The Environmental Disaster at the Fundão Dam in Mariana-MG and its Economic and Social Effects in Minas Gerais and Espírito Santo

Abstract

The environmental disaster that started in November 2015 in Mariana (MG) caused a wave of tailings that ran through the courses of the Santarém stream, the Gualaxo Norte and Carmo rivers to the Doce river, continuing until its mouth in Linhares (ES), leaving part of the tailings in the reservoir of Risoleta Neves Hydroelectric Plant and in the stretch between Candonga and the Baguari Hydroelectric Plant. This research analyzes the economic and social impacts of this disaster through the model of differences in differences with PSM. The results showed that, in the short term, there was a negative impact on school flow measures (pass/fail) and there is also evidence of a negative impact on the GDP of the affected municipalities. On the other hand, there is no significant difference in hospitalizations, however, due to the toxic character of the mud, damage to health can become evident in the long run.