Abstract:
Petroleum resources have been an important part of the Nigerian economy since it was discovered and has contributed greatly to the country’s foreign exchange earnings. Its exploration and exploitation activities have had severe environment consequences as a result of oil spillages. This study examined the assessment of compensation for oil spill damages in Uzere and Emadadja communities in Delta State, using the contingent valuation method to explore individuals’ willingness to pay (WTP) for a change in environmental goods and services to detects the cost and benefits.
Copies of 330 questionnaires were administered on the residents of the communities, out of which 250 of the questionnaire were returned for analysis representing 76% response rate. The data collected were analyzed using the frequency distribution, and binary logistic regression model based on Contingent Valuation Model. The frequency distribution was used to determine the socio – economic characteristics of the residents while the binary logistics model based on Contingent Valuation Model was used to calculate the total benefit and explain the socio – economic factors influencing the communities’ willingness to pay (WTP) for environmental resources. The results showed that majority of the respondents were willing to pay for environmental protection. The mean WTP was N948,018 per respondent. Also, religion (0.951), household size (3.103) and nature of job (5.715) were the important socio – economic factors that influenced the respondents willingness to pay (WTP) for environmental resources protection. This study concludes that contingent valuation model can be the most promising method of estimating non-marketed good/benefits. Since nonmarket environmental value of environmental or natural resources has been included as the main part of total economic component in achieving fair and adequate compensation, the discontent expressed by the oil producing communities with compensation paid would be reduced and this would ameliorate the crisis in the Delta state and by extension the Niger Delta region due to oil spill damages on the environment. The study therefore recommends that, in order to reduce dissatisfaction of the people of Delta State, government and oil companies should as a matter of respecting the fundamental rights of host communities of oil exploration and exploitation, ensure that victims of oil spillage damages be involved in the compensation assessment hence protecting environmental resources of its citizens.
