Economic Valuation of Goods
and Services Derived from Coral Reefs
Results from the
Soufriere, St. Lucia Reeffix Exercise
Table of Contents
•
•
•
•
•
Project Background
Overview of Economic Valuation Techniques
Site Background
Methodology
Results
– Coral Reef Valuation- Tourism & Recreation
– Coral Reef Valuation- Fisheries
– Benefits Value Transfer
• Discussion
• Conclusion & 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 is 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
Methodology
Results
Discussion
Conclusion
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
Methodology
Results
Discussion
Conclusion
Overview of Economic Valuation
Techniques
• Much of the Caribbean tourism plant exists due to the
presence of coral reefs (and associated ecosystems)
• Thus coral reefs health influences the main economic
activity of the region however are 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
Methodology
Results
Discussion
Conclusion
Overview of Economic Valuation
Techniques
Coral Reefs
Provisioning
Services
Regulating
Services
Cultural
Services
Food
Erosion Control
Spiritual Values
Medicine &
Pharmaceuticals
Shoreline
Protection
Knowledge
Systems and
Educational
Values
Ornamental
Resources
Recreation &
Ecotourism
Building Materials
Supporting Services
Sand Production
Primary Production
Background
Methodology
Results
WRI 2009
Discussion
Conclusion
Overview of Economic Valuation
Techniques
Total Economic Value
Non-Use Value
Use Value
Indirect Use
Future Use
(shoreline protection)
(option/bequest value)
Direct Use
Existence Value
Consumptive Use
Non-Consumptive Use
(food)
(tourism & recreation)
WRI 2009
Background
Methodology
Results
Discussion
Conclusion
Overview of Economic Valuation
Techniques
Total Economic Value
Non-Use Value
Use Value
Indirect Use
Future Use
(shoreline protection)
(option/bequest value)
Direct Use
Existence Value
Consumptive Use
Non-Consumptive Use
(food)
(tourism & recreation)
Background
Methodology
Results
Discussion
Conclusion
Overview of Economic Valuation
Techniques
Direct Use
Consumptive Use
Non-Consumptive Use
(food)
(tourism & recreation)
Fishing
Background
Tourism
Methodology
Results
Recreation
Discussion
Conclusion
Site
Background
• Soufriere Marine
Management Area
• 11 km of coastline
• Adjacent marine area to
include
–
–
–
–
–
Marine Reserves
Fishing priority areas
Multiple use areas
Recreational areas
Yacht moorings
• Main users include
–
–
–
–
–
MEDO 2003
Fishers (pot, line, seine)
Yachtspersons
Recreational divers
Water Taxis
Wider community
Background
Methodology
Results
Discussion
Conclusion
Site Background
Soufriere coastal area:
•Great ecological diversity
•Well developed coral reefs
•Rich forests
•Economy based on agriculture, fishing
and tourism
•Management activities began in the
early 1980s in response to
environmental and developmental
issues
•SMMA was established in 1994
•Successes include managing user
conflicts, participatory management
processes, and self-financing through
tourism activities.
Background
Methodology
Results
Discussion
Conclusion
Site Background
Significant impacts over the
years include:
•Harmful industrial waste released into
the river juts 500 metres upstream from
the coast
•Heavy sedimentation as result of road
construction, and from severe storms
notably 1996 and Tropical Storm Debbie
in 1994
•Big barrel sponges severely affected
but timely intervention saved major
parts of reef habitat from suffocation
•Reef fish populations are still under
threat and there is urgent need to reestablish declining red snapper
population
Background
Methodology
Results
Discussion
Conclusion
Methodology
(Brian Zane)
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Benefits
Value Transfer
• Use available Satellite
imagery (Google EarthTM)
• Identify, define and
measure area of significant
land cover types
• Using values from other
study sites, apply
economic values to current
site by unit area (hectares)
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Benefits
Value Transfer
Import & Re-Project
Features
Calculate Areas & Apply Economic
Value
Land Cover
Disturbed and Urban Beach
Beach
Beach near dwelling
Coastal & Riperian Forest
Freshwater Stream
Freshwater Herbaceous Swamp
Grassland/pasture
Near shore aquatic habitat
Coral Reef environ
Mangrove
Mangrove
Mangrove restoration
TOTAL
Background
Methodology
Results
Ave.$/ha/
yr
Lower
Bound
Upper
Bound
88,000
117000
1826
1595
72,787
118
16,283
100,000
37500
500000
77,000
140,000
5542
1231
32000
118
4630
99,000
94000
13,000
939
96000
118
27935
200000
225
900000
216000
Discussion
Area (ha)
8.71788699
0
0
0
5.362221
0
365.2
1335.694061
4.339961
0
0
Total ESV Flow (US
Dollars)
$0
$767,174
$0
$0
$0
$390,300
$0
$5,946,552
$133,569,406
$162,749
$0
$0
$140,836,180
Conclusion
WRI Coral Reef Valuation
• Utilise data available from:
• Fisheries Division
• SMMA
• SFCL
• Input values into tool –
Estimate of Total Economic
Impact is generated
• Values reviewed and
adjusted with new data
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationFisheries
Sum of revenue generated from:
• Commercial Fishing
• Fish Processing
• Local Fishing (consumption,
sale, enjoyment)
Fishing
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationTourism & Recreation
Sum of revenue generated from:
• Accommodation Sector
• MPA Entrance Fees
Tourism
• Snorkeling & Boating
• Diving
• Local Use
Recreation
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationFisheries
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Fisheries
Commercial Fishing
Total Estimated Landings
- cost of fishing (wages, operating costs)
Fish Processing
Total Estimated Processing Revenue
(processing, cleaning)
- cost of operations (wages, operating costs)
Fish Processing
Total Estimated Processing Revenue
(processing, cleaning)
- cost of operations (wages, operating costs)
TOTAL
ECONOMIC
IMPACT OF
FISHING
Local Fishing
Fishing for (sale, enjoyment, consumption)
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationFisheries
Value
(US Dollars)
Category
1. Commercial Fisheries
Gross Revenue
$2,185,001
Net Revenue
$724,900
Transfers to the economy (Wages)
$0
Total Commercial Fishing Value
$742,900
2. Fish Processing and Cleaning
$6,726,766
3. Local Fishing
$41,892,157
TOTAL DIRECT ECONOMIC IMPACTS OF FISHING
Background
Methodology
Results
$
Discussion
Conclusion
WRI Coral Reef Valuation- Tourism & Recreation
Accommodation
Total Estimated Revenue (occupancy rates, room
rates, # rooms, % visitors using reef)
- labour, operating costs, tax rates, service
charges, leakages
MPA Revenue
Entrance fees – collection costs
Snorkelling and Boating
Total Estimated Revenue (# snorkellers, equipment
rentals, all inclusive trips)
- labour, operating costs, tax, service charges
Diving
TOTAL
ECONOMIC
IMPACT OF
TOURISM &
RECREATION
Total Estimated Diving Revenue (# divers,
certifications, equipment, all inclusive trips)
- labour, operating costs, tax, service charges
Local Use
Beach use, reef-associated use
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationAccommodation
CATEGORY
VALUE
(US Dollars)
Accommodation
Percent (%) of accommodation revenue that is reef related
35%
Reef-associated Gross Revenue
$13,581,944
Reef-associated Net Revenue (Gross minus costs)
$7,877,537
Net revenue remaining in the country (net revenue – leakages)
$923,568
Transfers to the economy (taxes, via wages and service charges)
$1,086,556
TOTAL Accommodation Value
$11,245,856
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Recreation
CATEGORY
VALUE
(US Dollars)
Diving
Gross Revenue
$10,647,396
Net Revenue (gross minus cost)
$2,661,849
Transfer to economy (taxes, via wages and service charges)
$6,175,490
Total Diving Value
$8,837,339
Snorkelling
Gross Revenue
$1,217,280
Net revenue (Gross minus cost)
$304,320
Transfer to the economy (taxes, via wages and service charges)
$706,022
Total Snorkelling Value
Background
Methodology
$1,010,342
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Tourism and
Recreation Totals
CATEGORY
Value (US Dollars)
1.
Accommodation
$11,245,856
2.
Diving
$8,837,339
3.
Snorkeling
$1,010,342
4.
Marine Park
5.
Other Direct Expenditures (vending, water taxis, food sales)
$432,741
$440
TOTAL DIRECT AND INDIRECT IMPACTS
$21,526,718
Local Use of Coralline Beaches
Local use from reef recreation
Diving consumer surplus
$2,661,849
Snorkelling consumer surplus
$304,320
TOTAL ECONOMIC IMPACT OF REEF-RELATED TOURISM AND RECREATION
Background
Methodology
Results
$24,492,887
Discussion
Conclusion
WRI Coral Reef Valuation- Government
Revenue
$1,086,556.00
$851,792.00
$97,382.00
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Total
$11,245,856.00
Accommodation
$440.00
Other
$8,837,339.00
Diving
$1,010,342.00
Snorkelling and Boating
$432,741.00
Marine Park
$742,900.00
Commercial Fisheries
$6,726,766.00
Fish cleaning
$41,892,157.00
Local Fishing
0
Background
Methodology
10000000
20000000
Results
30000000
40000000
Discussion
50000000
Conclusion
Benefits Value Transfer
• seeks to aid marine space
use planning and
management in the
Saint Lucia
• visual representation of
critical habitats, areas
important for livelihoods,
fishing grounds, space use
conflict, etc.
• Data not available at this
time
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationFisheries
• Case study assumes Soufriere & surrounding
nearshore reefs provide supporting services to
the fished reefs
• No known multipliers
• Quality data was limited
– Data from one landing site as only one exists
– 220 fishers
– non-labour operating costs estimated to be 66% of
fishing value
– fisher surveys: 4
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Tourism and
Recreation
• Quality data was limited
– occupancy rates were rough estimates (high
room rate properties can skew data)
– Some level of unreported entry
– Tax revenue dependant on accountability of
operators
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef Valuation- Strengths
• Facilities dynamic data (allows updating and
expansion)
• Detailed and allows for categorisation of results
• When data is available, outputs of results &
corrections are generated instantaneously
• Sensitivity analysis as response to
errors in data
• Accounts for often overlooked value of local use
• More data improves applicability of results (not
general output)
• Some level of adaptability
– Can be applied to scenarios where data availability is
basic)
Background
Methodology
Results
Discussion
Conclusion
WRI Coral Reef ValuationWeaknesses
• Data gaps increases reliance of local 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
caveats about possible error ignored.
• Results are not visual and not as easy to
communicate as the Value Transfer method
Background
Methodology
Results
Discussion
Conclusion
Conclusion
• Significant disparity in accommodation and diving as
major source of clients emanate from hotels outside of
SMMA
• Cruise ship business is significant contributor but is not
measured currently
• Important contributions from the informal sector
(watertaxis)
• Significant contributions by added value (Fish cleaning)
• Sustainable revenue generation for park however it may
be further enhanced with more resources for revenue
collection
• Low local use of park
Background
Methodology
Results
Discussion
Conclusion
Further Research Options
• Fill necessary data gaps (fish landings,
occupancy rates)
• Expansion of study to the include CAMA
• Assessment of the regulating services
provided (shoreline protection value)
• Reef fish stock assessment
• Development of the MarSIS database
• Research into carrying capacity of SMMA
Background
Methodology
Results
Discussion
Conclusion
Questions?
Background
Methodology
Results
Discussion
Conclusion