Overview of the Cost Benefit Analysis - Challenges

Rashid Sumaila

Fisheries Centre, University of British Columbia

Vancouver, Canada

Governance and CBA of WIO Workshop Nairobi, 18-19, January 2011

Goal for the CBA work (from this meeting)

• To benefit from your collective knowledge and wisdom on how best to conduct our study to make it as useful to the region as possible;

• Leave meeting with a clear idea of what to do and how to do it;

• Learn from the policy and governance work.

Objectives 1

• Assessing the total economic value of marine and coastal resources of the ASCLME region and their contribution to the economy of the region’s countries:

– Defining the scope;– Meeting data needs;– Timeframe.

ASCLME region

• What is it?– The whole Western Indian Ocean?– Only the Agulhas and the Somalia LMEs?– Which countries belong to the region?– Which countries use the resources of the

ASCLME but do not belong to the region?

Total economic value

• Use and non-use values;• Market and non-market values;• Agreeing on which economic benefits to

include in analysis.

Coastal and marine resources

• Identifying coastal resources of the ASCLME• Which resources to include?• How do we include and or demarcate

resources that are not exclusively dependent on the ASCLME.

Contribution to the economy

• How do we measure this?• Which indicators to include?

Objectives 2: Distribution of benefits

• Scope of distributional analysis:– ASCLME countries versus non-ASCLME countries;– Between ASCLME countries;– Within ASCLME countries:

• High versus low income earners;• Female versus male participants.

• How do we do this:– Calculate the proportion of current total benefits to

different groups?– Use indicators, which ones?

Objectives 3: Marine & coastal resources and poverty alleviation

• Scope: – Within and between ASCLME countries;

• How to do it: – Distributional analysis in objective 2 will form the

basis for the analysis here.

Objectives 4: Indicators and policy analysis

• Using the economic results of the assessment, provide local resource managers with:– indicators and policy analyses about the economic

impact of different governance options for sustainable use of the resources; and

– the economic trade-offs among different uses of the marine ecosystem.

• Challenge here is that it is a huge task, whose scope needs to be carefully determined.

Objectives 5: Capacity building

• Increasing capacity for government and other stakeholders in the ASCLME region to use environmental economics effectively in their decision-making:

– How do we do this?– What timeframe?

Objectives 6: Report

• Compile the final regional report on Cost benefit Assessment of the marine and coastal resources of the western Indian Ocean region:

– This is the easy part, i.e., once earlier challenges are dealt with.

Coverage/scope

• Western Indian Ocean:– The Agulhas current;– The Somalia coast;– The Red Sea;– The Arabian Sea;– The High Seas.

Coverage/scope

• ASCLME countries– Comoros– Kenya– Madagascar– Mauritius– Mozambique– Seychelles– South Africa– Somalia– Tanzania

Coverage/scope• Total economic value: Use or non-use values;• Use values:

– Direct use values: Captures the direct use of coastal & marine ecosystem services from consumptive purposes such fish, wood and non-consumptive uses such as recreation, tourism and cultural activities.

Coverage/scope• Use values:

– Indirect use values: Captures the indirect ecosystem services provided such as waste assimilation, habitat and biodiversity protection, etc;

– Option value: the value for maintaining the option to use the ecosystem in the future.

• Non-use values:– Bequest– Existence

Coverage/scope

• Coastal and marine resources:– Small-Scale Fisheries;– Tourism;– Agriculture and forestry;– Mariculture;– Energy;– Ports and Coastal Transport;– Costal mining.

• How do we include and or demarcate resources that are not exclusively dependent on the ASCLME.

Method & data: Total economic value

• Direct output impact (e.g., catch value for fish);• Economic rent;• Income to labour;• Returns to capital;• Jobs supported;• Multiplier effects – added value throughout the

economy.

Thanks for your attention

Photo by Asep