Economic Valuation of Wet Land

8/9/2019 Economic Valuation of Wet Land

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ECONOMIC VALUATION OF

WETLAND

By Sumeet singh

RAVENSHAW UNIVERSITY

CONTENT

1. Introduction2. Important Of Study


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3. Meaning Of Wetlands4. Economic Valuation Of Wetland And Need

For It5. Methodologya. Wetland Process

b. Funct ionsc. Benefitd. Value

6. Quantification Of Economic Values OfWetlands

7. Classification Of Total Economic ValueFor Wetland8. Need For Economic Valuation Of Wetlands9. Market Price And Wetland Benefit

a. Individuals Willingness vs Market Priceb. Market Failure

10. Causes Of Market Failurea. Distribution Of Cost Between Owners And

Non Ownersb. The Tragedy Of Commonsc. Missing Costd. Cumulative Effect

11. Valuation ProcedureStep 1. Choosing Appropriate Procedure

a. Impact Analysisb. Partial Valuations


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c. Total ValuationsStep 2. Defining Wetland AreaStep 3. Identifying And Prioritizing Wetland

MeasureStep 4. Relating To Wetland Resources To

Use Value And GatheringInformation

Required For Assessment12. Quantifying Economic Value

a. Market Price Methodb. Efficiency Price Method

c. Total Cost Approachd. Contingent Valuation Methode. Hedonic Pricing Methodf. Production Function Approach

13. Implementing Appropriate AppraisalMethod

14. Data Requirement For Evaluation15. Other Requirement For Valuation


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a. Resource Required For Valuationb. Interdisciplinary Colorationc. Training Programsd. Resource And Economic Valuatione. Networking

16. Case Study (Lakes of Bangalore)17. Challenges And Limitation18. Action Plan For Conservation Of Wetland19. Wetland Policy Guidelines20. Recommendation For Effective Wetland

Management21. Conclusion

22. Reference


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INTRODUCTION

Natural resources are more important for progress of national economy. Functional

ecosystem represents natural capital upon which our economy depends for many goods and

services. Methods to measure the sociological and economy benefit and wetland show promise

and are beginning to demonstrate the returns on investment from actions to sustain wetlands and

the benefit that may be lost if they are degraded.

Valuing of economic benefit of wetland can set priority and allocate spending onconservation initiative. Valuing can also be used to consider the publics values of wetland

system and encourage public participation in certain initiative. For instance valuations may help

to achieve wetland conservation objective under the GREATLAKE WETLAND

CONSERVATION ACTION PLAN and may be applicable in Environmental Assessment (EA)

process. More specifically valuations could assist EA decision making by providing a reference

value against which other economic factors could be compared in order to determine the

significant of environmental effect- the bottom line in most EAs.

This paper contains economic valuations of wetland. Before discussing the topic we have

to discuss the following matter those are:

IMPORTA NCE OF STUDY

Aquatic ecosystems sustain life on earth, regardless of mankinds understanding of the

biology, chemistry, and geology involved. Population increase coupled with intense

anthropogenic activities and unplanned development activities have impaired the ecosystem

functions and are resulting in the extinction of these fragile ecosystem. The consequence may be

in the long term and possibly irreversible changes. Such changes reduce the value of the

ecosystem, even affecting the economy. Understanding of functions and values of the ecosystem

is crucial for appropriate decision making. The decision with the holistic ecosystem approach

ensures the sustainability of the ecosystem. Wetland is a major component of our environment.

Being highly productive, biologically rich and providing many ecological services wetlands


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particularly important to both biodiversity and economy. But this precious component of earth is

going on decreasing day by day. So it is more important to value economic benefit of wetland for

its efficient allocations reducing its wastage and for its conservations valuations may help to

achieve environmental and wetland conservations objective under the GREAT LAKE

WETLAND CONSERVATIONS ACTION PLANS and may applicable in the environmental

assessment process.

MEANING OF WETLANDS Wetland inhabits a transitional zone between

terrestrial and aquatic habitats and is influenced to varying degrees by both. A wetland is

seasonally or permanently covered by shallow water, as well as lands where the water table is

close to or at the earth surface. In either case the presence of abundant water has caused the

formation of hydric soils and favored the dominance of either hydrophytic or water tolerant

plants. These unique areas represents a combinations of terrestrial and aquatic characteristic, and

are further categorized by type as marsh, swamp, fen, and bog. As per the definition adopted at

Ramsar convention(Iran in 1971), wetlands are areas of marsh, fen, peat land or water, whether

natural or artificial, permanent or temporary, with water that is static or flowing, fresh brackish

or salt, including areas marine water, the depth of which at low tide does not exceed six meters.

They inhabit a transitional zone between terrestrial and inhabitants, and are influenced to varying

degrees by both. They differ widely in character due to regional and local differences in climate,

soils, topography, hydrology, water-chemistry, vegetation and other factors. Depth and duration

of inundation, a key defining force can differ greatly between types of wetland and also can vary

from year to year within a single wetland type.

Wetlands are categorized as inlands (also known as non-tidal, fresh water wetlands)

and coastal (also known as tidal, saltwater or estuarine wetlands Barbier et al, 1997]. In addition

to those manmade wetlands have also been included under wetland classes. Inland wetland

receives water from precipitation, snowmelt, and ground water runoff. Coastal and estuarine

wetland receives water from surface water tides and ground water discharge. Wetland due to

three biological, ecological, cultural and economic values from an important component of an

environment. They provide habitat and support divers range of biodiversity. Wetland undertakes

important biological and ecological process including life support system i.e. water and carbon

cycle. Hence they are important for hydrological functions, economic, sociological and cultural

development.


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Methods to measure the sociological and economic benefit of wetlands show promise

and are beginning to demonstrate the returns on investment from actions to sustain wetlands and

benefits that may be lost if they are degraded. Valuing the economic benefits of wetlands can

help set priorities and allocate spending on conservation initiative. Valuation can also be used to

consider the publics values of wetlands systems and encourage public participation in certain

initiative.

ECONOMIC VALUATION OF WETLANDS AND NEED

FOR IT

To begin with, it is useful to look at what is meant by economic value. In economic theory value

means exchange value. Since money is the medium of exchange value. Since money is the

medium of exchange, the value of benefit is generally determined through its price- i.e. the

quantity of money for which it will be exchange. However the value of the benefit is not simply

the price of that product in the open market. Rather it is the worth of that benefit to a potential

buyer. This is measured in economic term as willingness to pay. For example- in an over

simplified economy

Where only two commodities are exchanged- bread and rice- the value of a loaf of bread is

determined by how much rice one is willing to give up or exchange, to get that loaf of bread. In

other word the economic value of bread is measured by peoples willingness to pay with rice.

METHODOLOGY

The international literature on economic valuation of wetlands has grown

significantly over the last three decades. A brief discussion of the valuation literature here will be

instructive.

Economic valuation is a powerful tool to aid and improve wide use and

management of global wetland resource by providing a means for measuring and comparing the

various benefits of wetlands [Edward B Barbier et al, 1997]. The following are some of the terms

used while quantifying the wetland benefits.


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WET LAND PROCESSThe fundamental hydrological, chemical and physical activities that occur in a wetland that are

linked to its biological productivity. For example- the role of wetlands in the global carbon

cycling.

FUNCTIONS:The results of the interactions of the wetlands ecological process. Functions are physical,

chemical and biological process occurring in and making up an ecosystem. Process include the

movement of water through the wetland, into streams or the oceans, the decay of organic matters

the release of nitrogen, sediment and organic matter from water moving into the wetland, and the

growth and development of all the organism that require wetland for life.

BENEFIT :The goods and services made possible by a wetland functions. For example- by reducing wave

energy and stabilizing shorelines, the wetland reduces the chance of property damage. This

reduced risk is a benefit to society.

VALUE :The economic worth of goods or services, generally measured in terms of what individual are

willing to pay for. For example- the wetland has value because it support commercial fishery.

The value of benefit is determined by its price, i.e. the amount of money for which

it will be exchanged. The value the benefit is the price of that product in open market and the

worth of that benefit to a potential buyer. This is measured in economic terms as willingness to

pay. In other words the economic value of the wetlands services or commodity is measured by

peoples willingness to pay for those benefits. The economic valuation is essentially

quantification of environmental goods and services and the value of human beings for the

environment.

QUANTIFICATION OF ECONOMIC VALUES OFWETLANDS


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The economic values of an environmental goods and services are measured by the

summation of many individuals willingness to pay for it. In turn this willingness to pay reflects

individual choice for the in question. Therefore economic valuation in environment context is

about measuring the choices of people for an environmental benefit or against environmental

degradation. Valuation is therefore in relation to preference held by people. Moreover the use of

economic value permits the comparison that is required between environmental and

developmental values. The later is expressed in fiscal/ monetary terms either in rupees or as

economic rate of return.

Using other units to measure environmental values would not permit the

comparison with developmental values. The economic value of the wetlands includes both use

and non-use values. Typically use values involve some human interaction with the resources

where as non use values do not. Wetland use values are associated with adverse and complexarray of direct and indirect uses. Wetland values may be derived from outputs that can be

consumed directly such as food, water supply, recreation, timber, indirect uses which arise from

the functions occurring within the ecosystem, such as water quality and flood control, possible

future direct and indirect uses such as biodiversity or conserved habitats, and the knowledge that

such habitats or species exits (known as existence value)[Serageldin 1993].

Values are an estimate usually subjective, of worth, merit, quality or importance.

Direct uses of wetlands could involve both commercial (marketed value) and noncommercial

activities where as indirect use values are unmarketed, go financially unrewarded and are only

connected to economic activities. A special category of value is option value, which arises

because an individual may be uncertain about his or her future demands for a resource and\or its

availability in the wetland in future. If an individual is uncertain about the future value of

wetland, but believes it may be high or that current exploitation and conversion may be

irreversible, then there may be quasi option value derived from delaying the development

activities. The quasi option value is the value that the society would place on wetlands, if all

know the complex function of wetlands. Uncertainty is acceptable in non economic valuation,

but must be accounted somehow in economic valuation. Quasi option value is a concept allowing

expert scientist to define wetland value. In contrast non use values, often referred as intrinsic or

existence values are difficult to measure, as they involve subjective valuations by individuals

unrelated to either their own or others uses whether current or future. An important subset of

nonuse or preservation values is bequest value, which results from individuals pricing a high


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value on the conservation of tropical wetlands for future generation to use. Bequest values may

be particularly high among the local population currently using a wetland, in that they would like

to see the wetland, in that they would like to see the wet land and their way of life that has

evolved in conjunction with it passed on to their heirs and future generations in general. Table-1

shows the list of various use and non use values of wetlands.

CLASSIFICATION OF TOTAL ECONOMIC VALUEFOR WETLAND

USE VALUE NON-USE-

VALUE

Direct uses Indirect

usesOption and

quasi option

value

Existence

benefit

Recreation

1.Boating

2.fauna (birds

etc)

3.wildlife

viewing

4.walkin

Commercial

harvest

1.nuts

2.berries

3.grains

Fishery

Storm

protection

Ground

water

recharge

External

ecosystem

support

Water

filtration

Erosion

control

Shoreline

stabilization

Potential

future uses(as

per direct and

indirect uses)

Future value

of information

Example-

pharmaceutica

l education

Biodiversity

Culture

Heritage

Bequest


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Fuel wood

Wildlife

harvesting

Agriculture

Nutrient

retention

Flood

control

(Source- adopted and modified from Barbier et al 1997)

In general the direct uses of marketed products of ecosystems are easier to measure

since marketed products exits and their price may be adjusted for distortion. In contrast

ecological functions such as ground discharge may have indirect use values which are reflected

in the economic activities these functions support. Usually changes in the wellbeing or socialwelfare are used to define and quantify economic value. Therefore valuing goods and services

requires one to study the change in a persons welfare due to a change in availability of

resources. The purpose of economic valuation is to reveal the true cost of using scarce

environmental resources.

NEED FOR ECONOMIC VALUATION OFWETLANDS

Some specific major reasons for valuation of wetlands are:

The need for economic valuation of environmental impact and asset

arises for pursuing efficient policies and investing in efficient projects

and programmes. At most general level of integrational concern,

valuation is still required. If transfers of resources are to be made


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between generations- with the current generations sacrificing for future

or future benefit being lost for the sake of present gain, then it is

essential to know what is being sacrificed and how much it is that

being surrendered.

Macro economics management records monetary flows and

transaction within the economy. The national account are widely used

to indicate wellbeing and rates of changes and national accounts such

as gross national production(GNP) are widely constructed as a

measure of development. Weather the accounts are designed to record

economic activity or measure wellbeing or both. They are deficient

with respect to their treatment of the environment. Economic activity

involves the use of material and energy and once transformed into

products the same resources become sooner or later waste product.

Any measure of economic activity which ignores these material and

energy flows, will fail to record important activity that affect the

sustainability of economic activity. For these reasons there is a need

for wide spread consensus so that national accounts are modified and

environmental stock and flows are recorded. Depreciation in the stocks

of the natural resources requires proper valuation to ensure

sustainability.

Information on the economic values of policy changes (with regard to

the environment) can greatly assist in identifying the policy and

sectoral priorities. Economic valuation incorporating environmental

aspect helps in evaluating developmental projects, programmes and

policies.

Therefore in considering the value of natural areas such as

wetlands, trying to determine people willingness to pay for benefit

ranging from aesthetic beauty to recreational opportunity to clean

water is very important.

MARKET PRICE AND WETLAND BENEFIT


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INDIVIDUALS WILLINGNESS VS MARKET PRICE:In the environmental context, it is required to quantify ecosystem benefits in terms

of priced goods (i.e. private goods which have market value- fish) and unpriced goods (i.e.

public goods which have no market value- clean water, air). Market price is a measure of the

minimum that some people are willing to pay for a benefit- they will buy goods, commodity for

example if their willingness is equal to or more than the market price. There are also many other

forms of value beyond market economic term including subjective and intrinsic values which are

particularly important in environmental conservation in general especially the wetland.

The problem with using willingness to pay to measure the value of wetland is that it

requires a carefully designed survey as it is not as straight forward as market price. Nevertheless,

there is growing evidence of consumers willingness to pay for ecological benefits. Trends such

as the growing demand for the ecologically certified wood products, organic foods and other

products and services with an environmental advantage suggests that there is increasing market

recognition of the economic value of preserving natural areas and process. It involves finding a

willingness to pay measure in circumstances where market fails to reveal that information

directly.

MARKET FAILUREEconomic decision developmental projects which exclude ecosystem values, lead to

ecosystem degradation. Economists trace this problem to market failure. In this case of wetland,

the calculation of economic value for converting the wetland area to housing or commercial

layouts does not include costs such as loss of water quality or quantity. Since these ecosystem

services are available free to all and not purchase, there is a tendency to neglect the

quantification of vital function of these ecosystem and indirect benefit derived from them. It is

only when these services are lost the actual financial or commercial costs are incurred. So

paradoxically the zero prices for wetland services is of very high value to human wellbeing.

Since it is difficult for an individual owner to receive direct monetary benefit for those benefits

which a wetland provides to other, the true value of such benefit is generally not taken into

account.

CAUSES OF MARKET FAILURE


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1. DISTRIBUTION OF COST BETWEEN OWNERS AND NON-

OWNERS: unlike other assets a wetland may deliver more benefit to the community

(food, recreation etc) than to individual owner. Compared to the general the individual

owner may receive only a small proportion of benefit, such as ground water replenishment

and there fore will tend to under value of these benefits.

2. THE TRAGEDY OF COMMONS: with a widely share resource there is a little

incentive for an individual to control activities to benefit others. For example-a wetland may

support large population of frogs, but without any sort of limits or fees, there is no incentive

for any individual harvester to limit the number of frogs taken for incentive or bait, food or

class room experiment.

3. MISS ING COST : The market does not includes the lost of economic value ofwetland in the companys production cost. For Ex if an industry disposes its effluents into a

stream that feeds into a wetland the economic damage done to the wetland is not reflected in

the market price of the goods.

4. CUMULATIVE Effect: When taken together a combination of relativelysmall incremental changes to a wetland or a number of wetland within a watershed, can

have more dramatic effects than those recognized when individual changes are made. These

cumulative effects result from past, present and future changes and are difficult to recognizeand asses physically as well as economically in part because of dynamic nature of the

ecosystems. The ability to measure value is also limited by the understanding of the

ecological functioning and the benefits that wetlands provide for ecosystem stability. This

lack of ecological understanding under value wetland benefits that contribute to market

failure.

The economic valuations of wetland also countries act the market failure for

which wetland benefits are express in financial terms. This helps both the individuals and

policy makers to easily compare alternative usages and policy options. A value for the

economic benefit that will be lost through the development of a wetland, for example, could

prompt policy makers to put resources into the conservations of the wetland, instead.

Similarly such evaluations can lead to a better understanding of tax incentives, rebates or

subsidies that could give individual an economic incentive to retain a wetland in effect the


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community can purchase the wetland services from the individual, through which one can

provide panacea for market failure to some extent.

VALUATION PROCED URESTEP-1 - Choosing appropr iate procedure-

It is the 1st step in the economic evaluation process consisting 3 issues

more relevant to the economics of wetland. They are:

1. Impact Analys is - Impact analysis would be appropriate if the problem is aspecific external impact, for example- oil, spills on costal wetland.

2. Partial Valuations - If the problem is the necessity of making a choicebetween wetland use options. For ex- conversion of wetland to residential land or sport

complex.

3. Total valuation- If problems are general, for example- developing a restorationstrategy requires assessment of total net benefit of the wetland system. Total valuation is

expressed as

TEV= Direct use value+ Indirect use value+ option value+ existence value

STEP-2-Defining wetland area-In the second stage it is necessary to define wetland area based on maps

of land use\land cover, flood extent and soils using remote sensing data and survey of

India maps or any other maps.

STEP-3 -Identifying and priorit izing wetlandsmeasures

The third step involves using various data sources, including scientific

studies, consultancy reports and national resources inventories to produce a more

definite list of components functions and attributes present in the wetlands, then placethem in their order of importance. This may be in rank order say 1 to10 or expressed as

being high, medium or less significant based on its importance.


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STEP-4 -Relating to wetland resources to usevalue and gathering information required forassessment-

The fourth step is to determine whether each of the wetland resources is

associated with direct, indirect or non-use benefit.

Interviews with local communities, census data and consultancy reports

are usually good sources of information of direct uses. For example - obtaining

agricultural yield may involve interviews with farmers, collection of statistics from govt.

offices and visit to markets.

An indirect use value requires detail field investigation, concentrating on

physical link between wetland system functioning and economic activities affected.

Option and quasi option and existence values may be more difficult to

determine and it will often be done with the help of the multidisciplinary team, keeping

in mind the difficulties of quantifying these values.

Data collection begins with a literature survey of available statics,

existing studies, and their analysis for the regions, which may yield some of the required

information. Next site survey of specific economy activities have to be undertaken. In

the first instance a rapid rural appraisal best on brief interview with farmers or producers

would help to collect basic information on human uses and economic data. More

detailed baseline surveys may be required for in depth data collections for actual

valuation purposes. In all cases, it is important to be clear in advance about the

information required so as to avoid collecting data for datas sake.

QUANTIFYING ECONOMIC VALUESVarious valuation techniques are:

MARKET PRICE METHOD -1. The prevailing prices of goods and services traded in domestic or international

markets are used for quantifying wetland resources.

2. Market price reflects the private willingness to pay for costs and benefits that are

traded(e.g., fish, timber, fuel wood and recreation)


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3. Price data are relatively easy to obtain. Market imperfections, policy failures and

seasonal variations may distort market prices, which will therefore fail to reflect the

economic value of goods or services to society as a whole.

EFFICIENCY PRICES METHOD-1. Use of market prices but adjusted for market imperfection and policy.

2. Shadow prices may also be calculated for non- marketed goods.

3. This reflects the true economic value to society as a whole, artificial price may not

be accepted by the decision makers.

TRVEL COST APPROACH1. Widely used to estimate the value of recreational sites including public parks and

wildlife reserves 9in developed countries.2. The travel cost approach derives willingness to pay for environmental benefits

(e.g., ecotourism).

3. It needs information on the amount of money and time that to visit the location.

CONTIGENT VALUATION METHOD1. Contingent valuation surveys directly ask people what they are willing to pay for

something they are willing to receive in compensation for tolerating cost.

2. Personal valuation for increase or decrease in quantity of some goods based onhypothetical market. The aim is to elicit valuations or bids, which are close to what

would be revealed if an actual market existed.

HEDONIC PRICING METHOD1. Hedonic pricing has the potential for valuing certain wetland functions (e.g. storm

protection, ground water recharge etc) in terms of their impact on land values,

assuming that wetland functions are fully reflected in land prices.

2. The value of an environmental amenity (such as view) is obtained from property orlabour markets. The basic assumption is that the observed property value (or wage)

reflects stream of benefits (or working conditions) and that is possible to isolate the

value of the relevant environmental amenity or attribute.

3. Application of hedonic pricing to the environmental functions of wetlands requires

these values to be reflected in surrogate markets. The approach may be limited


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where markets are distorted, and choices are constrained by income and information

about environmental conditions is not widespread and data are scarce.

PRODUCTIO N FUNCTION APPROACH1. Estimate the value of non marketed resources or ecological function in terms of

changes in economic activity by modeling the physical contribution of the resource

or function to economic output

2. This is used to estimate the impact of wetland on deforestation, water pollution, etc

RELATED GOOD S METHOD1. Utilizes information about the relationship between non-marketed goods or services

and a marketed product to infer value.

2. The barter exchange approach relies on actual exchange of non marketed goods and

this approach requires information on the rate of exchange between two goods.

3. The direct substitute approach simply assumes that marketed goods can be

substituted for non-marketed goods and requires information on the degree of

substitution between two goods.

4. The indirect substitute approach requires the information about the degree of

substitution and direct substitute approach combined with production function

approach.

IMPLIMENTING APPROPRIATE APPRISALMETHOD

The ultimate step in the economic valuation of wetland should be placed in

appropriate frame work as preferred during the planning for study. The most

appraisal method for valuation is cost-benefit analysis method involving the cost and

benefit of wetlands measure through three sub-methods.(a) Net present value

(b) Benefit cost ratio

(c) Internal rate of return

There are other methods such as


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A. Environmental impact assessment needs a detail document of impact and

effect of wetland.

B. Cost effective analysis selects land use option that which will minimize cost

of realizing a defined non-monetary objective, in this case there is no need

to value benefits, but focus on cost information.

C. Multicriteria analysis involves mathematical programming technique to

select option based on objective functions including weighted goals of

decisions makers with explicit consideration of constraint and cost.

D. Risk assessment or risk benefit analysis evaluates benefit associated with a

land use option in comparison with risk.

E. Decision analysis involves step by step analysis of the consequence of

choice under uncertainty.

DATA REQUIREMENT FOR EVALUTION The following are some of the data collecting technique useful in quantifying

various resources or activities

RESOURCES/ ACTIVITY: wetland

VALUATION METHOD: change in productive or contingent valuation method

DATA REQUIREMENT: Type of wetland products

Cost of production and price information for these wetland products

will necessary. For example- fishery

Spatial extent of wetlands (temporal changes in spatial extent)

Number of individual depending on wetland

Extent of wetland damage due to adverse weather condition

RESOURCE/ ACTIVITY: agriculture

VALUATION METHOD: change in productive method or contingent valuation method

DATA REQUIREMENT: area and crop productivity for different crops

Itemised the cost of production per hectare by crops (fixed and

variable cost)

Output prices per type of crop (on- stand price and market price)


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Harvesting cost

Percentage sold in the export market for crop

Time series data on rainfall and production

Incidences of crop damage due to adverse weather conditionRESOURCE / ACTI VITY: Fishery

VALUATION METHOD: change in production method or market price method or contingent

valuation method

DATA REQUIREMENT: catch/effort

Size of the fishing fleet (including the number of fisherman)

Cost of fishing

Prices of fish by species (ex- vessel)

Species composition of catch

Type of fishing gear

Boat of capacity and type

Areas of wetland

Water quality

Other Requirement For ValuationResource required for valuation : Economic valuation of the wetland isbased on quality data which in turn depends on availability of resources that is required for

collecting and analyzing the data. For instance primary data collection for several valuation

survey may be required a number of trained office staff, a developed equipment, laboratory,

computers etc.

Inter disciplinary collaboration: Absolute valuation itself is a component of

economics which also requires an understanding of the functions of the wetland and therefore

requires an interdisciplinary approach. Hence economists, ecologists and other experts should

work together as a multidisciplinary team to tackle wetland valuation.


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Training programs: Training programes should be undertaken to support staff,

surveyors, and planners in collecting required information. In this regard economist planners

must be trained in economic valuation of wetland.

Research and economic valuation : Research and economic valuation should

be under taken to make sound decision on development option and to set regional national

policies.

Networking : Networking of experts from various areas can serve as an useful mediumof exchange of ideas and information. Two types of networking are required, first a network by

which researcher can exchange results and discuss basic principle and second a network by

which a practitioners can swap experience of applying method in different wetland types.

CASE STUDYValuation of lakes in Bangalore

Bangalore is the heart of southern India situated in Karnataka district with a

geographical area of about 2191 sq k.m. at an average elevation of 900metre above the mean sea

level. The climate of the district has agreeable temperature ranging from the highest mean

maximum of 36.2 degree Celsius in April to lowest mean maximum of 11.4 degree Celsius in

January. It has two rainy seasons from June to September and from October to November

coming one after another but with opposite wind regime i.e. south-west and north-east monsoon.

The maximum rainfall recorded here is 900mm with standard deviation 18.7mm.

Status of wetland depends on its management, anthropogenic activity, solid waste

collection and also attitude of people. Due to the large growth of population and steady

development of urbanization wetlands are disappeared from Bangalore city. It is recorded from

investigation that 35%, of decrease in water bodies from 1973 to 1996 (Deepa et al, 1999).

30% lakes are used for irrigation

25% lakes are used for fishing

36% lakes are used for washing only

3% lakes are used for drinking


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Agriculture is practiced in 21% of lakes. Approximately 35% of lakes are used for

grazing by cattle. Mud lifting was recorded in 30% and brick making in 38% of the lakes

(Krishna et al, 1996).

Economic valuation was undertaken in lakes namely Hebbal, Amruthalli, and

Rachenahalli lakes. Hebbal and Amruthalli lakes are situated in Bangalore north Taluk (east of

Bellary road) while Rachenahalli situated in Bangalore south and north Taluk.

HEB B AL LAKE VALUATION :

To assess the importance of Hebbal lake, a socio- economic survey is carried out in

the catchment areas of lake (Ranjani V.G. and Ramachandra-, T.V., 1999). A random survey was

carried out using questionnaire method with 1k.m. radius from lake. The study was done un four

areas around the lake namely Hebbal, Guddadahali, Bhoopasandra which are semi areas and one

is the U.A.S. layout which is completely urban. The economic valuation of the wetland resources

was done in contingent valuation techniques. Table-2 gives the economic details of lake water

benefit in terms of rupees.

RESULTS OF SOCIO- ECONOMIC S URVEYAreas Domestic

(per1000people

per day)

Agriculture (per

ha. Per day)

Livestock

(per 1000 animals every day)

Water use Fodder

Hebbal Rs.1937.50 Rs.19.00 RS.2170.80 RS.33500.00

Guddadahali Rs.1603.30 Rs.19.00 Rs.1250.00 RS.37500.00

Bhoopasandra Rs.1547.83 Rs.5.00 Rs.1270.80 Rs.16666.90

U.A.S layout Rs1547.00

Live stock : From above table it is known that for fodder and water in every two daysthe 1000 animal depend on Rs.33500 Rs.2170.80 in Hebbal areas and in Guddadahali area

dependency is Rs. 37500 for fodder and for water it is Rs.1250 per 1000 animal in every two


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days, in Bhoopasandra area dependency for fodder is Rs.16666.70 and for water it is Rs.1270.00.

So in above two areas total economic dependency for livestock is35670.80, 38750.00, 17937.50

per 1000 animal in every two days. Here the people rear cows to earn livelihood by selling milk

in surrounding areas. The fodder available in the local market is very expensive, therefore people

used lake as fodder as a chief source of food.

Agriculture : Agriculture is still in practice in Hebbal, Guddadahali, andBhoopasandra. Many of these areas use lake water for irrigation. The dependency on Hebbal lake

for irrigation is Rs.19.00 per hectare and on Guddadahali it is also Rs.19.00, in Bhoopasandra

area it is Rs.5.00 only because farmer in these areas owns a coconut grove and he uses lake water

as well as treated water to irrigate the land.

Domestic sector : The dependency for domestic sector was calculated bydetermining the water used per individual i.e. in Hebbal area it is Rs. 1937.50, in Guddadahali it

is Rs.1603.30, in Bhoopasandra it is 1547.80 and in U.A.S layout it is 1547.00 per 1000 people.

Hebbal area depends more on ground water than other area as for the lack of water supply. From

above table it is known that in these four areas economic dependency for livestock is more than

the other dependency, i.e. agriculture and domestic.

RECHENAHALLI AND AMRUTHALI LAKEVALUATION

Socio economic survey was undertaken in two lakes namely Rachenahalli and

Amruthalli (Rajnikanth R. and Ramachandra, T.V.2000) to assign quantitative values to the

goods and services provided by these wetlands. The economic value is used to assign the value

of particular wetland as a whole in terms of the rupees. This economic valuation concerned

ultimately with the allocation of wetland resources to improve human welfare. Socio economic

survey was conducted to:

1. Quantifies the value of wetland resources

2. Determine the economic dependency of people living in the surrounding areas

of these lake

Valuation of wetlands depend on their use value (human dependency and their

interaction with the wetland resources) and non use value (no interaction with wetland resources)


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were determined by conducting interviews with local community using questionnaire format

which contains the information on various uses of wetlands for irrigation, domestic recreation,

food, livestock, energy uses as direct value shown in table-3 and table 4 provides the non use

values

Five villages were selected in this regard namely Amruthalli (around Amruthalli lake),

Rachenahalli, mestripalaya, Srirampura, Daserahali (around Rachenahalli Lake). The valuation

of wetland products was done using market price method and contingent valuation method with

respect to public willingness to pay. By conducting this study, the requirement of local

communities and their economic dependency on the wetlands can be assessed.

VALUATION OF RECHENAHALLI AND AMRUTHALI LAKES

Items

Resources

Quantity of

Amruthalli lake

Amruthalli lake

values in rupees

Quantity of

Rachenahalli lake

Rachenahalli lake

value in rupees

Domestic

consumpti

on

277.9/1/house/da

y

1.667/house/day 214.97/1/house/day 1.289/house/day

Live stock

consumpti

on

59.28/cow/day 35.5/100cows/da

ys

60.39/1/cow/day 36.18/100cows/day

Agricultura

l

consumpti

on

7201.02/hectare/d

ay

43.19/hectare/da

y

12087.8/1/hectare/d

ay

72/hectare/day

A gricultura

l products

Paddy

Ragi

15.1q/ha/0.5 year

7.6q/ha/0.5 year

21140/ha/0.5yea

r

32.00/ha/year

4560/ha0.5year

12.5q/ha/year

44814/ha/year

7500/ha/year

19920/ha/year


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Flower

Guava

Vegetables

Coconut

3.95q/ha/year

74.23q/ha/year

3000 no./ha/year

11847.9/ha/year

37115/ha/year

11253/ha/year

5100.2 no. s

/ha/year

6.64/ha/year

60.1q/ha/year

7.69/ha/year

30050/ha/year

10381.5/ha/year

19125/ha/year

Energy

resources

0.47k.g/person/da

y

117.5/1000/per

day

1.298k.g/person/da

y

324.5/1000/persons/

day

Fishing

products

75k.g./day 900k.g/day

From above table it is clear that dependency on Rachenahalli lake is about Rs 10435/-

during cropping and fishing seasons which is only rupees 20/- in case of Amruthalli lake shows

that the economic dependency in case of Rachenahalli lake is more than that of people living

around the Amruthalli lake due to better water quality and ecosystem which is explained below:-

AGRICULTURE Wetlands are important source of water for agricultural use. The dependency on

Rachenahalli lake for irrigation is about Rs 9173.00 per day during cropping season while in

case of Amruthalli it is zero, because for its poor quality and quantity of water due to the

eutrophication and drying in summer season.

FUELFor fuel people depends on both the lake i.e. Rachenahalli provides Rs 325/- per day

and Amruthalli provides Rs13/- per day fuel wood.


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FISHWetlands provide food to local communities in form of fish. The dependency on

Rachenahalli Lake is Rs900/-per day due to higher concentration of oxygen in it, but in this case

Amruthalli lake has no value.

LIVESTOCKSThe economic dependency for live stock in the Rachenahalli lake water is about

Rs37/- per day and in Amruthalli lake it is about Rs7/- per day.

The ground water table of Rachenahalli Lake ranges from 50 feet immediate vicinity

and 250 feet at farther places (2-3 k.m.), while in the surrounding regions of Amruthalli Lake

ground table range from 180-400 feet. But Amruthalli lake degraded due to excessive inputs of

domestic sewage, industry wastage which reduce the dependency of people also. To avoid

eutrophic conditions and to improve the economic dependency of people residing closer to the

lake, appropriate conservation and restoration strategy are needed. The result which is shown in

table-4 below is obtained through secondary data gathered from material published by

governmental and non governmental agencies and primary data collected through two surveys:-

1. Collect the data from outsiders

2. Collect the data from local people having different questionnaire

The collected information will be processed with the help of standard statistical

tools to draw inference with respect to the stated objective.

VALUATION OF AMRUTHALLI ANDRACHENAHALLI LAKESLake Direct use

(value in rupees)

Indirect use value Existence use value

RACHENAHALLI Agriculture 9173.00

Fuel - 324.5

Fish - 900.00

1.Ground water

table varies from 50

(vicinity of Lake) 250

feet(2-3 k.m. away

from the lake )

1.Birds and

migratory birds

2.Cultural and

heritage value


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Livestock

Consumption - 37.50

2.It has a greater

capacity to

Retain flood water

from heavy rain fall

and disposal

Of treated water

from

JNCASR

3.Pooja during

festivals

RESULT Total value is

Rupees 10435 per day

During cropping and

fishing

Seasons.

Ground water

recharge and flood

protection is

increased due to

lakebed

perviousness.

Functional aspects

biodiversity and

cultural recreational

aspects indicates

importance of

The wetlands

In the ecosystem

AMRUTHALLI Use

Fuel

Live stock

Consumption

Value

12.5

7.5

Ground water table

varies from180 feet

(vicinity of

Lake) 400 feet (3

k.m. away from the

lake)

It has a lower flood

protection

Value.

Existing lake has no

culture, heritage and

bio diversity value


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RESULT Total value is rupees

20/- per

Day. Lower value is

due to

Eutrophic condition

of the lake

Which is made the

wetland

Resource unused.

It has no ground

water recharge and

fewer flood control

values mainly due

To the impervious

lakebed

Resulting from the

accumulation of silt.

This is due to the

pollution on account

of anthropogenic

activity in and

around the lake.

CHALLENGES AND LIMITATIONS:Although economic valuation of wetland allows a better measure of

overall economic efficiency but in certain cases economically efficient choice is not necessarily

most socially applicable or environmentally beneficial choice.

Wetlands simultaneously produce a number of benefits from clean

water and nutrient cycle to food control and recreation. Unlike many traditional economic

benefits a number of people can enjoy these benefits without the value to the individual being

any way diminished. For example a community gains from the clean water produced by the

wetland, but only a few would prosper from the housing built on a filled wetland. Wetlands here

provide multiple benefits simultaneously is often overlooked in comparison with more traditional

economic benefit.

The science of calculating economic values for wetlands is still

relatively new and evolving and methods are continually being refined and enhanced. Putting

values on naturally occurring services such as water filtration, erosion control, or sediment

trapping in particular is much newer concept than valuing traditional consumptive or extractive

uses like fishing or hunting.


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ACTION PLAN FOR CONSERVATION OFWETLAND

Investing economic benefit of wetland conservation action plan formulated taking

both governmental and nongovernmental organization to create, reclaim, and protect wetland.

The goals of wetland conservation act programmes are:

a. Increase public awareness and commitment for protection of wetland,

b. Develop wetland database and increase understanding of wet land

dynamics

c. Promote co-ordination among state, district, regional government and

nongovernmental partners

d. Give a place to the protection of wetland

e. Improve planning between governmental and nongovernmental partners

f. Promote the wetland state protected areas

g. Strengthen the legislation, policy. Agreements and compliance

h. Evaluate the outcome of programes and ensure a sound scientific basis for

policy.

WETLAND POLICY GUIDELINES The goal of wetland policy guidelines are:

1. Maintenance of functions and values derives from wetlands

2. No net loss of wetland functions in regional land and water3. Enhancement and rehabilitation of wetland where the continued

loss or degradation of wetlands or their functions reach critical

level

4. Recognition of wetland function in resource planning,

management and economic decision making, in all national state


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Programmes, policies and activity

5. Securement of wetland significance

6. Recognition of sound, sustainable, management practice in

sectors such as forestry, agriculture that make positive

contribution to the wetland conservation

7. Efficient utilization of wetland

8. Undertake cost benefit an analysis of the wetland resources

derived by the society and economic evaluation caused due to

the loss of wetlands

9. Advise government to provide fund fort wetland research and

conservation programmes

RECOMMENDATIONS FOR EFFECTIVE WETLAND

MANAGEMENT ARE:-

A. Integration of different government agency for effective

implementation of activities related to conservation of wetland

B. A national committee for lake and wetlands reclamation restoration

and development should be formed to formulate national policy for

wetland conservation and utilization

C. A comprehensive plan be prepared to study selective,

representative wetland in a phased manner to create database with

regard to their present status, sustainable use, management and

conservation and to formulate strategy for their long term

management.

D. Mass awareness through governmental and nongovernmental

organization

E. Fishermens socio economic aspect be taken into consideration

While formulating wetland policy


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F. Providing better education training, financial support to those

people who work in this field.

C O NCLUSION : Wetland a precious gift of nature is going on decreasing day by day, so it is

necessary to evaluate wetland and this economic evaluation of wetland help a layman to

understand the value of wetland and come forward for its conservation. Decision making

processes are increasingly considering the economic value of natural systems, including

wetlands. It is providing to be useful tool through which the value of wetlands can be

understood. Yet as illustrated given the complexity and variety of valuation method one

should only conduct wetland valuation with a full awareness of its challenges and

limitations.


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REFERENCE 1. Deepa R.S. Ramachandra, T.V. and Kiran, R.1988. Antropogenic stress on

wetlands of Bangalore, in proceedings of National seminars on

Environmental pollution: causes and remedies, P.E.S institute of

Technology, Bangalore, pp 166-182.

2. Edward B Barbier, Mike Acreman and Duncan Knowler, 1997, Economic

Valuation Wetland, A guide for the policy Makers and Planners, IUCN

Publication Unit, Ramsar Convention Bureau Gland, Switzerland. pp-1-

46, 81-97, 110-127.

3. Krishna, M.B., Chakrapani, B.K. and Srinivasa, T.S. 1996. Water birds

and wetlands of Bangalore, Karnataka State Forest Department,

Bangalore, pp 4-10, 17-25, 42-43 and 49-57.

4. Rajnikanth. R and Ramachandra, T.V., 2000. Restoration of lakes in

Bangalore based on status and Socio Economic aspects of wetlands,

project report, November 2000

5. Ranjani V.G. and Ramachandra, T.V. 1999. Bathymetric Analysis and the

characterization of Hebbal Lake to Explore Restoration and Management

Options, Project report, September 1999.

6. Serageldin, 1993. Making Developmental Sustainable. Finance and

Development, December 1993. Vol 30:(4):6

Documents

Economic Valuation of Wet Land