Firms whose economic activity might pose an environmental risk are sometimes required to post…

Firms whose
economic activity might pose an environmental risk are sometimes required to
post performance bonds before the activity is allowed to commence. The amount
of the required bond would be equal to the present value of anticipated
damages. Any restoration of the site resulting from a hazardous waste leak
could be funded directly and immediately from the accumulated funds. Any unused
proceeds would be redeemable at specified dates if the environmental costs
turned out to be lower than anticipated. What is the difference in practice
between an approach relying on performance bonds and
»

Firms whose
economic activity might pose an environmental risk are sometimes required to
post performance bonds before the activity is allowed to commence. The amount
of the required bond would be equal to the present value of anticipated
damages. Any restoration of the site resulting from a hazardous waste leak
could be funded directly and immediately from the accumulated funds. Any unused
proceeds would be redeemable at specified dates if the environmental costs
turned out to be lower than anticipated. What is the difference in practice
between an approach relying on performance bonds and one imposing strict
liability for cleanup costs on any firm for a toxic substance spill?

»

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