THE ROLE OF NATURAL RESOURCE
MANAGEMENT IN MITIGATING
CLIMATE IMPACTS:
MANGROVE RESTORATION
IN VIETNAM
by
Nguyen Hoang Tri
Neil Adger, Mick Kelly,
Sarah Granich and Nguyen Huu Ninh
CSERGE Working Paper GEC 96-06
1
THE ROLE OF NATURAL RESOURCE
MANAGEMENT IN MITIGATING
CLIMATE IMPACTS:
MANGROVE RESTORATION
IN VIETNAM
by
Nguyen Hoang Tri1
Neil Adger2, Mick Kelly3,
Sarah Granich4 and Nguyen Huu Ninh4
1
2
3
4
5
Mangrove Ecosystem Research Centre, Hanoi, Vietnam.
Centre for Social and Economic Research on the Global Environment,
University of East Anglia, Norwich and University College London.
Climatic Research Unit, University of East Anglia, Norwich, UK.
Consultant to International Institute for Environment and Development, London, UK.
Centre for Environment Research Education and Development, Hanoi, Vietnam.
Acknowledgements
The Centre for Social and Economic Research on the Global Environment (CSERGE) is a
designated research centre of the Economic and Social Research Council (ESRC).
Funding by the ESRC Global Environmental Change Programme, under the project ‘Socioeconomic and Physical Approaches to Vulnerability to Climate Change in Vietnam’ is gratefully
acknowledged. Assistance, in the form of resources and information, has also been given by Mr
A.M. de Klock and Mr. T.H. Dan of the World Food Programme; Mr. N.H. Nuoi from the Ministry
of Water Resources of Vietnam; Oxfam UK and Ireland; Save the Children Fund UK; Danish
Red Cross; and Japanese Action for Mangrove Restoration. Finally, the valuable research
recommendations and literature provided by Professor P.N. Hong of the Mangrove Ecosystem
Research Centre are gratefully acknowledged.
ISSN 0967-8875
2
Abstract
The risk that topical storm occurrence may alter as a result lf global warming presents coastal
managers, particularly in vulnerable developing nations, with a serious challenge. Many
developing countries are hard-pressed to protect their coastal populations and resources
against present-day hazards, let alone any increased threat in the future. Moreover, the threat
posed by climate change is uncertain. Here, we examine one management strategy, based on
the rehabilitation of a natural ecosystem, the mangrove, which may provide a dual, ‘win-win’
benefit on improving the livelihood of local resource users as well as enhancing sea defences.
Mangrove forests are currently being lost at an unknown rate from the world’s tropical coasts,
with implications for human use as well as for diversity in coastal ecosystems. The benefits of
conserving mangrove forests are recognised by many coastal communities, to the extent that
mangroves are now being rehabilitated and newly planted in selected areas.
This paper quantifies the economic benefits of mangrove rehabilitation undertaken iter alia, to
enhance sea defence systems in three coastal districts of northern Vietnam. The results of the
analysis show that mangrove rehabilitation can be desirable for an economic perspective based
solely on the direct use benefits by local communities. Such activities have even higher benefit
cost ratios with the inclusion of the indirect benefits resulting from the avoided maintenance cost
for the sea dike system which the mangrove stands protect from coastal storm surges. It is
argued that rehabilitated stands of mangroves necessarily have less total economic value than
conserved natural stands because of the option and existence values accruing to the natural
system, which are not applicable to a managed rehabilitative stand managed for its direct uses
rather than for diversity. While further research needs to be undertaken to evaluate the full costs
and benefits of mangrove rehabilitation, this analysis suggests that this approach may prove an
important component of a sustainable management strategy for the coastal zone in Vietnam
and in other similar regions.
Key Words
Mangroves; ecosystem rehabilitation; economic valuation; cost benefit analysis; tropical
cyclones; climate change; sustainable development; Vietnam.
3
1.
Climate Change, Coastal Protection and the Mangrove Ecosystem
Tropical cyclones can cause considerable damage along the 300km coastline of Vietnam. One
typhoon, in October 1985, was responsible for the loss of almost 900 lives, 3300 boats were
sunk and over half a million people were rendered homeless. While this was the most extreme
impact of recent times, over 400,000 hectares of crops were lost in the coastal provinces of
Vietnam as a result of tropical cyclone impacts over the ten-year period 1977-1986 (Thu, 1991).
Protecting vulnerable coastal areas from typhoon impacts is therefore of high social and
economic importance. Yet in a country where resources are limited, affording adequate
protection can prove problematic.
The risk of cyclone occurrence is variable, with from one to twelve typhoons per year
approaching the Vietnamese coasts during recent decades (Kelly, 1995). In future decades, the
characteristics of this risk may change as a result of global warming and there is concern that
the frequency of occurrence may increase. According to the second assessment report of the
Intergovernmental Panel on Climate Change (IPCC), regional changes in cyclone frequency
may occur as ocean temperatures rise and the atmospheric circulation alters (Houghton et al.,
1996; see also Lighthill et al., 1994). There are, however, many uncertainties and the IPCC
concludes that no firm assessment can be made.
This uncertainty leaves decision-makers in a difficult position. No firm assessment does not
mean that the risk is minimal, and it is in the nature of extreme events that unpreparedness itself
increases vulnerability and substantiality. What can be done to plan for an uncertain future?
What does a precautionary approach to reducing climate impacts entail? Kelly et al. (1994)
argue that a precautionary approach to adaptation must involve identifying ‘win-win’ situations in
which action to reduce future risk also minimises vulnerability in the present-day – to climate
change, to other environmental problems, or to social and economic threats. In this paper we
examine one such approach to coastal protection which takes advantage of a natural resource
found along much of the coastline of Vietnam: the mangrove ecosystem.
Wetlands, such as the mangrove, cover six percent of the world’s land surface and are found in
all climates from arctic tundra to the tropics (Matthews and Fung, 1987). Wetlands provide
humans directly and indirectly with ranges of goods and services, including staple food plants,
fertile grazing land, support for coastal and inland fisheries, flood control, breeding grounds for
numerous birds and fuel from peat. Despite being amongst the most productive ecosystems in
the world, the global area of wetlands has been decreasing through conversion for agriculture,
forestry and urban uses, and due to extraction of peat and timber for fuel, to the extent that
many remaining significant wetland areas are being protected under the Ramsar Convention.
Mangrove swamps, dominated by the sixty species of mangrove tree, are intertidal tropical and
sub-tropical coastal wetlands (usually found between 25°N and 25°S), and, according to Maltby
(1986), support over 2,000 species of fish, invertebrates and epiphytic plants. In Vietnam, large
areas of mangroves have been converted to agriculture and, in particular, to shrimp farms and
have been used for timer for construction, all causing ecological disturbance and environmental
degradation (Hong and San, 1993).
The various functions and services provided by mangrove areas have been documented and
appraised (e.g. Mitsch and Gosselink, 1994; Reimold, 1994; Lugo and Snedaker, 1974). It has
been recognised by economists that the functions and services provided by mangroves, and
wetlands in general, have positive economic value and that these are often ignored n the
opening process of mangrove conversion (Barbier, 1993; Ruitenbeek, 1994; Turner, 1991;
Swallow, 1994; Farber and Costanza, 1989). Mangrove wetlands display the features of public
1
goods in that their use is non-exclusive, and they are converted to other uses with private
economic returns because the functions and services associated with them are undervalued.
Identification of the functions and services and the incorporation of these into policy and the
designation of property rights are therefore necessary first steps in promoting sustainable
utilisation of such resources. The valuation of functions and services has often been expressed
in a framework of the total economic value.
Despite the trends in loss of mangrove area, in many parts of the world initiatives by local
institutions are reversing the trend of wetland loss by undertaking wetland restoration of
rehabilitation. Natural wetland restoration activities are undertaken for diverse reasons, such as
for wastewater and storm-water treatment (see Kent, 1994), utilising the nutrient cycling
functions of wetlands; or for local resource use. Critical issues in promoting the adoption of such
schemes, and hence their ultimate sustainability, include the timing of the costs and benefits
and the sensitivity of the economic appraisal of such schemes to discount rates and the limit of
the benefits of rehabilitation compared to conservation of existing wetlands (reflected in the
absence of option and existence values for such habitats). In the instance under analysis here,
the benefits of reduction in maintenance of sea dikes, a central assumption for schemes where
mangroves are planted in front of existing sea defences, is an important issue.
This paper documents the economic rationale behind mangrove rehabilitation in a case study of
three coastal districts of Nam Ha Province in northern Vietnam. In these areas, mangrove
rehabilitation is subsidised by international development agencies through income generating
projects (see SCF, 1993, for example), based largely on an assumed benefit to local
communities. The desirability of wetland restoration is quantified in this paper using data on the
costs and benefits of some quantifiable functions and services in a total economic value
framework. The results provide an initial assessment of the likely effectiveness of this response
to the risk of cyclone impacts in providing enhanced protection as well as improving local
livelihoods.
2
2.
Characteristics of Vietnam’s Coastal Zones and Risks to Mangrove Integrity
Nam Ha Province is located in the southwest of the Red River delta in northern Vietnam
(cc.20°N, 106°E). The province includes three coastal districts – Xuan Thuy, Hai Hau and Nghia
Hung – and has a sea dike system to protect people, houses and crops. Freshwater reserves
help mitigate against the impacts of saline intrusion, flood, storm and seawater rise. The total
area of the three coastal districts is approximately 72,052 ha. According to local hydrometeorological stations, the annual mean temperature is close to 23°C, with a maximum in the
monthly means of around 28°C in July and a minimum of about 16°C in January-February. The
annual mean monthly rainfall is close to 1,850mm with a maximum of 330-350mm in JulyAugust, and a minimum of about 25mm in December-January. The rainy season extends from
May to September. The tidal regime is daily with a mean amplitude of 3-3.5m as far as the
typical regime of Tonkin Bay is concerned. The area is affected by two main wind regimes: the
northeast monsoon wind which occurs in winter and the south-southeast wind which occurs in
summer (the rainy season). The area is towards the northern extreme of the mangrove range.
At present, a belt of mangroves of approximately 8,410ha (see Table I) acts as a buffer for the
sea dike system which has been built over the centuries to protect the intensively-used
agricultural land from coastal storm surges and floods.
Table 1:
Mangrove Area in Nam Ha Province
District
Xuan Thuy
Hai Hau
Nghia Hung
Total
Source:
Present mangrove
areas (ha)
3000
200
5200
8400
Land estimated to be
available for planting (ha)
7640
641
9826
18107
Nam Ha Province data.
The greatest number of typhoons and associated storm surges occur in Tonkin Bay in
September and October, the so-called ‘months of the shifting season’ when the monsoon
changes direction from southwest to northeast. During these months, typhoons also land to the
south on the central coast of Vietnam. At this time of the year, storm surges and sea level rise,
as well as high waves and strong winds, cause extensive damage to economic assets such as
agriculture and aquaculture. Estimates of the magnitude of impacts in Nam Ha Province from
floods and typhoons for the twenty years between 1973 and 1992 show that there were more
than 990 dead and injured people and over VND 470 billion damage (1993 constant prices) in
terms of the losses caused by storms.
Within Nam Ha Province, the impacts of severe storms are generally concentrated within the
coastal districts. The total population of the three coastal districts of Xuan Thuy, Hai Hau and
Nghia Hung is 444,730, with a population density of 1,076 per km2 which is typical of the
densely populated areas of the Red River delta plain. The economy of these districts is primarily
dependent on agriculture. Paddy cultivation, aquaculture and salt making are the major
agricultural activities. Each of these activities is susceptible to, and differentially affected by,
typhoon impacts. Other climatic extremes may also have significant consequences. Rainfall
levels and sunshine hours, for example, affect the viability of salt-making. The socio-economic
status of the coastal parts of the three districts in Nam Ha Province is summarised in Table 2.
3
Given the prevailing circumstances in the coastal districts of Nam Ha Province, and similar
regions elsewhere, it is clear that mangrove rehabilitation can provide income where
households are often severely constrained in cash income sources, as well as bringing about
environmental benefits in terms of productive assets and reducing the impact of coastal storm
surges. The following sections quantify an economic model of such an approach.
Table 2:
Socio-economic characteristics of the coastal areas in the three districts.
Total area (ha)
Xuan
Thuy
16246
District
Hai
Hau
12985
Nghia
Hung
9006
38237
Population (000 persons)
180.6
153.1
78.1
441.7
Number of households
35374
39380
19363
94117
Population density
(people per km2)
Labour force
(000 labourers)
Average yield for food crops
(tonnes ha-1)
Total food production
(000 tonnes rice equivalent)
Source:
Total
1076
83.2
70.8
26.3
180.3
5.0
4.0
3.7
4.4
47.0
29.0
16.4
92.4
Nam Ha Province data.
4
3.
Economic Framework for Assessing Mangrove Rehabilitation
Economic analysis of resource use can be undertaken in order to assess the magnitude of
benefits to local users of the resource. Some values of the goods and services can be assessed
by observation of existing markets, but some of the functions and services of mangroves are
indirect, or functional, benefits (see Pearce and Turner, 1990, for example).
Total Economic Value (TEV) is given by the sum of a number of components:
Total Economic Value = Direct-use value + Indirect-use value + Option value + Existence value
Direct-use values include revenues from timber and values of other products such as honey
from bee-keeping. Indirect-use values, or ‘functional’ values, relate to the ecological functions
performed by mangroves, such as global geochemical cycling, the protection of agricultural
areas, and the provision of spawning grounds for fisheries. Option value, or more precisely,
quasi-option value, is the expected value of the information on the benefits of an asset,
conditional on its preservation enabling an increase in the stock of knowledge relevant to the
utilisation of the asset. A frequently evoked example of quasi-option value is associated with
genetic resources: for example, the future value of pharmaceuticals developed from plant
materials. Existence values relates to the value of environmental assets irrespective of current
or optional uses. Empirical measures of existence values based on donations to conservation
organisations, or on to the contingent valuation method, suggest that these can be a significant
element in total economic value, especially in contexts where the asset has unique
characteristics or cultural significance.
Although intuitively appealing, applications of Total Economic Value to particular environmental
resources are few because of the problems of double counting if the elements are simply added
and of quantification of the components. For example, although direct and indirect benefits of
mangrove conservation can generally be assessed, the option and existence value of
mangroves are difficult to determine with an economic analysis. Much research has been
undertaken in this area, and some studies suggest that non-use values (option and existence)
can be at least as large in magnitude as use values (see Walsh et al., 1984; Cummings and
Harrison, 1995 for example). It has however been pointed out in studies of Total Economic
Value that option and existence values reflect global as well as local scarcity and that the
welfare gained from resource conservation normally accrues at the regional or global level,
bypassing the local users (see Adger et al., 1995, and Kumari, 1995, for example).
The crucial aspects of value for local decision making, and for the differential impacts of global
change, are the direct and indirect use benefits. It should be noted that some economic benefits
of the mangrove resource will increase in value over time, while others remain constant or
decline. For example, as agricultural development intensifies, the potential economic losses
from storm surges increases, so the value of the coastal protection function of the mangroves
will rise accordingly. Exogenous environmental change associated with global climate change
may increase the frequency and intensity of storm surges, and hence the value of this function
of the mangroves will rise.
The economic cost benefit analysis of mangrove rehabilitation schemes in this case is of the
form:
Y
NPV = ∑ ( BtT + BtNT + BtP − C t ) /(1 + r ) t
t =1
5
where:
NPV =
BtNT =
net present value (VND per ha)
net value of the non-timber products in year t (VND per ha)
BtT
=
net value of the timber products in year t (VND per ha)
P
t
B
Ct
=
value of the protection of sea defences in year t (VND per ha)
=
r
Y
=
=
costs of planting, maintenance and thinning of mangrove stand in year t (VND
per ha)
rate of discount
time horizon (25 year rotation)
Marketable products and services derived from the mangrove ecosystem have direct value. The
values of fisheries production in the mangroves and surrounding areas, and of forestry products
such as wood, fuel wood and honey, have been estimated below through interviewing fishermen
and by surveying local available markets. The evaluation of the role of mangroves in protecting
sea dikes is estimated from expenditure on their maintenance and repair in comparison with a
case where no mangroves exist, with the control situation assumed to have similar
morphological characteristics.
The planting of mangroves on the seaward side of the extensive sea dike system provides a
benefit of cost avoided in maintenance of these defences. Such maintenance takes place on an
annual basis in the coastal districts of Vietnam through the obligatory labour of district
inhabitants organised by the district committees paid for through local land taxes. These
commitments draw a heavy burden on labour scarce households and are a source of conflict on
inter-district allocation of labour contracts (Adger, 1996). The rehabilitation of mangroves to
reduce the costs of maintaining the dike system, are perceived to have high short term costs
(SCF, 1993; Macintosh and Hong, 1994). The benefits of rehabilitation have rarely been
quantified.
In general terms, the greater the area of mangrove, the greater the benefit interms of avoided
maintenance costs. Establishing a precise set of relationships in order to estimate the benefits is
not, however, a straightforward matter as the mechanisms by which mangroves protect the
adjacent dike are complex. Mangrove stands provide a physical barrier, resulting in the
dissipation of wave energy. They also stabilise the sea floor, trapping sediment, and can affect
the angle of slop of the sea bottom and again the dissipation of wave energy. Studies in
southern China have resulted in an empirical relationship through which the benefit, in terms of
avoided costs ( BtP ), can be expressed as:
BtP
=
f(width of stand, age of stand, average wavelength)
The relationship was developed and tested in mangrove stands in southern China and has been
calibrated in Vietnam through simulation (Vinh, 1995). While further research is needed in this
area, we make use of this relationship in estimating indirect use value in this study. The
relationship is:
X =
70 − (0.03 / α )
30 + (30 / α ' )
+
[0.026 − (0.023 − 2.3α ' ) /(α ' .K )] 2 − [1.6(1 − α ' ) /(α ' .K )]
6
and
α=
Figure 1:
2π ( R 2 − r 2 )
1.73b 2
Profile of mangrove rehabilitated
estimation of protection of sea dike
stands
showing
parameters
for
where:
X
=
r
R
b
K
=
=
=
=
proportion of total expenditure reduction on sea dike maintenance (%)
[ BtP =X.(total annual expenditure) in VND per ha]
mean diameter of stem (m)
mean diameter of canopy (m)
stand density (trees per m2)
ratio of width of stand to average wavelength = (w/ λ ).
These parameters and the design of such stands are illustrated in Figure 1. For the Nam Ha
example the equations above were calibrated using survey data on the annual costs of
maintenance of sea dikes in each of the three coastal districts and data on mangrove
productivity (growth in terms of mean annual increment, height, canopy density) for Rhizophora
apiclata reported in Aksornkoae (1993). The model was tested for its sensitivity to various
parameters including the costs of maintenance in the districts and the design of the protection
schemes in terms of the width of the stand in front of the sea dikes. While the model defined
here must be regarded as a provisional attempt to estimate the benefits associated with
reduced maintenance costs, uncertainties in this area may not be critical for two reasons. First,
as will be seen, the direct benefits from use of the resources are more significant than this part
of indirect use value and, second, the value estimated here is only part of the true storm
protection value, which must also include broader damage avoidance benefits, and is therefore
a lower bound figure.
7
4.
Estimated Direct and Indirect Costs and Benefits of Rehabilitation
4.1
Costs
Estimates of the costs of establishing the rehabilitated mangrove stands are presented in
Tables 3 and 4. These costs are estimated primarily based on the cost of labour for the activities
described. The survey research was carried out in 1994 with the costs for a work day in that
year being typically 2.5kg of rice or VND 5,000. Planting of one hectare of mangroves required
95 days work or VND 522,000, as shown in Table 4. The estimates are averaged across the
three districts, with variations in costs dependent on where the propagule and seedlings were
obtained.
Table 3:
Estimated Cost for Mangrove Plantation
Activity
Seed collection
Transportation
Soil preparation and inputs
Planting
Maintenance
Total
Source:
Cost (000 VND per ha)
137.5
110.0
82.5
110.0
82.5
522.5
Tri (1994, unpublished survey data)
The planting and handling fees for seedlings obtained from forests in the area under
rehabilitation are not significant compared to costs for collecting, handling and transportation for
other areas which increase depending on the distance from the seedling source site to the
planting site. The seed mortality rate between time of collection and time of planting adds an
additional cost factor.
For some mangrove species, such as Sonneratia sp, Avicennia sp, Aegiceras sp and others,
planting directly onto mud flats is unsuccessful due to the exposure to strong wind and wave
forces which wash away the seedlings. The cost of raising such species in a nursery and
transplanting them at eight months old is relatively high, with fees for maintaining the nursery,
care, protection and transportation adding to overall expenditure. The costs of establishing a
stand, including planting, gapping and protection, occur mainly in the first year. Maintenance,
from the second year on, incurs an estimated annual expenditure of VND82,500 per hectare.
The cost of thinning occurs in years 6, 9, 12, 15, 20 and 25, as shown in Table 5.
4.2
Direct use value
The benefits from wood and fuel-wood sources from the processes of periodic thinning and
extraction are derived from observations in local markets, and are shown in Table 5. The timber
benefits represent wood for poles and fuel-wood. The reported values for timber products are
much less than those reported for mangroves in Trinidad, Malaysia or Thailand but are
comparable to the value given for mangrove forestry products in Indonesia as reported by
Hamilton and Snedaker (1984), suitable adjusted to constant prices.
The benefits from direct fishing sources were estimated on-site. Fishing activities in the three
districts are undertaken through the use of simple fishing nets, simple tools or even by hand.
Aquatic products include fish, crabs, shrimps and shell fish. The yield is estimated at
8
approximately 50kg per hectare within mature mangrove stands annually for all types of aquatic
products. The average unit price in 1994 was around VND12,650 per kg averaged across the
products. There is some evidence that present exploitation of mangrove and aquatic products in
the Red River delta in general may be leading to declines in fish stocks, so the estimated yield
estimates may not be sustainable, although they are considered conservative for the districts
surveyed.
Table 4:
Year
1
2-5
6
7-8
9
10-11
12
13-14
15
16-19
20
21-24
25
Estimated costs for planting, protection, thinning and extraction of
mangroves
Planting
costs
440.0
Maintenance
Extraction and
Replanting
82.5
330
82.5
165
82.5
165
82.5
165
82.5
330
82.5
330
82.5
Source:
Tri (1994, unpublished data)
Table 5:
Estimated value of Thinning and Extraction
Year
6
9
12
15
20
25
Price
(VND per
tree)
180
290
320
540
1000
5000
179.2
510.1
88.0
259.9
62.1
1448.6
Total
(000 VND per ha)
522.5
330
261.7
165
592.6
165
170.5
165
342.4
330.0
144.6
330
1531.1
Value of extraction
(000 VND per ha)
Products
293.2
1075.9
153.6
510.3
1129.0
10535.0
Firewood
Firewood, small poles
Firewood, medium poles
Firewood, large
construction timber
Honey for bee-keeping is derived from the flowers of a number of mangrove species, though the
season spans a limited number of months. The honey from mangroves is obtained during the
first flowering season of Kandelia candel from January to March and from July to September for
other mangrove species and the second flowering season of Kandelia candel. The potential
yield from this bee-honey source was estimated to be an annual minimum of 0.21kg per
hectare. Honey production is possible from five years after planting, though some species of
9
mangrove con flower after three to four years, and even after one and a half years, from
planting.
4.3
Indirect use value
The model of sea dike maintenance described earlier was used for the three coastal districts to
derive the indirect benefit of mangrove rehabilitation. The baseline costs of maintenance are
incurred by district committees, which keep detailed records of work days and expenditure on
annual maintenance. 1994 estimates were used in the modelling: during this year, 314, 350
work days spent on permanent maintenance and occasional repairs for every 100km of sea
dike.
The model results show that the width of the mangrove stands can be designed to maximise the
protection of the sea dike system but that there is a trade-off in new planting with the maximum
length protected. The model results indicate that the optimal strategy for the prevalent tidal
system averaged across the three coastal districts in the south of the Red River delta area is to
maximise the length of dike protected planting a relatively narrow band of mangroves.
Figure 2 presents the Net Present Value (NPV) estimates to a minimum of one metre-width
stands – the model parameters turn negative below this level. This model is also constrained by
being based on average wavelength striking the coast, a factor of the topography and prevailing
winds. As the results represent the average situation, the impact of the most severe storm
surges on both the cost of maintenance and repair of dikes is not accounted for. It should be
noted that this model does not account for other damage costs associated with storm
occurrence, such as agricultural losses. Nevertheless, the increase in NPV associated with
mangrove planting resulting from including this indirect benefit, as shown in Figure 3, would
promote the desirability of planting. NPV increases as each rate of discount. The results
presented in Table 6 show that this indirect joint-producing benefit of mangrove rehabilitation is
significant in further strengthening the economic case for such action in these locations.
Figure 2:
Note:
Net present value of mangrove rehabilitation, varying with sea dike
protection at different stand widths.
r = discount rate (see text).
10
4.4
Cost benefit results
The full results of the cost benefit analysis are presented in Table 6. This cost benefit analysis is
of a partial nature, comparing establishment and extraction costs, with the direct benefits from
extracted marketable products, and with the indirect benefits of avoided maintenance of the sea
dike system. The results show a benefit to cost ratio in the range of four to five for a range of
discount rates. The low relative changes in benefit cost ratios illustrates that most of the costs,
as well as the benefits of rehabilitation, occur within a relatively short time frame, with even the
reduced maintenance cost beginning to accrue within a few years of initial planting.
Table 6:
Discount
rate
3
6
10
Figure 3:
Results of Cost Benefit Model of Direct and Indirect Use Values
Direct
Indirect
Benefits
benefits
PV million VND per ha
18.26
12.08
7.72
0.79
0.56
0.37
Costs
B/C ratio
3.45
2.51
1.82
5.52
5.03
4.44
Net present value of mangrove rehabilitation, including value of sea dike
protection
Figure 3 illustrates that the direct benefits from mangrove rehabilitation are more significant in
economic terms than the indirect benefits associated with sea dike protection. As discussed
above, the sea dike protection estimates do not include the benefits of reduced repair after
serious storm damage, not the potential losses of agricultural produce when flooding occurs.
Flooding associated with severe tropical storms can lead to large economic losses, as well as to
11
loss of life, and a reduced probability of flooding associated with the protection from the
mangrove itself would be another indirect benefit. This benefit has not been estimated to date,
though production function approaches to estimating such benefits for naturally occurring
mangrove stands are presently underway. In any event, it is clear from Figure 3 that, even if no
indirect benefits were to occur, direct benefits from mangrove rehabilitation mean that this
activity is economically desirable as evidenced by the positive Net Present Vales at all discount
rates considered.
12
5.
Do Rehabilitated Ecosystems have Option and Existence Values?
The analysis above shows that restoring mangroves is beneficial both for the direct and indirect
options. Rehabilitation of mangroves may be required due to pervious habitat loss.
Conservation of existing mangroves may therefore be expedient where mangroves still exist,
partly because ‘natural’ ecosystems possess economic value not concerned with their economic
uses, but rather due to their options for future use, or due to existence values. These issues are
now discussed in the context of the rehabilitated mangroves.
Option value is usually defined in terms of the preservation of species, groups of species or
ecosystems. In the sense of option value of environmental assets, the concept of option value
comes from the idea of conserving wilderness or populations of which knowledge in inherently
uncertain (Randall, 1991; Bishop, 1978, for example). Option value is made up of the elements
of:
•
a value akin to an insurance premium to ensure supply of an environmental asset, the
availability of which would otherwise be uncertain.
•
an information value for the characteristics of an asset which is unknown which may
become valuable in the future with changing demand or technological progress.
These two option values are conceptually different. The second element, the quasi-option value,
could, in effect, be negative as changing demands could make an unknown characteristic
unnecessary. In such situations preservation of the asset could have potential net cost. Randall
(1991) concludes that ‘we should approach the potential loss f any species with the presumption
that its expected value to humans in positive’ (Randall, 1991, p64).
The option and quasi-option value of rehabilitated mangrove ecosystems essentially depend on
the purpose of restoration, and hence the diversity and resilience of the resulting ecosystem.
Some wetland restoration requires little more than restoring the natural hydrological conditions,
while others involve complete reintroduction of original and complementary vegetation (see
Mitsch and Gosselink, 1993, chapter 17). These approaches have been designated by Todd
(1988) as two paradigms of restoration: restoration ecology, which tries to recreate pristine
habitats; and structural ecology, which re-establishes the general architecture of ecosystems to
restore their functions through pragmatic use of both native and exotic species. Most mangrove
rehabilitation in Vietnam falls into the latter category of structural restoration, concentrating on
short-cycle systems with economically and commercially important by-products.
Yet providing stable and resilient ecosystems, even through structural restoration, in itself
provides the basis for option values. Rehabilitated mangrove stands may well be resilient in that
they can survive species mix changes and external abiotic shocks (Lugo, 1995). The process of
managing ecosystems for biodiversity, although requiring a long time horizon (Lugo, 1995) itself
contributes to the functions such as nutrient cycling and economically important productivity, as
well as indirectly affecting the option (and existence) elements of economic value. Option value
therefore accrues to society due to the diversity and resilience of ecosystems, which can in
theory be promoted in rehabilitated ecosystems through management.
In the discussions above, existence value is the only non-use value for which there may be
various motivations such as bequest or stewardship. As discussed in Section 2, these values
are rarely measured, and such attempts as there are have generally sought to measure total
non-use values through contingent valuation surveys. Exceptions such as Walsh et al. (1984)
13
attempt to disaggregate use and non-use values, though it has been argued that this leads to
double counting of such preferences (Hanley and Spash, 1993). Indeed, Cummings and
Harrison (1995) question the validity of any claims for the magnitude of non-use compared to
use values. Studies which attempt to quantify existence values are also criticised for being
dependent on the information given to survey respondents and to other biases. Nevertheless,
such studies show positive individual preferences for the existence of particular species or other
environmental assets, where there are few or no available substitutes.
The essential feature of ecosystem rehabilitation is the substitution for previously existing
natural ecosystems. Hence substitutes are inherently available in resource allocation.
Alternatively, ecosystem rehabilitation is undertaken to substitute for other functions or human
made capital, in wastewater treatment or storm surge protection for example. The existence
value of managed ecosystems is, therefore, unlikely to be significant, certainly not to the extent
of that possessed by natural ecosystems.
The conclusions from this discussion are that although rehabilitated mangrove stands have
been estimated to provide large direct and indirect use values, within a Total Economic Value
framework they do not exhibit non-use values to the same extent. They can therefore never be
perfect substitutes for naturally occurring mangroves. These observations do not prejudge the
issue of measurement of the relative magnitude of non-use values: the methodological
difficulties presented, for example by Cummings and Harrison (1995), are amplified when
attempting to distinguish between ‘natural’ and rehabilitated ecosystems. Nevertheless, policy
implications from this discussion would be that the conservation of existing mangroves is
socially desirable in Vietnam, if the location specific estimates of use values in this study are
applicable to other sites. In terms of the preservation of complexity and the irreversibility loss of
natural ecosystems, mangrove conservation is always preferred to restoration. The restoration
of mangroves as part of mitigation of climate extremes therefore needs to be appraised within
the social and economic context of land and resource conflicts and related economic values.
14
6.
Conclusion
This paper has quantified, in a preliminary fashion, various economic benefits of mangrove
rehabilitation tied to sea defence systems in three coastal districts in northern Vietnam. It has
been argued, within the Total Economic Value framework, that rehabilitated stands of
mangroves are necessarily less intrinsically variable than natural stands because existence
values accruing to the undisturbed system which are not applicable to a managed rehabilitated
stand. Option values can accrue if stands are managed to enhance resilience and diversity. The
results from the quantified economic model show that rehabilitation is desirable from an
economic perspective based solely on the direct benefits of use by local communities. The
rehabilitation schemes have even higher benefit cost ratios when the indirect benefits of the
avoided maintenance cost of the sea dike system, protected from coastal storm surges by the
mangrove, are included.
This preliminary analysis neglects a number of species which need to be incorporated in a full
evaluation. In particular, no account has been taken of the economic benefits resulting from
improved protection against storm damage (in terms of more sustainable agricultural yields and
so on). There is also a need to test various assumptions, parameters and models used in the
analysis. Nevertheless, these initial results do suggest that there is a strong case for mangrove
rehabilitation as an important component of a sustainable coastal management strategy which
is proof against future, as well as present day, risk.
15
References
Adger, W.N., Brown, K., Cerigni, R. and Moran, D. (1995) Total economic value of forests in
Mexico, Ambio 24:286-296.
Adger, W.N. (1996) An Assessment of Social Vulnerability to Climate Change in Xuan Thuy
District, Vietnam, unpublished paper, CSERGE, University of East Anglia, Norwich.
Aksornkoae, S. (1993) Ecology and Management of Mangroves. IUCN: Bangkok.
Barbier, E. (1993) Sustainable use of wetlands valuing tropical wetland benefits: economic
methodologies and application. Geographical Journal 159:22-32.
Bishop, R.C. (1978) Endangered species and uncertainty: the economics of a safe minimum
standard. American Journal of Agricultural Economics 60:10-18.
Cummings, R.G. and Harrison, G.W. (1995) The measurement and decomposition of non-use
values: a critical review. Environmental and Resource Economics 5:225-247.
Farber, S. and Costanza, R. (1987) The economic value of wetland systems. Journal of
Environmental Management 24:41-51.
Hamilton, L. and Snedaker, S.C. (1984) Handbook for Mangrove Area Management. IUCN,
Gland.
Hanley, N. and Spash, C.L. (1993) Cost Benefit Analysis and the Environment. Edward Elgar:
Aldershot.
Hong, P.H. and San, H.T. (1993) Mangroves of Vietnam. IUCN: Bangkok.
Houghton, J.T., Meiro Filho, L.G., Callander, B.A. and others (eds.) (1996) Climate Change
1995: The Science of Climate Change. Cambridge University Press: Cambridge.
Kelly, P.M., Granich, S.L.V. and Secrett, C.M. (1994) Global Warming: responding to an
uncertain future. Asia Pacific Journal on Environment and Development 1:28-45.
Kelly, P.M. (1995) Tropical Cyclones on the Coast of Vietnam: Prospects for the future,
Unpublished Report. CSERGE, University of East Anglia, Norwich.
Kent, D.M. (ed.) (1994) Applied Wetlands Science and Technology. Lewis: Boca Raton.
Kumari, K. (1995) An Environmental and Economic Assessment of Forest Management
Options: A Case Study in Malaysia. Working Paper 026, Environment Department World
Bank, Washington D.C.
Lighthill, J., Holland, G.J., Gray, W.M., Landsea, C., Craig, G., Evans, J., Kuhihara, Y. and
Guard, C.P. (1994) Global Climate Change and Tropical Cyclones. Bulletin of the American
Meteorological Society, 75:2147-2157.
Lugo, A.E. (1995) Management of Tropical Biodiversity. Ecological Application, 5:956-961.
16
Lugo, A.E. and Snedaker, S.C. (1974) The Ecology of Mangroves. Annual Review of Ecology
and Systematics, 5:39-64.
Macintosh, D.J. and Hong, P.H. (1994) Case Study of Replanting Mangroves in Ha Tinh
Province, Central Vietnam. Paper presented at Workshop on Environment and Aquaculture
Development, Institute for Oceanographic Sciences, Haiphong. May 1994.
Maltby, E. (1986) Waterlogged Wealth: Why Waste the World’s Wet Places. Earthscan: London.
Matthews, E. and Fung, I. (1987) Methan emissions from natural wetlands: global distribution
and environmental characteristics of source. Global Biogeochemical Cycles, 1:61-86.
Mitsch, W.J. and Gosselink, J.G. (1993) Wetlands 2nd Edn. Van Nostrand Reinold: New York.
Pearce, D.W. and Turner, R.K. (1990) Economics of Natural Resources and the Environment.
Harvester Wheatsheaf: Hemel Hempstead.
Randall, A. (1991) The Value of Biodiversity. Ambio, 20:64-68.
Reimold, R.J. (1994) Wetlands functions and values. In Kent, D.M. (ed.) Applied Wetlands
Science and Technoloy. Lewis: Boca Raton pp 55-78.
Ruitenbeek, H.J. (1994) Modeling economy-ecology linkages in mangroves: economic evidence
for promoting conservation in Bintuni Bay, Indonesia. Ecological Economics, 10:223-247.
Save the Children Fund(1992) Mangrove Planting Project Interim Evaluation, December 1992,
Save the Children Fund, Hanoi, Vietnam.
Swallow, S.K. (1994) Renewable and non-renewable resource theory applied to coastal
agriculture, forest, wetland and fishery linkages. Marine Resource Economics, 9:291-310.
Thu, T.V. (1991) Advances in Forecast Dissemination and Community Preparedness Tactics in
Vietnam. Paper presented at the Second International Workshop on Tropical Cyclones.
Hydrometeorological Service, Hanoi.
Todd, J. (1988) Restoring diversity: the search for a social and economic context. In: Wilson,
E.O. (ed.) Biodiversity. National Academy Press: Washington D.C. pp 344-352.
Turner, R.K. (1991) Economics and wetland management. Ambio, 20:59-63.
Vinh, T.T. (1995) Tree Planting Measures to Protect Sea Dike Systems in the Central Provinces
of Vietnam. Paper presented at the Workshop on Mangrove Plantation for Sea Dike
Protection, 24-25 December 1995, Hatinh, Vietnam.
Walsh, R.G., Loomis, J. and Gillman, R. (1984) Valuing option, existence and bequest demands
for wilderness. Land Economics, 60:14-29.
17