HKS Affiliated Authors
Frank Plumpton Ramsey Professor of Political Economy
Excerpt
Excerpt
Deterring and Compensating Oil Spill Catastrophes: The Need for Strict and Two-Tier Liability. Richard Zeckhauser, July 2011, Paper. "The BP Deepwater Horizon oil spill highlighted the glaring weakness in the current liability and regulatory regime for oil spills and for environmental catastrophes more broadly. This article proposes a new liability structure for deep sea oil drilling and for catastrophic risks generally. It delineates a two-tier system of liability. The first tier would impose strict liability up to the firm’s financial resources plus insurance coverage. The second tier would be an annual tax equal to the expected..." Link