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Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Folkestone Park & Marine Reserve Reeffix Exercise.

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Presentation on theme: "Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Folkestone Park & Marine Reserve Reeffix Exercise."— Presentation transcript:

1 Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Folkestone Park & Marine Reserve Reeffix Exercise

2 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

3 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

4 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

5 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 Services Sand Production Primary Production WRI 2009 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

6 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. BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

7 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

8 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion WRI 2009

9 Overview of Economic Valuation Techniques Direct Use Non-Consumptive Use (tourism & recreation) Consumptive Use (food) Fishing BackgroundWRI Fisheries WRI TourismValue TransferDiscussion Recreation Tourism

10 Site Background Folkestone Park and Marine Reserve Reserve Area: 2.1km 2 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion Nicholls 2008 Holetown Lagoon

11 Site Background West Coast Reefs significantly impacted by: Land Based Pollution Coastal Development Physical Damage Overfishing Disease BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

12 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

13 (Brian Zane) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

14 Value Transfer: Spatial Distribution of Ecosystem Service Values Use available Satellite imagery (Google Earth TM ) 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

15 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 generated DATA VALIDATION Values reviewed and adjusted with new data Application of scenarios BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

16 Sensitivity Analysis Percent of gross profit spent on non-labour expenses BackgroundWRI Fisheries WRI TourismValue TransferDiscussion 25% 45%

17 World Resource Institute Coral Reef Valuation Tool Fisheries Valuation

18 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 Fishing Fishing for (sale, enjoyment, consumption) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion Multipliers Additional expenditures (re-sale only) TOTAL ECONOMIC IMPACT OF FISHING

19 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

20 WRI Coral Reef Valuation- Commercial Fisheries Results BackgroundWRI Fisheries WRI TourismValue TransferDiscussion Flyingfish Mahon et al. 2007

21 WRI Coral Reef Valuation- Fisheries BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

22 World Resource Institute: Coral Reef Valuation Tool Tourism & Recreation Valuation

23 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 Use Beach use, reef-associated use MPA Revenue N/A Other Revenue rentals, souvenirs BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

24 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

25 WRI Coral Reef Valuation- Accommodation BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

26 WRI Coral Reef Valuation- Recreation BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

27 WRI Coral Reef Valuation- Tourism and Recreation Totals BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

28 WRI Coral Reef Valuation- Government Revenue BackgroundWRI Fisheries WRI TourismValue TransferDiscussion Total ~ US$ 6 million

29 WRI Coral Reef Valuation- Results $29,328,561 US$485,835 - US$691,313 Fishing Tourism Recreation US$29,328,561 – US66,050,239

30 WRI Coral Reef Valuation- Total

31 WRI Coral Reef Valuation Hypothetical Reserve User Fee 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

32 Value Transfer: Spatial Distribution of Ecosystem Service Values

33 Value Transfer Methodology Identify FeaturesImport & Re-Project Features Outline Features Calculate Areas & Apply Conversion Factors for Associated Values BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

34 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

35 Value Transfer Methodology BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

36 Results Comparison BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

37 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

38 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

39 Value Transfer Methodology Strengths Availability of data source (Google Earth TM ) 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

40 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. BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

41 Other Case Study Sites Value Transfer Methodology Pros Produces both graphic and numeric results Low dependence on external/hard to locate data sources Cons 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

42 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) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

43 Other Case Study Sites BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

44 Other Case Study Sites (excluding Grenada Value Transfer) BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

45 Other Case Study Sites Area of Study Sites BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

46 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

47 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

48 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 BackgroundWRI Fisheries WRI TourismValue TransferDiscussion

49 Questions?


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