The International Information Center for Geotechnical Engineers

The Impacts of Brownfield Redevelopment Both Economically and Socially - History of Incentivizing Brownfield Cleanup on a National Level

ROLE OF LIABILITY, REGULATION, AND ECONOMIC INCENTIVES

Promoting the environmental remediation and redevelopment of brownfield sites is not an easy task. Market-based mechanism and incentives are needed to attract communities, policymakers, and public and private organizations. Though there are already positive reasons that attract redevelopment of brownfield sites, most investors still shy away from these potentially contaminated sites due to fear of becoming liable for the cost of cleanup as established by CERCLA. Alberini et al (2005) considered the point of view of key economic agents – private real estate developers - involved in making the decisions to brownfield redevelopments, and whether economic incentives and liability or regulatory reliefs would increase these brownfields redevelopment. It is apparent that developers value liability relief and they perceive contaminated sites, however big or small, as less attractive compared to regular sites. It is not a surprise to see that developers with prior experience are much more responsive and likely to deal with brownfields redevelopment than those without, but it is interesting to note that developers without prior experience are more likely to deal with redevelopment once presented with liability relief. The main determinants of a brownfield redevelopment came down to the revenues and costs of the project. These two factors drive the decision of the real estate developers whether to invest or not to invest on these brownfield sites.

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