Inputs to the Strategic Action Programme
Dear members of the Regional Task Force on Economic Valuation (RTF-E),
This e-forum has been established to facilitate inter-sessional discussion regarding RTF-E inputs to the regional Strategic Action Programme.
You will recall that on the final day of last week's meeting each member of the Task Force was provided with a clean electronic version of the empirical dataset relating to the economic value of goods and services derived from coastal habitats. I am sure that you will also recall the commitment that each of you made to:
Best regards, Chris .
Nest meeting of the RTF-E
I have requested Professor Huang to obtain visa authorisation for you all to enter China for the next meeting, and will try to get the invitations dispatched to you this week since I shall be going to Nairobi for two weeks from Sunday. I have checked the data sheets and suspect that some of you will also have noted that there are errors in the calculations associated with the mangrove national standard values for some of the resources. I shall correct these next week and hope that you will send corrections of the data sets and clarifications regarding the queries raised during our last meeting to Chris and I as soon as they have been completed.
Dear members of the RTF-E,
First Amendments to the MoUs
The proposed first amendments to the Memoranda of Understanding between your organisations/institutes and UNEP were sent to you today via e-mail. Please contact me immediately via e-mail (firstname.lastname@example.org) or telephone (662 288 1116) if you do not receive this document.
The proposed amendment contains a draft operational budget in Table 2. Please insert your budget requirements for the execution of the economic valuation tasks from 2007 to 30th June 2008 into this table, and return the document to the PCU via e-mail (email@example.com) and fax (662 288 1094). Please copy all e-mail communications to Ms. Saranya (firstname.lastname@example.org). You are reminded that the proposed budgets can only be used for new agreed activities and cannot be used to refinance unfinished tasks from the original MoU.
Seventh Meeting of the RTF-E (12th to 15th March 2007)
There is now very little time remaining before the seventh meeting of the RTF-E in China. It would be appreciated if all members could do their best to send the revised/corrected datasets of economic values to the PCU by the 12th February deadline. The meeting documents for the seventh meeting are now available online – please click here.
Weather in Beihai
Dr Lie has informed me that the weather in Beihai during the next meeting would be around 15-25 C.
see you there and best regards,
Cost Benefit Analysis
I hope youall had a nice flight back to your respective countries.
I have been thinking about the sources of benefits derived from the habitats. These are either prevention of the loss of existing habitats or the creation of habitats.
In our case, both loss prevention and habitat generation are present in the SAP. For seagrass, wetlands and coral reefs the source of benefits are the prevention of the loss of habitat.
For mangrove, both are present. Creation of habitat can be realized by replanting/reforesting 166.000+ hectares with mangrove species. Prevention of loss of habitat can be realized by placing the existing areas under SD management regime.
That being the case, I do not think that it is appropriate to include or add the value generated by the areas whose disappearance is prevented with the actions under SAP (as proposed by our eminent Chair). It will be double counting the benefits since precisely, the benefits we are speaking of are brought about by the prevention of habitat loss.
On the other hand, the benefits derived from creating the habitat (as in replanting), are the only benefits generated by the action. Non-action will mean that the area will lie idle and no benefits can be derived therefrom.
Therefore, the benefits we identified and quantified in the meeting are the total benefits generated by the actions under the SAP.
As you will recall, members agreed during the recent meeting in China to prepare text regarding future actions of the Task Force for inclusion in the Strategic Action Programme. The following is the draft text received to date. John is currently working on this and aims to finish the RTF-E section of the SAP by this Friday (30th March). In the meanwhile, members are encouraged to review the text below and suggest any changes and/or additional text.
Best regards, Chris.
INPUTS TO THE STRATEGIC ACTION PROGRAMME PREPARED BY MEMBERS OF THE RTF-E FOLLOWING THE SIXTH MEETING OF THE TASK FORCE IN CHINA (12th-15th MARCH 2007)
Dr. Noel Padilla
Collection of Empirical Data Relating to the Economic Values of the Goods and Services in the Demonstration Site Management Areas
Valuation of the goods and services provided by the habitats requires the collaborative efforts of a multidisciplinary team. The undertaking will need, at the very least, an ecologist who has the expertise in the variety of goods and services provided by the specific habitats and a resource economist who has the expertise in how to get these values. The member of the Regional Task Force on Economic Valuation from each country will team up with the ecologist from the demonstration site to undertake the valuation of goods and services provided by the said sites. The team meFor each demonstration site, the Regional Task Force Member of the country will team up from the on
Dr. Noel Padilla
Review and Update the Manual on Economic Valuation
"The process of collecting empirical data relating to the economic values of goods and services provided by the habitats will validate the valuation processes and procedures contained in the Manual on Economic Valuation. As such, the lessons learned and issues encountered and the corresponding actions/activities undertaken to address these issues will serve as inputs in updating the manual to make it more user friendly.
The different situations obtaining in the different demonstration sites shall serve as an important basis in providing more situational illustrations on how to apply the various valuation methods in different sets of conditions.
During the gathering of empirical data, The Regional Task Force on Economic Valuation members shall document the lessons and issues and how these issues were resolved in order that the review and updating of the manual can be facilitated."
Preparation of Cost Benefit Analysis for the Second 5-Year Plan
The benefit derived from action as outlined in the SAP (see page 43)...
The data and information that need to be provided by each Regional Working Group should include:
1. time series data of physical loss and degradation of specific habitat which will be eventually transformed into economic value, especially in terms of total economic value of habitat per unit area, through appropriate valuation techniques.
2. estimated rates of loss and degradation of habitat in high-pressure scenario (or high loss rate in case of without action plan or non-action) and in low-pressure scenario (or low loss rate in case of with action plan) in which the difference between two rates or decline in loss and degradation value of habitat is considered the benefit side of SAP.
3. details of action plan contained in the SAP according to national and regional priorities including target areas, planned activities and time frame of implementation.
4. investment and operating cost of all planned activities to be undertaken under SAP, which is considered the cost side of SAP
According to such data preparation, an economic cost-benefit analysis from the approach of with and without SAP action plan can then be performed to prove the feasibility of SAP for such habitat rehabilitation. In general, data prepared by the Regional Working Group are in the manner of comparison between the incremental benefit from decline in loss value of habitat and the total proposed cost estimate of expected action plan under SAP. Within the 5-year plan, which is normally used as baseline timeframe for project evaluation, benefit from annual loss decline will thus be put to compare with annual cost of SAP activities. However, since the fact is that any rehabilitated habitat will tend to yield benefits accumulatively into the future, benefits from loss decline of habitat will also be seen in accumulative values throughout the 5-year plan.
According to time value of money and inflation considerations, both flows of SAP costs and benefits within 5-year period will be adjusted with inflation rate as time passed by before discounting into the present value. Inflation as well as social discount rates to be employed in SAP action plan evaluation of each nation or region should then be agreed in advance by all working groups, especially by the involved economists. Summation of present values of cost and benefit over the timeframe can then be found and compared to conclude the SAP feasibility that Benefit-Cost Ratio(BCR) should be basically greater than 1.00 while Net Present Value (NPV) or difference between benefit and cost values should be greater then 0. On the other hand, percentage of present value of cost as compared with present value of benefit can also shed some light on possibility of investment in SAP. In brief, cost-benefit analysis will simply be used as a tool to justify SAP action plan to be implemented in reality.
Feasibility concept of cost-benefit analysis is generally applied to cover the 5-year period in case of short run planning, while it can be also used in terms of long run planning to cover the longer period such as 10-year period. When the cost-benefit analysis deals with the longer period of timeframe, however, sensitivity analysis of such feasibility is usually performed to reveal risk possibility of such action plan. Sensitivity analysis is basically the recalculation process of cost-benefit analysis under assumptions that there are negative changes in major factors to affect the feasibility of action plan, such as those factors leading to decreasing benefit or increasing cost. Sensitivity analysis will therefore be performed to make the typical static cost-benefit analysis the more dynamic evaluation tool.
According to the case of SAP action plan for coastal habitat rehabilitation, it should then be noted that data preparation for both cost-benefit analysis and sensitivity analysis should pay attention to possibilities of facing underestimated benefit value of habitat (such as wetland and coral reef) while proposing overestimated value of SAP cost (such as salary and management cost items). Technical and economic research to gain insight of update knowledge and information about coastal habitat benefits and values are therefore needed to support the search for more effective cost-benefit analysis of action plan.
Total Economic Values of Ecosystems in the South China Sea
Four ecosystems are considered in our attempt to derive regional values based on past valuation studies carried out in the 7 countries bordering the South China Sea. The values are weighted by the areas studied to derive the national values which are standardized at 2005 base year. These values are further converted into US dollar for common denomination that facilitates comparison among countries in the region. The sum of these values in US dollar represents the regional value for each ecosystem.
For ecosystems previously studied, the values are based on goods and services provided. The goods are valued using market prices while the services are valued using contingent valuation and travel cost methods. The following goods and services are valued for each ecosystem.
Leaves/palm fronds (Thatch, fodder)
Fruit - propagules
Extraction for Medicine
Nutrient - Sediment Retention
Carbon sequestration (carbon fixed per hectare per annum)
Option value - biodiversity
Fish Capture Fisheries (food and aquarium fish)
Molluscs (pearl oyster)
Coral - Building materials
Coral (curio trade)
Fish (food & aquarium fish)
Navigational Lane Commercial Fisheries Capture
Fermented Fish Rabbit fish fingerlings
Fish Pellet Dried (Boneless)
Fish Pellet Dried (with bones)
Crustaceans Prawn and Crab
Seaweed – algae
Tourism and Recreation
Environmental Services Protection of the coast from erosion
Nutrient cycle of ecosystem
Purification of seawater
Egg turtles nesting beaches
Option, existence & bequest
Biological Diversity Services
Honey and Wax
Leaves - fodder
Research & Education
Biodiversity (Existence value)
The values derived from these ecosystems are then used to justify the costs of strategic action programmes outlined for each ecosystem. However, these values are grossly underestimated to represent the benefits as not every resource has been valued in previous studies. Each action programme is aimed at reducing the current rate of degradation of resources in the region. The rates of degradation, strategic action programmes and the costs of actions are provided by the regional working groups in the project.
DR. KHALID’S ADDITIONAL INPUTS
The Total Economic Value of each ecosystem changes over time due to changes in demand and scarcity of the resources. These values must be reviewed and updated to reflect the scarcity of and changes in the demand pattern for the resources. Besides, further studies to incorporate the services provided by the ecosystem should be encouraged, especially in areas where the values have not been derived. This is essential in order to account for each contribution of the resources to the values of the ecosystems.
Periodic review and updating of the TEV should provide us estimates which are closer to the true value of the resources. On-going individual researches are particularly useful in determining the present value of the resources to be standardized when comparisons are to be made as in our attempt to derive the regional values. A five-year major review and updates are recommended for this exercise although annual review and updates are essential.
DR. NGUYEN THE CHINH
Dissemination of knowledge to senior government officials
THE NECESSIRY FOR DISSEMINATION OF KNOWLEDGE TO SENIOR GOVERNMENT OF OFFICIALS AND CHALLENGES.
• The current knowledge of senior government officials
• Challlenge to dissemination of Dissemination of knowledge to senior government officials
VIEWPOINTS AND OBJECTIVES OF DISSEMINATION OF KNOWLEDGE TO SENIOR GOVERNMENT OF OFFICIALS.
THE CONTENTS OF DISSEMINATION OF KNOWLEDGE TO SENIOR GOVERNMENT OF OFFICIALS.
• The total economic value of habitat in the sea
• The Methods of valuation.
• Market price
• Non market prics.
• Economic values of Mangrove
• Economic values of Coral reefs.
• Economic values of Seagrass.
• Economic values of Wetland
MONITORING BENEFITS AND COSTS OF THE PROJECT
Commonly a project is well planned not only for the implementation of the project, but also the anticipation of the positive and negative results that may appear from the projects, before, during and after the implementation of the project. Monitoring and evaluation of a project is a sequence of activities of recording, data collection and analysis of the implementation of the project including the impacts of the project on the community as a whole. The impacts of a project can be positive in the forms of benefits, and can be negative in the forms of costs. These are also true for the implementation of the SCS projects at the demonstration sites, where benefits and costs will also accrue to the society.
The benefits and costs may be distinguished into direct and indirect benefits and costs of the projects. Direct benefits are benefits that really stated as the main objectives that must be achieved by the projects. For example the main targets of the project is to rehabilitate the mangrove forest which has been decreasing in its acreage so that the hectarage of the good quality of the mangrove forest can really increase. The rehabilitation of the mangrove forest is expected to progress according to the plan.. However, in practice the implementation of the rehabilitation of the mangrove forest may not occur as what has been planned. Therefore a monitoring and evaluation is needed to produce records of what have been done, how much of the target have been achieved, what have caused its delay if exist, and what actions have been taken to remedy the problems. The monitoring has to list what types of products and services that have been achieved as the direct benefits. Furthermore, attempts should include the identification of the beneficiaries of the products and services resulted from the rehabilitation project. Since SCS-UNEP/GEF project covers many activities in several habitats (mangrove, coral reefs, sea grass, wet land, land pollution, and fisheries), therefore a huge effort of recording, data collection and analysis with sufficient number of experts and financial support will be needed.