Estimating the environmental cost of mixed rare earth production with willingness to pay: A case study in Baotou, China

Abstract

Rare earths are important key metal minerals, but their exploitation, smelting and separation leads to the emission of environmental pollutants. China has taken a series of measures to control and govern the environmental pollution caused by mixed rare earth development in northern China, but currently, environmental pollution still exists. Environmental pollution affects the lives of local residents, and this impact can be measured by the nonuse value of the environmental pollution caused by rare earth development. Willingness to pay (WTP) is widely used to assess the nonuse value of environmental goods or services. By investigating residents' WTP for environmental improvement with respect to mixed rare earth development in northern China, we can better promote environmental governance and provide a decision-making basis for the government to propose quantitative and feasible environmental governance policies. Northern Chinese mixed rare earths are located mainly in Baotou in the Inner Mongolia Autonomous Region. In this study, we conducted a questionnaire survey of residents around the Baotou rare earth mine regarding their basic personal situation, environmental cognition of rare earth development and WTP for environmental pollution control. Based on our findings, we used a double-bounded dichotomous choice (DC) model to calculate the average amount that residents are willing to pay for the treatment of environmental pollution, and we obtained the estimated mean value of their WTP. From February to April 2019, we obtained 568 valid questionnaires in the Hondlon District and Bayan Obo Mining District of Baotou. The analysis results show that the average value of the respondents’ WTP under the double-bounded DC model is 153.63 CNY per year and that the total value of the respondents’ WTP for environmental improvement with respect to rare earth development in Baotou is 442 million CNY per year. In addition, regarding the direct influencing factors of WTP, gender, the degree of cognition of environmental pollution, the degree of perception of bodily influence and the degree of expectations regarding environmental remediation have a significant positive correlation with WTP; moreover, the perception of bodily influence is the most important factor. Regarding the factors indirectly influencing WTP, age and place of residence affect the respondents' environmental cognition, which, in turn, affect the respondents’ WTP. Based on these influencing factors, the government can implement distinct environmental governance policies for different groups to effectively support the implementation of environmental policies.