1. Valuation of ecosystem services of Makira and Masoala Protected areas Michel Masozera

2. Mission’s objectives Meetings with relevant government, donor, and NGO representatives; Review of available GIS data and identification of any new information required to complete the analysis; Travel to Makira and Masoala to meet with staff and review final study design, including identification of field work needs; Finalize research design and plan field activities and a future visit to Madagascar to complete data collection Hold debriefing meeting prior to departure to advise on progress and provide a work plan for completing the assignment.

3. Relevance of the study to the MIARO project Result module IV: Sustainable Financing mechanisms operational Sub result module objective (4.2): Build on efforts made and cooperate with other EP3 actors to strengthen potential sources of income for forest habitat conservation Activity 4.2.2: Greater information and understanding within Madagascar about the value of ecosystem services developed and promoted

4. Objectives of the study To assess the value of ecosystem services provided by Masoala and Makira protected areas Specifically, assess the contribution ecosystem services the local and regional economy

5. Why value? Understand the contribution of ecosystems to the local, regional, national and global economy, and thus build local and political support for conservation and sustainable use; Convince (potential) donors that the benefits of conservation and sustainable use of ecosystems and protected areas (usually) outweigh the costs and thus attract investments; Identify the users and beneficiaries of ecosystem services to secure financial streams for the long-term maintenance of these services;

6. Why value? How are costs and benefits of a change in ecosystem distributed? How to make conservation financially sustainable? Spur the creation of innovative institutional and market instruments that promote sustainable ecosystem management

7. Valuation framework

8. Step 1- Specification of the boundaries

9. Impact of deforestation on main stakeholders at different scales Source: van Beukering et al. 2003

10. Step 2- Assessment of important ecosystem services for the Makira-Masoala-(Baie d’Antogil ?) landscape - Regulation services Maintenance of biodiversity Water supply (water quantity and quality) Climate regulation Carbon sequestration Erosion control and Sediment retention - Production services Non Timber Forest products - Cultural values Recreation and tourism Cultural, religion and spiritual heritage Scientific and educational information

11. Existence values Intrinsic value of resources and landscapes, irrespective of its use such as cultural, aesthetic, bequest significance, etc. Direct values Outputs that can be consumed or processed directly, such as timber, fodder, fuel, non-timber forest products, meat, medicines, wild foods, etc. Indirect values Ecological services, such as flood control, regulation of water flows and supplies, nutrient retention, climate regulation, etc. Option values Premium placed on maintaining resources and landscapes for future possible direct and indirect uses, some of which may not be known now. USE VALUES NON-USE VALUES Step 3- Valuation

12. Total economic value The four value types are exclusive and may be added. The sum of the direct use, indirect use and option values equals the total use value of the system; the sum of the use value and the non-use value is the total value of the ecosystem

13. Step 3- Valuation cont. Example Valuation Techniques

14. This study will use existing studies, reports and data to develop an integrated ecological economic model at the watershed scale. In addition we will use a combination of different valuation techniques to determine the total economic value

15. What has been and being done so far! Feasibility study “Construction barrage hydroelectrique sur la chute de Vodriana – Makira forest (4.8 Megawatts) (Direction de l’Energie) Etude d’impact économique de la déforestation sur la riziculture irriguée (Jürg Brand, 2002) Feasibility Study for an Avoided Deforestation Project in the Makira Region (Winrock International, 2004) Socioeconomic studies around Masoala and Makira (WCS) Watershed Protection for Ecosystem Services in the Makira Forest Area, Madagascar: a preliminary biophysical assessment (Jessica Albietz, 2005) Economic impact of tourism (Amanda Doster and Alex Krasavin, 2006) Etat de lieu de la baie d’Antongil (Andrew cook)

16. What has not been done yet! - Estimation of total economic value Previous studies have focused on single ecological services (carbon sequestration or water regulation). This tends to undervalue a landscape that has multiple functions

17. Applying the economic valuation to PES design

18. Watershed services: supply and demand Supply of services: Upstream land uses affect the Quantity, Quality, and Timing of water flows Demand for services: Possible downstream beneficiaries: Domestic water use Irrigated agriculture Hydroelectric power Fisheries Recreation Downstream ecosystems Source: World Bank 2003

19. Applying ecosystem valuation to payment for ecosystem service: simple in theory Benefits to producers Costs to offsite populations Conventional resource use: no conservation Conservation with payment for service Payment Conservation without payment Minimum payment willing to receive to change damaging behaviour to ecosystem Maximum payment willing to pay to reduce environmental damage

20. In practice not so simple… Complex biophysical linkages (Brand 2003)

21. In practice still not so simple…valuing effects of change in ecosystem conditions on agricultural production

22. Many stakeholders involved To develop financing mechanisms for ecosystem services it is necessary to identify the main beneficiaries of the ecosystem services delivered and to understand the different interests and perceptions of the main stakeholders at different scales

23. Institutions and governance Inappropriate institutional and governance arrangements are one of major drivers of ecosystems change Existing national and global institutions are not well designed to deal with the management of open access resources, a characteristic of many ecosystem services Unless we address the issue of governance and institutions the payments for ecosystem services will not provide the expected results

24. Next steps Jan – Feb, 07: Read all the reports, publications and look at the existing data March-May, 07: Collect additional information needed to develop the integrated ecological economic model May-Sept, 07: Analysis and report writing