Economic Valuation of Bhoj Wetlands for Sustainable Use
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EERC Theme: Wetlands and Biodiversity EERC Working Paper Series: WB-9 Economic Valuation of Bhoj Wetlands for Sustainable Use Madhu Verma Indian Institute of Forest Management, Bhopal MOEF IGIDR WORLD BANK ECONOMIC VALUATION OF BHOJ WETLAND FOR SUSTAINABLE USE MADHU VERMA With the research support of NISHITA BAKSHI RAMESH P.K. NAIR Under World Bank Aided India: Environmental Management Capacity Building Technical Assistance Project Co-ordinated by EERC Implementation Cell at Indira Gandhi Institute for Development Research, Mumbai INDIAN INSTITUTE OF FOREST MANAGEMENT BHOPAL March, 2001 Project Team Dr. Madhu Verma, the Principal Investigator, is an Associate Professor in the faculty area of Forest Resource Economics & Management, Indian Institute of Forest Management, (IIFM), Bhopal. She may be contacted at: Indian Institute of Forest Management Post Box: 357, Nehru Nagar Bhopal- 462 003, India Tel: 91 755 775716 Fax: 91 755 772878 Email: [email protected] Ms. Nishita Bakshi worked as Senior Research Fellow (Environmental Economics) in the project. She is currently doing her Ph.D. in Agriculture and Applied Economics at the Virginia Polytechnic Institute and State University. She may be contacted at: Dept. of Agricultural & Applied Economics 321 Hutcheson Hall Virginia Tech Blacksburg, VA 24061-0401 Email: [email protected] Mr. Ramesh Nair worked as Senior Research Fellow (Limnology) in the project. He is currently doing his Ph.D. at the Department of Limnology, Barkatullah University, Bhopal. He may be contacted at: Dept. Of Limnology Barkatullah University Bhopal- 462 026 Email: [email protected] Cover Page- Bhoj Wetland in a cloudy Day with Takia Island in backdrop. Back Page – Upper Lake at sunset Courtesy Central Colour Lab, Bhopal. Black & White Photo- The magnificent Upper Lake with the then amazing Yacht Club – Captured in Camera in 1961 Courtesy Mr. Prem Verma, Bhopal PREFACE Wetlands are the resources that interface between land & water systems. They are amongst the most productive & biologically rich ecosystems and are also amongst the most endangered. Wetlands include lakes, ponds, mangroves, swamps, marshes and coral reefs. Wetlands are complex ecosystems that are responsible for providing a wide array of unmeasured goods and services that benefit people. The livelihoods of millions of people in India are also dependent on these ecosystems. Despite all these benefits from the wetlands they have been mismanaged and are often neglected. Many decision-makers and even so called stakeholders think of wetlands as ‘wastelands’. These so-called wastelands are continued to be drained, depleted at an alarming rate through conversion to what some would term as ‘better’ alternate use like agriculture, industrial activity and residential housing development. At many a places they have been converted into a cesspool as they are considered as ‘most accessible sink’ for throwing various wastes. Wetlands, like many other common property resources are openly accessible to all. Every one claims a stake in their use, but few are willing to pay for the extractive use. In India many wetlands are in urban areas such as in Bhopal, Hyderabad, Srinagar, Udaipur, Nainital, Ooty, Thane. These urban wetlands are constantly degrading on account of various anthropogenic activities like urban development, encroachment, flow of domestic sewage, pesticides, fertilizers and industrial effluents, over fishing, boating, infestation with aquatic weeds and eutrophication, disturbances from excessive recreational activities and tourism, diversion of water from irrigation, domestic use or industrial uses. In many cities like Bhopal wetlands originated as manmade lakes primarily to supply drinking water to the city’s population and over the years they attained features of wetland and started providing multiple functions like commercial fishing, recreation etc. It has so happened that multiple benefits are extracted but little attention has been paid on the maintenance of these wetlands. In this context it becomes imperative to generate quantitative information on the economic benefits from wetlands, which could serve as a powerful tool to influence decision-making. i There is need to develop a comprehensive framework to implement a long-term programme for wetland valuation and policy responses. The Bhoj Wetland located in the heart of the city of Bhopal is one of the 16 wetlands of National Importance in the country. It is unique in its own way since it is an ancient man-made reservoir and provides drinking water to nearly 45 per cent of the city’s population of 15,00,000. It also provides a number of other direct and indirect benefits to the population living in the city. The growing population pressures and human interference have led to degradation of this Wetland. There are numerous threats, which face this fragile urban ecosystem and threaten its very existence in fact. The current research project ‘”Economic Valuation of Bhoj Wetland for Sustainable Use” attempts to analyse the factors causing Bhoj Wetland degradation; nature and extent of injury to the wetland; How does this degradation impact on the uses that citizens of Bhopal extract out of it ? What cost is borne by the users on account of degradation in terms of productivity losses and health impacts? How feedback can be taken from these impacts to revise or develop management policies and to seek participation of stakeholders to check wetland degradation or losses? What is the willingness of the people to pay to conserve this wetland? It was realised that economic valuation need to be attempted to make people aware of the worth of various benefits as well as losses from the wetland and valuation results so obtain could be used to counter wetland degradation. It is high time that necessary steps should be taken both in terms of physical interventions (prevention and restoration activities) and economic instruments such that stream of benefits from Bhoj wetland continue to be available in future as well. Though the urban wetlands are mandated under the Indian Constitution to be maintain by the Municipality but there is an urgent need to involve various stakeholders and resort to ‘collaborative or integrated management’ and ‘sustainable and equitable use’. ii Plan of Study The report is divided into two parts. The first two chapters of Part I provide an account of the functions & values of wetlands (Chapter I); techniques of valuing natural resources and wetlands in particular (Chapter II). Part II begins with highlighting the importance of water resources and introduces the study area i.e. the Bhoj Wetalnd, its features, user & threats and elaborates the objectives (Chapter III); the report then discusses the project methodology and particularly valuation techniques applicable to wetland valuation (Chapter IV); ecosystem modelling of Bhoj Wetland using water quality parameters to project future scenarios and matching policy interventions (Chapter V); use values generated through direct and indirect valuation approaches (Chapter VI); and recommends strategies for sustainable management. The annexures at the end of the report contains ward wise population of Bhopal city (Annexure I); questionnaire used for conduction of CVM & Hedonic Pricing surveys (Annexure II); details of stakeholders workshop seeking their perceptions on management issues of Bhoj Wetland (Annexure III). iii Acknowledgements This study was made possible by the financial assistance from the Environmental Economics Research Assistance Cell (EERC) of the World Bank Aided India: Environmental Management Capacity Building Technical Assistance Project implemented by the Ministry of Environment of Forest, Govt. of India through the Indira Gandhi Institute for Development and Research, Mumbai. I wish to also thank EERC for continuously providing us with the comments of various experts and timely availability of financial assistance to smoothly carryout our research work. My deep appreciation to all those authors whose writings are quoted in the report which made my team understand wetlands problems and valuation techniques. I have been specially influenced by the work of Dr. Gopal K. Kadekodi & Dr. S. C Gulati on “Root Causes of Biodiversity Losses in Chilika Lake: Reflections on Socio Economic Magnitudes” which greatly helped us in analysing wetland management issues and developing our System’s Dynamics model for the Bhoj wetland. I am specially indebted to Dr. Gopal K. Kadekodi (Research professor, CMDR, Dharwad) who was retained as a consultant in the project & who immensely helped us in the developing the ecological model using STELLA software. I am also thankful to him for allowing my team to make use of DEFINITE software at CMDR, Dharwad for Multri Criteria Analysis for property valuation. I am also thankful to Ms. Aparna Nayampalli (Research Associate, CMDR, Dharwad) for helping us throughout in model calibration and validation. I wish to extend my heart felt thanks to Dr. A.J.James, (Environmental Consultant,New Delhi) for extending great help to us in learning and administering CVM in our survey and his valuable input in stakeholders workshop and supplying great deal of literature. I am grateful to Dr. David Simpson (Natural Resource Economist, Resources for Future, Washington, USA) for giving his valuable time to come down to Bhopal and for his input for helping us to make use of Hedonic Pricing technique of valuation. I also express my gratitude to Dr. Kanchan Chopra (Prof. IEG, Delhi) for her guidance and comments