Overview of Economic Valuation of Coral Reefs

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Overview of Economic Valuation of Coral Reefs
Mt. Irvine, Tobago March 21-22, 2006

• Lauretta Burke
• World Resources Institute (WRI)

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• economics

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Beautiful
add pics.
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Valuable
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Valuable
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Valuable
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Valuable
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Valuable
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Valuable
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Valuable
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Threatened

• Coastal development
• Sewage
• Dredging

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Threatened

• Coastal development
• Sewage
• Dredging
• Runoff from construction and agriculture

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Threatened

• Coastal development
• Sewage
• Dredging
• Runoff from construction and agriculture
• Marine-based threats

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Threatened

• Overfishing

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Threatened

• Tourism pressure

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Threatened

• Coral Bleaching
• Coral Disease
• Ocean Acidification

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Threats to Coral Reefs from Land-based Sources

• Sediment

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Threats to Coral Reefs from Land-based Sources

• Sediment
• Nutrients

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Threats to Coral Reefs from Land-based Sources

• Sediment
• Nutrients
• Toxic Substances

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Global Analysis released in 1998 by World
Resources Institute, in collaboration with
ICLARM, WCMC and UNEP
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The Reefs at Risk Index
Low
High
Medium
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• Global Reefs at Risk successful at raising
  awareness.
• Relatively coarse-scale (4km.)

• Regional Reefs at Risk series
• Higher resolution analysis valuable for
  management
• More integration and improvement of data

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Reefs at Risk in the Caribbean

• Collaboration of over twenty international and
  regional partners
• Uses Geographical Information System (GIS) to
  evaluate threat to coral reefs

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Threats Evaluated in Caribbean

• Coastal Development
• Watershed-based sources of sediment and pollution
• Marine-based threat
• Overfishing

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Threat Coastal Development

• Dredging, land filling and reclamation
• Mining of sand and coral
• Runoff from construction
• Sewage discharge
• Impacts from tourism

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Coastal Development Analysis Method Inferential
Modeling
Reefs Classified

• Proxy Indicators
• Cities
• Ports
• Airports
• Dive tourism centers
• Coastal Population density
• Population Growth
• Tourism Growth
• Management Effectiveness of MPAs

Reefs Threatened by Coastal Development
Low Medium High
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Finding COASTAL DEVOPMENTthreatens an
estimated one-third of Caribbean coral reefs.
Estimated threat
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Regional Summary
Low
Medium
High
Very High
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Finding INTEGRATED THREAT - nearly two-thirds
of Caribbean coral reefs are threatened by human
activities.
Estimated threat
Low
Medium
High
Very High
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Finding Degree of human pressure on coral reefs
varies considerably across the region.
Low
Medium
High
Very High
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Country Summaries

• Note 1km resolution analysis is coarse scale for
  small islands in Eastern Caribbean. Higher
  resolution possible with local data.

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Finding If current trends in coral reef
degradation continue, coastal communities and
national economies are poised to sustain
substantial economic losses.
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Valuation Coral reef-associated fisheries

• Net annual revenues of over 300 million in 2000.
• Fisheries could decline by 30-45 by 2015

• Estimated loss of net revenues between US95
  million to US140 million per year by 2015.

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Valuation Dive Tourism

• Net annual revenues of over 2 billion in 2000.
• Coral degradation could results in a 2-5
  reduction in revenues by 2015

• Estimated loss of net revenues between US100
  million to US300 million per year by 2015.

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Valuation Shoreline Protection

• Over 20 of Caribbean coastline protected by
  coral reefs.
• Estimated value of this service is between 700
  million and 2.2 billion.

• Reef degradation could result in losses estimated
  between US140 million to US420 million per year
  by 2050.

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Policy Recommendations

• Create the Will for Change
• Consider long-term economic value in
  decision-making
• Build Capacity for Change
• Improve Management
• International Action

Reefs at Risk in the Caribbean http//reefsatrisk.
wri.org
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Demand for EV
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EV Project Characteristics

• Produce detailed EV estimates for 2 pilot areas
  (Tobago and St. Lucia)
• Result in estimates of likely economic loss due
  to coral reef degradation
• Develop a method that is efficient, inexpensive
  and replicable
• Rely predominantly on existing, available data
• Produce a tool for application of Econ Valuation
  to policy questions.

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Ecosystem Services

• Ecosystem goods (such as food) and services (such
  as waste assimilation) represent the benefits
  human populations derive, directly or indirectly,
  from ecosystems.

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Ecosystem Services
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Ecosystem Services from Coral Reefs
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Purpose of Economic Valuation of Ecosystem Goods
and Services

• The purpose of economic valuation is to obtain
  reliable, objective information on the benefits
  and costs of conserving ecosystems so as to
  inform decision-making.

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Economic Valuation Uses

• Evaluate Values
• Competing Demands
• Tradeoffs
• Externalities
• Beneficiaries, costs and benefits

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Taking natures value into account mangrove
conversion
Private Net Present Value per hectare Mangrove
91 Shrimp Farm 2000
Public Net Present Value per hectare Mangrove
1,000 to 3,600 Shrimp Farm -5,400 to 200
Source Millennium Ecosystem Assessment
Sathirathai and Barbier 2001
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Total Economic Valuation
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Economic Valuation Methods

• Effect on Productivity
• Travel Cost
• Hedonic Pricing
• Replacement Cost
• Avoided Damages
• Contingent Valuation

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Other key terms

• Net Benefits
• Consumer Surplus

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Categories of Economic Valuation

• determine the value of the total flow of benefits
  from an ecosystem (e.g., TEV)
• determine the net benefits of interventions that
  alter ecosystem conditions (e.g., evaluating the
  value of investing in an MPA)
• examine how the costs and benefits of an
  ecosystem are distributed (e.g., identifying
  beneficiaries)
• identify potential financing sources for
  conservation.