Economic Valuation of Coral Reefs in St. Lucia

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Economic Valuation of Coral Reefs in St. Lucia

• June 2008
• Castries, St. Lucia
• Lauretta Burke
• World Resources Institute

2
Project Partners Include

• Regional Partners
• University of the West Indies (UWI) / Sustainable
  Economic Development Unit (SEDU)
• Caribbean Natural Resources Institute (CANARI)
• TT Institute of Marine Affairs (IMA)
• CEHI
• OECS

• Saint Lucia
• Government of Saint Lucia
• Planning Department
• Fisheries Department
• SMMA
• Ministry of Tourism
• Statistical Office
• St. Lucia National Trust
• SLHA, resorts

3

• Financial Support
• Macarthur Foundation
• Ocean Foundation
• Henry Foundation
• Munson Foundation
• Dutch Ministry of Foreign Affairs
• SwedBio
• International Coral Reef Action Network (ICRAN)
• Buccoo Reef Trust

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Program Overview

• Ecosystem Goods and Services
• Summary of results
• Policy Applications
• Background on this Economic Valuation project
  method and features
• Valuation details for St. Lucia
• Policy Applications
• Buccoo Reef example
• Discussion

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Beautiful
6
Valuable
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Threatened

• Coastal development
• Mangrove removal
• Sewage
• Dredging
• Runoff
• Tourism
• Overfishing
• Warming Seas

8
Influencing better Management

• Economic Valuation is a tool to guide coastal
  planning, investment and management in the
  long-term interest of local communities and the
  country

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Evaluating trade-offs

• OPTIONS
• Development options
• Enforcement of regulations
• Capping tourist numbers
• Investing in pollution control

• OUTCOMES
• Revenue streams from tourism
• Societal benefits from reefs
• Ecosystem goods and services

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Economic Valuation of Coral Reefs

• WRI (with partners) developed a coral reef
  valuation methodology and implemented valuations
  for the coral reefs of Tobago and St. Lucia.
• The study evaluated the overall annual economic
  contribution of coral reef-associated
• tourism and recreation,
• fisheries, and
• shoreline protection services.

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Ecosystem Services

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

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Ecosystem Services from Coral Reefs

Provisioning Services -food fish and shellfish -genetic resources - natural medicines and pharmaceuticals -ornamental resources - building materials 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 Supporting Services -sand formation -primary production Supporting Services -sand formation -primary production

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Ecosystem Services from Coral Reefs

Provisioning Services -food fish and shellfish -genetic resources - natural medicines and pharmaceuticals -ornamental resources - building materials 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 Supporting Services -sand formation -primary production Supporting Services -sand formation -primary production

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Non-Valued Services

• Total Economic Value (TEV) would also include
• Other Use Values
• Research Values
• Option Values (e.g. pharmaceutical)
• Carbon storage
• Non-Use Values
• Bequest Value
• Existence Value

We focus on values that can be reliably estimated
using available data
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Summary of Valuesfor St. Lucia
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Valuation Summary Tourism and Recreation

• Coral reef-associated tourism and recreation
  contributed between US160 and 194 million to
  the national economy in 2006.

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Valuation Summary Fisheries

• Coral reef-associated fisheries
• important for cultural tradition, safety net, and
  livelihood
• provide annual economic benefits estimated at
  between US0.5 0.8 million.

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Valuation Summary Shoreline Protection

• Shoreline Protection Services of Coral Reefs
• avoided erosion and storm damage from waves
  valued between US28 and 50 million per year.

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Valuation Summary

• Tourism and Recreation - US160 to 194 million
  in 2006.
• Coral reef-associated fisheries - US0.5 0.8
  million / year
• Shoreline protection services US28 and 50
  million per year.
• These are significant compared to St. Lucias
  GDP, which was 825 million in 2005.
• Coral reefs provide other important values not
  estimated in this study, and these numbers should
  be regarded as a lower bound estimate.

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Coral Reefs economically important to St. Lucia

• Valuation can highlight
• Significant contribution to GDP
• Taxes paid to government
• Jobs and wages dependent on coral reefs
• Value of social safety net
• Supports
• Coastal Planning (shoreline protection analysis)
• Evaluation of trade-offs

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Economic Valuation applications

• Estimate Economic Contribution to GDP
• Compare benefits of development / management
  options
• Encourage increased investment in coastal
  management / MPAs / fisheries management
• Identify sources of support for management /
  policy / protected areas
• Set fees, such as visitor fees
• Damage assessment
• Comparing reef-dependence

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St. Lucia - specific examples

• To guide future development, including evaluating
  
• the changes resulting from marina development on
  east and west coasts
• The benefits of investing in improved sewage
  treatment
• Guide the management planning for SMMA or Point
  Sabel
• Examine changes in fisheries management and the
  impact on short-term livelihoods versus long-term
  benefits
• To evaluate tourism carrying capacity and
  potential revenue
• To estimate loss of local use of beaches due to
  development

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EV Project Characteristics

1. Develop method which is simple and replicable
2. Rely predominantly on existing, available data
3. Develop a tool to guide valuation and apply to
   policy questions.
4. Produce coral reef valuation estimates for 2
   pilot areas (Tobago and St. Lucia)
5. Estimate likely economic loss due to coral reef
   degradation

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Valuation Main Components

• Tourism
• Method Financial Analysis
• (Net revenues plus transfers)
• Fisheries
• Method Financial Analysis
• (Net revenues plus transfers)
• Shoreline Protection
• Method Avoided Damages

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Challenges

• Distinguishing the coral-reef associated benefits
• Tourism
• Fisheries
• Shoreline protection
• Valuing local use
• Secondary (indirect) economic impacts

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Tourism Components

• Accommodation
• Reef Recreation Diving
• Reef Recreation Snorkeling
• Marine Park Revenues
• Misc. Expenses (e.g., departure taxes, visitor
  expenditure)
• Local Use
• Indirect economic effects

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Tourism Valuation issues

1. Identifying coastal visitors
2. Quantifying reef recreation
3. Getting accurate MPA visitation numbers
4. Estimating labor and other operating costs

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Tourism and Recreation Valuation Assumptions

• 25 of visitors come to St. Lucia in part due to
  the reefs.
• Non-labor operating costs about 40

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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
(11 of GDP)
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
Indirect economic Impact 68 102
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
Indirect economic Impact 68 102
Total Direct Indirect Impact US160 194 million
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
Indirect economic Impact 68 102
Total Direct Indirect Impact US160 194 million
   
Consumer Surplus 2.2 2.4
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Tourism Valuation for St. Lucia
Coral Reef-associated (US million)
Accommodation Value 64.7
Reef Recreation Diving 4.9
Reef Recreation Snorkeling 0.8
Marine Park Revenues 0.1
Misc. Visitor Expenses 21.2
Total Direct Impact 91.6
Indirect economic Impact 68 102
Total Direct Indirect Impact US160 194 million
   
Consumer Surplus 2.2 2.4
Local Use 52 109
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Local Reef Use Survey

• Commissioned a survey through the University of
  West Indies / Sustainable Economic Development
  Unit / Government of St. Lucia, Department of
  Statistics
• 300 people surveyed in 6 locations in St. Lucia
  (Soufriere, Vieux Fort, Anse La Raye, Castries
  town, Gros Islet, Dennery/Micoud)
• Designed to measure local use of beaches and
  reefs as well as recreational and subsistence
  fishing

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Fisheries Components

• Commercial Fisheries
• Fish Processing and Cleaning
• Local Use (fishing)
• Indirect economic effects
• Focus on reef-associated species snapper,
  grouper, wrasse, grunts, squirrelfish, parrot
  fish, and lobster.

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Fisheries Valuation Issues

1. Limited data on local use
2. Focus on economic impact does not fully capture
   social values.

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Commercial Fishing in St. Lucia

• Estimate derived from two approaches
• reef fish productivity
• recorded landings

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a) Reef Fish Productivity

• Reef Area 33 km2 (from this project)
• Estimated fish productivity rate range of 1 to
  5 MT of fish / km2 of coral reef
• Potential sustainable harvest of 73,000 to
  363,000 lb of reef fish

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b) Landings recorded

• 9 landing sites
• Fisheries Dept. data for 2002-2004
• Prices
• Pot fish EC10 (US3.75)
• Lobster EC25 (US9.00)
• Sea Urchin EC50 (US18.00)

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Average Fish Landings 2002-04
  Pounds Value (US) Percent of Value
Squirrelfish 13,459 50,788 7.3
Snapper 44,995 169,795 24.5
Grouper 8,244 31,108 4.5
Parrotfish 9,930 35,445 5.1
Total for finfish 76,628 287,137 41.4
       
Lobster 29,000 273,585 39.5
Sea Urchin 7,251 132,538 19.1
       
Grand Total 112,879 693,260 100.0
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Fisheries Valuation for St. Lucia
Coral Reef-associated (US thousand)
Commercial Fisheries Gross Revenue 515 - 772
N.L. Operating Costs (25) 129 193
Commercial Fisheries Net Revenue 386 579
Fish cleaning and processing 51 77
Total Direct Impact 437 656
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Fisheries Valuation for St. Lucia
Coral Reef-associated (US thousand)
Commercial Fisheries Gross Revenue 515 - 772
N.L. Operating Costs (25) 129 193
Commercial Fisheries Net Revenue 386 579
Fish cleaning and processing 51 77
Total Direct Impact 437 656
Indirect economic Impact  82 185
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Fisheries Valuation for St. Lucia
Coral Reef-associated (US thousand)
Commercial Fisheries Gross Revenue 515 - 772
N.L. Operating Costs (25) 129 193
Commercial Fisheries Net Revenue 386 579
Fish cleaning and processing 51 77
Total Direct Impact 437 656
Indirect economic Impact  82 185
Total Direct Indirect Impact 520 841
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Fisheries Valuation for St. Lucia
Coral Reef-associated (US thousand)
Commercial Fisheries Gross Revenue 515 - 772
N.L. Operating Costs (25) 129 193
Commercial Fisheries Net Revenue 386 579
Fish cleaning and processing 51 77
Total Direct Impact 437 656
Indirect economic Impact  82 185
Total Direct Indirect Impact 520 841

Local (non-commercial) fishing 155 - 790
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Shoreline Protection Services

• Innovative method for isolating the role of coral
  reefs and integrating economics
• Map outputs
• Shoreline protected by coral reefs
• Areas vulnerable to waves \ storm damage
• Relative contribution of reefs to shoreline
  protection

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Shoreline Protection Valuation

• Potential Valuation Methods
• Replacement Cost
• Avoided Damages

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Physical Factors

• Physical factors affecting the protection
  afforded by a coral reef
• orientation of the coast (windward / leeward
  high energy or low energy coast)
• bathymetry / shoreline profile
• shoreline shape (bay, headland)
• depth of the reef / geology (type of reef)
• distance the reef is from land

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Complex Analysis

• IMA developed shoreline protection framework -
  rules for how much protection the reef affords
  this coastline situation.
• Can be adapted for climate scenarios

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Shoreline Protection Analysis (5 Steps)

1. Identify vulnerable areas
2. Identify areas protected by coral reefs
3. Evaluate the relative protection provided by
   reefs
4. Incorporate property values
5. Combine to evaluate potential storm damage avoided

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4 of St. Lucias land area rated vulnerable.
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44 of St. Lucias coastline is protected by
coral reefs.
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Shoreline Stability Factors (from IMA)

1. Coastal Geomorphology
2. Coastal Geology
3. Coastal Protection Structures
4. Wave Energy
5. Storm/Hurricane Events
6. Coral Reef Index (Reef type, continuity, distance
   offshore)
7. Coastal Elevation
8. Coastal Slope
9. Coastal Vegetation
10. Anthropogenic Activities

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 Factor Coastal Protection Scheme (from IMA) Coastal Protection Scheme (from IMA) Coastal Protection Scheme (from IMA) Coastal Protection Scheme (from IMA) Coastal Protection Scheme (from IMA)
 Factor Very High 4 High 3 Medium 2 Low 1 None 0
Coastal Geomorphology Rocky, Cliffed Coastline Soft (Limestone) Cliffs or Low Bluffs Mangroves Beaches N/A
Coastal Geology Igneous and/or Volcanic Metamorphic Sedimentary Unconsolidated Sediments N/A
Coastal Protection Structures Protected by 2 prominent headlands and breakwater Protected by 2 prominent headlands Seawalls, Riprap or Breakwaters Protected by one or two small headlands No protection by headlands
Wave Energy ( Max. Wave Height cm) lt 20 20 - 40 40 - 60 gt60 N/A
Coral Reefs Reef Type Reef Distribution Reef Distance (m) Barrier N/A lt 250 Patch N/A 250 - 500 Fringe Continuous 500 - 1000 Apron Discontinuous gt 1000 No reef present No reef present No reef present
Storm/Hurricane Events Affected by 1-5 TS every 10 years Affected by at least 5 TS every 10 years Affected by at least a category 1 every 25 years Affected by at least a category 3 every 25 years N/A
Coastal Elevation (m) gt 12 5 - 12 1 - 5 0 - 1 lt 0 (N/A)
Coastal Slope () 6.2 9.7 2.6 6.2 1.1 2.6 0.4 1.1 N/A
Coastal Vegetation Type Distribution Mangroves gt 75 length of coastline Coastal Woodlands 50 - 75 of length Thicket 25 - 50 of length Runners lt 25 length of coastline None No Vegetation
Coastal Anthropogenic Activities No sand mining, coastal development, etc. Misc. Other Activities Either sand mining or coastal development Sand mining and coastal development N/A
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Stability Factors used in St. Lucia Analysis

• Coastal Geomorphology
• Coastal Geology
• Wave Energy
• Storm/Hurricane Events
• Coral Reef Index (Reef type, continuity, distance
  offshore)
• Coastal Elevation
• Coastal Slope
• Coastal Vegetation
• Not Available
• Coastal Protection Structures
• Anthropogenic Activities

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Factor Integration

• 3a. Shoreline stability (RTCP)
• Sum of factor scores / n
• 3b. Relative reef contribution
• Sqrt of ((reef index / sum of factor scores) /
  RTCP))
• Apply with minimum of 5 factors.

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3a. Relative Total Coastal Protection (RTCP)

• With reef present

• Without reef

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3b.
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(No Transcript)
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Potentially Avoided Damages

• Estimated based on property values in vulnerable
  areas which are protected by a reef, based on
  the relative reef contribution for that area.
• St. Lucia property values estimated at US25 -
  30 per square foot
• Relative reef contribution applied at /- 20,
  reflecting some uncertainty.

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Shoreline Protection Summary St. Lucia
  St. Lucia  
Land Area (sq km) 610 km2  
Vulnerable Land Area (sq km) 24.5 km2 4
Vulnerable Area Protected by reefs (sq km) 10 km2 1.5
Shoreline length Protected by Reefs 44  
Average Property Value (US) US 25 - 30  
Potentially Avoided Damages (2007) US 28 50 mill  
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Shoreline Protection Summary St. Lucia
  St. Lucia  
Potentially Avoided Damages (2007) US 28 50 mill  
Potentially Avoided Damages (over 25 years) US 700 million - 1.2 Billion  
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Summary of Values for St. Lucia
Coral Reef-associated (US million / yr)
Tourism and Recreation Total Direct Impact 91.6 million
Tourism and Recreation Total economic Impact 160 194 million

Fisheries economic Impact 0.5 0.8 million

Shoreline Protection Services 28 50 million
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Policy Exploration Buccoo Reef

• Tourist Destination
• Environmental issues
• water quality
• overfishing
• reef condition
• BRMP - enforcement

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Management Options Buccoo Reef

• Enforcement of no-fishing regulations
• Re-routing of storm drain
• Integrated watershed management
• Sewage treatment

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Economic Value Buccoo Reef

• Glass-bottom / snorkel Tours US1.4 mill / yr
• Tourism
• US7-8 million / yr
• US128 156 million over 25 years
• Shoreline protection - US140-250 million over 25
  years

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Policy Recommendations for St. Lucia

• Improve mapping and monitoring of coral reefs and
  mangroves
• Maintain coastal mangroves
• Monitor and improve coastal water quality
• Monitor marine recreation and manage within
  sustainable limits
• Use the coral reef valuation methodology and Tool
  to track the economic contribution of coral reefs
  over time

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Discussion
Available online at www.buccooreef.org
and www.wri.org/project/valuation-caribbean-reefs
Contacts WRI Lauretta Burke, 1 (202) 729
7774, lauretta_at_wri.org Gov StL LaVerne Walker
lwalker2006_at_gmail.com IMA Sean Paddy, (868)
634 4291 x405, spaddy_at_ima.gov.tt