Voluntary Siting of Noxious Facilities: The Role of Compensation

Abstract

The siting of noxious facilities is an intrinsically difficult problem because the host region or community perceives that it absorbs most of the costs and risks while others accrue the benefits. There is normally little long-run employment created by facilities which store wate, and the tax revenues that may be forthcoming are generally not viewed as benefits if the residents perceive the facility as generating risks to themselves and future generations. Most people are not will to trade off economic benefits for risk to themselves or others. Unitl 1980 the traditional approach to siting was the Decide Announce Defend (DAD) method whereby the developer or contractor makes a series of technological choices as to the type of facility that should be built and where it should be located. The final decision is then announced to the concerned stakeholders and then defended. Under this process the proposed set of actions are not discussed with the concerned stakeholders in advance. The DAD approach has generally failed to locate facilities due to the adversarial nature of the process and the ability of those opposed to the facility to find legal ways of preventing it from being built.