Compensation and negotiation in the siting of hazardous-waste facilities

The transport and storage/disposal of hazardous materials is clearly of fundamental importance to the continuing economic and social well-being of the industrialized world. This is also an extremely difficult area for public policy, since it involves potentially large risks, and unresolved technical and economic uncertainties make informed consensus among affected stakeholders difficult. This paper will briefly review current policy options for siting storage/disposal facilities for toxic wastes. Emphasis will be on policies which are economically efficient and which provide incentives to various stakeholders to participate constructively in negotiating equitable risk-sharing solutions to the problems of interest. In particular, incentives based on compensation and insurance will be discussed in light of experience from several countries.