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Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Soufriere, St. Lucia Reeffix Exercise.

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Presentation on theme: "Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Soufriere, St. Lucia Reeffix Exercise."— Presentation transcript:

1 Economic Valuation of Goods and Services Derived from Coral Reefs Results from the Soufriere, St. Lucia Reeffix Exercise

2 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

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 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 BackgroundMethodology ResultsDiscussionConclusion

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 BackgroundMethodology ResultsDiscussionConclusion

5 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. BackgroundMethodology ResultsDiscussionConclusion

6 Overview of Economic Valuation Techniques Coral Reefs BackgroundMethodology ResultsDiscussionConclusion 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

7 Overview of Economic Valuation Techniques BackgroundMethodology ResultsDiscussionConclusion 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

8 Overview of Economic Valuation Techniques BackgroundMethodology ResultsDiscussionConclusion 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)

9 Overview of Economic Valuation Techniques BackgroundMethodology ResultsDiscussionConclusion Direct Use Non-Consumptive Use (tourism & recreation) Consumptive Use (food) Fishing Tourism Recreation

10 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 –Fishers (pot, line, seine) –Yachtspersons –Recreational divers –Water Taxis –Wider community BackgroundMethodology ResultsDiscussionConclusion MEDO 2003

11 Site Background BackgroundMethodology ResultsDiscussionConclusion 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. Soufriere coastal area:

12 Site Background BackgroundMethodology ResultsDiscussionConclusion 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 re- establish declining red snapper population

13 Methodology BackgroundMethodology ResultsDiscussionConclusion (Brian Zane)

14 WRI Coral Reef Valuation- Benefits Value Transfer Use available Satellite imagery (Google Earth TM ) 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) BackgroundMethodology ResultsDiscussionConclusion

15 WRI Coral Reef Valuation- Benefits Value Transfer BackgroundMethodology ResultsDiscussionConclusion Calculate Areas & Apply Economic Value Import & Re-Project Features

16 WRI Coral Reef Valuation BackgroundMethodology ResultsDiscussionConclusion 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

17 WRI Coral Reef Valuation- Fisheries BackgroundMethodology ResultsDiscussionConclusion Commercial Fishing Fish Processing Local Fishing (consumption, sale, enjoyment) Sum of revenue generated from : Fishing

18 WRI Coral Reef Valuation- Tourism & Recreation BackgroundMethodology ResultsDiscussionConclusion Tourism Recreation Accommodation Sector MPA Entrance Fees Sum of revenue generated from : Snorkeling & Boating Diving Local Use

19 WRI Coral Reef Valuation- Fisheries BackgroundMethodology ResultsDiscussionConclusion

20 WRI Coral Reef Valuation- Fisheries BackgroundMethodology ResultsDiscussionConclusion Total Estimated Landings - cost of fishing (wages, operating costs) Commercial Fishing 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) Fish Processing TOTAL ECONOMIC IMPACT OF FISHING Local Fishing Fishing for (sale, enjoyment, consumption)

21 WRI Coral Reef Valuation- Fisheries BackgroundMethodology ResultsDiscussionConclusion

22 WRI Coral Reef Valuation- Tourism & Recreation BackgroundMethodology ResultsDiscussionConclusion Total Estimated Revenue (occupancy rates, room rates, # rooms, % visitors using reef) -labour, operating costs, tax rates, service charges, leakages Accommodation Total Estimated Revenue (# snorkellers, equipment rentals, all inclusive trips) - labour, operating costs, tax, service charges Snorkelling and Boating Total Estimated Diving Revenue (# divers, certifications, equipment, all inclusive trips) - labour, operating costs, tax, service charges Diving TOTAL ECONOMIC IMPACT OF TOURISM & RECREATION Local Use Beach use, reef-associated use MPA Revenue Entrance fees – collection costs

23 WRI Coral Reef Valuation- Accommodation BackgroundMethodology ResultsDiscussionConclusion CATEGORY VALUE (US Dollars) Accommodation Percent (%) of accommodation revenue that is reef related35% 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

24 WRI Coral Reef Valuation- Recreation BackgroundMethodology ResultsDiscussionConclusion 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$1,010,342

25 WRI Coral Reef Valuation- Tourism and Recreation Totals BackgroundMethodology ResultsDiscussionConclusion CATEGORYValue (US Dollars) 1.Accommodation$11,245,856 2.Diving $8,837,339 3.Snorkeling $1,010,342 4.Marine Park $432, Other Direct Expenditures (vending, water taxis, food sales) $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$24,492,887

26 WRI Coral Reef Valuation- Government Revenue BackgroundMethodology ResultsDiscussionConclusion

27 WRI Coral Reef Valuation- Total BackgroundMethodology ResultsDiscussionConclusion

28 Benefits Value Transfer BackgroundMethodology ResultsDiscussionConclusion 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

29 WRI Coral Reef Valuation- Fisheries BackgroundMethodology Results DiscussionConclusion 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

30 WRI Coral Reef Valuation- Tourism and Recreation BackgroundMethodology ResultsDiscussionConclusion 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

31 WRI Coral Reef Valuation- Strengths BackgroundMethodology ResultsDiscussionConclusion 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)

32 WRI Coral Reef Valuation- Weaknesses BackgroundMethodology ResultsDiscussionConclusion 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

33 Conclusion BackgroundMethodology ResultsDiscussionConclusion 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

34 Further Research Options BackgroundMethodology ResultsDiscussionConclusion 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

35 Questions? BackgroundMethodology ResultsDiscussionConclusion


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