Liability Funding and Superfund Clean-Up Remedies,

The debate about Superfund liability has treated financing as a distinct issue from the efficiency of clean-up. However, this paper presents a model of EPA decision-making in which liability funding may increase or decrease the extent of clean-up. It then estimates this effect using data on remedies selected at National Priorities List sites and on the characteristics of liable parties. The results suggest that the EPA responds to concentrated private interests, selecting less extensive clean-up when liable parties are expected to bear a large share of costs. This effect should be considered in evaluating liability approaches to environmental protection.