IDEAS home Printed from https://ideas.repec.org/p/war/wpaper/2022-19.html
   My bibliography  Save this paper

Estimating environmental damages of a tailings dam failure: The case of the Fundão Dam in Brazil

Author

Listed:
  • Mikołaj Czajkowski

    (University of Warsaw, Faculty of Economic Sciences)

  • Norman Meade

    (Independent consultant)

  • Ronaldo Seroa da Motta

    (State University of Rio de Janeiro (UERJ))

  • Ramon Arigoni Ortiz

    (Independent consultant)

  • Mike Welsh

    (Independent consultant)

  • Gleiciane Carvalho Blanc

    (Lactec)

Abstract

We present the results of a contingent valuation study aimed at estimating the monetary value of environmental and cultural/heritage injuries caused by the Fundão (tailings) Dam failure in Brazil in 2015 as perceived by the Brazilian population. While the valuation literature considering mining-related externalities is considerable, valuation studies of injuries resulting from mining incidents are scarce and most available damage assessments apply market valuation methods while rarely considering environmental and other nonmarket-valued impacts. The flooding and the release of tailings from the dam failure led to injuries to sediments, watercourse opacity, and oxygenation, changes in riparian morphology, loss of human life, mortality to fish and wildlife, changes in the food chain and more along the 675 km watercourse of the Doce River. This was arguably the greatest environmental and cultural/heritage injury ever caused by a single tailings dam collapse. The study followed state-of-the-art recommendations for the development, administration, and data analysis of stated-preference valuation methods. The survey of a representative sample of 5,195 Brazilian urban households revealed that the average lower-bound willingness-to-pay estimate to avoid a similar incident in the near future was 137 USD and the parametric-based estimate was 230 USD per household, which aggregates to 7.96 or 12.91 billion USD, respectively. This corresponds to environmental damages of 176 or 295 USD per m3 of tailings released.

Suggested Citation

  • Mikołaj Czajkowski & Norman Meade & Ronaldo Seroa da Motta & Ramon Arigoni Ortiz & Mike Welsh & Gleiciane Carvalho Blanc, 2022. "Estimating environmental damages of a tailings dam failure: The case of the Fundão Dam in Brazil," Working Papers 2022-19, Faculty of Economic Sciences, University of Warsaw.
    • Handle: RePEc:war:wpaper:2022-19
    as

    Download full text from publisher

    File URL: https://www.wne.uw.edu.pl/download_file/1873/0
    File Function: First version, 2022
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Richard Carson & Robert Mitchell & Michael Hanemann & Raymond Kopp & Stanley Presser & Paul Ruud, 2003. "Contingent Valuation and Lost Passive Use: Damages from the Exxon Valdez Oil Spill," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(3), pages 257-286, July.
    2. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    3. Gurmu, Shiferaw & Trivedi, Pravin K, 1996. "Excess Zeros in Count Models for Recreational Trips," Journal of Business & Economic Statistics, American Statistical Association, vol. 14(4), pages 469-477, October.
    4. Richard Carson & Theodore Groves, 2007. "Incentive and informational properties of preference questions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 181-210, May.
    5. Seroa da Motta, Ronaldo & Ortiz, Ramon Arigoni, 2018. "Costs and Perceptions Conditioning Willingness to Accept Payments for Ecosystem Services in a Brazilian Case," Ecological Economics, Elsevier, vol. 147(C), pages 333-342.
    6. W. Michael Hanemann, 1984. "Welfare Evaluations in Contingent Valuation Experiments with Discrete Responses," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(3), pages 332-341.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Czajkowski, Mikołaj & Meade, Norman & Seroa da Motta, Ronaldo & Ortiz, Ramon Arigoni & Welsh, Mike & Blanc, Gleiciane Carvalho, 2023. "Estimating environmental and cultural/heritage damages of a tailings dam failure: The case of the Fundão dam in Brazil," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    2. Czajkowski, Mikołaj & Zawojska, Ewa & Meade, Norman & da Motta, Ronaldo Seroa & Welsh, Mike & Ortiz, Ramon Arigoni, 2024. "On the inference about a willingness-to-pay distribution using contingent valuation data," Ecological Economics, Elsevier, vol. 222(C).
    3. Ndebele, Tom & Forgie, Vicky, 2017. "Estimating the economic benefits of a wetland restoration programme in New Zealand: A contingent valuation approach," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 75-89.
    4. Blackman, Allen & Qin, Ping & Yang, Jun, 2020. "How costly are driving restrictions? Contingent valuation evidence from Beijing," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    5. Abate, Tenaw G. & Börger, Tobias & Aanesen, Margrethe & Falk-Andersson, Jannike & Wyles, Kayleigh J. & Beaumont, Nicola, 2020. "Valuation of marine plastic pollution in the European Arctic: Applying an integrated choice and latent variable model to contingent valuation," Ecological Economics, Elsevier, vol. 169(C).
    6. Aravena, Claudia & Hutchinson, W. George & Carlsson, Fredrik & Matthews, David I, 2015. "Testing preference formation in learning design contingent valuation (LDCV) using advanced information and repetitivetreatments," Working Papers in Economics 619, University of Gothenburg, Department of Economics.
    7. Kreye, Melissa M. & Adams, Damian C. & Escobedo, Francisco J. & Soto, José R., 2016. "Does policy process influence public values for forest-water resource protection in Florida?," Ecological Economics, Elsevier, vol. 129(C), pages 122-131.
    8. Ho-Young Kim & So-Yeon Park & Seung-Hoon Yoo, 2016. "Public Acceptability of Introducing a Biogas Mandate in Korea: A Contingent Valuation Study," Sustainability, MDPI, vol. 8(11), pages 1-16, October.
    9. Robert J. Johnston & Kevin J. Boyle & Wiktor (Vic) Adamowicz & Jeff Bennett & Roy Brouwer & Trudy Ann Cameron & W. Michael Hanemann & Nick Hanley & Mandy Ryan & Riccardo Scarpa & Roger Tourangeau & Ch, 2017. "Contemporary Guidance for Stated Preference Studies," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(2), pages 319-405.
    10. Aravena, Claudia & Hutchinson, W. George & Longo, Alberto, 2012. "Environmental pricing of externalities from different sources of electricity generation in Chile," Energy Economics, Elsevier, vol. 34(4), pages 1214-1225.
    11. Lee, Juyong & Cho, Youngsang, 2020. "Estimation of the usage fee for peer-to-peer electricity trading platform: The case of South Korea," Energy Policy, Elsevier, vol. 136(C).
    12. John C. Whitehead & Alicia Louis Cornicelli & Gregory Howard, 2024. "Total Economic Valuation of Great Lakes Recreational Fisheries: Attribute Non-attendance, Hypothetical Bias and Insensitivity to Scope," Working Papers 24-10, Department of Economics, Appalachian State University.
    13. Thapa, Samir & Morrison, Mark & Parton, Kevin A, 2021. "Willingness to pay for domestic biogas plants and distributing carbon revenues to influence their purchase: A case study in Nepal," Energy Policy, Elsevier, vol. 158(C).
    14. Catherine L. Kling & Daniel J. Phaneuf & Jinhua Zhao, 2012. "From Exxon to BP: Has Some Number Become Better Than No Number?," Journal of Economic Perspectives, American Economic Association, vol. 26(4), pages 3-26, Fall.
    15. Anastasio J. Villanueva & Klaus Glenk & Macario Rodríguez-Entrena, 2017. "Protest Responses and Willingness to Accept: Ecosystem Services Providers’ Preferences towards Incentive-Based Schemes," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(3), pages 801-821, September.
    16. Fabio Boncinelli & Francesca Gerini & Benedetta Neri & Leonardo Casini, 2018. "Consumer willingness to pay for non‐mandatory indication of the fish catch zone," Agribusiness, John Wiley & Sons, Ltd., vol. 34(4), pages 728-741, October.
    17. Lim, Seul-Ye & Kim, Hyo-Jin & Yoo, Seung-Hoon, 2017. "Public's willingness to pay a premium for bioethanol in Korea: A contingent valuation study," Energy Policy, Elsevier, vol. 101(C), pages 20-27.
    18. Pengfei Liu & Lingling Hou & Dongqing Li & Shi Min & Yueying Mu, 2021. "Determinants of Livestock Insurance Demand: Experimental Evidence from Chinese Herders," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 430-451, June.
    19. Fredrik Carlsson & Jorge García & Åsa Löfgren, 2010. "Conformity and the Demand for Environmental Goods," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 407-421, November.
    20. Seo-Hyeon Min & Seul-Ye Lim & Seung-Hoon Yoo, 2017. "The environmental benefits of reducing thermal discharge from nuclear power generation," Energy & Environment, , vol. 28(8), pages 885-894, December.

    More about this item

    Keywords

    tailings dam failure; nonmarket environmental damages; contingent valuation; willingness to pay;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:war:wpaper:2022-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Marcin Bąba (email available below). General contact details of provider: https://edirc.repec.org/data/fesuwpl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.