1. Overview of Economic Valuation of Coral Reefs Lauretta Burke World Resources Institute (WRI) Mt. Irvine, Tobago March 21-22, 2006

2. economics

3. Beautiful

4. Valuable

11. Threatened Coastal development Sewage Dredging

12. Threatened Coastal development Sewage Dredging Runoff from construction and agriculture

13. Threatened Coastal development Sewage Dredging Runoff from construction and agriculture Marine-based threats

14. Threatened Overfishing

15. Threatened Tourism pressure

16. Threatened Coral Bleaching Coral Disease Ocean Acidification

17. Threats to Coral Reefs from Land-based Sources Sediment

18. Threats to Coral Reefs from Land-based Sources Sediment Nutrients

19. Threats to Coral Reefs from Land-based Sources Sediment Nutrients Toxic Substances

20. Global Analysis released in 1998 by World Resources Institute, in collaboration with ICLARM, WCMC and UNEP

21. The Reefs at Risk Index Low Medium High

22. Global Reefs at Risk successful at raising awareness. Relatively coarse-scale (4km.) Global Reefs at Risk successful at raising awareness. Relatively coarse-scale (4km.) Regional Reefs at Risk series Higher resolution analysis – valuable for management More integration and improvement of data Regional Reefs at Risk series Higher resolution analysis – valuable for management More integration and improvement of data

23. Reefs at Risk in the Caribbean Collaboration of over twenty international and regional partners Uses Geographical Information System (GIS) to evaluate threat to coral reefs

24. Threats Evaluated in Caribbean: Coastal Development Watershed-based sources of sediment and pollution Marine-based threat Overfishing

25. Dredging, land filling and reclamation Mining of sand and coral Runoff from construction Sewage discharge Impacts from tourism Threat: Coastal Development

26. Coastal Development Analysis Method – Inferential Modeling Proxy Indicators –Cities –Ports –Airports –Dive tourism centers –Coastal Population density –Population Growth –Tourism Growth –Management Effectiveness of MPAs Low Medium High Reefs Threatened by Coastal Development Reefs Classified

27. Finding: COASTAL DEVOPMENT threatens an estimated one-third of Caribbean coral reefs. Low Medium High Estimated threat

28. Regional Summary LowMediumHighVery High

29. Finding: INTEGRATED THREAT - nearly two-thirds of Caribbean coral reefs are threatened by human activities. Low Medium High Very High Estimated threat

30. Finding: Degree of human pressure on coral reefs varies considerably across the region. LowMediumHighVery High

31. Country Summaries Note: 1km resolution analysis is coarse scale for small islands in Eastern Caribbean. Higher resolution possible with local data.

32. Finding: If current trends in coral reef degradation continue, coastal communities and national economies are poised to sustain substantial economic losses.

33. Valuation: Coral reef-associated fisheries Net annual revenues of over $300 million in 2000. Fisheries could decline by 30-45% by 2015 Estimated loss of net revenues between US$95 million to US$140 million per year by 2015.

34. Valuation: Dive Tourism Net annual revenues of over $2 billion in 2000. Coral degradation could results in a 2-5% reduction in revenues by 2015 Estimated loss of net revenues between US$100 million to US$300 million per year by 2015.

35. Valuation: Shoreline Protection Over 20% of Caribbean coastline protected by coral reefs. Estimated value of this service is between $700 million and $2.2 billion. Reef degradation could result in losses estimated between US$140 million to US$420 million per year by 2050.

36. Policy Recommendations Create the Will for Change –Consider long-term economic value in decision-making Build Capacity for Change Improve Management International Action Reefs at Risk in the Caribbean http://reefsatrisk.wri.or g

37. Demand for EV

38. EV Project Characteristics 1.Produce detailed EV estimates for 2 pilot areas (Tobago and St. Lucia) 2.Result in estimates of likely economic loss due to coral reef degradation 3.Develop a method that is efficient, inexpensive and replicable 4.Rely predominantly on existing, available data 5.Produce a tool for application of Econ Valuation to policy questions.

39. Ecosystem Services Ecosystem goods (such as food) and services (such as waste assimilation) represent the benefits human populations derive, directly or indirectly, from ecosystems.

40. Ecosystem Services Services provided by ecosystems Provisioning Services products obtained from ecosystems- Regulating Services Benefits obtained from regulation of ecosystem processes Cultural Services Nonmaterial benefits obtained from ecosystems Supporting Services -Services necessary for the production of all other ecosystem services- Source: adapted from MEA (2005)

41. Ecosystem Services from Coral Reefs Provisioning Services -food – fish and shellfish -genetic resources -natural medicines and pharmaceuticals -ornamental resources - building matrials Regulating Services - carbon storage / climate regulation -erosion control -storm protection Cultural Services -spiritual and religious values -knowledge systems / educational values -inspiration -aesthetic values -social traditions -sense of place -recreation and ecotourism Supporting Services -sand formation -primary production

42. Purpose of Economic Valuation of Ecosystem Goods and Services The purpose of economic valuation is to obtain reliable, objective information on the benefits and costs of conserving ecosystems so as to inform decision- making.

43. Economic Valuation Uses Evaluate Values Competing Demands Tradeoffs Externalities Beneficiaries, costs and benefits

44. Value (per hectare) 0 $2000 $4000 Mangrove Shrimp Farm Coastal Protection (~$3,840) Timber and Non- timber products ($90) Fishery nursery ($70) Net: $2,000 (Gross $17,900 less costs of $15,900) Pollution Costs (-$230) Less subsidies (-$1,700) Restoration (-$8,240) Private Net Present Value per hectare Mangrove: $91 Shrimp Farm: $2000 Public Net Present Value per hectare Mangrove: $1,000 to $3,600 Shrimp Farm: $-5,400 to $200 Source: Millennium Ecosystem Assessment; Sathirathai and Barbier 2001 Taking nature’s value into account: mangrove conversion

45. Total Economic Valuation Total Economic Value (TEV) Use ValueNon-use Value Direct use value Indirect use value Option value Existence Value -consumptive -non-consumptive -bequest value

46. Economic Valuation Methods Effect on Productivity Travel Cost Hedonic Pricing Replacement Cost Avoided Damages Contingent Valuation

47. Other key terms Net Benefits Consumer Surplus

48. Categories of Economic Valuation 1.determine the value of the total flow of benefits from an ecosystem (e.g., TEV) 2.determine the net benefits of interventions that alter ecosystem conditions (e.g., evaluating the value of investing in an MPA) 3.examine how the costs and benefits of an ecosystem are distributed (e.g., identifying beneficiaries) 4.identify potential financing sources for conservation.