Policy and Regulation:- United Kingdom Cost benefit analysis 

1. Policy and Regulation
1.1 Policy
The Government's objectives with respect to contaminated land are:    
    
(a) to identify and remove unacceptable risks to human health and the environment;    
    
(b) to seek to bring damaged land back into beneficial use; and    
    
(c) to seek to ensure that the cost burdens faced by individuals, companies and society as a whole are proportionate, manageable and economically sustainable. 
These three objectives underlie the 'suitable for use' approach to the remediation of contaminated land, which the Government considers is the most appropriate
approach to achieving sustainable development in this field. Limiting remediation costs to what is needed to avoid unacceptable risks will mean that the UK will be able to recycle more previously-developed land than
would otherwise be the case, increasing its ability to make beneficial use of the land. This helps to increase the social, economic and environmental benefits
from regeneration projects and to reduce unnecessary development pressures on greenfield sites. The 'suitable for use' approach provides the best means of reconciling the UK's various environmental, social and economic needs in relation to contaminated
land. Taken together with tough action to prevent new contamination, and wider initiatives to promote the reclamation of previously-developed land, it will
also help to bring about progressive improvements in the condition of the land which we pass on to future generations. Within the 'suitable for use' approach, it is always open to the person responsible for a site to do more than can be enforced through regulatory action. For
example, a site owner may plan to introduce at a future date some new use for the land which would require more stringent remediation, and may conclude that, in
these circumstances, it is more economic to anticipate those remediation requirements. However, this is a judgement which only the person responsible for
the site is in a position to make. The one exception to the 'suitable for use' approach to regulatory action applies where contamination has resulted from a specific breach of an environmental
licence or permit. In such circumstances, the Government considers that it is generally appropriate that the polluter is required, under the relevant regulatory
regime, to remove the contamination completely. To do otherwise would be to undermine the regulatory regimes aimed at preventing new contamination. Cost–benefit analysis is an inherent part of the management of environmental risks in a sustainable way, and is a formal component of particular stages of
regulatory regimes. It allows for the structured and transparent balance of the costs (usually, but not always, in financial terms) against benefits, which
can be wide-ranging depending on the context – for example, enhanced health and environmental protection, increased commercial confidence in the condition
of the land or simply greater certainty in ultimate decision making.  
1.2 Regulation
UK legislation on contaminated land is contained primarily in the    
* Section 57 of the Environment Act 1995 which introduced a new Part IIA into the Environmental Protection Act 1990, and the     
* Town and Country Planning Act.    
These are supplemented by statutory and non-statutory guidance    
(See UK country overview pages on EUGRIS)    
    
Under Part IIA where an authority is identifying remedial actions itself, it is specifically required to ensure that they are 'reasonable', having regard 
to the cost which is likely to be involved and the seriousness of the harm or of the pollution of controlled waters concerned. In general any remediation that
can be required must be 'reasonable', having regard to the cost which is likely to be involved and the seriousness of the pollution of water or harm caused. Assessment of costs and benefits allows comparisons between different remedial options based on the outcome of the remediation investment. Cost benefit
analyses consider the diverse range of impacts that may differ from one proposed solution to another such as the effect on human health, the environment, the
land use, and issues of stakeholder concern and acceptability on the basis of common units. In many instances, it is difficult to attach a strictly monetary
value to many effects of a remediation project. Hence assessments can involve a combination of qualitative, formal cost benefit analysis (CBA) and multi-criteria
analysis (MCA) methods. While there are no formally precribed cost benefit analysis (CBA) procedures in the UK, guidance has been produced by the Environment Agency. This suggests
a sequential approach, where increasing levels of detail are considered. Assessment can be limited to the minimum level of detail necessary for clear distinctions
to be apparent. Findings should be tested by a sensitivity analysis that assess the impacts of changes in the various input parameters on the analysis. This
is important because the assessments include scoring techniques based on expert judgements, which are at some level subjective. In theory CBA can encompass most of the diverse issues in decision-making for contaminated land management (goals, risk management, sustainable development
and stakeholder or ‘third party’ concerns). However, CBA valuations and assumptions may not be acceptable or agreed by all stakeholders. The subjective nature
of this process must be borne in mind. The practical usefulness of such an overarching analysis should be considered before it is undertaken, in particular: (1) of the number and possibly limited
transparency of assumptions and judgements made; (2) difficulties in communication of its findings to all stakeholders; and (3) the ‘added value’ of the analysis
compared to the cost of carrying it out.  
2. Authors
 
    
  
    

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