Valuation of losses and damages resulting from the Fundão's dam failure: An emergy perspective

Juliano Scarpelin, Feni Dalano Roosevelt Agostinho, Cecília Maria Villas Bôas de Almeida, Biagio Fernando Giannetti and Lívia Cristina Pinto Dias

Ecological Modelling, 2022, vol. 471, issue C

Abstract: In 2015, the ‘Fundão’ dam's failure in Brazil released 44 million m3 of tailings that traveled 670 km in the ‘Doce’ river watershed crossing 40 municipalities and two states until reaching the Atlantic Ocean. Since then, a public civil action (PCA) is responsible for litigation processes, and recently established a value of US$ 43.8 billion to repair losses and damages, a value that brings doubts about its accuracy in expressing the loses and damages of the disaster. This claims for alternative methods for its monetary quantification than the current tradicional economic ones. Among others biophysical approaches, the emergy accounting appears as a powerful tool due to its donor side perspective that objectively quantifies value and recognizes energy quality. This study aims to use emergy accounting as method to firstly identify and then quantify the impacts of ‘Fundão’ dam's failure, considering exclusively the negative direct and immediate impacts. Three categories are considered to quantify loses and damages: (I) suppressed stocks in the mud passage and deposition areas (MPDA), (II) social disruption, and (III) changes in landscape. For all the three scenarios of turnover times (Tt), results show that about 98% of total emergy in the suppressed stocks are related to (II) and (III), while only 2% in average is related to (I). This discrepancy highlights the importance of accounting for (II) and (III) since they are often disregarded or not directly considered by traditional economic approaches. From a macroeconomic perspective, the highest total emergy-based dollars (emdollar, EmUS$) found for scenario #3 reached EmUS$ 149.18 billion, a value 3.4 times higher than the US$ 43.8 billion established by PCA. This higher value is equivalent to the annual emergy demanded by the Ecuador economy with 18 million inhabitants. Rather than providing an accurate monetary value for the ‘Fundão’ disaster repair, this study contributes for the advancement of discussions about using biophysical methods such as emergy accounting that allows tracking all numbers for objective verification as alternative to the traditional economic approaches in quantifying losses and damages of high proportion disasters.

Keywords: Brazil; Dam failure; Ecological economy; Environmental valuation; Fundão dam (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecomod:v:471:y:2022:i:c:s0304380022001612

DOI: 10.1016/j.ecolmodel.2022.110051

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