Hyper-local Impacts of Mining in India: Implications for Climate Change

Many developing countries are endowed with mineral resources that have high potential economic value, but whose extraction and economic use are one of the world’s most significant contributors to climate change. Decision-making on how and when these natural resources will be extracted is typically in the hands of local policy-makers, who are trading off local economic gains against local and global environmental costs. But this tradeoff is still not very well understood. Industry and policymakers often argue that there are substantial benefits to people living in mineral-affected areas. But environmental groups and local stakeholders, ostensibly representing those local people, are often opposed to mining development.

The proposed research will create an extensive new microdataset to measure the local social, economic, and environmental costs and benefits of one of the most climate-relevant industries in one of the world’s largest emitting countries. The researchers will take advantage of the exogenous variation in the value of local mineral resources in India (driven by variation in global prices) in order to measure the impact of the mining industry on local communities. The possibility that natural advantage is having an effect is eliminated by focusing on changes across time in the value of local mineral wealth. India's large size, frequency and diversity of mineral deposits, and the quantity of relevant data make it an ideal context for this area of study. This more detailed dataset and accompanying strategy will also overcome identification issues faced by previous research on this topic.

Mineral and fossil fuel extraction in India is one of the largest and most easily regulated contributors to climate change globally. In order to legislate climate change mitigation in India and elsewhere, it is essential to understand the impacts of such mitigation efforts on vulnerable populations. Mining activity in India is concentrated in some of the poorest, most violent areas of the country, and the environmental tradeoffs of such activity is simultaneously brushed off as a necessary tradeoff for the resultant local economic benefits. Further, it is perceived as a major cause of conflict and insurgency. Understanding the impacts of mineral-led development on the
most vulnerable people (including women and Scheduled Tribes) is essential for crafting an aggressive climate change mitigation strategy for India (and other poor countries in similar circumstances) without further disenfranchising the poorest fraction of the population.