జర్నల్ ఆఫ్ కోస్టల్ జోన్ మేనేజ్‌మెంట్

నైరూప్య

Evaluation of Externalities Cost of Oil Spill Accidents in Nigeria Marine Ecosystem and the Sustainable Compensation

Nwokedi Theophilus Chinonyerem*, Kenneth U Nnadi, Ndikom Obed B, Chinedum Onyemechi

Over the years, there has existed conflict between oil and gas industry operators and the indigenous people in the coastal communities in Nigeria, arising from inabilities the oil and gas industry operators, to adequately compensate third party operators in the coastal communities, for damages to marine biodiversity and fishery resources, occasioned by operational and ship based oil spill, affecting third party operators in the marine ecosystem. The study evaluated the externalities cost of oil spill in the Nigerian marine ecosystem with a view to developing models for the reservation of adequate volume of funds for the sustainable compensation of affected third party operators. It used primary data sourced through questionnaire and interview as survey instruments. It employed the Willingness to Accept (WTA) approach of the Contingent Valuation Method (CVM) is analyzing the data obtained. It was found that the mean amount representing the externalities cost of oil spill damages to individual that third party operators in the marine ecosystem which they are willing to accept as compensation for oil spill damages is N 1,629,610 per human capita per annum, with a standard deviation of 508.83. The aggregate annual externalities cost of oil spill damages to marine biodiversity (externalities) suffered by multiple third party operators in the marine ecosystem, is modeled as the product of the mean WTA compensation (MWTA) and the aggregate number of the working population/third parties (X_n) employed in the marine ecosystem affectedi .e. Cexternalities=(MWTA (X_n))=N 1,629,610 (Xn). To ensure that marine underwriters have financial solvency to provide timely, adequate and sustainable compensation of externalities costs to multiple third party operators in the maritime sector affected by oil spill damages to marine ecosystem, underwriters must maintain an aggregate level of compensation fund for thir pdarty risks that satisfy the following expression/condition:OMPEN aggregate externalities costs ≥ ECexternalities→COMPENaggregate externalities costs ≥ N 1,629,610(X_n).