CHAPTER 2 • The Challenge of Demonstrating the Socio-economic Benefits of ICM
Box 2.2. Examples of the economic and social benefits derived from coastal areas and associated ecosystem functions
The progressive development of Resource Economics, Environmental Economics and more
recently Ecological Economics has provided a means of developing increasingly sophisticated
economic representations of the environmental and economic goods and services generated
by coastal ecosystems. This has facilitated the demonstration of the environmental and economic importance of coastal ecosystems as well as the value of the flows of resources they generate. This means that we are in a better position to explain to politicians, policy makers and
decision takers as well as the general public the economic value of environmental services such
as the protection of agricultural crops from storms provided by the buffer function of mangrove.
We have the economic skills to represent the non-marketed value of environmental goods
and services. The innovative use of economic valuation of the goods and services applied to
wetlands and other complex environmental systems is well documented, for example see:
HufSi>:hmidt et al. 1983; Barbie·r 1989; Dixon 1989; Pearce and Turner 1990; Turner 1991;
James 1991; Winpenny 1991; Pearce and Moran 1994; or Willis and Corkindale 1995.
The economic value of natural systems such as coral reefs, mangrove or salt marshes is gaining recognition. The actual value attributed to a coastal ecosystem will depend upon its area,
its current condition and the number of resources that are incorporated into the economic calculation. For example, mangroves are considered as being particularly rich in terms of the economic and environmental goods and services they provide (Hamilton and Snedaker 1984;
Dixon 1989; Burbridge 1990). The actual calculation of the economic value of the full range of
these goods and services is rarely carried out.
Costanza et. al. (1997) calculate that the total global value of natural capital stocks and services provided by ecological systems such as wetlands is between US $16-54 trillion (10 12 ) per
year with an average of US $33 trillion. Ecosystem services provided by the coastal realm are
valued at US $12568 X 10 9 which represents some 38% of the total global value of all biomes.
Costanza et al. (1997) argue that because ecosystem services are not fully captured by commercial markets or adequately quantified in terms comparable to economic services or manufactured capital they are« ... too often ignored or undervalued, leading to the error of constructing projects whose social costs far outweigh their benefits". They further argue that « ... this
may ultimately compromise the sustainability of humans in the biosphere".
45
Figure 2.3 illustrates a simple economic model representing the different goods and
services and whether they are normally marketed and whether they occur within the
mangrove or in surrounding areas.
Quadrant 1 represents the products derived from a mangrove that are generally recognized using market values. Quadrants 2, 3 and 4 represent goods and services that
are generally excluded from analyses of the value of coastal ecosystems.
Ecological linkages among coastal systems must also be taken into consideration
when valuing individual systems. There are linkages among systems in the form of
nutrient exchange, migratory pathways, energy transfers, etc. These are not well documented. Never the less, the positive influence of one coastal system on other systems
should be accounted for as part of any economic valuation exercise.
Attention should also be given to the value of the ability of coastal systems to compensate for changes caused by global environmental pressures and to continue to sustain human activities. Recent reviews of deve10pment pressures and the potential effects of major climatic and sea level changes (Jeftic et al. 1993; Pernetta and Elder 1993)
conclude that the impact on coastal systems from predicted social and economic
changes in coastal areas may outweigh the impact of climate change. It is therefore
important to consider the value of coastal systems in sustaining human activities while
Box 2.2. Examples of the economic and social benefits derived from coastal areas and associated ecosystem functions
The progressive development of Resource Economics, Environmental Economics and more
recently Ecological Economics has provided a means of developing increasingly sophisticated
economic representations of the environmental and economic goods and services generated
by coastal ecosystems. This has facilitated the demonstration of the environmental and economic importance of coastal ecosystems as well as the value of the flows of resources they generate. This means that we are in a better position to explain to politicians, policy makers and
decision takers as well as the general public the economic value of environmental services such
as the protection of agricultural crops from storms provided by the buffer function of mangrove.
We have the economic skills to represent the non-marketed value of environmental goods
and services. The innovative use of economic valuation of the goods and services applied to
wetlands and other complex environmental systems is well documented, for example see:
HufSi>:hmidt et al. 1983; Barbie·r 1989; Dixon 1989; Pearce and Turner 1990; Turner 1991;
James 1991; Winpenny 1991; Pearce and Moran 1994; or Willis and Corkindale 1995.
The economic value of natural systems such as coral reefs, mangrove or salt marshes is gaining recognition. The actual value attributed to a coastal ecosystem will depend upon its area,
its current condition and the number of resources that are incorporated into the economic calculation. For example, mangroves are considered as being particularly rich in terms of the economic and environmental goods and services they provide (Hamilton and Snedaker 1984;
Dixon 1989; Burbridge 1990). The actual calculation of the economic value of the full range of
these goods and services is rarely carried out.
Costanza et. al. (1997) calculate that the total global value of natural capital stocks and services provided by ecological systems such as wetlands is between US $16-54 trillion (10 12 ) per
year with an average of US $33 trillion. Ecosystem services provided by the coastal realm are
valued at US $12568 X 10 9 which represents some 38% of the total global value of all biomes.
Costanza et al. (1997) argue that because ecosystem services are not fully captured by commercial markets or adequately quantified in terms comparable to economic services or manufactured capital they are« ... too often ignored or undervalued, leading to the error of constructing projects whose social costs far outweigh their benefits". They further argue that « ... this
may ultimately compromise the sustainability of humans in the biosphere".
45
Figure 2.3 illustrates a simple economic model representing the different goods and
services and whether they are normally marketed and whether they occur within the
mangrove or in surrounding areas.
Quadrant 1 represents the products derived from a mangrove that are generally recognized using market values. Quadrants 2, 3 and 4 represent goods and services that
are generally excluded from analyses of the value of coastal ecosystems.
Ecological linkages among coastal systems must also be taken into consideration
when valuing individual systems. There are linkages among systems in the form of
nutrient exchange, migratory pathways, energy transfers, etc. These are not well documented. Never the less, the positive influence of one coastal system on other systems
should be accounted for as part of any economic valuation exercise.
Attention should also be given to the value of the ability of coastal systems to compensate for changes caused by global environmental pressures and to continue to sustain human activities. Recent reviews of deve10pment pressures and the potential effects of major climatic and sea level changes (Jeftic et al. 1993; Pernetta and Elder 1993)
conclude that the impact on coastal systems from predicted social and economic
changes in coastal areas may outweigh the impact of climate change. It is therefore
important to consider the value of coastal systems in sustaining human activities while