Social Impact Assessment of the Limestone Mining Industries in Local Communities of Korea

1. The 27th Annual Conference International Association for Impact Assessment6-9 June 2007, COEX Convention Center, Seoul, Korea Social Impact Assessment of the Limestone Mining Industries in Local Communities of Korea Daejin University Shin, Young Chul ycshin@daejin.ac.kr

2. Contents • Introduction☜ • Survey Method • Opinions about Strip Mining • Estimation of Damage Cost • WTP for Suggested Policies • Conclusion

3. Introduction • Purpose • To reveal opinions about limestone mining(strip mining) • To quantify experiences of damage and damage cost • Use questionnaire survey method • Include non-use value as well as use value of natural resources

4. Introduction • Fig. Strip mining of limestone in Korea

5. Introduction • Limestone Mining in Kangwon Do • 92% of total limestone reserves • Over 95% of total cement product

6. Introduction • Deforestation size due to limestone mining in Korea = 1,976 ha • Deforestation size of 3 cities (Donghae, Samcheok, Yeongwol) in Kangwon do = 1,274 ha (64.5% of total)

7. Introduction • Damage types of limestone mining and cement industries • Deforestation due to strip mining • Health effects(mortality and morbidity) due to air pollution materials • Increases of disamenity and averting behavior cost • Damages of noise and shaking • Other damages

8. Contents • Introduction • Survey Method☜ • Opinions about Strip Mining • Estimation of Damage Cost • WTP for Suggested Policies • Conclusion

9. Survey Method • Survey #1: Inhabitants survey in limestone mining area • Population: Donghae city, Samcheok city, and Yeongwol gun in Kangwon Do • Sample size: 991 households • Survey method: person-to person interview • Principal questions: opinions about experience of damage due to limestone mining, minimum compensation

10. Survey Method • Survey #2: Nationwide CVM(contingent valuation method) survey • Population: entire national households • Sample size: 1,000 households • Survey method: internet survey • Principal questions: opinions about limestone mining, willingness-to-pay(welfare measure) for suggested policies

11. Survey Method • Contingent Valuation Method(CVM) • Economic Valuation Method of Non-maketed goods • Stated preference method( cf. revealed preference method, benefit transfer) • Direct questionnaire approach of asking a sample of individuals to state their maximum WTP for preserving an environmental asset or suggested policies

12. Contents • Introduction • Survey Method • Opinions about Strip Mining☜ • Estimation of Damage Cost • WTP for Suggested Policies • Conclusion

13. Opinions about Limestone Mining • Contribution or Damage of Limestone Mining to Local Communities

14. Opinions about Limestone Mining • Damage Severity due to Limestone Mining

15. Opinions about Limestone Mining • Most Serious Damage to Inhabitants

16. Opinions about Limestone Mining • Minimum Compensation per Household

17. Contents • Introduction • Survey Method • Opinions about Strip Mining • Damage Cost Estimation☜ • WTP for Suggested Policies • Conclusion

18. Damage Cost Estimation • Deforestation with Mt. destruction • CVM to include use value & non-use value: 16,421 (10 thousand won)/ha • Total: 26,364 million won • Health effect1: cost of premature mortality • Benefit transfer: VSL(value of a statistical life) = 142,210 (10 thousand won) • Total: 3,857 million won

19. Damage Cost Estimation • Health effect2: cost of illness • Unit costs of illnesses from inhabitants survey • Total: 4,289 million won • Cost of damages except health effects due to air pollution • Averting behavior cost, clearing cost, outdoor activity restriction, disamenity: inhabitants survey & benefit transfer • Total: 13,840 million won

20. Damage Cost Estimation • Cost of noise and shaking • Benefit transfer: unit value of dB = 67,400 won • Total: 257 million won • Cost of other Damages • Unit costs from inhabitants survey • Total: 935 million won

21. Damage Cost Estimation • Estimated Damage Costs per Year: 51,542M

22. Contents • Introduction • Survey Method • Opinions about Strip Mining • Estimation of Damage Cost • WTPs for Suggested Policies☜ • Conclusion

23. WTPs for Suggested Policies • Suggested Policies of CVM • Purchase the forest areas which have high value of preservation • Support systematic ecological restoration • Support alternative industrial development as a kind of restoration • Support damage mitigation and compensation

24. WTPs for Suggested Policies • WTP Model for CV data • Random utility model (RUM) • Indirect utility function v(y, Z, q, ε) • v(y, Z, q1, ε) > v(y, Z, q0, ε) • V(y, Z, q1, ε) = v(y+CS, Z, q0, ε) • WTP =CS =CS(y, Z, q0, q1, ε) = X’β+ ε

25. WTPs for Suggested Policies • Estimation method of WTP model

26. WTPs for Suggested Policies • Allocation Ratios of WTP for Suggested Policies

27. WTPs for Suggested Policies • WTP per year for suggested policies: 79,549M

28. Contents • Introduction • Survey Method • Opinions about Strip Mining • Estimation of Damage Cost • WTP for Suggested Policies • Conclusion☜

29. Conclusion • Questionnaire Survey Method: useful to assess social impact • Reveal opinions about specific issues • Estimate damage costs of a region using benefit transfer • Estimate WTPs for suggested policies or preserving natural asset using CVM • benefit cost analysis of specific issues

30. Conclusion • Benefit Cost Analysis • Total damage cost of limestone mining in 3 cities = 51,542 million won per year • WTP for suggested policies = 79,549 million won per year • Implementing the suggested policies is needed to improve national welfare

31. Thank you !