Economic Valuation of Coral Reefs in St. Lucia – June 2008 Castries, St. Lucia Lauretta Burke World Resources Institute Project Partners Include Saint Lucia Government of Saint Lucia Planning Department Fisheries Department SMMA Ministry of Tourism Statistical Office St. Lucia National Trust SLHA, resorts Regional Partners University of the West Indies (UWI) / Sustainable Economic Development Unit (SEDU) Caribbean Natural Resources Institute (CANARI) T&T Institute of Marine Affairs (IMA) CEHI OECS Financial Support Macarthur Foundation Ocean Foundation Henry Foundation Munson Foundation Dutch Ministry of Foreign Affairs SwedBio International Coral Reef Action Network (ICRAN) Buccoo Reef Trust Program Overview 1. Ecosystem Goods and Services 2. Summary of results 3. Policy Applications 4. Background on this Economic Valuation project 5. Valuation – details for St. Lucia 6. Policy Applications – method and features Buccoo Reef example Discussion Beautiful Valuable Threatened Coastal development Mangrove removal Sewage Dredging Runoff Tourism Overfishing Warming Seas Influencing better Management Economic Valuation is a tool to guide coastal planning, investment and management in the long-term interest of local communities and the country Evaluating trade-offs OPTIONS Development options Enforcement of regulations Capping tourist numbers Investing in pollution control OUTCOMES Revenue streams from tourism Societal benefits from reefs Ecosystem goods and services Economic Valuation of Coral Reefs WRI (with partners) developed a coral reef valuation methodology and implemented valuations for the coral reefs of Tobago and St. Lucia. The study evaluated the overall annual economic contribution of coral reefassociated tourism and recreation, fisheries, and shoreline protection services. Ecosystem Services Ecosystem goods (such as food) and services (such as waste assimilation) represent the benefits human populations derive, directly or indirectly, from ecosystems. Ecosystem Services from Coral Reefs Provisioning Services -food – fish and shellfish Regulating Services - carbon storage / climate regulation -genetic resources -erosion control - natural medicines and pharmaceuticals -storm protection -ornamental resources - building materials Supporting Services -sand formation Cultural Services -spiritual and religious values -knowledge systems / educational values -inspiration -aesthetic values -social traditions -sense of place -recreation and ecotourism -primary production Ecosystem Services from Coral Reefs Provisioning Services -food – fish and shellfish Regulating Services - carbon storage / climate regulation -genetic resources -erosion control - natural medicines and pharmaceuticals -storm protection -ornamental resources - building materials Supporting Services -sand formation Cultural Services -spiritual and religious values -knowledge systems / educational values -inspiration -aesthetic values -social traditions -sense of place -recreation and ecotourism -primary production Non-Valued Services Total Economic Value (TEV) would also include: Other Use Values: Research Values Option Values (e.g. pharmaceutical) Carbon storage Non-Use Values Bequest Value Existence Value We focus on values that can be reliably estimated using available data Summary of Values for St. Lucia Valuation Summary – Tourism and Recreation Coral reef-associated tourism and recreation – contributed between US$160 and $194 million to the national economy in 2006. Valuation Summary – Fisheries Coral reef-associated fisheries – important for cultural tradition, safety net, and livelihood provide annual economic benefits estimated at between US$0.5 – 0.8 million. Valuation Summary – Shoreline Protection Shoreline Protection Services of Coral Reefs – avoided erosion and storm damage from waves valued between US$28 and $50 million per year. Valuation Summary Tourism and Recreation US$160 to $194 million in 2006. Annual Economic Contribution of Coral Reefs in St. Lucia 250 Coral reef-associated fisheries US$0.5 – 0.8 million / year Shoreline protection services – US$28 and $50 million per year. 200 US$ million 150 High estimate Low estimate 100 50 These are significant compared to St. Lucia’s GDP, which was $825 million in 2005. Coral reefs provide other important values not estimated in this study, and these numbers should be regarded as a lower bound estimate. 0 Tourism and Recreation Fisheries Shoreline Protection Coral Reefs – economically important to St. Lucia Valuation can highlight: Significant contribution to GDP Taxes paid to government Jobs and wages dependent on coral reefs Value of social safety net Supports: Coastal Planning (shoreline protection analysis) Evaluation of trade-offs Economic Valuation applications Estimate Economic Contribution to GDP Compare benefits of development / management options Encourage increased investment in coastal management / MPAs / fisheries management Identify sources of support for management / policy / protected areas Set fees, such as visitor fees Damage assessment Comparing “reef-dependence” St. Lucia - specific examples To guide future development, including evaluating the changes resulting from marina development on east and west coasts The benefits of investing in improved sewage treatment Guide the management planning for SMMA or Point Sabel Examine changes in fisheries management and the impact on short-term livelihoods versus long-term benefits To evaluate tourism carrying capacity and potential revenue To estimate loss of local use of beaches due to development EV Project Characteristics 1. Develop method which is simple and replicable 2. Rely predominantly on existing, available data 3. 4. 5. Develop a tool to guide valuation and apply to policy questions. Produce coral reef valuation estimates for 2 pilot areas (Tobago and St. Lucia) Estimate likely economic loss due to coral reef degradation Valuation – Main Components Tourism Method: Financial Analysis (Net revenues plus transfers) Fisheries Method: Financial Analysis (Net revenues plus transfers) Shoreline Protection Method: “Avoided Damages” Challenges Distinguishing the coral-reef associated benefits Tourism Fisheries Shoreline protection Valuing “local use” Secondary (indirect) economic impacts Tourism Components Accommodation Reef Recreation – Diving Reef Recreation – Snorkeling Marine Park Revenues Misc. Expenses (e.g., departure taxes, visitor expenditure) Local Use Indirect economic effects Tourism Valuation issues 1. 2. 3. 4. Identifying “coastal” visitors Quantifying reef recreation Getting accurate MPA visitation numbers Estimating labor and other operating costs Tourism and Recreation Valuation Assumptions 25% of visitors come to St. Lucia in part due to the reefs. Non-labor operating costs – about 40% Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 (11% of GDP) Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 Indirect economic Impact ** $68 – 102 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 Indirect economic Impact Total Direct & Indirect Impact ** $68 – 102 US$160 – 194 million Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 Indirect economic Impact Total Direct & Indirect Impact Consumer Surplus ** $68 – 102 US$160 – 194 million $2.2 – 2.4 Tourism Valuation for St. Lucia Coral Reef-associated: Accommodation Value ($US million) $64.7 Reef Recreation – Diving $4.9 Reef Recreation – Snorkeling $0.8 Marine Park Revenues $0.1 Misc. Visitor Expenses $21.2 Total Direct Impact $91.6 Indirect economic Impact Total Direct & Indirect Impact ** $68 – 102 US$160 – 194 million Consumer Surplus $2.2 – 2.4 Local Use $52 – 109 Local Reef Use Survey Commissioned a survey through the University of West Indies / Sustainable Economic Development Unit / Government of St. Lucia, Department of Statistics 300 people surveyed in 6 locations in St. Lucia (Soufriere, Vieux Fort, Anse La Raye, Castries town, Gros Islet, Dennery/Micoud) Designed to measure local use of beaches and reefs as well as recreational and subsistence fishing Fisheries Components Commercial Fisheries Fish Processing and Cleaning Local Use (fishing) Indirect economic effects Focus on reef-associated species – snapper, grouper, wrasse, grunts, squirrelfish, parrot fish, and lobster. Fisheries Valuation Issues 1. 2. Limited data on local use Focus on economic impact – does not fully capture social values. Commercial Fishing in St. Lucia Estimate derived from two approaches – 1. 2. reef fish productivity recorded landings a) Reef Fish Productivity Reef Area: 33 km2 (from this project) Estimated fish productivity rate: range of 1 to 5 MT of fish / km2 of coral reef Potential sustainable harvest of 73,000 to 363,000 lb of reef fish b) Landings recorded 9 landing sites Fisheries Dept. data for 2002-2004 Prices Pot fish = EC$10 (US$3.75) Lobster = EC$25 (US$9.00) Sea Urchin = EC$50 (US$18.00) Average Fish Landings 2002-04 Pounds Value ($US) Percent of Value Squirrelfish 13,459 $50,788 7.3% Snapper 44,995 $169,795 24.5% Grouper 8,244 $31,108 4.5% Parrotfish 9,930 $35,445 5.1% Total for finfish 76,628 $287,137 41.4% Lobster 29,000 $273,585 39.5% 7,251 $132,538 19.1% 112,879 $693,260* 100.0% Sea Urchin Grand Total Fisheries Valuation for St. Lucia Coral Reef-associated: ($US thousand) Commercial Fisheries – Gross Revenue $515 - 772 N.L. Operating Costs (25%) $129 – 193 Commercial Fisheries – Net Revenue $386 – 579 Fish cleaning and processing Total Direct Impact $51 – 77 $437 – 656 Fisheries Valuation for St. Lucia Coral Reef-associated: ($US thousand) Commercial Fisheries – Gross Revenue $515 - 772 N.L. Operating Costs (25%) $129 – 193 Commercial Fisheries – Net Revenue $386 – 579 Fish cleaning and processing Total Direct Impact Indirect economic Impact $51 – 77 $437 – 656 $82 – 185 Fisheries Valuation for St. Lucia Coral Reef-associated: ($US thousand) Commercial Fisheries – Gross Revenue $515 - 772 N.L. Operating Costs (25%) $129 – 193 Commercial Fisheries – Net Revenue $386 – 579 Fish cleaning and processing Total Direct Impact Indirect economic Impact Total Direct & Indirect Impact $51 – 77 $437 – 656 $82 – 185 $520 – 841 Fisheries Valuation for St. Lucia Coral Reef-associated: ($US thousand) Commercial Fisheries – Gross Revenue $515 - 772 N.L. Operating Costs (25%) $129 – 193 Commercial Fisheries – Net Revenue $386 – 579 Fish cleaning and processing Total Direct Impact Indirect economic Impact $51 – 77 $437 – 656 $82 – 185 Total Direct & Indirect Impact $520 – 841 Local (non-commercial) fishing $155 - 790 Shoreline Protection Services Innovative method for isolating the role of coral reefs and integrating economics Map outputs – Shoreline protected by coral reefs Areas vulnerable to waves \ storm damage Relative contribution of reefs to shoreline protection Shoreline Protection Valuation Potential Valuation Methods: Replacement Cost Avoided Damages Physical Factors Physical factors affecting the protection afforded by a coral reef: orientation of the coast (windward / leeward; high energy or low energy coast) bathymetry / shoreline profile shoreline shape (bay, headland) depth of the reef / geology (type of reef) distance the reef is from land Complex Analysis IMA developed shoreline protection framework - rules for how much protection the reef affords this coastline situation. Can be adapted for climate scenarios Shoreline Protection Analysis (5 Steps) 1. Identify vulnerable areas 2. Identify areas protected by coral reefs 3. 4. 5. Evaluate the relative protection provided by reefs Incorporate property values Combine to evaluate potential storm damage avoided 4% of St. Lucia’s land area rated “vulnerable.” 44% of St. Lucia’s coastline is protected by coral reefs. Shoreline Stability Factors 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. (from IMA) Coastal Geomorphology Coastal Geology Coastal Protection Structures Wave Energy Storm/Hurricane Events Coral Reef Index (Reef type, continuity, distance offshore) Coastal Elevation Coastal Slope Coastal Vegetation Anthropogenic Activities Coastal Protection Scheme (from IMA) Factor Very High 4 High 3 Medium 2 Low 1 None 0 Coastal Geomorphology Rocky, Cliffed Coastline Soft (Limestone) Cliffs or Low Bluffs Mangroves Beaches N/A Coastal Geology Igneous and/or Volcanic Metamorphic Sedimentary Unconsolidated Sediments N/A Protected by 2 prominent headlands and breakwater Protected by 2 prominent headlands Seawalls, Riprap or Breakwaters Protected by one or two small headlands No protection by headlands < 20 20 - 40 40 - 60 >60 N/A Coastal Protection Structures Wave Energy (~ Max. Wave Height [cm]) Coral Reefs Reef Type Reef Distribution Reef Distance (m) Storm/Hurricane Events Coastal Elevation (m) Coastal Slope (%) Coastal Vegetation * Type Distribution Coastal Anthropogenic Activities Barrier N/A < 250 Patch N/A 250 - 500 Fringe Continuous 500 - 1000 Apron Discontinuous > 1000 No reef present No reef present No reef present Affected by 1-5 TS every 10 years Affected by at least 5 TS every 10 years Affected by at least a category 1 every 25 years Affected by at least a category 3 every 25 years N/A > 12 5 - 12 1-5 0-1 < 0 (N/A) ** 6.2 – 9.7 2.6 – 6.2 1.1 – 2.6 0.4 – 1.1 N/A Mangroves > 75 % length of coastline Coastal Woodlands 50% - 75 % of length Thicket 25% - 50 % of length Runners < 25% length of coastline No sand mining, coastal development, etc. Misc. Other Activities Either sand mining or coastal development Sand mining and coastal development None No Vegetation N/A Stability Factors used in St. Lucia Analysis 1. 2. 3. 4. 5. 6. 7. 8. Coastal Geomorphology Coastal Geology Wave Energy Storm/Hurricane Events Coral Reef Index (Reef type, continuity, distance offshore) Coastal Elevation Coastal Slope Coastal Vegetation Not Available 1. Coastal Protection Structures 2. Anthropogenic Activities 3a. Relative Total Coastal Protection (RTCP) With reef present Without reef 3b. Potentially Avoided Damages Estimated based on property values in “vulnerable areas” which are “protected by a reef,” based on the “relative reef contribution” for that area. St. Lucia – property values estimated at US$25 - 30 per square foot Relative reef contribution applied at +/- 20%, reflecting some uncertainty. Shoreline Protection Summary – St. Lucia St. Lucia Land Area (sq km) Vulnerable Land Area (sq km) Vulnerable Area Protected by reefs (sq km) 610 km2 24.5 km2 4% 10 km2 1.5% 44% Shoreline length Protected by Reefs US $25 - 30 Average Property Value (US$) Potentially Avoided Damages (2007) US $28 – 50 mill Shoreline Protection Summary – St. Lucia St. Lucia Potentially Avoided Damages (2007) Potentially Avoided Damages (over 25 years) US $28 – 50 mill US $700 million $1.2 Billion Summary of Values for St. Lucia Coral Reef-associated : Tourism and Recreation – Total Direct Impact ($US million / yr) $91.6 million Tourism and Recreation – Total economic Impact $160 – 194 million Fisheries – economic Impact $0.5 – 0.8 million Shoreline Protection Services $28 – 50 million Policy Exploration – Buccoo Reef Tourist Destination Environmental issues water quality overfishing reef condition BRMP - enforcement Management Options – Buccoo Reef Enforcement of nofishing regulations Re-routing of storm drain Integrated watershed management Sewage treatment Economic Value – Buccoo Reef Glass-bottom / snorkel Tours –US$1.4 mill / yr Tourism US$7-8 million / yr US$128 – 156 million over 25 years Shoreline protection US$140-250 million over 25 years Policy Recommendations for St. Lucia Improve mapping and monitoring of coral reefs and mangroves Maintain coastal mangroves Monitor and improve coastal water quality Monitor marine recreation and manage within sustainable limits Use the coral reef valuation methodology and Tool to track the economic contribution of coral reefs over time Available online at www.buccooreef.org and www.wri.org/project/valuation-caribbean-reefs Contacts: WRI –Lauretta Burke, +1 (202) 729 7774, lauretta@wri.org Gov StL – LaVerne Walker lwalker2006@gmail.com IMA – Sean Paddy, (868) 634 4291 x405, spaddy@ima.gov.tt