 nautical. miles off Angola
260,000
Castillo de Bellver 1983 off Saldanha Bay, South Africa
252,000
Amoco Cadiz 1978 off Brittany, France
223,000
Haven 1991 Genoa, Italy
144,000
Odyssey 1988 700 nautical. miles off Nova Scotia, Canada
132,000
Torrey Canyon 1967 Scilly Isles, UK
119,000
Urquiola 1976 La Coruna, Spain
100,000
Hawaiian Patriot 1977 300 nautical. miles off Honolulu 95,000
Independenta 1979 Bosphorus, Turkey 95,000
Jakob Maersk 1975 Oporto, Portugal 88,000
Braer 1993 Shetland Islands, UK 85,000
Khark 5 1989 120 nautical. miles off Atlantic coast of Morocco 80,000
Aegean Sea 1992 La Coruna, Spain 74,000
Sea Empress 1996 Milford Haven, UK 72,000
Katina P. 1992 off Maputo, Mozambique 72,000
Assimi 1983 55 nautical. miles off Muscat, Oman 53,000
Metula 1974 Magellan Straits, Chile 50,000
Wafra 1971 off Cape Agulhas, South Africa 40,000
Exxon Valdez 1989 Prince William Sound, Alaska, USA 37,000
Source: ITOPF http//www.itopf.com/stats.html

A number of these accidents despite their large size, caused little environmental damages,
as the oil did not impact coastlines, which is why the names are unfamiliar to the public. At
the contrary, the amount of oil which flowed out of the Exxon Valdez is relatively limited,
since this oil spill ranks to number 34, but it is considered the number one spill world-wide
in terms of damage to the environment. More generally, the impact depends on the type of
oil spilled, the weather conditions and the sensitivity of the region.
But, of course, the magnitude of this type of disaster depends also on the socio-economic
characteristics of the impacted coastline and the assessment of the social damages will rely
on the available data and the state of the art. As indicated by Figure 1 we can schematically
distinguish between direct and indirect damages. The former have a monetary character,
whereas the latter have both a monetary and a non-monetary character.

Figure 1. Type of damages incurred by an oil spill

If we consider the direct effects of the pollution, the resulting damages correspond to
clean-up efforts and restoration costs. These damages are relatively easy to estimate,
because they correspond to monetary expenses in salaries hired equipment or physical
operations such as the installation of booms across the estuaries to protect them. In fact,
these activities raise a question about the amount of goods and services, which have to be
used to restore the shoreline. Three choices are possible:
An extreme position is the laisser-faire option based on the idea that a good self-
cleaning can be obtained by the action of the waves and the tide. Man’s intervention
using chemical dispersants is considered to be harmful to marine life. Natural recovery
is supposed to be more efficient from an ecological point of view than clean-up efforts.
Unsurprisingly, it is the position of the tanker owners (White and Nichols, 1982).
At the other extreme is the position of some conservationists, residents, fishermen and
hotel and restaurant owners for a full restoration. In order to minimise the profit
foregone and the economic losses these people are in favour of a rapid and total
cleanness of the coast.
Last, a rational clean-up effort can be imagined considering the trade-off between the
level of clean-up efforts and the losses reduction in use and non-use of the shoreline
and coastal resources. The determination of the optimum level of the clean-up efforts is
based on the marginal productivity per unit of person involved in the clean-up
operations, and the marginal flow of services produced by the polluted area. Such a
trade-off raises many empirical and theoretical problems.

Considering the indirect effects of the pollution, we are confronted with two sorts of
damages: the economic losses suffered by tourist and marine industries and firms whose
activity is linked to the tourism, and the non-market damages. These latter recover personal
losses of welfare through the disruption of seaside leisure activities and amenity losses.
There are also ecological losses following the perturbation of the ecosystem and
biodiversity decrease resulting of the oil spill. An important point in quantification of
damage to the ecosystem is the resource recoverability in reference to the baseline services,
i. e. the time to return to the conditions that would have existed had the spill not occurred.
The ecosystem recovers at natural recovery rate, which depends on the magnitude and the
toxicity of the oil discharge. This rate can be accelerated by human operations (Ward and
Duffield, 1992). Figure 2 presents various possibilities of accelerating the recovery rate.
According to the efforts to restore the natural resources the lost service flow will differ
with a minimum corresponding to areas A+B, when there is an important effort, and a
maximum when it is a natural recovery with the sum of the areas A+B+C+D.

Figure 2 Loss of natural resource services and their recovery rate

services
path 1 : high restoration
path 2 : low restoration
baseline service
D
C
B
A path 3 :
natural recovery
time
0 TS T1 T2 T3 T4

The possible effects of pollution upon natural resources can be seen as a decrease in the
flow of services provided by an asset. If we could estimate the various outputs produced by
this capital, the total would give the ecological damages. But the direct measure of
intangible as services as biodiversity for instance, raises many difficulties. Another way to
estimate this value, or the decrease of the value, is to elicit how much people would be
willing to pay to prevent future oil spills. Because injured resources have an important part
corresponding to existence values, it can only be measured by the contingent valuation
method

1 2 Estimating the social costs

Using the general framework presented in Figure 1, we assessed the social cost of the
Amoco Cadiz oil spill (Bonnieux and Rainelli, 1991). En route to Rotterdam from the
Arabian Gulf, the Amoco Cadiz, owned by Amoco International Oil Company and
chartered by Shell International Petroleum, loaded with 223 000 tons, was wrecked on a
reef in the morning of March 16, 1978. She stranded after being adrift for about 12 hours
by a trouble with a helm. Figure 2 indicates the location of the wrecking and the shoreline
polluted.

Figure 2. Amoco Cadiz wrecking and polluted shoreline
In spite of difficulties to fund a research dealing with the social cost, a global assessment
has been done (Bonnieux and Rainelli, 1980). But among the different types of costs
involved, the focus has been mainly put on economic losses because of the characteristics
of the polluted area. At the moment of the wrecking, although the coast defined from an
administrative way represents 30 % of the territory of the region, it concentrated almost 54
% of the inhabitants leading to a density of 165 persons per km2 opposed to 64 inland. The
economic structure of the coast is very strongly marked by maritime activities and
activities associated with tourism.
Concerning maritime activities, Brittany is by far the number one in France, sea-fishing
accounting for 35 % of the active workers and 46 % of salaried workers. The decline in
production after the pollution, explained by the depletion of stocks, reached 21 % for fish
and crustaceans. Shellfish breeding, which mainly consists of oyster-breeding represented
about 28 % of the French production in tons. The massive oil spill caused an increase in
the amounts of hydrocarbons in the flesh of the oysters making a part of the stock unfit for
consumption.
Concerning the tourism industry, Brittany represents 20 % of summer nights spent on
French coastal zones, or nearly 70 million vacation days. Using indicators reflecting the
variation of tourist days we have estimated the reduction in tourist visitation we estimated
to 11.6 million which corresponds to a 17 % drop leading to impressive monetary losses.
Furthermore, the drop in tourism industry and maritime activities had consequences on
businesses in connection with these activities, and the decrease in revenue of agents who
were victimised affected the final demand and the consumption of resident families in
Brittany. Those indirect monetary damages, which can be assessed through an adapted
input-output table, reach an important level since the ratio between the total effects and the
direct effects amounts 1.5.
Among the effects of the pollution, one of the most noteworthy is the loss of enjoyment
suffered by the population concerned. Insofar as location near the coast affords recreational
satisfaction to individuals, any damage in the quality of the shoreline brings on the
degradation of their welfare. A survey has been conducted during the summer of 1979 to
determine the amenity losses suffered by the inhabitants. Nearly one half of the population
of the coast (44 % exactly) states that it was disturbed or very disturbed personally by the
accident. Residents of the coast who stated they were disturbed and who also go to the
shore for recreational activities constitute 33 % of the population. Moreover, the survey
showed that in August 1979, more than a year after the wrecking, 25 to 30 % of the
persons questioned thought that the quality of beaches has degraded in comparison with
the situation before the oil spill.
At the moment of the study, several types of factors limited the use of monetary
environmental benefit valuation methods, particularly contingent valuation. From a
philosophical/ethical point of view there was in France, and there is always, considerable
resistance to the idea of estimating monetary values for human health, landscape or natural
heritage. The willingness-to-pay criterion is rejected both by conservationists and also by
economists opposed to the neo-classical framework. From a political point of view
obstacles are linked to the fact that valuation techniques are largely unknown by policy-
makers. Last, we have to recall that methodological aspects were under discussion, since
the “blue ribbon panel” commissioned by NOAA, gave its report in 1992 about the use of
contingent valuation method (CVM). Investigations using CVM have been conducted to
estimate the willingness to pay of the residents to avoid the pollution (NOAA, 1983). The
payment vehicle used was the possibility to purchase an insurance contract. Unfortunately
the sample was limited, with 200 households, and the rate of response very low: 10 %. In
consequence the results are not reliable.
To estimate the loss of enjoyment suffered by the population we supposed that the surplus
of the residents was equal to the expense budget of the vacationer per day. Because we
knew the frequency of visits to the seashore and the number of weeks it was not possible to
go to the seashore it was easy to have an estimate of the total amenity losses. In fact, there
is also a welfare decrease suffered by tourists who came to Brittany in 1978 who were
using the beach even at the low level of quality due to pollution. But this decrease has not
been assessed.
Table 2 sums up the social costs of the Amoco Cadiz oil spill.
Table 2 Social costs of the Amoco Cadiz oil spill

Million F F 1978 Million Euros 2003
Clean up and restoration costs Of which -at-sea component -land-based component -
substructures restoration and other 559.0 65.5 270.2 223.3
230.5 (46.2) 27.0 111.4 92.1
Marine resources losses Of which -fishing industry -shellfish breeding
122.9 54.9 68.0 50.6 (10.1) 22.6 28.0
Recreation and amenity losses 125.6 51.7 (10.4)
Tourist industry losses Of which -direct losses (value added) -indirect losses to the other
sectors 208.3 134.6 73.7
85.7 (17.2) 55.4 30.3
Ecological losses* 195.0 80.2 (16.1)
TOTAL 1210.8 447.0 (100)
*Ecological losses have been assessed on the basis of the value of commercial species
corresponding to the loss of the non-commercial biomass (Bonnieux and Rainelli, 1993).
Source: Bonnieux and Rainelli, 1991

As indicated in table 2, clean up and restoration costs represent the major part of the social
costs of the Amoco Cadiz oil spill (more than 46 %). The second item is tourist industry
losses and indirect losses on the rest of the regional economy with 17 % followed by
ecological losses (16 %) as they are estimated. We can see that in this assessment marine
resources losses are equivalent to the decrease of the welfare of the residents.
The magnitude of the various items depends on the methods of valuation used and also on
the geographic conditions where the wrecking is occurring. In the Exxon Valdez case, the
most important damages were the ecological ones, since the polluted shoreline is very
important with 160 km heavily or moderately oiled and about 900 km lightly or very
lightly oiled. It is an area of great natural beauty characterised by a rich wild fauna.
Moreover it is a sparsely populated area in which tourist industry is relatively limited
compared to the French coast. The lost passive use value, corresponding to the public’s
willingness to pay to prevent another Exxon Valdez oil spill, amounts 2.8 billion dollars
(Carson et al., 1992). Exxon said it spent 2.1 billion dollars on the clean up effort shoreline
treatment techniques (Alaska Department of Environmental conservation, 1993). Other
damages are very low compared to these figures. For instance, the recreational fishing
losses reached 31 million dollars (Carson and Hanemann, 1992).