Economic Valuation of Goods and Services Derived from Coral Reefs

1. Economic Valuation of Goods and Services Derived from Coral Reefs Results from the South Coast of Grenada ReefFix Exercise Jerry J. Mitchell

2. Presentation Outline • Project Background • Overview of Economic Valuation Techniques • Site Background • Methodology • Results • Coral Reef Valuation- Tourism & Recreation • Coral Reef Valuation- Fisheries • Benefits Value Transfer • Discussion • Conclusion & Way Forward

3. Project Background • Inter-American Biodiversity Information Network (IABIN) • to promote sustainable development and the conservation and sustainable use of biological diversity in the Americas • ReefFix is an ICZM tool that trains participating countries in ecosystem valuation methodologies and management techniques to conserve marine ecosystems and the associated watersheds through integrated park management 

4. Overview of Economic Valuation Techniques • Economic valuation assesses the goods and services provided by an ecosystem which contribute to the wellbeing of human life (financial, social, biophysical, etc) • By attributing a dollar value to natural resources, the benefits of conservation and some of the unforeseen “costs” of mismanagement are realised

5. Overview of Economic Valuation Techniques • Thus coral reefs health influences the main economic activity of the region however are not taken into account when major policy decisions occur • By assessing the ecosystem services, the tangible benefits provided by coral reefs to sustain and improve human life can be quantified.

6. Overview of Economic Valuation Techniques

7. Overview of Economic Valuation Techniques Total Economic Value Non-Use Value Use Value Indirect Use (shoreline protection) Future Use (option/bequest value) Direct Use Existence Value Consumptive Use (food) Non-Consumptive Use (tourism & recreation)

8. Direct Use Consumptive Use (food) Non-Consumptive Use (tourism & recreation) Overview of Economic Valuation Techniques Total Economic Value Non-Use Value Use Value Indirect Use (shoreline protection) Future Use (option/bequest value) Existence Value

9. Direct Use Consumptive Use (food) Non-Consumptive Use (tourism & recreation) Overview of Economic Valuation Techniques Fishing Tourism Recreation

10. Site Background • South/southwest coast of Grenada • Coral reef extent 8400 ha • Extensive mangrove forest • Seagrass meadows • Bounds coastline of two parishes • St George • St David • In-cooperates two marine protected areas • Moliniere/Beausjour Marine Protected Area • Clarkes Court/ Woburn Marine Protected Area

11. Site Background • Fishing (Recreational and commercial) • Recreational SCUBA Diving • Recreational Beach Activities • Yachting/yachting services- marina’s /haul-outs • Maritime Transport

12. Site Background Threats to resources • Algal overgrowth • Coastal development • Overfishing • Seasonal storms/hurricanes • Physical damage (anthropogenic) • Diving • Improper fishing methods • Improper boating practices

13. Methodology

14. WRI Coral Reef Valuation- Benefits Value Transfer • ArcGis shape files • Satellite Images • Identify, define and measure area of significant land cover types • Using values from other study sites, apply economic values to current site by unit area (hectares)

15. Calculate Areas & Apply Economic Value WRI Coral Reef Valuation- Benefits Value Transfer Outline Features Identify Features Import & Re-Project Features

16. WRI Coral Reef Valuation • Utilize data available from: • Fisheries Division • Land Use Division • Grenada Board of Tourism • Statistics Division • Previous Studies • Expert Opinion • Input values into tool – Estimate of Total Economic Impact is generated • Values reviewed and adjusted with new data

17. Fishing WRI Coral Reef Valuation- Fisheries Sum of revenue generated from: • Commercial Fishing • Fish Processing • Local Fishing (consumption, sale, enjoyment)

18. Recreation Tourism WRI Coral Reef Valuation- Tourism & Recreation Sum of revenue generated from: • Accommodation Sector • Snorkeling & Boating • Diving • Local Use

19. WRI Coral Reef Valuation- Fisheries

20. WRI Coral Reef Valuation- Fisheries Commercial Fishing Total Estimated Landings - cost of fishing (wages, operating costs) Fish Processing TOTAL ECONOMIC IMPACT OF FISHING Total Estimated Processing Revenue (processing, cleaning) - cost of operations (wages, operating costs) Local Fishing Fishing for (sale, enjoyment, consumption)

21. WRI Coral Reef Valuation- Fisheries

22. WRI Coral Reef Valuation- Tourism & Recreation Accommodation • Total Estimated Revenue (occupancy rates, room rates, # rooms, % visitors using reef) • labour, operating costs, tax rates, service charges, leakages TOTAL ECONOMIC IMPACT OF TOURISM & RECREATION Diving Total Estimated Diving Revenue (# divers, certifications, equipment, all inclusive trips) - labour, operating costs, tax, service charges Local Use Beach use, reef-associated use

23. WRI Coral Reef Valuation- Tourism & Recreation

24. Value Transfer

25. Benefits Value Transfer

26. WRI Coral Reef Valuation- Fisheries • Case study assumes that the South/southwest coast nearshore reefs provide supporting services to the fished reefs • No known multipliers • Quality data was limited • Exact location of catches are not known • Unknown # of local fishers • Non-labour operating costs unknown • No data on fish cleaning activities

27. WRI Coral Reef Valuation- Commercial Fisheries Results

28. WRI Coral Reef Valuation- Tourism and Recreation • Quality data was limited • occupancy rates were rough estimates (high room rate properties can skew data) • Tax revenue dependant on accountability of operators • Recreational dive data out dated • No snorkel data

29. Results Comparison

30. WRI Coral Reef Valuation- Strengths • Facilities dynamic data (allows updating and expansion) • Detailed and allows for categorization of results • When data is available, outputs of results & corrections are generated instantaneously • Sensitivity analysis as response to errors in data • Accounts for often overlooked value of local use • More data improves applicability of results (not general output)

31. WRI Coral Reef Valuation- Weaknesses • Data gaps increases reliance of local expert opinion • Requires full cooperation of relevant agencies and is dependent on the quality of their data • Errors are magnified with some calculations (e.g. fisher surveys) • Can encourage overconfidence in results if warnings about possible error ignored. • Results are not visual and not as easy to communicate as the Value Transfer method

32. Benefits Transfer Valuation- Strengths • Availability of data source • No data collection required; not dependent on quality of data from various sources • Results are visual and can be easily communicated

33. Benefits Transfer Valuation- Weaknesses • Results are static • Dependent on quality of aerial/satellite data (if absent requires intensive ground-truthing) • Requires knowledge of mapping software

34. Other Case Study Sites Montego Bay Marine Park (Brian Zane) • Benefits Transfer Valuation • Pros • Produces both graphic and numeric results • Low dependence on external/hard to locate data sources • Cons • Multipliers (values) developed for NE United States • Challenging to develop local values, which are critical to the accuracy and validity of the tool

35. Other Case Study Sites Montego Bay Marine Park (Brian Zane) • WRI Coral Reef Valuation • Strengths • Highly detailed results • Triangulates ESV of coral reefs • Tools – MS Excel • Weaknesses • Data - Heavily dependent upon external data sources • Aspects not yet developed (Coastal Protection) • Dependencies/Assumptions (built into formulas) • Complexity reduces probability of widespread adoption

36. Other Case Study Sites Tobago Cays Marine Park( David Gill) • WRI Coral Reef Valuation • Strengths • Highly detailed results • Triangulates ESV of coral reefs • Tools – MS Excel • Weaknesses • Data - Heavily dependent upon external data sources • Aspects not yet developed (Coastal Protection) • Dependencies/Assumptions (built into formulas) • Complexity reduces probability of widespread adoption

37. Other Case Study Sites

38. Conclusion • The results from this exercise indicate the value of Grenada’s coastal and marine resources • The significance of the results only emphasize the need for proper management, sustainable use of these resources, and effective management would ensure the longevity of these resources

39. Further Research Options • In order for this tool (WRI) to be more effective, an assessment should be carried out on the study to find gaps in the data set. • A short term data gathering exercise should be carried out to collect necessary data, and implement a data collection program. • The development of a comprehensive habitat map for Grenada and update existing maps. • Expand data collection within the various government entities.

40. Questions?Test ideas in the marketplace. You learn from hearing a range of perspectives. Consultation helps engender the support decisions need to be successfully implemented Donald Rumsfeld