Capturing ecotourism benefit values in Capturing ecotourism benefit values in Riverine and Marine Parks:Riverine and Marine Parks:

Montego Bay Marine Park, Jamaica, and Montego Bay Marine Park, Jamaica, and the Canaima National Park in Venezuelathe Canaima National Park in Venezuela

Most efficient way to raise money to fix Most efficient way to raise money to fix environmental deterioration and environmental deterioration and

sustainable manage natural resourcesustainable manage natural resource

Relationship made between ecosystems and Relationship made between ecosystems and the value of economic goods and services the value of economic goods and services

Who should rightfully retain rents or net Who should rightfully retain rents or net benefit values earned through the use of the benefit values earned through the use of the environment?environment?

Hotel room view – proximity to noisy highwayHotel room view – proximity to noisy highway Tour operators “feel” the true costs associated Tour operators “feel” the true costs associated

with using the protected area.with using the protected area.

Coral reef ecologyCoral reef ecology

Decline from 50% coral cover in 1970’s to 5% in Decline from 50% coral cover in 1970’s to 5% in 1990s1990s

Hughes -- Overfishing, hurricane damage and Hughes -- Overfishing, hurricane damage and disease -- Hurricane Allen (1980)disease -- Hurricane Allen (1980)

La Point -- Phase shift from coral to macroalgal La Point -- Phase shift from coral to macroalgal dominance -- Nitrogen and Phosphorous highest dominance -- Nitrogen and Phosphorous highest concentrations worldwide concentrations worldwide

TNC - REA -- nutrient loading, changes in current TNC - REA -- nutrient loading, changes in current circulation, and mechanical damagecirculation, and mechanical damage

Pigott and Land 1986 - submarine groundwater Pigott and Land 1986 - submarine groundwater dischargesdischarges

Large scale non-point source nutrient loading Large scale non-point source nutrient loading associated with deforestation sewage, ag and ind associated with deforestation sewage, ag and ind developments. developments.

What Triggers ICZM program?What Triggers ICZM program?

Decentralization and local autonomy Debt-Swap Decentralization and local autonomy Debt-Swap Desire to increase economic benefits flowing Desire to increase economic benefits flowing

from use of the Coastal Zonefrom use of the Coastal Zone Serious resource depletion problems and Serious resource depletion problems and

damage to productive coastal areas increasing damage to productive coastal areas increasing pollution of marine environment and loss of life pollution of marine environment and loss of life and propertyand property

Perceived economic opportunities associated Perceived economic opportunities associated with new forms of developmentwith new forms of development

conflicts of interest among user groupsconflicts of interest among user groups

Integrating Scientific Data & Expert Opinion Integrating Scientific Data & Expert Opinion to improve coral reef health & How to to improve coral reef health & How to

generate revenuegenerate revenue

What is the most cost What is the most cost effective means for effective means for achieving a given level achieving a given level of coral reef quality as of coral reef quality as expressed by percent expressed by percent coral cover?coral cover?

R e se arc h

A con ventio nal framew ork for econo mic optimiz ation an aly sis

0

Coral Reef Quality (E)

C ($/unit)

C1

C2

C3C4

C5

C6

C7

C8

Cs= Measure of cost-effectiveness in reducing effect/impact indicator "E" by intervention 's'E= Quality indicators= policy intervention or investmentB*-B* = Marginal environmental benefits associated with reducing quality indicator E

B*

B*

The EconomicsThe EconomicsValuation MethodsValuation Methods

Cunard Liner hit a reef in Gulf of Aquaba Cunard Liner hit a reef in Gulf of Aquaba Egyptians sought $23m or $10k/m2 Egyptians sought $23m or $10k/m2

Direct use valuation - estimating the lost Direct use valuation - estimating the lost productivity or value in the absence of proper productivity or value in the absence of proper protection or conservationprotection or conservation

Contingent valuation - estimating the benefits Contingent valuation - estimating the benefits derived from “public goods”derived from “public goods”

Use values Non-use values

Direct use values

Outputs/services that can be consumed directly

Extractive (capture fisheries, mariculture, aquarium trade, pharmaceutical)

Non-extractive (tourism/recreation, research/education, aesthetic)

Indirect use values

Functional benefits enjoyed indirectly

Biological support to sea bird, turtle, fisheriesPhysical protection to other coastal ecosystems, coastline, navigation)Global life-support in terms of carbon storage

Bequest, option and existence values

Functions that value either the future use, expected new information and based on moral convictions

Endangered and charismatic species Threatened reef habitats Aesthetic reefscapes ‘Way of life’ linked to traditional use

Total Economic Value (TEV)

Use values Non-use values

Direct use values

Outputs/services that can be consumed directly

Extractive (capture fisheries, mariculture, aquarium trade, pharmaceutical)

Non-extractive (tourism/recreation, research/education, aesthetic)

Indirect use values

Functional benefits enjoyed indirectly

Biological support to sea bird, turtle, fisheriesPhysical protection to other coastal ecosystems, coastline, navigation)Global life-support in terms of carbon storage

Bequest, option and existence values

Functions that value either the future use, expected new information and based on moral convictions

Endangered and charismatic species Threatened reef habitats Aesthetic reefscapes ‘Way of life’ linked to traditional use

Total Economic Value (TEV)

The EconomicsThe EconomicsCreating the Benefits FunctionCreating the Benefits Function

Valuation methods and site-specific economic Valuation methods and site-specific economic survey data to create the benefits function - to be survey data to create the benefits function - to be used as educational and planning tool to assist used as educational and planning tool to assist policymakerspolicymakers

Fishery NPV -- $1.31 millionFishery NPV -- $1.31 million Tourism and Recreation NPV -- $315 mTourism and Recreation NPV -- $315 m Coastal Protection Function -- $65 millionCoastal Protection Function -- $65 million

Policy Instruments Classified by Flexibility in Individual Decisionmaking

<----Minimum Flexibility----> <----Moderate Flexibility----> <----Maximum Flexibility----><----Maxiumum Government Involvement---> <----Increased Private Initiative----><Control Oriented> <-----------Market-Oriented-----------> <----Litigation Oriented---->Regulations andSanctions

Charges, Taxes, andFees

Market Creation Final DemandIntervention

Liability Legislation

General ExamplesGovernmentrestricts nature andamount ofpollution resourceuse for individualpolluters orresource users

Governmentcharges fee toindividual pollutersbased on amountof pollution orresource use.

Governmentestablishes systemof tradable permitsfor pollution orresource use andthen monitorscompliance

Governmentsupports labellingor performancerating program thatrequires disclosureof environmentalinformation.

Polluter or resourceuser is required bylaw to pay anydamages to thoseaffected throughcourt system.

Specific Examples Pollution

Standards Land use

restrictions Construction

impactregulations

Fines, Bans,and Quotas

Greening ofconventionaltaxes

Taxes affectingtransportationchoice

User chargesfor water

Source-basedeffluentcharges

Deposit-refund systemsfor solid andhazardouswastes

Tradablepermits forwater and airpollutionemissions

ConsumerProductLabeling

Disclosurelegislationrequiringmanufacturersto publishwasteinformation

Blacklist ofpolluters

DamagesCompensation

Liability onneglectingfirm’smanagers andenvironmentalauthorities

Source: Huber et al. 1999

Global Optimization using combined cost and Global Optimization using combined cost and benefit functionsbenefit functions

Optimal improvement of coral reef abundance of Optimal improvement of coral reef abundance of 13% requiring net expenditures of $27m13% requiring net expenditures of $27m

Interventions -- installation of sediment trap, Interventions -- installation of sediment trap, waste aeration, sewage outfall, improved SWM waste aeration, sewage outfall, improved SWM collection, and implementation of economic collection, and implementation of economic incentives to improve waste management by the incentives to improve waste management by the hotel industry. hotel industry.

Financing -- Voluntary $1/Night Hotel Tax Financing -- Voluntary $1/Night Hotel Tax earmarked hotel room fee of US$1 per bed-night, earmarked hotel room fee of US$1 per bed-night, to lead to an annual revenue of approximately to lead to an annual revenue of approximately US$1.5 million. US$1.5 million.

•Contingent valuation method (CMV) trust fund managed by the Park •Payment for a 25% increase in coral reef cover. •Willingness to pay (WTP) was estimated as US$3.24 per person in Jamaica •Estimated WTP of approximately US$20 million in Montego Bay (Spash et al. 2000).•Jamaicans had a mean expected WTP of US$3.75, while typical tourists had a mean expected WTP of US$2.73.•150,000 stopover tourists a year visiting Montego Bay, consumer surplus (WTP) total approximately US$410,000 •A NPV of US$1,708,000 (10% discount rate) over the five year stream of the payment scenario.

Establishment of a Public-private Partnership Matching Fund

Goal: Community-Based Restoration Program to restore important habitat and foster long-term environmental stewardship among citizens.

Objective: Restore Mobay’s most productive ecosystems mangroves, estuaries, coral reefs for on-the-ground habitat restoration projects through establishment of a dive and yacht mooring fee.

On-the-ground restoration projects: fish/lobster trap education and redsign; estuary and coral reef restoration, cleaning of storm water channels, a pilot volunteer stewardship and monitoring program, native plant propagation and planting, exotic plant removal, bulkhead removal, marsh creation, re-vegetation and reconstruction of barrier islands, streamside forest buffers, shoreline restoration, creek and storm water clean-ups, informational signage, and water quality monitoring.

Canaima National Park Canaima National Park VenezuelaVenezuela

Larger than BelgiumLarger than Belgium Tepui summits, steep Tepui summits, steep

flat-topped table flat-topped table mountainsmountains

100k visits/year100k visits/year 17.7 million kW/yr 17.7 million kW/yr

valued at 1.2k/kWvalued at 1.2k/kW

Canaima National Park Canaima National Park VenezuelaVenezuela

if unchecked if unchecked deforestation occurred deforestation occurred in the fragile Caroní in the fragile Caroní basin, the power basin, the power capacity of the capacity of the hydroelectric system hydroelectric system would be reduced would be reduced between 10% and 15% between 10% and 15% when the project when the project useful life was half useful life was half over. over.

Canaima National Park Canaima National Park VenezuelaVenezuela

Charge US$10 for Charge US$10 for international visitors international visitors and US$4 for and US$4 for Venezuelan residentsVenezuelan residents

US$1 per overnight US$1 per overnight stay in the park, to stay in the park, to lead to an annual lead to an annual revenue of revenue of approximately US$5.0 approximately US$5.0 million.million.

The EndThe End

If you need further information, please contact Richard Huber rhuber@oas.org or (202) 458-3227 Organization of American States