CARIBBEAN PLANNING FOR ADAPTATION
to CLIMATE CHANGE
COMPONENT 8:FORMULATION OF ECONOMIC AND
REGULATORY MECHANISMS
Country Report
Antigua and Barbuda
July 2002
Acknowledgements
The main author for this report was Mr. Hendren Parker, Country Team Leader for
Component 8 in Antigua and Barbuda. Special thanks also to the National Focal Point of
Antigua and Barbuda, Mrs Cheryl Jeffrey-Appleton and Mr. Philmore James as well as
the other members of country team who provided valuable inputs. We also wish to
acknowledge the contributions of Richard Huber, Environmental Specialist of the Unit
for Sustainable Development of the General Secretariat of the Organization of American
States, for his insightful comments on the document and Mr. Marco Alcaraz for the
editing of this report.
2
TABLE OF CONTENTS
Introduction………………………………………………………………1
The Impact of Climate Change on Caribbean Beaches………………….3
Country Description………………………………………………..…...12
Pilot Project Objectives ..……………………………………………….24
Methodology for Selection of Appropriate Economic Instruments…….25
Implementation Strategy………………………………………..………39
Conclusions……………………………………………………………..45
References………………………………………………………………48
INTRODUCTION
The overall objective of the CPACC pilot project Formulation of Economic
Instruments and Mechanisms was to demonstrate the design and utility of
economic and regulatory approaches, in coastal and marine resource management,
in response to threats of sea-level rise and other climate change impacts. The
component was intended to demonstrate how innovative approaches to
environmental management, such as the use of economic incentives, could
provide flexible, cost-effective alternatives to more traditional approaches.
Antigua and Barbuda was chosen as one of the countries where CPACC
Component 8 pilot project would be implemented. This pilot project focuses on
applying economic and regulatory instruments in the management of a resource at
risk to climate change impacts. More specifically, it examines the different
legislative and economic measures that would need to be taken in order to capture
the economic value of sand as a resource1. The pilot study makes a broad
qualitative assumption of a high value for sand based on its contributions to
tourism, construction, and recreation. Through meetings and discussions held with
stakeholders, a series of legislative, institutional, and regulatory measures were
developed and proposed in order to achieve this goal.
In an effort to address the impacts of climate change and sea level rise on the
formation and erosion of sand beaches through the use of economic instruments,
it is important to describe the natural process of sand beach formation and erosion
and the potential impact of sea level rise and other climate change impacts on
these processes, and to place this issue within the national socio-economic,
environmental, and political context.
1
It is important to note that the pilot study looks at ways to value sand as a resource taking into account its
market demand, but not its supply side, which depends on natural processes of beach formation and
degradation. However, the study does attempt to provide a framework that takes into account the natural
variability of the natural production function of sand by taking a precautionary approach, through
1
Therefore, this report will give an introductory overview of environmental, socioeconomic, political, and cultural aspects of Antigua-Barbuda deemed necessary to
appreciate the issues that were considered and perspectives that were encountered.
These perspectives include reflections on the vulnerability of Antigua-Barbuda´s
beaches to climate change impacts, other aspects of the natural environment, the
legal framework, the economic environment, and the political environment.
Each of these parameters is a key determinant in the way the economy moves and
thus, in determining the effectiveness of any instrument. The natural environment
lays the landscape of the possible economic activity and identifies part of the
interface between the potential impacts caused by sea-level rise and other climate
change related events, and economic activity. The legal framework specifies the
rules of engagement and identifies what changes can be made, by whom, and how
(the process). The economic environment describes what is considered valuable
and tradable, its price, the parties engaged in trade, and the rules under which they
operate. The political environment sets out how all these are held together and
how they interact.
regulating the extraction of sand from certain beaches, by banning or capping sand mining activities from
beaches that are deemed vulnerable to erosion.
2
THE IMPACT OF CLIMATE CHANGE ON CARIBBEAN BEACHES
Although the pilot component focuses on the legislative and economic adaptation
measures that could be taken in response to climate change impacts, it is
important to situate the physical context in which these impacts could take place.
This particular study focuses on developing sand management strategies, which
will need to be flexible enough to accommodate for the expected variations on
beach vulnerability to climate change impacts. Understanding beach formation
and erosion dynamics, and the potential impacts of climate change on these
dynamics, is key to providing the appropriate response mechanisms.
Beach Formation and Erosion Dynamics
Beaches are one of the most dynamic systems in nature, they show visible
changes over hours, days, months and years. They also represent a very important
natural and economic resource to small island states. The tourism industry, the
mainstay of the economy in many of the small Eastern Caribbean Islands, is still
very much beach oriented. Beaches are also under pressure to sustain diverse
forms of human economic activities, which include the use of their sand as
construction material, or as the key element of local recreational activities.
Beaches are often referred to as coastal depositional landforms, because they are
formed by the deposition of sediments on coastal areas by waves and currents.
These sediments, consisting mainly of quartz grains, are in constant motion, as
material from the land temporarily resides on the beach while it is in active drift
along the shore, in the process known as longshore drift. Some beaches are
relatively stable; others cycle seasonally, as they accumulate during the summer,
are then deposited offshore by winter storm waves, and are once again deposited
on the coast by gentle, low energy wave action during the summer
(Christopherson, 1997).
3
When changes in coastal sediment transportation occur, beaches may be lost, or
harbors can get clogged with sand deposits, and therefore artificial structures can
be built to offset these changes by inducing or preventing sand accumulation. In
this manner, jetties are built to block sand from the mouth of harbors, and groins
are built to induce beach accumulation; both structures function by interrupting
longshore drift. Although these strategies address the problem of sand drift at the
location they are built, by modifying sediment transportation, unwanted erosion or
accumulation of sand may occur downcurrent from these locations.
Effects of Climate Change on Beach Erosion
Climate change is expected to impact beaches mainly through two processes: sea
level rise, and increased frequency of high impact weather events, such as
hurricanes and tropical storms.
Sea level has risen and fallen with past changes in world climate. Several factors
can result in an increase in sea level, but two of the most important ones are the
melting of polar ice caps and mountain glaciers, and the thermal expansion of
water. Both of these effects can be expected from global warming. Because there
are several factors that influence global warming, as well as its effects on sea
level rise, estimates on the degree of sea level rise vary substantially from
projection to projection, with estimates varying somewhere between 0.04 and
0.13 cm per year until 2040, and between 0.09 and 0.37 cm per year until 2090
(IPCC, 2001).
Sea level rise would have a variety of physical impacts, but for the purposes of
this study, the one of interest is its likely effect on the erosion of beaches. Sea
level rise would result in most cases in a net erosion of the beach by allowing
storm waves to strike further inland, and by decreasing the ability of calm waves
to rebuild the beach. In many cases, sea level rise would result in a retreat of
beaches, but where natural landforms or human land developments impeded this
4
retreat, net beach erosion would occur. As the sea level rises, so does the level of
the ocean bottom, and the sand used to increase the sea bottom level is supplied
by the coastal zone; the beach profile moves landward and becomes steeper. This
is commonly known as the Bruun rule (see Fig. 1). A study in 1985 by the EPA
found an erosion rate of approximately 30 meters of sand erosion for each 30 cm
rise in sea level (EPA 1985). Another EPA study found the worldwide rate of
shoreline recession to be of about 0.3m per year, of which a substantial amount
could be attributed to sea level rise (EPA, 1986). However, the actual amount of
erosion would vary according to beach profile, sediment composition, and
exposure, and to wave action.
Fig. 1. The Bruun Rule: A rise in sea level causes beach erosion (from EPA,
1986).
Climate change would also impact on the rate of beach erosion through its effect
on increasing the frequency of high-impact weather events, namely tropical
storms and hurricanes. These, in turn, can impact on beach formation and erosion
5
processes directly, by ravaging coasts with high velocity winds and large waves,
or indirectly, by creating ocean swells.
Tropical storms and hurricanes may cause direct, catastrophic damage to beach
systems as a result of high seas, raised water level (known as a storm surge), high
winds and heavy rainfall (see Figure 2). Strong winds generate high seas, which
erode the beaches and penetrate farther into the land behind the beach causing
flooding, erosion of sand dunes, and destruction of coastal highways and
buildings. High rainfall often results in rivers cutting new channels through the
beach. After a hurricane, beaches are littered with debris, which may include
mounds of dead seagrass, rubble torn from the coral reefs and huge tree trunks
which sometimes originate in other islands.
Following a hurricane, beaches are usually lower and narrower. Some beaches
may be totally stripped of their sand leaving rock outcrops exposed; rocky ledges
often consisting of beachrock may become exposed where they were not evident
before. Considerable quantities of beach sand will have been moved inland and
deposited on coastal highways, in swimming pools and on beachfront properties.
Large volumes of sand will have moved offshore, and as a result, the water depth
in the offshore zone may be much shallower than before the hurricane. Sand
dunes, which were previously gently sloping and covered with vegetation, will
now stand at a near-vertical angle bereft of vegetation. In small sandy bays,
sometimes all the sand will have been transported to one end of the beach. The
material composing the beach may have changed from sand to stones and
boulders (Cambers, 2000).
6
Pre-hurricane beach conditions, Barnes Bay,
Anguilla, 1994. There is a wide sand beach
backed by palm trees.
Post-hurricane beach conditions, Barnes Bay,
Anguilla, 1995. The sand had been stripped
from the beach during Hurricane Luis leaving
rocky outcrops exposed and just a few pockets
of sand. The palm trees were lost.
Fig. 2 Pre- and post- hurricane beach conditions. From UNESCO, 2000.
7
The preceding list of effects of hurricanes on beaches is by no means exhaustive.
Indeed, on rare occasions, there may be no change or even accretion at a
particular beach.
Hurricanes also affect offshore systems, such as seagrass beds and coral reefs. In
these environments, damage often goes unseen and its effects may not become
apparent for several years. Coral reefs provide protection for beaches by acting as
natural breakwaters. They also produce sand for many beaches. Thus, hurricane
damage to a coral reef may result in reduced beach regeneration and enhanced
beach erosion several years after the actual hurricane.
Tropical storms and hurricanes are such intense, well-organized systems that they
generate waves that move out of the immediate vicinity of the hurricane to affect
other islands as swell waves. Thus, waves from a particular hurricane can affect
islands several hundred kilometres distant from its immediate path. While higher
category storms cause the most damage, even a tropical storm or category one
hurricane may do considerable damage depending on its particular characteristics.
Indeed, lesser storms also have the potential to cause serious beach erosion,
especially when the waves approach from an unusual direction, such as from the
west.
Hurricanes can also enhance processes of beach erosion indirectly through the
production of swell waves, waves that form where winds are blowing, and sort
themselves into groups with similar speeds and regular patterns. Swell waves are
most often experienced in the Caribbean between the months of October and
April. They are usually caused by intense mid-latitude storms in the North
Atlantic Ocean. Swell waves travel thousands of kilometres south to affect the
west, north and east coasts of the islands. Thus, severe storms in the North
Atlantic Ocean, like those off the coast of Canada and the eastern USA, may
indirectly affect the Caribbean through these swell waves. As a result of swell,
large waves may be seen breaking on the coast even on calm, sunny days in
8
winter (Cambers, 2000). For example, Hurricane Lenny in 1998 approached from
the west, and while it rested in the northern Caribbean for 12 hours it generated
swell waves and storm surges that were felt as far south as Tobago.
During swell wave conditions, leeward coasts in particular experience
considerable erosion. (These leeward coasts usually experience fairly calm
conditions.) Sand is moved offshore and trees and walls are undermined, leaving
their roots or foundations exposed. Swell waves may also cause changes in the
shape of a beach by moving sand from one end to the other. The land behind the
beach is also impacted by the hurricane waves and storm surge. Dune or land
retreat is important because features like sand dunes take decades to form. Thus,
such changes may be regarded as semi-permanent (Cambers, 2000).
Beaches, on the other hand, usually recover to a large extent after the hurricane.
For instance, within eight months of Hurricane Luis in 1995, an 80 percent
average recovery was recorded (Cambers, 1996c). However, not all beaches
show complete recovery after a hurricane. This was evident in Prince Rupert Bay
in Dominica after Hurricane Hugo in 1989. Several beaches did not recover to
pre-hurricane levels over a three-year period (Cambers and James, 1994).
A wide beach is the best protection against the high waves and storm surge
generated by a hurricane. A beach is a flexible barrier, which will be eroded
during the storm but rebuilt quickly afterwards. As soon as the hurricane has
passed out of the region, waves will usually begin to bring the sand back onto the
beach. Most of the beach recovery will have occurred within six months of the
hurricane. Most beaches do recover about 80 percent of their pre-hurricane size,
but there are always exceptions. Increasing hurricane frequency due to climate
change could interfere with the natural regeneration of beaches, by not allowing
enough time for depositional processes to take place.
9
Based on a study of weather patterns and climate records over the past century, it
appears that hurricane generation in the North Atlantic Ocean occurs in 20–25
year alternating cycles of activity and relative inactivity. The evidence indicates
that we are now entering an active cycle, which could only be intensified by
global warming.
Adaptation responses to beach erosion caused by climate change
Any measures which help to protect a beach or dune area, such as setting new
buildings well back from the active wave impact zone, conserving natural beach
and dune vegetation, implementing dune stabilization practices, and preventing
beach sand mining, will help to conserve the beach as a natural storm barrier. In
Antigua and Barbuda, beach sand mining is a particularly strong anthropological
factor in the erosion of beaches.
More recent techniques for protecting beaches include beachface dewatering and
placing artificial seaweed "speed bumps". Beachface dewatering basically
consists of continuously pumping water away from the beachface. The system is
based on the idea that, when the water table under the beach is lower than under
the ocean, sand accretion is enhanced. As each wave rushes up the beach, water
from the wave easily drains through the dry beach, leaving part of its suspended
sand load on the beach. Less water drains back into the ocean taking less sand
with it (UNESCO, 2000).
Another
technique that has been tried in the Caribbean, as in other parts of the
world, is artificial seaweed. In one pilot project tried in Barbados (Atherley,
1989), several hundred units of artificial seaweed were placed in the water. These
units consisted of 1.3 m (4 ft) long fronds attached to an anchor tube filled with
sand. The seaweed units reduce the speed of the current, thereby allowing sand to
be deposited around and on top of the seaweed units. The end result is that the
10
seaweed units are buried by an offshore sand bar. This offshore sand deposit will
then protect the beach from wave action
Conclusions
Sea level rise and climate change (through the increase in high impact weather
events) both affect the dynamics of beach formation and degradation. Sea level
rise would induce the retreat of beaches, and in cases where this retreat is
impeded, beaches would erode. Although the effect of the increase in frequency
of high impact weather events on specific beaches is harder to predict, the general
trend would be for the rates of beach formation and degradation to increase.
Given these circumstances, improving the management of sand and decreasing
anthropological sources of beach erosion would seem to be a good precautionary
measure, following the principle that, when in doubt, its better to err on the
cautious side. This is in addition, of course, to the need to manage sand properly
regardless of the impact of climate change and sea level rise. The threat of
climate change only adds incentive to ensuring the proper and sustainable use of
natural resources.
11
COUNTRY BACKGROUND
The Natural Environment
Antigua is roughly circular in shape, is approximately between 11 to 14 miles in
diameter, and is fringed with reefs and shoals. The coastline is indented with
numerous bays and offshore islands, hence giving rise to numerous beaches, on
which lies the basis to the claim that Antigua has 365 beaches, one for each day of
the year, as it appears on tourist brochures (James and Jeffrey, 1997).
The island can be divided into two geological typologies that converge on a
central plain. The northern section is flat and low with limestone formations. The
area boasts some of the best beaches in the Caribbean with broad white-sand
beachfronts. The predominantly flat character continues into the centre, where
the capital, St. John, is located. The southern portion is volcanic and relatively
hilly, with elevations of over a thousand feet, and rich, loamy soils.
The flat plains of the central and northern regions offered little resistance to
anthropological changes, and easy accessibility facilitated rapid development of
communications infrastructure. As such, it was a natural choice for this region to
serve as the centre of commercial activity and human settlement. With the
expansion of human settlement and communications infrastructure, the region
grew to accommodate more than 50% of the population and most of the
commercial activities taking place in this part of the island.
12
The Economic Environment
Antigua is typical of a Small Island Developing State (SIDS), and possesses the
following characteristics:

small area (108 m2 or 280 Km2);

small population (of 68,612 1997 people); and

small economy (a nominal GDP in absolute terms of EC $1,270,000,000
or US $475,000,000 in 1996).
As such, it exhibits the typical associated characteristic of SIDS such as limited
natural resources, diseconomies of scale, high degree of specialisation, open
economy, insularity, fragile environments, which constrain the variety and levels
of economic activity. Antigua´s Gross Domestic Product was calculated as 1.4
billion Eastern Caribbean (EC) dollars or US$518m.2 Antigua´s economy would
be classified as tourism-based, with tourism accounting for 60% of GDP and 31%
of direct employment, replacing a similar dependency on agriculture in previous
decades.
Tourism
During the 1970s and 1980s, heavy investment was made to establish the
infrastructure necessary to support tourism. Ports were upgraded, hotels were
built, and communication was improved among other public investment to create
the enabling environment. Tourism operates much like the stock market: it is
subject to the vagaries of market perception, and its response time is close to
instantaneous. Given this variability, economic instruments must have enough
built-in flexibility in order that quick response and recovery to changing market
conditions are facilitated.
2
The EC dollar, the shared currency of the seven OECS countries is tied to the US dollar at an exchange
rate of 2.7 to the US and it is established under the Eastern Caribbean Central Bank.
13
Several threats exist to the expansion of the industry; competition from new and
less expensive destinations, decline in global economic growth or disruption in
the functioning of the global market (e.g., the September 11th World Trade Center
attack) and natural hazards such as hurricanes. The hurricane season runs from
June to November, which correlates with the wet season and also with the start of
the winter tourist season. In the last six years the island has been directly affected
by seven (7) severe storms.
Normal patterns of life were totally disrupted in 1995 when Hurricane Luis, a
category 5 storm packing winds of up to 200 miles per hour, passed directly over
the island. The area of influence of the storm engulfed the whole island, and
estimated property damage was US $500 million. This estimate does not include
the environmental damage to wetlands, sea grass, and coral reefs.
There are an estimated sixty (60) hotels operating in Antigua, with a total bed
capacity in excess of 5,000 rooms. Most properties are either on the beach, or in
very close proximity to the beach. Stay-over visitor arrivals stood at 206,871 in
2000, which is about three times the native population size, with the majority
arriving during the hotel season that runs from November to March.
A growing segment of the market is daytime visitors arriving in the cruise
passenger ships docking at the main port in the city. This type of tourism has
been growing at a significant rate and currently accounts for the increase in visitor
arrivals, where the traditional market, consisting of stay-over visitors, has been
relatively lethargic. Both types of visitors visit the beaches for recreation during
their time on the island.
A sun, sea and sand-driven tourism product a places great pressure on the coastal
marine environment. Many of the activities involve the use of the coastal-marine
resources: at Runway Beach alone, fourteen different types of near-shore water
sporting activities were taking place, catering to the entertainment of the tourist.
14
Added to these activities are ventures such as beach vending of souvenirs,
commercial fishing, restaurants/bars, and construction.
The tourism sector contributes directly to approximately 10% of the government’s
annual revenue through a number of different taxes:

Hotel Tax

Guest Tax

Hotel Guest Levy

Income Taxes (businesses)

Casino Licences

Restaurant and Catering Taxes
Construction
Construction is the second largest sector in the economy accounting for
approximately 12% of GDP in some years. In the 1970’s and 1980’s there was a
construction boom as the country evolved from an agriculture- based to a tourismbased economy. Roads, ports, and hotels were all constructed to support the
tourism industry. This boom was cut back in the 1990’s, but construction
remained a significant contributor to GDP as the tourism infrastructure was added
to under an aggressive public investment thrust by the government. This period is
now being followed by reconstruction efforts to replenish the housing stock after
the ravages caused by the last decade of storms.
These investments had a high demand for sand, placing significant pressure on the
resource base in the mainland and the sister island. The government has been the
largest investor, with a portfolio in excess of one hundred million dollars
annually.
The implementation of the investment program is the responsibility of
the Public Works Department, with the Director of Public Works acting as the
government’s project manager. Interestingly, the same Department of Public
Works, which is also responsible for the administration and issue of, sand mining
15
licenses under the Beach Protection Act (see Stakeholder Meeting Report of May
11th 2000). The stakeholders felt that this was an obvious conflict of interest that
was expressed in the legislation and could be a significant factor accounting for
the low level of implementation.
The Legal and Institutional Environment
The legal system is based on the English common law. The judiciary is
autonomous and shared with the other OECS members and the Magistrate Court
operates at a lower level (Hanson Cooke, Commonwealth Online). Above them
are regional and international courts of justice for appeals and recourse, firstly to
the Eastern Caribbean Supreme Court and ultimately to the Privy Council in
London.
This system of justice, with its ties to international courts, and links to the English
tradition, has an elevated standing. This has been important in attracting foreign
investment and the establishment of offshore banking services. It also makes it
conducive for the functioning of economic instruments where legal rights can be
established and protected locally with recourse to an international forum.
The legislature is based on the Westminster model with a Lower and Upper
Houses, with the Lower House made up of elected representatives, and the Upper
House composed of nominated members to a senate. Elections are held every five
years for the seventeen parliamentary seats. The ruling Antigua Labour Party has
lost only one election since the granting of statehood in 1967. As is typical of
Caribbean governments, many policies tend to revolve around a five-year election
cycle, which limits the application of policies to the short term, rather than being
developed as part of a long-term strategy.
16
Parliament is required to convene for the first sitting of each new annual session
no later than six months after the prorogation of the previous parliament.3
Thereafter, no more than three months should elapse between sittings. Thus, at
least four sittings of parliament take place each annual session. The speed at
which legislation gets passed into law depends on several factors, including the
cycle and number of sittings left in the session, the number of bills on the order
paper, the complexity of the bill, the strength of the opposition, and the presence
or absence of executive support.
Typically, a new piece of legislation that is not complex in structure or issues
ancillary to it could take between three to six months if there are no strong
objections. Amendments on the other hand normally take from two weeks to
three months.
The Political Environment
The Antigua Labour Party (ALP) was returned to office in 1994 for the fifth
consecutive term; they have lost only one election (in 1971) in Antigua’s history
as an independent country. They have maintained a strong majority in the House,
suggesting that the present government has the political clout to enact the
necessary legislation to provide the enabling environment for economic
instruments to function properly.
As a strategy to further stimulate the economy and to increase its political
leverage, the government has kept a policy of not applying a personal income tax.
In the absence of this tax, the government is unable to redress equity concerns by
redistributing income through the tax base. The arrangement for dealing with
poverty has been through the provision of a system of social institutions and
through the pursuit of full employment. To this end the government has had
measurable success with unemployment remaining relatively steady at 4.5%.
3
Section 59 of the Constitution of Antigua and Barbuda Constitution Order, 1987
17
However, this has been through the bloating of the public services, which
employed approximately 8,000 of the total employable population of 26,753. The
proportion of public servants is linked to the critical mass required for
government to function effectively in order to legitimately support the needs of an
indirect taxation regime, a trait evident in small islands, as well as an exercise of
political discretion.
Political discretion here refers to the acceptance of coupling of equity and
employment, or rather, equity through employment, as a legitimate development
strategy. This has been supported by an economic growth focus where expansion
of the economy has to outpace inflation as well as to produce social development.
Panayotou (1998) alludes to this point: “ A 2-3 per cent growth rate is considered
an accomplishment among OECD countries, but is lamented as a failure among
developing economies, which, given a 2-3 per cent population growth, must grow
at least that fast to standstill at what is a very unsatisfactory standard of living.
Growth rates of 5-10 per cent are aspired to by all developing countries but
achieved by only a few.”
Although Antigua’s population is estimated to be growing at 0.5% p.a., inflation
is estimated to be growing at 2.6% p.a. over the 1990-1996 period with a deflation
of 1.1% recorded in 1997(CDB, 1998). In the 1980’s, Antigua recorded growth
rates of 7% p.a., but this levelled off to 2-3%, which includes the recovery from
the ravages of hurricanes. In a political culture dominated by a philosophy of full
employment, it seems inevitable for the public service to absorb staff when
growth slows. It is therefore important that economic instruments stimulate
further job creation in the private sector or at the very least not result in
retrenchments. Such circumstances favour instruments that create new
employment opportunities.
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Economic Considerations: Regulatory Mechanisms
The local consulting team considered the use of taxes as an economic mechanism
for capturing the value of sand. However, prevailing taxation mechanisms that are
in place need to be taken into account before this option is considered. As it
currently stands, the tourism sector is already heavily taxed, and the potential for
an additional direct environmental levy is not promising. Furthermore, the
industry has formed a strong lobby group in the Antigua Hotel and Tourist
Association (AH&TA), which has a membership of thirty-three businesses
including all the major properties. The AH&TA has the ability to mobilize
support, and could potentially frustrate any attempt to further increase the tax
burden.
The properties have enjoyed generous incentive packages from the government as
a part of its policy to attract investment in the sector. Typical development
incentive packages would include the following:

Duty-free concession on the importation of material for construction;

Exemption from tax on profits for up to ten years; and/or

Freedom to repatriate a percentage of profits.
Consideration was given to targeting these incentive packages; however, the
stakeholders preferred a direct attempt at resolving the issues surrounding sand
management. In addition, in Antigua and Barbuda there is no personal income
tax; thus, the government’s revenue is solely dependent on indirect taxation,
which varies according to consumption patterns. Altering the taxes that form a
part of the incentive packages can affect in turn the government’s incremental
share of increase in GDP. As a result, the government may be unwilling to take
the risk of instituting changes that could jeopardise its revenue base.
19
Legal Considerations
It would appear that, given the short time frame for the passing of Acts, the
current legal system and institutions would provide an effective and efficient basis
for the establishment of instruments. However, our study found several
legislation conflicts and institutional limitations in the application of legislation.
For example, as was observed at the end of the section describing the pilot
country, a legislated conflict of interest was identified that places the Director of
Public Works as the officer responsible for controlling sand mining, while at the
same time being the government’s chief engineer and project manager on projects
that consume sand. Furthermore, the director was not required to consult with
any other person when deciding to whom and when to issue sand mining licenses.
It was very clear from the discussion at the stakeholders meeting that the Beach
Protection Act has not been implemented effectively. The stakeholders
recommended two alternative courses of action.
The first recommendation was that the legislation be amended to involve
consultation with the other stakeholders. This could be achieved by transferring
the powers vested in the Director of Public Works to a cross-departmental
committee with representatives from the Environment and Tourism Departments,
in addition to the Director.
The other recommendation was to transfer the authority to the Development
Control Authority (DCA). This institution is legally charged with managing any
form of development excavation for construction and otherwise. It is the
established review panel for development plans; however, it has often been
bypassed, not only by private initiatives, but also by other government agencies.
As a result, this recommendation did not receive strong support given the inherent
political weakness of the DCA.
20
Another reason cited for the ineffective enforcement of law was the lack of a clear
definition of "beach" in the Act. This loophole in the law has been exploited and
has frustrated the efforts of the police to prosecute individuals caught mining sand
illegally. It was felt that this definition should be clarified as a part of the whole
revision of the legal and administrative restructuring. It was recommended that
this revision form a part of the efforts of the Environment Division to establish an
integrated coastal zone management program.
Responsibility for environmental concerns has now been re-established under the
portfolios of the Ministry of Tourism and Economic Development. The Ministry
suffers from several maladies, including lack of financial, technical,
administrative, and legislative capacity (personal communication: C. Sebastian,
Ministry of Environment, 1999). Its role can be described as a pseudo-oversight
department monitoring the enforcement by other departments of the terms signed
upon on international environmental agreements, but it has no legal backing.
There is no specific environment legislation in place that establishes principles
governing the use of environmental goods and services, nor is there any specific
act that gives the authority to the Environmental Division at the Ministry of
Tourism and Environment to ensure the enforcement of any standard or
procedure.
Over forty pieces of legislation have been identified from the Country
Environmental Profile done in 1990, including acts, amendments, and statutory
regulations that govern the management of the environment. Since then, there
have been a few amendments to the Profile, including the publication of an
updated volume of the Laws of Antigua and Barbuda, the repealment of certain
pieces of legislature, and the re-indexing of the applicable Acts. Where the
environmental legislation is concerned, the following amendments have been
identified:
21

Amendment to the Beach Protection Act 1993

National Solid Waste Management Authority Act 1995
There is no legal requirement for any project, private or public, to conduct an
Environmental Impact Assessment EIA. Those projects that have recorded EIAs
have done so under the weight of public pressure.
The Environment Department has been lobbying Cabinet to formalise the function
of the department in the legislature. One of the major areas of concern for the
department is the establishment of a comprehensive integrated coastal zone
management program. It is considered that the effort made under this project
could be institutionalised under this framework.
Political Considerations
The current government is unwilling to impose any new taxes, as promised during
its re-election campaign. This immediately narrows the range of available
mechanisms for economic instruments; fiscal instruments and charge systems
would not be met with enthusiasm by the government. It may be possible to
implement revenue-neutral instruments.
However, one must carefully consider the difficulty involved when one decides to
tackle entrenched bureaucracies. The case has been made earlier that due to the
propensity for economic instruments to increase the cost of goods and services, or
to add some form of tax or charge, there will be opposition from many fronts.
This would require good marketing and strong support by the government, since
sand management is a politically sensitive subject.
As opposed to Antigua’s case, sand mining is a state-run operation in Barbuda. In
1996 the local government Barbuda Counsel effectively challenged the Central
Government for the right to manage sand. Prior to this legal challenge, sand was
22
being mined in Barbuda by an Antiguan company with the cooperation of
Antigua’s government. Now the operation is an important revenue source to
Barbuda, and the associated rights are defended tenaciously.
In addition to the local counsel, Barbuda has a Parliamentary representative in the
Lower House. The Barbudan representative often lobbies the House Opposition
for support; this could make legislative changes in sand management difficult if
there is no ownership prior to the tabling of the bill.
23
PILOT PROJECT OVERVIEW
The overall objective of the project is to create a buoyant trading environment for
the sale of sand by causing a repricing of sand in order to capture its true value as
reflected in its scarcity, particularly in the context of the threat to Antigua and
Barbuda’s beaches posed by climate change impacts. In order to do this, an
enabling environment would have to be created. This involves:

Amending the legislation to close loopholes in the current structure;

Broadening the representation in the body responsible for management;

Increasing fines to re-reflect the value of the resource;

Strengthening the institutional framework to manage and control the
resource;

Promoting the enforcement of the legislation;

Capturing the true value of sand in the economic system by introducing a
sand mining tax that accounts for real economic cost of the resource;

Creating a retail "sand market" to allow legitimate access to the resource;

Supporting the creation of an integrated coastal zone management
program, which could include the zoning of beaches for sand mining
activities according to their erosion vulnerability status.
These tasks would need to be designed under the awareness of the particular
political and operational environment in which they would be implemented.
24
METHODOLOGY FOR SELECTION of APPROPRIATE ECONOMIC
INSTRUMENTS
Stakeholder Identification
The in-country implementation of Component 8 of the Caribbean Planning for
Adaptation to Climate Change (CPACC) Project officially began in March 2000,
with the local consulting parties coming onboard. Prior to this there was an initial
visit by representatives of CPACC and of the National Oceanic and Atmospheric
Administration (NOAA), as the external consultant, in November 1999, to launch
the project. The local consulting team at that time began the process of reviewing
the literature on the development of economic instruments and compiling
information on local conditions.
Given the concentration of the project on sea level rise it was decided to focus
research and initial information gathering to coastal environments. Following the
methodology suggested in the dissertation of Parker, 2000, it was agreed that a
stakeholder analysis would be the first step required in order to give more focus to
this research.
The initial stakeholder list was established using a combination of field
observation and legislative research. Four sites were chosen for observation to
identify potential economic stakeholders to sea level rise. Effort was made to
ensure that the chosen sites were as diverse as possible, in order to capture all
coastal environment types. Four beaches in Antigua: Runaway Beach, Jolly
Harbour, Falmouth Harbour, and Dickenson Bay were chosen as study sites (see
Map 1). It is interesting to note that concurrent studies have shown that three of
these beaches (Runaway Beach, Falmouth Harbour, and Dickenson Bay) are
considered to be at medium to high risk of erosion due to hurricane events. These
conclusions were based on observing erosion and accretion rates over a period of
ten years at different beach sites in Antigua and Barbuda. The rates themselves
were a measure of changes in beach width as measured from the high water tide
25
mark to the start of the sandy beach (OAS, 2001). Climate change could
potentially increase these erosion rates, increasing the vulnerability of these
beaches.
Next, an inventory was taken of the beach characteristics and the commercial
activities that people were involved in (see Table 1). The object of this
observation was to catalogue the various types of commercial activities taking
place around the coast and compile an initial list of stakeholders to sea level rise
and its possible impact on these activities.
26
Map 1. Location of selected study sites in Antigua, and vulnerability to erosion status
(source: OAS, 2001)
.
Dickenson
Bay
Runaway
Beach
Jolly
Beach
Falmouth
Beach
27
Table 1. Economic activities, vulnerability status, and sand mining activities taking place at selected study sites
in Antigua.
BEACH
ACTIVITIES
ECOLOGICAL
VULNERABILITY STATUS
SAND MINING/
ATTRIBUTES
LAND RECLAMATION
Runaway Beach
Hotel development,
water sports, pleasure
craft, beach vendors,
fishing, entertainment
(casino/bar), bird
watching, crab hunting,
line fishing.
High-quality white sand
beach, coral reef,
mangrove swamp,
wetland (McKinnon´s
Pond).
Medium vulnerability status, affected by wave
erosion during storms/hurricanes; areas along
northern stretch of beach are particularly affected,
especially where sea walls were erected.
Mangrove swamp is degraded,
suffering serious deterioration in water quality and
destruction of most of the mangrove trees due to
waste oil run-off, garbage dumping, landfilling,
and water pollution from semi-treated sewage
discharge.
Yes. Sand mining has occurred
north of Sand Haven hotel.
Land reclamation over wetland,
part of beach has occurred in order
to build causeway.
Dickenson
Bay
Hotel development,
water sports, diving,
beach vendors, mall
vendors, fishing,
entertainment
(bar/restaurant),
pleasure craft, variety
of resident beach
recreation activities.
White/silver, finegrain
sand beach with gentle
gradient,
mangrove swamp,
wetland,
coral reef.
High vulnerability status, due to its gentle
gradient. Beach has been badly eroded by recent
hurricanes, although has since regenerated
naturally.
No.
28
BEACH
ACTIVITIES
ECOLOGICAL
ATTRIBUTES
VULNERABILITY STATUS
SAND MINING/
LAND RECLAMATION
Club Antigua/ Jolly
Beach
Hotel development,
water sports, stalls and
mall vendors, fishing,
entertainment
(bar/restaurant),
pleasure craft, marina.
Sand beach,
off-shore sand bars,
coral reef,
mangrove swamp,
wetland.
Vulnerability status is low, as beach is placed in
a well sheltered bay in leeward side of the island.
Beach accretion due to granite boulder groynes has
arrested erosion near south end of beach.
For Jolly Beach, a significant large area at the
south end was washed out, and artificially rebuilt
with sand. 98 ft setback recommended in 1998.
Yes. Sand mining/dumping to
build up beach after Hurricane
Lenny´s impact.
Areas of swamp/ swamp pond
dredged to create marina.
Granite boulder groynes near south
end of beach arrest beach erosion.
Falmouth Beach
Hotel development,
water sports, fishing,
entertainment (one
restaurant), pleasure
craft, marina.
Sand beach,
coral reef (4000 ft.),
sand bar, reefs,
mangrove swamp,
wetland.
Medium to high vulnerability status, due to a
combination of factors: large harbor size, shallow
waters, low coastline, and south-facing mouth (as
hurricanes usually hit the south coast of Antigua
with force).
Scouring and gullying present across sections of
the beach due to copious runoff from Hurricane
Lenny flood waters.
Mangroves mainly fringe the coastline. In some
areas, these are cut down to make way for jetty
construction; evidence of hurricane damage.
Wetlands are present in the form of open mud
flats.
No. After every hurricane, sand is
bought to replenish the beaches.
29
In addition to observation, the local consultant compiled a list of government
organizations and agencies involved in the management or use of coastal
resources. The key personnel involved was identified and background
information was gathered on the function of the organization.
The individuals and groups from the list were invited to a stakeholder workshop
where the issues surrounding climate change, sea level rise, and CPACC strategy
and component 8 were discussed. The result of the discussion was the selection
of "sand management" as the theme around which the economic instruments
could be developed.
Stakeholder Analysis and Issues Review
The group was given the mandate to review the current state of management of
the resource, and to make a presentation of possible approaches that could be used
to solve the identified management gap. A review of the issues discussed and the
outcome of the discussions were used to formulate a basis for analyzing the
feasibility of implementing the various types of instruments suggested. Key to
implementation were issues relating to the current legal framework and the
institutional capacity required to carry out its mandate.
It was clear from the stakeholders meeting that the following agencies were
critical to the implementation of any management mechanism for sand and
therefore represent the key stakeholders of the project:

The Ministry of Public Works

The Development Control Authority

The Police Department

The Environment Division of the Ministry for Tourism and the
Environment

30
The Tourism Department

Construction Companies

Construction Aggregate Suppliers
Having identified these key stakeholders, the local consulting team sought to
analyze them in terms of their specific interest, legal standing, and administrative
structure, and to identify key personnel, in regards to the influence they could
have on the outcome of the project. Special attention was paid to potential areas
of conflict and synergies with project objectives that the stakeholders might have,
so as to understand the angles that these groups would promote, and to develop
proposals that could incorporate these concerns where feasible.
Generally, there was no major resistance from any particular group. What the
interviews revealed was that, in the absence of a clearly outlined policy, the
defective state of legislation, and the lack of defined management roles for the
agencies, project implementation was virtually impossible. For example, the
Public Works Department’s chief concern was construction and maintenance of
infrastructure, and viewed sand as an aggregate used in the process: sand,
therefore, was managed from a construction demand point of view. The
Development Control Authority, though legally having a stake in sand as a
resource (mineral) did little active management, as its concern and chief interest
was in planning approval for construction and development. The Police
Department was frustrated with a legislation that did not clearly define “beach’,
and thus allowing illegal sand miners to evade prosecution due to this
technicality.
Issues Definition
A stakeholders´ meeting in which the issues were openly and frankly discussed
with a view to providing a management framework based on economic
instruments lead to the suggestion of various approaches and types of instruments.
These included the following:
31

Exploring alternative sources of sand - importation, offshore sand banks;

Exploring alternatives to sand - grounded glass, grounded stone;

Exploring alternative construction methods that use less sand;

Setting up environmental performance bonds;

Establishing a sand mining tax;

Implementing a setbacks´ incentive scheme for new development on the
beach;

Implementing private sector incentives schemes, i.e., insurance and banks;
and

Establishing an environmental fund
The local consulting team analyzed these approaches for their feasibility of
implementation, and decided that these were all feasible, but would require the
private sector taking the initiative, with appropriate support from the government.
This support extended beyond any incentives that may be built into the
instruments, to include legislative and institutional changes. These would all be
incorporated into an overall framework for sand management, which would be a
part of a coastal zone management strategy.
This was achieved through the extensive gathering of all available relevant
legislation of the key stakeholders. Interviews were arranged with the people in
charge to discuss the interests of the organization they represented, the structure
of the organization itself, and their reaction to the issues raised in the stakeholders
meeting. The LCT sought to gain an impression of the interagency conflicts that
may exist and identify possible risks related to the implementation of the various
strategies. Efforts were made to meet at least once with as many private sector
bodies that had a stake in the outcome of the project as possible. However, no
success was made in engaging the Hotel and Tourist Association, although several
attempts were made to have their input.
32
CPACC’s efforts to foster greater involvement of the private sector at a regional
level through its workshop held in Trinidad and Tobago assisted in promoting
awareness in the business community. The local Chamber of Commerce
representative that attended the private sector workshop did make an input on
behalf of the Chamber and was able to inform other members of the existence of
the project. Articles on the workshop were published in the local papers.
Key concerns centered on the legislative framework, and the institutional
framework. It was believed that significant changes were necessary to provide
the environment for any form of economic instrument to function. Without these
changes, there could be no economic cost/benefit compliance relationship, the
backbone of an economic instrument.
Further, there was no policy in place for sand management. Sand was important
for the different stakeholders involved for many varied reasons:

In construction it is a major aggregate for concrete houses, which by far
was the preferred domicile structures for which the concrete mixes and
concrete block making was being used;

It is also a major aggregate in road construction and other infra-structural
development projects undertaken by the government;

It is the key resource in a sun, sea, and sand tourism product;

It is at the site where all of the major hotel properties are located;

It is the local resource from which a number of small vendors ply their
trade;

It is a key determinant in prime real estate value and;

It is present at the preferred recreational sites for locals.
In the absence of this policy, defining rights and privileges of various interest
groups becomes a major source of conflict. The final issue that raised widespread
33
concern was the funding of this project and most of its environmental
undertakings.
Policy definition, legislative and institutional framework design
The local consulting team came to the consensus that, since sand had such crosscutting implications for development, and from all indications, was the resource
upon which the whole development effort hinged on, it should have been
assigned a special status. It was therefore proposed that it should be declared a
national resource. On this premise, management machinery could be designed
that seeks to attach the appropriate value to the resource and establish suitable
processes that would satisfy the various demands placed on it in a sustainable
manner. The first step would be to have a policy framework in place that
articulates these views and sets the parameters to address rights and privileges.
The objective of meeting the demands for sand without undermining the
environmental integrity of coastal ecosystems was outlined.
Recognizing the weak implementation of the current system, and the
dissatisfaction expressed by the stakeholders with both the legislation and the
performance of the institutions, it was desirable to establish new management
machinery. Four options were presented based on different institutional
arrangements:

Upgrade the management under the existing arrangement with the
Director of Public Works maintaining responsibility for issuance of sand
mining permits.

Transfer the responsibility to a different agency, i.e. Development Control
Authority (DCA) or Environment Division.

Create a cross-agency body, composed of the representatives of the key
stakeholders, to oversee the issuance of licenses.

Transfer the responsibility to another agency, but leave the issuance of
licenses to be controlled by a cross-agency body.
34
The preferred arrangement was the fourth one. The responsibility would,
therefore, be transferred to DCA legally, but its approval would be issued by a
committee representing key stakeholders. The legislation would be amended to
empower this committee to review all sand mining applications. Model
legislation from the United States Virgin Islands and two United States’
legislation are currently under review.
Instrument Selection and Design
Of the eight economic instrument options discussed with the stakeholder group,
the LCT settled on three:

A sand mining environmental tax;

An incentive package for the development of equipment to produce an
alternative to sand and;

An incentive package for the purchase of equipment to bag sand for a
retail sand sale market
The price of sand sold in Antigua reflects mainly the cost of mining and
transportation plus profit. It does not take into account the economic value of the
resource. This will be corrected by the introduction of a sand mining
environmental tax that takes into consideration other aspects of the economic
value, using some of the methods from Component 7.
The resulting price adjustment will then reduce the artificial disparity between
local sand and imported sand. Sand can be imported from Guyana at the cost of
EC $60 per ton. There are no border charges on sand importation, thus the price,
which is landed consists of cost plus profit.
35
Most of the authorized sand mining activity is done in Barbuda directly by the
Barbuda Council. Sand sale is an important revenue-generating activity for the
Council. It is unlikely that the tax could be applied to them; thus it is
recommended that this tax be designed as a sale tax. It is recommended that the
proceeds from this tax be collected and a portion paid to the Barbuda Council as a
part of Antigua’s contribution to the Council’s operation.
Sand mining has been at the center of a lawsuit that the Government of Antigua
lost to the Barbuda Council. On the lawsuit judgement, the Council was given
control over the use of sand in Barbuda, and collects all revenue accruing from
sand mining. It is therefore a politically sensitive issue. Thus, on every ton of
sand sold in Barbuda, a certain percentage of the sales revenue goes to the
Council.
Secondly, a Commonwealth team recently completed a study of the financial
arrangements between the islands of the twin island state. The mission
recommended a number of changes that will result in a increase in funding to the
smaller island’s (Barbuda’s) operation. It would therefore not be expedient to
create a mechanism that will negatively impact the island's revenue collection.
Based on these two considerations, a direct sand mining tax would not be feasible.
What is therefore recommended is an environmental tax applied in a form similar
to that of a sales tax. The tax will be set at an optimum based on the economic
value of the resource, using perhaps one of the models tested in CPACC’s
Component 7, and giving consideration to the revenue needs of the government.
Adjusting the price through this mechanism is expected to lower the opportunity
cost for access to sand from alternative sources (i.e. importation from Guyana),
and to offer an incentive to the production of alternatives to sand. This price
adjustment should then set about a shift in the commercial sand sale market.
36
To complement this undertaking, the LCT is promoting the establishment of a
retail sand sale industry. This would be a partnership arrangement between a
private sector company and the Barbuda Council. The company would supply
equipment, know-how, and facilities. The Council provides an operations site and
raw materials. This retail operation will address a number of concerns:
Bagging is done manually and sold on a small scale to householders for small doit-yourself projects. A client that wishes to embark on such projects will either
purchase a “yard” of sand (the equivalent of a pickup truck load) from large
commercial suppliers or opt to illegally take sand from the beach. The first option
results in waste, since often most of the sand is not needed for the project.
The
second option will hopefully disappear with the strengthening of legislation and
institutional mechanisms for sand management. Thus, an intermediate market
will be created for retail sand sale.
Due to the political and revenue implications of the loss of market share by the
council from a restructured market, retailing provides a non-traditional and
unexplored local and regional market for development and export.
Whereas sand is sold wholesale at US $17.00 per ton, a ninety-pound bag could
possibly be retailed at US $3.00. In addition, flexibility in the order size and
shipping requirements would allow easier access to a more diversified market.
Value-added operations would provide additional employment, directly through
production, and indirectly through the potential for using commission agents and
wholesale outlet/suppliers regionally.
It will be necessary to consider setting a cap on mining at a sustainable level
based on the carrying capacity of the island to support the operation. In this
regard, it will be important to make a careful assessment of which beaches will be
able to support sand mining activities, particularly considering variations in
erosion risk among Antigua and Barbuda’s beaches; beaches considered to be at
high risk to erosion will probably have to be protected by banning sand mining
37
activities altogether. In addition, other beach protection mechanisms will need to
be considered. Performing cost-benefit analyses on different beach protection
and sustainable management mechanisms would be a useful strategy to pursue.
38
IMPLEMENTATION STRATEGY
The overall objective is to develop a coherent management mechanism for sand in
Antigua that takes into consideration the many and varied uses of sand, the
virtually non-renewable nature of the resource, and the increased risk of beach
erosion due to sea level rise and other climate change impacts.
This can be viewed under three strategic areas. The first area is producing a sand
management framework that provides laws and institutions to stop illegal
activities. The second is the restructuring of commercial sand sales to
incorporate the economic value of the resource in the price build-up of the
aggregate while promoting an alternative that support the needs of the
construction industry. The final area is the creation of a retail sand sale that
services the small household "do-it-yourself" activities, that provides access to the
resource in the appropriate amounts without violating the law, and that takes into
consideration the different vulnerabilities to erosion among Antigua-Barbuda’s
beaches.
In order to achieve this the local consulting team (LCT) identified the following
activities:

elevate the importance of the resource to a position of prominence by
having Cabinet declare "sand" to be a resource critical to national
economic development;

promote the development of a sand management policy that falls within an
overall coastal zone/coastal resource policy;

establish a public awareness program to further advance the realization of
the true value of sand as a natural resource and as an integral part of
economic activity;

create a suitable legislative and institutional framework for the
management of the resource;
39

educate and train implementing agencies;

introduce the true value of sand in the economic system by introducing a
"sand mining" tax that accounts for real economic cost of the resource;

support the development of a more diversified construction aggregate
market by promoting activities that produce alternatives for sand in
construction;

support efforts to import sand from alternative sources:

consider banning or capping sand mining activities from beaches at high
risk to erosion due to climate change events; and

support the development of a retail sand market.
Sand Management Framework
The fundamental nature of the change required suggests a short-to-medium term
timeframe. There must be full integration of the policy development and
formulation process into the other processes taking place within the Ministries of
Environment and Agriculture. The management framework must also be in place
to stop illegal sand mining activities. The legislation needs to be amended to
transfer responsibility to the Development Control Authority and to create a Sand
Management Committee and give it the support of law to make and enforce
measures to manage sand use in Antigua.
Steps involved:

seek the Cabinet's endorsement of the draft management proposal outline
(prepared from C8 implementation);

seek an Executive Declaration by the Prime Minister making sand a
national resource critical to economic development (included in minutes to
Cabinet from C8 Implementation);

facilitate the development of a Green Paper on Sand Management Policy
and endorsement by key stakeholders (currently being developed under
C8), the result of which will be included in a White Paper;

40
seek Cabinet's endorsement of the recommendations of the White Paper;

support Cabinet's mandate to the Legal Department to make legislative
changes based on the White Paper;

support Parliamentary approval of the legislative changes based on the
White Paper

provide training for new agency personnel; and

implement the recommended institutional changes at the Ministry level.
Commercial Sand Sale
The price of sand sold in Antigua reflects mainly the cost of mining and
transportation, plus profit. It does not take into account the economic value of the
resource. This will be corrected by the introduction of a sand environmental tax
that takes into consideration other aspects of the economic value, including its
essentially non-renewable nature, using some of the methods from CPACC
Component 7: Economic Valuation of Coastal and Marine Resources.
The resulting price adjustment will then reduce the artificial disparity between
local sand and imported sand. Sand can be imported from Guyana at the cost of
EC $60.00 per ton. There are no border charges on sand importation, thus the
price for imported sand could be as competitive as locally sourced sand. In
addition, sand imported from Guyana is freshwater sand, whereas sand mined
from Antigua-Barbuda’s beaches is saturated with salt, which corrodes the metal
framework used in construction (although most of the sand mining activities in
Antigua-Barbuda occur in inland sand deposits in Barbuda). Therefore, the
assumption is that, by reducing the price disparity, without necessarily equalizing
the price of imported vs. locally sourced sand, preference would be given to the
imported sand, lowering the pressure on the beach ecosystems.
Most of the authorized sand mining activity is done in Barbuda directly by the
Barbuda Council. Sand sale is an important revenue-generating activity for the
41
Council. It is unlikely that the tax could be applied to them; thus it is
recommended that this tax be designed as a sale tax. It is recommended that the
proceeds from this tax be collected and paid to the Barbuda Council as a part of
Antigua’s contribution to the Council’s operation (see Country Description
section).
The second strategy being pursued is promoting the use of alternative aggregate to
sand in construction. A local mining company, the Antigua Masonry Products
plant, produces sand from "Blue Bitch" stone at its quarry. The mining company
affirms the strength and durability of concrete products using this stone based
sand. However, they cite two factors contributing to its low level sales: the price
of the aggregate, and the inexperience of practitioners in using this aggregate.
Contractors, however, suggest that price is the only factor, since companies are
not motivated to try the new aggregate while sand is still significantly cheaper. In
adjusting the price of local sand, the price differential is expected to become less
of a determinant in aggregate selection. These measures combine to restructure
the economic market surrounding commercial sand by removing the invisible
price subsidy on local sand sale and making place for other products.
Steps involved:

Achieve Cabinet endorsement of the draft management proposal outline
(prepared during the implementation of C8);

Obtain approval by Barbuda Council (put forward via the Joint
Consultative Committee);

Realize an economic valuation of sand (building on the results of C7);

Obtain Cabinet endorsement of economic valuation of sand and proposal
for mining tax;
42

Draft legislation for introduction of sand mining tax by Legal Department;

Submit legislation on sand mining tax to Parliament for approval; and

Introduce the sand mining tax.
Retail Sand Sale
In Antigua there is currently only a small businessman involved in retail sand
sale. Bagging is done manually and sold on a small scale to householders for
small do-it-yourself projects. A client that wishes to embark on such projects will
either purchase a “yard” of sand (the equivalent of a pickup truck load) from large
commercial suppliers or opt to illegally take sand from the beach. The first option
results in waste, since often most of the sand is not needed for the project.
The
other option will hopefully disappear with the strengthening of legislation and
institutional mechanisms for sand management. Thus an intermediate market will
be created for retail sand sale.
However, increasing the price of local sand is expected to negatively affect the
sale of sand from the Council. The intermediate market in reality presents an
opportunity for expansion into new areas with greater value added. Further
secondary processing will provide greater employment opportunities, and create
new retailers and exports into non-traditional markets. Whereas sand is sold
wholesale at US$17.00 per ton, a ninety-pound bag could possibly be retailed at
US$ 3.00. A cap on sand mining would be required to be set at a sustainable
yield. This sustainable yield would be a combination of a revenue target and a
marginal sand-mining carrying capacity.
Steps involved:

Seek the Cabinet's endorsement of the draft management proposal outline
(prepared during the implementation of C8);

Prepare a business proposal for retail sand sale partnership;

Seek the endorsement of the Barbuda Council of the business proposal;

Seek the endorsement by Antigua Masonry Product of the business
proposal;

Facilitate a feasibility study and a full business plan preparation; and

Support the implementation of a business plan
43
There are certain political considerations that must be kept in mind when seeking
a solution to problems associated with sand management in Antigua and Barbuda.
Sand mining has been officially prohibited in Antigua for many years. However,
in practice, some level of mining reportedly takes place in some cases by
government departments or is “supported” by some government departments.
However, the situation is quite different in Barbuda. Sand mining has
traditionally been an activity undertaken or supported by official institutions and
continues to be so.
44
CONCLUSIONS
In many instances, the overexploitation and unsustainable use of natural resources
are due to a combination of institutional and economic factors. This is due usually
to, in the first place, a lack of recognition of an item as resource, which is also
reflected in a lack of an appropriate legislative and institutional framework to
regulate its use, and in the second place, to an insufficient or inexistent economic
valuation of the resource according to its uses, and that includes the
externalization of environmental costs that are incurred in its extraction.
This pilot study has developed a management mechanism for sand in
Antigua/Barbuda that provides for a way to place an economic value on sand as a
natural resource, taking into consideration its various uses and its inherent nonrenewable nature. In order to achieve this, economic, legal, and political
considerations were taken into account through consultations with stakeholders in
the resource, and an implementation strategy was constructed that addressed these
considerations, along with a series of economic regulatory mechanisms that were
suggested and analysed for feasibility.
In the first instance, key institutional constraints were identified, and new
institutional arrangements were suggested. It is possible that, in order to manage
natural resources or address environmental concerns in the Caribbean region, this
is the first step likely needed; in many instances, the mismanagement or lack of
management of a natural resource is due to its not being properly identified as a
common resource to various sectors. Therefore, no appropriate legal mechanisms
and or institutions exist for managing the resource as a cross-sectoral issue.
Once solutions to the institutional constraints have been developed, attention can
be turned to the appropriate mechanism for natural resource valuation. In the case
of this project, a sand mining tax to be applied in a first instance to the buyer of
locally sourced sand was suggested as appropriate, given the condition of sand as
45
a revenue generator for the government. This, in combination with the legislation
and enforcement of laws restricting illegal sand mining, was deemed the best way
to ensure the correct economic valuation of sand from the demand side, and an
important step toward its appropriate management as an essentially nonrenewable natural resource.
Additionally, performing cost-benefit analysis of protecting versus not protecting
the beaches would provide further insight into the potential economic gains of
pricing sand in this manner. A case study in sand valuation in Grenada
determined that, although banning sand mining incurs costs by causing losses to
government revenues and by increasing construction costs, the economic costs at
the macroeconomic level are relatively minor (Ruitenbeek and Cartier, 2001). If
one takes into account the major role beach tourism plays in Caribbean
economies, banning sand mining where necessary, and correctly pricing sand
become economically sensible actions.
An additional result of the increase in the price of sand as a result of its economic
valuation, implemented through the mechanisms described above, is a new-found
incentive to find substitutes for some of its uses. In the case of sand used in
construction, the substitutes include stone aggregates that were previously underutilized in favor of sand, due mainly to the price difference resulting from the
subsidy on sand costs created by its lack of appropriate management. In
economic terms, this results in a lessened impact on a natural resource that will
increase its availability for other economic sectors. At the same time, it increases
its sustainable use, helping to preserve natural ecosystems.
Finally, in the management of any natural resource, it is important to consider the
natural processes that result in its creation, maintenance, and destruction. In
economic terms, this would be understood as the "natural resource production
function". Only by understanding these processes, is it possible to correctly value
the resource in economic terms, and manage it in a sustainable manner. Climate
46
change will potentially impact this natural "production function"; in the specific
case of sand beaches, the increase in storm frequency and sea level rise could
result in increased rates of erosion, and therefore increased scarcity of sand as a
resource for all economic sectors. Not all beaches will necessarily be affected
equally; increasing the data collection and monitoring capacity in the Caribbean
for detecting changes incurred through climate change will help to formulate
policy and economic mechanisms that are flexible enough to accommodate
themselves to constantly changing natural conditions.
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