Habitat and Resource Equivalency Analysis: 30 Years of Lessons Learned and a Look to the Future

Abstract

Natural Resource Damage Assessment (NRDA) under the Oil Pollution Act of 1990 (OPA) is a process used to determine the amount of compensation due to the public for natural resource injuries arising from oil spills. Two models, Resource Equivalency Analysis (REA) and Habitat Equivalency Analysis (HEA), are used in essentially all OPA NRDAs to compute compensatory restoration requirements. REA is applied when members of wildlife populations are injured: usually mortality or a loss of reproduction among a species of bird, turtle, marine mammal, or fish. HEA is used when habitats are injured: usually oiling of beaches, wetlands, or sediments. The models are often implemented in a cooperative setting with input from both the Responsible Party and the Trustees. In this setting the models provide a structure for organizing negotiations and identifying the types of agreements that need to be reached before restoration can be identified and “right sized.” The models also have a technical basis in economic theory that is fully justified, but only in particular, limited circumstances. This technical basis is the only means of assuring the Trustees, RPs, and stakeholders that the NRDA process has identified an appropriate level of compensation. When the circumstances of a spill do not approximate those in which HEA and REA are defensible, creative solutions are needed to adjust the models to the circumstances of the case if they are to provide a convincing basis for scaling restoration and reaching resolution. This paper identifies the circumstances under which REA and HEA are fully defensible as well as 35 years of evolving adjustments designed to make them “work” when applied to real-world cases they do not quite fit. We also look to the future and how climate change may alter restoration scaling.