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

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

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

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

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.

Overview of Economic Valuation Techniques Provisioning Services Regulating Services Cultural Services Food Medicine & Pharmaceuticals Ornamental Resources Building Material Erosion Control Shoreline Protection Spiritual Values Knowledge Systems and Educational Values Recreation & Ecotourism Supporting Services Sand Production Primary Production

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

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

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

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

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

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

Methodology

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)

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

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

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

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

WRI Coral Reef Valuation- Fisheries

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

WRI Coral Reef Valuation- Fisheries

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

WRI Coral Reef Valuation- Tourism & Recreation

Value Transfer

Benefits Value Transfer

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

WRI Coral Reef Valuation- Commercial Fisheries Results

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

Results Comparison

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)

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

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

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

Other Case Study Sites 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 Montego Bay Marine Park (Brian Zane)

Other Case Study Sites 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 Montego Bay Marine Park (Brian Zane)

Other Case Study Sites 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 Tobago Cays Marine Park( David Gill)

Other Case Study Sites

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

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.

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