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).