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  • Uneven Distribution of Environmental Quality as a Source of Social Conflict

2008-2009 Niger Delta Oil Spills and Shell's Settlement

In 2008 and 2009, oil extraction by Royal Dutch Shell caused two major spills in Nigeria's Niger Delta, devastating local fisheries. The Ogoni people, who were harmed by this negative externality, took legal action against Shell's subsidiary in British courts. The case ended in 2015 with an out-of-court settlement where Shell paid compensation of £3,525 per person to 15,600 beneficiaries. While this amount was substantial, potentially exceeding a typical annual income, it only partially compensated the community for the environmental loss. According to the UN Environment Programme, full restoration of the area is estimated to cost $1 billion and take 30 years. The settlement compelled Shell to bear some of the financial cost of the environmental damage caused by its activities.

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