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Economic Valuation of Goods and Services Derived from Coral Reefs. Results from the Folkestone Park & Marine Reserve Reeffix Exercise. Table of Contents. Background Project Background Overview of Economic Valuation Site Background Three Methodologies Coral Reef Valuation: Fisheries - PowerPoint PPT Presentation
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Economic Valuation of Goods and Services Derived from Coral Reefs
Results from the Folkestone Park & Marine Reserve
Reeffix Exercise
Table of Contents
• Background– Project Background– Overview of Economic Valuation– Site Background
• Three Methodologies– Coral Reef Valuation: Fisheries– Coral Reef Valuation: Tourism & Recreation– Value Transfer Methodology
• Discussion & Way Forward
Project Background
• Inter-American Biodiversity Information Network (IABIN)– to promote sustainable development and the
conservation and sustainable use of biological diversity in the Americas
• ReefFix – an ICZM tool that trains participating countries in
ecosystem valuation methodologies and management techniques to conserve marine ecosystems and the associated watersheds through integrated park management
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Overview of Economic Valuation Techniques
• Economic valuation assesses the goods and services provided by an ecosystem which contribute to the wellbeing of human life (financial, social, biophysical, etc)
• By attributing a dollar value to natural resources, the benefits of conservation and some of the unforeseen “costs” of mismanagement are realised
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Overview of Economic Valuation Techniques
Coral Reefs
Provisioning Services
Food
Medicine & Pharmaceuticals
Ornamental Resources
Building Materials
Erosion Control
Shoreline Protection
Regulating Services
Cultural Services
Spiritual Values
Knowledge Systems and Educational
Values
Recreation & Ecotourism
Supporting ServicesSand Production
Primary Production WRI 2009
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Overview of Economic Valuation Techniques
• Much of the Caribbean tourism plant exists due to the presence of coral reefs (and associated ecosystems)
• Thus the profitability of the tourism industry is impacted by coral reef health however this is not taken into account when major policy decisions occur
• By assessing the ecosystem services, the tangible benefits provided by coral reefs to sustain and improve human life can be quantified.
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Overview of Economic Valuation Techniques
Total Economic Value
Non-Use Value
Existence Value
Future Use(option/bequest value)
Indirect Use(shoreline protection)
Direct Use
Non-Consumptive Use(tourism & recreation)
Consumptive Use(food)
Use Value
WRI 2009
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Overview of Economic Valuation Techniques
Total Economic Value
Non-Use Value
Existence Value
Future Use(option/bequest value)
Indirect Use(shoreline protection)
Use Value
Direct Use
Non-Consumptive Use(tourism & recreation)
Consumptive Use(food)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI 2009
Overview of Economic Valuation Techniques
Direct Use
Non-Consumptive Use(tourism & recreation)
Consumptive Use(food)
Fishing
Background WRI Fisheries WRI Tourism Value Transfer Discussion
RecreationTourism
Site Background• Folkestone Park and Marine
Reserve • Reserve Area: 2.1km2
• 11% of West coastline• Established in 1981• No-take zone• Management under the National
Conservation Commission• Heavy recreational use:
>100,000 annual visitors• Coastal Habitat: mangroves and 3
types of reefs (patch, fringing, bank)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Nicholls 2008
Holetown Lagoon
Site Background
West Coast Reefs significantly impacted by:•Land Based Pollution•Coastal Development•Physical Damage•Overfishing•Disease
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Site Background
Significant declines on all reefs along the coasts, pollution appears to be the main factor
• some Folkestone reefs lost more than half their coral cover in the past 20 years
•Doubling of algae cover (indicator of pollution)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
(Brian Zane)Background WRI Fisheries WRI Tourism Value Transfer Discussion
Value Transfer: Spatial Distribution of Ecosystem Service Values
• Use available Satellite imagery (Google EarthTM)
• Identify, define and measure area of significant land cover types
• Using values from heavily researched study site, apply values to current site by unit area (hectares)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI Coral Reef Valuation Methods: Fisheries & Tourism
DATA COLLECTION• Utilised data available from:
• FPMR Staff• BHTA• Fisheries Division• Previous Studies• Expert Opinion
DATA INPUT• values inputted into tool – Estimate of Total
Economic Impact is generatedDATA VALIDATION• Values reviewed and adjusted with new data• Application of scenarios
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Sensitivity Analysis
Percent of gross profit spent on non-labour expenses
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Economic Valuation of Coral Reefs from Tourist Accomodation: Current and Projected Revenues
and Transfers
$10,816,364$6,203,651
$28,425,496
$28,425,496
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
Current Average Projected Average
$US
TransfersWithin theEconomy
Net RevenueRemaining inCountry
25% 45%
World Resource Institute Coral Reef Valuation Tool
Fisheries Valuation
WRI Coral Reef Valuation- Fisheries
Total Estimated Landings (weight x price)- cost of fishing (wages, operating costs)
Commercial Fishing
Total Estimated Processing Revenue(processing, cleaning)- cost of operations (wages, operating costs)
Fish Processing
Local FishingFishing for (sale, enjoyment, consumption)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
MultipliersAdditional expenditures (re-sale only)
TOTAL ECONOMIC IMPACT OF
FISHING
WRI Coral Reef Valuation- Fisheries
• Case study assumes Folkestone reefs provide supporting services to target species directly (habitat) or indirectly (prey habitat) – + 20% landings used
• Quality data was limited – Aggregated landings data from separate sources
(overlap, gaps unknown)– No data available on local fishing ([occasional] sale,
consumption, enjoyment)– Prices vary depending on many factors: seller,
customer, supply (average values used)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI Coral Reef Valuation- Commercial Fisheries Results
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Flyingfish
Mahon et al. 2007
WRI Coral Reef Valuation- Fisheries
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Category Low Value
(US Dollars) High Value
(US Dollars)
1. Commercial Fisheries
Gross Revenue $104,112 $156,168
Net Revenue $67,673 $101,509
Transfers to the economy (Wages) $26,028 $39,042
Total Commercial Fishing Value $93,701 $140,552
2. Fish Processing and Cleaning $8,135 $12,202
3. Local Fishing $151,829 $190,303
4. Multipliers $232,170 $348,256
TOTAL DIRECT ECONOMIC IMPACTS OF FISHING
$485,835 $691,313
World Resource Institute: Coral Reef Valuation Tool
Tourism & Recreation Valuation
WRI Coral Reef Valuation- Tourism & Recreation
Total Estimated Revenue (occupancy rates, room rates, # rooms, % visitors using reef)
- labour, operating costs, tax rates, service charges, leakages
Accommodation
Total Estimated Revenue (prices, # snorkelers, equipment rentals, # all inclusive trips)
- labour, operating costs, taxes, service charges
Snorkeling and Boating
Total Estimated Diving Revenue (prices, # divers, # certifications, equipment, all inclusive trips)
- labour, operating costs, taxes, service charges
Diving
TOTAL ECONOMIC IMPACT OF TOURISM &
RECREATION
Local UseBeach use, reef-associated use
MPA RevenueN/A
Other Revenuerentals, souvenirs
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI Coral Reef Valuation- Tourism and Recreation
Quality data was limited– occupancy rates were rough estimates based on
averages of the class of accommodation (A-class, luxury, etc)
– No value of total beach use – Difficult to isolate benefits from certain recreational
user– No data available from number of resource users
from all-inclusive properties – other recreational activities not accounted for (e.g.
waterskiing)– No data on local use
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI Coral Reef Valuation- Accommodation
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Category Low Value
(US Dollars) High Value
(US Dollars)
Percent of accommodation revenue that is reef-related 59% 85%
Reef-associated Gross Revenue $40,145,516 $89,803,161
Reef-associated Net Revenue (Gross minus costs) $17,993,176 $42,115,939
Net revenue remaining in the country (net revenue - leakages)
$6,657,475 $15,582,897
Transfers to the economy (taxes, via wages and service charges)
$19,141,427 $40,951,985
Total Accommodation Value $25,798,902 $56,534,883
WRI Coral Reef Valuation- Recreation
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Category Low Value
(US Dollars) High Value
(US Dollars)
Diving
Gross Revenue $765,000 $827,000
Net Revenue (Gross minus costs) $191,250 $206,750
Transfers to the economy (taxes, via wages and service charges)
$401,625 $434,175
Total Diving Value $592,875 $640,925
Snorkeling
Gross Revenue $3,482,500 $10,596,000
Net Revenue (Gross minus costs) $870,625 $2,649,000
Transfers to the economy (taxes, via wages and service charges)
$1,915,375 $5,827,800
Total Snorkeling Value $2,786,000 $8,476,800
WRI Coral Reef Valuation- Tourism and Recreation Totals
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Category Low Value
(US Dollars) High Value
(US Dollars)
1. Accommodation $25,798,902 $56,534,883
2. Diving $592,875 $640,925
3. Snorkeling and Boating $2,786,000 $8,476,800
4. Marine Parks - -
5. Other Direct Expenditures (Vending, food sales) - Total Value
$33,131 $33,131
TOTAL DIRECT AND INDIRECT IMPACTS $29,210,908 $65,685,739
Local Use of Coralline Beaches $112,050 $303,750
Local Use from reef recreation $5,603 $60,750
TOTAL ECONOMIC IMPACT OF REEF-RELATED TOURISM AND RECREATION
$29,328,561 $66,050,239
WRI Coral Reef Valuation- Government Revenue
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Total ~ US$ 6 million
Accommodation
Recreation (Snorkelling &
Diving)
Other (FPMR rentals,
souvenirs,etc)
WRI Coral Reef Valuation- Results
$29,328,561
US$485,835 - US$691,313
Fishing
Tourism Recreation
US$29,328,561 – US66,050,239
WRI Coral Reef Valuation- Total
Accommodation85.7%
Snorkeling and Boating
9%
Fishing1.2%
Other (FPMR rentals,
souvenirs,etc)0.1%
Diving1.3%
WRI Coral Reef Valuation Hypothetical Reserve User Fee
www.geocaching.com/trackdetails.aspx?id=126781
DivingSnorkeling
US$34,000 – US$70,000
US$5.00 mandatory
fee
US$10.00 mandatory
fee
US$3.00 voluntary
fee(1 in 3)
US$5.00 voluntary
fee(1 in 2)
US$116,000 – US$883,000
US$150,000 – US$953,000
Value Transfer: Spatial Distribution of Ecosystem Service Values
Value Transfer Methodology
Identify Features
Import & Re-Project Features
Outline Features
Calculate Areas & Apply Conversion Factors for Associated Values
Land CoverAve.$/ha/
yrLower Bound
Upper Bound Area (ha)
Total ESV Flow (US Dollars)
Disturbed and Urban Beach $0Beach 88,000 77,000 99,000 8.71788699 $767,174Beach near dwelling 117000 140,000 94000 0 $0Coastal & Riperian Forest 1826 5542 13,000 0 $0Freshwater Stream 1595 1231 939 0 $0Freshwater Herbaceous Swamp 72,787 32000 96000 5.362221 $390,300Grassland/pasture 118 118 118 0 $0Near shore aquatic habitat 16,283 4630 27935 365.2 $5,946,552Coral Reef environ 100,000 1335.694061 $133,569,406Mangrove 37500 4.339961 $162,749Mangrove 500000 200000 900000 0 $0Mangrove restoration 225 216000 0 $0TOTAL $140,836,180
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Value Transfer Methodology
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Ecosystem Type $/ha/yr Total
Hectares Total Contribution
(US Dollars)
Beach Near Dwelling $117,000 2.5 $295,980
Freshwater Herbaceous Swamp
$72,787 0.2 $17,115
Coral Reef Environ $100,000 32.3 $3,226,522
Mangrove $37,500 0.3 $11,396
TOTAL FPMR ECOSYSTEM SERVICE VALUE
$3,551,014
Results Comparison
Background WRI Fisheries WRI Tourism Value Transfer Discussion
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
WRI Coral Reef ValuationTotal
Value Transfer Methodology
Evaluation Methodology
US
Dol
lars
ValueTransfer
Fisheries
Tourism
WRI Coral Reef Valuation- Strengths • Facilities dynamic data (allows updating and expansion)• Detailed and allows for categorisation of results• When new data is added, outputs of results & corrections are generated instantaneously • Sensitivity analysis as response to potential errors in data
• Accounts for often overlooked value of local use • Some level of adaptability
– can be applied to sites where data availability is basic or exhaustive• More data improves applicability of results (site-specific output)• Potential for future development: inclusion of other values such as shoreline protection
Background WRI Fisheries WRI Tourism Value Transfer Discussion
WRI Coral Reef Valuation- Weaknesses
• Data gaps increases reliance on expert opinion• Requires full cooperation of relevant agencies
and is dependent on the quality of their data• Errors are magnified with some calculations (e.g.
fisher surveys)• Can encourage overconfidence in results if
warnings about data quality is ignored.• Currently no valuation of economic impact of
cruise ships and shoreline protection• Results are not visual and not as easy to
communicate as the Value Transfer method
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Value Transfer Methodology Strengths
• Availability of data source (Google EarthTM)
• Rapid results• No extensive data collection
required from multiple agencies
• Results are visual (maps) and can be easily communicated
• Resulting dataset has wide applications for management (e.g. changes in forested area and associated value over time)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Value Transfer Methodology Weaknesses
• Results are static• Dependent on quality of
aerial/satellite data (if absent requires intensive ground-truthing)
• Requires knowledge of mapping software (not ubiquitous)
• Economic values not developed in the Caribbean
• Some values (e.g. coral reefs) vary greatly by site and use of recommended values can be misleading.
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Other Case Study Sites
Value Transfer Methodology Pros• Produces both graphic and numeric results• Low dependence on external/hard to locate
data sourcesCons• Challenging to develop local values, which are
critical to the accuracy and validity of the tool• Some values developed in NE United States
Montego Bay Marine Park (Brian Zane)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Other Case Study Sites
WRI Coral Reef Valuation
Strengths• Highly detailed results• Triangulates ESV of coral reefs• Tools – MS Excel
Weaknesses• Data - Heavily dependent upon external data sources• Aspects not yet developed (Coastal Protection)• Dependencies/Assumptions (built into formulas)• Complexity reduces probability of widespread adoption
Montego Bay Marine Park (Brian Zane)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Other Case Study Sites
Background WRI Fisheries WRI Tourism Value Transfer Discussion
0
100
200
300
400
500
600
700
800
900
1000
SVG Jamaica DRepublic
Bahamas Grenada Barbados St. Lucia
US$
Mill
ion
WRI Coral ReefValuation TotalValue TransferMethodology
Other Case Study Sites(excluding Grenada Value Transfer)
Background WRI Fisheries WRI Tourism Value Transfer Discussion
0
20
40
60
80
100
120
140
160
SVG Jamaica DRepublic
Bahamas Grenada Barbados St. Lucia
US$
Mill
ion
WRI Coral ReefValuation TotalValue TransferMethodology
Other Case Study SitesArea of Study Sites
Background WRI Fisheries WRI Tourism Value Transfer Discussion
0100002000030000400005000060000700008000090000
Hec
tare
s
Site Area
Further Research Options • Fill necessary data gaps to reduce errors from
assumption (e.g. local recreation use and local fishing) • More accurate values for snorkelling and diving usage • Quantification and inclusion of other major revenue
generating activities, namely waterskiing and jet ski rentals
• Assessment of spear fishing catch and effort• Assessment of coastal protection value• Quantifying reefs by type (fringing, bank reefs)• Expansion to West Coast or entire island• Compare resource value with cost of management• Willingness to pay study on user fees for the Folkestone
reserve
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Conclusion • Folkestone coral reefs and
associated ecosystems likely contribute over US$29 - US$66 million annually to the economy of Barbados (based on current market values)
• Likely a gross undervaluation as most tourists use the beach and WRI values do not count shoreline protection (existence , bequest values not included but important)
• Shoreline protection may increase the value to hundreds of millions due to land and property values in the area
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Conclusion • Many assumptions in fisheries model, however
variations not likely significant (pelagics ~ 20% of revenue)
• Comparison between methods: Large variation in the results between methods likely due to the low value assigned for coral reefs in the Value Transfer Methodology
• Comparison to other sites: low values likely due to size of study area
• Results not entirely comprehensive but reveals a portion of the value of coral reefs to the economy.
• Able to highlight the potential loss to the economy if the already threatened reefs not protected
Background WRI Fisheries WRI Tourism Value Transfer Discussion
Questions?