Estonian Residents Willingness to Pay for Stopping Quarry Expansion: a Contingent Valuation Study

Abstract

The article discusses the indirect extemal costs of limestone mining. Limestone is an important construction material in Estonia, with 5-6 million tons mined annually. Rubble is used extensively in road construction, for which there is no domestic alternative. Maintaining the volume of limestone production and ensuring security of supply requires the exploitation of new limestone deposits and opening of new quarries. Limestone mining is accompanied by extensive changes in the natural environment and disturbances to residents. However, local govemments are often against the opening of new mines, and litigations can last for decades. This endangers the security of limestone supply. Municipal govemments' opposition to mines is due to the decrease in residents' welfare associated with mines, which is not adequately compensated. A contingent valuations study was conducted to identify and quantify the indirect extemal costs of mined limestone, which revealed that the aggregate willingness to pay of the Estonian adult population to stop the expansion of limestone quarries is 36.6 million euros per year. This can be interpreted as an indirect extemal cost of limestone. By relating to the willingness to pay to the limestone produced, the indirect extemal cost of one ton of limestone is approximately 6 euros. Quantifying the indirect extemal cost allows it to be included in the price of production as an environmental tax.