Economic Analysis of Liability for Environmental Accidents

This article deals wuth the issue o liability assignment in case of environmental accident. The intention is to consider the economic aspects of the different consequences, such as the need to compensate affected parties for loss or damage and to provide incentives for implementing preventive measures in the context of the assignment to responsible parties of a strict liability according to the "polluter pays principle". in this regrad, the CERCLA liability system and the EC White Paper on Environmental Libility are reviewed. Two issues causing current debate are closely examined: firstly, the limitation of available compensation to affected partiesto their assets and, secondly, the attribution of liability to lenders to responsible parties. With regard to the issue of lender liability, contemporary economic literature is reviewed in relation to the use of an information asymmetry framework with standardised notation.