1. Economic Valuation of Goods and Services Derived from Coral Reefs
Results from the
Soufriere, St. Lucia Reeffix Exercise

2. Table of Contents 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 
Background
Methodology
Results
Discussion
Conclusion

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
Methodology
Results
Discussion
Conclusion

5. Overview of Economic Valuation Techniques
Much of the Caribbean tourism plant exists due to the presence of coral reefs (and associated ecosystems)
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.
Background
Methodology
Results
Discussion
Conclusion

6. 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
Methodology
Results
Discussion
Conclusion

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
Methodology
Results
Discussion
Conclusion

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
Background
Methodology
Results
Discussion
Conclusion

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

10. Site Background Soufriere Marine Management Area 11 km of coastline
Adjacent marine area to include
Marine Reserves
Fishing priority areas
Multiple use areas
Recreational areas
Yacht moorings
Main users include
Fishers (pot, line, seine)
Yachtspersons
Recreational divers
Water Taxis
Wider community
MEDO 2003
Background
Methodology
Results
Discussion
Conclusion

11. Site Background Soufriere coastal area: Background Methodology Results
Great ecological diversity
Well developed coral reefs
Rich forests
Economy based on agriculture, fishing and tourism
Management activities began in the early 1980s in response to environmental and developmental issues
SMMA was established in 1994
Successes include managing user conflicts, participatory management processes, and self-financing through tourism activities.
Background
Methodology
Results
Discussion
Conclusion

12. Site Background Significant impacts over the years include: Background
Harmful industrial waste released into the river juts 500 metres upstream from the coast
Heavy sedimentation as result of road construction, and from severe storms notably 1996 and Tropical Storm Debbie in 1994
Big barrel sponges severely affected but timely intervention saved major parts of reef habitat from suffocation
Reef fish populations are still under threat and there is urgent need to re-establish declining red snapper population
Background
Methodology
Results
Discussion
Conclusion

13. Methodology Background Methodology Results Discussion Conclusion
(Brian Zane)
Background
Methodology
Results
Discussion
Conclusion

14. WRI Coral Reef Valuation- Benefits Value Transfer
Use available Satellite imagery (Google EarthTM)
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)
Background
Methodology
Results
Discussion
Conclusion

15. WRI Coral Reef Valuation- Benefits Value Transfer
Import & Re-Project Features
Calculate Areas & Apply Economic Value
Background
Methodology
Results
Discussion
Conclusion

16. WRI Coral Reef Valuation
Utilise data available from:
Fisheries Division
SMMA
SFCL
Input values into tool – Estimate of Total Economic Impact is generated
Values reviewed and adjusted with new data
Background
Methodology
Results
Discussion
Conclusion

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

18. WRI Coral Reef Valuation- Tourism & Recreation
Sum of revenue generated from:
Tourism
Accommodation Sector
MPA Entrance Fees
Recreation
Snorkeling & Boating
Diving
Local Use
Background
Methodology
Results
Discussion
Conclusion

19. WRI Coral Reef Valuation- Fisheries
Fishers often complain that fuel is one of the most significant operating cost and that fuel price increases can severely threaten their livelihood and the profitability of fishing. Interviews in 2006 revealed that fishers believed that fuel may account for as much as 50% of costs (Gill 2006). Given the recent increase in fuel prices subsequent to the interview, net revenue decreased by about $US ½ million
Background
Methodology
Results
Discussion
Conclusion

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)
Fish Processing
Total Estimated Processing Revenue
(processing, cleaning)
- cost of operations (wages, operating costs)
Local Fishing
Fishing for (sale, enjoyment, consumption)
Background
Methodology
Results
Discussion
Conclusion

21. WRI Coral Reef Valuation- Fisheries
ategory V
alue
(US Dollars)
1. Commercial Fisheries
Gross Revenue
$2,185,001
Net Revenue
$724,900
Transfers to the economy (Wages) $0
Total Commercial Fishing Value
$742,900
2. Fish Processing and Cleaning
$6,726,766
3. Local Fishing
$41,892,157
TOTAL DIRECT ECONOMIC IMPACTS
OF FISHING $
Fishers often complain that fuel is one of the most significant operating cost and that fuel price increases can severely threaten their livelihood and the profitability of fishing. Interviews in 2006 revealed that fishers believed that fuel may account for as much as 50% of costs (Gill 2006). Given the recent increase in fuel prices subsequent to the interview, net revenue decreased by about $US ½ million
Background
Methodology
Results
Discussion
Conclusion

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
MPA Revenue
TOTAL ECONOMIC IMPACT OF TOURISM & RECREATION
Entrance fees – collection costs
Snorkelling and Boating
Total Estimated Revenue (# snorkellers, equipment rentals, all inclusive trips)
- labour, operating costs, tax, service charges
Diving
Total Estimated Diving Revenue (# divers, certifications, equipment, all inclusive trips)
- labour, operating costs, tax, service charges
Local Use
Beach use, reef-associated use
Background
Methodology
Results
Discussion
Conclusion

23. WRI Coral Reef Valuation- Accommodation
CATEGORY
VALUE
(US Dollars)
Accommodation
Percent (%) of accommodation revenue that is reef related
35%
Reef-associated Gross Revenue
$13,581,944
Reef-associated Net Revenue (Gross minus costs)
$7,877,537
Net revenue remaining in the country (net revenue – leakages)
$923,568
Transfers to the economy (taxes, via wages and service charges)
$1,086,556
TOTAL Accommodation Value
$11,245,856
Background
Methodology
Results
Discussion
Conclusion

24. WRI Coral Reef Valuation- Recreation
CATEGORY
VALUE
(US Dollars)
Diving
Gross Revenue
$10,647,396
Net Revenue (gross minus cost)
$2,661,849
Transfer to economy (taxes, via wages and service charges)
$6,175,490
Total Diving Value
$8,837,339
Snorkelling
$1,217,280
Net revenue (Gross minus cost)
$304,320
Transfer to the economy (taxes, via wages and service charges)
$706,022
Total Snorkelling Value
$1,010,342
Background
Methodology
Results
Discussion
Conclusion

25. WRI Coral Reef Valuation- Tourism and Recreation Totals
CATEGORY
Value (US Dollars)
Accommodation
$11,245,856
Diving
$8,837,339
Snorkeling
$1,010,342
Marine Park
$432,741
Other Direct Expenditures (vending, water taxis, food sales)
$440
TOTAL DIRECT AND INDIRECT IMPACTS
$21,526,718
Local Use of Coralline Beaches
Local use from reef recreation
Diving consumer surplus
$2,661,849
Snorkelling consumer surplus
$304,320
TOTAL ECONOMIC IMPACT OF REEF-RELATED TOURISM AND RECREATION
$24,492,887
Background
Methodology
Results
Discussion
Conclusion

26. WRI Coral Reef Valuation- Government Revenue
Background
Methodology
Results
Discussion
Conclusion

27. WRI Coral Reef Valuation- Total
Background
Methodology
Results
Discussion
Conclusion

28. Benefits Value Transfer
seeks to aid marine space use planning and management in the
Saint Lucia
visual representation of critical habitats, areas important for livelihoods, fishing grounds, space use conflict, etc.
Data not available at this time
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
Methodology
Results
Discussion
Conclusion

29. WRI Coral Reef Valuation- Fisheries
Case study assumes Soufriere & surrounding nearshore reefs provide supporting services to the fished reefs
No known multipliers
Quality data was limited
Data from one landing site as only one exists
220 fishers
non-labour operating costs estimated to be 66% of fishing value
fisher surveys: 4
Fish species may be offshore pelagics, fishers could be landing at other sites. Unofficial landings sites heavily used.
Background
Methodology
Results
Discussion
Conclusion

30. WRI Coral Reef Valuation- Tourism and Recreation
Quality data was limited
occupancy rates were rough estimates (high room rate properties can skew data)
Some level of unreported entry
Tax revenue dependant on accountability of operators
Background
Methodology
Results
Discussion
Conclusion

31. WRI Coral Reef Valuation- Strengths
Facilities dynamic data (allows updating and expansion)
Detailed and allows for categorisation 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)
Some level of adaptability
Can be applied to scenarios where data availability is basic)
Background
Methodology
Results
Discussion
Conclusion

32. 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 caveats about possible error ignored.
Results are not visual and not as easy to communicate as the Value Transfer method
Background
Methodology
Results
Discussion
Conclusion

33. Conclusion
Significant disparity in accommodation and diving as major source of clients emanate from hotels outside of SMMA
Cruise ship business is significant contributor but is not measured currently
Important contributions from the informal sector (watertaxis)
Significant contributions by added value (Fish cleaning)
Sustainable revenue generation for park however it may be further enhanced with more resources for revenue collection
Low local use of park
Background
Methodology
Results
Discussion
Conclusion

34. Further Research Options
Fill necessary data gaps (fish landings, occupancy rates)
Expansion of study to the include CAMA
Assessment of the regulating services provided (shoreline protection value)
Reef fish stock assessment
Development of the MarSIS database
Research into carrying capacity of SMMA
Background
Methodology
Results
Discussion
Conclusion

35. Questions?
Background
Methodology
Results
Discussion
Conclusion