economic value

Kralendijk – The recently concluded Dutch Caribbean Nature Alliance (DCNA) convention reminded participants that nature is big business. However, many people are unaware of the varied ways in which nature’s resources can be leveraged to create sustainable economic growth. One of DCNA’s goals is to raise awareness of nature’s potential.

Nature’s Economic Value

Mrs. Hellen van der Wal, chairlady of DCNA, notes that “nature provides us with food and offers us alternatives for entertainment and relaxation. The unique biodiversity that we have in the Dutch Caribbean is a source of attraction for tourists who travel to the region purely to contemplate this nature.” Nature underpins all economic activity and according to the World Wildlife Fund for Nature, nature’s contribution to global GDP was valued at US125 trillion in 2018.

Mrs. Van der Wal leading important discussions during the DCNA convention

Sustainability Concerns

While nature provides opportunities for considerable economic growth, DCNA believes that such growth should not be attained at the expense of natural assets. To protect its unique biodiversity, the Dutch Caribbean islands need to integrate sustainable development practices into policies and long-term plans. To achieve this, nature must be the point of departure in decision-making and in the creation of strategic plans.

DCNA’s Contribution

During the recent convention in Curaçao, DCNA’s board renewed its commitment to intensify efforts to raise awareness of nature’s economic value, particularly among Dutch Caribbean governments. DCNA will also continue to engage the next generation in nature conservation discussions. Youth contribution is of great value, which is why DCNA has created a structural program for young people.

DCNA will also continue to encourage and facilitate credible scientific research, which is needed to navigate a future that will be shaped by climate change-induced challenges and crises. To achieve these important goals, DCNA will continue to build partnerships and raise funds. This is crucial, considering the challenges that resulted from the pandemic.

There is still a lot of work to be done, which is why close collaboration between the six Dutch Caribbean islands is of paramount importance. Mrs. Van der Wal believes the recent convention succeeded in strengthening existing relationships, but many challenges remain. “With the important changes we are making in our governance structure, we are equipping ourselves to better serve our Protected Area Management Organizations in their task to conserve nature and raise awareness. We also want to inform governments more effectively and will therefore continue working on strengthening our relationship and collaboration with the respective governments.” Van der Wal concludes emphasizing that “we cannot talk about sustainable development without talking about nature conservation.”

More information about the DCNA convention can be found on DCNA’s Facebook page: DutchCaribbeanNatureAlliance

Article published in Special Edition BioNews: 2021 DCNA Convention

Quantification of the benefits humans obtain from Marine Protected Areas (MPAs) supports decision-makers by elucidating the link between the functioning of MPAs and human welfare. By conducting a residential household survey among residents in the Cayman Islands, this study assesses people’s willingness to pay for the marine environment from a perspective of cultural and recreational values. In this way the study offers a partial estimation of the total economic value of the marine environment of the Cayman Islands. Two valuation methods are applied: the contingent valuation and the choice modelling method.

Data from 384 household surveys shows that 63% of the respondents are willing to pay for additional management of the marine environment. The average amount that respondents are willing to pay per month for an improvement in a marine protection area ranges between is 12.69 CI$ and 16.55 CI$. The Cayman Islands has approximately 24,165 households, resulting in a range of the total yearly cultural and recreational value of the marine environment of between 3.7 million – 4.8 million CI$ for its residents.

The choice experiment shows that respondents especially value coral reefs and water quality as marine elements. Moreover, households who participate in fishing on average express a higher value for all attributes of marine environment covered in the experiment. The study also shows that residents from Cayman Brac value fish catch significantly more than the other sister islands and that no-take zones are less valued by older residents and people born on the Cayman Islands.

The conclusions from our study concerning public support for expansion of the MPA diverge the findings of an earlier study. While Richardson et al. (2013) concludes that levels of support range from 14% to 47% between the sister islands, our study measured much higher levels of public support ranging between 58% to 85%. Whilst Richardson et al. (2013) used public consultation, geared towards assessing people’s opinions on the intended expansion, the statement within this study was part of a larger survey and a simplification of the proposed changes presented during the public consultation. However, besides the simplification, within this study people might have been primed by previous questions in the survey, which may have led to respondents realizing what trade-offs need to be made in marine conservation.

Finally, this research reveals the presence of an anchoring/ordering effect in the valuation process. Showing respondents the choice experiment first is associated with a higher fraction of the respondents being willing to pay in the contingent valuation, and to respondents being willing to pay more in the contingent valuation, compared to respondents that were shown the contingent valuation question first. 

The Challenge
Healthy ecosystems such as the forests on the hillsides of the Quill on St Eustatius and Saba’s Mt Scenery or the corals reefs of Bonaire are critical to the society of the Caribbean Netherlands. In the last decades, various local and global developments have resulted in serious threats to these fragile ecosystems, thereby jeopardizing the foundations of the islands’ economies. To make well-founded decisions that protect the natural environment on these beautiful tropical islands against the looming threats, it is crucial to understand how nature contributes to the economy and wellbeing in the Caribbean Netherlands. This study aims to determine the economic value and the societal importance of the main ecosystem services provided by the natural capital of Bonaire, St Eustatius and Saba. The challenge of this project is to deliver insights that support decision-makers in the long-term management of the islands’ economies and natural environment. 

The Approach
By assigning economic values to the main ecosystem services of the Caribbean Netherlands, this research draws attention to the economic benefits of biodiversity
and highlights the growing costs of biodiversity loss and ecosystem degradation.
From the onset of the study, stakeholders on each island actively participated in the research by providing information and valuable insights. This process of stakeholder engagement also created public support for the concept of ecosystem services among the target audiences. The studies address the most relevant ecosystems and ecosystem services for each of the three islands and apply a range of economic valuation and evaluation tools. By surveying more than thousand people on the three islands including tourists, local residents as well as interviewing around 1,700 Dutch residents in the continental Netherlands, this study estimates the willingness of individuals to pay for the protection of nature of the Caribbean Netherlands. Furthermore, scenario analyses are conducted to inform decision-makers about the most effective strategies to manage the ecosystems of the islands thereby supporting the economy and wellbeing of its residents.

The Results
The total economic value (TEV) of the ecosystem services provided by marine and terrestrial ecosystems represents an important part of the economy. The TEV of the natural environment of the Caribbean Netherlands amounts to $122 million per year. The TEV and its underlying components can be used to design a strategy for effective conservation measures and sustainable development. After extensively analysing different development scenarios for the value of future ecosystem services on Bonaire, St Eustatius and Saba, we can draw a number of clear and outstanding conclusions. For example, there are indeed ample opportunities to further develop the tourism industry, however, increasing the tourism sector beyond its capacity will cause pressures the local ecosystems cannot endure. Consequently, degradation of the natural environment will deter future tourists from coming to the Caribbean Netherlands. Furthermore, we clearly show that with the current pressure on ecosystem services of Saba, St Eustatius and Bonaire, the TEV of its natural environment will significantly decrease. Therefore, increased support for nature conservation proofs to be a profitable investment in the economy as well as the environment of the three islands. These and other lessons learned in this elaborate study are well documented in a series of extensive online reports and a number of easily accessible policy briefs communicating the outcomes of the study for each individual island. 

Policy Brief

The Challenge
Healthy ecosystems such as the corals reef patches and forests on the characteristic Mount Scenery are critical to the Island of Saba. Local people call Saba ‘The Unspoiled Queen’, showing how proud residents are of their cultural heritage and pristine nature. In the last decades, various local and global developments resulted in serious threats to these fragile ecosystems, thereby jeopardizing the foundations of the island’s economy. To address these threats in an effective manner, it is crucial to understand how nature contributes to the economy and wellbeing of this beautiful tropical island. This research aims to determine the economic value of the main ecosystem services that are provided by the natural resources of Saba and their overall importance to the island’s society. The challenge of this project is to deliver insight that supports decision-makers in the long-term management of the island’s economy and the natural environment.

The Approach
By assigning economic values to the main ecosystem services of Saba, this study draws attention to the economic benefits of biodiversity and highlights the growing costs of biodiversity loss and ecosystem degradation. From the onset of the study, stakeholders participated by facilitating data and simultaneously creating support for the concept of ecosystem services among the target audience. The study applies a range of economic valuation and evaluation tools. By surveying over a 1,000 people including tourists, local residents, and citizens of the Netherlands, this study estimates the willingness to pay of individuals for the protection of nature of Saba. Furthermore, scenario analysis is conducted to inform decision-makers about the most effective strategies to protect the ecosystems of Saba to improve the economy and wellbeing on the island. 

Policy Brief

The Challenge
Healthy ecosystems such as the corals reefs and the forests on the hillsides of Boven and the Quill are critical to the society of St Eustatius. The St Eustatius Strategic Development Plan also acknowledges the importance of natural attractions for the expansion of the tourism sector. In the last decades, various local and global developments have resulted in serious threats to these fragile ecosystems, thereby jeopardizing the foundations of the island’s economy. It is crucial to understand how nature contributes to the economy and wellbeing to make well-founded decisions that affect the natural environment on this beautiful tropical island. This research aims to determine the economic value of the main ecosystem services that are provided by the natural resources of St Eustatius and their overall importance to society. The challenge of this project is to deliver insight that supports decision-makers in the long-term management of the island’s economy and natural environment.

The Approach
By assigning economic values to the main ecosystem services of St Eustatius,
this research draws attention to the economic bene ts of biodiversity and highlights the growing costs of biodiversity loss and ecosystem degradation. From the onset of the study, stakeholders participated by facilitating data and simultaneously creating support for the concept of ecosystem services. The study addresses the most relevant ecosystems and ecosystem services for St Eustatius and applies a range of economic valuation and evaluation tools. By surveying over a 1,000 people including tourists, local residents, and citizens of the Netherlands, this study estimated the willingness of individuals to pay for the protection of nature of St Eustatius. Furthermore, scenario analysis was conducted to inform decision-makers about the most effective strategies to protect the ecosystems of the island in order to improve the economy and wellbeing of its residents.

The Results
The total economic value (TEV) of the ecosystem services provided by the marine and terrestrial ecosystems of St Eustatius is calculated to be $25 million per year. After extensively analyzing different development scenarios for the value of future ecosystem services, it becomes very clear: Despite the ample opportunities to develop the tourism industry, increasing the tourism sector beyond its capacity
are likely to cause pressures which the local ecosystems cannot endure. This potential degradation of the natural environment will prevent future tourists from coming to St Eustatius. In other words, tourism can destroy the very environmental attractions that visitors come to experience on St Eustatius. Furthermore, increased support for nature conservation proofs to be a pro table investment. With the current pressure on ecosystem services on St Eustatius, the TEV of its natural environment, will decrease from $25 million today to around $18 million in 30 years. The project is well documented and provides several extensive online reports and three easily accessible policy briefs to communicate the results of the study. 

Policy Brief

The Challenge
Bonairean ecosystems support touristic activities that depend on the quality of the natural environment, such as diving, snorkelling, kayaking, boating, enjoying beaches, and participating in land activities. The tourism sector is an industry with substantial size and nancial contribution to the economy of Bonaire. However, the economic value of the contribution of nature to Bonaire’s tourism has never been quanti ed, nor have the most important aspects of Bonairean nature for tourism been identi ed. It is essential that the economic value of the ecosystem service to tourism and the dependence of tourism on Bonairean ecosystems while impacting these same ecosystems be determined in order to further assist policy-makers in understanding this crucial relationship and support them in wise long-term decision-making.

The Approach
To determine the value of Bonairean ecosystems for the tourism industry a survey among tourists visiting Bonaire is conducted. This study estimates the average expenditures of these visitors, as well as their Willingness-To-Pay (WTP) for protection of Bonairean nature. The result of this survey also elucidates tourists’ perceived value of different aspects of Bonairean nature. The socio-economic value of the ecosystem services for tourism is combined with spatial data to determine which ecosystems are the most economically valuable with regards to tourism.

Results & Recommendations
The expenditure by tourists on Bonaire is found to be around $125 million annually. An estimated welfare of around $50 million is contributed by Bonaire’s nature
to tourism. Stay-over tourists are found to contribute more to the tourism industry than cruise tourists, and marine ecosystems are found to be more economically signi cant than terrestrial ecosystems on the island. The high WTP of tourists
for additional nature protection in Bonaire provides opportunities for the local government to increase the current user fees of visitors to Bonaire. 

Policy Brief

The Challenge
How important is the unique Caribbean environment for the Dutch citizen? How does one value the worth of these islands’ ecosystems to citizens of the Dutch mainland, even if these people will never visit these beautiful islands? Does the fact that the Caribbean Netherlands islands recently became special Dutch municipalities, while having to manage a huge nature area, create a sense of solidarity among the population of the Netherlands? These questions are addressed in an extensive case study with the aim to advice policy makers in the Netherlands about the level of public support for assisting the Caribbean Netherlands in their effort to sustainably manage their ecosystems.

The Approach
This study applied the contingent valuation method and choice experiments to determine the willingness-to-pay (WTP) for the nature conservation on the mainland and on the islands. Over 800 face-to-face interviews of people living in the Netherlands were conducted, and additional 500 respondents lled out an online survey.

Results & Recommendations
The most notable result is that Dutch mainland citizens have a positive WTP for protecting nature on both sides of the ocean. Individual’s initial value on the environment as a whole and their level of consumer con dence in economy were strong explanatory variables in deriving their WTP. Despite a negative perception
of Dutch economic prospects, respondents nonetheless placed signi cant emphasis on environmental protection. After adjusting for preference and payment uncertainty of the respondent, the aggregated monthly amount for the non-use value of nature protection in the mainland Netherlands and the Caribbean Netherlands is estimated at €34 million and €17 million, respectively. Raising awareness that 20,000 inhabitants of the Caribbean Netherlands are in no position to fundamentally support the level of nature conservation that is needed is an important rst step to take. 

The global environment is in a relatively bad state and there is growing awareness of its importance to human wellbeing. This study aims to shed light on a corner of this importance. Although a corner its affects to human wellbeing is great. What if the entities one culturally identifies with should begin to deteriorate or very plausibly disappear? In the spirit of learning and providing innovation to current environmental policy practices, it is the objective of this study to determine the recreational and cultural value that the marine and terrestrial environment of Bonaire provides to its residents. The later in order to improve decision making on conservation efforts on the island by internalizing externalities in policies that affect the environment and its ecosystems. This was done through use of the environmental economics technique of choice modelling, which consists of a choice experiment as well as a supporting structured survey. Choice modelling determines the WTP (willingness to pay) to conserve nature. The results of this study suggest a yearly WTP by all households on Bonaire to improve the overall natural environments state from poor to moderate to be approximately $2,9 million USD and from poor to high as much as $3,9 million USD. However from the supporting background questions it was also concluded that a widely employed PES system (Payment for Ecosystem Services) would not succeed with- out learning taking place. There should be dialogue on the one hand and on account- ability (locals or tourists?) and on the other hand on the need for environmental management itself. In addition to this the most important perceived threats were found to be waste (solid and liquid) and coastal development. To sum up the study shed light on the tension that exists between tourism which residents economically depend on and the effect expanding tourism has on the nature of Bonaire. An impor- tant conclusion is that restriction of coastal and inland development is supported by locals as well as better waste management and goat management. Policy makers should take this document into account since it expresses the concerns and desires of the local population as regards to policies affecting the environment. 

To inform decision makers about the most effective strategies to protect the ecosystems of Bonaire, a full-scale valuation of all ecosystem services on the island of Bonaire has been undertaken by WIKCS and the VU University Amsterdam. The study addresses a wide range of ecosystems, ecosystem services and applies a multitude of economic valuation and evaluation tools. For budgetary reasons, a distinction has been made in terms of the ecosystem services covered by the studies between ecosystem services that are valued through primary research and ecosystems services that are addressed through secondary data analysis. This report summarises the ecosystem services that are valued on the basis of desk research or through key informant interviews. The quality of each sub-study varies, depending on the data availability to the subsequent researchers. This also implies that not each sub-study was able to actually generate a monetary value to be included in the Total Economic Value (TEV) estimate. Despite this caveat, the individual studies increase the understanding of the complex links between nature and society on Bonaire and are therefore worth presenting.

Art value

Artists are inspired by their surroundings. Such is also the case on Bonaire, where the natural scenery of the island stimulates artists to use components of nature in their work. Clearly, nature plays a crucial role in the production process of art on Bonaire. The demand of art consists of the thousands and thousands of tourists visiting the island, who are keen to bring home a piece of art to memorise the beauty of the island upon their return. Moreover, the beautiful photographs and books produced on Bonaire are distributed to clients across the world. Given the explicit demand and supply of art on Bonaire and its strong dependence on nature, the art sector on Bonaire plays an important role in the overall economy and provides an additional reason to manage nature well on the island. The value of the ecosystem service of artistic inspiration is valued at $460,000 annually.

Research value

Nature in Bonaire provides important services for research and education. The marine and terrestrial environment of Bonaire is subject for a large group of academics who conduct and publish innovative research based on these unique and easily accessible ecosystems. Without the presence of healthy ecosystems, Bonaire would not attract large numbers of researchers nor would Bonaire’s nature be a source of inspiration for many educational activities on the island and beyond. This sub-study made an inventory of all ecosystem related research expenditures funded by governmental and non-governmental organisations for Bonaire. In total a total research value was estimated between 1,240,000 USD and 1,485,000 USD in 2011.

Medical and pharmaceutical value

Medicinal plants play important roles in many traditional societies. The healing properties of herbal medicines have been recognized in many ancient cultures thousands of years ago. Besides these local benefits, biodiversity is important for the development of pharmaceutical treatments and drugs. The purpose of this sub-study is to economically value the benefits of species and ecosystem functions that are relevant for medicinal and pharmaceutical purposes. The study found that a large part of the population in Bonaire regularly collects and uses local herbs and other medicinal plants for medical treatment. Two-third of the inhabitants who were surveyed made use of local plants as an alternative to modern medicine or prescription drugs. Ultimately, a total annual medicinal and pharmaceutical value results of $688,788 of which more than half is comprised of the local value of medicinal plants.

Carbon sequestration

The ecosystem service of climate regulation deals mainly with greenhouse gas emissions and how ecosystems can mitigate such effects. Bonaire has six ecosystems that provide carbon-sequestering properties: salinas, dry forest, coral reefs, sea grass, mangroves and open ocean. The objectives of this sub-study is to (1) identify the ecosystems that are relevant to climate regulation in Bonaire with their functions and threats; (2) describe the different economic valuation methods suitable for climate regulation calculations; and (3) value the overall climate regulation potential of Bonaire. This desk study has made a rough attempt to estimate the carbon sequestration value of the main ecosystems of Bonaire. Based on carbon market prices at the time of research, this value was estimated at $290,000 per year.

Pollination by bats

The island of Bonaire is a fauna and flora rich and beautiful attraction in the Caribbean. By supporting fruit growth and aesthetic values, bats plays an important role in preserving high levels of biodiversity on Bonaire. This study made an attempt to give more insight in the importance pollination by bats for the island. Due to limited availability of data and time, the study will not generate an actual economic value of pollination. Yet, by describing the possible links between pollination and the economy of Bonaire, this study adds value and provides a solid foundation for an actual economic valuation study in the future. Despite of the lack of a concrete economic value, the evidence provide support the notion of conservation of the bats of Bonaire their natural habitat (i.e. caves). Both economic and cultural reasons have been identified to support this conclusion.

Coastal water quality

This paper attempts to examine the values of ecosystems in provisioning good water quality in Bonaire, Dutch Antilles. Bateman’s (2011) steps in ecosystem assessment and economic analysis are used as a framework to run this examination. Three ecosystems are identified that contributes to deliver services in question: mangroves, saliñas/salt marshes, and sea grasses. Based on their functions related to providing good water quality (filtering, water purification, and nutrient cycling) this report proposes three valuation methods: 1) replacement cost method for mangroves and saliñas; 2) Production function method for sea grasses. Benefit transfer also mentioned in the discourse to tackle the challenge of finding relevant data.

Amenity value

The fact that many people prefer natural over built environments is often manifested in house prices. Therefore various environmental conditions may have a significant impact on house prices. In Bonaire these include the view or proximity to water bodies, coral reefs and other healthy ecosystems. This study aims to estimate this so-called amenity value of nature on Bonaire. Through a hedonic pricing analysis, the hypothesis was tested whether property values are not only determined by conventional house and neighbourhood characteristics, but also affected by the presence and quality of Bonaire’s ecosystems. From this statistical analysis no strong significant impact of environmental variables onto the house prices has been detected and thus the hypothesis is rejected. This lack of evidence limits the possibility to calculate the amenity value. The cause of the poorly performing analysis is the limited data available on house sales on Bonaire.

Cultural value

The island of Bonaire has a precious though threatened nature and its culture is indistinguishable from nature. Yet, times are changing and so is the relationship between nature and society in Bonaire. Since the development of industrial times, less Bonairean practise agriculture, and less people are working in the nature. The objective of this study is to estimate the value of the cultural ecosystem services of the island of Bonaire. The scope of this sub-study is limited to four cultural values of ecosystems on Bonaire: (1) Recreational activities; (2) Subsistence and recreational fishing; (3) Kunukus; and (4) Cultural landscape. 

Healthy ecosystems such as coral reefs and mangroves are critical to Bonairean society. In the last decades, various local and global developments have resulted in serious threats to these fragile ecosystems of Bonaire, thereby jeopardizing the foundations of the island’s economy. Therefore, it is crucial to understand how nature contributes to Bonaire’s economy and its wellbeing in order to make well-founded decisions when managing the economy and nature of this beautiful tropical island. This research aims to determine the economic value of the main ecosystem services that are provided by the natural resources of Bonaire and their overall importance to society. The challenge of this project is to deliver sound scientific insights that will guide decision-making regarding the protection of Bonaire’s ecosystems and the management of the island’s economy.

By assigning economic values to the main ecosystem services of Bonaire, this research draws attention to the economic benefits of biodiversity and highlights the growing costs of biodiversity loss and ecosystem degradation. The study addresses the most relevant ecosystems and ecosystem services for Bonaire and applies a range of economic valuation and evaluation tools. By surveying over 1,500 persons, including tourists, fishermen, local residents, and citizens of the Netherlands, this study estimated the willingness of individuals to pay for the protection of Bonairean nature, as well as mechanisms (e.g. user fees) through which such payments would be transferred. Furthermore, a scenario analysis is conducted to inform decision makers about the most effective strategies to protect the ecosystems of Bonaire. This study intensively involved stakeholders from the start to finish, which facilitated data collection while simultaneously building capacity in applying the concept of ecosystem services among the target audience.

In total, more than 10 different ecosystem services have been valued in monetary terms. The totaleconomic value (TEV) of the ecosystem services provided by the marine and terrestrial ecosystems of Bonaire is $105 million per year. This TEV and its underlying components can be used to build a strategy for effective conservation measures on Bonaire. After extensively analyzing different scenarios for future ecosystem services values one result becomes very clear: an ounce of prevention is worth a pound of cure. In other words, it is more efficient to prevent extensive environmental damage than trying to revitalize the environment while there are still threats at hand. With the current threats unmanaged, the TEV of Bonairean nature will decrease from $105 million today to around $60 million in ten years time and to less than $40 million in 30 years. The project is well documented and provides several extensive online reports, five easily accessible policy briefs and a beautiful film documentary that translates the scientific results into real life situations on Bonaire.