Faculty of Earth and Life Sciences, VU University
7
Economic valuation of Bonaire coral reefs
Master Thesis – Environment and Resource Management
Lidia Muresan - 2205073
13 July 2012
Supervisor: Pieter van Beukering
2nd assessor: Elissaios Papyrakis
468017 ERM Research Project (18 ec)
Word count: 17,000
Environment and Resource Management
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Environment and Resource Management
Economic valuation of Bonaire coral reefs
Foreword
This study represents the Research Project carried out for the Master in Environment
and Resource Management. The project was conducted at the Institute for
Environmental Studies (IVM), in the department of Environmental Economics. The
purpose of this study was to determine the total economic value of Bonaire's coral reefs
by modeling their ecosystem using dynamic simulation. IVM has a range of projects
which debate diverse environmental problems both from social and economic
perspectives. Moreover, the department of Environmental Economics focuses on
understanding the interaction between economy and environment.
This project helped me become experienced with economic valuation processes and
turned me into an advanced user of the Stella software, the program I have used to build
the simulation model.
First of all I would like to thank my project supervisor, Dr. Pieter van Beukering,
environmental economist and associate professor at IVM. He helped me define the
purpose of the study and construct the model in a realistic manner. Moreover, he
advised me about the assumptions I had to make when it was necessary and supported
every decision I made.
Second of all, special thanks to Esther Wolfs, from WKICS, which helped me identify the
most significant scenarios to be analyzed in this paper. Furthermore, she was in touch
with the stakeholders and provided important data.
Many thanks to former students Ingrid van Beek (Wagenigen University) and Francielle
Lacle (VU University-ERM) for the data they have provided for the ecological module
and Bonaire’s demographics.
Gratitude for current students Stijn Schep (VU University-ERM) and Jorge Amrit Cado
van der Lely (University of Groningen) that gave me their junior expert advises to
calculate the fisheries value and make assumptions regarding ecological interactions as
close as possible to reality.
I am also very grateful to my colleagues Angela Nichols and Jillian Student who spent a
significant amount of time proofreading my thesis and provided me with important
feedback.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
List of abbreviations:
CPV – Coastal Protection Value
CT – Cruise Tourists
GDP – Gross Domestic Product
N – Nitrogen
NPV – Net Present Value
P – Phosphorus
SOR – State of the reef
SOT – Stay-over Tourists
TEV – Total Economic Value
TIN – Total Inorganic Nitrogen
WTP – Willingness to Pay
Environment and Resource Management
Economic valuation of Bonaire coral reefs
Contents
List of abbreviations:
4
Summary
7
1
Introduction
11
1.1
1.2
Purpose of the study
Outline of the paper
11
12
2
Background
13
2.1
2.2
2.3
2.4
2.5
Bonaire
Bonaire ecosystems
Marine ecosystems: Threats and Impacts
Intervention methods
Boundaries and limitations
13
15
16
19
19
3
Methodology
21
3.1
3.2
3.3
3.4
Overall approach
Ecological benefits of coral reefs
Economic benefits of coral reefs
Valuation techniques and data collection
21
22
23
25
4
The model
27
4.1
4.2
4.3
4.4
4.5
4.6
Ecological module
Recreational sub-module
Biodiversity sub-module
Fisheries sub-module
Amenity sub-module
Coastal protection sub-module
27
38
42
44
44
46
5
Results
47
5.1
5.2
5.3
5.4
Baseline scenario
Scenario 1 – Increase in the number of tourists
Scenario 2 – Lionfish eradication
Scenario 3 – Construction of a sewage treatment plant
47
55
60
66
6
Conclusions
71
7
Recommendations
75
References
77
Environment and Resource Management
Economic valuation of Bonaire coral reefs
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Summary
Coral reefs are one of the oldest marine ecosystems in the world and are well known
due to their capacity to support high numbers and varieties of aquatic species and to
offer recreational and research opportunities (NOAA, 2011). More than 20% of the
world's corals are damaged and have no chance of recovery. The main reasons behind
this are anthropogenic activities, such as unsustainable fishing, pollution, sedimentation,
physical destruction or climate change, as well as natural events such as storms,
hurricanes or coral diseases (NOAA, 2011). Despite this, the coral cover of Bonaire was
well conserved and represents one of the healthiest in the entire Caribbean. The best
explanation for this trend is the existence of Bonaire National Marine Park (BNMP)
established in 1979, which has the role to conserve and manage the waters around the
island (Parsons and Thur, 2007).
The final aim of this project is to provide transparent and critical information that assists
policy makers and government officials in taking high-quality regulatory measures for
nature conservation, protection and management of their resources.
In order to reach this goal, first a dynamic simulation model is build which illustrates the
ecological interactions of Bonaire's coral reef and establishes their total economic value
(TEV). For this case, the Stella software was used to model the relation between
ecology and economy provided by coral reefs (Costanza & Voinov, 2001; Costanza &
Gottlieb, 1998) (see Figure 1).
Furthermore, the study will focus on the following research question:
"To what extent will economic development and nature management influence the
marine ecosystem services in Bonaire, and vice versa?"
The marine ecosystem consists of corals, fish and algae. An analysis done for the reefs
of Bonaire and Curacao revealed that their main threats are human activities,
marine-based pollution, and coastal development.
Future scenarios and the baseline will be analyzed for a time period of 30 years. This
period is enough for the impacts on ecosystems to show their effects and from an
economical point of view it is short enough to make predictions. These management
options are:
1.
Construction of a sewage treatment plant in order to reduce the amount of
nutrients released into the water. The government already has plans to build this.
2.
Eradication of lionfish which represent a direct threat to coral reef fish. Since
they were first observed in the Caribbean, a lot of awareness programs were developed
explaining their existence and threat. A number of programs to encourage their catch
are in progress nowadays.
3.
Increase the number of tourists by increasing recreational activities on the
island. For realize this there are plans to construct 10 recreational piers on the leeward
part of the island.
The general dynamic simulation model of coral reef ecosystem is represented in Figure
1.
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8
Summary
Ecological
module
Step 1 - Ecological Description
Step 4 - Ecological Effects
State of
the reef
Step 2 - Economic
Description & Valuation
Recreational
submodel
Amenity
submodel
Fishery
submodel
Biodiv ersity
submodel
Coastal
protection
submodel
Economic benef its
of the reef s
Step 3 - Threats
Threats to
coral reef s
Exogenus
v ariables
Management
options
Step 5 - Management Intervention
Cost of
interv ention
Economic benef its of the
reef s af ter interv ention
Net Present
Value
Step 6 - Economic Effects
Step 7 - Evaluation
Figure 1 – General dynamic simulation model of coral reefs
Coral reefs provide a range of services such as: physical structure services for coastal
protection (CP), biotic services within and between ecosystems for maintaining the
habitat, bio-geo-chemical services for nitrogen fixation and CO2 control, information
services for climate and pollution control and social and cultural services for tourism,
recreation and cultural values (Cesar et al, 2002).
Every good or service provided by coral reefs has an attached economic value. The
services analyzed in this paper are: recreational, biodiversity, fisheries, amenity and
coastal protection. By summing up their values, the total economic value of coral reef
ecosystems is obtained. The TEV represents the value of an ecosystem which brings
benefits to people.
For the baseline scenario it is expected that the TEV will increase from $39.5M in 2012
to $43.6M in 2042, while an increase in the number of tourists will increase the TEV of
coral reefs by 13% in 2042 compared with the baseline scenario.
The complete eradication of lionfish proves to be the best management option for the
ecosystem and for the economy of Bonaire. If this management option will be
accomplished, the state of the reef is expected to increase from 0.66 to 0.7 and the TEV
will increase from $43.6M to $47M.
The third scenario analyzed proved to be beneficial from both an economic and
ecological perspective. After a reduction in the concentration of nutrients released into
the sea, the state of the reef will reach 0.55 in 30 years compared with the baseline
where it is probably to arrive at 0.49.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
9
To conclude and answer the first part of the research question, an economic
development in Bonaire will degrade the marine ecosystem below the medium quality
and the coral cover will be 88% lower than current values. However, the TEV of coral
reefs will be higher than the current value due to an increase in the generated revenues
from tourists as a consequence of a higher number of tourists.
From an ecologic perspective, both scenarios will increase the economic value placed
on coral reefs from $39M in 2012 to $47M in 2042 if lionfish are eradicated and
respectively from $39M in 2012 to $44M in 2042 once the sewage treatment plant is
constructed.
Environment and Resource Management
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Summary
Environment and Resource Management
Economic valuation of Bonaire coral reefs
1
11
Introduction
Coral reefs are one of the oldest marine ecosystems in the world and are well known
due to their capacity to support high numbers and varieties of aquatic species and to
offer recreational and research opportunities (NOAA, 2011). Over the world, coral reef
ecosystems are declining. In 2000, about 27% of the world’s coral reefs were destroyed
and it is expected that this number is going to increase in the future (Parsons & Thur,
2007). About 8% of the world’s coral reefs occupy a surface of 26,000 km 2 and are
located in the Caribbean Sea. Out of 70 different species of hard corals that can be
found in the Caribbean, about 65 species were identified in 2011 in the waters of
Bonaire Island occupying a surface of 2,700 hectares (IUCN, 2011; Alevizon, 2009).
More than 20% of the world's corals are damaged and have no chance of recovery. The
main reasons behind this are anthropogenic activities, such as unsustainable fishing,
pollution, sedimentation, physical destruction or climate change, as well as natural
events such as storms, hurricanes or coral diseases (NOAA, 2011). A meta-analysis
done for the Caribbean Sea by Gardner et al. (2003) for 263 sites revealed that the from
1970s until 2003 there was a high decrease of coral cover from ~50% to ~10%. Despite
this, the coral cover of Bonaire was well conserved and represents one of the healthiest
in the entire Caribbean. The best explanation for this trend is the existence of Bonaire
National Marine Park (BNMP) established in 1979, which has the role to conserve and
manage the waters around the island (Parsons and Thur, 2007).
About 30 million people in the world depend entirely on reefs. As an underwater
structure, coral reefs provide coastal protectors against storms, hurricanes and erosion.
They are an important source of food, due to the fish banks they sustain, and also
provide a decent source of income from tourism. Moreover, because of their diversity,
corals are studied by diverse scientists and pharmaceutical companies as sources for
possible new medicines. They have a high economic value and contribute each year to
the world’s economy with approximately $29.8billion (NOAA, 2011). Besides the
fisheries and tourism sectors, the prices for houses located near coral reefs and the
mitigated damage due to costal protection are important factors that contribute to define
their total economic value. This paper will calculate an economical valuation of goods
and services provided by coral reef ecosystems.
1.1
Purpose of the study
This study presents the research conducted at the Institute of Environmental Studies for
my final thesis of the program entitled “Environment and Resource Management”. The
paper is a part of the project "What's Bonaire nature worth?" which seeks to provide a
socio-economic valuation of the ecosystem services and biodiversity of Bonaire by
putting a monetary value on them (Wolfs, 2010).
The first objective of this study is to develop a dynamic simulation model that links the
ecology and economy of the Bonaire coral reef ecosystem using the Stella software1.
Within the model, the threats to coral reefs will be specified as well as their ecological
and economic impacts. To do so, a monetary value will be placed on the goods and
1
Stella Software is simulation model that makes possible the process of building complex
numerical models and offers the chance of visualize how these models work. It also answers
to the intriguing question "What if?" by providing the option of analyzing different scenarios
(IseeSystems, 2012).
Environment and Resource Management
12
Introduction
services provided by corals. The second goal is to present a socio-economic valuation
of coral reefs in the baseline scenario and run the model for a time period of 30 years.
The third objective is to analyze future scenarios that target the nature and economic
development in Bonaire and calculate their costs and benefits. The interventions taken
into account will be: 1) lionfish eradication, 2) construction of a sewage treatment plant
and 3) increase in the number of tourists through building recreational piers. The final
aim is to provide transparent and critical information that assists policy makers and
government officials in taking high-quality regulatory measures for nature conservation,
protection and management of their resources.
In order to reach this goal, the paper will focus on the following research question:
"To what extent will economic development and nature management influence the
marine ecosystem services in Bonaire, and vice versa?"
The following sub-questions will be answered to facilitate the response to the main
question:
1. What is the total economic value of Bonaire coral reefs in the present state?
2. What is the net present value of the current state of Bonaire coral reefs for a
time period of 30 years at 5% discount rate?
3. What future plans can be devised for nature conservation and economic
development?
4. What are the total economic value and the net present value of Bonaire coral
reefs over 30 years regarding these plans?
In conclusion, this research encompasses a literature study on coral reefs ecosystem
services and future plans for the nature of Bonaire, plus the construction of an integrated
model that brings together ecology and economy.
1.2
Outline of the paper
This project is structured in 7 chapters as follows.
Chapter 1 presents the research question and the purpose of this study. Chapter 2
provides some background information about the island of Bonaire, the current
ecosystem services found there, a more detailed explanation of the current threats on
coral reefs plus the boundaries and limitations of this project.
Further, chapter 3 will describe the overall approach for building the dynamic simulation
model of coral reefs ecosystem along with their ecological and economic benefits, then
chapter 4 will describe in detail the construction of the model and each sub-module.
The results obtained for the baseline scenario and the three other scenarios will be
presented in chapter 5, while the conclusions and the recommendations will be drawn in
chapter 6 and 7 respectively.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
2
13
Background
This chapter provides information about the location studied, as well as a description of
its available biodiversity. However, as the marine ecosystem is the central piece in this
paper, a detailed explanation of coral reefs plus their threats and impacts will be
provided. The chapter will conclude by presenting the boundaries and limitations of this
project.
2.1
Bonaire
The Caribbean Archipelago includes the Netherlands Antilles (800 km2), which are
divided in two groups of islands: the leeward group which incorporates the islands of
Aruba, Bonaire and Curaçao, also known as the ABC islands, and the windward group
which consist of the islands of Saba, Sint Eustatius and Sint Maarten (see Figure 2)
(CBS, 2010).
Figure 2 – Bonaire in relation to other Dutch Caribbean Islands (source: CBS, 2010)
Bonaire is located 46 km east from Curaçao, 80 km north of Venezuela and 129 km east
from Aruba. The surface of Bonaire is 288 km 2 plus another 6 km 2 for its additional
island Klein Bonaire. It measures 38 km from North to South and a maximum of 11 km
wide from East to West (Wolfs, 2011; CBS, 2005). Due to its position, Bonaire is
situated outside the hurricane belt. One of the last hurricanes which caused significant
damage especially on the windward site was Hurricane Ivan in September 2004
(STINAPA-Bonaire, 2008).
Bonaire is part of the Kingdom of the Netherlands and the capital is Kralendijk, the
biggest city on the island. Population count varies from source to source. According to
the Centraal Bureau voor de Statistiek (2012), after the census from 2010 there were
15,666 people living on the island.
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14
Background
This number varies due to immigration and emigration. The total number of immigrants
registered in 2010 was 1,200 while the number of emigrants was approximately 1,028.
The principal country both for immigrants and emigrants is the Netherlands (CBS, 2011).
About 86% of Bonaire residents are Dutch, while the rest of 14% have different
nationalities such as Dominicans, Venezuelans, Colombians and Peruvians (CBS,
2005). As a result, the official language is Dutch. However, the local language is called
Papiamentu, and includes elements of English, Spanish, Portuguese, African and Dutch.
This language is common in Bonaire, as well as in Curaçao and Aruba (CBS, 2010).
The number of households in Bonaire is 5,336 according to CBS (2010), but this number
is expected to increase. In 2009, approximately 296 building permits were issued (CBS,
2010).
The Bonaire's GDP in 2003 was 164.2 million USD (CBS, 2005). Bonaire's principal
economic pillar is represented by the tourism sector which increases fast from a year to
another (CBS, 2005).
Visitors are attracted by the unique combination of terrestrial and marine ecosystems
and the variety of activities they can enjoy on the island, such as diving, snorkeling,
kayaking, windsurfing, sailing, bird watching, etc (InfoBonaire, 2012). As a result of the
high number of visitors, the construction sector almost doubled and there are plans to
further increase the number of houses and accommodation (DEZA, 2004). The sectors
which contributed the most to the island income are presented in Figure 3 (CBS, 2005).
Figure 3 – Contribution of different sectors to Bonaire's GDP in 2003 (source: CBS,
2005)
Bonaire's industry includes oil trans-shipment, salt production and rice refining
(WRI.com). The climate is arid tropical, fairly constant throughout the year with low
rainfall (about 463.3 mm/year registered) and high temperatures during the year, varying
between 26.6˚C and 28.4˚C (MSNA&A, 2008). This climate allows the existence of large
and diverse ecosystems.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
2.2
15
Bonaire ecosystems
The island of Bonaire has 5 Ramsar sites: Klein Bonaire, Pekelmeer, Salina Slagbaai,
Gotomeer and Lac, and two National Parks (see Figure 4) (CBS, 2005).
Figure 4 – Bonaire Ramsar sites and the WSNP (source: CBS, 2005)
The terrestrial park, Washington Slagbaai National Park (WSNP), established in May
1969, has a surface of 5.6 km 2 and protects approximately 17% of the total land area of
Bonaire. Different species of birds and reptiles, such as parrots, flamingos and iguanas
can be found within the park (STINAPA-WSNP, 2012; Wolfs, 2011).
Figure 5 – The Lora, endangered species, and the Green Iguana (source: K.de Meyer)
Environment and Resource Management
16
Background
The Bonaire National Marine Park (BNMP) was established in 1979 and is recognized
by the International Coral Reef Initiative as "one of the best-managed marine parks in
the world". It surrounds the island of Bonaire and Klein Bonaire up to 200 m from the
coast and 60 m in depth. There can be found more than 350 species of fish and over 50
species of stony coral (STINAPA-BNMP, 2012; Wolfs, 2011). The park consists of 2,700
ha of fringing coral reef, seagrass and mangrove ecosystem. BNMP is managed by a
local NGO, called STINAPA, which provides education, monitoring, and research of
Bonaire's biodiversity. To manage the park, an annual admission fee was established in
1992, for divers and snorkelers of $25 and $10 respectively (WRI.com; Thur, 2010).
The vegetation on Bonaire is drought resistant, and adapted to its climate. Most of the
plants have thick leafs, water storage tissues or change their angle to avoid direct
sunlight. Table 1 presents some species of plants, terrestrial fauna and birds specific to
the island of Bonaire (STINAPA-Bonaire, 2008).
Table 1 – Plants, fauna and birds specific to the island of Bonaire
Nr.
Plant Species
Terrestrial fauna
Birds
1
Cacti
Lizards
Bananaquit
2
Acacia
Green iguana
Southern Mockingbird
3
Mesquite
Bonairian Anole
Yellow Warbler
4
Caper plants
Land snails
Amazon Parrot
5
Brasia
Whiptail lizard
Caribbean Flamingo
6
Lantana
Goats and Donkeys
Cayenne Terns
7
Croton
Insects: Drosophila and Tenebrinoid
beetles; ants and some other Diptera
sp.
8
Red, White &
Black Mangrove
Arthropods: scorpions and spiders
9
Buttonwood
*adapted from STINAPA-Bonaire (2008).
Bonaire's marine ecosystem is unique with regard to its species. Nevertheless, coral
reefs present the fundamental structure for the majority of marine ecosystems such as
fish and algae. From a total number of 450 species of reef fish, the most common are
Blue Tang, Bicolor Damsel, Stoplight Parrotfich, Brown Chromis and Bluehead Whasse.
Different species of algae such as Sea Pearl and Mermaids Tea Cup can also be found
in Bonaire's waters (IUCN, 2011).
According to IUCN (2011) there are about 65 species of stony corals. Due to their
diversity they also represent the main source of economic development and coastal
protection of the island. However, they are threatened by terrestrial activities such as
sediments, pollution and nutrients (STINAPA-Bonaire, 2008).
2.3
Marine ecosystems: Threats and Impacts
The marine ecosystem consists of corals, fish and algae. For the economic development
of Bonaire, this is very important due to high number of tourists attracted by this habitat.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
17
However, it is threatened by both natural and human activities. An analysis done for the
reefs of Bonaire and Curacao, revealed that their main threat are human activities,
marine-based pollution, and coastal development, (see Figure 6). Beside this, there are
other threats for the coral reef, mentioned as follows (WRI.com):
Figure 6 – Main threats for Netherlands Antilles coral reefs
• Overfishing
Fishing techniques, like the use of explosives and overfishing of specific species,
contribute to a decline of coral reef over the world (NOAA, 2008).
The Caribbean has lost many of its reef fish species over time. One third of the reefs
around Bonaire and Curacao are threatened by overfishing. Less information is
available about the effect that overfishing might have on species diversity, while a bigger
attention is focused on the effect of overfishing on the trophic level. A study done by
Arias-Gonzales et al (2004) in the Mexican Caribbean proved an expected outcome:
unprotected areas have a higher rate of exploitation compared with a protected area.
Due to the practice of fishing down the food web, sharks and manatees were depleted.
Nowadays, the focus is on smaller predators such as groupers and herbivores like
parrotfish (Burkepile & Hay, 2008). As a result, there is an increase in the amount of
algae that puts the corals under stress, contributes to their death and makes them more
vulnerable to diseases (ICRI; Debrot & Bugter, 2010).
Overfishing occurs as a result of high demand for aquarium reef fish and for commercial
purposes. High levels of fishing can reduced genetic variation (due to specific species
being overfished), alter ecological balance on the reef and change the trophic interaction
(McGinley & McClary, 2010; WRI.com).
• Physical destruction
The tourism sector is another threat to the marine ecosystems of Bonaire. Due to the
activities performed by tourists, such as diving and snorkeling, approximately 2.7% coral
reefs are damaged every year (De Mayer, 1998). These activities have a direct impact
Environment and Resource Management
18
Background
on corals as a result of their direct contact or illegal anchoring, but also an indirect
impact due to the nutrients loaded into the water from hotels through wastewater
(WRI.com).
• Sedimentation
Sedimentation is mainly caused by the dredging associated with construction of different
types of buildings and development of infrastructure. As an impact, the sediments
released in water can affect the food web by killing the corals and other organisms
essential for fish. Sediments also reduce the photosynthetic activity and light availability,
and in high amounts they can even bury the reefs (Roger, 1990; Wieggers, 2011).
• Nutrients
Nitrogen and phosphorus are the most important nutrients. Their presence causes
eutrophication, an excessive growth of algae which are in strong competition with the
corals (Wieggers, 2011).
The sewage water of Bonaire is collected in septic tanks and leaches into the sea
through groundwater, without being treated properly. In their paper, Kekem et al (2006),
mentioned the main reason for coral reef decline to be the inflow of surface and
subsurface water, partly untreated. Besides wastewaters, the manure of goats and
donkeys also represent a source of nutrients (Kekem et al, 2006).
A study done by Dailer et al (2012) analyzed the effect of N and P on diverse species of
algae, using different concentrations of nutrients. The outcome of this study revealed
that the growth rate of algae increases with the percentage of wastewater affluent
added.
• Lionfish
Invasive species such as lionfish became a problem after human expansion. Lionfish
represent a threat to reef fish due to their diet composed mainly by young fish. They are
characterized by rapid expansion as a result of the limited number of natural predators
they have. Until now, groupers are the only known predators of lionfish. However it is not
an easy choice to control lionfish using groupers due to the unknown consequences
they may have on corals. In the Bahamas, lionfish damaged 79% of the coral reefs
(Vermeij, 2012). The first lionfish captured in Bonaire was in October 2009. Since then,
their numbers have increased. Known as predators, they cause disruptions to the
function and diversity of coral reefs. Many programmes have been developed to raise
awareness and ask tourists to report their presence. (Mumby et al, 2011).
• Climate change
Sea level rise, increased water temperature, a higher frequency of hurricanes and an
increase in ocean acidity are part of the IPCC scenarios2 for climate which represent
serious threats for coral reefs. Global warming can make coral reefs more vulnerable to
diseases and affect their resilience capacity and can also kill the corals (Debrot &
Bugter, 2010). The rate of corals’ death due to bleaching varies from 0 to 100%. An
example is from 1982 and 1994 in Indonesia and the Pacific when almost half of the
bleached corals died (Hoegh-Guldberg, 1999).
The water temperature increased in the past 50 years by less than 2˚C and triggered a
decrease in the healthy coral cover. It is considered that coral reefs are already at their
2
Scenarios proposed by IPCC include an increase in average air temperature with 1.1˚C to
6.4˚C; an increase in the level of precipitation in some parts, and decrease in others; sea level
rise by 18-59cm and an increase in ocean acidity by 0.14-0.35pH.
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Economic valuation of Bonaire coral reefs
19
thermal limits and a further increase will lead to their bleaching, disease and mortality
(Hoegh-Guldberg et al, 2007). In tropical environments, usually coral reefs experience
water temperatures between 18˚ and 30˚C. Below and above this temperature, coral
reefs are affected and are threatened by overgrown macroalgae (Hoegh-Guldberg,
1999).
2.4
Intervention methods
The impacts of anthropogenic threats mentioned above can be avoided or mitigated if
good management options are taken. In this paper, some possible management options
will be analyzed and compared with the baseline scenario. The result of this analysis
can influence policy makers and improve the general state of the reefs.
Some of the possible interventions are:
1.
Construction of a sewage treatment plant in order to reduce the amount of
nutrients released into the water. The government already has plans to build
this.
2. Eradication of lionfish which represent a direct threat to coral reef fish. Since
they were first observed in the Caribbean, a lot of awareness programmes were
developed explaining their existence and threat. A number of programmes to
encourage their catch are in progress nowadays.
3. Reduce fishing rate through building more zones where fishing is forbidden
and/or limit for specific seasons or specific species.
4. Include more programmes to make tourists aware of their impact due to
recreational activities on coral reefs. Such programmes are available in other
areas where the divers and snorkelers have to watch an educational movie
after they rent the equipment and before they go into the water. These
educational movies serve the purpose of making them aware about the impacts
of touching the corals.
In this paper, the first two interventions methods will be analyzed plus another scenario
which will analyze the effect of an increase in the number of tourists.
2.5
Boundaries and limitations
This study will analyze in the first part the marine ecosystems of Bonaire and their
biggest threats, followed by the economic benefits gained due to the services they
provide, and the calculation of the total value of coral reefs. Future scenarios and the
baseline will be analyzed for a time period of 30 years. This period is enough for the
impacts on ecosystems to show their effects and from an economical point of view it is
short enough to make predictions.
The area studied represents the total area of Bonaire Island. However, because the
highest amount and the healthiest reefs are on the leeward side, most of the threats and
interventions will focus on this part.
Limitations regarding the data used:
Data availability – some of the data are collected from 5 or 10 years ago and a baseline
is missing, so no comparisons can be made. Moreover, due to different groups which
analyzed these ecosystems, some of the data are available only for specific locations of
the island. To overcome this, some data were extrapolated to the entire reef area.
Environment and Resource Management
20
Background
Data accessibility – Some of the data is available only in the private sector and the
reports are not available. Governments are not willing to share their data. As a result
some data were transferred from studies done on other islands.
Data quality – Some of the data available are questioned due to the lack of resources
while gathering the data and the type of sample analyzed.
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Economic valuation of Bonaire coral reefs
3
21
Methodology
The purposes of the project are to build a dynamic simulation model to illustrate the
ecological interactions of Bonaire coral reefs and to establish their total economic value
(TEV). In order to do so, a literature study was conducted about the island of Bonaire, its
marine ecosystem, the goods and services provided by coral reefs and their economic
value.
This chapter will provide more information about the model used, and a description of
the ecological and economic benefits of coral reefs.
3.1
Overall approach
Coral reef ecosystems generate a range of goods and services, known as benefits for
Bonaire's society. These benefits are measured through valuation techniques. However,
the corals are threatened by various factors, and different management options should
be taken into account to respond to these threats. But different interventions have
varying costs. As a result the perfect ones will be those which bring higher economic
development and an improvement in the general state of the reef.
To reach the final purpose of this study a dynamic simulation model was build to present
the relationship between ecology and economy. For this case, the Stella software was
used to model the relation between ecology and economy provided by Bonaire coral
reefs (Costanza & Voinov, 2001; Costanza & Gottlieb, 1998). As a simulation model it
analyzes the impacts of different variables and gives the opportunity to perceive real
world behavior. The choice for a dynamic model is due to its capacity to vary the
parameters over time, while a static model assumes that the parameters remain
unchanged over time (Prevost et al, 2005).
Figure 7 represents the general framework of this model. In the first step the ecological
indicators and the current interactions of ecosystems that contribute to the state of the
reefs are going to be analyzed and combined in a single indicator, called the state of the
reef indicators. The general state of the reef represents the quality of the reef
ecosystem. The second step plans to define the economic benefits of the coral's
existence and sum them up to calculate the total economic benefits of the reefs. The
third and fourth step will identify the current threats and measure their effects on
ecological indicators and on the economic value of corals over a time period of 30 years.
Moreover, exogenous variables such as the global economy and an increase in
Bonaire's population are also analyzed. Further, possible intervention measures are
identified, and their influence on ecological condition and economic value is determined
and compared with the baseline. For any management option, their cost and benefits
are mentioned in order to calculate the net present value of management intervention.
Environment and Resource Management
22
Methodology
Ecological
module
Step 1 - Ecological Description
Step 4 - Ecological Effects
State of
the reef
Step 2 - Economic
Description & Valuation
Recreational
submodel
Amenity
submodel
Fishery
submodel
Biodiv ersity
submodel
Coastal
protection
submodel
Economic benef its
of the reef s
Step 3 - Threats
Threats to
coral reef s
Exogenus
v ariables
Management
options
Step 5 - Management Intervention
Cost of
interv ention
Economic benef its of the
reef s af ter interv ention
Net Present
Value
Step 6 - Economic Effects
Step 7 - Evaluation
Figure 7 – General framework of the dynamic simulation model
3.2
Ecological benefits of coral reefs
Around the world, the presence of coral reefs offers a range of goods and services for
people living close to them. Bonaire is one of the islands that benefit from the goods and
services provided by coral reefs (see Figure 8).
As mentioned in Cesar et al (2002), goods provided by coral reefs can be seen as
renewable and non-renewable. Renewable goods can be fish, seafood or seaweed, and
non-renewable goods are represented by sand and corals extracted and used as
building materials.
Coral reefs also provide a range of services such as: physical structure services for
coastal protection (CP), biotic services within and between ecosystems for maintaining
the habitat, bio-geo-chemical services for nitrogen fixation and CO2 control, information
services for climate and pollution control and social and cultural services for tourism,
recreation and cultural values (Cesar et al, 2002).
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Economic valuation of Bonaire coral reefs
Goods
23
Services
Social and
cultural services
Renewable
(e.g. fish, seafood,
seaweed)
Biotic services
Information
services
Non-renewable
(e.g. sand and
corals for buidings)
Physical structure
services
Bio-geo-chemical
services
Figure 8 – Goods and Services provided by coral reefs
3.3
Economic benefits of coral reefs
Every good or service provided by coral reefs has an attached economic value. By
summing up their values, the total economic value of coral reef ecosystems is obtained.
The TEV represents the value of an ecosystem which brings benefits to people. To put
an economic value on the goods and services provided by coral reefs it was necessary
to do an extended study of the literature and projects done in past years to analyze
Bonaire's benefits, along with a close communication with relevant stakeholders.
The value placed on a good or service represents the level of preference of individuals
on that good or service. The commonest units that express this value are the "money"
(van Beukering et al, 2007b). Even goods without a market price can be expressed in
monetary terms by using monetary values such as willingness to pay (WTP), willingness
to accept (WTA), market and non-market value, financial and economic value, costs and
benefits, producer and consumer surplus, etc (van Beukering et al, 2007b).
The TEV is calculated by summing the use and non-use value of coral reefs, which are
defined by the type of their use (see Figure 9).
• Use values are defined by direct and indirect use of coral reefs.
Direct use values represent those goods and services that can be directly used by
humans and have a market price. They can be consumptive (extractive) and nonconsumptive (non-extractive). Extractive uses are represented by the goods which once
consumed are not returned to the ecosystem, such as timber, fish for food and aquarium
trade. Non-extractive uses are services provided by the ecosystem that are not
extracted, for example recreation and education.
Indirect use values are more difficult to value and are represented by diverse benefits
provided by the ecosystem in an indirect way. Some examples are biological support to
fisheries and turtles, physical protection of coast, carbon storage, etc.
Environment and Resource Management
24
Methodology
Figure 9 – The TEV of coral reef ecosystem
• Non-use values are divided in bequest and existence values.
Non-use values illustrate the value place by people on different goods and services by
taking into account any present or future use of them.
Bequest values express the benefits that a good and service have for future
generations, such as avoided damage due to climate change, while existence values
represents the benefits of knowing that a good or service exists, for example, simply the
existence of certain species gives happiness to some people.
A combination between use and non-use value result in a new sub-category, the option
value. This value shows the significance a good or service have in the present for a
potential future use. An example is the potential to derive a remedy for cancer from the
substances found on reefs (van Beukering et al, 2007b).
The services analyzed in this paper that bring economic benefits to the island and
contribute to the TEV of coral reefs are the following:
Recreational activities: Tourists are the major contributors to the total recreational
value of coral reefs, followed in a small part by locals. Tourism industry has developed a
lot in the recent years in Bonaire, and represents the main pillar of economic
development. The best explanation for this is the large and healthy cover of coral reefs
from the Caribbean (Groenenboom & Krul, 2009).
There are two types of tourists: stay-over tourists (SOT) and cruise tourists (CT). Both
types contribute to the recreational value of coral reefs. Stay-over tourists generate
direct revenues by paying the fee for recreational activities such as diving and
snorkeling, and indirect revenues through hotel and food costs. Cruisers only produce
direct revenues through expenses they have on diverse activities and souvenirs they
Environment and Resource Management
Economic valuation of Bonaire coral reefs
25
buy. Moreover, locals contribute as well to the TEV of coral reef by providing direct
revenues through recreational activities they undertake such as snorkeling and diving.
However, tourism has not only positive sides. It represents also a threat though waste
disposal and physical destruction of corals while diving.
Biodiversity: Bonaire is known as having the largest amount of healthy coral reefs in
the Caribbean. Moreover, it provides home to a high number of corals and fish species.
The money spent on projects for studying the corals and the potential for discovering a
new drug from corals are taken into account for determining the biodiversity value of
coral reef. Non–use values are also included in this section by determining the WTP of
locals and Dutch population for improving or conserving the coral reef ecosystem.
Fisheries: Commercial, recreational and aquarium fishing is important for the economy
of Bonaire. The total fish caught for sale depends on variables such as the fishing effort,
the season and the fish stock. Approximately a quarter of the catch represents reef
dependent fish, while about 70% of the total fish caught is sold in Bonaire (personal
communication Stijn Schep). The coral reef value due to fisheries is considered to be
equal with the percentage of coral reef dependency multiplied with the total profit of
fishermen.
Amenity value: The presence of houses on the coast near coral reefs is a factor that
contributes to the value of the house. A nice view with healthy coral reefs increases the
price of the house with a certain percentage. On the opposite, damaged corals will
decrease the price for a house, as the amount of algae is going to increase and with
their disintegration will trigger a bad smelling and unpleasant view. The value added or
discounted as a result of coral reefs existence represents the value placed on their
existence, called the amenity value (Bervoets et al, 2010)
Coastal protection: One of corals functions is their capacity to protect the coast against
hurricanes and erosion. Due to their structure, corals act as wave breakers mitigating
the impact of waves on coast and protecting the properties placed on the coast. Coral
reefs protect the shoreline within 2000m and represent 29% of the Caribbean coastline
(van Beukering et al, 2007). For this paper was considered that the total damage
avoided of the properties that lies on the coast as a result of coral reefs existence
represents the coastal protection value of coral reefs.
Cesar et al (2003) calculated the annual worldwide coastal protection value at $9 billion.
From this value, $720M was attached to the Caribbean. Sarkis et al (2010) calculated
the annual coastal protection value of coral reefs around Bermuda. The NPV they
obtained was $266M. The coastal protection value of USVI's coral reefs was calculated
to be $6.72M per year. The method used to determine it utilized avoided damage cost.
Based on insurance data, the damage per property was valued to be 16.6% of the
average house value (van Beukering et al, 2007).
The TEV of Guam's coral reef was determined to be $127.3M per year, with 75%
contributing the tourism sector (van Beukering et al, 2007).
World's net benefits of coral reefs were determined by Cesar, Burke and Pet-Soede,
(2003) to be around $29.8 billion per years. The biggest share of this is due to tourism
and recreation with $9.6 billion, followed by coastal protection with $9 billion.
3.4
Valuation techniques and data collection
For valuing the goods and services provided by coral reefs different valuation
techniques are used. Some of the most frequent techniques applied for this kind of
Environment and Resource Management
26
Methodology
valuation are presented in Table 2. The data collected are both secondary data, from
literature, and primary data from surveys that are conducted in the present.
Table 2 – Techniques used to valuate goods and services provided by coral reefs
Technique
Market price
Contingent valuation method
Market price
Hedonic pricing
Stock (houses) at risk
Avoided damage cost
Property-value
Environment and Resource Management
Goods and Services
Tourism and recreation
Biodiversity
Fisheries
Amenity
Coastal protection
Economic valuation of Bonaire coral reefs
4
27
The model
In order to make predictions on the effect a decision may have, models are used to
analyze their outcomes. There are two types of simulation models: static and dynamic.
Prevost et al, (2005), made a comparison between a static and dynamic simulation
model to forecast the abundance of salmon in the River Bush (North Ireland). The
results obtained from these two models revealed that dynamic models are a better
choice for predicting ecological indicators because they are more flexible.
The model described in the previous chapter was built in order to present the interaction
between the ecology and economy of coral reefs. This model is formed from different
sub-modules that are connected with each other (see Figure 10), and are going to be
explained in the following part.
Recreational
sub-module
Amenity submodule
Fisheries submodule
Ecological
module
Biodiversity
sub-module
Coastal
protection submodule
Figure 10 – Sub-modules forming the general dynamic simulation model
4.1
Ecological module
Coral reefs are a valuable ecosystem for the nature and society of Bonaire. As coral
reefs support fish habitat, it can be stated that they represent a source of food and
income for locals. Coral reefs are also important due to the services they provide, such
as coastal protection, amenity, support for fish species diversity, etc. They also attract
tourists that enjoy their beauty through diving and snorkeling (McClanahan, 1995).
However, coral reefs are under pressure which triggers a great concern to those who
depend on them from a social and economic point of view (Cesar et al, 2003).
The coral reef community in the Caribbean has degraded over time as a result of human
activities. Anthropogenic factors such as overfishing, nutrient loading, sedimentation and
Environment and Resource Management
28
The model
climate, plus natural stresses such as storms and hurricanes have made some changes
in the reefs ecosystem and benthic cover. Some of the most important changes are the
reduction of fish stock and the change of benthos dominance from coral to algae
(Newman et al, 2006; Sandin et al, 2008)).
The ecological module of coral reefs is very difficult to model in a realistic manner due to
a high number of interdependencies and variables that threaten the ecosystem.
Because it is impossible to model all the factors that contribute to the quality of the reef,
for this project the most important indicators are taken into account. All possible effort
was put in order to draw a model as close to reality as possible and to use data
available for the island of Bonaire.
To have an overview of the whole ecological module see Figure 11.
The model consists of six main ecological indicators that contribute to the quality of the
reef. They are: coral cover, coral diversity, fish stock, fish diversity, algae cover and
sand and rubble cover. Each indicator has a rate of increase and decrease per year as
well as different variables that threat their existence. Also discussed are the most
significant threats which include the lionfish, rate of sedimentation, overfishing, nutrients
loaded into the water, physical destruction and temperature increase.
Further, the construction of every indicator, its relations with other factors and their
threats will to be explained.
• Coral Cover and Coral Diversity
Out of 2,700ha, the current coral cover is 28.6% (IUCN, 2011). It embodies both soft
(8.8%) and hard corals (19.8%). Coral cover depends on different factors that contribute
to their increase or decrease. When no external factors are present the maximum
expansion rate of coral cover, which also includes their resilience3 property, is 50% per
year (Tanner, 1995; Bak et al 2009). However, this expansion is limited by a carrying
capacity. Using the result from a report done by IUCN (2011) which measured the coral
cover, the carrying capacity was calculated to be the maximum cover found in Bonaire,
equal with 60%. Factors that contribute to the decline of coral cover are physical
destruction, influenced by the number of stay-over tourists, the rate of sedimentation,
amount of nutrients loaded into the water, a change in the temperature and the increase
of algae cover which overgrow the corals and kill them (see Figure 12).
The present number of coral species is 65 according to IUCN (2011). Compared with
2001, this number increased by 20 (Thur, 2007). Extrapolating these two years a
maximum increase of coral species of 0.55% per year was calculated. The maximum
number of species that can exist was decided together with a junior marine expert to be
equal with 70. Factors that contribute to a decline in the number of coral species are
considered to be the rate of sedimentation and the concentration of nutrients loaded into
the sea (see Figure 12).
3
Resilience of coral reefs represent coral reef's capacity to return to their state of equilibrium after
a disturbance (Mumby & Steneck, 2011)
Environment and Resource Management
Economic valuation of Bonaire coral reefs
~
~
Rate of Algae Cov er
decrease due to Herb Fish
Carry ing capacity
Coral Cov er
Biomass herbiv ores
Coral cov er
presence rate
Maximum
Reproduction
Rate
Algae Cov er
Increase and Decrease of
Algae Cov er
Increase and Decrease of
Coral Cov er
~
Decrease of f ish stock
due to Lionf ish
Rate of Algae Cover
decrease due to Herb Fish
Sand and Rubble
Cov er
Decrease of
Fish Stock
Carry ing capacity
Fish Stock
~
Coral decrease
due to Algae cov er
increase
Maximum
ExpansionRate
Coral Cov er
Coral Cov er
Fish Stock
Increase of
Fish Stock
~
Algae Increase
due to Coral Cov er
decrease
Coral Cov er
Decrease f rom
Sedimentation
Coral cov er
decrease f rom
Nutrients
~
~
Coral cov er decrease
f rom temperatue
Maximum
Expansion Rate
Algae Cov er
Fish stock
presence rate
FISHING RATE
LIONFISH STOCK
NUTRIENTS
29
SEDIMENTATION RATE
Algae cov er
presence rate
Carry ing capacity
Algae Cov er
Recreational submodel.Nb of SOT
TEMPERATURE
PHY SICAL DESTRUCTION RATE
~
Variation in phy sical
destruction
~
Decrease of f ish div ersity
due to LF
~
Variation in nutrients
due to SoT
Coral Div ersity
Decrease f rom
Sedimentation
Coral Div ersity
Decrease f rom
Nutrients
+
Total surf ace
Fish
Div ersity
+
Coral surf ace Sand and Rubble surf ace Algae surf ace
Coral Div ersity
Recreational submodel.Nb of SOT
+
+
State of the reef
Increase of
Fish Div ersity
Maximum Increase
of Fish Div ersity
Maximum
Fish Div ersity
Decrease of
Fish Div ersity
Fish biodiv
presence rate
Increase of
Coral Div ersity
Maximum Increase
of Coral Div ersity
Maximum
Coral Div ersity
Decrease of
Coral Div ersity
Coral Cov er
Score
Coral Biodiv ersity
Score
Fish Stock
Score
Fish Biodiv ersity
Score
Algae Cov er
Score
Coral biodiv
presence rate
Figure 11 – Ecological module of coral reefs ecosystem
Environment and Resource Management
30
The model
~
Carry ing capacity
Coral Cov er
Maximum
ExpansionRate
Coral Cov er
Coral decrease
due to Algae cov er
increase
Coral Cov er
Increase and Decrease of
Coral Cov er
Coral cov er
decrease f rom
Nutrients
Recreational submodel.Nb of SOT
NUTRIENTS
Coral Cov er
Decrease f rom
Sedimentation
SEDIMENTATION RATE
~
Coral cov er decrease
f rom temperatue
PHY SICAL DESTRUCTION RATE
TEMPERATURE
~
Variation in phy sical
destruction
~
Variation in nutrients
due to SoT
Coral Div ersity
Decrease f rom
Nutrients
Coral Div ersity
Decrease f rom
Sedimentation
Coral Div ersity
Recreational submodel.Nb of SOT
Increase of
Coral Div ersity
Maximum Increase
of Coral Div ersity
Decrease of
Coral Div ersity
Maximum
Coral Div ersity
Figure 12 – Description of coral cover and coral diversity interactions
Nutrients:
Groundwater represents the source of nutrients loaded into the sea. The major causes
of nutrient enrichment in Bonaire are improper land use and the lack of a sewage
treatment plant (Slijkerman et al, 2011). Untreated sewage consists of high amounts of
nitrogen and phosphorus, important nutrients which contribute to sea water
entrophication4, coral reefs degradation and a decrease in coral species (Kekem et al,
2006). The average concentration of inorganic nitrogen (TIN; NH4+NO3 + NO2) in
Bonaire waters was measured by Slijkerman et al (2011) to have a value of 1.51 ± 1.36
µM. In order to model, the standard error was ignored.
In their study about economic valuation of Hawaiian reefs, Cesar et al (2002) revealed
the following equations for calculating the total decrease of coral cover and coral
diversity due to the concentration of nutrients loaded.
4
Euthrophication represents the process by which a high concentration of nutrients is loaded in
water and produce excessive growth of algae. Once the algae decompose they occupy the
surface of the water depleting the oxygen and causing death to other organisms such as
corals and fish (Art, 1993).
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Economic valuation of Bonaire coral reefs
31
(1) Coral cover decrease due to nutrients = 15.5*NUTRIENTS/30
(2) Coral diversity decrease due to nutrients =10.8*NUTRIENTS/30
A variation in the amount of nutrients loaded into the water depends on the number of
tourists. An increase in the number of tourists increases N load. As no data was
available about how much does the number of tourists influence the level of nutrients, it
was assumed that if the number of SOT will double the level of nutrients loaded will
double as well, following the trend from Figure 13. For the current state, it was
considered that the amount of nutrients loaded is 1.51 as this is the only value known
until now (Slijkerman et al, 2011).
Figure 13 – Variation rate in the amount of nutrients due to SOT
Sediments:
High levels of sediments can bury the corals or damage them, making them vulnerable
to diseases. Not only coral cover is threatened, but coral biodiversity as well. Bak et al
(2005) mention that sediments are an important factor that contribute to coral mortality,
considering that most coral species don't have the capacity to remove the sediments
brought by hurricanes and deposited upon them.
A study done to represent the influence of sedimentation on coral cover and coral
diversity in Hawaii, Cesar et al (2002) used the following relations to represent the effect
of sedimentation on coral cover and diversity.
(1) ln Coral Cover (%) =3.17-0.013*Sedimentation Rate(mg/cm2*day)
(2) ln Coral Species =4.97-0.018* Sedimentation Rate(mg/cm2*day)
To insert these equations into the model and calculate the decrease in coral cover and
cover diversity, they were transformed into the following equations:
(1)Decrease Coral cover=Coral_Cover-EXP(3.17-0.013*SEDIMENTATION_RATE))/30
(2)Decrease Coral Div.= (Coral_Div.-EXP(4.25-0.018*SEDIMENTATION_RATE)) /305
5
These equations were divided to 30, the time period studied in order to determine the total
decrease in coral cover per year.
Environment and Resource Management
32
The model
Physical destruction:
Tourists and the activities they perform have a direct negative impact on corals. Through
diving and snorkeling they are tempted to touch the corals, which decrease their
resistance to diseases and make them more vulnerable to bleaching and possible death
(WRI.com). According to De Mayer (1998), recreational activities such as diving and
snorkeling, damage approximately 2.7% of coral reefs per year. A variation in the
number of SOT is assumed that will influence the damage upon coral reefs with 50% as
presented in Figure 14.
Figure 14 – Influence of SOT on physical destruction rate
Temperature influence on the coral cover:
An increase in water temperature due to global warming will cause bleaching of coral
reefs, loss of their natural colour due to death of their symbiotic algae. Once a coral is
bleached it is more vulnerable to diseases and its growth and regeneration functions are
reduced (Debrot & Bugter, 2010).
The most frequent diseases that bleached corals encounter are "black-band",
"white-plague" and "yellow-band". Their impact can result in death of the affected corals.
For example, Ancropora species have been decimated in the Caribbean as a result of
diseases (Wieggers, 2011).
It was considered that at the current water temperature the rate of decrease in coral
cover is 3.5%. A change in the temperature is expected to change this rate as
represented in Figure 15.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
33
Figure 15 – Rate of decrease in coral cover due to temperature change
Algae influence on coral cover:
There is a direct competition between corals and algae for the same space (Vermeij et
al, 2010; McClanahan-1995; Edwards et al, 2010). Algae abundance threatens the
existence of coral reefs due to their capacity to overgrow or block corals space,
hampering their growth and expansion. According to Box & Mumby (2007), macroalgae
and turf algae cause hypoxia on coral tissues, reduce coral fecundity and inhibit larval
settlement. Once a reef becomes dominated by macroalgae beyond a certain value,
there is a high tendency to reduce coral cover (Williams & Polunin, 2001).
After years of research, evidence was gathered to prove that corals are affected by
algae as a result of algal release of organic carbon that increases the local activity of
microbes (Barott et al, 2011). Dissolved organic carbon affects the coral reefs by
increasing the level of pathogens, which makes them more vulnerable to coral diseases
and coral death and will allow the microbes and algae to invade and overgrow them
(Barott et al, 2011).
The direct effect of algae growth on coral cover was assumed to follow the trend from
Figure 16. The maximum possible decrease of coral cover was considered to be 50% as
their maximum expansion rate, judging that a maximum algae cover will inhibit their
growth. The decrease in algae cover was not considered to be linear because small
decreases in algae cover influence the decrease of coral reefs in a lower percentage.
Environment and Resource Management
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The model
Figure 16 – Influence of algae cover on coral cover decrease
• Algae cover:
Algae are an important part of the benthic community. The current algae cover is 42.4%
of the benthic cover. It is formed mainly by turf algae which cover death corals (38.2%)
and macroalgae (4.2%) that grow on the surface of the water. As explained before they
are an important regulator of coral cover. Their growth is sensitive to water temperature
and is influenced by a decrease in coral cover, while their only major threat is
considered to be herbivore fish (see Figure 17). However, their growth is also limited by
their carrying capacity calculated to be 82.2%, the maximum algae cover determined by
IUCN (2011).
~
~
Algae Increase
due to Coral Cov er
decrease
Rate of Algae Cover
decrease due to Herb Fish
Algae Cov er
Increase and Decrease of
Algae Cov er
~
Maximum
Expansion Rate
Algae Cov er
Carry ing capacity
Algae Cov er
TEMPERATURE
Figure 17 – Factors that contribute to algae cover indicator
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Economic valuation of Bonaire coral reefs
35
Temperature:
The normal water temperature for Bonaire is 29˚C (Davis, 2011). At this value algae
cover will increase by 50% (Vermeij et al, 2010). It was assumed that a fluctuation in
temperature will increase the rate of algae cover as represented in Figure 18.
Figure 18 – Influence of temperature on expansion rate of algae cover
The main reason that can contribute to an increase in temperature is global warming, an
important stress factor for corals, which can cause bleaching and even the death of
corals (Edwards et al, 2010).
Even tough, algae cover have a high growth rate which increases with a raise in water
temperature, algae also have natural threats, the herbivorous fish.
Herbivore fish:
Herbivore fish are a threat to algae cover due to their diet formed by algae and sea
grass. In one of their studies, Newman et al (2006) and Edwards et al (2010)
demonstrated that there is a negative and linear relation between herbivorous fish
biomass and algae biomass. Mumby et al (2006) revealed that parrotfish can graze a
maximum of 30% of the seabed in 6 months, meaning a maximum of 60% of algae
being grazed in one year. As the herbivore fish present in the water of Bonaire are not
just parrotfish, the maximum algae decrease at the carrying capacity for herbivore fish
was established to be 50% (see Figure 19).
Figure 19 – Influence of herbivores of the rate of algae cover decrease
Environment and Resource Management
36
The model
Fish Stock and Fish Diversity:
Fish biomass and fish diversity are important parameters for Bonaire's inhabitants as
they represent a source of food and income. There are two types of fish in Bonaire's
reefs: herbivores and predators. A study done by IUCN (2011) in different locations in
Bonaire discovered the average biomass for herbivore fish to be 7,319 g/100m 2, while
the one for predators was 5,290 g/100m 2. To include the total biomass in the model
these two values were summed, so the total biomass of fish in the BNMP was calculated
to be 3,404.43 tones.
The increase in fish stock is influenced by their reproduction rate. Myers et al (1999)
calculated the maximum reproduction rate of different fish species to vary between 1
and 7. Because Bonaire has approximately 450 fish species, the maximum reproduction
rate was considered to be 0.35. The maximum carrying capacity for the fish stock was
calculated to be equal with 5,600t, by taking into account the maximum amount of fish
found by IUCN (2011) in diverse locations of Bonaire.
To determine the maximum increase in fish diversity, the data from 2001 and 2009 were
analyzed, and the rate of increase between these two years was determined to be 4.2%
(Parsons & Thur, 2007; IUCN, 2011).
However, like the other indicators the fish stock is also threatened by diverse factors,
such as overfishing and the presence of lionfish (Dew, 2001) (see Figure 20).
Fish Stock
Increase of
Fish Stock
Decrease of
Fish Stock
~
Decrease of f ish stock
due to Lionf ish
Maximum
Reproduction
Rate
Carry ing capacity
Fish Stock
FISHING RATE
LIONFISH STOCK
~
Decrease of f ish due to LF
Fish
Div ersity
Increase of
Fish Div ersity
Maximum Increase
of Fish Div ersity
Decrease of
Fish Div ersity
Maximum
Fish Div ersity
Figure 20 – Factors that define the fish stock and fish diversity
Fishing rate:
Fishing rate contributes directly to the decline of reef fish stock. Overfishing can have
impacts on the trophic level by removing species that are essential for algae control
(Bruckner et al, 2010). For the ecosystem, less grazing fish will trigger an increase of
algae which will become dominant and reduce the coral cover. In contrast, a lower
fishing rate will increase fish biomass and can also alter the ecosystem balance. That is
Environment and Resource Management
Economic valuation of Bonaire coral reefs
37
why, in order to avoid a modification of the ecosystem, it is necessary to define a
compromise rate of fishing.
For Bonaire, the total reef dependent fish catch represents 25% from the total catch.
Compared with the fish stock this represents 1.3% from the current stock (personal
communication Stijn Schep).
Lionfish:
Lionfish are an invasive species which represent a big threat to the fish stock and fish
diversity due to their appetite for small-bodied and young reef fish. As a result of their
ability to invade multiple habitats and reproduce very fast they are considered very
dangerous. Furthermore, due to their venomous spines they are protected against
predators (Mumby et al, 2011). A study done by Vermeij (2012) revealed that at a depth
of 15m the presence of lionfish in Bonaire is of 3 g/m 2. By multiplying this value with the
total surface of the BNMP, the current biomass of lionfish is equal to 81 tones.
In their study, Cote & Maljkovic (2010) discovered that an adult lionfish (350g)
consumes 8.5g fish per day. Calculating what it means for a year, it proved that 21% of
fish stock decreases at the current biomass of lionfish, and it is assumed that this
decrease is linear with the increase in lionfish stock. The direct relationship between the
existence of lionfish and fish stock is represented in Figure 21.
Figure 21 – Influence of lionfish on fish stock rate of decrease
The same trend is followed for the decrease in fish diversity as a result of lionfish
existence. However, according to Albins (2011) the maximum decrease is 1% per year.
An important relation in this model is the one between corals, sand and algae as
represented in Figure 22. They form the benthic cover of coral reef, equal to 2,700ha.
However, they compete for the same space, so a decrease in coral cover signifies an
increase in sand and rubble cover as a result that dead corals will decompose at the
bottom, (Holmes & Johnstone, 2010). Furthermore, as explained before, a decline in
algae cover gives the opportunity for algae to expand their surface.
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The model
Carry ing capacity
Coral Cov er
Maximum
ExpansionRate
Coral Cov er
Sand and Rubble
Cov er
Coral Cov er
Increase and Decrease of
Coral Cov er
Algae Cov er
Increase and Decrease of
Algae Cov er
~
Maximum
Expansion Rate
Algae Cov er
Carry ing capacity
Algae Cov er
Figure 22 – Benthic cover composition
All these indicators are collected into one indicator, the state of the reef which reflects
the general quality of coral reef ecosystem. To calculate the state of the reef, a common
indicator with values between 0 (worse scenario) and 1 (best scenario) was built
following the next steps. First, for every indicator the rate of their presence was
calculated through dividing their present amount (kg or %) to their maximum possible
amount. Second, according to their importance, each indicator was assigned with
different scores, as follows: coral cover-0.3, coral biodiversity-0.2, fish stock-0.2, fish
biodiversity-0.15, and algae cover-0.15. The scores were taken from Cesar et al (2002),
and are based on expert opinions. Finally, in order to calculate the state of the reef,
each score was multiplied with their corresponding existence rate and the results were
summed up. The total sum was divided by the sum of the scores, which in this case is
equal with 1, obtaining the value of coral reef quality.
Once the state of the reef is defined, the next step is to calculate the total economic
value of the coral reef which is influenced by the reef's quality, among others.
4.2
Recreational sub-module
The tourism sector represents the pillar of Bonaire's economy. There are two types of
tourists: stay over tourists that come with planes or yachts and spend a few days on the
island, and cruise tourists which spend just a few hours on the island. From one year to
another the number of tourists has increased considerably. The current number of SOT
is 74,342 and CT are 229,228 (CTO, 2011). Through the expenses on the island they
contribute to the total revenues of Bonaire and to the TEV of coral reefs.
The principal factors that contribute to the growth rate of tourists are considered to be
the global economy and the state of the reef. To represent the global economy, the
current GDP, approximately equal with 4%, was taken into account (World Bank, 2012),
while the state of the reefs is the one determined in the ecological module.
The growth rate of SOT, influenced by the GDP, is currently 0.8%, and based on past
trends it is assumed it can increase or decrease with a maximum of 2% when the GDP
varies between -1 and 6% (see Figure 23). Meanwhile, the present growth rate of CT is
double that of SOT, being equal with 1.6% and increasing or decreasing with a
maximum of 4% when the GDP varies between -1 and 6% (see Figure 23).
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Economic valuation of Bonaire coral reefs
39
Figure 23 – Influence of world GDP on the growth rate of SOT (left) and CT (right)
The same trend is used to express the influence of the state of the reef on the growth
rate of SOT and CT, with a maximum variation of 1 and 2% respectively, when the state
of the reef indicator fluctuates between 0 and 1 (see Figure 24).
Figure 24 – Influence of the state of the reef indicator on the growth rate of SOT (left)
and CT (right)
When attempting a model to be as realistic as possible, it is important to consider that a
high number of CT may decrease the number of SOT, as the last group will not enjoy
the beauty of the island due to a high number of cruise ships and visitors. Even though
this relation was drawn into the model, due to the lack of data it was assumed to be zero
and let the possibility to be filled in once this information will exist. Figure 25 shows all
the variables and the relations between them, plus the factors that contribute to the TEV
of coral reefs due to recreational activities.
Stay over tourists brings revenues to the island as a result of their direct and indirect
expenditures.
a. Direct expenditures are due to the fees they pay to enjoy recreational activities
directly linked with corals, such as diving or snorkelling. From the total number of
tourists, 50% go diving on the island and pay a fee of $25, while the rest go
snorkelling and pay a fee of $10 per stay. All these expenses form the total revenues
from direct expenses of SOT. As assumed in the report of Cesar et al (2002), only
25% of this value can be considered as value added to coral reefs.
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40
The model
b. Indirect expenditures, represented by food or hotel payments, also contribute to the
value of coral reefs. The average stay of a tourist is 9 nights with a cost of $500 for
accommodation per tourist per stay and $150 for food (Annual Statistics Report,
2008). From the total revenues gained, according to Cesar et al (2002), only 25% are
considered as value added to the coral reef.
On the other hand, cruise tourists bring revenues only from direct expenditure. Due to
the fact that they do not need any accommodation and food, the only way to spend
money are through diving, snorkeling or buying souvenirs. However, it is important to
bear in mind that not all cruise tourists will chose either to dive or snorkel. They may just
have a walk on the beach and chose to buy souvenirs. Cruisers spendings on the island
are about $60 per tourist per stay, which is only a few hours (Annual Statistics Report,
2008). From the total revenues gained through direct expenses of CTs, only 1.4% is
considered as value added to the TEV of coral reefs (van Beukering et al, 2011).
Moreover, besides tourists, Bonaire inhabitants contribute as well to the total
recreational value of coral reefs. Their contribution is not so much compared with the
tourism industry, but it is still an important factor when calculating the total recreational
value of the coral reefs. A growth rate of 1.6% per year was considered in the number of
Bonaire inhabitants, because local government presented their plans to increase their
number from 15,666 to 25,000 in the coming 25 years. To calculate their total expenses
on activities attached to corals it was considered that inhabitants pay a fee of $25 per
year for scuba diving or other recreational activities that contribute to the TEV of coral
reefs.
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Economic valuation of Bonaire coral reefs
41
EV.GDP
Ecological submodel.State
of the reef
~
Growth rate of SOT
due to GDP
~
~
Growth rate
stay ov er tourists
Growth rate
Cruise tourists
~
~
Growth rate of CT
due to GDP
EV.Growth rate of population
Decrease of SOT
due to CT
Div ers
Change in the nb
of CT
Extra Growth rate
due to piers
Change in the nb
of SOT per y ear
Bonaire populaton
Nb of CT
Nb of SOT
Changes in the nb
of population
Snorkellers
Price f or f ood and others
Price f or snorkelling
Price f or div ers
CT expenses
Price f or accommodation
Total DIRECT expenses of SOT
Total INDIRECT expenses of SOT
Locals direct expenses
Total DIRECT rev enues f rom CT
Total DIRECT
rev enues f rom locals
Coral reef v alue f rom CT
DIRECT expenses
Coral reef v alue f rom locals
DIRECT expenses
+
Total recreational
v alue of coral reef
Coral reef v alue f rom SOT
DIRECT expenses
Coral reef v alue f rom SOT
INDIRECT expenses
+
Total Recreatonal Rev enues
Figure 25 – Recreational module
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The model
4.3
Biodiversity sub-module
The quality of Bonaire coral reefs is known as being the highest in the Caribbean. With
the healthiest corals, Bonaire can also be proud of the highest number of different
species. Until now, there are about 65 species of corals and 354 species of fish known
in the waters of Bonaire, which generate economic benefits (IUCN, 2011). The benefits
determined by a vast biodiversity to Bonaire are modeled in Figure 26.
EV.GDP
Change in WTP
due to GDP
~
Dutch households
Ecological submodel.State
of the reef
WTP of Dutch
households
~
Nonuse v alue Dutch
households
Change in WTP of locals
due to GDP
Change in scientif ic v alue
due to GDP
~
~
WTP of
households
Bonaire households
Probability of discov ery
Ecological
submodel.Coral Diversity
Ecological
submodel.Total surface
~
Cultural v alue Bonaire
citizens
Total scientif ic v alue
Bioprospecting v alue
Biodiv ersity v alue
Figure 26 – Biodiversity module
The total biodiversity value is formed by the sum of the scientific value, bioprospecting
value, cultural importance and non-use value.
The scientific value, also known as research value represents the budgets assigned to
diverse institutes or researchers for studying the coral reef ecosystem of Bonaire in this
case. The amount assigned depends in principle by the global GDP, but as this data is
missing it is considered to have no influence in this case. After analyzing the budgets
allocated for the year 2011 for different institutions to study the corals, the total value
was determining to be $500,000 (personal communication Esther Wolfs).
Bioprospecting value refers to the revenues that pharmaceutical companies can obtain
as a result of discovering important drugs that can be obtained using molecules from
corals. It is calculated by multiplying the probability of discovery with coral diversity, total
surface, probability of discovery and the value placed per species (Brock et al, 2011)
Bioprospecting value = Probability_of_discovery*Coral_Diversity* Total_surface* 7775
The probability of discovery depends on the state of the reef. In accordance with Pearce
and Puroshothaman (2009), the mean probability considered is 0.0005. A healthy and a
high diversity of corals will increase the chance to discover new substances that can be
further used as drugs. The average value placed on species of coral is considered to be
$7.775 in concordance with Ruitenbeek & Cartier (1999).
The non-use value of coral reefs is determined by the WTP of people for goods and
services they do not use in a direct way. In this case, the WTP of Dutch households to
maintain the state of the reefs was taken into account.
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Economic valuation of Bonaire coral reefs
43
A survey was conducted in order to determine the WTP of Dutch citizens for improving
the state of the reef. The outcome of the survey revealed that Dutch citizens have a
WTP of $25 to improve the state of the reef. This value was assigned for three islands
from Caribbean, Bonaire, Saba and St. Eustasius (Botzen, van Beukering and Wolfs,
2012). Lacle (2012) determined that the WTP of Dutch citizens depends on the quality of
the reef. To determine the WTP for the island of Bonaire, this value was divided by 3
and it was decided that it follows the trend obtained by Lacle (2012) (see Figure 27). As
a result a more than medium quality will bring a higher WTP from Dutch citizens
compared with a degraded state of the reef.
Figure 27 – Influence of the SoR on WTP of Dutch households
The cultural value is determined by the WTP of Bonaire households to improve the
quality of the coral reefs. Locals are aware of the fact that corals provide them coastal
protection and economic benefits, and as a result they will place a higher price on their
improvement. A survey done by Lacle (2012) presented that the WTP of locals to
improve the state of the reef from poor to high is $21.8 per month. This value was
determined to vary according to the state of the reef as represented in Figure 28.
Figure 28 – Influence of the SoR on WTP of Bonaire households
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The model
4.4
Fisheries sub-module
Fishing activities are defined by their purpose: commercial fishing, subsistence fishing,
aquarium fishing and recreational fishing. For our case study, only commercial and
subsistence fishing are going to be analyzed because there was no available data about
the other two types.
To calculate the value of coral reefs due to fisheries the following steps were followed:
First, the total revenues from fish selling were calculated. The fishing rate on Bonaire
was established to be 5.4% of the total stock (personal communication Stijn). However,
from this amount only 70% is sold at an average price of $12 per kg (personal
communication Stijn Schep). Second, the cost for fishing was calculated by multiplying
the average cost for boat maintenance, $8,169, with the total number of boats, 38. Third,
the profit of fishermen was calculated by extracting the costs from the total revenues,
and last, the value of coral reefs was determined to be equal with 60% of the total profit,
because was assumed that 60% of the total fish sold is reef dependent (Cesar et al
2002).
Figure 29 shows the elements constructing the module that define the value of coral
reefs due to fisheries.
Ecological submodel.Fish Stock
Fish Rate
Fish catch
Nb of boats
Fishing cost
Fish catch f or sale
Fish price
Total Fishing prof it
Coral reef dependency
Reef associated
Fishery v alue
Figure 29 – Fisheries module
4.5
Amenity sub-module
The value added to the house price as a result of coral reef existence is called amenity
value. Houses close to the coastline are more valuable due to their view than those that
are far from the coast. A clean beach and healthy coral reefs will raise the price of a
house when it has to be sold, as a result of the beautiful view. On the other hand,
unhealthy corals will decrease the house price (van Beukering et al, 2007).
The elements contributing to the amenity value of coral reefs are represented in Figure
30.
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Economic valuation of Bonaire coral reefs
Ecological submodel.State
of the reef
45
EV.GDP
~
House price v ariation
due to state of the reef
Av erage house price
Number of Houses sold
Real house price
Total Houses cost
Coral reef v alue
of the total price
Amenity v alue
Figure 30 – Amenity module
Amenity value calculated from the cost of houses and the number of houses sold, which
are influenced by the state of the reef and the world GDP.
The average price of a house and the average number of houses sold influenced by the
world GDP, were defined by analyzing their values in the last 8 years and establishing
the following relations between them.
Average house price= 19603*GDP+168804
Average houses sold= 3.4829*GDP+26.192
The influence of reefs' quality on the price of a house was defined by Cesar et al (2002)
who mention that a presence of coral cover between 10 to 50% change the house price
with 1.3% following a S shape, as shown in Figure 31.
Figure 31 – Influence of the SoR on house price variation
As mentioned in Cesar et al (2002), from the total value of houses sold, only 1.5% is
considered to be the amenity value of coral reefs.
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The model
4.6
Coastal protection sub-module
Coral reefs provide coastal protection and as a result that they have the capacity to
dissipate wave energy and protect the shoreline against storms, hurricanes and erosion.
Healthy coral reefs prevent damage to the infrastructure and houses developed on coast
during extreme events. To value this function it is necessary to know how the absence
of coral reefs will influence the value of houses and infrastructure and the necessary
costs to prevent shoreline damage, by constructing wave breakers or providing coastal
nourishment (van Beukering et al, 2011).
Due to the lack of reliable data, in this model the coastal protection value of coral reefs
is calculated only through assessing the damage cost avoided to the properties close to
the coast in case of no coral existence.
The factors contributing to the CPV are presented in Figure 32.
Hurricane f requency
Amenity submodel.Real
house price
Damage per property v alue
due to coral extinction
Houses
on the coast
CPV
Figure 32 – Coastal Protection module
According to Cesar et al (2002), the avoided cost damage per property was established
to be 16.6% from the total house price for Hawaii. As no data were available for Bonaire
this value was transferred to this study as well. Moreover, for a more reliable result, the
avoided cost damage was multiplied with hurricane frequency considered by Blackwood
et al (2011) to be 1 in 30 years, and with the number of houses on the coast equal to
20% of the total houses.
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Economic valuation of Bonaire coral reefs
5
47
Results
In this chapter the baseline scenario plus another three possible management options
will be analyzed by taking into account the ecological indicators and economic valuation
of coral reefs. The three scenarios will focus on 1) investigating the influence of an
increase in the number of tourists on reefs quality and value, 2) analyzing the effects of
lionfish eradication on the ecology and economic benefits of the reef and 3) providing
information about the effect of sewage treatment plant construction on the state of the
reef and their TEV.
The purpose of this analysis is to determine how the state of the reef is going to be
affected 30 years from now by representing the path it follows during this period, to
calculate the TEV of coral reefs for every year during this period. Moreover, in order to
establish which the benefits of the society are, a sensitivity analysis using different
discount rates will be conducted to determine the NPV. However, a discount rate of 5%
was selected for this study, according to ecologist and economists that attach this value
for small countries (Meindertsma, n.a)
5.1
Baseline scenario
The baseline scenario assumes that no changes are going to happen in the selected
time framework and that the current indicators and interactions between them will
remain constant.
Ecological indicator:
The ecological module will define the state of the reef indicator by taking into account all
ecological factors that contribute to the general state of the reef. These factors are fish
stock, fish diversity, coral cover, coral diversity and algae cover. The effect of the current
threats on each factor and the general state of the reef indicator are going to be
analyzed. The main threats identified for coral reef ecosystem are the presence of
lionfish, fishing rate, amount of nutrients released into the water, accumulation of
sediments and physical destruction and a change in water temperature.
If the present state remains stable over the next 30 years, the fish stock is expected to
decrease. As presented in Figure 33, there will be a rapid decline in the first 6 years,
followed by a steady decline until year 30 when the fish stock reaches a population of
1400t. The presence of lionfish represents the reason for this trend, because as they
consume young fish, they reduce the fish stock which triggers a decline in the total
reproduction rate of reef fish per year (Albins & Hixon, 2011).
In the same way, the current amount of lionfish will affect the amount of fish species. It is
expected that by 2042, there will be 50 species which decrease fish diversity following
the trend presented in Figure 33.
As mentioned in section 4.1, the amount of herbivore fish influences algae cover due to
their diet and algae cover further influences coral cover. Morover, algae compete with
corals and sand for occupying the benthic cover.
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Results
Fish Stock
3.00
2.50
2.00
1.50
0
10
Year
20
Fish Diversity
470
Fish diversity [nb. of
species]
3.50
Fish Stock [t*1000]
30
450
430
410
390
370
0
10
Year
20
30
Figure 33 – Fish stock and fish diversity variation in time for the baseline scenario
As of 2012, the benthic cover is dominated by algae with 42.6% coverage, followed by
corals, 28.6%, and sand plus rubble, 29% (IUCN, 2011). If all values of ecological
indicators and their interaction will suffer no change in the following 30 years, the
benthic cover will experience a modification as shown in Figure 34. Even though algae
cover constantly expands, it will remain dominant and its value will increase to 65.4%
benthic cover until year 30, while coral cover is expected to decrease to 6.9%. As a
result of more coral deaths, the sand cover will increase and will cover 27.7% of the
benthic surface by year 30.
Benthic Cover
70
60
Coral Cover
50
% of cover
48
Algae Cover
40
Sand Cover
30
20
10
0
0
5
10
15
20
25
30
Year
Figure 34 – Benthic cover variation in time for the baseline scenario
In order to observe the effect of a change in the water temperature, a sensitivity analysis
was conducted at different temperature values as represented in Figure 35. It can be
noticed that if the current water temperature (29˚C) will increase with 3˚C the coral cover
will disappear in 23 years. Furthermore, as expected, a higher increase to 36.3˚C or
40˚C of the water temperature will eradicate the corals in less than 5 years. At the same
time with the increase in water temperature, algae cover will expand. As a result, they
will overgrow the corals and contribute to their decline. However, as mentioned before,
algae and an increase in water temperature are not the only threats to coral reef, but
sedimentation, nutrients and the number of tourists that produce physical destruction
also contribute to coral cover decline.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
Temperature effect on Coral Cover
35
Temperature [˚C]
49
30
25˚C
25
28.8˚C
20
32.5˚C
15
36.3˚C
10
40˚C
5
0
0
5
10
15
20
25
30
35
Year
Figure 35 – Temperature effect on coral cover
From the threats affecting the coral cover, the amount of sediments and nutrients loaded
into the sea contribute as well to a decline in coral diversity following a linear trend from
65 to 51 over a time period of 30 years.
State of the reef indicator
All these ecological indicators define the general state of the reef and were explained in
the previous chapter. The present state of the reef has a value of 0.66, which place the
corals at a higher than medium quality. The effect of the current threats on the
ecological indicators will decrease the general quality of the reef at a rate of 1% every
year in the next 6 years, followed by a slower decrease until year 30 when it will reach
0.49, a value that will place the general marine ecosystem under medium quality (see
Figure 36).
State of the reef indicator
0.7
0.6
0.5
0.4
0.3
0
5
10
15
Year
20
25
30
Figure 36 – State of the reef indicator for baseline scenario
Recreational value:
The total expenses of tourists and locals on activities related to corals contribute to the
definition of the recreational value of coral reefs. As explained in the previous chapter,
the state of the reef and the world GDP determine a growth in tourism and the average
amount of money that tourists spend once they arrive on the island. It is expected that
the number of stay-over tourists will increase to about 99,500 by 2042, while the number
of cruisers will almost double if the current growth rate is maintained (see Figure 37).
Regarding Bonaire’s population, the growth rate is considered independent of any of the
Environment and Resource Management
Results
aforementioned factors, and is assumed to be constant at 1.6% per year according to
DEZA (2008) (see Figure 37).
Number of tourists
500.00
30.00
Number of locals*1000
Number of tourists *1000
400.00
300.00
SOT
200.00
CT
100.00
0.00
Number of Bonaire
population
25.00
20.00
15.00
10.00
5.00
0.00
0
10
Year
20
30
0
10
20
30
Year
Figure 37 – Change in the number of tourists and locals over 30 years
A higher number of tourists will increase the revenues on the island and as a result the
coral reef value. Figure 38 illustrates the increase in the value of coral reef due to
recreational activities from $16M in 2012 to $22M in 2042.
Recreational Value
Recreational Value [million $]
50
24.00
22.00
20.00
18.00
16.00
14.00
12.00
10.00
0
10
20
30
Year
Figure 38 – Recreational value of coral reefs
Biodiversity value:
The existence of a high diversity of coral reefs generates economic benefits by means of
both direct use and indirect values. For this case study, it was considered that the
biodiversity value is determined by summing the scientific and the bioprospecting value
with the non-use and cultural value of Bonaire coral reef. Figure 39 illustrates the
variation of these values over the studied time period.
Assuming that 50% of Dutch households would agree to pay a monthly fee of
approximately $5 to protect Bonaire's coral reef, non-use value represents the largest
share to the total biodiversity value. During the next 30 years as a result of coral reef
degradation it is assumed that the WTP of Dutch citizens to improve reefs quality will
decrease, and as a result the non-use value will decrease with about $1.8M.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
51
In contrast, the cultural value attribute to coral reef ecosystem by locals will increase in
the baseline scenario with $0.4M in 30 years.
Coral reef values
Non-use value
18.00
Non-use value [million $]
Coral reef value [$*1000]
1,000.00
800.00
17.50
600.00
17.00
400.00
16.50
Cultural value
Bioprospecting value
Scientific value
200.00
0.00
0
Year
16.00
0
20
Year
20
Figure 39 – Values contributing to the total biodiversity value of coral reef
The bioprospecting value is expected to decrease with $0.14M as a result of a decline in
the number of coral species, while the budget allocated for research on coral reef
ecosystem was considered to remain at its present value of $0.5M per year.
Summing up all these values, the total biodiversity value of coral reefs is obtained. This
value decreases from one year to another as a result of a higher decrease in the
non-use value, following the trend shown in Figure 40.
Total Biodiveristy Value [million $]
Biodiversity Value
19.80
19.60
19.40
19.20
19.00
18.80
18.60
18.40
18.20
0
5
10
15
20
25
30
Year
Figure 40 – Biodiversity value of coral reef for the baseline scenario
Fisheries value:
To determine the value of coral reef from fisheries it is necessary to know the amount of
fish caught for sale. From the total amount of fish catch, which varies between 183t to
110t, only 70% is sold, as explained in the previous chapter. Figure 41 represents a
decrease in the amount of fish caught for sale from 128t to 73t, following a decrease in
the fish stock due to the presence of lionfish, their biggest threat.
Environment and Resource Management
Results
Fish caught for sale [t]
Amount of fish caught for sale
150
100
50
0
0
10
Year
20
30
Figure 41 – Variation in time of the amount of lionfish caught for sale
As a result of a decrease in the amount of fish caught for sale, the profit of fishermen will
decrease as well in the following 30 years from $1.2M to half of its value. Their profit
was calculated by extracting from the total revenues gained the cost for fishing
mentioned in section 4.4.
Because only 60% of the total profit was established to contribute to the TEV of coral
reef, the value of coral reef due to fisheries will decline to $400,000 in 2042, half of its
current value, following the same trend as for the amount of fish sold (see Figure 42).
Fisheries Value
Value of fisheries [$*1000]
52
800.05
700.05
600.05
500.05
400.05
300.05
200.05
100.05
0.05
0
10
Year
20
30
Figure 42 – Value of coral reef due to fisheries
Amenity value:
According to Cesar et al, (2002), the state of the reef influences the variation in the
average house price by ± 1.3%. Beside this, the global GDP is the major contributor that
defines the price of a house. Currently, the average price of a house was calculated to
be $0.25M, and if the GDP will remain constant over the next 30 years it is expected that
this value will decrease very slightly to $0.24M as a result of a decline in the state of the
reef.
Considering that every year approximately 40 houses are sold and that the amenity
value represents 1.5% of the total price paid for all houses sold, the value of coral reef
as a result of their proximity to residential buildings will decline by $0.01M in 30 years as
illustrated in Figure 43.
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Economic valuation of Bonaire coral reefs
53
Amenity value [$*1000]
Amenity value
150.60
150.50
150.40
150.30
150.20
150.10
150.00
149.90
149.80
149.70
0
5
10
15
20
25
30
Year
Figure 43 – Amenity value of coral reef for the baseline scenario
Coastal protection value:
The ability of Bonaire’s coral reef to protect the coast is monetized by calculating the
avoided damage of properties close to the coast in case of a hurricane in the absence of
coral reef. With a once every 30 years hurricane frequency and a damage of 16.6% to
the total house value, as mentioned in section 4.6, the coastal protection value of coral
reefs will decline from $2.92M to $2.90M in 30 years following the path shown in Figure
44. Again, the reason for this decrease is the decline in the general state of the reef
explained in the beginning of this chapter.
Coastal Protection Value [$*1000]
Coastal Protection Value
2,924.00
2,922.00
2,920.00
2,918.00
2,916.00
2,914.00
2,912.00
2,910.00
2,908.00
2,906.00
0
5
10
15
20
25
30
Year
Figure 44 – Coastal protection value of coral reef for baseline scenario
Total economic value of Bonaire coral reef for the baseline scenario:
In order to define the TEV of Bonaire’s coral reef, the final step is to sum up all provided
benefits which were determined in the previous steps. Figure 45 displays an increase of
the economic value from $39.5M in 2012 to $43.6M in 2042.
Environment and Resource Management
Results
Total Economic Value
45.00
TEV [million $]
54
43.00
41.00
39.00
37.00
35.00
0
5
10
15
20
25
30
Year
Figure 45 – TEV of Bonaire coral reef for the baseline scenario
The recreational value of coral reefs contributes the most to the TEV with a share of
49%, followed by the biodiversity value with 41%, while fisheries’ value contributes less,
with only 1% (see Figure 46).
Amenity
value
3%
Total Economic Value
Coastal
Protection
value
6%
Fisheries
value
1%
Biodiversity
value
41%
Recreational
value
49%
Figure 46 – Share of different values to the TEV of Bonaire coral reef
However, this TEV is presented at a 0% discount rate. In the literature, several studies
(van Beukering, 2007; Cesar et al, 2002) used a discount rate that varied between 1%
and 10%. In order to see the impact of different discount rates, a sensitivity analysis was
conducted at different values, as represented in Figure 47. The value added to Bonaire
society will decrease at a discount rate varying from 1% to 10% with a range between
$1.3billion and $421M.
Environment and Resource Management
Net Present Value [million $]
Economic valuation of Bonaire coral reefs
55
Net Present Value at different
Discount Rates
1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
0.00
0
2
4
6
Discout Rate
8
10
Figure 47 – NPV at different discount rates
Scenario 1 – Increase in the number of tourists
5.2
As the tourist sector is the most important for Bonaire’s economy and it also contributes
the most to the TEV of coral reefs, the effects of a higher growth in the number of SOT
and CT should be analyzed.
Bonaire's local government plans to increase the number of tourists, as a result of the
economic benefits they bring to the island. To accomplish this plan, there are current
debates to build ten recreational piers on the leeward coast of the island which will
provide a higher range of recreational activities and will increase the revenues (personal
communication Esther Wolfs). If all ten piers are going to be constructed, it is assumed
that the number of both types of tourists will increase by 0.85% compared with the
baseline until the touristic capacity of the island is reached. Consequently, in 30 years,
the number of SOT will reach 127,000 and the number of CT will be approximately
521,600 (see Figure 48).
Number of tourists *1000
600.00
Tourists number
500.00
400.00
SOT baseline
CT baseline
SOT
CT
300.00
200.00
100.00
0.00
0
5
10
15
20
25
30
Year
Figure 48 – Number of tourists in scenario 1 and comparison with baseline
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Results
An increase in the number of tourists has negative impacts on ecosystem because they
contribute to the direct damage of coral reef through physical destruction while diving
and snorkelling. The main reason for this is tourist's lack of awareness about the
damage they produce by touching the corals. Figure 49 illustrates the decline in coral
cover as a result of an increase in the number of tourists. Coral cover will decline to
3.31% in 30 years, half of the value for the baseline scenario if the current plans of the
government are realized.
35
Coral Cover
% of cover
30
25
Coral Cover baseline
20
Coral Cover
15
10
5
0
0
5
10
Year
15
20
25
30
Figure 49 – Variation in coral cover for scenario 1
As a result of this decline in coral cover, as well as the deterioration resulting from
ecological indicators remaining constant, the general state of the reef indicator will follow
the same trend as in the baseline but with a more rapid degradation starting in year 12
(see Figure 50). In 30 years, the state of the reef will be with 4.2% lower than the
baseline scenario for an increase in the number of tourists with 0.85%.
0.7
State of the reef indicator
56
State of the reef
0.65
0.6
0.55
SOR baseline
SOR
0.5
0.45
0
5
10
Year
15
20
25
30
Figure 50 – State of the reef variation for scenario 1
As mentioned at the beginning of this section, the main reason for increasing the
number of tourists is to increase the revenues, by increasing the number of tourists that
will come to the island. As a result of an increase in the revenues generated by tourists,
the recreational value of coral reef will increase as well (see Figure 51). The value of the
coral reef due to recreational activities will increase from $16.2M in 2012 to $27.8M in
2042, and exceeds the baseline value by $7M in year 30.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
Recreational Value
30,000.00
Recreational value [$ *1000]
57
25,000.00
20,000.00
15,000.00
Recreational value
baseline
10,000.00
Recreational value
5,000.00
0.00
0
5
10
15
20
25
30
Year
Figure 51 – Recreational value of Bonaire coral reef
Biodiversity value [million $]
Because an increase in the number of tourists will not modify a lot the state of the reef
compared to baseline, the biodiversity value of coral reef will follow that same trend for
the first 12 years and then it will separate slowly. The explanation for this trend is that an
increase in the number of tourists won't decline the quality of the reef starting from the
first year, as corals are characterized by an expansion and a resilience rate. Thus, it will
reach in year 30 a value of $18.1M, which is 1% lower than in the baseline scenario (see
Figure 52).
Biodiversity value
20.00
19.80
19.60
19.40
19.20
19.00
18.80
18.60
18.40
18.20
18.00
Biodiversity Value
baseline
Biodiversity Value
scenario 1
0
5
10
15
20
25
30
Year
Figure 52 – Biodiversity value of the coral reef for scenario 1
The increase in the number of tourists brings no change in the value of coral reef from
fisheries which will follow the same path and will again vary from $0.7M to $0.37M in 30
years.
This does not apply to the amenity and coastal protection value. A decrease in reef
quality triggers a decrease in both of these two values. Even though the change in the
state of the reef is not very big, both amenity and CPV are expected to decrease by
0.16% (see Figure 53).
Environment and Resource Management
Results
Amenity value
150.60
Coastal protection
value
2,925.00
150.40
Coastal protection value [$
*1000]
Amenity value [$ *1000]
2,920.00
150.20
2,915.00
150.00
2,910.00
149.80
Amenity value baseline
149.60
Amenity value scenario 1
149.40
0
10
20
30
2,905.00
CPV baseline
2,900.00
CPV scenario 1
0
Year
10
Year
20
30
Figure 53 – Amenity and coastal protection value for scenario 1
Finally, as the purpose of expanding the number of tourists was to increase the
revenues they generate on the island, it is expected that the TEV of coral reef will rise
too. As illustrated in Figure 54, this hypothesis proves true and the TEV of coral reefs
will be worth 13% more in 2042 compared with the baseline scenario. Therefore, it will
increase by $10M, from $39M to $49M.
Total Economic Value
55.00
Economic Value [million $/year]
58
50.00
45.00
40.00
35.00
30.00
TEV baseline
25.00
TEV
20.00
0
5
10
15
Year
20
25
30
Figure 54 – Total economic value of Bonaire coral reef for scenario 1
The contribution of every good and service provided by coral reef is represented in
Figure 55. Again, the recreational value contributes the most to the economy with
56.3%, a higher value than in the baseline, followed once more by the biodiversity value.
This time the amenity value has the lowest contribution compared with the baseline
when fisheries value brought the lowest benefits.
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Economic valuation of Bonaire coral reefs
59
Total economic value
Recreational
value
56.33%
Biodiversity
value
36.76%
Fisheries value
0.73%
Amenity value
0.30%
Coastal
Protection
value
5.88%
Figure 55 – Share of each value to the TEV of Bonaire coral reef for scenario 1
The same sensitivity analysis was conducted for analysing the influence of different
discount rates on the total gains for Bonaire society. As Figure 56 illustrates, the NPV is
higher than in the baseline with about 35% and decreases once more with a higher
discount rate. At 5% discount rate the NPV for the baseline scenario is about $668M,
and for the 1st scenario it is $690M.
Net Present Value
Net present value [$ *1000]
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
NPV
200,000
NPV baseline
0
0
2
4
6
8
10
12
Discount rate
Figure 56 – NPV at different discount rate for scenario 1
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Results
5.3
Scenario 2 – Lionfish eradication
Another scenario will analyze the effects of lionfish eradication on the TEV the general
quality of Bonaire’s coral reefs. The process of eradication involves workshops and
projects to make tourists aware of their existence and to train divers to catch them. It is
important to mention that there are a lot of volunteer divers that could help to catch
lionfish as they understand the threat posed on marine ecosystem. Furthermore, recipe
books were published about how to cook them in the hope that this will increase their
demand.
The eradication of lionfish will have the biggest influence on fish stock and fish diversity
as they are the first affected by their existence. Because of their diet consisting in young
fish, the total fish stock and biodiversity are under pressure.
Accordingly, Figure 57 shows the difference between the fish stock in the current state
and the fish stock when lionfish are eliminated. If the eradication of lionfish is
accomplished, the fish stock will be higher than the baseline scenario by approximately
3,000t.
Fish stock
6,000.00
5,000.00
Fish stock [t]
60
4,000.00
3,000.00
2,000.00
Fish stock baseline
1,000.00
Fish Stock scenario 2
0.00
0
10
20
30
40
Year
Figure 57 – Fish stock variation in time for scenario 2
Eradication of lionfish has the same effect on fish diversity. If management actions to
eradicate the lionfish are taken into account, the number of fish species will increase
with a maximum of 80 until year 30 compared with the baseline (see Figure 58).
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Economic valuation of Bonaire coral reefs
61
Fish diversity
Fish diversity [nb of species]
490
480
470
460
450
440
430
420
410
400
Fish Diversity baseline
Fish Diversity scenario 2
0
10
20
30
40
Year
Figure 58 – Fish diversity variation in time for scenario 2
A higher and important change is noticed in the case of benthic cover. The surface of
algae and corals will be higher than in the baseline scenario. Because the lionfish will
not pose any other threat to the fish stock, the latter will continue to increase and as a
result more algae will be consumed by herbivorous fish. Algae cover will decrease by
14% in 30 years and more space will be left for coral to increase their cover from 28.6%
to 32.2%. Compared with the baseline scenario (see Figure 59) where the coral cover
will decrease until 7% in year 30, the eradication of lionfish proves to be an efficient
management option that will increase the coral cover from year 7 to year 30. The slight
decline in the first years proves that even though lionfish are not a threat anymore it
takes a while for algae cover to decrease due to the herbivorous fish and for the
expansion rate of coral cover to be noticable.
Coral cover
35
30
% of cover
25
20
15
Coral cover scenario 2 Lionfish eradication
Coral Cover baseline
10
5
0
0
5
10
15
20
25
30
35
Year
Figure 59 – Coral cover variation in time for scenario 2
By summing up the ecological indicators that contribute to the state of the reef, a new
indicator to express its quality is obtained. If in the current situation, the state of the reef
is expected to decrease from 0.66 to 0.49, the eradication of lionfish will increase the
Environment and Resource Management
Results
quality of the reef to around 0.71 in the first 14 years then it will decline to 0.70 by year
30 as a result of the variation in coral cover (see Figure 60).
State of the reef
State of the reef indicator
0.8
0.7
0.6
0.5
0.4
0.3
SOR scenario 2
0.2
0.1
SOR baseline
0
0
5
10
15
20
25
30
35
Year
Figure 60 – State of the reef variation in time for scenario 2
Because of a higher state of the reef compared with baseline, the growth rate of SOT
and CT is expected to increase as well and follow the trend explained in section 4.2. The
number of SOT will vary from 74,000 to 108,000, while the number of cruisers will
increase by approximately 250,000 in 30 years. This increase in the number of tourists
will trigger higher revenues for the island, and as a result a higher recreational value will
be placed on coral reefs. As presented in Figure 61, the difference in the total
recreational value of coral reef between the baseline and the scenario when no lionfish
are on the island, is $1.9M year 30.
Recreational value
26.00
Recreational value [million $]
62
24.00
22.00
20.00
18.00
16.00
14.00
Recreational value baseline
12.00
Recreational value scenario 2
10.00
0
5
10
15
20
25
30
35
Year
Figure 61 – Recreational value of coral reef for scenario 2
The situation is not different for the biodiversity value either. As explained in the baseline
scenario, higher revenues are expected to come from the non-use and cultural value, for
which the Dutch citizens and Bonaire residents have a certain WTP. As their WTP is
Environment and Resource Management
Economic valuation of Bonaire coral reefs
63
positively correlated to the state of the reef, and as management actions will contribute
to the improvement in the state of the reef, the total revenues summed up into
biodiversity value will follow the trend from Figure 62. The trend increases until year 14
and then experiences a slight decrease. The values vary between $19.5M to $19.7M.
The explanation for the trend is that it follows the same path as the state of the reef
indicator that first increases to 0.71 and then decreases with 0.01.
Biodiversity value
Biodiversity value [ million $]
20.00
19.80
19.60
19.40
Biodiversity Value
baseline
19.20
19.00
Biodiversity Value
scenario 2
18.80
18.60
18.40
18.20
0
5
10
15
20
25
30
35
Year
Figure 62 – Biodiversity value of coral reef for scenario 2
If lionfish are going to be eradicated, the fish stock will increase and as a result, the fish
catch and the amount of fish sold will be higher and will provide higher benefits for
fishermen. If more revenues are going to be gained from fisheries, the value of coral reef
due to fisheries will also be higher. In this situation the value of coral reef due to
fisheries will be 3.5 times higher than the baseline.
Fishery value [million $]
Fishery value
1.40
1.20
1.00
Fishery value baseline
0.80
Fishery value scenario 2
0.60
0.40
0.20
0.00
0
5
10
15
20
25
30
35
Year
Figure 63 – Variation in the value of coral reef from fisheries for scenario 2
A very small change is noticed in the case of amenity and coastal protection value. An
improvement in the quality of coral reefs will have no big effects on their value but this
Environment and Resource Management
Results
trend was recognized in the other scenarios as well. In 30 years, the amenity value is
expected to increase with 0.5% while coastal protection value will increase with 1%
compared with the baseline, see Figure 64.
150.70
150.60
150.50
150.40
150.30
150.20
150.10
150.00
149.90
149.80
149.70
149.60
Amenity value
Coastal protection
value
2.93
CPV value [million $]
Amenity value [$ *1000]
baseline
scenario 2
0
Year
20
2.93
2.92
2.92
2.92
2.92
2.92
2.91
2.91
2.91
2.91
2.91
40
baseline
scenario 2
0
20
40
Year
Figure 64 – Amenity and coastal protection value of coral reef for scenario 2
All values determined in this scenario contribute to the TEV of coral reef in case of
lionfish eradication. As represented in Figure 65, over a time period of 30 years, the TEV
of coral reef will increase from $39.6M to $47.8M compared with the baseline when the
TEV increases to $43.6M.
Total economic value
50.00
48.00
46.00
TEV [ million $]
64
44.00
42.00
40.00
38.00
TEV baseline
36.00
TEV scenario 2
34.00
32.00
30.00
0
5
10
15
20
25
30
35
Year
Figure 65 – Total economic value of Bonaire coral reef for scenario 2
The share of each value that contributes to the TEV of coral reef follows the same
structure as in the first scenario, having the recreational and biodiversity value bringing
most benefits and the amenity value the least.
Environment and Resource Management
Economic valuation of Bonaire coral reefs
Amenity
value, 0.31
Coastal
Protection
value, 6.11
65
Total Economic value
Fisheries
value, 2.68
Recreational
value, 49.58
Biodiversity
value, 41.21
Figure 66 – Share of each value contributing to the TEV of coral reef for scenario 2
The same sensitivity analysis was done to determine how a different discount rate will
influence the present benefits for the Bonaire society. As represented in Figure 67, a
discount rate varying between 0% and 2% will pose a lower value in the present than
the baseline scenario, while a higher value will bring more benefits. However, the
difference between scenario 2 and the baseline is not so big and both of them follow the
same path, having a decrease in the NPV for a higher discount rate.
Net present value
1,400.00
NPV [ million $]
1,200.00
1,000.00
800.00
600.00
400.00
NPV baseline
200.00
NPV scenario 2
0.00
0
2
4
6
Discount rate
8
10
12
Figure 67 – NPV at different discount rates for scenario 2
Environment and Resource Management
Results
5.4
Scenario 3 – Construction of a sewage treatment plant
There are plans to construct a waste water treatment plant in Bonaire near Kralendijk in
order to reduce the amount of nutrients, especially N and P that loads into the sea every
year. Rresearch done by Slijkerman et al (2011) determined that the amount of TIN in
the sea has a concentration of 1.51µM. It is expected that once the sewage system will
be built, this concentration will be not higher than the threshold of 0.5 µM, as the
nutrients will continue to load into the sea from agricultural activities through
groundwater. This scenario will analyze the effect of building this plant on the ecological
and economic indicators of coral reef ecosystem.
The change in the amount of nutrients has no direct effect on the fish stock and
diversity. However, the benthic cover is expected to suffer small changes in the coral
cover which will get to 13% in the end of the studied period, while algae cover will
decrease by 2.5% (see Figure 68).
Coral cover
35
% of cover
30
25
20
15
10
Coral Cover baseline
5
Coral Cover scenario 3
0
0
5
10
15
Year
20
25
30
Figure 68 – Coral cover variation in time for scenario 3
This slight change will influence the state of the reef ecosystem, which as seen in Figure
69 is expected to decrease from 0.66 to 0.55. Even though the state of the reef is
degrading during the period studied, it is an improvement compared to the baseline
scenario where the decrease is expected to reach 0.49.
State of the reef
0.7
State of the reef indicator
66
0.65
0.6
0.55
SOR baseline
0.5
0.45
SOR scenario 3
0.4
0
5
10
15
20
25
Year
Figure 69 – State of the reef indicator for scenario 3
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Economic valuation of Bonaire coral reefs
67
Because the state of the reef will improve compared to the baseline once the amount of
nutrients loaded into the water will be reduced, the value of coral reefs due to
recreational activities is expected to be higher than without any sewage management
option. Figure 70 shows how the recreational value of coral reef will increase by $6M in
the next 30 years, as it is influenced by the increase in the number of SOT and CT. In
year 30, this value will be with 2% higher than the baseline scenario.
Recreational value [million $]
Recreational value
24.00
22.00
20.00
18.00
Recreational value baseline
16.00
Recreational value scenario 3
14.00
0
5
10
Year
15
20
25
30
Figure 70 – Recreational value of coral reef for scenario 3
For the biodiversity value of coral reefs, the situation is similar with the previous
scenario. A higher state of the reef will increase the WTP of Dutch citizens and Bonaire
habitants for preserving and increasing their quality, and as a result the biodiversity
value of coral reef will follow the path from Figure 71. Compared with the baseline
scenario, after the sewage treatment plant will be constructed, the biodiversity value will
be higher by $0.4M in year 30.
Biodiversity value
Biodiversity value [million $]
19.80
19.60
19.40
19.20
19.00
18.80
18.60
Biodiversity Value baseline
18.40
Biodiversity Value scenario 3
18.20
0
5
10
15
20
25
30
Year
Figure 71 – Biodiversity value of coral reef for scenario 3
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Results
The fisheries value is not going to be affected by the construction of a sewage treatment
plant as it has direct effects only on corals. Thus, the value of coral reefs from fisheries
has the same value as in the baseline scenario, of $0.37M.
Amenity and coastal protection value follow once again the same trend, decreasing over
30 years by a small amount. However, compared with the baseline scenario, the
amenity value will have a final value higher by $328 and CPV by $6,400 in year 30, as
shown in Figure 72.
Amenity value
150.60
150.50
150.40
150.30
150.20
150.10
150.00
149.90
149.80
149.70
149.60
Coastal protection
2,924.00
value
CPV [$ *1000]
Amenity value [$ *1000]
baseline
scenario 3
0
10
Year
20
2,922.00
2,920.00
2,918.00
2,916.00
2,914.00
2,912.00
2,910.00
2,908.00
2,906.00
baseline
scenario 3
0
30
10
Year
20
30
Figure 72 – Amenity and coastal protection value variation in time for scenario 3
The total economic value in this case will be very similar with the one determined in the
baseline scenario (see Figure 73). Its value will be $0.86M less than in the baseline
case for the last year.
Total economic value
50.00
Economic value [million $]
68
45.00
40.00
35.00
30.00
TEV baseline
25.00
TEV with management
20.00
0
5
10
15
20
25
30
Year
Figure 73 – Total economic value of Bonaire coral reef for scenario 3
The share of each value to the TEV of Bonaire coral reef will be similar with the share of
the TEV in the case of scenario 1 (see Figure 74).
Environment and Resource Management
Economic valuation of Bonaire coral reefs
Coastal
Protection
value, 6.55
69
Total economic value
Amenity value,
0.34
Fisheries value,
0.83
Recreational
value, 50.19
Biodiversity
value, 42.09
Figure 74 – Share of each value to the TEV of Bonaire coral reef for scenario 3
The net present value of coral reefs at different discount rates was established to be
0.2% lower than the baseline scenario. As the difference is not observed on the graph,
Table 3 was built for representing these values.
Table 3 – NPV of Bonaire coral reef at different discount rate
NPV scenario 3
DR
[million $]
NPV baseline
0
1,277
1,280
1
1,101
1,104
3
841
844
5
664
667
8
494
497
10
418
421
Environment and Resource Management
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Results
Environment and Resource Management
Economic valuation of Bonaire coral reefs
6
71
Conclusions
The coral reef ecosystem of Bonaire is considered to be important because it sustains
both life and the economic development of society by means of goods and services
such as tourism, fisheries, amenity, coastal protection or scientific services. Even though
nowadays it is believed that Bonaire’s coral reef cover is the healthiest in the Caribbean,
over the time its quality has degraded. Moreover, corals are continuously threatened by
factors such as sedimentation, nutrients, physical destruction or temperature.
The aim of this study was to provide an economic valuation of Bonaire marine
ecosystem in order to provide transparent information for policy makers, so that the
most appropriate measures are taken for improving the ecosystem and stimulating the
economic development. The research question of this project was formulated as
follows:
"To what extend will economic development and nature management influence the
marine ecosystem services in Bonaire, and vice versa?"
In order to reach the aim of this study, several activities have been performed:
1.
A literature study about marine ecology with a specific on coral reef ecosystem
and the procedure to build a dynamic simulation model using Stella software.
2.
Construction of a dynamic simulation model that links the ecology of coral reefs
with the economic benefits they provide.
3.
An extended process of finding specific data to fill in the model , plus close
communication with the supervisors to check the reliability of the data and make the
most accurate assumptions where it was required.
4.
Run the model using a time framework of 30 years by changing several
parameters and interpreting the results.
5.
Summarize all findings and give recommendations for future research.
An analysis of the marine ecosystem services from an ecological point of view, keeping
the values of the current threats constant for the entire period of 30 years, shows that
the quality of the reef will decrease below a medium value, from 0.66 to 0.49 (see Figure
75). Among all indicators that contribute to define the general state of the reef, coral
cover will suffer the biggest change, decreasing from 28% to 6.9% (see Figure 76). It is
important to avoid this, as coral reefs generate most revenues for the island by means of
providing goods and services.
An economic analysis of the baseline scenario shows an increase in the TEV of
Bonaire’s coral reef from $39M in 2012 to $43M in 2042, with the tourism sector
contributing the most. The baseline scenario will bring a net present value of $668M at
5% discount rate. Every studied scenario predicts that in the following years the
economic value of coral reefs will slowly increase while the state of the reef and the
coral cover will steadily decrease unless important measures are taken.
The first scenario analyzes the effects of the economic development on the nature of
Bonaire. The local government plans to stimulate the economy of the island by
increasing the number of tourists. For instance, they plan to build 10 recreational piers in
Leeward site of the island to determine tourists to spend more time on the island and
undertake a variety of recreational activities. The rate increase in the number of tourists
was estimated to be 0.85% per year for the following 30 years. Due to this increase, the
state of the reef indicator will decline in the following 30 years from 0.66 to 0.47. This
Environment and Resource Management
72
Conclusions
decline is larger compared to the baseline value 0f 0.49. If more tourists will come on
the island, the level of nutrients loaded into the water will increase. Furthermore, tourists
will contribute to the degradation of coral cover through physical destruction during
diving or snorkelling. As a consequence, by 2042, the coral cover will represent only
3.31% of the marine surface in Bonaire, 50% lower than the value of 6.9% predicted if
the number of tourists will have a negligible increase.
An economic analysis of the first scenario (rise of tourists’ number) shows an increase in
the TEV of Bonaire’s coral reef from $39M in 2012 to $47M in 2042. As the economy of
Bonaire will develop in the following years, the net present value at 5% discount rate
was determined to be $690M (see Figure 77).
To conclude and answer the first part of the research question, an economic
development in Bonaire will degrade the marine ecosystem below the medium quality
and the coral cover will be 88% lower than current values. However, the TEV of coral
reefs will be higher than the current value due to an increase in the generated revenues
from tourists as a consequence of a higher number of tourists.
The 2nd and the 3rd proposed scenarios analyze the effect of two different management
options that plan to combat the threat of lionfish presence and the increase in nutrients’
quantity loaded into the sea.
From an ecological point of view, both scenarios present an increase in the quality of the
reef compared with values of the baseline scenario. Looking at the second scenario, the
eradication of lionfish will increase the state of the reef from 0.66 to 0.7 as a
consequence of higher fish stocks and less algae. Moreover, the coral cover is expected
to slightly increase from 28% to 32%. Analyzing the third scenario, reducing the amount
of nutrients released into the sea by building a sewage plant will decrease the coral
cover from 28% in 2012 to 13% in 2042. It can be observed that the value of 13% coral
cover is almost double than the value of 6.9% estimated for the baseline, in absence of
a sewage plant. However, just by reducing the amount of nutrients released into the sea
alone, will not lead to an improved state of the reef and collateral measures should be
implemented.
From an economic perspective, both scenarios will increase the economic value placed
on coral reefs from $39M in 2012 to $47M in 2042 if lionfish are eradicated and
respectively from $39M in 2012 to $44M in 2042 once the sewage treatment plant is
constructed (see Figure 78). This change will generate a net present value of $710M for
the 2nd scenario and $664M respectively for the 3rd scenario, at a discount rate of 5% in
both cases.
Environment and Resource Management
State of the reef indicator
Economic valuation of Bonaire coral reefs
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
State of the reef variation
73
Year 1
Year 30
SOR baseline
SOR scenario 1 -Nb of SOR scenario 2 tourists
Liofish eradication
SOR scenario 3 Sewage plant
Figure 75 – State of the reef variation for different scenarios
Year 1
Year 30
Coral cover variation
35
% of coral cover
30
25
20
15
10
5
0
Coral Cover baseline Coral Cover scenario Coral cover scenario Coral Cover scenario
1 - Nb of tourists
2 - Lionfish
3 - Sewage plant
eradication
Figure 76 – Coral cover variation for different scenarios
Net Present Value at 5% DR
710
NPV [million $]
700
690
680
670
660
650
640
NPV baseline
NPV scenario 1
NPV scenario 2
NPV scenario 3
Figure 77 – NPV at 5% discount rate for different scenarios
Environment and Resource Management
Conclusions
Total Economic Value variation
60.00
Year 1
Year 30
50.00
TEV [million $]
74
40.00
30.00
20.00
10.00
0.00
TEV baseline
TEV scenario 1 - Nb TEV scenario 2 of tourists
Lionfish eradication
TEV scenario 3 Sewage plant
Figure 78 – TEV variation for different scenarios
Environment and Resource Management
Economic valuation of Bonaire coral reefs
7
75
Recommendations
Worldwide, many people depend on coral reefs because of their provided ecosystem
services such as fisheries, coastal protection, tourism, etc. However, as the coral cover
has declined all over the world in the past years and it is constantly under threat, it is
important to take effective decisions to stop its decline and improve it as much as
possible.
It is very difficult to predict the future especially for an ecosystem that is affected by so
many factors, where everything is interconnected in ways that are still not understood.
However, as far as human imagination allows it, there have been multiple attempts to
simulate various ecosystems. Dynamic simulation models proved to be the best way to
try to determine the impact that a certain decision may have on diverse factors. It should
be bared in mind that a realistic model is impossible to construct, as it is very difficult to
predict future unexpected events, such as a drop in world economy or eradication of
certain species.
For this paper, a dynamic simulation model was constructed to try to evaluate the
marine ecosystem services provided by coral reefs in a specific location, the island of
Bonaire in this case. However, this model can be used for any other location as the
benefits provided by coral reef are similar everywhere.
For future research I would recommend some changes regarding the construction of
the model, other possible scenarios and the process of defining the data.
As a fact that the number of cruise tourists is expected to double in the following years it
is essential to investigate and include in the recreational module the influence they may
have on the number of SOT. There is a possibility that they may discourage SOT to
come and spend a long time in Bonaire as they will overcrowd the island and will disturb
the relaxing environment. When I constructed the model I included this variable, but due
to lack of data it was assumed that it has no influence. To determine this more
accurately it is recommended to have interviews with relevant stakeholders.
For a more extended analysis of the ecological module I suggest that a detailed
evaluation of fish species and their fishing rate to be made, as not all species are
targeted at the same level. This is a very complicated step, but it can provide more
accuracy when defining the state of the reef.
To determine the non-use value of coral reef biodiversity the tourist industry should be
involved in the development of coral reefs. There are current surveys taking place that
try to determine the WTP of Bonaire tourists to preserve or improve the quality of the
reef. Once the data will be available it would be interesting to see how the TEV of coral
reef is influenced.
It is advised to do a more detailed analysis when calculating the amenity and coastal
protection value of coral reef. For calculating the amenity value, it was considered that
every year a certain number of houses will be sold, but the proximity to coral reefs was
not taken into account. The same assumption was made when calculating the avoided
damage in case of a hurricane and a lack of corals to protect the coast.
Other scenarios should be also investigated in order to analyze the different impacts of
possible decisions that may affect the TEV of coral reefs. Because the marine
ecosystem suffers changes most of the time and because these changes do not happen
one at a time, a scenario where more than one management option is considered
should be analyzed as well. For example, it would be interesting to see how the TEV
Environment and Resource Management
76
Recommendations
and the coral cover will be affected after the construction of the sewage treatment plant
and lionfish eradication, combined with an increase in the number of tourists. Moreover,
there are rumors that the local NGO, Stinapa, plans to restore the coral cover by
planting new corals. It is interesting to see how this plan will evolve.
A change at a global level in the world economy is very difficult to predict. However, a
sensitivity analysis for different GDPs values should provide some information about
how a decline or an increase in the world economy will change the TEV of Bonaire coral
reef.
Finally, refining the model by using advanced correlations and interdependencies, as
well as more specific data for the island of Bonaire will increase the accuracy of the
predictions of the model.
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77
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Environment and Resource Management