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On the issue of Roşia Montană gold exploitation An application and extension of the Arrow-Fisher uncertainty model on local issues

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  • Mircea Săveanu

Abstract

The aim of this article is to analyse the prospects of gold mine development at Roşia Montană, with a focus on the uncertainty regarding this process. We are specifically interested in the issues associated with cyanide spill accidents and how these uncertain events can alter the cost/benefit analysis. Making use of an established methodology, we conclude that the projected gold exploitation can pose considerable risks to the environment, and that an efficient operation would imply either reducing these risks, their effect on the environment, or both. Finally, we also draw from historical knowledge regarding the ancient mine Alburnus Maior, in order to assess the viability of the modern exploitation. We conclude that the modern project could be improved by technological progress, which would seek to maximize the scale of operations, while minimizing both the risk of accidents and their impact on the environment.

Suggested Citation

  • Mircea Săveanu, 2015. "On the issue of RoÅŸia Montană gold exploitation An application and extension of the Arrow-Fisher uncertainty model on local issues," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 18(55), pages 71-84, March.
  • Handle: RePEc:rej:journl:v:18:y:2015:i:55:p:71-84
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    File URL: http://www.rejournal.eu/sites/rejournal.versatech.ro/files/articole/2015-03-17/3245/5saveanumircea.pdf
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    References listed on IDEAS

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    1. repec:rej:journl:v:9:y:2006:i:21:p:5-20 is not listed on IDEAS
    2. Kenneth J. Arrow & Anthony C. Fisher, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, Oxford University Press, vol. 88(2), pages 312-319.
    3. Anca Ilie & Rodica Zaharia, 2007. "Common Agricultural Policy. The Implementation of the Acquis Communautarie in Romanian Agriculture," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 10(23), pages 87-98, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Montană; uncertainty; environmental damage; technological progress; gold.;

    JEL classification:

    • D89 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Other
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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