Estimation of Environmental Damages from Mining Pollution: The Marinduque Island Mining Accident

Pollution, in general, can cause damages on natural resource systems which provide valuable though unpriced services to society. Oftentimes, the harmful effects of pollution are not considered by the polluter in decision-making, thus creating excessive environmental externalities. To estimate the externalities generated by pollution, it is necessary to develop economic measures of values of the environmental and resource services provided by the affected resource systems. The estimation process is undertaken primarily to provide inputs to the information base supporting public resource and environmental management decisions (Freeman 1993). One of these decisions that is of primary relevance to this study has to do with determining the natural resource damage liability of responsible parties in pollution cases, which can be used as basis for damage compensation to affected parties. Mining pollution has historically been a major source of degradation of natural resource systems such as river, coastal, and air (USEPA 1995). For this reason, mining, as an economic activity, is subject to major environmental regulations worldwide, including the Philippines.1 Unfortunately, the current information on mining externalities is insufficient to be useful for policy setting. This study was undertaken partly to partly fill this information gap, particularly in the development of policy instruments which require information on social costs of mining, and partly to assist in the formulation of guidelines on damage assessment and compensation for the mining sector. A case study of an accident-induced mining pollution was implemented.