I think it can be done just as well as current valuation, because you are always dealing with assumptions. Of course, you need historical data and documentation, the more the better. No data available will render a valuation useless.
I have been working in a real estate development company in Germany, assisting in selling and developing hundreds of contaminated Russian Army military facilities of all kinds. The point to take into account is that even for current time land valuation the valuator is making assumptions.
One recent example in Germany is that my former employer was subject of a criminal investigation because the Public Prosecution Service is charging them for selling a 200-hectare barracks area for about 10 million less than the valuator estimated. BUT: The valuator took assumptions that never came true, nobody wanted to tear down the buildings, repair the buildings protected by National Monument Conservation Authority, and build a golf range.
The only way to get rid of it was sell it to someone else planning a different land use, but for considerably less. During my time in that company I learned that “value” does actually not represent what a valuator has estimated but what a buyer is willing to pay.
Biodegradation of organic contaminants does not play a prominent role. If there is massive contamination by phase liquids, it will stay there for tens (if not for thousands of years. And it can be thousands of years indeed, I had a case where the estimated time to reduce the kerosene in soil and groundwater to zero was estimated at 15,000 years.
I know that in Nigeria the Oil Producing Companies [OPC] are promoting natural attenuation, but in none of the cases I have seen there it had worked, simply because the bacteria don’t cope with oil phase. If there is little contamination, it will be either cheap to deal with or take a few years to go away by itself. Thus resulting in loss of land value either by a few years of loss of use, or by remediation costs.
And, the planned land use is always an issue. I have come across more than a dozen plans where the architects put the kindergarten exactly on the former gasoline station site, resulting in extremely high remediation costs and loss in land value. My approach was to recommend putting the supermarket’s parking lot there and the kindergarten in the barrack’s former admin/housing areas, thus reducing the loss in land value.
To replay/rewind the past to see what it would have been like about 5 to 10 or 15 years ago when the contamination first occurred – is an important one I did not consider in my last posting, especially considering the situation in Nigeria.
If there is a massive contamination like many of those I saw in Ogoniland in 2010, the problem is that if no action is taken, the situation gets worse. Even an oil spill of thousands of gallons can be remediated relatively easily if it is being tackled with appropriate measures immediately. What I saw in 2010, though, were mere attempts to do something that looks like action, but in the end made no difference to no action at all.
But I am straying off topic. The point is, if no action is taken immediately, or action is taken inappropriately, and maybe even only after a few years, (in serious and large scale incidents) the situation will worsen from year to year, and the costs for remediation will rise, from year to year.
This is why I consider it important to document the status quo immediately after the incident, and on a regular basis afterwards.
Compensation after the incident will be useless if no remediation takes place. Why? Because the situation will worsen, and the damage will exceed the value of the compensation paid once and initially. Thus, compensation should not be paid instead of remediation, but in addition to remediation. As long as no remediation takes place, the state of the environment should be monitored and documented at least annually. This would give the parties involved the chance to be up to date about the property value at any given point in time.
Of course, it does make a difference if you actually have a land use (e.g. agricultural) or if you have an unused brownfield area. During my time managing contaminated areas on former Red Army facilities in Germany, I have been dealing mainly with unused areas and prospective use. In the case of farmers in Ogoniland, you will e.g. have cassava fields that are productive, and may be contaminated at a certain point in time. It would be a great advantage if the farmers somehow managed to document the harvest, to be able to prove their losses.
So, even land valuation without any damage or losses may make sense, even if there is no intention to sell the property.