THE ECONOMIC COST OF RESIDUAL ENVIRONMENTAL RISK - A CASE-STUDY OF LOUISIANA

This paper summarizes the results of an extensive economic analysis of the costs associated with residual environmental risks in Louisiana. The analysis has estimated these costs by impact category and allocated them to risk sources. The total estimated costs of these residual risks range from $1094·053 million to $2014·740 million per year, a cost of approximately $250 to $460 per person in Louisiana, or 2·0 to 3·7% of the per capita income in 1988. These costs were approximately 1·5 to 2·7% of the state's gross domestic product. The major risk sources were waste-water and non-point source discharges, indoor air, ozone, hazardous and solid waste disposal sites, and particulates. Several potentially important risk sources, pesticides and lead, could not be evaluated because of the lack of exposure data. Risks associated with global issues, such as warming and loss of stratospheric ozone, were not evaluated because of the lack of data. Economic values, such as existence and option values, were also not estimated because of the lack of appropriate data. © 1992 Academic Press Limited.