C2A5 Fiji Qoliqoli Tourism

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    FINAL REPORT

    ECONOMIC VALUATION

    IQOLIQOLI - TOURISM STUDY SUPPORT

    (Fiji)

    Isoa KOROVULAVULA

    Tanya OGARRA

    Patrick FONG

    Rusiate RATUNIATA

    COMPONENT 2A - Project 2A2

    Knowledge, monitoring, management and

    benefcial use o coral ree ecosystems

    January 2008

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    Funded by :

    COMPONENT2AKnowledge, monitoring and management of coral reef ecosytems

    Contact person:Ken McKAY

    School o Marine StudiesFaculty o Islands and Oceans

    The University o the South PacicSuva, Fiji

    Phone: (679) 3232612Fax: (679) 3231526Email: [email protected].

    T he Initiative or the Protection and Management o Coral Rees in the Pacic(CRISP), sponsored by France and prepared by the French Development Agency(AFD) as part o an inter-ministerial project rom 2002 onwards, aims to develop a vi-

    sion or the uture o these unique eco-systems and the communities that depend on

    them and to introduce strategies and projects to conserve their biodiversity, while

    developing the economic and environmental services that they provide both locally

    and globally. Also, it is designed as a actor or integration between developed coun-

    tries (Australia, New Zealand, Japan, USA), French overseas territories and Pacic Is-

    land developing countries.

    The CRISP Programme comprises three major components, which are:

    Component 1A: Integrated Coastal Management and watershed management- 1A1: Marine biodiversity conservation planning

    - 1A2: Marine Protected Areas

    - 1A3: Institutional strengthening and networking

    - 1A4: Integrated coastal ree zone and watershed management

    Component 2: Development o Coral Ecosystems

    - 2A: Knowledge, monitoring and management o coral ree ecosytems

    - 2B: Ree rehabilitation

    - 2C: Development o active marine substances

    - 2D: Development o regional data base (ReeBase Pacic)

    Component 3: Programme Coordination and Development

    - 3A: Capitalisation, value-adding and extension o CRISP Programme activities

    - 3B: Coordination, promotion and development o CRISP Programme

    The CRISP programme is implemented as part o the

    policy developped by the Secretariat o the Pacifc

    Regional Environment Programme or a contribution

    to conservation and sustainable development o coral

    rees in the Pacifc

    CRISP Coordinating Unit (CCU)

    Programme manager : Eric CLUA

    SPC - PoBox D5

    98848 Noumea Cedex

    New Caledonia

    Tel : (687) 26 54 71

    Email : [email protected]

    www.crisponline.net

    nPROJECT 2A-1 :

    Postlarvae (sh and crustacean) capture and culture or aquarium trade andrestoking

    nPROJECT 2A-2:

    Improvement o knowledge and capacity or a better management o reeecosystems

    nPROJECT 2A-3 :

    Synopsis and extension work on indicators or monitoring the health o co-ral ecosystems and developing a remote sensing tool

    nPROJECT 2A-4 :

    Testing o novel inormation eedback methods or local communitis andusers o ree and lagoon resources

    nPROJECT 2A-5 :

    Specic studies on i) the efects on the increase in atmospheric CO2 on thehealth o coral ormation and ii) the development o eco-tourism

    Contact the author:

    Isoa KOROVULAVULA

    Environmental economistEmail: [email protected].

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    1

    TABLE OF CONTENTS Page

    Ac knowledgem ent .......................................................................................................... 3

    Exec utive Summary.......................................................................................................... 5

    1 Introduc tion ............................................................................................................... 8

    1.1 Objective............................................................................................................10

    1.2 Research Tea m ...................................................................................................10

    2 Method: ec onomic va luation ap proac hes ap plied in the study .................... 11

    2.1 Tota l Ec ono mic Value Frame wo rk......................................................................12 2.1.1 Use Va lues...........................................................................................................................................13

    2.1.1.1 Direct Use.................................................................................................................................... 132.1.1.2 Indirect Use.................................................................................................................................. 13

    2.1.2 Non-Use Va lues.................................................................................................................................. 142.1.2.1 Option Value................................................................................................................................ 142.1.2.2 Quasi-Option Value..................................................................................................................... 142.1.2.3 Bequest Value ..............................................................................................................................142.1.2.4 Existence Value ...........................................................................................................................15

    3 Results Literature Review and Data Ga thered ................................................. 16

    3.1 Tota l Ec ono mic Value o f Co ra l Ree f ..................................................................18 3.1.1 Co ral Ree f Use Va lues..................................................................................................................... 18

    3.1.1.1 Direct Use Value..........................................................................................................................183.1.1.2 Indirect Use Value.......................................................................................................................31

    3.1.2 Co ral ree fs Non-Use Va lues............................................................................................................323.1.2.1 Option values ...............................................................................................................................323.1.2.2 Existence values...........................................................................................................................333.1.2.3 Bequest values .............................................................................................................................33

    3.2 Tota l Ec ono mic Value of Ma ngrove ..................................................................35

    3.2.1 Ma ngrove Use Va lues...................................................................................................................... 353.2.1.1 Direct Use Value..........................................................................................................................353.2.1.2 Indirect Use Value.......................................................................................................................35

    3.2.2 Ma ngrove Non-Use Va lue..............................................................................................................36

    3.3 Tota l Ec ono mic Va lue of Bea c hes and C oa sta l Areas ......................................37

    3.4 Summ ary of Key Ec ono mic Valuat ion Me thod s App lied to Qua ntify TEV ..........38

    4 Discussion and Conc lusion ................................................................................... 42

    5 Rec ommendation................................................................................................... 43

    Referenc es....................................................................................................................... 46

    ANNEX 1 QOLIQOLI AND TOURISM ECONOMIC VALUATION PROJECTQUESTIONNAIRE........ 49

    Tab le 1 Sum ma ry of the Key iqo liqo li Biop hysical systems. 15Tab le 2 Ec onom ic Va luat ion o f Sa lea b le Asset s (fish and inverte b rate s21Table 3 Tourism Expend iture 2000-2003.30

    Tab le 4 Oversea s Tou rists Und erta king Non-o rga nised ac tivities (%) in a Iqoliqo li....30Tab le 5 Prop ortion (%) o f Oversea s Visitors Und erta king No n-Organised Ac tivities 1999-2003.31

    Tab le 6 Sum mary o f t he Key Find ings.40

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    2

    Figure 1 Fiji Trad itiona l Customa ry Fishing Ground Qoliqoliin Fiji...4

    Figure 2 Typ ica l iqo liqolis b iophysica l, soc ioec onom ic and institutiona l a ttribute s..9Figure 3 Tota l Ec onomic Va lue.12Figure 4 Biophysica l Fea tures of the iq oliqo li with its d ifferent Ec onom ic Va lues.17

    Figure 5 Iqo liqo lis a long the c oral coa st...26

    Figure 6 Ec ono mic Va lue a nd Ec ono mic Valua tion M etho ds...39Figure 7 Prop osed c om pensa tion frame wo rk if the c urrent Qoliqo li Bill ....44

    Figure 8 Key requirem en ts fo r co mpensation ........45

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    3

    Acknowledgement

    We appreciate the assistance, contribution and constructive comments

    provided by the follow ing p eop le in the co mp ila tion o f this rep ort: Professor Bill Aalbersberg (Institute o f the Ap p lied Sc ienc es, The University

    of the South Pac ific ; Dr Trac y Berno (Dep artme nt of Tourism a nd Hosp ita lity, The University of

    the South Pac ific ); Assoc iate Professor Richa rd Brown (Sc hool of Ec onomics, The University of

    Queensland) Mr Dick Smith (Cha irman o f Fiji Hoteliers Assoc iat ion) Mr Red dy (Department of Lands, Gove rnment o f Fiji) Mr Aisake Batibasaga (Department of Fisheries, Government of Fiji)

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    Figure 1: Fiji Trad itiona l Customa ry Fishing Ground Qoliqoli (ma rked in red) in Fiji

    Viti Lev u

    Vanua Levu

    Kadavu

    Lau G roup

    Taveuni

    YasawaGroup

    LomaivitiGroup

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    5

    Executive Summary

    The primary a im of this stud y is to determine the va lue of na tural assets tha t

    affect the two key stakeholders in the tourism industry the Fijian taukei ni

    vanua/iqoliqoli owners and the resort owners. Figure 1 illustrates the entire

    iqo liqoli in Fiji. The und erlying fa c tor that led to this stud y was the possible a nd

    potential positive and negative implications of the impending iqoliqoli Bill

    leg islation m ay have on the tourism ind ustry. Mo reo ver the stud y is one o f the first

    step s to seek some m ea ns at which the overall harmo nious relat ionship betw een

    Fijian ta ukei ni vanua / i qoliqoli and resorts c an be m ainta ined .

    The three sites tha t we re identified for the stud y we re:

    The Cora l Coast which is a long the south western c oa st of Viti Levu (Old

    but still a vib rant to urism a c tivity area in Fiji);

    The tourism a rea s and iqo liqoli on the island of Kadavu (new tourism

    deve lop ment a rea one o f the outer islands loc a ted on south o f Fiji); and

    Ma manuc a island resorts to the South-we st of Nad i Airport.

    The o nly site out o f three sites tha t had releva nt da ta on sa leab le natura l assets

    of the iqo liqoli wa s the eleve n iqo liqoli a long the Co ra ls Coast. The o ther two sites

    Kad avu and the Mama nuca s had inad equate d ata ava ilab le. The biolog ic al

    da ta wa s c ollec ted from Cora l Cay assessme nts in 2005.

    The Tota l Ec ono mic Value (TEV) frame wo rk wa s used for the literature review and

    the analysis of data. It is important to note that a full economic valuation of Fijis

    na tural resources has not been c arried out . This rep ort ind ica tes tha t the re a rega ps and a m ore in-de pth ec onomic va luation ought to be do ne for coral reef ,

    ma ngrove a nd rela ted ec osystems.

    The various ec onom ic va luat ion stud ies and rep ort rev iewe d in this stud y show

    that production approach and replacement cost method are used to quantify

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    6

    the monetary direct and indirect use value respectively. Contingent Valuation

    Method a nd Bene fit Transfer methods are used to q uantify non-use va lues.

    The fo llow ing are the find ings based on the p rimary ob jec tives of the stud y.

    The eleven iqo liqoli along the Coral Coa st indica te sa lea ble assets (fish a nd

    invertebra tes) o r its direc t use va lue based on two sc ena rios of MSY ranged from

    F$3,001,422.02 to F$8,025,022.29 p er Km2 per year in sc ena rio A (or F$30,014.22 to

    F$80,250.02 pe r hec ta re p er yea r) and F$75,723.07 to F$547,998.90 per Km2 per

    yea r in sc ena rio B (or F$757.23 to F$5,480 per hec ta re per yea r). In add ition the

    direc t use va lue o f ma ngrove is about US$11,000 a hec tare (Hamilton and

    Snedaker eds. in Brown et a l. 1993).

    The c oral reef system as rep orted by va rious stud ies elsew here ha s a to ta l

    ec onom ic va lue w hic h inc lude s tang ible a nd intang ible a ssets in the rang e o f

    US$1,373 pe r hec ta re to US$1.02 million p er hec ta re. There were inadeq uate

    data to make such valuation in Fiji, but assuming tangible value to be a major

    component of total economic value, the lower limits are in good agreement.

    Most interna tiona l c a lculations of the TEV is in the rang e o f US$7,000 to US$12,000

    per hecta re.

    The a pp roxima te a verage ec onomic va lue o f the use o f ma rine resourc es and

    ecosystem by tourists namely swimming, snorkelling, scuba diving, reef walking

    and kayaking/ c ano eing/ wa ter spo rts fishing (a s determined by the informa tion

    in the Fiji Inte rna tiona l Visitor survey) is estima ted to range from be F$74.08 million

    a year, or F$171.20 per visitor per year to F$335.05 million or F$777.74 per visitor

    per ye a r (based on 2003 Tourist d ata).

    The no n-use va lue (op tion, qua si-op tion, beque st a nd existenc e va lues) c anno t

    be calculated because of inadequate information and data as well as time

    c onstraint in relat ion to this spec ific stud y. How ever, ac c ording to Sisto (1999)

    based on the application of benefit transfer valuation method the disturbance

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    regulation of coral reef and mangrove in Fiji are approximately F$307.2 million

    and F$105 million respec tively.

    In futu re there is a rea l need to c onduct in-dep th econom ic va luation studies on

    the indirect use values, option values, existence values and bequest values of

    c oral ree f, mangrove and related ec osystems in order to fully capture the TEV of

    iqo liqoli. This c an only b e d one if reliab le and relevant b iolog ica l and

    soc ioec onomic d ata are a vailab le.

    The spec ific resort survey in Fiji had a poo r response a nd bette r c o -operation by

    resorts wo uld lea d to m ore ac c ura te d a ta on to urist resource use p er area.

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    8

    1 IntroductionThe main purpose of the ec ono mic va luation study is to p rovide a framework

    that can be used as a basis for discussing compensation in relation to the

    iqoliqolqi development issues. In this case the focus is on tourism development

    and a c tivities. The iqo liqoli is the c ustomary fishing ground which extend s from

    the high-tide wa ter ma rk along the shoreline to the mo st outer ree f c rest (tha t is it

    can be either a fringing or a barrier reef). Hence, a iqoliqoli may consist of the

    following biophysical features: shoreline with mudflats and/or beaches;

    mangrove ecosystem, fringing reef system, lagoon and barrier reef system.

    Ac c ording to the Qo liqoli Bill (2006) iqoliqoli is defined as the any area of sea be d

    or soil und er the wa ters, sand , ree f, ma ngrove swa mp , river, stream o r we tland or

    any other area, recognised and determined within customary fishing grounds

    under the Fisheries Ac t or as c larified in ac c orda nc e w ith this Ac t, and inc ludes

    any custom ary fishing grounds rec la imed before or any q oliqoli a rea rec la imed

    after the commenc eme nt of this Ac t.

    The report is d ivided into six ma jor sec tions. The first sec tion is an introd uc tion to

    the ob jec tives and scop e o f the study. The sec ond de sc ribe the method that

    was applied in the research particularly the framework at which the required

    info rma tion was review ed and assessed . The third sec tion is the result and

    d isc ussion of the o utc om es of the investiga tion. The fourth sec tion spec ifica lly

    sums up the result of the find ings as it rela tes to the ob jec tive o f the stud y. The

    fifth section puts forward recommendation on how some critical aspects of

    ec onom ic valuation need to b e c arried out in future in orde r to come up with

    more reliable and realistic economic values of coral reef and related

    ecosystems. In addition this section also proposes a framework at which aformula of compensation of iqoliqoli can be explored and be used for further

    d isc ussion.

    In order to develop a meaningful framework for the development of a iqoliqoli

    compensation formula it is important that key factors and issues are identified

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    and its inter and intra-relat ionships, cond itions or req uirem ents a re integrated into

    the framework. Figure 2 below is a hypothetical iqoliqoli area and its possible

    biop hysic a l, soc ioec onomic and institutiona l at tributes.

    Figure 2 Typ ica l i qoliqolis b iophysica l, soc ioec onom ic and institutiona l attributes

    Bounda ry of the iq oliqoli

    area

    Foreshore and inter-

    tidal zone area that isleased by the TouristResort/ Deve loper

    Mangrove

    Coral reef

    Shoreline

    Land Lea se

    (Ad ministered by NLTB)(The g reen d otted line isthe bound ary of the land

    that is leased b y theresort)

    Resort

    Village/ Community&

    Landowners

    Benefits

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    1.1 ObjectiveThe princ ipa l objec tives of the study a re to:

    Ca rry out a n ec ono mic va lua tion of three rep resenta tives iqoliqoli based

    on sa leab le assets (fish a nd inverteb ra tes) to p rovide a range of va lues

    per area unit. Evaluation will be based on existing biological surveys and

    market c osts.

    Carry out an evaluation of a coral reef system that combines sale-able

    assets as well as internationally accepted intangible (service) values. A

    survey of such studies done internationally will be undertaken and

    va luations ad justed b ased on Fiji ec onom ic rea lities.

    Ca rry out a sep arate eva luation o f the iqoliqoli based on tourist use. This

    will be d one by loo king at how ma ny tourists use the iqoliqoli d ifferent

    wa ys and wha t va lue this b rings to the industry.

    1.2 Resea rch TeamThe ec onom ic va luation stud y tea m w ere Patric k Fong, Rusiate Ratuniata , Tanya

    O Ga rra and Isoa Korovulavula.

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    2 Method: econom ic valuation ap proaches applied in thestudy

    A literature review wa s c onduc ted on ec onom ic valuation spe c ific ally on c oral

    reefs, coastal ecosystems and tourism. A survey questionnaire was sent to a

    number of resorts to gather information on tourist use of coastal and marine

    ec osystem s (refe r to Annex 1). For the Coral Coast c ase study the Cora l Cay

    biological data provided the principal basis for the valuation of the tangible

    saleable marine resource assets.

    The consultanc y examined three sites as a case stud y for this exerc ise. The three

    sites tha t ha ve b een identified a re:

    The Cora l Coast which is a long the south western c oa st of Viti Levu (Old

    but still a vib rant to urism a c tivity area in Fiji);

    The tourism a rea s and iqo liqoli on the island of Kadavu (new tourism

    deve lop ment a rea one of the oute r islands loc a ted on south o f Fiji); and

    Mamanuca island resorts south-west of Nadi airport, a major tourism

    destination.

    The c oral coa st has a ll relevant b iological and soc ioec onomic d a ta to ena b le

    the quantifica tion of monetary value of all the ta ngib le assets. The follow ing

    were iqoliqoli that were part of the study along the coral coast located on the

    south-western p art o f Viti Levu. They a re: Korolevu-i-Wai; Vanua Ko Conua kei

    Naivikikab uta ; Vanua ko Yavusauna kei Voua ; Yavusa ko Burenitu; Yavusa ko

    Nad ruku; Vanua ko Madudu; Vanua ko Nasiga toka ; Vanua ko Tabanivono I Ra;

    Yavusa Ketena ma si, Lew eitaqa lulu, Tac ini, Nalota wa , Lew ei; Yavusa NoiNac ulac a and Vanua of Komave c omp rising of Yavusa Vusu.

    The tourism area s and iqoliqo li on the island of Kada vu canno t be a de qua tely

    covered in this study because of the lack of tourism, biological and

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    soc ioec ono mic da ta . There was a lso p oo r response from resort ow ners in

    c om pleting the q uestionna ires tha t were sent to them.

    The tourist resorts Ma ma nuc as and Yasawa s provided som e d ata but not

    adeq uate to gauge reliab le tourist use va lues spec ific a lly of the iqoliqoli.

    2.1 Tota l Ec onomic Value FrameworkThe findings from the literature review and da ta ga thered from the survey w ere

    ana lysed using the Tota l Ec ono mic Value (TEV) frame wo rk as dep icted in Figure

    3. It is imp ortant to note tha t the TEV conc ep t is limited to a nthrop og enic va lues

    only. In other words the resource is va lued exc lusively in te rms of the va lues it

    yields to humans; no intrinsic va lue is attributed to it. Table 1 illustrates the

    imp ortant biophysic al go od s and servic es that c an be po tentially ec onom ic ally

    valued in a iqoliqoli.

    Figure 3 Tota l Ec ono mic Value

    (Source: ad ap ted from Cesar and Chong , 2005)

    Bequest

    Value

    Option

    Value

    Non-Use Va luesUse Va lues

    Quasi-

    option

    Value

    Ind irec t Use Va lueDirec t Use Va lue Existe nc e

    Value

    Tota l Ec ono mic Value

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    TEV therefore c an be summarised as:

    The follow ing are the brief d esc rip tions of the va rious ec ono mic va lue

    categories.

    2.1.1 Use Value s

    Use Va lues c omprise o f two c a teg ories and they a re d irec t use a nd ind irec t use

    values.

    2.1.1.1 Direct UseDirect uses usually include the most obvious and important market based

    c onsump tive and non-c onsump tive use. For instanc e in a iqoliqoli a consumptive

    use would include subsistence, artisinal inshore fisheries, recreational fishing, and

    large -sc a le com me rc ia l fishing . A non-consumptive use would inc lude to urism

    activities such as snorkeling and scuba diving. Other non-consumptive uses

    wo uld be coral mining and live roc k harvesting for aquarium p urposes.

    2.1.1.2 Indirect Use

    The ind irec t use va lues are va lues derived from the indirec t uses largely

    comprised of an area's ecological functions such as shoreline protection,

    breeding habitat for migratory species, wastewater treatment (one of the

    servic es provided by ma ngrove and we tland system s), clima tic stab ilisa tion and

    c arbon seq uestra tion.

    TEV = Direc t Use + Ind irec t Use + Option Value + Quasi-Option + Beq uest Value +

    Existenc e Value

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    2.1.2 Non-Use Values

    Nonuse va lues are derived indep end ently of any c urrent o r expec ted future

    c onta c t w ith the resource itself or with the tang ib le servic es tha t it p rovide s. Non-

    Use va lues are c a teg orized into four ca teg ories and they a re op tion, qua si-

    op tion, beque st a nd existenc e va lues.

    2.1.2.1 Option Value

    Option value is the value an individual attaches to keep alive the possibility of

    one day to b e a ble to benefit from the resource . Therefore sinc e it is the va lue

    attached to potential use, its current non-use value is attributable to its potential

    use va lue in future. An example o f this wo uld b e the p ote ntial of extrac ting and

    developing a pharmaceutical product sometime in the future from a natural

    resource which may not be used or consumed at all in the present time by

    people.

    2.1.2.2 Quasi-Option ValueQua si-Op tion Va lue is related to o p tion va lue. The only differenc e is the em phasis

    of uncertainty and irreversibility. In other words quasi-option value is the value

    attached by delaying any action or decision that would cause irreversible

    degradation.

    2.1.2.3 Bequest ValueBeq uest va lue is the va lue a n individua l plac e o n his/ her sa tisfac tion a ttributed

    to the c ontinued existenc e o f a b iop hysic a l resource for future p ossib le b ene fit o f

    others, either know n o r unknow n to him or her.

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    2.1.2.4 Existence ValueExistence value is the value that an individual places (not necessarily among

    pe rsons c urrently and prospec tively ac tive in the ma rket) on the environment o r

    a pa rtic ular ec osystem to ob tain satisfac tion from the m ere know led ge that pa rt

    of tha t natura l environm ent or ec osystem rem ains.

    In summa ry the me thod app lied in this study is tha t the ec onomic values were

    colla ted from the ava ilab le literature. In som e c ases annua lized to 2003 Fiji dollar

    per km2 (the fin-fish and inverteb rates va lues from the Coral Coa st survey wa s

    annua lized using d isc ount rates g iven in the paper i.e. 10%). The estima tes were

    orga nized g iven in stud ies into va lue ca tegories (d irec t, ind irec t and non-use).

    Tab le 1 Summ ary of the Key iqo liqoli Biophysic al systems that prov ide important goods orservices

    Key iqoliqoli Biophysical system that provideimpo rtant go od s or services

    Tota l Eco nomic Value Com po nentsCoral

    reef

    Foreshore/

    lagoon

    Mangrove

    Direc t extrac tive use

    Fin-fisheries (c om me rcia l) x x x

    Fin-fishe ries (sub sistenc e) x x x

    Othe r fisheries e.g . she llfish (c om me rcia l) x x

    Ot he r fishe ries e.g . she llfish (sub siste nc e) x x x

    Other food (e.g. seaw eed ) x

    Timber/ firewoo d (co mm ercial) x

    Timbe r/ firew oo d (subsistenc e, loc a l use) x

    Non Timb er Forest Prod uc ts (e.g .

    medicines, dyes)

    x

    Curio/ jewelry/ hand icrafts x

    Coral/ live roc k for aq uarium trade x

    Aq ua rium fish x

    Co ral bloc ks/ lime x

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    Tab le 1 Summ ary of the Key iqo liqoli Biophysic al systems that prov ide important goods orservices

    Key iqoliqoli Biophysical system that provideimpo rtant go od s or services

    Tota l Eco nomic Value Com po nentsCoralreef

    Foreshore/lagoon

    Mangrove

    Direc t non-extrac tive use

    Tourism/ rec rea tion x x x

    Ind irec t use

    Coa stal/ shoreline protec tion x x

    Waste assimila tion x x

    Ma intenanc e of biod iversity x x x

    Sup po rt for other key hab itats & spec ies x x x

    CO 2 sink x

    Non-use values (inde pe nde nt o f use)

    Beq uest va lue x x x

    Existenc e va lue x x x

    Op tion & va lues x x x

    quasi-op tion x x x

    Furthermore the literature review will also identify various economic valuation

    method s o f q uantifying use and non-use va lues.

    3 Results Literature Review and Data GatheredIn the literature review several studies were identified that have attempted to

    estima te to ta l ec ono mic va lues (TEV) (or a t lea st va lues tha t inc orpo ra te som e

    ind irec t a s we ll as d irec t use va lues) for the c oral ree f (fringing a nd barrier ree fs),

    ma ngrove ec osystem s and the shoreline and beac hes. This rep ort will address

    each of the non-marketed goods and services provided by the marine

    ec osystems within iqo liqolisin turn. This will invo lve a b rief desc ription o f ea c h of

    these goods or services, an overview of valuation methods used to place a

    monetary value on these goods and services, a brief review of studies carried

    out in this area, and an evaluation of the relevance of carrying out such a

    valuation for this projec t. In orde r to c ap ture the c omp lete e c onom ic value of

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    the iqoliqoli it is therefore imp ortant to examine g oods or servic es provide d by

    the three main biophysical features as stated above (coral reef, mangrove and

    shoreline and beaches) that can be found in a 1qoliqoli. Figure 4 illustrates the

    type s of e c ono mic va lues can be assessed in a n iqo liqoli.

    Figure 4 Biop hysica l Fea tures of the Iqoliq oli with its different Economic Values

    Source: Eme rton , 2002

    Direc t ValuesProduction andConsumptiongo od s suc h as: Fish Firewood Build ing

    materials Shells Corals Tourism

    Transport etc

    Indirect ValuesEcolog ica l Servicesand functions sucha s: Shoreline

    protection Prevention o f

    saltwaterintrusion

    Storm a nd floodcontrol

    Carbonsequestration

    Wildlife ha bita t

    Biodiversity etc.

    Optional ValuesPremium p lace d infutu re possible usesand ap plica tionssuc h a s: Extractive Leisure Pharmaceutical

    Industrial

    Existenc e ValuesIntrinsic sign ificanc e interms of: Culture Aesthetic Heritage

    Beq uest e tc.

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    3.1 Tota l Ec onomic Value of Coral Reef3.1.1 Coral Ree f Use Values

    3.1.1.1 Direct Use Value

    For this stud y the m ain direc t use values tha t had availab le d a ta were fisheries,

    rec rea tiona l and to urism. Fisheries da ta we re p rimarily financ ia l ma rket va lues

    assoc ia ted with ha rvesting fish from an a rea . In a dd ition rec rea tion and tourism

    da ta we re ma rket va lues based on expend itures by tourist a nd visitors on the use

    of the c oa sta l and m arine environm ent for rec rea tiona l purposes.

    3.1.1.1.i FisheriesBecause of the limited data available as well as time constraint the most

    prac tic al a nd log ic ally me ans to elic it the mone tary value o f the d irec t use va lue

    of the qoliqo li in terms of fisheries was to use o f the marine b iolog ic a l survey

    findings tha t we re c ond uc ted by Coral Cay Conservation. They key area s tha t

    were used for the monetary valuation were anthropocentric value of marine

    resourc es. These were fin-fish a nd invertebra tes. The fin-fish da ta we re c ollec tedby using b elt transec t method ology.1

    The tota l number of fin-fish and invertebra tes c ollec ted in the sub-samp le of the

    iqoliqoli wa s extrapolated to c ove r the tota l iqoliqoli hec ta res.

    1 The belt transec t method ology as ap plied b y Coral Cay Conservation a llow s compa rison of relativeab und ances ac ross the reg ion. The metho d is non-e xtrac tive and as suc h has no d etrimenta l imp ac t to fishpopulations in the area. Using the same 100 metre tape, four 5 metre wide by 20 metre long sections weresurveyed (centred on the transect line) (Raines, P. et al. 2005). A 5-meter gap was left un-surveyed betweensections to make each section a distinct statistical unit (Raines, P. et al. 2005). Absolute numbers of fish, target

    species, and families were recorded (Raines, P et al. 2005). A similar method was utilised for samplinginvertebrate taxa (Raines, P. et al. 2005). Four 2 metres wide by 20 metres sections were surveyed (centred onthe transec t line) (Ra ines, P. et a l. 2005). Aga in, a 5-me tre gap w as left un-surveyed b etw een sec tions. Thesmaller survey area was a compromise to the increased time required to complete accurate invertebratec ensus per unit a rea (Raines, P. et a l. 2005).

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    The va lue o f sa leab le a ssets (i.e. fin-fish and inverteb ra tes) wa s ca lc ulated by

    multiplying the b iomass of fin-fish and inverteb ra tes in the iqoliqoli(assessed by

    Cora l Ca y Conservation) by the market price. This agg reg ate a mount is the

    value if all consumptive marine resources are fished and sold thus there will be

    literally none left. This in turn would me an tha t there will be no more ec onomic

    value of the iqoliqoli for the following year and in perpetuity. In other words

    valuing the whole fin-fish and invertebrates stock would be incorrect. Hence

    wha t is va lued is the p erce ntage of the to ta l fin-fish stoc k and invertebrates (as

    mea sured by Coral Cay) c onsume d or sold by loc a l c ommunities. How ever the

    data for this is not available. For this reason the sustained biological yield of 3.4

    tonnes of fisheries in a q oliqo li per Km2 per year based on Jennings and Polunin

    1995 find ings of six iqoliqoli in Fiji wa s app lied to dete rmine the ec ono mic va lueof ea ch of the iqo liqo li a long the Cora l Coa st. They also rep orted tha t taking

    more than 5 percent of the biomass in a given year lead to increased stress to

    the ec osystem. There are thus go od rea sons for adop ting a quic ker and more

    simp le va luation tec hniques using Ma ximum Susta inab le Yields (MSYs) a lthough

    comm only sought MSYs are sensitive to assumptions. How ever, by m ultip lying

    MSY by approp ria te m arket or substitute p rices this me thod can provide

    adequate estimates this method can provide adequate estimates of reef

    produc tivity va lues (Spurgeon, 1992: 530).

    Table 2 provides the result of the ec onom ic va luation o f sa leab le a ssets (fish and

    invertebra tes) and their monetary va lues per area unit. The unit in this stud y is

    squa red kilometres. The key foc us of this stud y is the C oral Coa st iqoliqo lis as

    illustrated in Figure 5. The gross present va lue wa s c a lc ulated based on the

    disc ount rate of 10% for a 99 years lease. The d iscount rate2 was based on the

    2There are two m ain rea sons why d iscounting is used . First is to do w ith time preference. This basica lly me ansthat individuals prefer to enjoy benefits sooner, and costs later, rather than the other way round. A cost orbe nefit of a given a mount has a lower subjec tive va lue, the later it a rises. This ma y be due to a myop ia, anurgent need for gratifica tion (e.g. bec ause o f po verty or greed ), or the belief tha t future c onsumption w ill be

    grea ter (and the refore the ma rginal utility of a given unit of c onsump tion will be less). These fa ct ors ap ply toprivate individua ls. Governme nts, ac ting in a rat ional and enlightene d w ay on be half of their citizens, may a lsohave soc ial time preference, for examp le where they e xpe ct future incom es to b e g reater, where $1 now isworth more to soc iety than the sam e in the future. Sec ond, is to do w ith opp ortunity co st o f c ap ital. This ismeans that a sum of money is worth more now than the same amount in future because it can be employedprod uc tively, e.g. invested profitab ly, or lent for interest. In this case the discount rate is the inverse o f the rate of

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    c urrent lend ing and go vernment b ond ra tes. The munic ipa l pric e for the various

    sa leab le assets in the iqo liqoli tha t were assessed was based on the m arket p rice

    from fishing o utlets in Siga toka, Nad i, Suva and Lautoka.

    For each iqoliqoli, two calculations were performed, one assuming that 3.4 tonnes of

    bioma ss c an be harvested or extrac ted pe r Km2 pe r year and the o ther that 5 percent of

    the t ota l bioma ss c an be extrac ted p er year. The resulting figures will be give a rang e o f

    present va lue pe r yea r.

    interest. Funds used on a project w hich gene rates a given return on some future d ate co uld have bee n used togenerate returns immediately. A discount rate reminds us of this alternative use of funds. Discounting assists the

    rationa l alloc ation of ca pital be twee n uses that have different te mp oral profiles.

    (Source : OECD. Econo mic De velop me nt Institute o f the World Bank, 1995)

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    Tab le 2

    qoliqoli (Custom aryshing Ground )

    Tota lareaKm2

    3Biomass(Tonne)

    Tonnepe r Km2

    43.4Tonne p erKm2 peryear

    Gross Value(this is thesum of thebiomass ofeach marineresourcesmultiplied byits respectivemarket pricein a yea r)

    Sc ena rio A

    Gross Valueba sed on 3.4tonnes perKm2 peryear)

    Sce na rio B

    Gross valueba sed on55% ofmarineresources tobeharvested/fished in ayear

    Sce na rio A

    DirectEconomicValue (basedon 99 yearslease and on10% discountrate)(Fiji $)

    Sce na rio B

    DirectEconomicValue(based on 99years leaseand on 10%discountrate)(Fiji $)

    Sce na rio A

    DirectEconomicValue perKm2 Per yea r(Fiji$)

    Sce na rio B

    DirectEconomicValue p er KmPer year (Fiji $

    oliqoli 1

    avusa Na druku oforovisilou village ine District o f Serua

    2.93 784.72 267.82 9.96 3,708,167.83 372,231.26 185,408.39 23,323,701.00 1,853,935.92 7,960,307.51 632,742.

    oliqoli 2

    avusa Noiaculava ofamaqumaquaillage in the District Serua

    1.65 282.62 171.29 5.61 1,515,958.21 270,224.28 75,797.91 16,932,028.43 757,918.60 10,261,835.41 459,344.

    oliqoli 3

    avusa Burenitu ofaboutini andabukelevu villages

    the District oferua

    7.46 2,264.91 303.61 25.36 10,968,643.75 432,449.29 548,432.19 27,096,912.42 5,483,884.10 3,632,293.89 735,105.

    3 This is the p roduct o f multiplying the abunda nc e va lue (i.e. numb er of fin-fish and inverteb rates in ea ch iqo liqo li) by its mass (tonne)4 Based on Jennings and Polunin, 1995 stud y on 6 d ifferent iqo liqo li in Fiji, they repo rted tha t fisheries in these iqoliqo lis we re ca pa ble o f susta ining yields of up to 3.4tonne (3,400 kg) per km 2per year or 10.2 km2 coral reef per year and that in sites where yields were less they might be increased sustainably.5 A ca tch rate o f 5% of b iomass pe r year was also reporte d b y Jennings and Polunin (1996) was set a s rough estima te up pe r limit of the M SY (e.g . for qoliqo li 1 it wouldbe 5% of $3,708,167.83

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    qoliqoli (Custom aryshing Ground )

    Tota lareaKm2

    3Biomass(Tonne)

    Tonnepe r Km2

    43.4Tonne p erKm2 peryear

    Gross Value(this is thesum of thebiomass ofeach marineresourcesmultiplied by

    its respectivemarket pricein a yea r)

    Sc ena rio A

    Gross Valueba sed on 3.4tonnes perKm2 peryear)

    Sce na rio B

    Gross valueba sed on55% ofmarineresources to

    beharvested/fished in a

    year

    Sce na rio A

    DirectEconomicValue (basedon 99 yearslease and on

    10% discountrate)(Fiji $)

    Sce na rio B

    DirectEconomicValue(based on 99years lease

    and on 10%discountrate)

    (Fiji $)

    Sce na rio A

    DirectEconomicValue perKm2 Per yea r(Fiji$)

    Sce na rio B

    DirectEconomicValue p er KmPer year (Fiji $

    oliqoli 4

    avusa Davutukia,olabola,easuganaqali,ubunicere, Noi

    uba i andaculava in theistrict o forolevuiwai

    1.3 130.64 100.49 4.42 735,914.31 166,496.45 36,795.72 10,432,528.97 367,927.78 8,025,022.29 283,021.

    oliqo li 5

    anua ko Conua

    ei Naivikabuta &avusa Noi-

    Weredrugaomprisingatukarasa,orotogo,awamagi, Naroro,arata, Malevu andadrala in the

    istrict of C onua

    0.65 17.85 27.46 2.21 98,447.85 44,546.54 4,922.39 2,791,249.02 49,220.00 4,294,229.26 75,723.

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    qoliqoli (Custom aryshing Ground )

    Tota lareaKm2

    3Biomass(Tonne)

    Tonnepe r Km2

    43.4Tonne p erKm2 peryear

    Gross Value(this is thesum of thebiomass ofeach marineresourcesmultiplied by

    its respectivemarket pricein a yea r)

    Sc ena rio A

    Gross Valueba sed on 3.4tonnes perKm2 peryear)

    Sce na rio B

    Gross valueba sed on55% ofmarineresources to

    beharvested/fished in a

    year

    Sce na rio A

    DirectEconomicValue (basedon 99 yearslease and on

    10% discountrate)(Fiji $)

    Sce na rio B

    DirectEconomicValue(based on 99years lease

    and on 10%discountrate)

    (Fiji $)

    Sce na rio A

    DirectEconomicValue perKm2 Per yea r(Fiji$)

    Sce na rio B

    DirectEconomicValue p er KmPer year (Fiji $

    oliqoli 6

    anua ko Maduduom prising Naya wa

    Laselase villagesthe District of

    asigatoka

    4.17 685.86 164.47 14.18 3,276,366.95 231,088.09 163,818.35 14,479,787.40 1,638,052.71 3,472,371.08 392,818.

    oliqoli 7

    anua koasigatokaomprisingasigatoka, Yavulo,olivoli, Vunavutu &asama villages ine District of

    asiga toka

    6.73 1,565.56 232.62 22.88 7,376,519.40 322,372.14 368,825.97 20,199,570.19 3,687,965.29 3,001,422.02 547,988.

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    qoliqoli (Custom aryshing Ground )

    Tota lareaKm2

    3Biomass(Tonne)

    Tonnepe r Km2

    43.4Tonne p erKm2 peryear

    Gross Value(this is thesum of thebiomass ofeach marineresourcesmultiplied by

    its respectivemarket pricein a yea r)

    Sc ena rio A

    Gross Valueba sed on 3.4tonnes perKm2 peryear)

    Sce na rio B

    Gross valueba sed on55% ofmarineresources to

    beharvested/fished in a

    year

    Sce na rio A

    DirectEconomicValue (basedon 99 yearslease and on

    10% discountrate)(Fiji $)

    Sce na rio B

    DirectEconomicValue(based on 99years lease

    and on 10%discountrate)

    (Fiji $)

    Sce na rio A

    DirectEconomicValue perKm2 Per yea r(Fiji$)

    Sce na rio B

    DirectEconomicValue p er KmPer year (Fiji $

    oliqoli 8

    anua koavuasuna andoua comprisinguvu, Yadua,

    aevuevu,ukurukulevu,osoinaviti, Voua,emo, Emuri,adroumai andabau villages ine Districts of Cuvund Tuva

    3.91 738.46 188.86 13.29 3,522,579.01 264,975.10 176,128.95 16,603,119.33 1,761,148.91 4,246,322.08 450,421.

    oliqoli 9

    anua Tab anivono-ra (Malomalo)omprising ofavusa Leweisave,eweinavivasa,ab anivono,eweinuku, Noi Laund Leweivucini ine District of

    alomalo

    1.02 56.92 55.81 3.47 262,832.21 75,787.83 13,141.61 4,748,802.62 131,405.62 4,655,688.84 128,829.

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    qoliqoli (Custom aryshing Ground )

    Tota lareaKm2

    3Biomass(Tonne)

    Tonnepe r Km2

    43.4Tonne p erKm2 peryear

    Gross Value(this is thesum of thebiomass ofeach marineresourcesmultiplied by

    its respectivemarket pricein a yea r)

    Sc ena rio A

    Gross Valueba sed on 3.4tonnes perKm2 peryear)

    Sce na rio B

    Gross valueba sed on55% ofmarineresources to

    beharvested/fished in a

    year

    Sce na rio A

    DirectEconomicValue (basedon 99 yearslease and on

    10% discountrate)(Fiji $)

    Sce na rio B

    DirectEconomicValue(based on 99years lease

    and on 10%discountrate)

    (Fiji $)

    Sce na rio A

    DirectEconomicValue perKm2 Per yea r(Fiji$)

    Sce na rio B

    DirectEconomicValue p er KmPer year (Fiji $

    oliqo li 10

    anua of Nasoqoomprising ofavusa Ketenamasi,eweitaqalulu,

    ac ini, Nalota wand Leweiasiga ine District ofalolmalo

    3 505.17 168.39 10.20 2,160,925.15 211,855.41 108,046.26 13,274,683.44 1,080,376.33 4,424,894.48 360,125.

    oliqo li 11

    he Va nua o fomave comprising

    Yavusa Vusu

    esiding at Biausevu,amatakula,omave andusamaravu

    illages

    2.97 326.16 109.82 10.10 1,456,480.65 144,234.57 72,824.03 9,037,617.85 728,182.20 3,042,968.97 245,179.

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    As ind ic a ted in Tab le 1 ab ove the sa lea b le a sset (direc t va lue) of marine

    resources in the various iqoliqoli in the coral coast range from F$178 to

    F$227,522.13 p er Km2 per yea r

    Figure 5 Iqoliqo lis along the Coral Coast

    Source : Ra ines et a l. 2005

    There is a lac k of stud ies on the ec onom ic va lue of c oral ree fs done in Fiji

    because there is not enough quality biological and socioeconomic data to

    ac tua lly c om pute a va lid va lue (Sisto, 1999). Therefore a numb er of studies in

    othe r parts of the wo rld we re review ed and the follow ing a re som e summary of

    the releva nt findings that c an provide some insight a s to w hat e c onomic va lue

    of c oral ree f in Fiji wo uld b e.

    De Groo t (1992) estima ted a Tota l Econom ic Value (TEV) for a coral reef system

    of the Ga lapagos Islands a t US$120 a yea r for each hec ta re, whic h transla tes to

    a Net Present Va lue (NPV) o f US$2,400 a he c ta re and US$2.8 billion for the entire

    system.

    Viti Lev u

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    Gusta vson (1998) estima ted the Net Present Va lue (NPV) o f tourism, fishing a nd

    c oa sta l protec tion o f Monteg o Bay, Jama ica a t US$273 million to $US702 million.

    The a rea of the Ma rine Pa rk is 1,530 hec ta res, imp lying a va lue o f US$397,000 to

    US$1,020,000 for ea c h he c ta re of p rotec ted area . For Ind one sian cora l ree fs,

    Cesar (1996) estimated a NPV for fishing, tourism and coastal protection of

    US$1,373 to US$11,619 a hec ta re.

    Co sta nza et a l. (1998) ma de an estima te of TEVs for all the earth s ec osystems,

    based on considerable extrapolation from published studies, and these

    estimates need to be treated with caution. For coral reefs, Costanza et al.

    estima ted a va lue of US$6,076 ea c h yea r for ea c h hec ta re.

    The va lue of Florida Keys Nationa l Marine Sanc tua ry was va lued in 1990 at

    US$50,000 a hectare NPV and at US$44.6 billion NPV in total (NOAA 1995).

    Davis (2001) und ertoo k an ec onom ic ana lysis of the Solitary Island s Ma rine Park in

    New South Wales and c onc luded that the p ark produc ed annua l net benefits of

    A$5,746,700.

    3.1.1.1.ii Co mmerc ial TourismA study of the Virgin Islands National Park in 1981, conducted by Posner,

    Cuthbertson e t a l, examined the d irec t ec onomic c osts and b enefits assoc ia ted

    with tourism and rec rea tiona l use of the Virg in Island s Nat iona l Park. Tota l costs of

    US$2.1 million, were offset b y US$23.3 million a year (US$3.3 million d irec t b enefits

    and US$20 million ind irec t b enefits).

    Gustavson (1998) has estimated the NPV of the value of recreation and tourism

    for Montego Bay cora l ree fs. The NPV wa s found to be US$315 million a yea r,

    ba sed on 1996 da ta. This study inc luded ac c omm od ation, food and beverag e,

    entertainment, transportation, retail and miscellaneous services. Unlike other

    stud ies, the va lue of US$315 million is a net va lue, and , therefore, takes ac c ount

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    of the costs of providing recreational goods and services, as well as direct

    expend iture. The to ta l cora l ree f area within Monteg o Bay is estima ted to b e

    42.65 hectares. Recreation and tourism are, therefore, worth approximately

    US$7.4 million a hec ta re o f c ora l ree f.

    It is also possible to separate out the value of different components of tourism

    and recreation. For example, Dixon et al. (1992) estimated the value of dive-

    based tourism in the Bonaire M arine Park, loca ted in the Ca ribbea n Sea . This

    stud y found tha t g ross revenue genera ted in 1991 wa s US$23.2 million, com prising

    expend iture on hote ls, dive o perations, air transpo rt on the loc a l airline and othe r

    purchases. This stud y a lso explored rela tionships between coral cover, spec ies

    density a nd stress on sites used for diving to identify a func tion o f dama ge versusd iver numbers.

    3.1.1.1.iii RecreationRec rea tion va lues are o ften inc luded with tourism va lues, althoug h this ma y lead

    to a n underestimate of recrea tion values of loc a l c om munities.

    The non-ma rket va luation tec hnique s c alled trave l co st method wa s ap plied toestima te the va lue of rec rea tion in the Great Barrier Reef. The net ec onomic

    value for domestic and international tourists visiting the reef region was A$144

    million a year, with net economic value for Australian visitors A$117.5 million, and

    for inte rnationa l visitors A$26.7 million. This figure inc ludes a ll visitors to the reef

    reg ion. It is wo rth no ting tha t the net ec ono mic va lue for only those visitors tha t

    intend ed to see , or had see n, cora l sites, wa s A$106 million a yea r.

    The va lue of rec rea tiona l servic es provided by Fiji c oral ree fs, lagoo ns and

    beaches, may be assessed on the basis of expenses undertaken by users. In

    1994, visitors to Fiji brought in F$420 million in foreign exchange earnings

    (Lockhart, l998). How much of this should be attributed to the recreational

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    services provided by coral reefs, lagoons and beaches depend partly on the

    motive s bring ing visitors to Fiji (Sisto , 1999).

    Visitors coming to Fiji to visit family and friends, to attend school or undergo

    training cannot be said to be attracted to Fiji primarily because of the

    recreational opportunities provided by coral reefs, lagoons and beaches,

    a lthough they might b e enjoying those services incidenta lly (Sisto, 1999). Business

    travellers and conference participants, similarly, do not come to Fiji see to enjoy

    beach and water-based activities, although they might do so incidentally. It

    could, however, be argued that Fijis pleasant environment is a reason why

    c onferences are organised here in the first p lac e. To be c onservative, however,

    a ttention in this va luat ion exerc ise is restric ted to holiday-ma kers who c onstituted84 perc ent (Ministry of Tourism, Culture, Heritage a nd Civil Aviat ion, 2003) of the

    to ta l numb er of visitors.

    Data are available for visitor surveys on what percentage of visitors use coral

    reefs for various recreational activities. What is difficult to determine is what

    percent of visitor expenditure (in terms of days stayed or choosing to visit Fiji at

    a ll) is due to the ava ilab ility of these ac tivities. Based on Tourism d ata from the

    year 2003, the upper bound which include swimmers (64.8%), reef walkers (3.5%)

    and fishers (1.8%) comes to 70.1 percent in a given year. On the lower bound,

    assuming half of the scuba divers come specifically for this activity plus a small

    percentage of others might c ome to 615.5percent.

    Henc e the estima ted ec onomic va lue of tourist rec rea tion wo uld b e the range

    betwee n the lower and upper bounds. This would be 15.5% x 84% x $569million

    which is about F$74.08million annua lly or $171.20 pe r pe rson p er year and 70.1% x

    84% x $569 which a mounts to F$335.05 million a nnua lly or F$774.74 pe r visito r per

    yea r (per pe rson for bo th rec rea tion va lues are based on the tota l arriva ls in 2003

    of 430,800).

    6 This is assuming tha t som e o r even a ll reef w alkers are a lso scub a d ivers

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    Table 3 Tourism Exp enditure 2000-2003

    2000 2001 2002 2003 Average fo r t4 years

    Tourism Expend iture

    $F (M) $F (M) $F (M ) $F (M ) $F (M)

    Overseas Expend iture 362 445 522.4 569 474.60

    Non- Org anised Ac tivit ies 13.34 17.29 22.6 21.84 18.77

    Source : Ministry o f Tourism, C ulture, Heritag e and Civil Aviation , 2003

    Tab le 4 Oversea s Tourists Undertaking Non -organised ac tivities (%) in a Iqo liqo li

    Prop ortion o f Overseas Tourists Und erta kingNon-orga nised ac tivities [p erce nt (%)]

    Non-Organised Activity

    2000 2001 2002 2003

    Average the 4 ye(%)

    Swimming 69 65 62 63 64.8

    Sno rkelling 59 57 61 65 60.5

    Sc ub a d iving 13 12 12 11 12.0Ree f wa lking 5 2 4 3 3.5

    Kayaking / Ca noeing / Water sp orts NA 6 4 8 NA

    Fishing 2 1 2 2 1.8

    Source : Ministry o f Tourism, C ulture, Heritag e and Civil Aviation , 2003

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    Tab le 5 Propo rtion (%) o f Oversea s Visitors Undertak ing Non-Orga nised Ac tivities 1999-

    2003

    Source : Ministry of Tourism, C ulture, Herita ge and Civil Aviation, 2003

    3.1.1.2 Indirect Use Value

    Due to the challenge involved in measuring indirect use values, such as the

    habitat function provided by coral reefs or mangroves, most existing indirect use

    valuations have focused on coastal protection. Here we will focus on coastal

    protection (which includes erosion prevention and disturbance regulation) and

    waste assimilation, as these are considered major benefits provided by the

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    marine ecosystems in Fiji. Other important indirect use values, such as habitat

    and b iologica l co ntrol, will be a ssessed in terms of impac ts on fisheries.

    Coral reefs provide protection to shorelines and human settlements from floods,

    storms and erosion. The ec ono mic va lue o f this p rote c tion c an be estimate d

    either by va luing the c ost of d am ag e to land and home s, when the ec osystem is

    removed (da mag e cost ap proac h), or valuing the c ost of replac ing the c oral

    reef with protective infrastructure (replacement c ost ap proac h), or valuing the

    c ost of averting dam ag e to land and homes (ave rtive expend iture a pp roa ch).

    The c oa sta l p rotec tion func tion o f coral ree fs wa s estima ted a t US$275,000 per

    km o f shoreline per yea r (in 1994). Ac c ording to Sisto (1999) coa sta l protec tionservices of coral reefs were assessed by Costanza and co-authors (1997) at

    US$2,750 per ha per yea r. Zann a nd c o-autho rs (1998) put the number of c oral

    reefs in Fiji at 1,000, but provide no measure of their surface area, so the value

    presented b y Costanza c annot be used d irec tly.

    3.1.2 Coral reefs Non-Use Va lues

    3.1.2.1 Option valuesOp tion va lues are no t c onsidered releva nt to this study, as they typ ic a lly app ly to

    unique ec osystem s (e.g. those w ith endem ic spec ies, or those c onta ining the last

    remaining numbers of a particular species) which are in danger of being

    c om pletely de stroyed . This does not a pp ly to Fiji, which ha s low end em ism, and is

    not und er threa t of ha ving a ll it s ec osystem s of one typ e b eing d estroyed .

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    Valuation Projec t, coordina ted by Tanya O Ga rra , c onfirmed tha t be quest

    values were indeed very significant drivers of local preferences associated with

    protection of iqoliqoliecosystems. For this reason, these must be considered an

    imp ortant va lue assoc iate d with iqoliqolisin Fiji.

    There ha ve been few stud ies to va lue beq uest va lue. Hargrea ves-Allen (2004)

    estimate d the b eq uest va lue a ssoc ia ted with coral ree fs in the Wa katob i Ma rine

    Park in Sulaw esi, using a CV survey. The beq uest va lue w as estima ted a t Rp

    412,000 per km2 or approximate ly US$412 pe r km2 or US$4 per hectare (Present

    Value o f Rp91 million or approxima te ly US$91,000), a fifth o f tha t a ssoc iated with

    a ll the ree f s benefits. More rec ent stud ies inc lude: Ruijgrok (2006) and Tog ridou

    et a l (2006). These ha ve ye t to be reviewe d.

    Valua tion of b eq uest va lues wo uld req uire a full co ntingent va lua tion survey. This

    involves a questionnaire in which respondents are asked for their willingness to

    pay for a hypothetical scenario, in this case: the protection of their iqoliqolifor

    future generations (independent of ones own use of the iqoliqoli). Suc h a stud y

    is being c arried out a t present a s part of the Tanya O Ga rra s Nava kavu

    Valua tion study; howeve r results a re not yet a va ilab le.

    As noted previously, this valuation is only relevant for this project, if the iqoliqoli

    were to be destroyed, or if the lease were to have no expiry date. In this case,

    future generations would not be able to benefit from the iqoliqoli, and these

    losses would need to be taken into account. Otherwise, future generations will

    still be able to benefit from the iqoliqoli, and valuation of b eq uest va lues wo uld

    be irrelevant.

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    3.2 Total Ec onom ic Value o f Mang rove

    3.2.1

    Mang rove Use Values

    3.2.1.1 Direct Use Value

    For mangrove systems in Bintuni Bay, Indonesia, Ruitenbeek (1992) estimated a

    value of US$4800 a hectare and a total of US$961 to US$1,495 million for the

    entire system (quoted in Cartier & Ruitenbeek 1999). Only 15 percent to 35

    percent of this amount is direct use value, so the majority of value is not usually

    identified as ma rket va lues.

    3.2.1.2 Indirect Use ValueM ang roves and c oa sta l littoral veg eta tion p rovide p rotec tion to a gric ultura l land

    and human sett leme nts from floo ds, storms and e rosion. The ec ono mic va lue of

    this p rotec tion c an be e stima ted either by:

    valuing the cost of damage to land and homes, when the ecosystem is

    removed (da mag e cost approac h); or

    valuing the cost of replacing the mangrove with protective infrastructure

    (rep lac ement co st app roa c h); o r

    valuing the cost of averting damage to land and homes (avertive

    expend iture ap proach).

    The c oa sta l protec tion func tion mangroves we re estima ted a t US$170,100 pe r kmof shoreline per yr (in 1994 US$).

    Ma ngroves and sea-grass bed s have a wa ste a ssimila tion func tion. They

    effec tively proc ess inadeq uately trea ted sewage and o ther wa ste, by ab sorbing

    excess nutrients, before this enters the sea (and affects fisheries and health).

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    Valuation of this function would be carried out using the replacement cost

    approach, by which the value of the mangrove and sea-grass bed waste

    assimilation function would be estimated as the value of the waste treatment

    system needed to replace it. Constanza et al. (1997) place the value of waste

    trea tment func tion o f ma ngroves a t US$66,960/km / yr (in 1994 US$).

    Given the short timescale for this project, a proper valuation will not be possible

    and va lues provided in Constanza et a l (1997) will provide the m ost ac c ep tab le

    approximation. However, as noted with the coastal protection function, this

    valuation is only appropriate if there is to be any mangrove clearance.

    Otherwise, this function will continue to p rovide be nefits to loc a l co mm unities.

    3.2.2 Mangrove Non-Use Value

    For this pa rticular study non-use va lue o f ma ngroves cannot b e incorporated to

    the overall assessment o f TEV. This is bec ause first, the re a re very few stud ies

    conducted in most parts of the world specifically on the non-use values of

    ma ngroves. Henc e, there wa s the data av ailab le was not a de qua te.

    Mangrove option values are not considered relevant to this study, as they

    typically apply to unique ecosystems (e.g. those with endemic species, or those

    containing the last remaining numbers of a particular species) which are in

    danger of be ing c om pletely destroyed. This doe s not apply to Fiji, whic h has low

    endemism, and is not under threat of having all its ecosystems of one type

    be ing de stroyed .

    On the whole therefo re, in terms of the TEV of mangrove the follow ing are som e

    key findings. An earlier stud y of mangroves in Ind ia estimated a TEV of over

    US$11,000 a hec ta re (Dixon 1989). Similar estimate s of $US15,000, US$11,000 and

    US$13,000 a hec ta re w ere made fo r mangrove systems in Trinidad, Fiji and Puerto

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    Rico respectively, but these estimates may only include direct uses of fishing,

    forestry and tourism (Hamilton a nd Sned aker eds. quo ted in Brow n et a l. 1993).

    Padma Lal (1989) in her study on mangrove compensation in Fiji reported the

    ec onomic va lue for c om pe nsating rec lama tion o f ma ngroves in Fiji we re a s

    follows: for the Central Division is F$2,939 per hectare; F$217 per hectare in

    Western Division; and F$209 per hec ta re in the Northe rn d ivision. This ec onomic

    value was solely based on use values and non-use values were not accounted

    for. Hence it is thus important to note that this the main difference of the

    ec onom ic values rep orted b y Pad ma and Brown et, al.

    3.3 Total Ec onom ic Value of Bea c hes and Coa stal AreasCompared to the number of studies valuing the direct uses of coral reefs and

    mangroves (e.g. fisheries and tourism), there are very few studies valuing the

    coastal protection function of marine and coastal ecosystems, and most of

    these va lue the p rote c tive func tion of c oral ree fs in pa rticular (see Mc Kenzie et

    a l, 2005; Gusta vson, 2000; Cesar, 1996).

    Constanza et al. (1997), estimates of the economic value of the worlds

    ecosystems were assessed using a benefit transfer approach (for more

    informa tion on b ene fits transfer see Batem an et a l, 2002).

    The m ang rove and co ra l ree f sta ted a bove were va lues used in Sisto (1998) to

    obtain estimates of the value of coastal protection provided by coral and

    ma ngroves in Fiji spec ific a lly. These va lues, however, should only be c onsidered

    broa d ly indica tive, as they were ob ta ined by ag grega ting values from a c ross

    the wo rld . The c oa sta l protec tion func tion of c oral ree fs and ma ngroves in Fiji

    would ideally be carried out as an independent exercise, using any of the

    va lua tion approa c hes outlines ab ove , and the Co nstanza e t al (1997) va lues

    simply used for comparison and validation. At present, there is a large-scale

    projec t a t SOPAC (unde r Paula Holland) which is seeking to va lue the c oa sta l

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    protec tion func tion of marine ec osystem s around the Pac ific. This stud y would be

    a va lid sourc e o f ec onom ic values.

    In this particular study, economic valuation of the coastal protection functions

    will on ly be relevant in tho se c ases where this func tion is threa tened . This wo uld

    only occur if the coral reef and/ or mangrove were to be destroyed. It is

    c onsidered tha t d estruct ion of the c ora l ree f is highly unlikely (unless c ora l mining

    is to take place); however, the coastal protection function would be seriously

    compromised if mangrove clearance were to take place. In this case, valuation

    of this function would b e w arranted.

    It was not possib le within 2-month timesc ale to c ond uct a prope r ec onom icva luation for this stud y. If mo re fund ing is p rovided, a Fiji-spec ific stud y could be

    performed using estimates of the extent of c oa sta l erosion in area s where there

    has been ma ngrove c lea ranc e, and va lue the land lost (using land lea se p ric es).

    3.4 Summ ary o f Key Econom ic Va luation Method s App lied to QuantifyTEV

    In the coral reef and mangrove va luat ion literature reviewed a bo ve, these are

    the m ost fre quently used me thod s.

    Production Approach - this based on observable changes in the market

    and market t ransac tions.

    Travel Cost Method (TCM ) this is ba sed on econo mic interpreta tions of

    beha viour; relating to travel and tourism. Rea l and hypo thetica l ma rkets.

    Replacement Cost Method (RC) this is the cost of replacing an

    ec osystem function if when system is una b le to p rovide it (e.g. c oa stal

    protection); Dama ge Cost Method ; and

    Contingent Valuation Method (CVM) this is based on hypothetical

    markets, can be used for use and non-use value or the expressions of

    value.

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    Figure 6

    Bequest

    Value

    Option

    Value

    Non-Use Va luesUse Va lues

    Quasi-

    option

    Value

    Ind irec t Use Va lueDirec t Use Va lue Existe nc e

    Value

    Tota l Ec ono mic Value

    Production

    Approach

    Replac eme nt

    Cost Method &

    Dam ag e Cost

    Method

    Travel Cost

    Method

    Contingent Valuation

    Method

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    Tab le 6 Summ ary o f the Key Finding s from Literature Review and Data G athered from Primary a nd Sec onda ry Sources

    Key iqoliqoli Biophysical system that provideimportant g ood s or service s

    Tota l Eco nomic Value Com pone ntsValuationMethod

    Co ral reef Foreshore/lagoon

    Mang rove Data CollectionEconomic Value Findinas relates to Fiji

    Direct extractive useFin-fisheries (co mme rcial) x x x

    Fin-fisheries (sub sistenc e) x x x

    Othe r fisheries e.g. shellfish (co mme rcial) x x

    Other fisheries e.g . she llfish (sub sistenc e) x x x

    Other food (e.g. seaw eed ) x

    Timber/ firewo od (com mercial) x

    Timbe r/ firew ood (subsistenc e, loca l use) x

    xNon Timbe r Forest Produc ts (e.g. me dic ines, dye s)

    Productionapproach

    Primary data from Coral CayConservation Study and

    surveys from fishing marketoutlets

    Direct use value of coreef resources in t

    various iqoliqoli in the CoCoa st based on twscenarios of MSY rangfrom F$3,001,422.02 F$8,025,022.29 in scenarA and F$75,723.07 F$547,998.90 pe r Km2 peyear

    Direct use value mangrove is aboUS$11,000 a hecta(Hamilton a nd Sned ak

    eds. quoted in Brown et a1993).

    Direc t non-extrac tive use

    x x

    x

    Tourism/ recrea tion

    Productionapproach

    x X x

    Sec onda ry da ta from theMinistry of Tourism andquestionnaire responses fromResorts

    F$74.08 m illion to F$335.05year, or F$171.20 F$777.74 pe r visitor (ba seon 2003 data ).

    Indirec t use

    Coa stal/ shoreline protec tion x x

    Waste assimilation x x

    Maintena nce of b iodiversity

    ReplacementCost &Damage CostMethod

    x X x

    Sec onda ry da ta from theLiterature review specificallysimilar studies in other parts ofthe w orld

    Ac co rding to Sisto (199disturbance regulation coral reef and mangrovin Fiji are F$307.2 milliand F$105 milli

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    Key iqoliqoli Biophysical system that provideimportant g ood s or service s

    Tota l Eco nomic Value Com pone ntsValuationMethod Co ral reef Foreshore/

    lagoonMangrove Data Collection

    Economic Value Findinas relates to Fiji

    Suppo rt for othe r key habita ts & spe cies x X x respe ct ively

    Non-use va lues (indep ende nt o f use)

    Beq uest va lue x X x

    Existenc e va lue x X x

    Op tion & values x X x

    quasi-option

    ContingencyValuation

    x X x

    Sec onda ry da ta from theLiterature review specificallysimilar studies in other parts ofthe w orld

    Cannot be calculatebec ause of inadequainformation and data well as time constraint relation to this specifstudy

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    4 Discussion and Conc lusionThe eleven iqo liqoli along the Coral Coa st indica te sa lea ble assets (fish a nd

    invertebra tes) o r its direc t use va lue based on two scena rios of MSY ranged from

    F$3,001,422.02 to F$8,025,022.29 in sc ena rio A (o r F$30,014.22 to F$80,250.02 per

    hec ta re p er yea r) and F$75,723.07 to F$547,998.90 per Km2 per yea r in sc ena rio B

    (or F$757.23 to F$5,480 per hec ta re per year).

    The coral reef system as reported by various studies elsewhere has a saleable

    and ec onomic va lue whic h inc lude ta ngible and intangible be tween the rang e

    of US$1,373 per hec ta re to US$1.02 million per hec ta re. As indica ted in sa leab le

    assets of verteb ra tes and invertebrates a long the C oral Coa st the sa lea ble va lue

    of coral reef system will be determined on the quality of health of reef system

    and the abundance of marine resources in given site or iqoliqoli. For this reason

    the biophysical condition of a coral reef system can only be assess through a

    proper biolog ic al and ec ologica l baseline a ssessment.

    The m ost logic a l way to va lue the use o f ma rine resource s and ec osystem by

    tourists is to use the proportion of holiday makers expenditure in the following

    non-organised ac tivities name ly swimm ing, snorkelling , sc uba d iving , ree f wa lking

    and kaya king / c anoe ing/ wa ter sports fishing. These non-orga nised ac tivities a re

    referred as rec rea tiona l ac tivities. These are estima ted to be F$177.20 to F$777.74

    per visitor pe r yea r.

    Based on nume rous othe r ec ono mic va lua tion stud ies, the d irec t use va lues from

    the fisheries and tourism are much higher than non-use values (as long as the

    c oral reef a nd related ec osystem or hab itats are not de stroyed ) and these c anbe used as a basis for c om pensation valuation.

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    5 Rec ommendationThere is a rea l nee d to c ond uc t in-dep th economic va lua tion stud ies on the

    ind irec t use va lues, op tion va lues, existenc e va lues and beq uest va lues of c oral

    ree f and rela ted ec osystems in order to fully c apture the TEV of iqo liqoli. This can

    only be done if reliable and relevant biological and socioeconomic data are

    available.

    TEV and its c orrespond ing non-ma rket va lua tion ap proa c hes and m etho ds is a

    good basis of facilitating an objective and systematic compensation procedure

    of the iqoliqoli. However, it is also crucial that other considerations such the

    present go od will pa yments and non-monetary benefit should be inc luded in the

    formulation of a c ompe nsation formula.

    The key tourism e c onom ic va luation c om ponent req uires a visitor survey to

    determine how the iqoliqoli health determines visitor destinations and deciding

    to c om e to Fiji.

    Most of the current compensation claims are based on a percentage of the

    resorts profit. Other benefits such as employment etc. are recognised as

    goodwill payments. For this reason and based on some responses from resort

    ow ners Figure 7 s a p rop osed com pensation framewo rk if the c urrent Qo liqo li Bill

    (in its original form) is passed in the Fiji parliament. Figure 8 are the key

    req uirem ents to a c ompensation p roc ess.

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    Figure 7 Proposed c om pe nsation fram ewo rk if the current Qoliqo li Bill (in its original

    form)is pa ssed in the Fiji pa rliam ent

    Bound ary of the iqo liqoli a

    Land, foreshore and

    inter-tida l zone a reathat w ill be lea sed bythe Tourist Resort/

    Developer

    Village/

    Community

    Mangrove

    Coral reef

    Shoreline

    Land Lea se(Ad ministered by NLTB)

    (The g reen d otted line isthe bound ary of the landthat is leased b y the

    resort)

    Resort

    Landowner

    Benefits

    A Area of the iqo liqo liarea (hec ta res or Km2)

    Tota l Ec ono mic Value A of algo od s and servic es provided bythe various marine resource

    A1 This is the leased a rea in the iq oliqoli area fo

    tourist outdoor water activities (e.g. snorkellingswimming etc .).

    Assumption:

    Once the a rea A1 is leased iqoliqoli owners cannohave access to it for both subsistence andc om me rc ial fishing

    Compensation for the leased foreshore area andinshore area= $ Marine resources and affected ecosystems pe

    hectare x A1/ A foreshore lease benefits providedby resorts.

    The result should then be d isc ounted over theduration of the lease.

    Key Requirement:The b iologica l and soc ioec onomic d ata areavailable.

    Benefits

    Employment Com munity hall, c hurc h

    build ing a nd villag einfrastructure

    Education (primary,secondary)

    Ca sh be nefits Free sea transport e.g.

    Tiger 4 and Ma lolo C at

    Financ ia l c ontrib ution tovillage / ma taq ali/ Yavusa

    obligations Providing scuba

    eq uipme nt fo r fishing

    A

    A1

    Inc om e from

    rent

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    Figure 8 Key requireme nts for com pe nsation

    Identification and

    analysis of keystakeholders and theirinterest and roles/

    institutiona l func tion

    Identification of the net

    benefits tha t the Touristdevelopment wil lcontribute to the

    enhancement welfare ofthe landowners andlivelihood of the affected

    community (ies), thedeveloper and

    Government

    Availability of

    biophysical andsocioeconomicdata of the

    iqoliqoli

    Identification and

    information of theproposed leasearea(s) and its related

    tenure cond itions

    App lica tion of a pp rop riate

    ec onomic valuat ionap proac hes and tools to

    mea sure the p otential da mag e

    c ost a nd op po rtunity c ost

    Use the ec onomic value to neg otiate c omp ensation

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    References

    Ad ger et a l (2002) Trop ica l forest va lues in Mexico , in Valuing the Environm ent inDeveloping Countries, David Pearce, Corin Pearce and Charles Palmer (editors),Ed w ard Elga r: Cheltenha m, UK

    Bateman, I., Ca rson, R.T., Day, B., Hanemann, M., Hanley, N., Hett , T., Jones-Lee ,M., Loomes, G., Mourato , S., Ozdemiroglu, E., Pearce, D.W., Sugden, R., andSwanson, J., (2002) Econom ic Va luation w ith Sta ted Prefe renc e Tec hniques: AManual, Edward Elga r: Cheltenham, UK.

    Brown, K., Pearce, D., Perrings, C. and Swanson, T. (1993) Economics and theConservation of Global Biodiversity, Working Paper No. 2, Global EnvironmentFacility, Washington D.C.

    Cesar H (1996) Economic Analysis of Indonesian Coral Reefs. The World Bank,

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    Cesar H and Chong CK (2004) Ec onomic Va lua tion a nd Soc ioeconomics ofCora l Ree fs: Method olog ica l issues and three c ase stud ies , p14-40 in Ahmed M,Chong CK and Cesar, H. (Eds) Economic Valuation and Policy Priorities forSusta inab le ma nag ement of c oral ree f, WorldFish Centre ConferenceProc ee d ings 70

    Co nsta nza R., d Arge, R., de Groo t, R., Farber, S., Grasso, M., Hannon, B., Naeem ,S., Limb urg, K., Paruelo , J., O Neill, R.V., Raskin, R., Sutto n, P. and Va n d en Belt, M.(1997) The va lue of the wo rld s ec osystem services and na tura l ca p ital, Nature,

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    ANNEX 1 QOLIQOLI AND TOURISM ECONOMIC VALUATION PROJECT

    QUESTIONNAIRE

    Background

    1. Nam e o f hotel/ resort:2. Yea r of estab lishment o f hote l:3. Qoliqoli ow ner (village ne arby):4. Landowner:

    Water-spo rts Ac tivities5. What are the recreational activities or water sports that your hotel offers to

    your guest and how much does a guest has to pay for each of theseactivities?

    (Please tick existing a c tivities and spec ify c ost)Fee for sing le in F$ Number of Tou ristRec reational ac tivities Please tick

    here 02 03 04 05 02 03 04 05Dive t rip

    Snorkeling

    Surfing

    Wind surfing

    Game fishing

    Sport fishing

    Sunset c ruise

    Bea c h p ic nic

    Kayaking

    Banana boat cruise

    Glass-bottom boat fishw a tch

    Shark feed ing w atc h

    Others (plea se spe c ify)

    6. Please fill the tab le be low

    2002 2003 2004 2005What was the total number of guests that stayed in yourhotel ove r these p eriod s

    What was the total number of guest or percentage thatused the i q oliqolifor recreational activities

    What is the oc c upa ncy rate o f your hotel

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    7. What are some other services that your hotel use from the i qoliqoli (e.g.fishing fo r foo d for the g uest or sta ff etc .)

    Lease a nd Benefits8. What is the current lease arrangement (including actual amount paid

    annua lly and to w ho) a nd wha t does your hote l offers to resource ow ners interm o f goo dwill payments (is it a one o ff payment o r pa id annua lly and howmuch) and other benefits (e.g. scholarship, employment at what level etc.).Please detail information

    9. What are the conditions outlined for the foreshore lease and land lease, interms of duration, exclusivity and access rights both for the resource ownersand your hotel.

    VINAKA VAKALEVU FOR YOUR TIME AND EFFORT!!!