Lunch seminar with Francesca Leucci
The Efficiency of Remedies for Environmental Harm: A Comparative Law and Economic Analysis of Natural Resource Damage Valuations in Courts
Imagine a river surrounded by villages and farmlands. Then, imagine a tailings dam linked to that river where the byproducts of close mining operations are stored. One day that dam might collapse and all the toxic waste might flood the near villages. Contaminated mudslides might kill people, fishes, plants and ultimately end up in countless human and ecological health damages in the short and the long run.
Some questions arise here. Set aside human rights (pecuniary and nonpecuniary) damages, how much should the mining company pay for the lost natural resources? And would that price be enough to incentivise other mining companies to invest in prevention in order to avoid similar accidents in the future?
The starting point of this research is represented by a proceeding instituted before the International Court of Justice in 2010. At that time, the Republic of Costa Rica sued the Republic of Nicaragua for an alleged “incursion into, occupation and use by Nicaragua’s army of Costa Rican territory”, in connection with the construction of a canal in the San Juan River. After establishing that Nicaraguan activities were unlawful because in breach of the claimant’s territorial sovereignty, on 2 February 2018 the Court issued its very first decision on compensation for the impairment or loss of environmental goods and services. What is peculiar about this case is that the Court did not accept any of the methods of damage assessment proposed by the parties (neither the ‘ecosystem service approach’ proposed by the claimant nor the ‘replacement cost approach’ suggested by the defendant). The ICJ examined the different methods and ultimately stated that an overall assessment was more suitable to equitable considerations. The case at hand provides clear evidence of the existing uncertainty in jurisprudence on how to assess environmental damages, regarding either the heads of damages and the method of monetary compensation. Furthermore, it shows that equity seems to the judiciary more appealing than accurate calculations.
By analysing first the methods of environmental damage valuation in environmental economics and then selected cases at the International, regional and domestic level, the project aims to illustrate trends in the judicial assessment of environmental damages. Moreover, drawing on the theory of tort law and economics, it unveils the expected behavioural effects of remedies on potential polluters. Based on these findings, it puts forward a theory of ‘smart’ remedies to achieve both optimal deterrence and a good restoration status. Lastly, it questions whether the ecosystem service approach supported by the ecologists might provide a plausible road ahead for cost-effective and roughly accurate assessments.
The lunch seminar will offer an overview of the dissertation and a focus on specific empirical chapters.
Speaker bio
Francesca Leucci is a fourth-year PhD candidate at Bologna, Rotterdam, and Hamburg Universities (European Doctorate in Law and Economics) under the supervision of Professors Michael Faure and Luigi Franzoni. Her doctoral project is titled ‘Law and Economics of Environmental Damage Assessment’ and it investigates pecuniary and non-pecuniary remedies for environmental damage with a method that combines efficiency questions with a multilevel case-based analysis. The aim is to explore whether judges at the International, EU and domestic levels assess environmental damages in a cost-effective way that provides polluters with optimal incentives of deterrence. The long-term goal is to find out a simple metric of environmental damages that can pursue at the same time deterrence, harm compensation and sustainability.
Francesca holds a master’s degree in Law from the University of Lecce (2014), a master’s degree in Social Sciences from one of the institutes of interdisciplinary studies built in Italy upon the model of the Parisian École Normale Supérieure (2015) and a LL.M. in Economic Analysis of EU Law from the College of Europe in Bruges (2017). She worked as a trainee lawyer at the Italian Public Attorney, as a judge assistant at the Administrative Local Court and as an intern in the Legal Office of the Italian Antitrust Authority. She is also temporary expert for Eklipse, working on the impact assessment of projects on biodiversity (no net loss) through the concept of ecosystem services, and a member of the SERE (Society of Ecological Restoration Europe) Legal working group.
At iCourts, Francesca will continue working on the empirical analysis of judicial decisions on environmental damages and she will be involved in the team of Veronika Fikfak’s project Human Rights Nudge.