Chapter 11 – OPA90: Why Economic Incentives Only Work Sometimes


The Oil Pollution Act of 1990 (OPA90) incorporates principles of the law and economics movement championed by Guido Calabresi and Richard Posner. In addition to more traditional regulatory approaches (including drilling bans in sensitive areas and detailed safety rules), OPA90 created economic incentives including strict liability rules and the threat of massive fines to spur care and other desired behavior by industry. OPA90 also requires responsible parties to clean up the spills, compensate victims, and pay for natural resource damages. While OPA90 significantly reduced the number and severity of oil spills since the 1989 Exxon Valdez disaster, the law did not prevent the Deepwater Horizon spill which has been attributed to multiple human failures to anticipate a complex combination of events.