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DRAFT VERSION 27-3-2011

A Preliminary

Ecological-Economic Estimation of the Environmental Service Loss Due to the Current

Ecological Conflict in the Isla Portillos Region in the

Caribe Noreste Wetland in

Northeastern Costa Rica.

Bernardo Aguilar-González1

Azur Moulaert2

1 Executive Director of Fundación Neotrópica, San José, Costa Rica; Adjunct Faculty, Environmental Studies, Northern

Arizona University, Flagstaff, Arizona, USA; President, Mesoamerican Society for Ecological Economics. 2 Research Fellow, Gund Institute for Ecological Economics, University of Vermont, Burlington, Vermont, USA.

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Contents Abstract ..............................................................................................................................................3

I. Introduction and Statement of the Problem ...................................................................................3

II. Methodology ................................................................................................................................10

A-The RAMSAR Mission to assess the damage in the CNW and UNITAR/UNOSAT Study ............10

B- Ecological Economic Valuation: The Benefit Transfer Methodology and Multicriteria Analysis.

.....................................................................................................................................................18

C- Other Methodological Considerations .....................................................................................26

IV. Results and Discussion ................................................................................................................26

V. Preliminary Conclusions ...............................................................................................................30

VI. References ..................................................................................................................................31

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Abstract

In a time of crisis and environmental uncertainty, environmental conflicts abound. Costa Rica and

Nicaragua both have different levels of socioeconomic and environmental development which

imply challenges for the conservation of some of their most important ecosystems. They also have

resources of extreme importance as is the case of their transboundary wetlands: the San Juan

River Wildlife Refuge (Nicaragua) and the Caribe Noreste Wetland (Costa Rica).

An environmental conflict originating in the actions of the Nicaraguan government in October

2010 has resulted in serious environmental damages to these wetland areas documented by a

RAMSAR Convention technical mission and UNOSAT reports. The conflict is now in the

International Court of Justice which has ruled with preventive measures that restrict access to the

affected area (given diverging territorial claims) to the possibility of environmental damage

monitoring actions by Costa Rica.

This study makes a preliminary ecological economic estimate of the potential loss in ecosystem

services given the diagnosis of the RAMSAR mission in a Direct Influence Area of 225 hectares and

an Indirect Influence Area of 21.500 hectares. It estimates the Net Present Value using diverse

discount rates similarly to the UN-TEEB initiative for losses in 10 and 100 years. It recommends

methods to improve the assessment based on access to the region and the adoption of an

international scope. It also prescribes using the process of discussion on environmental service

loss as a vehicle to foster adequate participation in the decision making process for the policies

that will rule these binational natural capital areas in the future.

Keywords: Civil Society driven Multi-criteria analysis, ecological economic valuation, participatory

processes, wetland conservation, ecological conflict resolution, Nicaragua, Costa Rica, San Juan

River, Caribe Noreste Wetland.

I. Introduction and Statement of the Problem

In a time of crisis and environmental uncertainty, environmental conflicts abound. Costa Rica is a

good example of this statement. The country has become very aware of the environmental

conflicts that accompany two seemingly contradictory agendas. On one side, seeking to maintain a

green republic (Evans, 1999) reputation as has been affirmed by international recognitions (such

as the first place in the Happy Planet Index and the recognition of the Convention for Biodiversity

of its Biodiversity Law, which came in 2010) and its tangible achievements: a reputable

conservation area system with about 25% of its territory in protected areas and evidence of gains

of forest cover during the last decade (FONAFIFO, 2007; UNEP, FAO, UNFF, 2009;FAO, 2010). At

the same time, its government has been criticized for its apparent contradictory behavior in terms

of fostering economic growth through measures for which it is not prepared to fully address the

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environmental impacts. This is the case of inadequate urban development, watershed

management, tourism infrastructure and other development options deemed as depleting (Pera,

2008; Rogers, 2009; Honey, Vargas & Durham, 2010) . During the last 2 years, Costa Rica has made

many such decisions to face the economic crisis that started in 2008. A complicating factor has

been the criticism of lack of enough channels of participation for environmental decision-making

(FUNPADEM, 2005; Sáenz & Rivera, 2008) Yet, a recent court decision has demonstrated the value

of the control powers of the judiciary system when the infamous open pit mining known as

¨Crucitas”, supported by the previous Costa Rican government, was declared illegal. The current

government has already passed a new law closing the door to future similar projects, yet it has

also appealed the court decision on Crucitas.

The base of Costa Rica´s relative enlightened behavior is its social base. A well educated

population and relatively higher social indicators, resulting from its social democratic past, have

been essential in promoting scientific and technical development. Recent development decisions

have been accompanied by a concern on the widening gap between the wealthier and the poorest

(Programa del Estado de la Nación, 2010; Aguilar-González, Chang & Leonard, 2010).

The result is a mixed bag of GDP and trade growth (GDP up to levels of 5 and 6% per year until

2009 when the GDP decreased by a 2.5% due mostly to the U.S. economic crisis) and ambiguous

environmental and social indicators. For instance, 16% of the Costa Rican population still lives

below the poverty line (in 1970 it was as high as 24%), the GINI Index of inequality in income is

currently around .49 after having been in 1985 at its lowest level of .44. The ecological footprint of

the country has increased from 1.95 global hectares per capita in 1999 to 2.77 today (lower

ranking as 55th in the world down from 37 in 2001) and its biocapacity decreased from around 5.00

in 1960 to 2.50 in 2001 and to 1.81 global hectares per capita today.

This scenario has led to the development of ecological conflicts in areas where unsustainable

models of development have been implemented. Yet, several areas of the country remain remote,

protected and relatively pristine. This is the case of the Northeast region of Costa Rica, including

several protected areas of great importance such as Tortuguero National Park, the Barra del

Colorado Wildlife Refuge, the Border Wildlife Refuge and the RAMSAR Convention for Wetlands´

recognized Caribe Noreste Wetland (CNW) (made up by the first two) (Figure 1).

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Nicaragua also has a challenging socio-

ecological scenario. Its economy is heavily

dependent in agriculture and other primary

products. With a population that has more than

doubled in the last 30 years, last year it saw a

larger than expected growth in its GDP and

Export Revenue, which is attributed to the

increase in primary product prices. Its two main

trade partners are the USA (28.7% mainly

coffee and gold) and Venezuela (13.05% mainly

coffee and meat) (ACAN-EFE, 2011; Sánchez,

2011). This growth was accompanied by the

largest inflation in Central America (Marenco,

2011). Government advisors feel optimistic

about the outlook for the economy this year

due to new renewable energy projects and the

increase in exports (América Economía, 2010).

The country seeks to reverse the high poverty

and migration situation that has characterized its reality in the last decades. Oxfam (2011) reports

a poverty rate of 48% of the population. The migration ranking of Index Mundi places Nicaragua as

number 123 of 178 countries in the world (Index mundi, 2011) indicating one of the highest

migrating populations due to the conditions of the country.

In the environmental area, Nicaragua seeks to promote conservation through its young Ministry of

the Environment and Natural Resources (MARENA) and civil society participation. It has some

good indicators, for instance in its lower ecological footprint. Yet, Mongabay (2011) reports that

Nicaragua lost 30 percent of its forest cover between 1990 and 2010, though its deforestation rate

has fallen 17 percent since the close of the 1990s. The Foundation for sustainable Development

(2011) reports problems with agrochemicals in agricultural practices and water resources. Yet,

both sites highlight the remaining wealth in forest resources that are located in the Caribbean

coast of the country, a key component of the Mesoamerican Biological Corridor. South of these

resources is another key wetland site of international recognition (RAMSAR) located in a relatively

low populated area: the San Juan River Wildlife Refuge (SJWR), opposite of the Caribe Noreste

Wetland on the Costa Rican side (Figure 2). Altogether, these two RAMSAR sites comprise over

118000 hectares (75310 for the CNW and 43000 for the SJWR) of valuable wetlands.

Figure 1- Location of the Caribe Noreste Wetland (7) as part of the RAMSAR Sites in Costa Rica. Source: MINAET, Costa Rica.

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The conservation of these bi-national

resources has been challenged by the

situation that has developed since October,

2010. Since then, the Costa Rican government

denounced that Nicaraguan troops and

construction personnel were executing work

that went beyond the works that had been

announced in a meeting between

representatives of both governments

(Arguedas y Oviedo, 2010).

The Costa Rican Ministry of Foreign Affairs has

led the claim that the government of

Nicaragua has unlawfully constructed a

channel in its territory and executes dredging

that had initially been announced to the

Minister of Foreign Affairs of Costa Rica in the

above mentioned meeting between

representatives of the two nations. Further,

Nicaraguan troops have been stationed in the

northern section of Portillos Island, north of

Calero Island. The Nicaraguan government

claims that it is executing works in what is its

territory according to its interpretation of the

border treaties. This interpretation was initially

substantiated in a map from Google maps (which

has generated controversy) and in its reading of the

results of the Alexander arbitration (http://google-

latlong.blogspot.com/2010/11/regarding-

boundary-between-costa-rica.html ) according to

which there used to exist a natural channel out of

Portillos Lagoon, or Harbor Head, that connected it

with the San Juan River (Figure 3).

Costa Rica claims that such channel never existed,

that there is no historical evidence of it in the

cartography of the 19th century and, in particular, in

the maps of the Alexander arbitration, and that

General Alexander refers in his border description to

the connection that currently exists between the

Portillos Lagoon and the San Juan river north of

the disputed area (Figures 4 and 5). Therefore,

Figure 2- Refugio de Vida Silvestre Río San Juan. Source: Comisión Centroamericana de Ambiente y Desarrrollo.

Figure 3- Google Image indicating the border between Nicaragua and Costa Rica in yellow. The caption at the critical ogle web site reads: “Current incorrect border in Google Earth, showing the S-shaped river course”. Source: http://ogleearth.com/2010/11/about-costa-rica-nicaragua-their-border-and-google/

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Costa Rica claims the work as unlawful and the presence of Nicaraguan army soldiers as an armed

invasion of its territory (República de Costa Rica, 2010).

Costa Rica took its claim to the Organization for

American States which resolved supporting the

Costa Rican arguments and recommending that

the Nicaraguan army should vacate the area.

Nicaragua disregarded the OAS decision alleging

that it did not have jurisdiction to intervene in the

conflict.

In view of the scale of the works that continued,

the Costa Rican government focused on the

environmental damage that is being caused as an

additional argument point to strengthen its claim

that rhymes with its environmental reputation.

The serious perceived impacts have been

documented and commented in an ample way by

Costa Rican scientists and environmental NGOs

(República de Costa Rica, 2010). The government

invited a RAMSAR Convention on Wetlands´

technical mission to inspect the site and

contracted the UNOSAT service

from the United Nations to

technically verify the

environmental damages being

caused by the works. The visit of

the RAMSAR technical mission

took place between November 27th

and December 1st. The report was

sent to Costa Rica shortly

thereafter. Both these reports

have been used to substantiate a

claim filed on November 11th, 2010

by the Costa Rican government

against the Nicaraguan

government in the International

Court of Justice (ICJ) in The Hague,

The Netherlands.

Figure 5-Sketch from the Alexander Arbitration files presented as evidence by Costa Rica. Source: Hale, 2010.

Figure 4- 1897 Map contained in the first arbitral award given by Alexander indicating both the Nicaraguan and Costa Rican claim on where the border line should be located and the Boundary Line Fixed in 1897. Source: Moore, 2007.

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The claim seeks that the Court declares that Nicaragua is in breach of its international

obligations as regards the incursion into and occupation of Costa Rican territory, the serious

damage inflicted to its protected rainforests and wetlands, and the damage intended to the

Colorado River, wetlands and protected ecosystems, as well as the dredging and

channelization activities being carried out by Nicaragua on the San Juan River (ICJ, 2011).

As a preventive petition, Costa Rica asked the ICJ the following provisional measures, given

the irreversible nature of the damages alleged:

1- Nicaragua shall not, in the area comprising the entirety of Isla Portillos, that is to say,

across the right bank of the San Juan River and between the banks of the Laguna Los

Portillos (also known as Harbor Head Lagoon) and the Taura River (‘the relevant area’):

a- station any of its troops or other personnel;

b- engage in the construction or enlargement of a canal;

c- fell trees or remove vegetation or soil;

d- dump sediment;

2- Nicaragua shall suspend its ongoing dredging program in the San Juan River adjacent to

the relevant area and,

3- Refrain from any other action which might prejudice the rights of Costa Rica, or which

may aggravate or extend the dispute before the Court.

Nicaragua´s government rejected both the claim and the petition for provisional measures

sticking to its main argument that it is acting based on acts of sovereignty. Further, it has

rejected the environmental basis of the claim based on three main considerations: 1- the

fact that it has sufficient environmental impact analyses according to law; 2- the fact that its

works are just clearing a preexisting channel, aside from the dredging of the San Juan River,

and 3- the support of its scientific and environmental NGO community (Grupo Ad-Hoc de

Observación Ambiental, 2011).

Costa Rica rebutted these arguments as false or insufficient. As can be seen from this

summary of facts, this is a socio-ecological conflict of international dimensions, with very

important environmental resources at stake, which has become extremely polarized. It is

clear that the most credible sources for technical information will be those coming from

international technical institutions. The only two sources of this nature at the time are the

RAMSAR report of the technical mission invited by Costa Rica and the UNITAR/UNOSAT

report “Morphological and Environmental Change Assessment: San Juan River Area

(including Isla Portillos and Calero), Costa Rica” from January, 2011. Nicaragua rejected the

RAMSAR report, calling it partial and lacking on the ground verification (Grupo Ad-Hoc de

Observación Ambiental, 2011; Asamblea Nacional de la República de Nicaragua, 2011). Yet,

until now, the convention authorities support its conclusions. Nicaragua invited a technical

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mission to make an assessment directly in the area of the San Juán River. The mission visited

Nicaragua between March 7 and 13, 2011. The report is pending as we finish this paper.

It is clear that there is no transboundary environmental impact statement to evaluate an

impact that is clearly transboundary. The significance of the impact (actual and potential)

could be lost in finger pointing about sovereignty.

The ICJ resolved the petition for provisional measures on March 8, 2011, supporting some of

the arguments expressed above. It ordered an exclusion zone in the DIA (accepting petitions

1 a,b and c from Costa Rica yet including the prohibition of permanent personnel for both

countries) which it calls “disputed territory” (Figure 6) and granted Costa Rica´s provisional

measure number 3. Recognizing the importance of RAMSAR it ordered an additional

provisional measure whereby, given the fact that it considered plausible that the DIA has

belonged to Costa Rica for over 100 years, it gave Costa Rica possibility to “dispatch civilian

personnel charged with the protection of the environment to the disputed territory,

including the caño, but only in so far as it is necessary to avoid irreparable prejudice being

caused to the part of the wetland where that territory is situated; Costa Rica shall consult

with the Secretariat of the RAMSAR Convention in regard to these actions, give Nicaragua

prior notice…” (ICJ, 2011)

As can be seen, this conflict fits

perfectly the profile of problems

that benefit from postnormal

science contributions (Funtowicz

and Ravetz, 1993). Systemic

uncertainty is high due to the

contradictory nature of the

information and the small amount

of technical, impartial sources. At

the same time, the stakes are high

as fragile and globally important

resources are at risk of irreversible

damage in a short amount of time.

A combined ecological economic and political ecology analysis seems in order.

In order to contribute with a better understanding of the need for an internationally

enforceable solution to this problem, Fundación Neotrópica seeks in this research to assess,

with the best technical international information available at this point, the monetary value

of the impact being caused to the environmental services in the region in order to create a

parameter of comparison and understanding for a better solution to this conflict.

Figure 6- Map illustrating the Resolution of the ICJ 8-3-11. Source: La Nación Infographic, 9-3-11.

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This paper follows the commitment that Fundación Neotrópica embraced 2 years ago for the

protection of wetlands with two action community based projects. The first one, ECOTICOS, a

collaborative project, funded by the Blue Moon Fund from the U.S., between the University of

Vermont´s Gund Institute for Ecological Economics, Neotrópica and several Costa Rican and US

counterparts which yielded not only very participatory results but also tangible policy outcomes

for the conservation of the endangered Terraba-Sierpe Wetland Reserve (Aguilar-González and

Moulaert, unpublished). The second one, Mangle-Benin, a collaborative south-south cooperation

community mangrove conservation project, funded by the government of The Netherlands and

focused on the mangrove areas of the Gbaga Channel in Benin and the Dulce Gulf in the Osa

peninsula, Costa Rica (González and Herrera, 2010).

This effort seeks to follow the example of other ecological economic studies which do not aspire to

create a process of valuation which reduces nature to a commodity or present price as

comprehensive measure of value. Aware of the limitations of ecosystem service monetary

valuation methods, it hopes to inform, in view of potential traditional development and economic

growth decisions, of the costs of the damage caused to the CNW in terms of natural capital

erosion. These can also have important social consequences. Given those potential consequences,

it also seeks, while suggesting methodological improvements, a more participatory process which

incorporates, in a democratic way, all the stakeholders that should be consulted in order to make

better decisions about this watershed and its wetlands.

In synthesis, it seeks to stimulate a reflection that leads to a path to manage uncertainty focusing

on information quality. It also hopes to stimulate pertinent actions and to open a participatory

process that captures the interests that should be involved in the solution to the causes of the

conflict.

II. Methodology

A-The RAMSAR Mission to assess the damage in the CNW and

UNITAR/UNOSAT Study

Both technical documents resulting from these processes define the extent of environmental

damage considered in this paper. Costa Rica reported the changes to the CNW on November 15

and 22, 2010 and requested based on article 3.2 of the RAMSAR treaty a mission to evaluate the

damage. The mission came to Costa Rica between November 27 and December 1 and its main goal

to evaluate the ecological changes in the CNW and to issue recommendations to maintain the

ecological characteristics of this site from a technical perspective without getting the Secretariat

involved in any political situation between the parties (RAMSAR Advising Mission 69, 2010).

The report issued on December 17 emphasizes that the purpose of the mission and report is not to

make any judgment on the political or juridical aspects of the actions being done in the CNW but

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to evaluate the situation in a technical and impartial way and to arrive at, based on this evaluation,

a series of conclusions and recommendations to government instances and decision makers

(RAMSAR Advising Mission 69, 2010).

From the visit to Costa Rica, consultations and technical information reviewed, the Mission

concluded and recommended:

1- From the technical information provided by the government of Costa Rica there are changes in

the ecological conditions of the CNW in the area of direct influence defined as close to 225 ha

(2,25 km2 ) or 0,3% of the total area of the wetland;

2- The aquatic system in its components of quality of water, flora and fauna and the resident and

migratory birds will be the most affected;

3- Even if the analysis is focused on the CNW it is clear, from the information analyzed, that

Portillos Lagoon, located in the RAMSAR site SJWR, will be the most affected by the hydraulic

connection with the San Juan River;

4- Assuming the dredging of the San Juan River continues, the sediments cannot be deposited in

the CNW;

5- If the magnitude and size of the alterations on the San Juan River continue (relative to its state

before them) it is probable that the medium and long terms scenarios forecasted in the report will

become real (RAMSAR Advising Mission 69, 2010).

The report adheres to the recognition of the Millennium Ecosystem Evaluation´s definition of

Ecosystem Services in wetlands presented in Table 1.

Table 1 - Ecosystem services in wetlands as defined the by Millennium Ecosystem Evaluation from 2005. Source: Adapted from RAMSAR Advising Mission 69 (2010).

Supply of Services Products obtained from the

ecosystems

Food

Potable water

Fuel

Vegetable fiber

Biochemicals

Genetic resources

Regulation of Services Benefits obtained from ecosystem regulation

processes

Climate regulation

Disease control

Water regulation

Water purification

Pollination

Cultural Services Non material benefits received

from ecosystems

Spiritual and religious

Recreational and touristic

Aesthetic

Inspirational

Educational

Sense of identity

Cultural capital

Support Services

Services necessary for the production of all the other services of the ecosystem

Soil formation Nutrient Cyclying Primmary Productivity

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The report recognizes that from these services flood control, recharge of the water table,

sediment and nutrient retention, water purification, biodiversity and wetland products such as

sport and subsistence fisheries, hunting and forest products and recreation for tourism can be

highlighted at the CNW.

It highlights that it is one of the areas of highest flora and fauna terrestrial biodiversity in the Costa

Rican Caribbean in habitats such as:

Beach vegetation,

High forests in hills,

Flooded forests,

Rafia (Raphia taedigera) areas,

Herbaceous swamps,

Floating herbaceous communities.

It contains one third of the endangered species of fauna that are declared as endangered in Costa

Rica (RAMSAR Advising Mission 69, 2010).

The changes documented in the report have occurred in the area denominated as Direct Influence

Area (DIA) which is located in Isla Portillos bordering the San Juan river in the west, the Caribbean

sea in the north-northeast and the south-southwest shoreline of Portillos Lagoon or Harbour Head

up to the site named Aragón (225 ha of wetlands in Isla Portillos).

The report also recognizes an Indirect Influence Area (IIA) to be the coastal area from the mouth

of the San Juan River to the mouth of the Colorado River as well as the delta of the San Juan River

and the rest of the wetlands located in Isla Portillos (According to this description about 21.500

ha.). It also recognizes that adjacent to the IIA is Portillos Lagoon which is part of the RAMSAR

SJWR (RAMSAR Advising Mission 69, 2010) (Figure 7).

The report says that according to the evidence shown by Costa Rica the following events are

indicated as causing the changes:

Dredging of the San Juan River west of Portillos lagoon,

Sediment deposition in the CNW coming from the San Juan River in the area of Portillos

island. The estimated sediment deposit at that time (November, 2010) was 1688 m3 (0,24

ha),

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Cutting of the vegetation of

the CNW (forest and

understory vegetation), the

forest cover was at that time

5,75 ha (1,67 ha of trees and

4,8 ha of understory

vegetation),

Flooding of soils by the

construction of an artificial

channel(RAMSAR Advising

Mission 69, 2010).

The report evaluates changes in

physical aspects of the area

(changes in the local recharge of the

wetland aquifer, in the hydrological

network, in the superficial

hydrology, soils and subterranean

geomorphology and hydrology.

It also evaluates changes in

ecosystem components. In terms of

water it evaluates the changes in the

quality of the water by the increase

in the flow of fresh water into the

estuarine system of Portillos lagoon,

the trophic state of Portillos lagoon due to a decrease in the time of residence of nutrients and

organic material, in the quality of water due to the increase of fresh water flows on the insular

wetland of Portillos island, in the quality of the superficial aquifer of the insular wetland due to the

entrance of waters from the San Juan River and in the trophic state of the insular wetland. It

evaluates changes in flora and vegetation in terms of the changes in vegetation cover due to the

clear cutting in the insular wetland, the abundance and distribution of aquatic species in Portillos

lagoon and the insular wetland, of the abundance and distribution of terrestrial species in the

insular wetland and in the rate of growth of vegetation species in the insular wetland. In terms of

fauna it evaluates changes in the abundance and distribution of aquatic species (especially fish in

Portillos lagoon and the insular wetland), loss of aquatic habitat by the transformation of a still to

a flowing water condition, changes in the trophic chain and reproductive success of aquatic

species in Portillos lagoon and the insular wetland, loss of habitat for migrant and resident birds in

the insular wetland and Portillos lagoon, changes in the distribution and abundance of terrestrial

species and fragmentation of biological corridors in the insular wetland (RAMSAR Advising Mission

69, 2010).

Figure 7- Approximate location of the DIA and IIA according to the description of the RAMSAR Report. The line of the diagram on the San Juan River should be interpreted strictly on the Costa Rican Edge. Source: Authors Based on Official CR-IGN Maps 1:500000

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Based on the evaluation of these changes from the information provided, the RAMSAR mission

constructed short (3 to 6 month), medium (1 year) and long term (5 to 10 years) scenarios for the

DIA and the IIA. The scenarios for the DIA consider only the creation of the hydraulic connection

between the San Juan River and the Portillos lagoon, without considering modifications in the

superficial flows. The scenarios for the IIA consider additionally the main flow of the San Juan River

being directed to the artificial channel rather than to the current mouth (Table 2).

The other important piece of technical evidence presented in the proceedings coming from an

international technical source is the UNITAR/UNOSAT report “Morphological and Environmental

Change Assessment: San Juan River Area (including Isla Portillos and Calero), Costa Rica” (2011).

UNOSAT is a program of the United Nations Institute for Training and Research (UNITAR),

providing satellite imagery and related geographic information, research and analysis to UN

humanitarian & development agencies & their implementing partners (UNOSAT, 2011). The

report presents a review of a 30 year time series of satellite imagery dating from 1979 for

significant morphological and environmental changes in Costa Rica along the San Juan River area

focusing on the areas of Portillos Island and Calero Island. It states that particular focus was made

on identifying and analyzing important morphological and environmental changes since October

2010 over the area between the San Juan River and Los Portillos Lagoon (UNOSAT, 2011).

The report is divided in two analysis sections. The first one is a review of the assessment area and

the second one is an analysis of the changes between the San Juan River and the Los Portillos

Lagoon. The first section concludes that the area has been environmentally stable over the past 30

years, with small indications of morphological change. The second section concludes that there are

indications of recent vegetation removal in the immediate area. New growth can be seen and is

visibly thinner than surrounding sections. It identifies “strong signature indicators of recent tree

cover removal: hundreds of fallen or cut trees are visible, as well as disturbed top soil and

probable localized fire burn scars resulting from small fires used to clear remaining brush.

Although it is not possible to determine with certainty the date period that such tree cover

removal occurred, it is a reasonable presumption that considering the relative lack of surface

vegetation cover within the area of removed trees, and its rapid growth as identified in the

satellite imagery of 14 November 2010, that the trees were likely cleared within 2-4 months

preceding the acquisition of the 8 August imagery, thus placing the removal during the period of

May-August 2010… Based on an analysis of satellite imagery recorded on 19 November and 14

December 2010, there is strong evidence to suggest that a new river channel leading from the San

Juan River to the Los Portillos lagoon was constructed between August and November 2010.

As of 8 August 2010 there were no signatures within the satellite imagery indicating the existence

of an ephemeral stream to explain the appearance of this channel. There are also no apparent

characteristic patterns of vegetation to suggest the presence of stream delineation as expected

with an ephemeral stream activity resulting from seasonal floods. The San Juan River in fact

currently remains stable with no signs of recent flooding in the area, ruling out ephemeral activity.

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Table 2– Short, Medium and Long Terms Scenarios Based on the Ecological Changes Evaluated by the RAMSAR Report. Source: Adapted from RAMSAR Advising Mission 69 (2010)

Short Term Scenario (3 to 6 month)

Medium Term Scenario ( 1 year)

Long Term Scenario (5 to 10 years)

Direct Influence Area (225 ha)

Changes in rates of biogeochemical processes

Alteration in the flow of environmental services and products

Changes in behavior and morphology of Portillos Lagoon

In one hydrological cycle the total or partial loss of Portillos Lagoon due to the breaking of the bar between the lagoon and the Caribbean Sea

In the insular wetland the extension of the flooded zone will increase showing fluctuations correlated to the dynamics of the San Juan River

Water stress will increase over tree and understory vegetation due to flooding generating a halo of dead vegetation

Loss of habitat for terrestrial fauna

Erosive processes will be activated on the wetland due to the transformation of Portillos Lagoon into a flowing water system

The recharge of the aquifer will be altered under the insular wetland

Due to the flow of the artificial channel the full extent of the wetland could be eroded

The wetland will be completely modified due to the hydraulic connection between the San Juan River and Portillos Lagoon, the change of the recharge of the water table under the insular wetland, the flow of sediments, the quality of water in the Portillos Lagoon which will change in morphology from a lagoon to a bay with more salt water

Indirect Influence Area (approx. 21.500 ha)

No changes expected since the flow patterns of the San Juan River delta will not be altered by the hydraulic connection between the river and Portillos Lagoon. The systems will have their normal variability

Due to the loss of the bar between Portillos Lagoon and the Caribbean Sea there will be changes in the biogeochemical processes, alteration of the habitats and of the flows of ecosystem services and products.

Diminished flow, increase of sedimentation rate and on the trophic state of the water.

Increase in the erosion of the rest of the wetlands present in Portillos Island (southeast side of the artificial channel)

Habitat modification from a static to a flowing system dynamic due to the main discharge occurring through the artificial channel.

Portillos lagoon will become functionally similar to the current mouth of the San Juan River and the current mouth will become like Portillos lagoon currently.

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However, there are strong indications of vegetation removal having occurred along the now

existing channel path and the new entry point along the river bank. The new channel entry point

along the river bank is consistent in shape and width with vegetation removal signatures identified

in the satellite imagery recorded 8 August 2010. The channel course also follows the length of land

where vegetation has been cleared. In addition, its course and banks are linear with a consistent

width indicating artificial creation…The new channel has increased to an average diameter of 15m,

showing a 5m increase between 19 November and 14 December 2010. This increase of channel

width was likely due to erosion as new water flow cuts into the soil. Removal of vegetation along

the channel has helped facilitate the erosion processes as it develops. This high rate of erosion is

additionally facilitated with the high velocity of water flowing in from the San Juan River. As a

result the banks of the channel appear to have also increased in width from the erosion process to

an average of 23m in width. It is likely that as the water cuts through the soil, the existing banks

will continue to widen as sediment washes out into Los Portillos lagoon…In the satellite imagery

from 19 November and 14 December 2010 there is an apparent active attempt to redirect the San

Juan River by straightening a meander approximately 400m upstream of the new river channel. In

both imagery dates a large trench is clearly being cut into the meander. An apparent dredging

boat is visible in both satellite image dates. From November to December 2010 the trench

increased 22m in length to a total of 68m. If completed this cut in the meander will redirect the

San Juan River approximately 175m to the west, and will likely significantly increase the water

velocity downstream. Such a velocity increase will also increase the amount of water entering the

new channel, thus likely widening the channel due to an acceleration of the erosion process

resulting from the increased water velocity and inflow.” (UNOSAT, 2011).

This report verifies most of the actions that have caused the ecological changes evaluated by the

RAMSAR report, illustrating the dynamics through time between August a99nd December 2010. A

summary of its conclusions is presented in Figure 8.

From the conclusions of the two mentioned reports this paper adopts a series of methodological

premises:

1- The actions taken in the DIA by the Nicaraguan government have altered the ecological

conditions of the Costa Rican HCN, part of the network of transboundary RAMSAR sites;

2- These actions have consequences on the provision of environmental goods and services both of

the DIA and the IIA. The consequences in this provision are verifiable, according to the RAMSAR

evaluation and the UNOSAT report in the short run in the DIA. They will be verifiable, given the

conditions specified in the report, in both the medium and long terms in both regions;

17

Figure 8- Map 2 from UNOSAT report summarizing the changes in the ecosystem identified between August 2010-December 2010. Source: UNOSAT, 2011.

3- The reports are assertive on the fact that the effects can happen yet lack sufficient clarity as to

define the extent to which the flows affected will be reduced.

4- The DIA measures 225 ha mostly composed by wetland and flooded forest type vegetation. The

IIA measures about 21.500 ha, yet the reports are not clear in terms of the land cover in this area.

Additional information obtained from CENAT-Prias and FUNDECOR´s maps of the Tortuguero

Conservation Area based on multispectral MASTER 2005 images as well as JAPDEVA maps allow

conservative estimates of approximately 14.450 hectares of forest, 5.900 hectares of grassy and

18

palm wetlands and around 1.150 hectares of rivers, lakes and natural channels. The presence of

mangroves is mentioned in several sources (Grupo Ad-Hoc de Observación Ambiental, 2011;

Gobierno de Costa Rica, et. al, 1997; Bonilla, 2011). Yet there is no clarity as of the size in hectares

of mangrove land cover in both areas.

For methodological purposes, this study conservatively assumes the presence of 20 hectares of

mangrove in the DIA. No assumption is made regarding the IIA due to the lack of clarity of the

information available.

B- Ecological Economic Valuation: The Benefit Transfer Methodology and

Multicriteria Analysis.

Ecological economics has taken a multidimensional approach to valuation. This approach is

represented in three positions that usually do not overlap: monetary (or allocative), biophysical

and multi-criteria (MCA). This characteristic is related to the recognition of capital as a complex

phenomenon. According to this position, the human economic system creates a throughput of

energy and materials from and to the environment through different levels of capital. Here capital

is seen functionally: it is a stock that produces flows of goods and services that are valuable in the

present and future. The essence in this definition is the concept of stock. For example, industrial

machinery in textile factories produces a flow of clothes. Equally, the stock of trees in humid

tropical forests produces a flow of goods in the form of new trees and services as oxygen, erosion

control, habitat for animals, etc. The flows may be considered income. Eroding the stocks is to

consume capital (Costanza and Daly, 1992; Folke, et. al, 1994, Aguilar-González, 2002).

This functional definition allows a systemic and comprehensive understanding of capital. The first

type is natural capital. Natural capital (NC) is the stock of natural resources that produces the flow

of environmental goods and services. It is different from Manufactured or Human-made capital

(MC) in that it is not transformed. The flow of goods and services coming from natural capital are

called natural income.

The main value for human beings of NC is that it provides life support. It provides for the

biophysical needs of life. The ecosphere is made up of organisms, processes and resources that

interact to provide food, energy, mineral nutrients, air and water among others.

NC is complementary to MC. Limitations in the productivity of manufactured capital are

determined by the stocks of natural capital. The existence of this limit becomes more obvious as

human activity increases (Costanza and Daly, 1992; Folke, et. al, 1994, Aguilar-González, 2002).

From the above considerations it is possible to conclude that NC, through energy and materials,

make the essence of what makes our economic systems possible. We can use this understanding

to justify why it is necessary to account for another level of capital. Humans use energy in two

forms:

19

A. Endosomatically, through food, heat absorption, etc. This form of energy use is mostly

conditioned by our biological nature

B. Exosomatically, through heat at houses, transportation, etc. This form is conditioned by a

collection of human institutions: culture, politics, law, tradition, etc.

So, we can speak of another category of capital: the stock of education, skills, culture, knowledge

and other human institutions of this kind. We can call it social, cultural, institutional capital. For

the purposes of this work we will call it Cultural Capital (CC).

CC provides the adaptation between our exosomatic use of energy and the natural capital. It is an

interface between MC and NC. It includes our perception of the natural world and the ethical

systems that motivate our economic decisions and make the management of NC to produce MC

possible. It includes information, theories, philosophy, cultural traditions, traditional knowledge on

the environment, etc. (Costanza and Daly, 1992; Folke, et. al, 1994; Berkes and Folke, 1994;

Aguilar-González, 2002). So, for example, a small boat tour operator in the Colorado River region

of Costa Rica does not only perform an act of labor. She/he uses her values, cultural belief and

knowledge. The action lies in the interface between MC and NC. As a boat tour operator She/he

depends on knowledge about the

dynamics of the river, the natural and

human history of the region, knowledge

of the regulations involved and the

understanding on the effects over the

natural resource base that his/her

action causes. In this sense, CC is

essential in the search for sustainability.

The secret of our life support system

may lie in it. This is why when we erode

CC we are eroding something as

important as biodiversity.

With this information, we can complete

a systemic vision of capital. We can

illustrate this through Figure 9. We can

see in it the collection of interactions

between the diverse categories of

capital and the limits on scale that are

imposed by them. Total capital is made

up by the stocks of NC, CC and MC. We

also see the flows of matter and energy

that make natural, social and economic

processes possible. In this model, the

economy is an open system through Figure 9- A Systemic Vision of Capital. Adapted from Aguilar (2002)

20

which flows a throughput of energy and materials. The limits to growth are determined by its

substrate (CC and NC). The adaptation between NC and MC is facilitated by CC.

It is necessary to recognize also that the value of cultural capital does not only extend between

geographically or ethnically differentiated groups. The ideas presented here are also applicable in

groups that are differentiated by means of social stratification by income, gender or any other

classification.(Berkes and Folke, 1994; Aguilar-González, 2002).

The complex nature of capital then requires adequate methods of measurement of its flows. This

is why a simple monetary valuation does not suffice. Such an approach is incapable of overcoming

the potential problems at stake which will result in socio-ecological conflicts.

Elaborating on this idea, as was said above, the three positions of valuation in ecological

economics usually do not overlap: monetary (or allocative), biophysical and multi-criteria (MCA).

Briefly explained, monetary ecosystem service valuation seeks to measure the monetary value of

resource flows as a “rod to measure the gains or losses in welfare”. The Dutch economist, de

Groot (1994) bases his adoption of this type of valuation in the benefits provided by

environmental functions to human welfare. This idea is clarified by Costanza, et al (1997) who

point to the benefits of estimating “how changes in the quantity or quality of various types of

natural capital or ecosystem services may have an impact on human welfare.”

These ideas are formalized in the Total Value Equation (TVE) which expresses Total Economic

Value (TEV). This position proposes that the values and benefits of biological diversity can be

classified in two main groups: direct and indirect (Aguilar and Semanchin, 1998, de Groot, et. al,

2007).

Direct values (DV) are related to the consumption of a good or service. Direct values can be

divided into productive use values (PUV) and consumptive use values (CUV). The PUV is the value

of goods and services that are commercially harvested and traded. It is determined through a

market (wholesale, retail). In essence, these are MC and stocks and flows of NC that are sold in

markets. This is the traditional notion of a market price. If you buy a pound of fish, you usually pay

the PUV for it. The CUV is the value of goods and services that are consumed without having been

taken to the market for valuation. I catch the fish and take it home to be eaten. This consumption

implies an increase in welfare that arises from the utility derived and the savings from the

potential value that would have been paid in the market. It can also be called self-consumption

value. Consumption is understood in this scenario in its strict sense of ingesting, expending or

using up (Aguilar and Semanchin, 1998).

Indirect values (IV) are usually related to NC and CC services. They measure human welfare that

does not originate in consumption & they acknowledge the intrinsic value of nature. Indirect

Values are subdivided in non-consumptive use values (NCUV), option values (OV) and existence

values (EV).

21

NCUVs derive from NC and CC services that provide increases in welfare without being consumed

or traded in the marketplace. They also derive from uses that do not imply consumption of the

good or service involved such as recreation, tourism or education. For instance, if a mangrove

forest provides habitat where muscles that I eat live, the mangrove forest is providing me with a

NCUV. The fact that by observation I have learned from it about its habitat service provides me an

educational NCUV. If a group of foreign tourists stops goes out in a boat with me and appreciates

the aesthetics of the mangrove and feels pleasure from watching my way of collecting muscles,

they derive a NCUV from the mangrove, the muscles and from my knowledge about them. De

Groot says that the “option value is a type of life insurance for access to future services from

natural ecosystems” (de Groot, 1994). Pearce and Turner (1990) explain the need for this value in

the uncertainty of future supply of determined environmental services and human risk aversion.

The OV is an extra value that seeks to assure the future availability of resources. It includes the

serendipity value for those goods and services that may be found to affect human welfare in the

future (McNeely, 1988). Going back to the mangrove forest example, its genetic material has an

OV due to its potential to grow better species in the future. It also has an OV given the potential

uses that could be found for it with future technology.

The EV is the intrinsic, intangible and ethical value of goods and services that is unrelated to any

actual or potential use of the good. It stems from a feeling of stewardship for non-human entities

and future generations of humans. This value implies a form of extensionism in the “recognition of

value referents beside people.” The wetland has a value that is independent of any benefit that it

provides for me or others. It comes from the fact that it exists.

The Total Value Equation can then be expressed as:

TEVt = DV t + IV t

where,

DV t = PUV t + CUV t

and,

IV t = NCUV t + OV t + EV t

There is a series of alternative classifications of the components of TEV . Yet, for the purposes of

this study we adopt the one with which we have worked in the past (Aguilar and Semanchin,

1998).

TVE estimation techniques depend on the available information. They range from simple valuation

(when prices are available) to shadow pricing and survey based approaches (relying mostly on

contingent valuation methods) (Aguilar and Semanchin, 1998). Shadow pricing methodologies

include the benefit or value transfer methodology, which consolidates monetary economic

valuation data from peer reviewed academic journal articles in order to estimate, through land use

22

data, a high and low dollar value range for a list of ecosystem services (according to an estimate of

them being in optimal or suboptimal conditions) for the ecosystem in question according to the

size of area in different land uses. It therefore adapts to a context under examination the

estimates from another context. It is mostly used when it is too expensive or there is very little

time to conduct an original valuation study, yet some measure is needed (Ecosystem Valuation,

2011).

This methodology has been used for well known peer reviewed articles such as the seminal work

of Costanza, et. Al (1997). Further, it has been widely used by the United States´ NGO Earth

Economics (Earth Economics, 2006; Batker, et al, 2010; Earth Economics, 2010) and the Gund

Institute for Ecological Economics. Due to its nature, it is only as accurate as the studies that made

the original estimates. Yet, it is optimal as a postnormal scientific tool (Ravetz, 2004) when, as said

before, systemic uncertainty is high and the interests at stake are many.

Yet, the use of this methodology for a provisional estimate should not preclude from accepting the

main criticism to monetary approaches in the sense that they are vertical, technical and tend to

oversimplify the complex nature of ecosystems and human systems (or capital as we have

conceptualized it here). In the words of Funtowicz and Ravetz (1994) ...”the issue is not whether it

is only the marketplace that can determine value, for economists have long debated other means

of valuation; our concern is with the assumption that in any dialogue, all valuations or numeraires’

should be reducible to a single one-dimensional standard.” Some fairly reputable work today

recognizes the need to acknowledge this by accepting the diversity of approaches to estimate

nature´s values (TEEB, 2010) as is presented in Figure 10

Fundación Neotrópica used this approach in partnership with the Gund Institute for Ecological Economics, Earth Economics and other partners for a recent project (ECOTICOS) in the Térraba-Sierpe Wetland Reserve (Aguilar and Moulaert, unpublished). In view of this criticism, the value transfer approach was used in combination with a multicriterial approach according to the model presented in Figure 11.

Some defenders of monetary cost benefit analysis present the relationship between monetary

analysis and MCA as scientifically oppositional (i.e. Dobes & Bennett, 2009). The RAMSAR

Convention secretariat has also recognized the importance of participatory exercises for the

purposes of wetland valuation (de Groot, et al, 2007).

In Costa Rica, several studies are using an integrative approach. Essentially, this approach

combines environmental service valuation techniques and biophysical indicators with multi-

criterial techniques in order to gain a more comprehensive perspective that may lead to develop

potentially more effective means to address the problems causing ecological conflicts.

23

Figure 10-Diversity in Approaches to Estimate Nature´s Values Reocognized by the "The Economics of Ecosystems and Biodiversity" Project. Source: TEEB (2010).

Figure 11- Multidimensional Valuation Model. Source: Adapted from Aguilar (2004)

24

MCA tries to capture the complexity of systems and decision-making and does not recognize a

unique source of ‘value’ as the appropriate basis, but multiple. The main idea is to incorporate

multiple evaluation criteria that overcome the limitations of simplification (technical

incommensurability) and lack of diverse actor perspectives guiding the economic decision-making

process (Munda, 2004; Farley and Aguilar, unpublished).

Among the most significant examples of studies integrating the monetary and multi-criteria

methodologies in Costa Rica before ECOTICOS is Marozzi and Solís (unpublished). This study, made

for the Alianzas program of IUCN, focused on the valuation of the Gandoca-Manzanillo Wildlife

Refuge (Costa Rica) and San San Pond wetlands (Panamá). It applied an integrated methodology

which included focus groups, a Delphi expert analysis, MCA/monetary valuations and stakeholder

interaction analysis (through the NAIADE software developed at University of Barcelona). Its

conclusions are therefore fairly comprehensive including an integration of qualitative preference

rankings by stakeholders and monetary valuation.

In our case, the value transfer methodology considered the ecological services and papers

presented in Table 3 (Earth Economics, 2010). This value was the used, as Figure 12 shows, to

engage the diverse stakeholders of the region in a process of scenario building and ranking in

order to define preferences given diverse conservation and development challenges. This

participatory process applied the model shown in Figure 11 according to which the diverse

ecological economic valuation methodologies can be integrated into a multidimensional valuation

exercise that is optimal to account for the dynamics between NC, CC and MC and to design and

implement policies. The end result included real policy effects that enable the effective

conservation and community participation in the management decisions for the Térraba-Sierpe

Wetland (Aguilar and Moulaert, unpublished).

Table 3-Land Uses, Environmental Services and Literature Sources for the Benefit Transfer Methodology of the ECOTICOS Project in the Terraba-Sierpe Wetland Reserve. Source: Earth Economics (2010).

Land Use Environmental Service Literature

Mangrove Food production Foster (1978); Lahmann (1999)

Recreation Bell (1989); Hamilton and Snedaker (1984)

Habitat/Refuge Christensen (1982); de Groot (1992)

Raw materials Costanza, et al. (1997); Dugan (1990)

Disturbance regulation Christensen (1982); Dugan (1990)

Waste treatment de Groot (1992)

Total ecosystem Hickman (1990); Lugo & Brinson (1978)

Tropical Forests Erosion control Chopra (1993)

Nutrient cycling Chopra (1993)

Genetic resources Farnworth, et al. (1983)

Food production Godoy et al. (1993)

Water regulation Kramer et al. (1992)

Water supply Kumari (1995)

Recreation Lampietti & Dixon (1995)

Raw materials Lampietti & Dixon (1995)

Soil formation Pimentel et al. (1995)

Waste treatment Pimentel et al. (1995)

25

Land Use Environmental Service Literature Disturbance regulation Ruitenbeck (1988)

Climate regulation Adger et al. (1995)

Wetland Water regulation Thibodeau & Ostro (1981); Ernst et al. (2004) ; Wilson (2008)

Water supply Lant & Tobin (1989); Hayes et al. (1992) ; Allen, et al. (1992) ; Creel & Loomis (1992); Pate & Loomis (1997)

Aesthetic and recreational Allen, et al. (1992); Doss & Taff (1996) ; Hayes et al. (1992); Mahan, et al. (2000) ; Thibodeau & Ostro (1981); Whitehead et al. (1997); Wilson (2008)

Refugium and nursery Allen, et al. (1992); van Kooten & Schmitz (1992);IJC Study Board (2006)

Climate regulation Wilson (2008)

Waste treatment Wilson (2008)

Total Ecosystem Wilson (2008)

Beach Disturbance regulation Parsons & Powell (2001); Pompe & Rinehart (1999)

Recreation Taylor & Smith (2000); Kline & Swallow (1998)

Pastures Aesthetic and recreational Boxall, et al. (1996); Costanza, et al. (2006)

Soil formation Pimentel (1998); Costanza, et al. (1997)

Biological control Costanza, et al. (1997)

Food production Costanza, et al. (1997)

Pollination Costanza, et al. (2006)

Urban Gas and climate regulation McPerson (1992); McPherson, et al. (1998); American Forests (1998)

Urban (cont.) Water regulation McPerson (1992); American Forests (1998)

Aesthetic and recreational Tyrvainen (2001)

Cropland Aesthetic and recreational Bergstrom, et al. (1985)

Pollination Robinson, et al. (1989); Southwick & Southwick (1992)

Figure 12-MCA Workshops Process in the ECOTICOS Process. Source: Aguilar and Moulaert, Unpublished.

Delphi

•Experts Workshop at UCI campus, San José

•Define the combinations of development options which make the most pressing challenges for the HNTS and choose the most likely scenarios estimating their potential socio-ecological consequences including potential effects on the value of ecosystem services.

Focal•3 workshops with diverse stakeholder groups in Palmar Sur, Uvita and Coronado to validate

and refine the opinion of the experts.

Vision

•2 workshops in Palmar Sur

•Based on the development of a graphic community vision the communities vote for the different development scenarios according to their preferences..

26

In this paper, we aim to present the preliminary results of the monetary valuation done to

estimate the “value” of the damage to the ecosystem services produced by the DIA and the IIA.

For the purposes of such estimation we adopt the discount rates reported by the TEEB (2010)

report in order to have comparable results to internationally recognized literature aware of the

discussion in ecological economic literature regarding the adequacy of such use. We hope that

those results will motivate a better estimation through the appropriate on the ground evaluation

of ecological and social conditions and the completion of a process of participatory decision-

making as the one we used in ECOTICOS.

C- Other Methodological Considerations

The Costa Rican scientific community has expressed other concerns regarding ecological effects

that may go beyond the DIA and IIA. Among these are effects such as the potential breaking of the

sand bar that divides Portillos Lagoon and the Caribbean Sea and the macro regional impact that

this may generate. According to Dr. Allan Astorga, one of the most respected sedimentologists in

the nation, Alvaro Morales, Director of the Marine Research Center in University of Costa Rica and

Didiher Chacón, Director of WIDECAST in Costa Rica, the effects could go, due to prevailing

currents, as far south as to affect the corals in Uvita island or Cahuita National Park in south

eastern Costa Rica and affect important species such as sea turtles in beaches located (República

de Costa Rica, 2010). This and other considerations may affect the area defined by the RAMSAR

report as the IIA. This would also affect the valuation of the damage produced as additional

ecosystems and environmental services may have to be included.

The best way to define the areas of direct and indirect impact, the environmental services affected

as well as performing a valuation applying the full range of methodologies available would be to

have direct access to the area and to be able to gather primary data. The potential magnitude of

the damage justifies considering this an urgent priority. Hopefully, the March 8 resolution will

allow the authors to get primary data from the region.

IV. Results and Discussion

Results from the DIA and the IIA estimations are presented in Table 4. They show the total value

estimation for the environmental services produced in the DIA based on the assumption of 205 ha

of wetlands and 20 ha of mangrove. The IIA environmental services are estimated assuming a

21.500 ha size (14.450 hectares of forest, 5.900 hectares of grassy and palm wetlands and around

1.150 hectares of rivers, lakes and natural channels). The value of the estimates would turn into a

loss of the capacity of the area to generate these services was completely hampered (an unlikely,

yet possible scenario). We use a 4% and 1% discount rate (as said before). Yet, the most

appropriate discount rate, given the importance of the resources at stake is arguably 1% (Howarth

and Tisdell, 2009).

27

Table 4- Total Value and NPV Values for Diverse Scenarios of Discount Rates for the DIA and IIA According to the RAMSAR Mission 69 Report. Source: Authors elabration.

Value Estimate Direct Influence Area Indirect Influence Area

First Year Per Year Low

$ 625.206,03 $33.158.795,28

First Year Per Year High

$10.364.403,10 $338.829.895,19

NPV Low 10 years (1% discount)

$ 5.921.516,73 $314.057.047,97

NPV High 10 years (1% discount)

$ 39.406.035,23 $3.209.161.121,49

NPV Low 10 years (4% discount)

$ 5.070.980,97 $268.947.532,69

NPV High 10 years (4% discount)

$ 15.320.673,2 $2.748.213.966,85

NPV Low 100 years (1% discount)

$ 98.164.418,01 $2.089.961.687,78

NPV High 100 years (1% discount)

$ 653.256.706,27 $21.356.068.386,87

NPV Low 100 years (4% discount)

$ 84.064.593,33 $812.556.245,09

NPV High 100 years (4% discount)

$ 253.979.687,49 $8.303.026.241,94

These values help us as benchmarks to get a sense of the size of the loss at stake and to estimate

the losses given the scenarios foreseen by the RAMSAR Mission. It is important to point out as

parameters of comparison, the size of the GDP of both Nicaragua and Costa Rica for 2009. Costa

Rica had a GDP in 2009 of $ 48.630.000.000, while Nicaragua had $ 16.540.000.000.

The estimated potential loss if 100% of the environmental services provided were lost is presented

in Table 5 as a percentage of the GDP of both countries per year in 2009. As can be seen by the

numbers highlighted in red (the ones above 2% of the 2009 GDP in question), the significance of

the estimates becomes more important as the IIA is included.

As can be inferred these are very gross estimations based on the information available. The more

appropriate way of assessing the damage would be, as said before, to access the area and apply

more specific estimation techniques associated with a field methodology. This would allow

specifically assessing how each one of the ecosystem services at stake is affected.

Even in the case that the value transfer methodology was used it would be necessary to have a

much more detailed field evaluation than the RAMSAR report assessment has done of the

environmental damage in the DIA and IIA and the possible scenarios in the short, medium and

long run. This assessment would have to focus on the specific changing conditions of the

environmental services valued for the land covers considered.

28

Table 5- Percentage of the value of 2009´s GDP of Costa Rica and Nicaragua that the total loss of ecosystem services according to the diverse estimates would represent. Source: Authors.

Value Estimate DIA % CR DIA % NC IIA % CR IIA % CR

First Year Per Year Low

1.28 -03 3.77 -03 6.81 -03 0.20

First Year Per Year High

0.02 0.06 0.69 2.04

NPV Low 10 years (1% discount)

0,01 0,04 0,65 1,90

NPV High 10 years (1% discount)

0,08 0,24 6,60 19,40

NPV Low 10 years (4% discount)

0,01 0,03 0,55 1,63

NPV High 10 years (4% discount)

0,03 0,09 5,65 16,62

NPV Low 100 years (1% discount)

0,20 0,59 4,30 12,64

NPV High 100 years (1% discount)

1,34 3,95 43,92 129,12

NPV Low 100 years (4% discount)

0,17 0,51 1,67 4,91

NPV High 100 years (4% discount)

0,52 1,54 17,07 50,20

Such fine tuning of the data would allow the creation of scenarios estimating the gradual loss of

service values and to estimate potential recoveries given certain mitigation scenarios.

The area for each land use could also be fine tuned through better GIS information and “ground

truthing” of the corresponding polygons. This would allow not only including other land

uses/covers which may not be in the estimate at this point, but also validating the ones that have

been used for this estimation from the information available, including the uncertain presence of

mangroves in the area. Wetland research in Costa Rica has been deficient for several years in

terms of identifying land cover types. For many years the assumption was that there were no

mangroves but in the Costa Rican Pacific. Today it is accepted that they exist in the south

Caribbean and several sources, as said before, recognize their presence in the DIA/IIA.

The Costa Rican government should take the opportunity that it has right now to enter in the

exclusion area in order to fine tune these assessments. In an issue with such high interests at stake

and such high uncertainty, good information becomes an urgent need in order to make the

appropriate policy decisions.

Further, it is important to expand the scope of the assessment in order to include an adequate

evaluation of the transboundary impacts of the dredging and obvious modification of the San Juan

River and to make better projections of the off-site effects of both the damage created in Isla

29

Portillos by the opening of the channel and by the work in the San Juan River. Some Costa Rican

environmentalists have made basic applications of a value transfer approach to try to estimate the

damage off-site (Table 6). Yet, more academic rigor is required to make these estimates credible

since they are based on only one study (Costanza, et. al, 1997), which uses the transfer value

methodology, yet only updated until 1997 in terms of studies. Further, Astorga (2011) does not

detail the assumptions used to determine the land cover sizes and does not consider the

possibility of mangroves or the values of flooded forests in the area (the admitted categories of

swamps and floodplains do not correspond strictly with the land covers found in the area). Finally,

no discount rate is used to project the net present value of the damage into the future, which

merits at least a justification.

The resolution of March 8 opens the possibility of inviting another RAMSAR mission in order to

make these assessments, yet several of these evaluations will require more field time that is usual

from these technical missions. A combined effort between MINAET (Ministry of the Environment)

technicians, local universities and other Non-government actors would seem in order.

Table 6- Estimation of Value of Environmental Damage Using Allan Astorga´s (2011) Approach Based on a Value Transfer from Olsen (2003). The NPV is projected with a 4% discount rate.

Scale 1 year 10 years (4%) 100 years (4%)

Local (60 ha.) $1.200.000 $ 9.733.074,94 $ 29.405.998,80

Subregional (650 ha.) $13.000.000 $ 105.441.645,13 $ 318.564.986,96

Regional (3000) $60.000.000 $ 486.653.746,76 $ 1.470.299.939,83

Further, it is important to address one of the main criticisms for this type of value estimation. Cost

benefit analysis has traditionally been mostly a technical and vertical exercise. The question of

participation and the need to explore for whose benefit is the wealth estimated is pertinent. As

said before, the RAMSAR Convention Secretariat itself recommends a participatory approach to

wetland valuation. This is especially true given the fact that these are public goods. In this sense,

as above pointed, the integration of participatory multicriteria evaluations is necessary in order to

capture how local businesses, communities and organizations perceive the value of those

environmental services in view of the potential “development” scenarios that are posed to the

area. Further, it is important to understand how they rank these options in views of their own

livelihood (Aguilar and Moulaert, unpublished; Farley and Aguilar, unpublished; Giampierto &

Ramos-Martin, 2005; Marozzi and Solis, unpublished; Munda, 2004). The relevance of this

30

exercise is highlighted for Costa Rica given recent criticisms of insufficient participation channels in

environmental decisions (FUNPADEM, 2010). The resolution of March 8th also opens an

opportunity for this type of exercise.

Finally, it seems important to extend this full multidimensional and participatory valuation of

environmental damage to the Nicaraguan side. The RAMSAR mission report to the Nicaraguan side

should be used to make a similar estimation for the San Juan River Wildlife Refuge given the work

done in the river. In fact, the most adequate solution seems to be to make on single international

environmental impact assessment that combines the work done by both missions on this bi-

national wetland area including the impact of the dredging in the San Juan work on the Costa

Rican side. Only then would the monetary valuation of damages have an integrally solid departure

point.

V. Preliminary Conclusions

The estimates of this study, although preliminary, do demonstrate the size of the potential loss in

environmental service value given the alteration of the ecosystem in Isla Portillos. Therefore, they

add to the sense of urgency for mitigation actions and for a resolution of this conflict. The area has

significant importance from an ecological and economic area for the governments, communities,

international organizations, local NGO and others.

All methodological improvements proposed above, including on site ecological evaluations and

refined estimation methods should be implemented to follow up this preliminary estimate in

order to validate these results and in order to reinforce the awareness of the importance of the

loss at stake. Further RAMSAR technical inspections on site and access to all stakeholders to the

process of decision making would improve the understanding of this significance and help stop the

loss.

The spirit of the March 8 resolution leads in the direction of establishing more transboundary

cooperation and a permanent international monitoring team in order to ensure that this type of

occurrence is not repeated. In view of the inspections done in the area in following months, the

option to stop all works should be considered until satisfactory evidence is given of impact control

given the stipulations of the RAMSAR convention, the Convention for Biological Diversity and

other related international regulations.

The lessons of this case study should be integrated with other participatory evaluations of wetland

environmental conflicts (such as the ones mentioned in this study in Térraba-Sierpe, the Dulce Gulf

and the binational wetlands between Costa Rica and Panama) in order to identify trends that may

allow not only reducing “conflictivity” but also to systematize trends and share successful

experiences in other parts of both countries and the neotropical region.

31

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