1. Economic Valuation of Goods and Services Derived from Coral Reefs
Results from the
Folkestone Park & Marine Reserve
Reeffix Exercise

2. Table of Contents Background Three Methodologies
Project Background
Overview of Economic Valuation
Site Background
Three Methodologies
Coral Reef Valuation: Fisheries
Coral Reef Valuation: Tourism & Recreation
Value Transfer Methodology
Discussion & 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
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 
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

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
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

5. Overview of Economic Valuation Techniques
Coral Reefs
Provisioning Services
Food
Medicine & Pharmaceuticals
Ornamental Resources
Building Materials
Erosion Control
Shoreline Protection
Regulating Services
Cultural Services
Spiritual Values
Knowledge Systems and Educational Values
Recreation & Ecotourism
Products obtained from
Ecosystems
Benefits obtained from
regulation of ecosystem
Processes
-Nonmaterial benefits
obtained from ecosystems
Natural processes that maintain the other servicess
Supporting Services
Sand Production
Primary Production
WRI 2009
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

6. Overview of Economic Valuation Techniques
Much of the Caribbean tourism plant exists due to the presence of coral reefs (and associated ecosystems)
Thus the profitability of the tourism industry is impacted by coral reef health however this is 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.
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

7. Overview of Economic Valuation Techniques
Total Economic Value
Use Value
Non-Use Value
Indirect Use
(shoreline protection)
Future Use
(option/bequest value)
Direct Use
Existence Value
Consumptive Use
(food)
Non-Consumptive Use
(tourism & recreation)
WRI 2009
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

8. Overview of Economic Valuation Techniques
Total Economic Value
Use Value
Non-Use Value
Indirect Use
(shoreline protection)
Future Use
(option/bequest value)
Direct Use
Non-Consumptive Use
(tourism & recreation)
Consumptive Use
(food)
Existence Value
WRI 2009
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

9. Overview of Economic Valuation Techniques
Direct Use
Non-Consumptive Use
(tourism & recreation)
Consumptive Use
(food)
Recreation
Tourism
Fishing
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

10. Site Background Folkestone Park and Marine Reserve
Reserve Area: 2.1km2
11% of West coastline
Established in 1981
No-take zone
Management under the National Conservation Commission
Holetown Lagoon
Heavy recreational use:
>100,000 annual visitors
Coastal Habitat: mangroves and 3 types of reefs (patch, fringing, bank)
Nicholls 2008
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

11. Site Background West Coast Reefs significantly impacted by:
Land Based Pollution
Coastal Development
Physical Damage
Overfishing
Disease
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

12. Site Background
Significant declines on all reefs along the coasts, pollution appears to be the main factor
some Folkestone reefs lost more than half their coral cover in the past 20 years
Doubling of algae cover (indicator of pollution)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

13. Background WRI Fisheries WRI Tourism Value Transfer Discussion
(Brian Zane)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

14. Value Transfer: Spatial Distribution of Ecosystem Service Values
Use available Satellite imagery (Google EarthTM)
Identify, define and measure area of significant land cover types
Using values from heavily researched study site, apply values to current site by unit area (hectares)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

15. WRI Coral Reef Valuation Methods: Fisheries & Tourism
DATA COLLECTION
Utilised data available from:
FPMR Staff
BHTA
Fisheries Division
Previous Studies
Expert Opinion
DATA INPUT
values inputted into tool – Estimate of Total Economic Impact is generated
DATA VALIDATION
Values reviewed and adjusted with new data
Application of scenarios
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

16. Percent of gross profit spent on non-labour expenses
Sensitivity Analysis
25%
45%
Percent of gross profit spent on non-labour expenses
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

17. World Resource Institute Coral Reef Valuation Tool
Fisheries Valuation

18. WRI Coral Reef Valuation- Fisheries
Commercial Fishing
Total Estimated Landings (weight x price)
- cost of fishing (wages, operating costs)
TOTAL ECONOMIC IMPACT OF FISHING
Fish Processing
Total Estimated Processing Revenue
(processing, cleaning)
- cost of operations (wages, operating costs)
Local Fishing
Fishing for (sale, enjoyment, consumption)
Multipliers
Additional expenditures (re-sale only)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

19. WRI Coral Reef Valuation- Fisheries
Case study assumes Folkestone reefs provide supporting services to target species directly (habitat) or indirectly (prey habitat)
+ 20% landings used
Quality data was limited
Aggregated landings data from separate sources (overlap, gaps unknown)
No data available on local fishing ([occasional] sale, consumption, enjoyment)
Prices vary depending on many factors: seller, customer, supply (average values used)
Fish species may be offshore pelagics, fishers could be landing at other sites. Unofficial landings sites heavily used.
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

20. WRI Coral Reef Valuation- Commercial Fisheries Results
Flyingfish
Mahon et al. 2007
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

21. WRI Coral Reef Valuation- Fisheries
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

22. World Resource Institute: Coral Reef Valuation Tool
Tourism & Recreation Valuation

23. 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
MPA Revenue
TOTAL ECONOMIC IMPACT OF TOURISM & RECREATION
N/A
Snorkeling and Boating
Total Estimated Revenue (prices, # snorkelers, equipment rentals, # all inclusive trips)
- labour, operating costs, taxes, service charges
Diving
Total Estimated Diving Revenue (prices, # divers, # certifications, equipment, all inclusive trips)
- labour, operating costs, taxes, service charges
Local Use
Other Revenue
Beach use, reef-associated use
rentals, souvenirs
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

24. WRI Coral Reef Valuation- Tourism and Recreation
Quality data was limited
occupancy rates were rough estimates based on averages of the class of accommodation (A-class, luxury, etc)
No value of total beach use
Difficult to isolate benefits from certain recreational user
No data available from number of resource users from all-inclusive properties
other recreational activities not accounted for (e.g. waterskiing)
No data on local use
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

25. WRI Coral Reef Valuation- Accommodation
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

26. WRI Coral Reef Valuation- Recreation
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

27. WRI Coral Reef Valuation- Tourism and Recreation Totals
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

28. WRI Coral Reef Valuation- Government Revenue
Total ~ US$ 6 million
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

29. WRI Coral Reef Valuation- Results
Fishing
$29,328,561
US$485, US$691,313
Tourism
Recreation
US$29,328,561 – US66,050,239

30. WRI Coral Reef Valuation- Total

31. WRI Coral Reef Valuation Hypothetical Reserve User Fee
Snorkeling
Diving
US$3.00 voluntary
fee
(1 in 3)
US$5.00 voluntary fee
(1 in 2)
US$5.00 mandatory fee
US$10.00 mandatory fee
US$116,000 – US$883,000
US$34,000 – US$70,000
US$150,000 – US$953,000

32. Value Transfer: Spatial Distribution of Ecosystem Service Values

33. Value Transfer Methodology
Identify Features
Outline Features
Import & Re-Project Features
Calculate Areas & Apply Conversion Factors for Associated Values
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

34. Background WRI Fisheries WRI Tourism Value Transfer Discussion
This project, conducted by Kimberly Baldwin (PhD candidate) seeks to aid marine space use planning and management in the Grenadines by gathering information on marine space use particularly critical habitats; representative marine ecosystems; areas of high aesthetic value and cultural importance; areas important for livelihoods, fishing grounds and marine-based tourism; areas of highest human threat and space use conflict
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

35. Value Transfer Methodology
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

36. Results Comparison Background WRI Fisheries WRI Tourism Value Transfer
Discussion

37. WRI Coral Reef Valuation- Strengths
Facilities dynamic data (allows updating and expansion)
Detailed and allows for categorisation of results
When new data is added, outputs of results & corrections are generated instantaneously
Sensitivity analysis as response to potential errors in data
Accounts for often overlooked value of local use
Some level of adaptability
can be applied to sites where data availability is basic or exhaustive
More data improves applicability of results (site-specific output)
Potential for future development: inclusion of other values such as shoreline protection
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

38. WRI Coral Reef Valuation- Weaknesses
Data gaps increases reliance on 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 data quality is ignored.
Currently no valuation of economic impact of cruise ships and shoreline protection
Results are not visual and not as easy to communicate as the Value Transfer method
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

39. Value Transfer Methodology Strengths
Availability of data source (Google EarthTM)
Rapid results
No extensive data collection required from multiple agencies
Results are visual (maps) and can be easily communicated
Resulting dataset has wide applications for management (e.g. changes in forested area and associated value over time)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

40. Value Transfer Methodology Weaknesses
Results are static
Dependent on quality of aerial/satellite data (if absent requires intensive ground-truthing)
Requires knowledge of mapping software (not ubiquitous)
Economic values not developed in the Caribbean
Some values (e.g. coral reefs) vary greatly by site and use of recommended values can be misleading.
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

41. Value Transfer Methodology
Other Case Study Sites
Montego Bay Marine Park (Brian Zane)
Value Transfer Methodology
Pros
Produces both graphic and numeric results
Low dependence on external/hard to locate data sources
Cons
Challenging to develop local values, which are critical to the accuracy and validity of the tool
Some values developed in NE United States
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

42. WRI Coral Reef Valuation
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
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

43. Other Case Study Sites Background WRI Fisheries WRI Tourism
Value Transfer
Discussion

44. Other Case Study Sites (excluding Grenada Value Transfer)
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

45. Other Case Study Sites Area of Study Sites
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

46. Further Research Options
Fill necessary data gaps to reduce errors from assumption (e.g. local recreation use and local fishing)
More accurate values for snorkelling and diving usage
Quantification and inclusion of other major revenue generating activities, namely waterskiing and jet ski rentals
Assessment of spear fishing catch and effort
Assessment of coastal protection value
Quantifying reefs by type (fringing, bank reefs)
Expansion to West Coast or entire island
Compare resource value with cost of management
Willingness to pay study on user fees for the Folkestone reserve
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

47. Conclusion
Folkestone coral reefs and associated ecosystems likely contribute over US$29 - US$66 million annually to the economy of Barbados (based on current market values)
Likely a gross undervaluation as most tourists use the beach and WRI values do not count shoreline protection (existence , bequest values not included but important)
Shoreline protection may increase the value to hundreds of millions due to land and property values in the area
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

48. Conclusion
Many assumptions in fisheries model, however variations not likely significant (pelagics ~ 20% of revenue)
Comparison between methods: Large variation in the results between methods likely due to the low value assigned for coral reefs in the Value Transfer Methodology
Comparison to other sites: low values likely due to size of study area
Results not entirely comprehensive but reveals a portion of the value of coral reefs to the economy.
Able to highlight the potential loss to the economy if the already threatened reefs not protected
Background
WRI Fisheries
WRI Tourism
Value Transfer
Discussion

49. Questions?