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

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



• 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.



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



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



Total Economic Value

Non-Use Value

Existence Value

Future Use(option/bequest value)

Indirect Use(shoreline protection)

Use Value

Direct Use





Direct Use



Fishing Tourism Recreation

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


MEDO 2003

Site Background


•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:

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 re-establish declining red snapper population

Methodology


(Brian Zane)

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)


WRI Coral Reef Valuation- Benefits Value Transfer


Calculate Areas & Apply Economic Value

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

Import & Re-Project Features

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

WRI Coral Reef Valuation- Fisheries


• Commercial Fishing

• Fish Processing

• Local Fishing (consumption, sale, enjoyment)

Sum of revenue generated from:

Fishing

WRI Coral Reef Valuation- Tourism & Recreation


Tourism

Recreation

• Accommodation Sector

• MPA Entrance Fees

Sum of revenue generated from:

• Snorkeling & Boating• Diving• Local Use





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)



Category Value

(US Dollars)

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 $

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 (# 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 RevenueEntrance fees – collection costs

WRI Coral Reef Valuation- Accommodation


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

WRI Coral Reef Valuation- Recreation


CATEGORY VALUE

(US Dollars)

Diving


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


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

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 $432,741

5. 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

WRI Coral Reef Valuation- Government Revenue


WRI Coral Reef Valuation- Total


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



• 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

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

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)

WRI Coral Reef Valuation- Weaknesses


• 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

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

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

Questions?


Documents

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