Poster #49 - Extractive industries and household wealth in Zimbabwe: a two-way fixed effects approach

• In Event: Saturday Poster Luncheon

Abstract

While global transition to renewable energy sources will reduce carbon emissions, building those renewable sources also comes at an environmental cost. Solar panels, wind turbines and battery storage all require substantially more metal and critical minerals than are currently in production, and mining will have to increase to meet this demand. Mining operations can dramatically, and sometimes irreversibly, alter a landscape and its surrounding community, threatening the health and safety of local peoples and ecosystems. Conversely, they may also bring new employment opportunities, improving consumption and health outcomes. These impacts warrant study.

In this paper, I use a two-way fixed effects approach to estimate the impact of nearby mining operations on household wealth outcomes in Zimbabwe, a developing country with some of the world’s largest deposits of platinum, chromium ores and lithium. I construct a novel time-series dataset of mine opening dates, using publicly available satellite imagery and machine-learning identified locations of mines. Combining this with geolocated repeated cross-sectional household surveys from DHS, I can compare households in close proximity to a mine to those further away from mines, before and after the mines begin operating.

My preliminary results reflect no impact on household wealth overall, but mining’s impacts may be heterogeneous. I plan to explore further impacts among different types of households; in particular, agricultural workers may suffer from land degradation, but households who take employment at new mines could see higher incomes. I also plan to compare wealth impacts between large, multi-national mines, and artisanal and small-scale mines (ASMs). While ASMs are often unregistered and unregulated, making their environmental and safety impacts potentially worse, the wealth generated there is typically more likely to remain in the community than at foreign-owned industrial mines. Overall, these results could help inform policymaking in developing countries that are anticipating a dramatic expansion of extractive industries.

Author

• Elizabeth Brown, University of North Carolina at Chapel Hill
  Presenting Author