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The source document for this Digest states:
The Chernobyl nuclear accident, and government policies adopted to cope with its consequences, imposed huge costs on the Soviet Union and three successor countries, Belarus, the Russian Federation and Ukraine. Although these three countries bore the brunt of the impact, given the spread of radiation outside the borders of the Soviet Union, other countries (in Scandinavia, for instance) sustained economic losses as well.
The costs of the Chernobyl nuclear accident can only be calculated with a high degree of estimation, given the non-market conditions prevailing at the time of the disaster and the high inflation and volatile exchange rates of the transition period that followed the break-up of the Soviet Union in 1991. However, the magnitude of the impact is clear from a variety of government estimates from the 1990s, which put the cost of the accident, over two decades, at hundreds of billions of dollars.6
[6 Belarus, for instance, has estimated the losses over 30 years at US $235 billion.]
The scale of the burden is clear from the wide range of costs incurred, both direct and indirect:
— Direct damage caused by the accident;
— Expenditures related to:
- Actions to seal off the reactor and mitigate the consequences in the exclusion zone;
- Resettlement of people and construction of new housing and infrastructure to accommodate them;
- Social protection and health care provided to the affected population;
- Research on environment, health and production of clean food;
- Radiation monitoring of the environment; and
- Radioecological improvement of settlements and disposal of radioactive waste.
— Indirect losses relating to the opportunity cost of removing agricultural land and forests from use and the closure of agricultural and industrial facilities; and
— Opportunity costs, including the additional costs of energy resulting from the loss of power from the Chernobyl and the cancellation of Belarus’s nuclear power programme.
Coping with the impact of the disaster has placed a huge burden on national budgets. In Ukraine, 5–7 percent of government spending each year is still devoted to Chernobyl-related benefits and programmes. In Belarus, government spending on Chernobyl amounted to 22.3 percent of the national budget in 1991, declining gradually to 6.1 percent in 2002. Total spending by Belarus on Chernobyl between 1991 and 2003 was more than US $ 13 billion.
This massive expenditure has created an unsustainable fiscal burden, particularly for Belarus and Ukraine. Although capital-intensive spending on resettlement programmes has been curtailed or concluded, large sums continue to be paid out in the form of social benefits for as many as 7 million recipients in the three countries. With limited resources, governments thus face the task of streamlining Chernobyl programmes to provide more focused and targeted assistance, with an eye to helping those groups that are most at risk from health hazards or socio-economic deprivation.
Source & ©: UN Chernobyl Forum
What was the economic cost of the Chernobyl nuclear disaster?, p.32-34
The source document for this Digest states:
The affected territories are mostly rural. The main source of income before the accident was agriculture, both in the form of large collective farms (in the Soviet period), which provided wages and many social benefits, and small individual plots, which were cultivated for household consumption and local sale. Industry was mainly fairly unsophisticated, concentrated in food processing or wood products. This profile has remained largely the same after the accident, though the three countries have taken different approaches to the legacy of collective farms.
The agricultural sector was the area of the economy worst hit by the effects of the accident. A total of 784 320 hectares of agricultural land was removed from service in the three countries, and timber production was halted for a total of 694 200 hectares of forest. Restrictions on agricultural production crippled the market for foodstuffs and other products from the affected areas. "Clean food" production has remained possible in many areas thanks to remediation efforts, but this has entailed higher costs in the form of fertilizers, additives and special cultivation processes.
Even where remediation measures have made farming safe, the stigma of Chernobyl has caused some consumers to reject products from affected areas. Food processing, which had been the mainstay of industry in much of the region, has been particularly hard-hit by this “branding” issue. Revenues from agricultural activities have fallen, certain types of production have declined, and some facilities have closed altogether. In Belarus, where some of the best arable land was removed from production, the impact on agriculture has affected the whole economy.
Government policies aimed at protecting the population from radiation exposure (both through resettlement and through limitations on agricultural production) could not help but have a negative impact on the economy of the affected regions, particularly the rural economy. However, it is crucial to note that the region also faced great economic turmoil in the 1990s owing to factors completely unrelated to radiation. The disruption of trade accompanying the collapse of the Soviet Union, the introduction of market mechanisms, prolonged recessionary trends, and Russia’s rouble crisis of 1998 all combined to undercut living standards, heighten unemployment and deepen poverty. Agricultural regions, whether contaminated by radionuclides or not, were particularly vulnerable to these threats, although Chernobyl-affected regions proved particularly susceptible to the drastic changes of the 1990s.
Wages tend to be lower and unemployment higher in the affected areas than they are elsewhere. This is in part the result of the accident and its aftermath, which forced the closure of many businesses, imposed limitations on agricultural production, added costs to product manufacture (particularly the need for constant dosimetric monitoring), and hurt marketing efforts. But equally important is the fact that farm workers in all three countries are among the lowest-paid categories of employees. Employment options outside of agriculture are also limited in Chernobyl-affected regions, but, again, the causes are as much a consequence of generic factors as of Chernobyl specifics. The proportion of small and medium-sized enterprises (SMEs) is far lower in the affected regions than elsewhere. This is partly because many skilled and educated workers, especially the younger ones, have left the region, and partly because — in all three countries — the general business environment discourages entrepreneurship. Private investment is also low, in part owing to image problems, in part to unfavourable conditions for business nationwide.
The result of these trends is that the affected regions face a higher risk of poverty than elsewhere. In seeking solutions to the region’s economic malaise, it is important to address the generic issues (improving the business climate, encouraging the development of SMEs and the creation of jobs outside agriculture, and eliminating the barriers to profitable land use and efficient agricultural production) as well as addressing the issues of radioactive contamination.
Source & ©: UN Chernobyl Forum
What were the main consequences of Chernobyl for the local economy?, p.34
The source document for this Digest states:
Since the Chernobyl accident, more than 330 000 people have been relocated away from the more affected areas. 116 000 of them were evacuated immediately after the accident, whereas a larger number were resettled several years later, when the benefits of relocation were less evident.
Although resettlement reduced the population’s radiation doses, it was for many a deeply traumatic experience. Even when resettlers were compensated for their losses, offered free houses and given a choice of resettlement location, many retained a deep sense of injustice about the process. Many are unemployed and believe they are without a place in society and have little control over their own lives. Some older resettlers may never adjust.
Opinion polls suggest that many resettlers wished to return to their native villages. Paradoxically, people who remained in their villages (and even more so the “ self-settlers,” those who were evacuated and then returned to their homes despite restrictions) have coped better psychologically with the accident’s aftermath than have those who were resettled to less affected areas.
Communities in the affected areas suffer from a highly distorted demographic structure. As a result of resettlement and voluntary migration, the percentage of elderly individuals in affected areas is abnormally high. In some districts, the population of pensioners equals or already exceeds the working-age population. In fact, the more contaminated a region, the older its population. A large proportion of skilled, educated and entrepreneurial people have also left the region, hampering the chances for economic recovery and raising the risk of poverty.
The departure of young people has also had psychological effects. An aging population naturally means that the number of deaths exceeds the number of births, yet this fact has encouraged the belief that the areas concerned were dangerous places to live. Schools, hospitals, agricultural cooperatives, utility companies and many other organisations are short of qualified specialists, even when pay is relatively high, so the delivery of social services is also threatened.
Source & ©: UN Chernobyl Forum
What impact did Chernobyl and its aftermath have on local communities?, p.35-36
The source document for this Digest states:
As noted in the Chernobyl Forum report on Health, “the mental health impact of Chernobyl is the largest public health problem unleashed by the accident to date.” Psychological distress arising from the accident and its aftermath has had a profound impact on individual and community behaviour. Populations in the affected areas exhibit strongly negative attitudes in self-assessments of health and wellbeing and a strong sense of lack of control over their own lives. Associated with these perceptions is an exaggerated sense of the dangers to health of exposure to radiation. The affected populations exhibit a widespread belief that exposed people are in some way condemned to a shorter life expectancy. Such fatalism is also linked to a loss of initiative to solve the problems of sustaining an income and to dependency on assistance from the state.
Anxiety over the effects of radiation on health shows no sign of diminishing. Indeed, it may even be spreading beyond the affected areas into a wide section of the population. Parents may be transferring their anxiety to their children through example and excessively protective care.
Yet while attributing a wide variety of medical complaints to Chernobyl, many residents of the affected areas neglect the role of personal behaviour in maintaining health. This applies not only to radiation risks such as the consumption of mushrooms and berries from contaminated forests, but also to areas where individual behaviour is decisive, such as misuse of alcohol and tobacco.
In this context, it is crucial to note that adult mortality has been rising alarmingly across the former Soviet Union for several decades. Life expectancy has declined precipitously, particularly for men, and in the Russian Federation stood at an average of 65 in 2003 (just 59 years for men). The main causes of death in the Chernobyl-affected region are the same as those nationwide cardiovascular diseases, injuries and poisonings — rather than any radiation-related illnesses. The most pressing health concerns for the affected areas thus lie in poor diet and lifestyle factors such as alcohol and tobacco use, as well as poverty and limited access to health care. These threats may be even more acute in Chernobyl-affected areas, owing to the impact of low incomes on diet, the high share of socially deprived families, and shortages of trained medical staff.
Added to exaggerated or misplaced health fears, a sense of victimization and dependency created by government social protection policies is widespread in the affected areas. The extensive system of Chernobyl-related benefits (see below) has created expectations of long term direct financial support and entitlement to privileges, and has undermined the capacity of the individuals and communities concerned to tackle their own economic and social problems. The dependency culture that has developed over the past two decades is a major barrier to the region’s recovery. These factors underscore the importance of measures aimed at giving the individuals and communities concerned control over their own futures — an approach that is both more efficient in use of scarce resources and crucial to mitigating the accident’s psychological and social impact.
Source & ©: UN Chernobyl Forum
The Socio-economic Impact of the Chernobyl Nuclear Accident,
What has been the main impact on individuals?, p.36-37
The source document for this Digest states:
The Soviet Union undertook far-reaching measures in response to the Chernobyl nuclear accident. The government adopted a very low threshold with regard to the level of radioactive contamination that was considered acceptable for inhabited areas. The same caution applied to the zoning principles that were defined by the Soviet government in the wake of the accident, and that were subsequently reinforced by national legislation after the dissolution of the Soviet Union in 1991. These principles determined where people were permitted to live and imposed limitations on the types of activities that might be pursued (including farming and infrastructure investment). The zones were created based on very cautious standards for radiation risk and using measurements made very soon after the accident occurred.
In the wake of the accident, rehabilitation actions were undertaken on a huge scale (see Table). To accommodate the resettled populations, large investments were made in the construction of housing, schools, and hospitals, and also in physical infrastructure such as roads, water and electricity supply and sewerage. Because of the risk that was believed to be involved in burning locally produced wood and peat, many villages were provided with access to gas supplies for heating and cooking. This involved laying down a total of 8,980 kilometres of gas pipeline in the three countries in the fifteen years following the accident. Large sums were also spent to develop methods to cultivate “clean food” in the less contaminated areas where farming was allowed.
Table: Chernobyl-related construction, 1986–2000
An extensive benefits system was established for the populations that were seen to have suffered as a result of the Chernobyl accident, either through exposure to radiation or resettlement. Benefits were offered to very broad categories of Chernobyl victims, defined as people who:
- Fell ill with radiation sickness or became invalids due to the consequences of the accident;
- Took part in clean-up activities at the Chernobyl site and in the evacuation zones in 1986–1987 (known colloquially as “liquidators”);
- Participated in clean-up activities in 1988–1989;
- Continued to live in areas designated as contaminated; or,
- Were evacuated, or resettled, or left the affected areas at their own initiative.
Some 7 million people are now receiving (or are at least entitled to receive) special allowances, pensions, and health care privileges as a result of being categorized as in some way affected by Chernobyl. Significantly, benefits include measures that have no identifiable relation to the impact of radiation. Moreover, the benefits confer certain advantages and privileges even to those citizens who had been exposed to low levels of radiation or who continue to live in only mildly affected locations, where the level of radiation is close to natural background levels in some other European countries. In effect, these benefits compensate risk rather than actual injury.
By the late 1990s, Belarusian and Russian legislation provided more than seventy, and Ukrainian legislation more than fifty, different privileges and benefits for Chernobyl victims, depending on factors such as the degree of invalidity and the level of contamination. The system also guaranteed allowances, some of which were paid in cash, while others took the form of, for example, free meals for schoolchildren. In addition, the authorities undertook to finance health holidays in sanatoria and summer camps for invalids, liquidators, people who continued to live in highly affected areas, children and adolescents. In Belarus, almost 500 000 people, including 400 000 children, had the right to free holidays in the early 2000s. In Ukraine, the government funded 400 000–5 00 000 health holiday months per year between 1994 and 2000.
These government efforts were successful in protecting the overwhelming majority of the population from unacceptably high doses of radiation. They also stimulated the development of agricultural and food-processing techniques that reduced the radionuclide level in food. In the absence of alternative sources of income, government-provided Chernobyl benefits became the key to survival for many whose livelihoods were wiped out by the accident. And the health care system detected and treated thousands of cases of thyroid cancer that developed among children who were exposed to radioactive iodine in the weeks following the accident.
Alongside these successes, however, government efforts undertaken in response to the accident contained the seeds of later problems. First, the zones delineated to restrict the areas where people could live and work soon proved unwieldy. As the level of radiation declined over time, and knowledge on the nature of the risks posed by radiation became more sophisticated, the continuation of limitations on commercial activities and infrastructure development in the less affected areas became more of a burden than a safeguard. Zoning adjustments have been made in some places, but more needs to be done in light of new research.
Second, the massive investment programmes initiated to serve resettlement communities proved unsustainable, particularly under market economic conditions. Funding for Chernobyl programmes has declined steadily over time, leaving many projects half completed and thousands of half-built houses and public facilities standing abandoned in resettlement villages.
Third, the Soviet government delayed any public announcement that the accident had occurred. Information provision was selective and restrictive, particularly in the immediate aftermath of the accident. This approach left a legacy of mistrust surrounding official statements on radiation, and this has hindered efforts to provide reliable information to the public in the following decades.
Fourth, wide applicability meant that Chernobyl benefits mushroomed into an unsustainable fiscal burden. Somewhat counter-intuitively, the number of people claiming Chernobyl-related benefits soared over time, rather than declining. As the economic crisis of the 1990s deepened, registration as a victim of Chernobyl became for many the only means to an income and to vital aspects of health provision, including medicines. According to Ukrainian figures, the number of people designated as permanently disabled by the Chernobyl accident (and their children) increased from 200 in 1991 to 64 500 in 1997 and 91 219 in 2001.
In conditions of high inflation and increasing budget constraints, moreover, the value of the payments fell steadily in the early 1990s. In many cases, Chernobyl payments became meaningless in terms of their contribution to family incomes, but, given the large number of eligible people, remained a major burden on the state budget. Especially for Belarus and Ukraine, Chernobyl benefits drained resources away from other areas of public spending. By the late 1990s, however, any attempt to scale back benefits or explore alternative strategies to target high-risk groups was politically difficult, given the likelihood of protests from current recipients.
Despite this constraint, some changes to Chernobyl legislation have already been made to improve policy efficiency. In Belarus, for example, individual benefits are no longer paid to the least-affected categories of the population, and the meagre sums paid out as compensation to individual families living in the contaminated areas are now accumulated at the regional level and used by local authorities to improve medical and communal services for the affected population.
The enormous scale of the effort currently being made by the three governments means that even small improvements in efficiency can significantly increase the resources available for those in need. Governments realize that the costs and benefits of particular interventions need to be assessed more rigorously, and resources targeted more carefully to those facing true need. Resources now committed to Chernobyl health care benefits should be targeted to high-risk groups (e.g., liquidators) and those with demonstrated health conditions, or be shifted into a mainstream health care system that promotes preventive medicine and improved primary care. Similarly, Chernobyl benefits that in practice meet socio-economic needs should be folded into a nationwide means-tested social protection programme that targets the truly needy. Such changes take political courage, as reallocating resources faces strong resistance from vested interests.
Source & ©: UN Chernobyl Forum
How have governments responded to the challenges of Chernobyl?, p.37-41
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