Power Point Presentation
• Study presents the first economic valuation of a Caribbean island coastal lagoon.
• A choice experiment embedded in a larger household survey is used for the valuation.
• The Simpson Bay Lagoon provides many valuable ecosystem services to local people.
• Findings illustrate that the lagoon is currently worth $12.1 million per year.
• Mangrove restoration and improved sewage treatment raise value up to $26.3 million.
Like many Caribbean coastal ecosystems, the Simpson Bay Lagoon in Saint Martin suffers from heavy development, wastewater pollution, and overexploitation. These pressures have severely degraded its ecological integrity, causing significant environmental impact as well as negative socio-economic consequences. Local livelihoods depend on important ecosystem services provided by the Simpson Bay Lagoon, such as storm protection and water purification. A major cause for the continued degradation of the Simpson Bay Lagoon is that decision-makers undervalue these ecosystem services. This study conducts an economic valuation of the Simpson Bay Lagoon to solve this undervaluation, providing the first economic valuation of a Caribbean island coastal lagoon. To estimate the economic value of the Simpson Bay Lagoon, this paper employs a choice experiment, which is embedded in a larger household survey among residents of Saint Martin. The findings of the choice experiment reveal that the Simpson Bay Lagoon in its current environmental state is worth US$12.1 million per year to the residents of Saint Martin. Besides an economic valuation, this paper also scrutinizes the welfare benefits of improved environmental management. Two environmental management scenarios are evaluated: the installation of a sewage treatment plant and mangrove restoration. The installation of a sewage treatment plant would enhance the annual economic value to US$16.5 million, mangrove restoration to US$23.0 million, and the implementation of both measures to US$26.3 million. Hence, ameliorating the ecological integrity of the Simpson Bay Lagoon through improved environmental management proves to be a promising venture for the environment, society, and economy of Saint Martin.
Similar to many other Caribbean coastal wetlands, the Simpson Bay Lagoon suffers from heavy development, wastewater pollution, and overexploitation. These pressures have severely degraded the ecological integrity of the lagoon. Almost all mangrove forests have been removed for development, and sewage inflow and illegal waste dumping have deteriorated the water quality. This is problematic, not only for ecological reasons, but also because local livelihoods depend on the ecosystem services provided by the lagoon. This policy brief provides a summary of three studies that have been conducted on the Simpson Bay Lagoon in the period March 2019 to June 2019, respectively focussing on the three pillars of the Triple Bottom Line – Planet, People & Profit. Central in these three studies was the implementation of a household survey in Saint Martin, in which 219 households were interviewed about how they perceive and value the Simpson Bay Lagoon.
The “Planet” study mainly focused on the water quality in the lagoon, and identified the main pollution sources. This study found that in many parts of the lagoon, the levels of nitrate-nitrogen, total coliform and faecal coliform were unacceptably high, and often rising over time. This further confirms the acute problem of poor water quality in the lagoon. The main identified pollution sources were sewage discharge, destruction from development, sunken boats, domestic waste pollution, and the release of toxic chemicals in the lagoon.
The “People” study assessed the issue from a societal perspective. It shows that the population of Saint Martin greatly values the Simpson Bay Lagoon, given their high willingness to pay for more environmental management. The survey results revealed that the degrading environmental condition of the lagoon was noticed by the vast majority of the respondents. People also highly supported better environmental management of the lagoon (e.g. through mangrove restoration or building a sewage treatment plant). The results further signify that more educational opportunities could change the resident’s environmental behaviour in a positive way. Engaging the public to come more into contact with nature, for instance by involving them in recreational activities, could lead to improved environmental behaviour as well.
The results of the “Profit” study, the economic analysis, show a clear economic rationale for improved environmental management of the Simpson Bay Lagoon. The study reveals that although the current total economic value of the lagoon is still nearly US$20 million per year, this value would nearly be completely lost if the current business-as-usual scenario continues. This decline can be avoided by intervening in the lagoon. Mangrove restoration or the installation of a sewage treatment plant would significantly raise the annual economic value to US$28 or US$31 million, respectively. A cost-benefit analysis reveals that the benefits of mangrove restoration and the construction of a sewage treatment plant far outweigh their costs, and that in all aspects these environmental management scenarios economically outperform a business-as-usual scenario.
Overall, the results of all three studies imply that better environmental management of the lagoon is highly needed, simultaneously benefiting the environment, society, and the economy . Opportunities to improve environmental management are ubiquitous; it is now the turn of local policy makers to put them into practice.