Wednesday, December 18, 2013

Economics of Superfund Sites

One topic we explore in my cost-benefit classes is the value of cleaning up hazardous waste sites.  Ihlandfeldt and Taylor find that in some cases it is much more than the cost of cleaning them up (and students can analyze their data here.)  The EPA lists references to studies that value the economic benefits of cleaning up superfund sites.

San Jose, CA has two properties on the National Priorities List: Fairchild Semiconductor, and Lorentz Barrel & Drum Co.,   All 1,164 NPL sites are listed here.

Lorentz Barrel & Drum is located near SJSU's Spartan Stadium which is on our South Campus.  This Environmental Impact Analysis report (for a proposed renovation to our Spartan Stadium property,) concludes we don't have to worry about contamination.  That's a relief!!! 

Next time I teach the cost-benefit analysis class, we may try to measure the economic benefits of a proposal to clean up Lorentz Barrel & Drum.  It would be interesting to do this, not least because that would require students to learn how the Environmental Protection Agency decides how to allocate money for clean-up activities.

As you can see below, these contaminated properties are in between the river park and the transit connections (which are near the highway in the lower left) and are near its downtown, where public and private green investments have been taking place, in the form of new bike lanes, bikeshare and "parklets".

It seems reasonable to me that a public-private partnership that cleaned up the hazardous waste sites and expanded public park land in the neighborhood would not only benefit those with new urbanist preferences, but would have benefits that can be seen in increased property values.  As Ihlandfeldt and Taylor point out, when the increase in property values is high enough, tax increment financing can be used to finance the clean-ups, meaning the cleanup cannot be accomplished without resources, but potentially can be accomplished without new taxes.