Two recent papers address the issue of environmental policy for mining. A paper by White, Doole, Pannell and Florec in the Australian Journal of Agricultural and Resource Economics reviews the current policy in Australia, which is based on environmental bonds, and proposes an alternative policy the damaged land tax (DLT).
The problem with bonds is that they only provide funds when the firm is non-compliant (usually when it has gone bust). The alternative DLT generates funds and acts as an incentive for firms to plan their rehabilitation as part of the mining plan. Online library.
An important and neglected, aspect of environmental policy for mines is the social cost of environmental damage. In a recent paper by Burton, Zahedi and White in Resources Policy estimates people's values in terms of the quality and timeliness of mining rehabilitation in WA. In short the preference is for in situ rehabilitation of native vegetation that also restores habitat for charismatic fauna such as red-tailed black cockatoos. Science Direct
As the mining boom continues there will be an increased need for effective and efficient environmental policies. These papers propose new approaches to address a problem that will come to the fore as the current mines start to close and the full environmental costs of mining become more apparent.
Professor Ben White (School of Agricultural and Resource Economics) (+61 8) 6488 3409