overview of economic valuation of coral reefs lauretta burke world resources institute (wri) mt....
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Overview of Economic Valuation of Coral Reefs
Lauretta Burke
World Resources Institute (WRI)
Mt. Irvine, Tobago
March 21-22, 2006
• economics
Beautiful
Valuable
Valuable
Valuable
Valuable
Valuable
Valuable
Valuable
Threatened
• Coastal development
• Sewage
• Dredging
Threatened
• Coastal development
• Sewage
• Dredging
• Runoff from construction and agriculture
Threatened
• Coastal development
• Sewage
• Dredging
• Runoff from construction and agriculture
• Marine-based threats
Threatened
• Overfishing
Threatened
• Tourism pressure
Threatened
• Coral Bleaching
• Coral Disease
• Ocean Acidification
Threats to Coral Reefs from Land-based Sources
• Sediment
Threats to Coral Reefs from Land-based Sources
• Sediment
• Nutrients
Global Analysis released in 1998 byWorld Resources Institute,in collaboration with ICLARM, WCMC and UNEP
The Reefs at Risk Index
LowLow MediumMedium HighHigh
• Global Reefs at Risk successful at raising awareness.
• Relatively coarse-scale (4km.)
• Global Reefs at Risk successful at raising awareness.
• Relatively coarse-scale (4km.)
Regional Reefs at Risk series• Higher resolution analysis – valuable
for management• More integration and improvement of
data
Regional Reefs at Risk series• Higher resolution analysis – valuable
for management• More integration and improvement of
data
Reefs at Risk in the Caribbean
• Collaboration of over twenty international and regional partners
• Uses Geographical Information System (GIS) to evaluate threat to coral reefs
Threats Evaluated in Caribbean:
• Coastal Development
• Watershed-based sources of sediment and pollution
• Marine-based threat
• Overfishing
• Dredging, land filling and reclamation
• Mining of sand and coral
• Runoff from construction
• Sewage discharge
• Impacts from tourism
Threat:Threat: Coastal Development Coastal Development
Coastal Development Analysis Method – Inferential Modeling
• Proxy Indicators
– Cities
– Ports
– Airports
– Dive tourism centers
– Coastal Population density
– Population Growth
– Tourism Growth
– Management Effectiveness of MPAs Low
Medium
High
Reefs Threatenedby Coastal Development
Reefs Classified
Finding: COASTAL DEVOPMENTthreatens an estimated one-third of Caribbean coral reefs.
Low
Medium
High
Estimated threat
Regional Summary
0%
20%
40%
60%
80%
100%
Coastaldevelopment
Sedimentation Marine-basedpollution
Overfishing Integratedthreat
Low Medium High Very High
Finding: INTEGRATED THREAT - nearly two-thirds of Caribbean coral reefs are threatened by human activities.
Low
Medium
High
Very High
Estimated threat
Finding: Degree of human pressure on coral reefs varies considerably across
the region.
0%
20%
40%
60%
80%
100%
Bahamian GreaterAntilles
EasternCaribbean
SouthernCaribbean
Southw esternCaribbean
Western Caribbean
Gulf of Mexico Florida
Low Medium High Very High
Country Summaries
• Note: 1km resolution analysis is coarse scale for small islands in Eastern Caribbean. Higher resolution possible with local data.
Finding: If current trends in coral reef degradation continue, coastal communities and national economies are poised to sustain substantial economic losses.
Valuation: Coral reef-associated fisheries
• Net annual revenues of over $300 million in 2000.
• Fisheries could decline by 30-45% by 2015
• Estimated loss of net revenues between US$95 million to US$140 million per year by 2015.
Valuation: Dive Tourism
• Net annual revenues of over $2 billion in 2000.
• Coral degradation could results in a 2-5% reduction in revenues by 2015
• Estimated loss of net revenues between US$100 million to US$300 million per year by 2015.
Valuation: Shoreline Protection
• Over 20% of Caribbean coastline protected by coral reefs.
• Estimated value of this service is between $700 million and $2.2 billion.
• Reef degradation could result in losses estimated between US$140 million to US$420 million per year by 2050.
Policy Recommendations
• Create the Will for Change
– Consider long-term economic value in
decision-making
• Build Capacity for Change
• Improve Management
• International Action Reefs at Risk in the Caribbean
http://reefsatrisk.wri.org
Demand for EV
EV Project Characteristics
1. Produce detailed EV estimates for 2 pilot areas (Tobago and St. Lucia)
2. Result in estimates of likely economic loss due to coral reef degradation
3. Develop a method that is efficient, inexpensive and replicable
4. Rely predominantly on existing, available data
5. Produce a tool for application of Econ Valuation to policy questions.
Ecosystem Services
Ecosystem goods (such as food) and services (such as waste assimilation) represent the benefits human populations derive, directly or indirectly, from ecosystems.
Ecosystem ServicesServices provided by ecosystems
Provisioning Services
products obtained from ecosystems-
Regulating Services
Benefits obtained from regulation of
ecosystem processes
Cultural Services
Nonmaterial benefits obtained from ecosystems
Supporting Services
-Services necessary for the production of all other ecosystem services-
Source: adapted from MEA (2005)
Ecosystem Services from Coral Reefs
Provisioning Services
-food – fish and shellfish
-genetic resources
-natural medicines and pharmaceuticals
-ornamental resources
- building matrials
Regulating Services
- carbon storage / climate regulation
-erosion control
-storm protection
Cultural Services
-spiritual and religious values
-knowledge systems/ educational values
-inspiration-aesthetic values-social traditions
-sense of place
-recreation and ecotourism
Supporting Services-sand formation -primary production
Purpose of Economic Valuation of Ecosystem Goods and Services
• The purpose of economic valuation is to obtain reliable, objective information on the benefits and costs of conserving ecosystems so as to inform decision-making.
Economic Valuation Uses
• Evaluate Values
• Competing Demands
• Tradeoffs
• Externalities
• Beneficiaries, costs and benefits
Value (per hectare)
0
$2000
$4000
Mangrove Shrimp Farm
Coastal Protection (~$3,840)
Timber and Non-timber products ($90)
Fishery nursery ($70)
Net: $2,000 (Gross $17,900 less costs of $15,900)
Pollution Costs (-$230)
Less subsidies (-$1,700)
Restoration (-$8,240)
Private Net Present Value per hectare
Mangrove: $91
Shrimp Farm: $2000
Public Net Present Value per hectare
Mangrove: $1,000 to $3,600
Shrimp Farm: $-5,400 to $200
Source: Millennium Ecosystem Assessment; Sathirathai and Barbier 2001
Taking nature’s value into account: mangrove conversion
Total Economic Valuation
Total Economic Value (TEV)
Use Value Non-use Value
Direct usevalue
Indirect usevalue
Option value
Existence Value
-consumptive -non-consumptive
-bequest value
Economic Valuation Methods
• Effect on Productivity
• Travel Cost
• Hedonic Pricing
• Replacement Cost
• Avoided Damages
• Contingent Valuation
Other key terms
• Net Benefits
• Consumer Surplus
Categories of Economic Valuation
1. determine the value of the total flow of benefits from an ecosystem (e.g., TEV)
2. determine the net benefits of interventions that alter ecosystem conditions (e.g., evaluating the value of investing in an MPA)
3. examine how the costs and benefits of an ecosystem are distributed (e.g., identifying beneficiaries)
4. identify potential financing sources for conservation.