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EXECUTIVE SUMMARY.Pdf Economic Assessment of the Contribution of the National System of Protected Areas: Tourism and Hydroelectricity Executive Summary Economic Assessment of the Contribution of the National System of Protected Areas: Tourism and Hydroelectricity Verónica Muñoz Source: ©Ministry of Environment, 2015 Sumaco Napo Galeras National Park This publication has been developed under the framework of the Financial Sustainability Project (PSF) for the National System of Protected Areas (SNAP), which is an initiative of the Ministry of Environment of Ecuador (MAE), which has the technical assistance of the United Nations Development Programme (UNDP) and the Global Environment Fund (GEF). The main objective of PSF is to implement a financial operational framework institutionalized and tested in practice, to achieve an expanded and sustainable National System of Protected Areas (SNAP) of Ecuador. Produced by: Grupo consultor Mentefactura. Produced by: Grupo consultor Mentefactura. Design: Manthra Comunicación integral y Producción editorial Layout: h2ostudio. Carla Aguas Cover Photos: Tapir Lodge and Ministry of Environment Editing and proofreading: Luis Miguel Casas de la Peña Made in Ecuador, First edition, October 2015 ISBN: 978-9942-22-0424 This document should be cited in the following manner: Ministry of Environment (2015). Economic Assessment of the Contribution of the National System of Protected Areas to the New Productive Matrix of Ecuador: Tourism and Hydroelectricity. Quito – Ecuador The opinions expressed here belong to the authors and do not necessarily represent the opinions of UNDP and GEF. Complete or partial reproduction requires the authorization of MAE and UNDP Executive summary Historically, the Ecuadorian economy has been characterized by the export of raw materials and unprocessed agricultural products, as well as the import of goods and services with high value added. Faced with this reality, the Government promotes the transformation of the development model of Ecuador, for which two major national priorities are defined and they lead to a New Productive Matrix (NMP, by its acronym in Spanish ) and a New Energy Matrix (NME, by its acronym in Spanish) . For the Ministry of Environment (MAE, by its acronym in Spanish ), protected areas are an essential element of the development vision of the country for their strategic contributions to the preservation of biodiversity, carbon sequestration and the provision of a range of environmental services that, despite their lack of knowledge and distance, form the basis of multiple supply chains and support the lifestyle of hundreds of communities and the country itself, being the source of many raw materials that enable the generation of hydroelectric power and provide unique inputs for potential industries such as pharmaceuticals and food. In this context, these studies are part of the goal set by the MAE, which aspires to become an ally and strategic partner of the NMP and NME. The Ministry of Environment intends to add value to the prioritized productive chains and promote new economic opportunities based on the sustainable use of environmental goods and services from the National System of Protected Areas (SNAP, by its acronym in Spanish ). The strategic importance lies in making visible the contribution of SNAP to the national economy, so it can justify public policy and new investments to meet two major objectives such as conserving biodiversity and maximizing the potential to generate economic benefits for the population. 3 ECONOMIC ASSESSMENT OF THE CONTRIBUTION OF THE NATIONAL SYSTEM OF PROTECTED AREAS: TOURISM AND HYDROELECTRICITY Executive Summary The main objective of this institutional effort is to estimate the economic contribution of SNAP to two key areas for the NME and NMP of Ecuador. On one hand, this effort describes and estimates the contribution of tourism activities in protected areas, and on the other, it estimates the contribution of Protected Areas (PA) to hydroelectric generation projects. Both economic activities would not be possible without the contribution of environmental services generated by the SNAP. Tourism sector results First, it is important to know and appreciate the great contribution that protected areas make to tourism in Ecuador, both for its enormous economic value as well as for being based on the enjoyment of values that are not consumed, such as the landscape and culture. For this reason, a study was carried out in the framework of this topic; “The Economic Valuation of the Contribution of Protected Areas to the New Productive Matrix of Ecuador: Tourism Sector”. The results of this study confirm that SNAP is the main attraction and tourist destination in the country, with more than 1.77 million visitors in 2014. In the last five years, tourism in protected areas grew seven times faster than the average growth of tourism at the national level. By 2014, one in twelve Ecuadorians had visited the SNAP, compared with 2010 when barely one in forty-nine Ecuadorians had this opportunity. The SNAP generates annual revenues around USD 527 million, which represent approximately 35.0% of the tourism revenues in Ecuador. From this value, the Galapagos National Park recorded a contribution equivalent to 20.0% of the tourism economy in the country, while the remaining 15.0% is generated in the continental protected areas (PAs). 4 ECONOMIC ASSESSMENT OF THE CONTRIBUTION OF THE NATIONAL SYSTEM OF PROTECTED AREAS: TOURISM AND HYDROELECTRICITY Executive Summary Source: Ministry of Environment Source: Machalilla National Park ECONOMIC ASSESSMENT OF THE CONTRIBUTION OF THE NATIONAL SYSTEM OF PROTECTED AREAS: TOURISM AND HYDROELECTRICITY Executive Summary This study confirmed that the SNAP attracts tourists with greater purchasing power. Foreign visitors arriving to the SNAP spend an average of USD 2,797 in their visits, approximately USD 1,200 more than the average foreign tourist visiting other destinations in Ecuador such as the sun and beach, culture, etc. It should also be noted that these same tourists stay over five nights more in the country than the average foreign tourist aforementioned. The study concludes that the PA conservation is an excellent destination for public investment in the country. The USD 21 million invested annually in the continental areas generated in tourism alone, added benefits to the economy approaching USD 213 million in 2014. This means that every dollar invested in the continental areas, generated a return of USD 10. It can be noted that through MAE investment in infrastructure and improvement of tourism, between 2011 and 2014 the average time spent by visitors in PA increased. In just four years, this indicator went from 6.9 to 11.4 hours average per visit. Few investments coming from the public sector could have such performance, considering that in SNAP the benefits are distributed to less fortunate and remote sectors of society along a surface that equals to 20% of the national territory. These results confirm that the SNAP is a strategic sector for the NMP because of its dynamic effect on rural economies and the articulation with the main products and touristic circuits of the country. Also, this study was able to establish differences in the average spending of domestic visitors versus foreign visitors in the SNAP. A foreign visitor spends an average of USD 147 per person per day to SNAP, compared to an expense of USD 110 spent by the national tourist. Foreign visitors to the AP not only stay longer in the country, but also have a daily spending considerably higher than other segments of tourism that visit Ecuador such as the sun and beach tourism for example. 6 ECONOMIC ASSESSMENT OF THE CONTRIBUTION OF THE NATIONAL SYSTEM OF PROTECTED AREAS: TOURISM AND HYDROELECTRICITY Executive Summary According to the Register of Tourist Establishments (MINTUR, 2013), there are 1,341 establishments that provide tourist services in the vicinity of the 5 PA involved in the study (Machalilla National Park, Cotopaxi National Park, Cotacachi Cayapas Ecological Reserve, Cuyabeno Wildlife Reserve and Marino Costera Puntilla Santa Elena Wildlife Reserve); these establishments generated 5,735 jobs in 2013. However, most tourist establishments mentioned are of the second and third category, which is normally associated with limited operating standards and quality of services. The results suggest that visitors return with money they cannot spend within PAs or in surrounding populations, due to the limited range of products offered by the existing supply. In this study two possible scenarios for the evolution of tourism in the SNAP for a period of 20 years are evaluated. On the one hand, Business As Usual is presented – BAU (in Spanish “No Change”), which assumes that the current conditions are maintained without any changes in the supply of tourist services in the SNAP. This scenario predicts that the number of visits will peak in late 2016 and then start a slow deceleration. Source: Ministry of Environment Source: Cotopaxi National Park 7 ECONOMIC ASSESSMENT OF THE CONTRIBUTION OF THE NATIONAL SYSTEM OF PROTECTED AREAS: TOURISM AND HYDROELECTRICITY Executive Summary On the other hand, Sustainable Ecosystem Management – SEM (in Spanish “Manejo sostenible de ecosistemas”), in which the number of tourists increases at the rate of 0.11% per month, due to the changes made in the tourism of SNAP through the implementation of ecotourism centers1. By applying the SEM scenario throughout the system, it is estimated that in 20 years the tourism income of SNAP will be 6.3 times larger, so the SNAP contribution of tourism to the economy would be around USD 1.2 billion in 20332. Additionally, the articulator effect between supply and demand that generated ecotourism centers, could expect to harvest an increase of the average visitor expenditure of the order of 54% to 30% for foreigners and domestic visitors. Source: Ministry of Environment Source: Yasuní National Park 1 Resorts (CE, as the Spanish acronym) adopt the principles of sustainability (economic, socio-cultural and environmental) as essential pillars to develop tourism experiences that take advantage of high natural and cultural diversity of protected areas of Ecuador.
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