PII:
Marine Pollution Bulletin Vol. 37, Nos. 8±12, pp. 373±382, 1998
Ó 1999 Elsevier Science Ltd. All rights reserved
Printed in Great Britain
S0025-326X(99)00074-0
0025-326X/99 $ - see front matter
"Reports"
The Socio-Economic Costs and Bene®ts
of Coastal Habitat Rehabilitation and
Creation
JAMES SPURGEON*
GIBB Environment, Gibb House, London Road, Reading RG6 1BL, UK
This paper provides a comprehensive overview of the
merits and limitations of using an economics based approach to assess and implement initiatives for coastal
habitat rehabilitation and creation. A review of the literature indicates that habitat rehabilitation/creation costs
vary widely between and within ecosystems. For coral
reefs, costs range from US$ 10,000 to 6.5 million/hectare
(ha); 1 for mangroves US$ 3000±510,000/ha; for seagrasses US$ 9000±680,000/ha and for saltmarshes US$
2000±160,000/ha. A review of the economic bene®ts derived from various coastal habitats based on a ÔTotal
Economic ValueÕ approach (i.e. accounting for direct and
indirect uses, and Ônon-usesÕ) reveals that many thousands
of US$ per hectare could ultimately accrue from their
rehabilitation/creation. The paper concludes that despite
its limitations, the Ôbene®t-cost analysisÕ framework can
play an important role both in assessing the justi®cation of
coastal habitat rehabilitation/creation initiatives, and by
helping to improve the overall e€ectiveness of such initiatives. Ó 1999 Elsevier Science Ltd. All rights reserved
Keywords: coastal habitats; economic valuation; costs;
bene®ts; restoration; rehabilitation; creation; coral reefs;
mangroves; seagrasses; saltmarsh; sand dunes; lagoons;
shingle ridges; cost-bene®t analysis.
Introduction
As a means of maintaining global bio-diversity, increasing attention is being given to rehabilitating and
creating a variety of coastal habitats. Is it a wise use of
*Study undertaken whilst an employee of Posford Duvivier Environment, UK. E-mail: jspurgeo@gibb.co.uk\cor
1
All monetary values in the paper have been updated to 1997 US$
values using appropriate indices (to adjust for in¯ation) and currency
exchange rates, unless stated otherwise. The 1997 exchange rate is US$
1 ˆ UK£0.60.
resources? This paper examines the relevance of economics and highlights the role of bene®t-cost analysis
(BCA) as a decision-making tool not only to help justify
habitat rehabilitation/creation, but also as a framework
to help maximise overall net bene®ts.
Economics can be de®ned as Ôthe study of the ecient
allocation of resourcesÕ. Governments are faced with the
challenge of maximising the economic returns from use
of their countryÕs resources (labour, capital and natural
resources). As a result, BCA has developed over the past
30 years to help prioritise the selection of public sector
development schemes given the limited resources available. The technique enables all economic costs and
bene®ts for alternative schemes to be weighed up and
compared. The preferred scheme can then be selected
based on the most ecient use of available resources.
The main stages involved in BCA are to:
1. de®ne the details for each feasible scheme (including the ``do nothing option'');
2. determine the most appropriate spatial and temporal study limits;
3. identify all scheme costs and all scheme bene®ts;
4. place an economic (monetary) value, where possible, on all costs and bene®ts;
5. calculate ``present day'' costs and bene®ts through
``discounting'';
6. compare present day costs to present day bene®ts.
Those schemes with a bene®t to cost ratio (BCR) greater
than 1 are economically justi®ed. Generally, the higher
the BCR the more ecient the use of resources. The
formula for calculating the BCR is:
T
P
BCR ˆ
tˆ0
T
P
tˆ0
Bt = 1 ‡ r†t
Ct = 1 ÿ r†
t
;
373
Marine Pollution Bulletin
P
where
is the sum of values, Bt the bene®t at time t, Ct
the cost at time t, T the timescale of project, t ˆ 0 the
start time of project, and r the discount rate.
The application of BCA to habitat rehabilitation/
creation initiatives has only recently become worthwhile. There are three main reasons for this. Firstly, it is
only when such schemes have been implemented for
several years that their true economic costs and bene®ts
can be comprehensively identi®ed. Secondly, only recently has our understanding of rehabilitation/creation
begun to develop suciently. Thirdly, as the techniques
available to place monetary values on environmental
bene®ts continue to improve, more comprehensive and
accurate estimates of their value become possible.
This paper is the result of an initial investigation into
economic aspects relating to coastal habitat rehabilitation/creation which, for the present, is limited to a brief
review of available literature.
Costs
Categories and valuation of costs
The various costs associated with habitat rehabilitation/creation schemes can be either ÔeconomicÕ, ÔfinancialÕ or both. Economic costs relate to the overall cost to
society of using a resource (e.g. a material or labour).
These ÔeconomicÕ costs are used in the BCA process.
Economic costs are measured in terms of the Ôopportunity costÕ of using each particular resource. The
opportunity cost of a resource is the value of that resource in its next best alternative use, as measured by its
social value less the social value of any inputs (labour,
material etc.) which could be used elsewhere. Market
prices can generally be used as a basis for opportunity
costs, although they often need adjusting to allow for
market distortions (e.g. government subsidies and
taxes).
Financial costs, on the other hand, generally relate to
prices set by monetary transactions made. Financial
costs are critical for private sector schemes where ®nancial viability and pro®tability are vital to the success
of the project and of particular interest to investors.
The assessment of ®nancial costs is also important for
public sector schemes to determine the necessary
®nancial resources and funding required. Financial
values are generally measured using actual market
prices, although they may need adjusting to take into
account appropriate accounting principles (e.g. depreciation of assets).
Rehabilitation/creation of coastal habitats is a complex and lengthy process involving many di€erent activities and resources, each with their own economic and
®nancial implications. The main economic (and ®nancial) cost components can generally be broken down
into `capital' and `operational' costs as detailed in
Table 1.
374
Costs for rehabilitation/creation of coastal habitats
A review of the costs associated with rehabilitating/
creating coastal habitats revealed a substantial di€erence in the relative order of magnitude of costs, as illustrated in Table 2. There are several simple, yet
important, reasons for the variances, which occur both
within habitat types and between habitat types. A brief
discussion for each habitat type and an explanation of
the source of the cost data follows.
Coral reefs. Coral reefs appear to be potentially the
most expensive coastal habitat to rehabilitate, with costs
of up to US$ 6.5 million per ha. However, this ®gure
relates to extrapolated rehabilitation costs funded
through compensation paid as a result of ships running
aground on coral reefs. In 1989 the M/V Elpis ran
aground on reefs in the Florida Keys National Marine
Sanctuary and restoration funds of US$ 1.66 million
(1991 price) were awarded to restore 3000 m2 of damaged reef. The rehabilitation involved removing debris,
stabilising the reef substrate, importing new substrate,
transplanting corals and sponges, and monitoring
(NOAA, 1997a). Extrapolating coral reef rehabilitation
costs relating to a similar incident, the grounding of the
M/V Fortune Reefer in Puerto Rico in 1997, gives an
average rehabilitation cost of US$ 2 million per ha. The
US$ 1.05 million payout covered, amongst other things,
the re-attachment of around 400 live pieces of elkhorn
coral (NOAA, 1997b).
In a study comparing the e€ectiveness of di€erent
coral reef rehabilitation techniques in the Maldives,
Edwards et al. (1994) estimated costs for three di€erent
options. One-cubic-metre concrete blocks cost US$ 318/
m2 (US$ 1.59 m/ha using recommended maximum of
50% coverage for larger areas), concrete Armor¯ex
mattresses cost US$ 100/m2 (US$ 1 m/ha) and anchored
chain-link fencing cost US$ 39.4/m2 (US$ 0.4 m/ha) (all
costs are in 1994 prices). At the other end of the scale,
low-tech reef rehabilitation initiatives in low energy
environments need only cost in the order of US$ 10,000
per ha (Lindahl, 1998 and personal communication,
1998).
Mangroves. Costs for planting mangroves can range
from approximately US$ 3000 to 28,500 per ha using
seeds (collected or purchased), from US$ 5700 to
230,000 per ha when using seedlings, and from US$
90,000 to 510,000 per ha using three-year-old transplants (NOAA, 1997c). It should be noted that these
costs are primarily for small-scale experiments and that
overheads are not included. Furthermore, the costs very
much depend on density of spacing, which ultimately
a€ects the likelihood of success. A recent Puerto Rican
project to restore tidal ¯ushing to 400 ha of black
mangrove cost US$ 1.6 million, representing US$ 4000
per ha. This involved topographical alterations to increase tidal ¯ow and saltwater exchange, and clearance
and planting of mangroves (NOAA, 1997d).
Seagrasses. Several examples are given in NOAA
(1997c) for the costs of rehabilitating seagrass beds. For
Volume 37/Numbers 8±12/August±December 1998
TABLE 1
Costs typically incurred in habitat rehabilitation/creation initiatives.
(A) Capital costs
Pre-construction
Feasibility studies ± to identify appropriate sites
Pilot studies ± small scale experiments to test di€erent methods
Existing site surveys (e.g. topographical, hydrological, chemical, physical, biological)
Nearby site surveys ± to compare parameters of nearby habitats
Objective setting ± to determine precisely what is wanted
Design (e.g. of topography and restoration methods to be used)
Tendering (i.e. speci®cation and bill of quantities)
Management plans ± to devise a plan for managing the site
Land purchase (e.g. from farmer or landowner)
Construction
Site preparation (e.g. excavation, contouring)
Equipment (e.g. boats and earth diggers)
Labour (e.g. wages and expenses for professionals and volunteers)
Building materials (e.g. water control structures, pipes)
Stock (e.g. vegetation and animals)
Transport (e.g. of materials and stock)
(B) Operational costs
Management ± to control and enhance the development of the site (e.g. prevent disturbance to vegetation/animals, adjust chemical status)
Monitoring ± to assess how the site develops (e.g. development of plant and animal communities)
Maintenance ± to maintain operational structures and equipment (e.g. to repair damages to structures and re-plant vegetation)
Each of the above operational costs may include:
Materials (e.g. fencing, chemicals, camera ®lm and processing)
Equipment (e.g. vehicles, cameras, stakes)
Sta€ wages (full and part time)
Expenses (e.g. of volunteers)
Administration (e.g. telephone, postage)
(C) Other costs
Compensation (e.g. to farmer or landowner)
Legal costs (e.g. relating to site purchase)
Opportunity cost of the site (e.g. land value/loss of agricultural output/loss of existing ecological value)
Damage to donor site (i.e. loss of value to site donating organisms)
TABLE 2
Costs for habitat restoration/creation per ha.a
Cost estimate
Low (US$ 000/ha)
High (US$ 000/ha)
a
Coral reefs Mangroves Seagrasses Saltmarshes
10
6500
3
510
9
684
2
160
Sources: See main text. Note: All costs are in 1997 prices.
temperate seagrasses (e.g. eelgrass), costs range from
US$ 9000 to 46,000 per ha when using plugs (i.e. where
the blades, roots, rhizomes and sediment are transplanted together), and from US$ 11,500 to 74,000 per ha
when using shoots on their own. The UK Steering
GroupÕs Report on Bio-diversity Action Plans (English
Nature, 1996) assumed an average cost of around US$
8,600 per ha for transplanting temperate seagrasses,
assuming 1000 ha are planted.
A 1994 seagrass rehabilitation project in Galveston
Bay, USA, cost the equivalent of US$ 1000 for 1 ha
(NOAA, 1997d). However, this cost represents a minimum ®nancial cost since signi®cant amounts of manpower, supplies and equipment were provided in-kind
by government departments and universities. For tropical and subtropical seagrasses, costs have been known
to be in the order of US$ 22,800 to 684,000 per ha using
seedlings, and US$ 228,000 using plugs (NOAA, 1997c).
Saltmarshes. A considerable amount of work on rehabilitating/creating saltmarshes has been undertaken in
the United States. Based on the extensive US literature
available, NOAA (1997c) advises that costs for planting
saltmarshes are in the order of US$ 9000 to 46,000 per
ha. The lower end of the scale is for quality seeding efforts, whilst the upper end is generally for commercially
grown stock. Key factors are the plant spacing and the
method of establishment in terms of seeding, or transplanting nursery or wild stock. In addition to planting
costs, other costs (e.g. topographical and hydrological
alterations) can range from around US$ 600 to 80,000
per ha, depending on existing site conditions (NOAA,
1997c).
However, two USA case studies put the overall cost of
saltmarsh creation in the order of US$ 100,000 to
160,000 per ha. At the Galilee Bird Sanctuary, Rhode
Island, restoration works to 14 ha of saltmarsh cost US$
1.4 million. The rehabilitation work was primarily to
restore tidal ¯ows through the re-excavation of natural
channels and the installation of culverts (NOAA,
1997d). In 1997, US$ 7 million was earmarked under
the US Coastal Wetlands Planning, Protection and
375
Marine Pollution Bulletin
Restoration Act to create 44.5 ha of marshland at
Greenhill Marsh in Louisiana, USA (NOAA, 1997e).
It is interesting to compare the USA experience with
that in the UK where the government is adopting a
completely di€erent approach to saltmarsh rehabilitation/creation. Several experiments are underway in Essex whereby agricultural land is opened up to ¯ooding
by the sea. This generally involves moving back the line
of sea defence and hence is referred to as `managed retreat'. Little human intervention is required other than
monitoring and minor maintenance. The re-vegetation is
left to occur naturally. At Northey Island, a 1991
scheme of 1 ha cost an equivalent US$ 43,000; at Horsey
Island, a 1993 scheme of 2 ha cost the equivalent of US$
1860 per ha; and at Orplands, a 1995 scheme of 40 ha
cost an equivalent US$ 2600 per ha (East Midlands
Environmental Consultants, 1995). In each case, the
scheme costs are based on the engineering costs required
to secure existing secondary defences further inland,
which varied greatly for each site. All pre- and postconstruction phase costs (e.g. planning, site survey,
monitoring and opportunity costs ± see Table 1) are
excluded.
This preliminary study has not been able to identify
the range of costs relating to the rehabilitation/creation
of sand dunes, lagoons and shingle ridges, although
several examples are provided below.
Sand dunes. Posford Duvivier was recently involved in
a sand dune rehabilitation project which forms part of a
coastal defence scheme at Tramore, Ireland. Estimated
rehabilitation costs for almost 2.5 ha of dune were US$
45,000, equating to US$ 17,000 per ha. The rehabilitation
works were fairly intensive and included replanting
marram grass and providing fencing both for preventing
access and for trapping wind-blown sand. A further US$
22,000 was required for additional gabion revetments,
and overall annual maintenance costs are estimated to be,
on average, US$ 830 per year (Posford Duvivier, 1997).
Following a severe winter in 1991, a sand dune rehabilitation project was undertaken in Monterey, California, USA, to re-vegetate 17.8 ha of coastal dune at a
cost US$ 295,000. This represents US$ 18,800 per ha
and involved placing over 150,000 seedlings of 26 native
dune plants (NOAA, 1997d).
Lagoons. Creating marine lagoons in the UK so far
has an average cost of US$ 7000/ha. This is based on
creating one lagoon in Norfolk, and one in Cleveland,
with combined construction (i.e. earth moving) costs of
US$ 51,000 (updated from 1995 costs) for a total area of
7.2 ha (English Nature, personal communication, 1997).
Shingle Ridges. No speci®c cost data was been found
on rehabilitating/creating shingle ridges, although engineering costs for creating shingle beaches can be in the
order of up to US$ 6000 per linear metre (Posford
Duvivier, 1996a). Experiments have been undertaken
assessing various techniques of establishing shingle
vegetation, although costs were not readily available
(e.g. Walmsley and Davy, 1997).
376
Comments on the costs of habitat rehabilitation/creation
For a number of reasons, some of which are discussed
below, the costs detailed above only provide an indication of the potential extent of costs that may be incurred
in habitat rehabilitation/creation schemes. Table 3 presents some of the main factors that a€ect the magnitude
of the cost components shown in Table 1.
Expenditure on habitat rehabilitation/creation
schemes documented in literature is often dictated by
available budgets. This is especially true in the USA
where signi®cant amounts of money are sometimes
made available, particularly as a result of compensation
payments in retribution for damages to habitats (as in
the above USA coral reef and saltmarsh examples).
Attempts at saving on costs, particularly on initial site
surveys and design, can compromise the likely success of
a project. Initial site surveys to determine existing site
conditions and conditions at nearby similar habitats are
often of paramount importance to a projectÕs overall
success. However, the extent and expense of the di€erent
surveys required depends on the type of habitat to be
restored/created, and the current level of general and site
speci®c understanding of the relevant parameters. For
example, when creating saltmarsh and mangrove habitats, the inundation (tidal) regime, elevation, and water
column strati®cation of temperature and salinity should
TABLE 3
Factors a€ecting magnitude of habitat rehabilitation/creation costs.
(1) Location of the site
site accessibility
site remoteness
closeness and links to similar and other habitats
(2) Current or potential use of the site
need to purchase the land/pay compensation
existing use and value of the site
potential for other uses of the site
(3) The operation
type of habitat
scale
complexity
restoration or creation
density of planting
depth of planting
previous experience of designer and contractors
intended timescale
proposed method of establishment- natural, seeding or
transplanting
sources of vegetation ± natural or commercial
local labour and material costs
(4) Conditions at the site
exposure (e.g. to wind, tides, waves)
existing topography (need for alteration)
type of substrate (chemical and physical properties)
existing habitat/species present
likely need to control other plants/animals
presence of contamination
use of adjacent areas
(5) Availability of funds
Volume 37/Numbers 8±12/August±December 1998
be assessed. Other necessary surveys may include those
relating to a range of water, chemical, biological and soil
parameters as discussed in other papers in the Special
Issue.
Scheme costs are highly dependent on the method of
rehabilitation/creation adopted. For example, relatively
little expenditure has been used to create successful new
saltmarshes in the UK because the responsible agencies
have been focusing on cost-e€ective and practical means
of creating the right physical conditions for natural
vegetation re-establishment. Minimal expenditure has
been necessary to create the necessary conditions, and
no expenditure has been required to plant vegetation.
The results so far appear encouraging, with saltmarsh
plants readily establishing themselves.
Many of the costs documented in the available literature provide little detail as to exactly what they include.
The costs that are most often recorded relate only to the
construction and/or ®nancial costs, which are relatively
easily identi®ed, or they may represent a particular fund
made available for the rehabilitation/creation. Invariably there will be other unrecorded costs such as sta€
time, facilities and materials provided by numerous organisations involved, and any o€-site scheme impacts
including those incurred by the donor site.
As emphasised in the introduction, the overall cost of
rehabilitation/creation schemes can only be fully determined on their completion. There are many uncertainties involved which can lead to complications and
additional cost implications. For example, one incident
of unexpectedly severe wave action or rainfall can easily
impede or destroy the rehabilitation process.
Monitoring of rehabilitation progress should be carried out at all stages to help ensure that the habitat
develops as intended and to enable any problems to be
identi®ed and recti®ed. It is also a cost-e€ective means
of furthering our understanding of rehabilitation techniques, since each rehabilitation initiative is e€ectively
an experiment from which others can learn. The extent
of monitoring methods and their cost varies enormously
depending on several factors: the techniques used; the
frequency of monitoring; and who carries it out. Techniques range from basic observations to highly detailed
analyses. The use of volunteers to assist can reduce the
costs signi®cantly, although their opportunity costs
should be accounted for.
Bene®ts
Coastal habitats provide a vast array of bene®ts to
mankind in the form of goods (products) and services
(functions). Since few of the goods and services are
traded in the market-place, they rarely have a readily
observable monetary or ®nancial value. However, they
can have a considerable socio-economic value, particularly when utilised on a sustainable basis. Coastal habitat rehabilitation schemes should in theory be able to
re-introduce many, if not all, of the bene®ts associated
with each habitat.
There are several ways of categorising the full range of
bene®ts attributable to di€erent habitats (see Barton,
1994; Pearce and Turner, 1990). Possibly the most
comprehensive and appropriate is based on the notion
of ÔTotal Economic ValueÕ, which comprises ÔdirectÕ and
Ôindirect use valuesÕ and Ônon-use valuesÕ, as outlined in
Table 4.
Within the literature on environmental valuation,
some authors suggest that there are other values additional to those shown in Table 4. These include for example, Ôbio-diversity valueÕ, Ôaesthetic valueÕ and
Ôprimary valueÕ. However, it can be argued that these
represent di€erent attributes that are, or should be, accounted for within the valuation of the above uses and
non-uses (i.e. they are attributes that contribute towards
the use and non-use values of a habitat).
On the other hand, in addition to the ÔcurrentÕ habitat
values shown in Table 4, there will also be a range of
ÔpotentialÕ values. For example, a coral reef may not
currently be used for tourism, but it may be in the future. Similarly, a particular coral reef species may have
no current use, but it may prove to be a valuable
product in the future (e.g. for medicinal purposes).
ÔOption valueÕ may capture humankindÕs willingness to
pay now to preserve a reef in case these values may arise
in the future, but it does not represent the extent of
future related earnings which may be massive.
Valuation of bene®ts
Since economists tend to determine values based on
observing market behaviour, the value of non-traded
environmental goods and services needs to be measured
in some other way. Over the past few decades, various
economic techniques have been adopted which now
enable the value of all habitat uses and non-uses (but
excluding intrinsic value) to be estimated (Hufschmidt
et al., 1983; Pearce and Turner, 1990). The methodologies are by no means problem-free, but they are constantly being re®ned and improved through further use
and subsequent critical review. They should only ever be
used when their limitations are fully acknowledged and
minimised accordingly. Some of the main techniques
can be summarised as follows:
· Change in productivity/production function: A technique based on ``cause and e€ect'' which assesses direct and indirect relationships between the loss of an
environmental resource and associated changes in
economic output.
· Replacement/relocation cost: A technique whereby the
value of a habitat is assumed to be equivalent to the
cost of replacing or relocating it elsewhere.
· Aversive/preventative cost: A technique whereby the
value of a habitat is assumed to be equivalent to previous expenditure used to avert/prevent damage to
that habitat type.
377
Marine Pollution Bulletin
TABLE 4
Categories of environmental bene®ts.a
(A) Use values
Direct use values ± goods and services directly consumed by users, for example:
Products (e.g. edible, ornamental, construction, medicinal)
Recreation
Waste assimilation
Research
Education
Indirect use values ± indirect bene®ts arising from ecological systems, for example:
Biological support ± links to other species and habitats
Physical protection (e.g. coastal defence function)
Global life support ± functions which help to support life on earth
(B) Non-use values
Option value ± the value individuals place on expected future use and indirect use of the components of ecological systems
Quasi-option value ± the value arising from expected new information which will arise from the conservation of bio-diversity for future use
Existence value ± a range of values, encompassing aesthetic and cultural aspects, arising from some or all of the following human motivations:
Bequest motives ± preservation for future generations
Stewardship motives ± preservation for its own sake
Altruism ± preservation so that it is available for others
Q-Altruism ± the belief that organisms have intrinsic rights
(C) Non-anthropocentric values
Intrinsic value ± organisms have a worth of their own regardless of human perceptions
a
Source: Adapted from DoE (1996).
· Hedonic pricing: A technique based on extracting the
environmental value of a marketed product by analysing the e€ect of each attribute on the overall market
price.
· Travel cost: A technique whereby the travelling time
and costs of a sample of visitors to a site are used
to determine a demand curve and hence the recreational value for that site.
· Contingent valuation: A questionnaire survey technique whereby a representative sample of individuals
are asked their ``willingness to pay'' to ensure or prevent a speci®c environmental change. The responses
are interpreted and aggregated to produce an overall
value, potentially including option and existence
value.
Examples of the bene®ts for di€erent habitats
There are few examples in the literature providing
speci®c monetary values for use and non-use values of
habitats in general, let alone those to be gained from
habitat rehabilitation/creation initiatives. The following
paragraphs highlight some monetary values that have
been estimated for bene®ts relating to coastal habitats.
Meanwhile, Table 5, compiled for this study, provides
an overview of the relative magnitude of bene®ts that
could potentially be associated with rehabilitating/creating various coastal habitats.
Coral reefs. As seen in Table 5, and detailed further in
Spurgeon (1992), coral reefs provide potentially signi®cant bene®ts through the provision of products, recreation, and coastal protection, as well as potentially for
their non-use value. Mattson and DeFoor (1985) esti378
mated values for the recreational bene®t provided by
coral reefs in Florida. Based on direct recreational expenditure, the reefs can be argued to generate US$
235,000 haÿ1 yrÿ1 , equivalent to US$ 11.8 million over
50 years (not discounted). When related indirect expenditure is included, the reefs can be argued to generate
US$ 1.27 m haÿ1 yrÿ1 , or US$ 63.5 million over 50 years
(not discounted). The natural coast protection function
of reefs can be argued to be worth up to US$ 170,000
per km, based on the cost of arti®cial coast protection
structures (see Posford Duvivier, 1996a). A value of US$
79 million per year for the non-use value (relating to
Australian nationals only) of the Great Barrier Reef has
also been estimated (Hundloe, 1990).
Mangroves. Mangroves also provide a great many
products and services, as revealed in a review of their
economic value undertaken by Spaninks and van Beukering (1997). The values shown in Table 6 relate to the
highest values determined for various products and
services provided by mangrove systems, as calculated by
®ve di€erent studies. In addition, a value for the coast
protection function provided by mangroves could be in
the same order as that suggested for coral reefs. Given
that any mangrove system could give rise to many, if not
all, of these bene®ts, it can be surmised that potentially
signi®cant bene®ts can be attached to the restoration of
mangrove systems.
Seagrasses. There appear to be few data on the economic value of seagrasses. However, a study in Australia (Watson et al., 1993) examining the relationship
between prawn ®sheries and seagrasses in Cairns Harbour, Australia, estimated that the nursery function of
the seagrasses ultimately yields, and is thus responsible
Volume 37/Numbers 8±12/August±December 1998
TABLE 5
Relative magnitude of bene®ts associated with habitats (and thus restoration).
Bene®ts
Coral ReefsMangroves
Seagrasses
Saltmarsh
Sand
Dunes
Lagoons Shingle Ridges
Direct uses
Products
Edible
Construction
Pharmaceutical
Ornamental
Recreation
Waste assimilation
Research
Education
XX
XX
XX
XX
XXX
ÿ
XX
XX
XX
XX
XX
X
XX
XXX
XX
XX
XX
ÿ
?
X
X
X
XX
XX
XX
ÿ
?
X
XX
XXX
XX
XX
XX
X
?
X
XXX
X
XX
XX
X
ÿ
?
X
XX
X
XX
XX
±
X
?
X
XXX
X
XX
XX
Indirect uses
Biological support
Coastal defence
Global life support
XX
XXX
XX
XXX
XXX
XX
XXX
XX
X
XX
XXX
X
X
XXX
X
X
XX
X
X
XXX
X
Option value
Quasi-option value
Existence value
Intrinsic value
XX
XX
XXX
XXX
XX
XX
XXX
XXX
XX
XX
XXX
XXX
XX
XX
XXX
XXX
XX
XX
XXX
XXX
XX
XX
XXX
XXX
X
X
XXX
XXX
Symbol
Bene®t
Description
None
Low
Medium
High
Not Known
Provides no bene®t
Provides minor economic bene®t only
Provides bene®t between low and high
Potentially provides signi®cant economic value
Could potentially provide large bene®ts in the future
Key:
ÿ
X
XX
XXX
?
TABLE 6
Valuation of selected mangrove bene®ts.a
Service/product
Value (US$ haÿ1 yrÿ1 )
Value (US$/ha for 50 yr)
Author
126
435
756
7833
189
20
6300
21,750
37,800
391,600
9500
1000
Ruitenbeek (1992)
Christensen (1982)
Gammage (1994)
Lal (1990)
Christensen (1982)
Ruitenbeek (1992)
On-site sustainable ®sheries
Other products (e.g. fruits, thatch)
Sustainable forestry
Waste assimilation
O€-site ®sheries
Bio-diversity (capturable)
a
Note: All values updated to 1997 values for this study.
for, commercial prawns worth in the order of US$ 1150
haÿ1 yrÿ1 . Over a 50 year period this gives a value of
US$ 57,500 (not discounted).
Saltmarsh. Saltmarsh systems provide a range of important products and services. In the UK, various values
have been calculated for di€erent widths of saltmarshes
that e€ectively act as a form of coastal defence, leading
to potentially massive savings on the cost of arti®cial
coastal defences. For example, it has been estimated that
an 80 m wide strip of saltmarsh could result in cost
savings equivalent to an amount in the order of US$
0.53 million to US$ 1 million per hectare (King and
Lester, 1995). The same study also provided an example
of a value for wildfowling of US$ 870 haÿ1 yrÿ1 and for
agricultural grazing of US$ 26 haÿ1 yrÿ1 . A di€erent
study estimated that saltmarsh grazing in North Norfolk could be worth in the order of US$ 200 haÿ1 yrÿ1
(Posford Duvivier, 1996b).
Sand dunes. A comprehensive review of the Total
Economic Value of sand dune systems was undertaken
by Posford Duvivier (1996a), although it did not extend
to placing monetary values on each type of bene®t.
However, in the coastal defence project appraisal study
mentioned earlier regarding sand dunes at Tramore,
Ireland (Posford Duvivier, 1997), monetary estimates
were made of the economic bene®t of rehabilitating a
section of sand dune. Estimated total present value
bene®ts of US$ 380,000 were identi®ed assuming a 50
year timescale and a discount rate of 6%. This comprised US$ 290,000 recreational bene®t for maintaining
access along the dune and US$ 90,000 coast protection
bene®t for the continued protection function of the
dunes acting to prevent the partial destruction of an
internationally important wetland.
Lagoons and shingle ridges. No values were identi®ed
at this stage for the bene®ts of lagoons or shingle ridges,
379
Marine Pollution Bulletin
although as Table 5 shows, there are likely to be signi®cant bene®ts. Shingle ridges, for example, could provide bene®ts potentially worth thousands of US$ as a
bathing and recreational beach resource.
Comments on the bene®ts of habitat rehabilitation
Many factors a€ect the magnitude of bene®ts that
potentially accrue from rehabilitating/creating coastal
habitats, some of which are listed in Table 7. Prior
knowledge of all of these factors, inter alia, is required
before a complete valuation of the full bene®ts from
rehabilitating/creating coastal habitats is possible.
Despite the existence of appropriate methodologies,
few attempts have been made to assess the Total Economic Value of any coastal habitats. This is partly due
to the diculties encountered in assessing the true value
of some of the bene®ts. However, it also re¯ects the
contentious nature of attempting to value the environment, and peopleÕs aversion towards such valuations.
No studies appear to have addressed the full economic
bene®ts of coastal habitat rehabilitation/creation initiatives.
The main diculties in bene®t valuation relate to the
lack of relevant data; the relatively poor understanding
of inter-relationships between neighbouring habitats
and between environmental causes and e€ects; and
problems with theoretical issues relating to the estimation of non-use values. However, development of the
various methodologies is continually being advanced, as
is our understanding of the underpinning natural science
and economic theory. Environmental valuation is possible and the reliability and validity of estimates should
improve each time an assessment is properly undertaken
and subsequently reviewed.
TABLE 7
Factors a€ecting magnitude of habitat rehabilitation/creation bene®ts.
(1) Location of the site
site accessibility
site remoteness
closeness and links to similar and other habitats
number and type of species attracted to the site
amount of the same habitat nearby
(2) Current and potential use of the site
population of local, regional and national residents
likely direct and indirect use by locals
number of current and potential visitors
likely direct and indirect use by visitors
(3) The operation
scale of the operation
type of habitat to be rehabilitated/created
speed of habitat development
(4) Conditions at the site
visual attractiveness
local culture
local values, money and economy
380
Whilst it is sometimes useful to cite monetary values
from the literature to illustrate the value of habitats, it
can also be dangerous. The values can easily be misinterpreted and used elsewhere inappropriately. As will be
discussed later, great care is needed in reporting bene®ts
and consequently using those values for other purposes.
Whilst the monetary value of most habitat bene®ts
can now be estimated in some way, it is vital to realise
that Ôintrinsic valueÕ will always be a component of value
for which it is impossible to place a monetary ®gure on.
Although it is, by its very de®nition, divorced from the
concept of human welfare, it is nevertheless an important constituent value. It can thus be argued that any
valuation of habitat bene®ts will only ever produce a
minimum monetary value.
Potential applications for a bene®t-cost analysis approach
BCA can play a valuable role in the future of coastal
habitat rehabilitation/creation. Firstly, it can be used in
the decision-making process to choose between di€erent
scheme options. This is its classic role as a tool for
economic appraisal. Secondly, it can be used as a valuable framework to help maximise the economic eciency of a particular rehabilitation/creation technique.
An example of the practical application of BCA as a
means of project appraisal is its use in assessing coastal
defence options for the sand dunes of Tramore, Ireland.
An assessment of the economic bene®ts and costs of
di€erent coastal defence options for a deteriorating sand
dune system revealed dune rehabilitation (coupled with
the use of small scale gabions) to be the best solution
from both an environmental and economic point of
view. Comparing discounted scheme costs (US$ 66,000)
to discounted scheme bene®ts (US$ 380,000) produced a
BCR of almost 6 (Posford Duvivier, 1997). The BCR
was used to justify government funded coastal defence
grant aid for the scheme on economic grounds.
When one compares the potential scale of bene®ts
associated with coastal habitats with the potential costs
for their rehabilitation/creation it seems that there
should be scope for the economic justi®cation of rehabilitating/creating the coastal habitats reviewed in this
paper. However, as is explained below, there is a problem with the timing of those bene®ts, linked with the
e€ect of ÔdiscountingÕ.
As a framework to help maximise the bene®ts and
eciency of rehabilitation schemes, BCA can be used
both to help identify the most suitable location and to
determine the best rehabilitation technique.
For example, there may be a choice of potential locations for a habitat rehabilitation/creation scheme if a
large volume of dredged material becomes available, or
if compensation is required for an accident or development which severely damages a coastal habitat. In such
cases, an holistic BCA framework can be used to assess
the potential costs and bene®ts for each site, based on an
appreciation of all the relevant parameters. The most
ecient and preferred site can then be selected.
Volume 37/Numbers 8±12/August±December 1998
There will always be a range of decisions to take regarding the precise rehabilitation/creation technique to
be used and the timing of implementation. Each variation in methodology will involve its own technical, environmental and economic trade-o€s. The BCA
philosophy can provide an invaluable framework to help
assess which variation should be selected to provide the
maximum overall bene®t. For example, when restoring
coastal habitats, the dominant lifeform, whether vegetation or coral, can generally be re-established by
transplantation, seeding, natural inter-habitat colonisation processes, or by all of these means. The cost of each
technique varies considerably, as does the magnitude
and timing of the potential bene®ts. Therefore, although
transplanting vegetation may cost more than seeding or
natural colonisation, greater economic bene®ts may
arise because the annual bene®ts accruing from storm
protection, biological support and recreation are generated signi®cantly earlier. On the other hand, in other
circumstances, it may be that the vegetation will colonise
rapidly anyway and there could even be an overall
economic loss if planting or seeding were to be undertaken.
Problems with the application of bene®t cost analysis
Although there are strong arguments for adopting a
BCA approach, a number of fundamental issues cause
problems in its application. Some of the main problems
are outlined below, together with potential means of
overcoming them.
Many habitat-related bene®ts, particularly non-use
values, are both dicult and expensive to quantify in
monetary terms. As suggested earlier, diculties are
increasingly being overcome with more frequent application of valuation techniques. The relatively recent
concept of Ôbene®t transferÕ has potential for reducing
the costs associated with valuing some environmental
bene®ts. Where a number of valuations have been undertaken for the same type of environmental bene®t,
there is sense in drawing upon these values to indicate
the value of a similar bene®t elsewhere. One of the main
applications of bene®t transfer in the UK has been in the
assessment of recreational and amenity bene®ts resulting
from coastal and ¯ood defence schemes, in particular
where environmental enhancements have been integral
to the scheme design (see Penning-Rowsell et al., 1992).
Several Ôstandard valuesÕ have been derived for use at a
feasibility study level from a number of previously undertaken contingent valuation studies. However, it is
vital that a number of site-speci®c factors are taken into
consideration, otherwise there is a great danger that
incorrect values will be adopted. As yet, there have been
too few suciently thorough valuation studies for this
approach to be widely practised.
Intrinsic value will always remain an incalculable element of the bene®t accruing from habitat rehabilitation/creation schemes. However, it is possible to make
an allowance for this alongside the BCA process, either
qualitatively or quantitatively. The greater the diversity
and abundance of organisms resulting from a rehabilitation/creation scheme, the greater the potential intrinsic value. Coupled with the diculty of assessing other
non-use values, there are thus strong arguments for the
use of other non-monetary decision making tools. For
example, there are various Ômulti-attributeÕ techniques
(e.g. multi-criteria analysis) which provide a framework
for the identi®cation of a broad range of potentially
a€ected parameters and adopt a scoring and weighting
process to account for the importance of any changes.
Many complex uncertainties inherent in the natural
environment a€ect the assessment of potential costs and
bene®ts of habitat restoration. They include the complex
and dynamic nature of habitats and the environmental
factors that in¯uence them (e.g. waves, hydrology and
climate), as well as phenomena such as global warming,
sea-level rise and the El Ni~
no Southern Oscillation. Such
uncertainties should be taken into account within the
BCA process as far as possible by means of risk and
sensitivity analyses. These latter analyses make use of
probabilities and a range of high to low valuation estimates to assess a full range of potential scenarios.
Finally, use of the economic procedure ÔdiscountingÕ,
an essential part of BCA, prejudices against restoration.
In discounting, a Ôdiscount rateÕ, currently set at 6% for
most UK government funded schemes, is used to convert all future ¯ows of money to an equivalent Ôpresent
valueÕ. The process re¯ects the fact that future sums of
money are worth less than those available today. As a
result, while most costs associated with rehabilitation
initiatives are incurred early on and thus have a relatively high Ôpresent valueÕ cost, rehabilitation bene®ts
rarely accrue until substantially later in time, thus generating signi®cantly reduced Ôpresent valueÕ bene®ts. In
order to improve the bene®t-cost ratio of a rehabilitation/creation scheme, it is therefore essential to keep
costs to a minimum, perhaps staggering them over time,
and to attempt to maximise bene®ts, in particular
through ensuring that they accrue as early on as possible. An alternative approach is to question the recommended discount rate, and calculate several BCRs based
on a range of discount rates, including a rate of zero.
Conclusions and recommendations
This paper has demonstrated that if the full range of
bene®ts relating to coastal habitat rehabilitation/creation is valued, then low-cost habitat rehabilitation/
creation schemes can be justi®able on economic
grounds.
Current and future restoration initiatives should attempt to set out clearly all costs incurred using an agreed
framework. This itemisation should include the identi®cation of all resources used, including, for example,
that of pre-scheme planning, use and training of volunteers, and on-going monitoring requirements.
More studies should be conducted to determine the
economic bene®ts derived from coastal habitats and to
381
Marine Pollution Bulletin
assess the economics of rehabilitation/creation initiatives. Further studies into economic bene®t valuation
would help in several ways: improving the accuracy of
the techniques; generating more Ôstandard valuesÕ for
bene®t transfers (thereby potentially reducing the costs
of future valuations); and ultimately leading to a more
ecient use of resources.
The concept of using a BCA framework should be
considered in all rehabilitation initiatives at an early
stage to ensure that the most ecient site and method of
rehabilitation/creation is selected.
If coastal habitat rehabilitation/creation is to be
widely implemented, greater attempts should be made
to: ®nd ways of reducing the overall costs of such initiatives; devise means of increasing the rate at which
environmental bene®ts accrue; and to identify mechanisms for appropriating the environmental bene®ts.
The author is grateful to Posford Duvivier for their support in the
undertaking of this study. He would also like to thank Scottish Natural
Heritage, the UK government advisory body for conservation in
Scotland, who kindly contributed funds to the study. Thanks are also
extended to the many people who generously provided information for
the paper and to Jonathan Burney (English Nature, UK), Ronan
Palmer (Environment Agency, UK) and Richard Wing®eld (Gibb Ltd,
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