The Economic Value of the Coral Reef Ecosystems of the United States Virgin Islands; April 2010 - 2012

Contact Person: Pieter van Beukering

Client: This report was commissioned by Coral Reef Conservation Program, US National Oceanic and Atmospheric Administration (NOAA) http://coralreef.noaa.gov/ and the National Fish and Wildlife Foundation (NFWF) http://www.nfwf.org/

Summary

Given the importance of the coral reefs to the United States Virgin Islands (USVI), and in light of the increasing threats caused by human development potentially reducing the services provided by this ecosystem, there is a need for quantitative information to guide decision making regarding management of coral reefs. The coral reefs of the USVI provide a wide range of ecosystem services including tourism services, recreational uses, fisheries, coastal protection, amenity values, and education/research services.

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The objective of this study is to provide a quantitative measure of how important the reefs are to the USVI in monetary terms, and generates a reference point with which to compare possible alternative development/conservation plans. Information on the Total Economic Value (TEV) of reefs provides a basis for advocating the preservation of the coral reefs in USVI, establishing damage compensation, setting fees for permit applications, or determining potential user fees for residents and tourists.

  1. The study involved a wide range of research activities. These include the following:

    An elaborate local resident survey aimed at estimating the local cultural and recreation attachment to the marine environment;
  2. An extensive tourist survey with the objective to get a comprehensive insight into the importance of the marine environment for visitors to the USVI;
  3. A thorough analysis of the coastal protection function of reefs thereby revealing the role of coral reefs in avoiding storm damage to properties and infrastructure;
  4. A hedonic pricing analysis based on real estate transactions which led to conclude about the positive impact of healthy reefs on house prices;
  5. A spatial analysis aimed at preparing value maps of the coral reefs of the USVI.
  6. An aggregation exercise combined with a rapid scenario analysis leading to the estimation of the TEV of coral reefs of the USVI.

 

  The above activities resulted in the estimation of the main ecosystem services provided by coral reefs in the USVI. The levels at an annual basis vary between ecosystem services: reef related tourism ($96 million), recreation ($48 million), amenity ($35 million), coastal protection ($6 million) and support to commercial fisheries ($3 million). The TEV adds up to $187 million per year. In addition to estimating TEV, GIS techniques are used to visualize and better understand the spatial distribution of economic values for three services: tourism, coastal protection and amenity.  

The study provides various insights that help to develop policy measures directly contributing to a more sustainable management of coral reefs in the USVI. First, the TEV of coral reefs is crucial in determining the financial claims in case of damage events in reef areas. Second, the economic valuation study is crucial in 'capturing' the estimated benefits for the purpose financing coral reef management. The TEV study provides a clear perspective who is benefiting most from healthy coral reefs. These beneficiaries may contribute to the preservation of the USVI coral reefs. Third, the study shows that the second most important beneficiary of the coral reefs is the local community, who benefits from the reef in various ways (e.g. recreation, culture, coastal protection). Through stronger engagement of the local public in marine management, decision makers may build more local support for conservation oriented measures while at the same time enhancing the awareness of local communities.

Publications:

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Policy Brief (How much are US Virgin Islands Coral Reefs worth?)