The Process of Forest Conservation in : A Study in

Luca Tacconi

December 1995

A Thesis Submitted for the Degree of Doctor of Philosophy at The University of New South Wales I hereby declare that this submission is my own work and that, to the best of my . knowledge and belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree or diploma of a university or other institute of higher ·learning, except where due acknowledgment is made in the text of the thesis.

Luca Tacconi

School of Economics and Management University College The University of New South Wales

22 December 1995 With love to my parents Alfi.o and Leda

(Con affetto dedico questa tesi ai miei genitori Alfio e Leda) IV

Abstract

The objective of this thesis is to develop an ecological economic framework for the

assessment and establishment of protected areas (PAs) that are aimed at conserving forests

and . The framework is intended to be both rigorous and relevant to the

decision-making process.

Constructivism is adopted as the paradigm guiding the research process of the

thesis, after firstly examining also positivist philosophy and 'post-normal' scientific

methodology. The tenets of both ecological and environmental economics are then

discussed. An expanded model of human behaviour, which includes facets derived from

institutional economics and socioeconomics as well as aspects of neoclassical economics,

is outlined. The framework is further developed by considering, from a contractarian view

point, the implications of intergenerational equity for biodiversity conservation policies.

The issues of intragenerational distribution and allocation are then considered. In this

regard, cost-benefit analysis (CBA), as applied to the valuation of forests, PAs, and

biodiversity, is criticany reviewed. A participatory approach to decision-making, which may also include CBA, is then proposed.

The resulting ecological economic framework may be thus summarised: (a) ecosystem use patterns should be chosen on the basis of their , distributional, and efficiency aspects; (b) systems of PAs should be established in order to achieve minimal intergenerational equity; (c) intragenerational equity requires the correction of the asymmetrical distribution of the costs and benefits arising from the establishment of PAs;

(d) the institutional features relevant to the environmental-economic issues being analysed v

should be considered; and (e) the decision-making process should be participatory and action oriented.

The framework is applied to two case studies in Vanuatu. These applications detail

(a) stakeholders' views and trade-offs faced in relation to forest management (b) modes of

participatory research and decision-making, (c) forms of compensation that may be

adopted in correcting asymmmetrical distributions of the costs and benefits of PAs, and

(d) institutional influences on ecosystem use and implications for conservation projects.

The institutional arrangements developed for the establishment of the PAs are presented.

The application of this ecological economic framework has resulted in the formal

establishment of one P A and the identification and assessment of five other PAs. Vl

Acknowledgments

I gratefully thank my supervisor Associate Professor Jeff Bennett for his comments, for reading several drafts of the chapters and papers, and for extending to me his friendship during the years that we have worked together.

My warmest thanks go to Livo Mele, who assisted me for two and half years while

I was conducting rese3!Ch in Vanuatu. He shared with me the joys and frustrations of research along with his knowledge of his beautiful country and of his people. It is the support, cooperation, and hospitality of the local rural people of Vanuatu that have enabled this thesis to see the light of the day. In particular, I would like to thank: Andrew

Namai, Isaac Utwohor, Chief Tom Kiri, Jerry Taki, and their families in Happy Land village, Erromango; Chief Timothy Nehapi, Gonnel Nehapi and their family in Wiawi village, Malekula. The support and cooperation of the staff of the Department of Forest of

Vanuatu, and in particular the Director Am Mathias, is gratefully aclmowledged. Many thanks also go to the President and staff of the MALAMPA Local Government Council.

Mr Ernest Bani, Principal Environmental Officer, Environment Unit, and his staff, Mr

Ralph Regenvanu, Director, Vanuatu Cultural Centre, and his staff gave their support and encouragement In Port Vila, my friend Steve Wyatt shared his knowledge of issues, thoughts and doubts about conservation and development issues. Patricia Holmes, from the Australian High Commission in Port Vila, provided useful material on land tenure in Vanuatu. Many thanks for their support also go to: Mr Peter Shannon, Australian High

Commissioner, and Mrs Lyn Peck, AusAID representative; Mr Hans-Jorge Von Bieler,

Resident Adviser, European Union; Mr Brian Smythe, High Commissioner, and Mrs Deborah Geels, First Secretary, New Zealand High Commission. vn

My co-supervisor, Dr Bob Fisher, has hardly seen me due to geograpliical distance, but he provided extremely useful material at the critical time when the outline of my research approach was getting into focus.

I am indebted to many scholars who have taken time to comment on chapters and/or material published from the thesis, or who have discussed research issues with me.

Many thanks to: Jerry Ravetz, Silvio Funtowicz, Neil Byron, Mick Common, Chandran

Kukathas, Tony Norton, Alan Randall, Clem Tisdell, Dennis Dykstra, Geoffrey Brennan.

The comments of anonymous reviewers of different academic journals have also been very useful. Several staff members of the School of Economics and Management provided useful comments during seminars. Dr Robin Pope also took time to comment on drafts of chapters. The support of the School of Economics and Management, of the Head of

School, Associate Professor Paul McGavin, and of the secretarial staff is acknowledged.

Funding from the Australian Centre for International Agricultural Research

(ACIAR), Project No. 9020, 'The socio-economic assessment of native forest preservation proposals in Vanuatu: implications for forest management' enabled me to carry out research without the daily worries of seeking funds for specific research activities, and to be employed full-time while reading for this thesis. David , with his interest in forestry issues and love for Vanuatu, facilitated the establishment of the ACIAR research project.

My love and thanks for having tried as best she could to correct my Anglo-Italian lingo go to Nancy Dahl. viii

Contents

Abstract lV

Acknowledgments Vl

List of Tables xiv

List of Figures XV

ListofMaps XV

List of Publications from the Thesis XYl

Acronyms xvii

Part I Introduction 1

Chapter 1 Introduction 2

1.1. Introduction 2

1.2. The policy problem 3

1.3. The context of the thesis 4

1.4. Scope of thesis 6

1.5. Thesis outline 9

Chapter 2 Forests, Biological Diversity and Protected Areas 14

2.1. Introduction 14

2.2. Forests and biodiversity: their functions and status 15 2.2.1. Forests status and functions 15 2.2.2. Ecological aspects of biodiversity 17 2.2.3. The status of biodiversity 19 2.3. Factors contributing to biodiversity loss and deforestation 20

2.4. Underlying causes of deforestation and biodiversity loss 23 2.4.1. Population pressure 23 2.4.2. Poverty and affluence 24 2.4.3. Institutional failure 26 2.4.4. Environmental degradation and the market 28 1X

2.5. Protected areas: functions and problems 30 2.5 .1. The functions of protected areas 30 2.5.2. Problematic issues 33 2.6. Outline of the issues to be considered in the thesis 36 Part II An Ecological Economic Framework 41

Chapter 3 Scientific Methodology for Ecological Economics 42

3.1. Introduction 42

3.2. Positivism and its influence on economics 45 3.2.1. Positivist philosophy 45 3.2.2. The decline of positivism 49 3.2.3. Positivism in economics 51 3.3. Methodology for ecological economics 56 3.3.1. Normal science 56 3.3.2. Ecological economics as a post-normal science 58 3.3.3. Comments on the Funtowicz and Ravetz proposal 62 3.4. An alternative research paradigm 64 3.4.1. Constructivism 64 3.4.2. Action and rigour in the constructivist paradigm 70 3.5. Conclusion 74

Chapter 4 Economic Paradigms and Environmental Decision-Making 76

4.1. Introduction 76

4.2. Ecological economics 78

4.3. Neoclassical economics and the environment 84 4.3.1. Methodological individualism 86 4.3.2. Preferences and the Pareto criteria 87 4.3.3. Utility maximisation 89 4.3.4. Rationality 93 4.4. Implications for the study of environment-economy relationships and the valuation of ecosystems 95 4.4.1. Methodological individualism 95 4.4.2. Preferences 96 4.4.3. Utility and Pareto optimality 97 4.4.4. Rationality 100 X

4.5. Expanding the human behavioural space 102 4.5.1. Behaviour mode 104 4.5.2. Morality 107 4.5.3. Aggregation level 108 4.6. Conclusion: implications for the decision-making framework 109 Chapter 5 Implications of Intergenerational Equity for Biodiversity Conservation Policies 112

5.1. Introduction · 112 5.2. The economics of biodiversity 114 5.2.1. Irreversibility and uncertainty 114 5.2.2. The economic value of biodiversity 116 5.2.3. The precautionary principle 118 5.2.4. The safe minimum standard of conservation 120 5.3. Issues on the concept of natural capital 126 5.3.1. The ecological-social system 126 5.3.2. On the substitu4J.bility between natural capital and manufactured capital 127 5.4. Ethics and intergenerational equity 131 5.4.1. Utilitarian ethics 132 5.4.2. Rawls' theory of justice 133 5.4.3. Some critical issues in intergenerational equity 136 5.5. Implications for biodiversity conservation 140 5.5.1. Three degrees of intergenerational equity 140 5.5.2. Implications for conservation policy and protected area assessment 141 5.6. Conclusion 143 Chapter 6 Rethinking the Economic Analysis of Forests and Protected Areas: Theory and Practice 145

6.1. Introduction 145 6.2. Neoclassical economic valuation of forests and protected areas 146 6.2.1. The CBA framework for the valuation of forests 147 6.2.2. Godoy's application of the CBA framework 149 6.2.3. The economic analysis of protected areas 153 6.3. Implementation problems faced by CBA 154 6.3.1. Distribution, non-timber forest products, and tourism · 155 6.3.2. Royalties, alternative land uses, and centralised planning 159 6.4. An alternative to marginalist decision-making 162 6.4.1. Participatory evaluation 163 6.5. Conclusion and summary of Part ll 168 xi

Part ill Forest Conservation in Vanuatu 171

Chapter 7 Institutions and Stakeholders in Forest Management in Vanuatu 172

7 .1. Introduction 172 7 .2. Geographic background 173 7 .2.1. The climate 17 4 7 .2.2. The population 17 4 7.2.3. Forests and biodiversity 176 7 .3. Institutions and forest management in Vanuatu 180 7.3.1. Land tenure in Vanuatu 180 7 .3.2. Formal and informal organisations and their role in forest management 183 7.4. Peoples' role and attitudes in relation to conservation 189 7.5. People and forest conservation in Vanuatu 192 I 7.5.1. Views and knowledge about logging activities 194 7.5.2. The use and collection of non-timber forest products 199 7.5.3. Views about conservation and future generations 204 7.6. Conclusion 211 Appendix 7A 214 Chapter 8 The Process of Assessment and Establishment of the Erromango Kauri Protected Area 218

8.1. Introduction 218 8.2. Previous proposals and surveys of the Erromango Kauri Protected Area 220 8.3. Geographical characteristics of the protected area 222 8.4. Socioeconomic characteristics of the study area 228 8.4.1. The village economy 228 8.4.2. Tenure and natural resource management 231 8.5. The economic assessment of the protected area 233 8.5.1. Commercial benefits from the forest 235 8.5.2. Subsistence benefits from the forest 241 8.6. Determining the economic incentive for the landowners 247 8.6.1. The current status of the Erromango Kauri Protected Area 252 8. 7. Conclusion 253 Appendix 8A 256 X11

Chapter9 Financial Aspects of Sandalwood Cultivation in Relation to the Erromango Kauri Protected Area 264

9 .1. Introduction 264

9.2. Sandalwood and its status in Vanuatu 265 9.2.1. Sandalwood prices in Vanuatu 267 9.3. Methods 269 9.4. Sandalwood growth rates and heartwood yields 270 9.4.1. Growth rates 270 9 .4.2. Heartwood yields 272 9.5. Financial aspects of sandalwood cultivation 276 9.5.1. Costs of a sandalwood plantation 277 9.5.2. Benefits of a sandalwood plantation 279 9.6. Rural people and sandalwood 285

I 9. 7. Implications for the Erromango Kauri Protected Area 286

9 .8. Conclusion 289

Appendix9A 291

Chapter 10 Conservation Planning in Malekula Island 292

10.1. Introduction 292

10.2. Protected area identification and assessment 294 10.2.1. Protected area identification 294 10.2.2. The process of protected area assessment 298 10.3. Geographical background 302

10.4. Institutional setting 304

10.5. The areas considered for protected status 310 10.5.1. The Lasenuwei area 310 10.5.2. The Nagha mo Pineia Protected Area 314 10.5.3. The Vendik Dik (Bamboo Bay) Protected Area 321 10.5.4. The Lakorombanga Protected Area 324 10.5.5. The Pankumo Protected Area 327 10.5.6. The Nevnal (Leviamp) Protected Area 331 10.6. Conclusion 334

Appendix lOA 338

Appendix 1OB 343

Appendix lOC 350 xiii

Chapter 11 Conclusion 352 11.1. Introduction. 352 11.2. Research findings and their application 352 11.3. Policy implications 358 11.4. Elements for a construct:tvist assessment of this study 361

11.5. Significance of the thesis 363 11.6. Limitations of the thesis 365 11.7. Indications for further research 369 Bibliography 371 xiv

List of Tables

Table 2.1. Some proximate and underlying causes of deforestation. 22

Table 4.1. Tenets of environmental economics and ecological economics. 81

Table 5.1. Functions of natural capital and of manufactured capital. 128

Table 6.1. Components of the total economic value of forests. 148

Table 7.1. cover of Vanuatu. 178

Table 7.2. Views and knowledge about logging activities. 196

Table 7.3. Respondents' frequency of visit to the 'dark bush' for collection of NTFPs and recreation. 202

Table 7.4. Attitudes towards avoiding logging in part of the forest. 207

Table 7.5. Views concerning the establishment of the Erromango Kauri Protected Area. 209

Table 7.6. Importance of establishing a protected area to enable the children to see the kauri . 211

Table 8.1. Description of the Erromango Kauri Protected Area. 227

Table 8.2. Volumes of merchantable timber. 236

Table 8.3. Merchantable timber in kauri forest. 239

Table 8.4. Merchantable timber for the other forest types. 240

Table 8.5. Value of timber royalties. 241

Table 8.6 .. Place of collection of medicinal and their frequency distribution. 245

Table 8.7. Present value of the protected area lease and timber royalties. 251

Table 9.1. Annual average growth rates of sandalwood. 271

Table 9.2. Heartwood yields in Erromango and . 274

Table 9.3. Summary of costs for the establishment and maintenance of a sandalwood plantation. 278

Table 9.4. Heartwood yields (after 20 years) and financial returns from a 5000 m2 sandalwood plantation. 280

Table 9.5. Net present value of output from a ten hectare sandalwood plantation. 283-284

Table 10.1. Vegetation cover of Malekula. 303 XV

List of Figures

Figure 2.1. Agents and institutions determining environmental management 38 Figure 4.1. Human behavioural space. 103 Figure 5.1. The economic system as part of the ecological-social system. 128

List of Maps

Map 7.1 The Republic of Vanuatu 175 Map 8.1 Location of the Erromango Kauri Protected Area 224 Map 8.2 The Erromango Kauri Protected Area 225 Map 10.1 Proposed protected areas and non-loggable areas ofMalekula 305 Map 10.2 The Lasenuwei area 312

Map 10.3 The Nagha mo Pineia Protected Area 317 Map 10.4 The Vendik Dik Protected Area 323

Map 10.5 The Lakorombanga Protected Area 326

Map 10.6 The Pankumo Protected Area 329 Map 10.7 The Nevnal (Leviamp) Protected Area 333 xvi

List of Publications from the Thesis

The following publications contain material extracted from this thesis.

Tacconi, L. (1995). 'Rethinking the economic analysis of forests: theory and practice';

Forest and Management, 73(1-3): 229-238.

Tacconi, L. (1995). 'Community use of forest resources in Umpong Yelongi, Vanuatu:

implications for forest management', in H.T. Tang, L.S. Finiasi, K. Enevoldsen • (eds). What Value Forest and Trees. Proceedings of the Heads of Forestry

Meeting, Nadi, ·, 20-24 September, 1993. UNDP/FAO, Suva, pp. 190-209.

Tacconi, L. (1995). 'An economic analysis of sandalwood cultivation and trade in

Vanuatu', in L. Gjerum, J.E.D. Fox, L. Ehrhart (eds). Sandalwood Nursery

and Plantation Technology. CIRAD-Foret, Australian Centre for International

Agricultural Research, FAOIUNDP, Suva, pp. 235-257

Tacconi, L., Bennett, J. (1995). 'Economic implications of intergenerational equity for

biodiversity conservation', Ecological Economics, 12(3): 209-223.

Tacconi, L., Bennett, J. (1995). 'Biodiversity conservation: the process of economic

assessment and establishment of a protected area in Vanuatu', Development and

Change, 26(1): 89-110. XVll

Acronyms

ACIAR Australian Centre for International Agricultural Research CBA Cost Benefit Analysis ECE Ecological Economics EKPA Erromango Kauri Protected Area FOB Free on Board HC Human Capital IUCN The World Conservation Union LDCs Less Developed Countries LGC Local Government Council MC Manufactured Capital :MNC Multi-National Corporation NC Natural Capital NEE Environmental Economics NGO Non Government Organisation NNC Nonrenewable Natural Capital NPV Net Present Value NTFPs Non-timber forest products PA Protected area PRA Participatory Rural appraisal RFBPS Royal Forest and Protection Society RMU Resource Mapping Unit RNC Renewable Natural Capital RRA Rapid Rural Appraisal SMS Safe Minimum Standard UNCED United Nations Conference on Environment and Development VANRIS Vanuatu Resource Information System WCMC World Conservation Monitoring Centre WRI World Resource Institute PART I Introduction Chapter 1 Introduction

'The . which moves some to tears of joy is in the eyes of others only a green thing which stands in the way' (William Blake, written in 1799.)

1.1. Introduction

The meaning I ascribe to Blake's words, taken from a poster that hung in my

bedroom when I first conceived to work on a dissertation that focused on nature and the

economy, has changed to a great extent during the time required to complete this thesis.

Originally, it symbolised a love for nature. Now, it also encapsulates the subject matter of

this thesis.

The same tree may be a different thing to different people. The world-view we

hold influences how we construe reality. A most important lesson learned through the

work carried out for this dissertation is the importance that values have in shaping views

and actions. Our values shape our conception of nature, of how people interact with other people and with the environment Values shape the way we study these interactions. The work undertaken for this dissertation has influenced my conception and understanding of both nature and economics. Therefore, the content of the dissertation itself has been modified from the original plan.

The thesis has become more than a study on the economic management of forest ecosystems. It is also astudy of the values guiding research processes and of the processes themselves, of the values that generally guide economic analyses of environment issues,

2 3

and of the values that I believe should guide these analyses.

The need to rethink the research approach adopted by economists is exemplified by the words of a well known neoclassical economist. who has a keen interest on methodological issues.

'[E]conomics has not been very successful and has not made much empirical progress, ... its

empirical difficulties are legion, and, if the speculative thoughts of these pages are correct, it will

never conquer them. So the case of economics might seem hopeless. But there are better ways

forward .... I would urge economists to be more eclectic, more opportunistic ... and more willing

to collaborate with other social scientists.' Hausman (1992. pp. 279-280).

Hausman's thoughts may appear to some as too pessimistic. However, they testify a seemingly growing concern among economists about their actual successes and the need to broaden their methodological horizons. This thesis aims at exploring a better way forward in the study of the relationships between the economy and the environment. and in the application of the research fmdings. It attempts to contribute to the development of the emerging discipline of ecological economics.

1.2. The policy problem

Deforestation has been recognised as one of the most important current environmental problems. Deforestation may result, for example, in loss of biological diversity (biodiversity), soil erosion and water pollution, which are perceived to affect human welfare. Deforestation may also have negative effects on the welfare of the local people through shortages in resources, that are traditionally derived from the forests.

The factors contributing to deforestation and possible solutions are currently debated in academic circles and within national and international institutions. Protected 4

areas (PAs) have been recognised as important means of conserving forest ecosystems and

biodiversity. However, their establishment faces several problems. Firstly. several aspects

relating to the potential contribution of PAs to the conservation of the environment and to

human welfare have not yet been clarified. Secondly, once the positive contribution of

specific PAs to environmental conservation and human welfare is established, appropriate

mechanisms that contribute to the resolution of resource use conflicts and help in making

PAs viable over the long-term have to be devised. These two problematic aspects

regarding pAs are addressed in this thesis. An ecological economics framework for the

assessment and establishment of PAs is developed.

1.3. The context of the thesis

The work presented in the thesis was carried out while the author was employed as

Research Fellow, Department of Economics and Management, University College, The

University of New South Wales, for the project 'The socio-economic assessment of native

forest preservation proposals in Vanuatu: implications for forest management' This

project took place during the period of July 1992 - December 1995 and was funded by the

Australian Centre for International Agricultural Research (ACIAR), Project No. 9020.

ACIAR supports research projects that are expected to further academic research and to

provide benefits to developing countries. In this specific case, the project was undertaken in collaboration with the Government of Vanuatu. In order to benefit Vanuatu, the research carried out for the project had to address issues of policy relevance to the latter country, to provide timely outputs, and to assist in developing suitable mechanisms for the implementation of the research outputs, if the concerned stakeholders were interested in 5

doing so.

The research context of the thesis meant that the research methodology used had to enable the accomplishment of research that was issue-driven, policy-relevant and rigorous. The positivist methodology traditionally adopted by mainstream economists did not appear suitable to the requirements of the research context. Therefore, research methodologies alternative to positivism were considered for their application to the study of environmental-economic issues.

A second implication of the research context is that the researcher should spend as much time as possible in the location being research~d. In order to address policy-relevant issues from the stakeholders' viewpoints, and to facilitate the definition of the mechanisms required to implement the research findings, the researcher needs: a) to understand as much as possible the socioeconomic, cultural and political conditions

proper of the area being researched. b) to interact with the stakeholders in order to facilitate the identification of the issues

and the definition of potential solutions.

As a consequence of the above· requirements, the author was based at the Department of

Forests, Port Vila, Vanuatu, during the period January 1993- June 1995. Periodic visits to

Australia facilitated interaction with the Australian ACIAR Project Leader, and thesis supervisor, Associate Professor Jeff Bennett.l Mr Livo Mele, a ni-Vanuatu2 holding a

Diploma in Forestry, worked as Research Assistant (ACIAR Project) in Vanuatu. He was

1 The Director of the Department of Forests of Vanuatu acted as the Vanuatu Project Leader ex officio. First Mr Leonard Bole, then his successor, Mr Aru Mathias held the position. 2 Ni-Vanuatu means indigenous inhabitant of Vanuatu. 6

of great support in helping the author in partially achieving point (a) above and m facilitating point (b).

1.4. Scope of thesis

The work described in this thesis had three major broad objectives.

1. To contribute to the methodological development of the emerging discipline of

ecological economics.

2. To develop an ecological economics framework for the assessment and establishment

of PAs.

3. To apply the theoretical framework to the case studies in Vanuatu in order (a) to

assess whether the framework has practical relevance, and if it has (b) to determine the

implications for forest and biodiversity conservation in Vanuatu.

Throughout the thesis particular attention is given to the processes that underlie research methodology, the framework for the assessment and establishment of PAs, and the application of the framework. This focus on processes is due to three main concerns.

Firstly, the process guiding research partly determines the research fmdings. Therefore, it is important to know the process in order to understand fully the findings. Secondly, economic studies tend to focus on what was found, rather than how it was found. Given that the details of the research (the what) are often less transferable to other siruations than the process (the how), providing a detailed account of how research was carried out· amplifies the benefits derived from a specific research project The knowledge of the specific strengths and weaknesses of a specific research process may facilitate other researchers' work. Thirdly, a research project that defines appropriate processes to deal 7

with the issues of interest (e.g. forest conservation) has a better chance of deliveririg long­ term benefits to the stakeholders. For example, the delineation and establishment of appropriate processes of participatory planning enable the stakeholders to address not only current problems but also future ones.

In addressing the first objective of the thesis, the research question considered is as follows.

1. Can a rigorous research programme be developed while ensuring that the research

carried out is both relevant and may have an impact on the decision-making process?

This question is answered in the affirmative. A constructivist philosophy of social sciences is adopted as the research methodology for the thesis. After addressing methodological issues, the thesis focuses on the development of the framework for the assessment and establishment of PAs. In this respect two further research questions are considered.

2. What are the implications of the tenets of the neoclassical economics paradigm for

decision-making processes concerning the utilisation of ecosystems?

3. What are the tenets of the emerging ecological economics paradigm and what are its

implications for decision-making processes concerning the utilisation of ecosystems?

Ecological economics is characterised by its focus on (a) the sustainable use of ecosystems and resources, (b) their distribution among stakeholders, and (c) their allocation to different uses. The concern regarding the efficient allocation of resources is shared with environmental economics, which has its in neoclassical economics.

Given this common concern, attention is given to a tool that is mainly used to assess 8

resource allocation issues: cost-benefit analysis. The analysis considers the weaknesses of cost-benefit analysis, with particular attention to the valuation of forest ecosystems, PAs and biodiversity. It is argued that cost-benefit analysis presents several weaknesses. Once these weaknesses are recognised, the place of cost-benefit analysis in a broader evaluation framework may be outlined. In order to defme this broader framework, the following research questions have to be addressed.

4. What are the elements that characterise a model of human behaviour that is broader

than the one assumed in neoclassical economics, and what are the implications of that

broader model for the evaluation process?

5. What are the implications of intergenerational equity conditions for the conservation

of biodiversity and for the assessment of PAs?

6. How can the views and the interests of the stakeholders be best accounted for in the

decision-making process?

The analysis carried out in order to answer the six research questions stated above leads to the development of a framework for the assessment and establishment of PAs that me be summarised as follows. l. Ecosystem use patterns should be chosen on the basis of their sustainability and

distributional aspects together with their efficiency aspects.

2. Systems of PAs should be established in order to achieve, at least partially, minimal

intergenerational equity.

3. Intragenerational equity requires the correction of the asymmetrical distribution of

costs and benefits arising from the establishment of PAs. ------

9

4. The institutional features relevant to the specific environmental-economic issues being

analysed should be considered.

5. The decision-making process should be participatory and action oriented.

The above framework is applied to two case studies in Vanuatu. These applications focus particularly on (a) different modes of participatory research and decision-making, (b) different forms of compensation that may be adopted in correcting

asymmmetrical distributions of costs and benefits of PAs, and (c) institutional influences on ecosystem use and implications for conservation projects. In considering these issues,

1 the thesis also focuses on the micro factors influencing the process of forest and 11

biodiversity conservation. The applied outcomes of the research process discussed in the dissertation are also considered.

1.5. Thesis outline

Part I, the introductory part of the thesis, is concluded with Chapter Two. The factors that have to be taken into consideration in the process of conservation of forests and biodiversity are considered in that chapter. The functions and status of forests and

biodiversity are reviewed. Then, some causes of deforestation and biodiversity loss are introduced and the most significant ones are considered in detail. Problematic issues regarding the establishment of PAs are discussed. In the concluding section, the factors that have to be taken into consideration in the process of conservation of forests and biodiversity are summarised. These factors will be addressed in detail in Part ill of the thesis.

Part II is concerned with the development of a theoretical framework concerning 10

the contribution of economics to the assessment and establishment of PAs. The research paradigm adopted in the dissertation is discussed in the first chapter of Part IT, Chapter

Three. It is important to commence the development of the theoretical framework by considering the paradigmatic position adopted. The specific paradigm espoused contributes critically to the structuring of the research problem by providing implicit rules regarding what issues are relevant, how to proceed in the analysis and what analytical tools may be employed in addressing the research questions. Positivist philosophy of science, its influence on economics and its shortcomings are outlined. Then, a proposal for ecological economics to become a 'post-normru' science is critically considered. Finally, a constructivist philosophy of science, adopted as the methodological basis of the dissertation, is discussed.

While the paradigmatic basis of the thesis with regard to the research approach is discussed in Chapter Three, the paradigmatic basis of the thesis in relation to environmental-economic issues is considered in Chapter Four. The objective of the chapter is to provide some of the theoretical elements required for the development of the framework for the assessment and establishment of PAs. Features of the ecological economics paradigm and of the environmental economics paradigm are discussed. The conception of human behaviour that one holds is important in determining the preferred decision-making process. Therefore, models of human behaviour and their implications for the evaluation framework are examined in Chapter Four.

The development of the theoretical framework is completed in Chapters Five and

Six. Issues regarding the evaluation process with specific regard to forests, biodiversity, 11

present and future people are considered in these chapters.

The question of what constitutes intergenerational equity in natural resources use is explored in Chapter Five. Firstly, some economic aspects of biodiversity and the concepts of the precautionary approach and the safe minimum standard are reviewed.

Biodiversity is an important attribute of natural capital. Thus, the implications for

biodiversity conservation policies of seeking to achieve intergenerational equity are

analysed by addressing the wider issue of the use of natural capital. Then, contractarian

ethics and its application to intergenerational equity questions are considered. The

implications of intergenerational equity for biodiversity conservation policies and for the I

economic analysis of PAs are derived in the chapter.

The objective of Chapter Six is to detail how it may be possible, in practice, to deal

with distributional and allocative issues in relation to forest resources. Firstly, details of

the application of the environmental economics approach to forest valuation and P A

assessment are discussed. The focal point of the analysis is the practical problems faced in

valumg forest resources and PAs. Features of the illtemative approach to the distribution

and allocation of forest resources proposed in the dissertation are defmed in the chapter. A

summary of the framework for the assessment and establishment of PAs developed in Part

II of the thesis concludes the chapter.

The framework developed in Part IT has been applied to the assessment and

establishment of PAs in Vanuatu. Details of the application of such a framework are

presented in Part Ill. 12

An in depth knowledge of the context being studied is required. It is the principal objective of Chapter Seven to present the information that was used to gain an initial understanding o( the Vanuatu context. Information about some geographical features of the country and on institutions significant to forest management are presented in the chapter. A view widely held by some conservationists in relation to the role of rural people in forest conservation is considered. Then, some views of rural ni-Vanuatu people regarding forest management and their implications for forest conservation in Vanuatu are analysed.

The first case study, the Erromango Kauri Protected Area, is considered in

Chapter Eight. A detailed account of the application of the framework developed in Part II is presented. Previous proposals concerning the establishment of the PA are reviewed. The geographical and socioeconomic features of the study area are reported. An assessment of the commercial and subsistence benefits that may be derived from the forest is presented.

Then, the kind of agreement (i.e. a land lease contract) and the level of economic incentives provided to the landowners for the establishment of the PA are detailed.

Chapter Nine concludes the analysis of the first case study. While the land lease agreement may be adopted for a long period, it is also important to assess whether income generating activities can be developed in the area. The establishment of income generating activities could decrease the need to rely on external funding for the payment of the lease agreement. The objective of Chapter Nine is the assessment of the financial potential of sandalwood as an income generating .activity to be established in conjunction with the

Erromango Kauri Protected Area. 13

The second case study, the process of identification, assessment and establishment of PAs in Malekula island, is presented in Chapter Ten. The application of the theoretical framework to Malekula island differs from the case of the Erromango Kauri Protected

Area. The approach to the identification, assessment and establishment of individual PAs adopted in Malekula was designed to establish PAs that are consistent with local peoples' needs and wants in relation to ecosystem conservation without the need for compensation.

The individual PAs con.Sidered in Malekula have been identified and assessed through a process of participatory planning that, for reasons explained in the chapter, differs from the process adopted in Erromango. Both approaches (detailed in the two case studies) have a place in an overall strategy for the conservation of forests and biodiversity in

Vanuatu. Their specific role and their integration are discussed in the concluding chapter.

The thesis is concluded with Chapter Eleven. In that chapter, the research findings are summarised, some shortcomings of the research presented are stressed, the significance of the thesis is considered, and issues to be considered for further research are outlined. Chapter2 Forests, Biological Diversity and Protected Areas

2.1. Introduction

Forest ecosystems and biodiversity contribute to the sustenance of life on Earth.

They provide ecological services and materials that help in maintaining and improving the welfare of human beings. To understand the need for conservation of forest ecosystems and biodiversity, their functions have to be clarified. To understand how conservation • initiatives may be carried out, it is necessary to comprehend the factors that may determine ecosystem degradation. PAs, a specific form of conservation initiative, have a relevant role to play in the conservation of forests and biodiversity. An understanding of their functions as well as the problems related to their establishment is required in order to devise a methodology for their assessment and establishment

The objective of this chapter is to provide the background information required to clarify the above issues. Section 2.2 considers the functions and status of forests and biodiversity. Some causes of deforestation and biodiversity loss are introduced in Section

2.3. The most significant of these causes are considered in detail in Section 2.4. Section

2.5 analyses the role of PAs in conserving forests and biodiversity, and problems related to their establishment Section 2.6 draws together the arguments presented in the previous sections. It also outlines the factors that have to be taken into consideration in the process of conservation of forests and biodiversity. It is opportune at this stage to define the meaning of conservation and that of degradation. The term conservation is used in the

14 15

present context to refe-r-t:o the· maintenance of ecosystem functions not excluding possible human utilisation of the ecosystem. It differs from the term preservation. The latter is often used to indicate that an ecosystem is maintained under strict conditions, such as the exclusion of any human activity from the area.

Degradation refers to _a loss of ecological qualities of the ecosystem (Blaikie and

Brookfield, 1987).

2.2. Forests and biodiversity: their functions and status

2.2.1. Forests status and functions

Forests may initially be divided into the' two major groupings of temperate forests and tropical forests. The latter category may be subdivided in tropical moist forests 1 and tropical dry forests. Tropical moist forests are then further subdivided into rainforests, deciduous forests and ; rainforests account for about 50 per cent of all tropical forests and are the most diverse ones (Sharma et al., 1992; Vanclay, 1993; Collins et al.,

1991; Sayer et al., 1992). Burgess (1993) reports that: a) the global area covered by tropical forests in 1990 was estimated at 1,715 million

hectares; b) rainforests accounted for 656 million hectares; c) deciduous forests covered 626 million hectares; d) during the 1980s, tropical forests decreased at a rate of 16.9 million hectares per year-

a rate of 0.9 per cent per year.

1 Myers (1980) provides a detailed defmition of tropical moist forests. 16

Forests have a variety of ecological functions and provide a multitude of materials

and services to human beings. They harbour a large genetic pool, regulate water run-off

and soil erosion, and they contribute to the regulation of the climate (e.g. they influence

rainfall and absorb carbon dioxide). Forests are a source of timber and non-timber forest

products (NTFPs).2 They are objects of religious values, cultural values, and aesthetic

values. Forests are also a media for research and education (see e.g. Jacobs, 1988).

Tropical moist forests are particularly important from a biodiversity conservation

point of view. They are thought to harbour between 50 per cent and 90 per cent of all

existing species (Reid and Miller, 1989; Wilson, 1988). The role of forests in climate ' stabilisation is evidenced by the fact that tropical forests store more than 50 per cent of the

Earth's organic carbon stock (Rowe et al., 1992). They report that between one and three

billion tonnes of carbon are released annually into the atmosphere as a result of tropical

forest burning, compared to 5.6 billion tonnes released from the use of fossil fuels. The

other important function of forests noted above has to do with the regulation of the

hydrological cycle. Brooks et al. (1992) note that forests in their natural state tend to (a)

yield the highest quality of water of any ecosystem, (b) produce the lowest erosion and

sedimentation rates, and (c) generate a more uniform streamflow in a watershed than any

other vegetation cover.

2 NTFPs are all biological materials other than timber which are obtained from natural forests (de Beer and McDermott, 1989). Forest areas may be under some form of management in order to maintain the natural production of NTFPs, but these products are not cultivated. 17

2.2.2. Ecological aspects of biodiversity

The tenn biodiversity refers to the diversity of life at all levels and it also embodies the linkages between these different levels of the biological hierarchy (Wilson, 1992). This is the meaning of biodiversity adopted in the Convention on Biodiversity ratified in June

1992 at the United Nations Conference on Environment and Development (UNCED) in

Rio de Janeiro. The tenn biodiversity has also been used with the all encompassing meaning of the totality of biological resources (e.g. McNeely et al. 1990). Problems may arise in analysing biodiversity issues if this dual meaning is not recognised. This issue will be further considered in Chapter Six.

Biodiversity may be considered at the genetic, species and ecosystems levels.

Genetic diversity may be considered at different levels (e.g. population) and provides the basis for speciation. The productivity and resilience of populations may be related to their genetic composition. Species diversity refers to the variety of species within a specific area. The existence of populations of a species in geographically and environmentally distinct areas is considered important in order to maintain diversity in the gene pool and to protect the species as a whole against events such as isolated epidemics of disease and predators that co.uld exterminate entire populations (Norton, 1987). Ecosystem diversity refers to the variety of biotic communities and habitats, and to the diversity within ecosystems. Ecosystem diversity is nonnally considered at the landscape and regional level. At the landscape level. diversity includes a variety of ecosystems and is important due to the biogeographical characteristics (e.g. patterns, juxtapositions and interconnectedness) that allow for the free movement of individuals and for the maintenance of the shifting patterns of ecosystems (Noss and Harris, 1986). 18

Ecological research has greatly furthered knowledge on the complex aspects of biodiversity, such as ecosystem changes, habitat patchiness, and the role of natural and human-induced disturbances on biota (see Reid and Miller, 1989). However, many fundamental questions about several aspects regarding the specific levels (and their linkages) at which biodiversity may be considered remain unanswered. The impacts of habitat fragmentation on genetic diversity and how biodiversity influences the ability of ecosystems to withstand stress are poorly known; so are the impacts of landscape fragmentation on the functioning of ecosystems, population viability, and the functions and activities of many individual species (Ehrlich and Daily, 1993; Meyer, 1993; Perrings et al., 1992; Solbrig, 1991).

Despite this lack of knowledge about various aspects of biodiversity, Barbier et al.

(1994) remark that ecologists tend to stress that the major function of biodiversity is its contribution to the maintenance of ecosystem resilience. 3 Thus, they note that the challenge of biodiversity conservation is the maintenance of those ecosystem functions that generate ecological services and make ecosystems resilient to change. These ecosystem functions and services support life on Earth and contribute to the betterment of human welfare.

Economic aspects of biodiversity will be considered in Chapter Five. Here, it is sufficient to remark that the maintenance of biodiversity through the conservation of

3 Resilience is defmed by Holling (1986) as the capacity of an ecosystem to withstand perturbations and shocks. 19

forests provides important economic benefits such as the maintenance of genetic material

used for pharmaceutical purposes and breeding. 4

2.2.3. The status of biodiversity

The approximate current state of biodiversity at the biosphere level may be

understood by considering the trends affecting species diversity. The number of existing

species is thought to be between five and 100 million, with a suggested conservative

estimate of 12.5 million (WCMC, 1992). The human-induced extinction rate is thought to

be between 100 to 1,000 times the non-human induced rate (Reid and Miller, 1989). If

current trends in biodiversity loss continue, the resulting extinction rates have been . ' estimated to range between 10 per cent and 50 per cent of all species over the next fifty to

one hundred years (Bawa et al., 1991; Panel of the Board on Science and Technology for

International Development, 1992; Reid, 1992).

In the context of this study, it is relevant to note that the South Pacific island states

have some of the world's highest rates and numbers of recorded species extinction,

especially (Carew-Reid and Sheppard, 1985). This may be due to the particular

fragility of island environments (e.g. McNeely et al., 1990; Vitousek, 1988). Concern has

been expressed about the less visible but widespread loss of traditional agro-forestry

systems that is occurring in the Pacific islands (e.g. Clarke, 1991; Thaman, 1988). The

latter is the cause of both a reduction in the diversity of plant species found in agro- forestry systems and of traditional ecological knowledge. The consideration of traditional

4 World Conservation Monitoring Centre (WCMC) (1992) and World Resource Institute (WRI) et al. (1992) provide a wide range of exmples of the economic values of biodiversity. 20

ecological knowledge leads to a final and important note on a general aspect of biodiversity.

Biodiversity has normally been considered from a biological perspective. However,

Nelson and Serafm (1992) have highlighted the importance of also considering

biodiversity from a human ecology perspective. This includes the activities and influences

of human beings on the environment They stress that this approach may provide a better

understanding of the interactions between biophysical systems and human activities and

interests. Thus. the adoption of this approach at the micro level provides a basis for

dealing with conflict and controversy in land use planning.

Having outlined the contribution of forests and biodiversity to life on Earth. it is

necessary to highlight the factors causing deforestation and biodiversity loss. The causes

of deforestation and biodiversity loss may be classified into proximate and underlying

causes. Proximate causes are those activities that contribute directly to species over­

exploitation and habitat modification. Underlying causes are the social, cultural and

economic factors that drive the proximate causes.

An outline of both types of causes is provided in the following section. Section 2.4

will provide a detailed review of the underlying causes of deforestation and biodiversity

loss.

2.3. Factors contributing to biodiversity loss and deforestation

The major proximate causes affecting biodiversity include habitat loss and

fragmentation, pollution, species over-harvesting, invasion by exotic species, global

climatic change and the development of industrial agriculture and forestry (WRI et al., 21

1992; Perrings et al., 1992). In particular, the loss and fragmentation of tropical moist forests is one of most significant threats to the world's biological diversity (Sayer and

Wegge, 1992), together with climatic change. Given that biodiversity loss and deforestation are so closely related, and also given that the focus of the dissertation is on forest protected areas, the following analysis will centre on the causes of deforestation.

· Before proceeding, the meaning of deforestation has to be stated. Here, deforestation is defined as either (i) the clearing of forest, or (ii) the degradation of the forest ecosystem to a degree that regeneration is impaired.

There exists voluminous literature analysing the causes of deforestation, its implications and possible remedies for it5 This section does not attempt to review this literature. Rather it presents a summary of the factors that are thought to contribute to deforestation. Knowledge of the multiple causes of deforestation will help in identifying the specific causes pertinent to the particular case studied. In turn, this will help in devising appropriate conservation initiatives.

Table 2.1 presents a summary of the proximate and underlying · causes of deforestation as presented in two recent studies. These have been chosen as they articulate · many of the causes found in a large section of the literature on deforestation. It has to be stressed that in the literature there is not a large degree of agreement on what are the most important causes of deforestation. For instance, it has long been debated whether shifting cultivators are the main perpetrators of tropical deforestation. This lack of agreement is not surprising as the identification and analysis of the 'problems' depends on the specific

5 Albrecht (1993) provides about thirty pages of references on deforestation. 22

paradigm6 adopted (see e.g. Stanich (1989) and Tisdell (1990a) for a description of some

paradigms adopted in the analysis of environmental problems).

Here, it is emphasised that the causes of, and solutions to, tropical deforestation

will vary from case to case, depending on the specific ecological, cultural, political and

economic conditions. It is useful to identify the possible impacts that a specific factor may

have on deforestation. However, it is not helpful to make broad generalisations about the

overall causes of deforestation. Each specific case should be analysed in its own right

The following section considers in detail some important underlying causes of

deforestation and biodiversity loss.

Table 2.1. Some proximate and underlying causes·or deforestation.

Rowe et al. (1992) Vanclay (1993) Proximate causes Proximate causes Agricultural expansion (mainly shifting cultivation) Shifting cultivation Overgrazing Industrial agriculture Fuelwood gathering Logging practices Commercial logging Infrastructure and industrial development

Underlying causes Underlying causes Market failure Greed Policy failure Corruption Population growth Overpopulation Poverty Poverty State of the economy International trade policies Imperialism Bureaucratic inefficiency Ignorance of best logging practices

6 The meaning of paradigm and its importance in conditioning research processes and outcomes is discussed in Chapter Three. 23

2.4. Underlying causes of deforestation and biodiversity loss

Conflicting views about the underlying causes of deforestation and biodiversity loss may be found in the literature. An example, further discussed below, is that concenring poverty and affluence. Some authors claim that poverty is a major cause of ecosystem degradation, and suggest that economic growth is therefore required to counteract degradation. Others suggest instead that it is affluence that causes degradation.

The view espoused here is that the causes of environmental degradation are normally multiple. Different causes may be operating at the same time, depending on the

specific case. The objective of the following analysis is to depict the range of causes rather

than identifying any single cause of environmental degradation.

2.4.1. Population pressure

It is widely accepted that population pressure may lead to ecosystem degradation.

However, the relationship between population pressure and the environment is complex

(e.g. Clay et al. 1994; Mink, 1993).

Concerning the relationship between deforestation and population, statistical

studies support the existence of a positive relationship between increase in population and rates of deforestation (e.g. Allen and Barnes, 1985; Burgess, 1993). However, population

pressure does not automatically lead to environmental degradation as implied by the neo­ malth.usian paradigm (e.g. Eckholm, 1976). The impacts on ecosystems of population

pressure are mediated by a number of factors, such as consumption patterns, institutional structures, and technology. Therefore, the localised effects of population pressure cannot

be assumed a priori. For example, it has been reported that a decrease of population, due 24

to migration, has led to a weakening of indigenous institutions regulating resource use which, in turn, has caused lartd degradation (Garcia-Barrios and Garcia-Barrios, 1990).

Furthermore, Blaikie and Brookfield (1987) note that major cases of land degradation are to be found not only in areas of high population density but also in areas of low to medium density.

2.4.2. Poverty and affluence

Lele (1991), in a review of the mainstream approach to sustainable development,7 observes that although several factors of environmental degradation have been acknowledged, attention has concentrated on the 'vicious circle' by which poverty causes environmental degradation and vice-versa. He depicts the problem of environmental degradation as a much more complex one. Poverty, affluence, technology and culture are all critical factors in influencing environmental processes. Access to resources is one factor that determines poverty and affluence. It has also been stressed that affluence may induce consumption patterns which could cause environmental degradation (Durning, 1991).

Given that this dissertation focuses on conservation in a developing country it is useful to consider in more detail the issue of poverty and environmental degradation. In relation to individual decision making, poor people are seen as having high discount rates because they appear to value present consumption much more than future consumption

(Perrings, 1989). On the other hand, it has been noted that:

7 In the mainstream approach Lele (1991) includes IUCN, WWF, World Bank, UNEP, USAID, WRI, liED and NGOs such as Global Tomorrow Coalition. 25

'discount rates of the resource users are not 'given'. They are themselves the result of the resource-

degradation process which compels actions to be taken which imply high discount rates ... high

apparent discount rates are not explanation of the NRD [natural resource degradation] process: they

are simply restatements of it.' (Pearce, 1988a pp. 109-110).

For instance, Chambers (1991, p. 7) notes that 'poor rural people often want to take the long view' as local natural resources often provide the only means for their survival in

both the short and long run. However, poor people may not be able to take a long-term

view because of the processes intrinsic to the local and national political economy, and to foreign aid (see Chambers et al., 1989). Notice that for poor people to take the long-term view, it may not be necessary that their culture embeds ethical values such as 'respect' for

the environment They might take the long-term view, if their rights over resource use are recognised, because it is reasonable from an economic point of view (i.e. this may be the

best insurance for survival). Then, according to this view, the issue is how to enable them

to use the environment sustainably.

A further point has been raised by Lipton (1983) in relation to the interaction of the poor with the environment He distinguishes between 'the poor' and the 'ultra-poor'.

The latter, not having any other available alternative, might degrade natural resources in

order to provide for present needs. However, the poor might be able to resort to livelihood strategies that tend to avoid the degradation of natural resources.8

Concerning the poverty-affluence-deforestation relationship, Thapa and Weber

(1990) argue that, in the Asian countries they consider, the affluent elite have carried out

8 For examples of studies about rural people's socioeconomic strategies see, for example, IDS Bulletin (1989). 26

deforestation on a large scale (both for logging and commercial agriculture) and have marginalised the poor. The latter, relegated to small land-holdings, have contributed to deforestation in order to satisfy their needs for food, fuelwood, and fodder. Evidence on the process of marginalisation of the poor and their role in deforestation is also presented by Witte (1992).

2.4.3. Institutional failure

Many economists usually make reference to market and government failures. This

section is titled 'institutional failure' because the government and the market are only two

of the institutions that influence the management of ecosystems. Other relevant in~titutions

are community-based ones, such as churches and village councils.

Market failure is said to occur when the market does not achieve a socially

efficient allocation of resources. Market failure may be caused by the existence of

externalities, lack of information, uncertainty, irreversibility, market imperfections, and

non-defined property rights. Government failure arises when policy interventions are either

not undertaken (e.g. to correct market failure), or create distortions that lead to socially

sub-optimal outcomes. 9

First, it has to be noted th:.lt in the case of ecosystem management the concept of

efficient·allocation of resources presents severe problems in itself. In fact, the great degree

of uncertainty about ecosystem functions hinders the viability of determining the efficient

allocation of resources (e.g. Cropper and Oates, 1992; Dietz and van der Straaten, 1992).

Therefore, it is practically impossible to attempt the achievement of efficient

9 The concepts of efficiency and optimality are considered in Chapter Four. Here. it is useful to anticipate that both concepts (and particularly soci.U optimality) present relevant theoretical and empirical problems. 27

use. Second, it should also be noted that for most ecosystem functions it is incorrect to speak of degradation due to market failure. It is rather a condition of 'non-existent' markets (Bromley, 1991). This situation cannot be expected to change substantially; most ecosystem functions are not marketed and it is unlikely that they will ever be. To face these conditions of non-existent markets and continuous market failure, the adoption of policies that tend to constrain the operation of market actors has been proposed. This issue will be disc_ussed in Chapter Five.

Government failure may originate from, and is often attributed to, ignorance and/or lack of information. Government failure may also originate from rent-seeking behaviour (e.g. Bates, 1988). In order to stay in power, governments may implement policies that are economically inefficient but politically expedient

Several studies have pointed out that government failure, expressed in pricing distortions, has caused accelerated deforestation (Binswanger, 1991; Repetto, 1988).

Other studies show that extensive deforestation has resulted ·from policies designed to benefit the government officials and powerful eli!:e5 (Dauvergne, 1993-94; Hecht, 1985;

Thapa and Weber, 1990; Thompson, 1993). These latter studies suggest that deforestation originated mainly from the political process and that poverty and population pressure were only minor causes.

Of particular interest here are the institutions of property rights that regulate access and use of ecosystems. These systems have been classified into four categories: state property, private property, common property and open access (Bromley and Cemea,

1989). While the meaning of private property and state property is clear, it is useful to· clarify the meaning of common property and open access regimes. In an open access 28

system there are no exclusive rights and resource use is open to everyone. In a common property regime the resources are owned and/or managed by a defined group. In this regime, specific rules detail the composition of the group and regulate the use of the resources. Common property differs from state property because in the former resources are. owned and managed at a group level. There is evidence to suggest that private, state and common property regimes can all be viable systems for the management of ecosystems

(Feeny et al., 1990; Shepherd, 1991; Stanley, 1991). It should be noted that the establishment of private property rights is at times advocated as a solution to environmental problems. However, private property too may lead to irreversible environmental changes such as species extinction. It has been demonstrated that extinction may be efficient from an individual point of view (e.g. Farrow, 1995).

The role played by community-level institutions in resource management has often been disregarded. The government centralisation of resource management has at times induced the breakdown of traditional management systems. This, coupled with lack of government capacity to manage resources has virtually created a situation of open access regime. Environmental degradation has followed (e.g. Bromley and Chapagain, 1984).

2.4.4. Environmental degradation and the market

Some authors have considered the impact of the rise of capitalism and the development of the global exchange market on ecological functions and biodiversity

(Eckholm, 1982; Redclift, 1987, 1988; Smith, 1984). These authors have argued, from a dependency theory point of view, that the social relations of production and reproduction undergo a substantial change during the adjustment of the economy to the conditions of 29

the global market. Tills leads to increased demands on the environment which in turn

result in degradation. This approach has been criticised on several grounds, especially

because it does not consider the role played by institutions and individuals in the Third

World. These actors may mitigate the demands of the core nations, with the consequent

variability of social, economic and environmental outcomes (Stonich, 1989). Redclift's

(1988) claim that indigenous societies have always managed their resources sustainably is difficult to support. Even jf many examples of sustainable management by pre-capitalist

societies can be found, the contrary is also true. Northern China, the Mediten·anean

region, Mesopotamia, and Mesoamerica all experienced deforestation and soil erosion

induced by indigenous societies (Ponting, 1991).

It is not the market in itself that leads to environmental problems but the dynamics that entail the economic process. These include:

a) political processes, such as corruption in the logging industry that allows very few

people to benefit from the wealth of the forests;

b) changes in values, including loss of respect for the environment and decreased social

cohesion of communities (Dasmann, 1975176; Tisdell, 1992); c) demands arising from economic growth, such as increased demand in less developed

countries (LDCs) as well as in developed countries; d) technologies used to satisfy these needs, for example in tropical forests up to ten trees

may be destroyed in order to cut one for export.

A further market dynamic has been identified by Norgaard (1988). He notes that the global exchange market has affected biodiversity by encouraging specialisation, as in the case of the development of mono-cropping cultures which reduce the diversity of 30

crops and supporting species. Notice that the homogenisation of production techniques may imply the loss of opportunities for an actual increase of biodiversity arising from farmers experimentation in their traditional and complex agro-ecosystems.

The previous sections have examined the functions and importance of forest ecosystems, the role of biodiversity in sustaining life and its status, and the causes of their degradation. It will be noted below that PAs are regarded as an important instrument for the conservation of forests and biodiversity. For this reason, the process for their assessment and establishment is the focus of this dissertation. The functions of PAs and some problematic questions related to their establishment are examined in the next section.

2.5. Protected areas: functions and problems

2.5.1. The functions of protected areas

The World Conservation Union (IUCN) recognises six categories of PAs (The

World Conservation Union Bulletin, 1994). These categories relate to the degree of human use allowed within the area. For example, in Strict Nature Reserves human use is not allowed, with the exception of research activities. Managed Resource Protected Areas are managed mainly for sustainable use of natural ecosystems.1° Currently, PAs cover about 5.19 per cent of the Earth's land area (WCMC, 1992).11

Several functions of protected areas have been recognised (McNeely et al. 1990;

IUCN, 1993). Protected areas: i) contribute to tlie maintenance of ecological processes,

10 The IUCN categories are as follows: Category 1; Strlct Nature Reserve/Wilderness Area; Category II, National Park; Category ill, Natural Monument; Category N, Habitat/Species Management Area; Category V, Protected Landscape/Seascape; Category.... VI, Managed Resource Protected Area. 11 This figure refers to the first five categories of the IUCN classification system. 31

species diversity, and the genetic variation within species; ii) safeguard ecosystems and specific species' habitats; iii) facilitate scientific research, education, and training; iv) maintain or enhance the productive capacity of the ecosystems and their use for recreational and tourism purposes; v) contribute to the maintenance of the ecological functions of adjoining ecosystems; vi) may help to maintain the cultural capital of the local people. PAs usually have multiple conservation objectives, such as the conservation of genetic resources, the control of erosion and sedimentation, the maintenance of indigenous use, and the provision of recreation and tourism services. They may be established in relatively unmodified habitats or in areas highly influenced by human intervention such as the protected landscapes found in Europe.

In the past, the conservation of biodiversity was an objective of minor importance in the establishment of PAs. The choice of PA sites was often based on their recreational and tourism potential or because they could not accommodate other land uses (e.g. Hall,

1989). However, biodiversity conservation has become an increasingly important goal in the establishment of PAs (e.g. Braatz et al., 1992; Nilsson and Gotmark, 1992; House of

Representatives Standing Committee on Environment, Recreation and the Arts, 1993).

The Global Biodiversity Strategy (WRI et al., 1992) is a document developed through a world-wide consultation process with experts, governments and non­ government organisations. This document provides the broad spectrum approach needed for the conservation of biodiversity, the majority of which is found in landscapes managed by local people (Pimentel et al., 1992). The Global Biodiversity Strategy details, both at the national and the international level, the institutional requirements, the policy changes and the funds needed to conserve biodiversity. PAs are an integral component of this 32

strategy as they are recognised as being among the essential means for saving biodiversity

(WRI et al., 1992). However, PAs can only complement the other actions required to conserve biodiversity (e.g. changes in legislation, changes in ecosystem use. ex situ conservation) rather than substitute for them. In fact, PAs can help in conserving only a portion of all existing species. For instance, Reid and Miller (1989) have attempted to estimate the contribution of PAs to species conservation in tropical forests. In the scenario that all tropical forests were cleared with the exception of those in legally established PAs, the following percentage of species would survive: Africa 37-65 per cent; Asia and Pacific

44-71 per cent; and Latin America 28-58 per cent.

It has been noted that the land surface covered by PAs in categories I-V and category VI will probably never exceed ten and twenty percent respectively of the Earth's total land area (Reid and Miller, 1989). However, these are only suggestive figures. There is limited knowledge about the extent to which existing PAs satisfy the criteria set forth in the design of national PA systems.12 Because of this knowledge gap, it is currently impossible to determine exactly the amount of area that should be dedicated to PAs. The notion that a 'target percentage area' (e.g. 10 per cent of the land area of a country) should be set aside for biodiversity conservation is inappropriate. Individual countries have different conservation needs determined by their specific environmental and socioeconomic conditions.

To understand the issues involved in the process of assessment and management of

PAs, it is now opportune to consider their eventual problems and weaknesses.

12 Rarity and representativeness are two of the main ecological criteria used to assess PAs (Smith and Theberge, 1986). 33

2.5.2. Problematic issues

Conservation initiatives have been criticised because of their narrow focus on

genes, species, and ecosystems and their consequent disregard of the interactions between

the human population and the natural environment The implementation of the

'biologically focused approach' to conservation and the existence of pressures from

politically powerful vested-interest groups have contributed to the cultural and socio­

economic marginalisation of many people living within or close to PAs. These resource

use conflicts are widespread and span most of the (e.g. Abel and Blaikie, 1986;

Gadgil, 1992; Ghimire, 1994; Gurung, 1992; Hough and Sherpa, 1989; Shanna, 1990;

Utting, 1994).

As a result of these resource-use conflicts, many PAs around the world suffer from

encroachment by the people living near them. This is a clear manifestation of the negative

impact that some PAs have had on the livelihood of these people. This problem persists

even when there has been an attempt to devise projects that 'provide local people with

alternative sources of income (Ghimire, 1994). The existence of. these problems is

however increasingly acknowledged. The need to maintain the culture and the livelihood

of the people living within, or close to, proposed and existing PAs is now recognised. It

has been featured as a main theme at international meetings such as the IVth World

Congress on National Parks and Protected Areas held in Caracas, Venezuela, in 1992. The recognition of peoples' rights to control and manage their resources is currently

considered a fundamental requirement for the maintenance of their culture and 34

livelihood.I 3 As a result, more funds appear to be devoted to the establishment of PAs with the participation of local people at all stages of the process (e.g. Reti, 1993).

Certainly, there is no easy way out of resource distribution problems. However, given the positive attitudes towards conservation often registered among local people (Hackel,

1990; Newmark et al., 1993), an increased attention to their needs and problems may increase the likelihood of success for conservation-development initiatives.14

A further issue to be considered is if the development of P A systems will significantly constrain food availability. A tentative but logical answer is no. Firstly, food availability is not simply a question of productive capacity. It is well documented that social, political, and economic factors are all causes of food scarcity problems (e.g. Dreze and Sen, 1989). Secondly, PAs are increasingly being designed in ways that allow the local people to use food and other resources found within the area. Thirdly, many PAs in LDCs contribute significantly to the economy by attracting tourists. If local people can share in the economic benefits from tourism, 15 their capacity to acquire food would increase as a result Fourthly, in the case of a hypothetical world food crisis arising from productive constraints, it is highly doubtful that the areas dedicated to PAs could provide a substantial contribution to food production. About 36 per cent of the Earth's land area is currently dedicated to agricultural and pastoral uses (World Bank, 1992). The productive land that will be included in PAs cannot be quantified at this stage, but it is likely to be only a fraction of the agricultural-pastoral land currently used. In fact, assuming that PAs will

13 For a collection of papers addressing these issues see for example Kemf (1993). 14 Wells and Brandon (1992) discuss in detail the dilemmas and opportunities presented by conservation­ development projects. 15 In 1988, 'nature tQurism' contributed between US$ 2.2 billion and US$ 12.1 billion to the economies of LDCs (Lindberg, 1991). 35

cover 10 per cent of the Earth's land area, a large fraction of this area will cover land of low agronomic potential. Fifthly, because of the low agricultural productivity of many areas, agricultural output could often receive a greater boost from land redistribution policies and conservation measures applied to existing agricultural land, rather than from expansion onto forest land included in P As. 16

A further weakness of PAs is their susceptibility to damage caused by pollution and exotic species infestation. However, these problems endanger not only PAs but also, for example, agricultural production. They have to be addressed at the national and international levels through the development of responses such as the Global Biodiversity

Strategy.

Finally, the current approach to the protection of biodiversity in PAs has been criticised by Noss and Harris (1986) because, among other reasons, it does not deal effectively with biotic change. Rather, it focuses on single PAs instead of whole landscapes and it concentrates on species and populations instead of ecosystems and landscapes in which they interact It is on this basis that the concept of bioregional management has been proposed for the conservation of biodiversity. The should be sufficiently large to ensure the viability of ecosystems, the maintenance of ecological functions and to contain human communities (WRl et al., 1992). The consideration of biodiversity at the bioregionallevel allows the integration of PAs with the surrounding landscapes.

16 See Feamside (1993) for a detailed discussion of the issue of forest conservation and food availability. 36

2.6. Outline of the issues to be considered in the thesis

The previous sections have considered the functions and status of forest

ecosystems and biodiversity. The underlying causes of deforestation and biodiversity loss

have been detailed, as well as the problems relating to the establishment of PAs. It is now

useful to summarise the infonnation presented and to consider the implications for the

achievement of the main objective of the dissertation: the development of a process

oriented toward the assessment and establishment of PAs aimed at conserving forest

ecosystems and biodiversity.

Forests and biodiversity contribute to the maintenance of life-support functions. ' The conservation of forests contributes not only to maintaining biodiversity. It contributes

to the regulation of the climate, to the regulation of the hydrological cycle, and to the

direct provision of materials, such as timber and NTFPs. The conservation of biodiversity

contributes indirectly to the provision of these services; it contributes to the maintenance

of viable ecosystems and species. Thus, the conservation of forests should not be equated

· to the conservation of biodiversity. For instance, the conservation of forests with little

biodiversity value may contributes to the regulation of the climate and to the provision of

resources important to the livelihood of people.

The fact that forests and biodiversity provide life-support functions should be

taken into account when assessing a conservation initiative. Given that the disruption of

these life-support functions may affect the current and future generations, their interests

should also be factored into the assessment process.

To devise a process for the assessment and establishment of PAs that is suitable to

the conditions of the specific cases under consideration, the causes underlying 37

deforestation and biodiversity loss have to be understood. Not only are they the elements that make PAs needed, they are also important factors in determining the successful implementation of PA initiatives. Figure 2.1 summaries the agents and the institutions

(their interactions are indicated by the arrows) that contribute to the process of environmental management Technology is also a factor affecting environmental management Trade, multi-national corporations (MNCs), aid, and commercial funding mediate the interaction of a LDC with the rest of the world.

The demands of the 'rest of the world' on the environment of a specific country are mediated through the institutions and individuals of the country17 which, in the case studied here, is a developing country. Institutions and individuals interact (partly through the political sphere) to devise and change policies that, among other things, influence the distribution of resources and their management and the technologies adopted. Interaction takes place both outside and within the market The specific demands placed on the environment- by the poor, power groups, the government and other institutions such as non-government organisations (NGOs) - are mediated through specific resource management institutions, classified in Figure 2.1 into four different types (a mix of different property regimes is certainly conceivable). This representation tends to emphasise that there is no univocal relationship between the status of the agents (e.g. rich or poor) and the impact of their demands on the environment It also stresses that, with the exception of the open access regime, all property regimes may result in either conservation or degradation of the environment The technologies adopted depend on the policies,

17 An exception to this is transboundary air and water pollution, over which each single country has limited or no control. 38

Figure 2. L Agents and institutions determining environmental management.

,.------~:!'1 RestoftheWorld 1

-Trade -MNCs -Aid - Commercial funding ------w ------Developing Country

NGOs < :> I People Power Groups l~ ::::.- I Government I

~r ~ 1 \ I 't~ ' ''~ '~ f tt '~ '~ Institntions for resource management ,l,;...... ·"-J,., Technology I I I I I Open II Common Private State I access access property 1 I property

-ell c: c: c: c: c: 0 c: c: 0 0 .9 0 •.:j 0 0 •.:j •.:j <:!3 •;:J •;:J <:!3 Cti <:!3 <:!3 <:!3 c:; "0 c:; "0 "0 e: ~~ 4.) <:!3 4.) <:!3 4.) ~ 0 .... t:! .... ell O.Ou 0.0 "'c: 0.0 c: "'c: 4.) 4.) t:! 4.) 0 0 ~ 0 f:-<-5 u Q CJ Q Q u w ,, "'~ v " '~ Degradation ENVIRONMENT Conservation 39

needs, and. wants of the different agents, and on the particular institutional milieu.

Technology may in tum affect the institutional structure. Finally, changes in the

environment affect the actions, needs, and wants of national and international individuals

and institutions.

Figure 2.1 presents a general picture of the issues to be considered in studying

economic-environmental processes. In each specific case, once the links between agents

and the environment are understood, a strategy for the implementation of conservation

initiatives may be developed. Experiences with existing conservation initiatives tend to

indicate that they often create resource use conflicts, as with any other initiative that

influences the distribution of resources. Thus, it has been stressed that all the stakeholders

should be involved from· the start in the assessment and in the establishment of

conservation initiatives.

This review chapter has stressed the importance of forest and biodiversity

conservation for the maintenance of life on Earth and for the maintenance of human well

being. It has been noted that PAs have a significant role to play ·in the conservation of forests and biodiversity. It is therefore important to devise successful assessment and

establishment processes.

The objective of Part II of this dissertation is to develop a framework for the

assessment of PAs that takes into account their importance for the current and future generations. This framework needs also to account for the needs and aspirations of the people that may be negatively affected by the establishment of PAs. Fmally, this framework should be designed in a way that allows the provision of policy relevant information in a timely manner. How the framework is developed and how research is 40

carried out depends on the specific methodological paradigm adopted. Therefore, it is important to make this explicit. This is done in the first chapter of Part II. PART II An Ecological Economic Framework Chapter3 Scientific Methodology for Ecological Economics

3.1. Introduction

The previous chapter has outlined what are currently thought to be the

proximate and underlying causes of deforestation and biodiversity loss. Part II of the

thesis is concerned with the development of a theoretical framework for the

assessment and establishment of PAs for the conservation of forest ecosystems and·

biodiversity. This chapter contributes to the development of this framework by

presenting the research paradigm espoused in the thesis.

The following chapter considers the paradigmatic basis of the thesis in relation

to environmental-economic issues. The tenets of the emerging ecological economics paradigm are outlined. These tenets are compared with those of the environmental economics paradigm in order to gain a better appreciation of the strengths and weaknesses of the latter paradigm. The aim of the chapter is to provide theoretical elements required for the development of the decision-making framework for the assessment of conservation initiatives. Chapter Five deals with the ethical question of the rights of future generations. It considers the implications of intergenerational equity for biodiversity conservation policies. Chapter Six concludes Part II of the dissertation by addressing issues concerning the economic evaluation of forests and biodiversity. It details the framework to be applied in Part ill to the assessment and establishment of specific PAs.

42 43

In discussing biodiversity policies, Norton and Ulanowicz (1992) note that while studying ecosystems conservation biologists should be obligated to follow both a criterion of rigour and a criterion of relevance to policy development. This is a rather important issue to be considered in developing a research methodology for social science. In fact, Uphoff (1992, p. 295) notes that there appears to be 'an inverse relationship between rigour and relevance in most social science work'. Here

Uphoff refers to that conception of rigour normally associated with quantitative hypothesis testing (the Scientific Method). He follows the footsteps of sociologist

Wright Mills (1959) in noting that social scientists have become trapped in what is considered to be the Scientific Method. As a result, they not only refrain from tackling issues that do not suit their method but, in the name of objectivity, they also feel compelled to refrain from taking any action aimed at influencing the situation being considered.1

The central issue to be considered in this chapter is this. Can a rigorous research programme be developed while ensuring that the research carried out is both relevant and may have an impact on the decision-making process?

At times economists have expressed the view that methodology2 is irrelevant to the practice of economics. However, it has been rightly stressed by Hoover (1995,

1 Uphoffs team worked on water management in Sri Lanka. He notes that they could have followed the Scientific Method in their work. They could have tested various hypotheses about the factors determining the hopeless situation of the water management system being considered, and they could have easily predicted the demise of that water management system. They actually decided to influence the system and 'against the odds' made the water management system viable (see Uphoff, 1992). 2 In a narrow sense, the term methodology has been used to refer to the study of the process through which theories are formed and justified (e.g. Blaug, 1992). In a broader meaning, methodology refers to the process of learning about the social and/or physical world (e.g. Hausman, 1992). A methodological study may assess how these processes are carried out or detail how they should be carried out. 44

p. 733), who paraphrases Keynes, that those 'economists, who believe themselves to be quite exempt from any methodological influences, are usually slaves of some defunct methodologist.'. In fact, Kuhn (1970) argues that the specific paradigm adopted by the researcher structures the research problem by providing implicit rules regarding what issues are relevant, how to proceed in the analysis and what analytical tools may be employed in addressing the research questions. Therefore, it is essential to start the development of the theoretical framework of this dissertation by considering its paradigmatic position.

Positivist philosophy has dominated scientific research throughout most of the twentieth century. However, positivism has been discredited or rejected by some philosophers of science (e.g. Feyerabend, 1975; Kuhn, 1970; Suppe, 1974).

Nevertheless, many, if not most, scientists view the world through positivist glasses and attempt to adopt (or subscribe to, at least in their rhetoric3) positivist prescriptions for scientific inquiry (Caldwell, 1982; Lincoln and Guba, 1985;

McCloskey, 1985). Therefore, this chapter starts by outlining in Section 3.2 the tenets of positivism, its major shortfalls and its influence on economics.

This dissertation is carried out within the framework of the emerging discipline of ecological economics. In Section 3.3 a specific methodological position that has been proposed to ecological economists is discussed.

Caldwell (1982) notes that few economists are familiar with the philosophy of science and, when they are acquainted with it, it is mainly the philosophy developed for the natural sciences, and particularly physics. This is probably due to the fact that

3 This term is used here in its classical meaning 'art of arguing', rather than in the modem disparaging fashion. 45

positivist philosophers of science have maintained that there is unity of science. That is, there is one and only one Scientific Method that can be applied in all scientific disciplines. However, a philosophy of social sciences has developed in parallel with the decline of positivism. Given that ecological economics is regarded here as a social science, one particular philosophy of social science, constructivism, is considered for its applicability to the study of economic-environmental issues. This is done in Section

3.4. Section 3.5 draws conclusions from the chapter.

Before proceeding with the analysis it will be useful here to define the meaning of paradigm. In this context paradigm refers to a set of beliefs (or world view) around which 'reality' is organised (Berman, 1981; Kuhn, 1970; Lincoln and

Guba, 1985). Any paradigm of inquiry may be categorised by detailing its ontology

(or nature of reality that the paradigm postulates), its epistemology (the nature of the relationship between the knower and the known), and its methodology (the method of investigation to be followed).

3.2. Positivism and its influence on economics

3.2.1. Positivist philosophy

Positivism began with the French philosopher Comte in the first half of the

19th century (Unnson and Ree, 1989). Over time, some distinct interpretations of positivism have emerged. The logical empiricist stance evolved over two decades in the period between the mid 1930s and the mid 1950s. It then replaced logical positivism as the dominant positivist stance (Caldwell, 1982).4

4 The following· summary of logical positivism and logical empiricism is derived from Caldwell (1982). 46

Logical positivist philosophers maintained that science may be characterised by two features. Firstly, there is knowledge only from experience, which is gained through the study of empirical data. This provides the bounds for legitimate science.

Secondly, logical analysis is the method to be used in the scientific effort These two features imply that all sciences are unified. That is, social sciences and natural sciences are both concerned with observable phenomena and so adopt the same method of inquiry.

Only the statements that could be verified by empirical evidence were considered meaningful and could be the subjects of scientific inquiry. Because metaphysical concepts could not be subjected to tests, they were considered meaningless and outside the scope of science. The emphasis logical positivists put on the foremost importance of empirical evidence led them to attempt to rid scientific language of all theoretical terms, an attempt that did not prove fruitful. In order to discern between meaningful and meaningless statements, the adoption of the verifiability principal was proposed by logical positivists. To have empirical content, a statement must have been amenable to complete verification by observable evidence.

Acceptable evidence was that which the inquirers and their peers could observe during their existence. Verification was interpreted as a complete and definitive establishment of truth. This principal was, however, shown to be practically inapplicable because of its strict requirements. For instance, a law of physics can never be completely verified.

Logical empiricists developed a more moderate form of positivism. Similar to logical positivists, they stressed. the primacy of empirical evidence. However, they accepted the existence of theoretical statements in scientific theories. They did not 47

require that these statements be individually tested. It was the theory as a whole that

had to be confirmed by physical evidence. Again, similarly to logical positivists,

logical empiricists held that only testable hypotheses were considered scientific.

However, they proposed that confirmation rather than verification should be used to

test hypotheses. Confirmation of a law was achieved through a series of tests that

resulted in findings that supported the law.

A further relevant difference .between logical positivists and logical empiricists

concerns the role of science. The former subscribed to the view that scientific

endeavour could and should only aim at describing phenomena. Logical empiricists,

instead, posjted that the goal of science is explanation rather then description.

The confirmation test was shown to be flawed (see Caldwell (1982) for a

review). Therefore, in the current version of positivism (to which many economists

subscribe), confmnation has been replaced by falsification as the test to which

hypotheses should be subjected. The introduction of the concept of falsifiability is due

to Popper (1959). He points out that instances that confirm a hypothesis are not

difficult to encounter. However, a theory can never be definitely shown to be correct.

Instead, if an instance that disproves the theory is found, the theory is proven to be

incorrect. Therefore, Popper (1959) recommends that scientists should carry out tests

that seriously seek instances which would falsify the theory being tested. According to

Popper (1959), the falsifiability principle is the demarcation criterion that should be

adopted in distinguishing between science and non-science. Scholarly endeavours that

do not produce falsifiable hypothesis do not constitute scientific activities.

It should be pointed out that Popper was critical of some of the views held by

philosophers of the logical positivist and logical empiricist circles and distanced 48

himself from those philosophers. They differed in their definitions of rationality and

objectivity of sCience, and on the demarcation of scientific from non scientific

activities (Skolimowsky, 1974). However, their views presented fundamental

similarities. Both Popper and logical empiricists believed in the rational and objective

character of science. They also shared an admiration of the natural sciences and

believed that a distinction between science and non-science should be drawn.

An outline of the evolution of positivist philosophy of science that occurred in

the twentieth century has been presented above. It should be noted that there have

been several interpretations of what positivism actually implies. 5 It is important,

therefore, to clearly detail what is implied by positivism in the following analysis. The

ontology, epistemology and methodology of positivism as intended here are well

summarised by Egon Guba, a scholar of the philosophy of social sciences.

'Ontology: Realist: - reality exists out there and is driven by immutable natural laws and

mechanisms. Knowledge of these entities, laws and mechanisms is

conventionally summarized in the form of time - and context free

generalizations. Some of these latter generalizations take the form of cause­

effect laws.

Epistemology: Dualist/objectivist- it is both possible and essential for the inquirer to adopt a

distant, noninteractive posture. Values and other biasing and confounding

factors are thereby automatically excluded from influencing the outcomes.

Methodology: ExperimentaVmanipulative - questions and/or hypotheses are stated in advance

in propositional form and subjected to empirical tests (falsification) under

carefully controlled conditions.' (Guba, 1990 p. 20).

5 See, for example, Bryant (1985) for a discussion of the different interpretations of positivism. 49

3.2.2. The decline of positivism

Philosophers and scientists in various fields have rejected the tenets of positivism in relation to its ontology, epistemology, and methodology. The rejection of positivism by philosophers of science dates back to the early 1970s (e.g. Suppe,

1974) but it has been slow in filtering through to the natural and social sciences.

The view that there exists only one reality to observe has come across serious criticisms. Two alternative positions to that which postulates the existence of an objective reality may be distinguished. These have been termed the constructed reality position and the created reality position (Lincoln and Guba, 1985). The constructed ' reality position (e.g. Hesse, 1980) purports that reality is a construction of the minds of individuals. Therefore, there are multiple individually constructed realities rather than one objective reality. Objects are tangible entities but the meanings ascribed to them in order to make sense of them are constructed realities. The created reality position presents a more radical view of reality and may be identified with the work of

·physicists. 6 This position advances the case that reality does not exist at all. Reality comes into existence when it is perceived. It may be said that in a certain way we contribute to its creation. Physicists have noted that when studying subatomic particles they cannot determine both the momentum and the position of a particle.

Therefore, they have to choose which of the two properties they want to determine.

By doing so, they effectively create the other property. As a result of the acknowledgment of the role played by the researcher in influencing the reality being studied, scientists are no more referred to as observers (which has a connotation of

6 It has to be stressed that this position correspond to a particular interpretation of quantum theory. Conflicting views among physicists exist 50

neutral, objective entity) but as participators (Wolf, 1981; Zukav, 1979; Lincoln and

Guba, 1985).

The constructed reality position and the created reality position logically lead to a criticism of the epistemology of positivism. These conceptions of reality imply that there cannot exist value-free and objective research as postulated by positivist philosophy. Firstly, the development of theory depends on the specific researcher's values and interests. Secondly, observation is not independent of theory. Observation cannot be a neutral collection of facts; it involves selection and interpretation. These are guided by the theoretical construct developed, or subscribed to, by the researcher.

The researcher not only'sees' a specific reality; he or she also influences this reality directly or indirectly, as already noted above. For example, if the researcher attempts to not influence a situation by refraining from any action, events will take a different course from that which they would have followed otherwise. Several authors from a variety· of disciplines have put forward these arguments decades ago (Easlea, 1973;

Harre, 1972; Kuhn, 1970; Myrdal, 1957; Polanyi, 1958; Wright Mills, 1959; Wolf,

1981).7

In relation to methodology, the problems faced while applying falsificationism are considered in the following section with specific regard to economics. Here, it is useful to make a few remarks in relation to the concept of hypothesis. Medawar

(1974) notes that one of the weaknesses of the hypothetico-deductive model8 rests in

7 Easlea (1973, p. 153) remarks that social scientists 'like their colleagues in the physical sciences, are born and brought up in societies. Their education and social position will ensure that they have defmite social interests and objectives, which they may at some time reject for different ones ... for the social scientist. the choice between competing social paradigms is not 'merely' one between different images of the existing social reality but, very explicitly, a choice between mutually exclusive future societies.' 8 The hypothetico-deductive model may be thus summarised (Hausman, 1992): (i) formulate a hypothesis; (ii) deduce some prediction or observable claim from the hypothesis jointly with other 51

not being able to provide any explanation of how hypotheses are generated. He defines a hypothesis as 'an imaginative preconception of what might be true in the form of a declaration with verifiable deductive consequences.' (Medawar, 1974 p.

279). He asserts that good hypotheses are 'felicitous strokes' of creative scientists.

Popper ( 197 4) subscribes to this view and adds that luck is also needed to advance good hypotheses. Later in the chapter, when presenting an alternative model to the hypothetico-deductive one, a different definition of hypothesis will be provided. An approach to the generation of hypotheses that appears to be more fruitful than that advanced by the two latter philosophers is also presented.

After providing a description of positivist philosophy of science, the analysis may now focus on the views held by economists in relation to positivist inquiry.

3.2.3. Positivism in economics

Positivism was introduced to economics by Hutchinson (1938). Over the years, positivism has been endorsed by many economists. They regard it as a philosophy that could lead economics towards becoming a scientific, more objective, and value-free discipline9 (Caldwell, 1982).

The influence of positivist thought on many economists is exemplified by the purported subdivision of economics in positive economics and normative economics.

Positive economics is supposed to describe and explain the functioning of the economic system. Given that it is supposed to describe and explain 'facts' it is said to

statements (e.g. ceteris paribus clauses); (iii) test the prediction or claim; (iv) judge whether the hypothesis is disconflfUI.ed. 9 Gee (1991), a neoclassical economist, in his summary of the neoclassical school states that this school claims to be value-free. It is useful to remark that there certainly are neoclassical economists who recognise that economics cannot be a value-free discipline. Here, we are at issue with those that do not recognise this. 52

be value-free and objective, in pure logical empiricist style. It may be noted that even within welfare economics, which is normally regarded as part of normative economics, there have been attempts to establish an objective foundation for analysis.

For instance, Hennipman (1976) seeks to provide an objective interpretation of Pareto optimality. However, these assertions are untenable. It has been stressed in the previous section that observation cannot be value-free and objective.

Two main implications of the arguments developed above are worthwhile noting. Firstly, making a distinction between positive and normative economics may not be as useful as is often argued (Caldwell, 1982). Any research activity, which according to the established view is classified in the domain of positive economics, involves value-judgements and subjective factors. Secondly, a1dn to the previous

point, some schools of economic thought have become separated from philosophy

due to the attempt at establishing a positive economic science (Sen, 1987). However,

economists should not shy away from considering issues that involve philosophical

matters; it is impossible to avoid taking a specific ethical stance.

We may now tum to considering hypothesis testing in the form of

falsificationism, which is considered to be the hallmark of positive scientific inquiry by

many economists.

Mark Blaug (1992), a neoclassical economist who has written widely on the

philosophy of science and economics, has stressed that economists appear to have

endorsed falsificationism, at least in their rhetoric. However, he notes that the tenets

of falsificationism have not been put into practice. Despite this failure in applying

falsificationism thus far, he stresses that economists should strive to apply it. That is,

they should attempt to produce theories that are testable and can be falsified. By 53

taking this view, Blaug implies that falsificationism can actually be put into practice in economics.

The view that falsificationism may be successfully applied to economics has been put into serious doubt by Caldwell (1982). In putting forward this argument he follows the same line adopted by other philosophers of science regarding the applicability of falsificationism to the natural sciences. He contends that disconfirming tests do not normally appear to be unambiguously interpretable in economics.10

Falsificationism requires that hypotheses or theories be tested in a straightforward way. To carry out a straightforward test, Caldwell (1982) notes that:

a) it must be possible to clearly specify the initial conditions and the general

laws;

b) the proxies that are chosen to describe theoretical concepts must allow a

true test of the theory;

c) the empirical data must be clean.

Caldwell (1982) presents detailed arguments showing that these three conditions do not appear to apply to economics. It is useful to summarise them here.11

1. Initial conditions are numerous. A complete test of a theory could be said to take

place if all the exogenous variables were known, one was varied while the others

were held constant and the effects could be noted. This is not the case in

10 In relation to the natural sciences, Kuhn (1970, p. 26) remarks: 'there are seldom many areas in which a scientific theory, particularly if it is cast in a predominantly mathematical form, can be directly compared with nature. ... Furthermore, even in those areas where application is possible, often demands theoretical and instrumental approximations that severely limit the agreement to be expected.' 11 The application of falsificationism to economics is also rejected by Hausman (1992) on the basis of arguments that parallel those of Caldwell's. 54

econormcs. In economic systems, there is a large number of poorly specified

exogenous variables that change through .time.

2. Some initial conditions are uncheckable. For example, the state of information,

tastes and preferences cannot be independently checked. This results in the fact

that the rationality assumption and the maximisation assumption cannot be

subjected to tests that could provide unambiguous falsification.

3. There is an absence of falsifiable laws. Falsificationism requires that laws proven

to be false should be discarded. The existence of cases in which 'fundamental

laws' of economics cannot be subjected to unambiguous tests creates a major

problem to positivist economists. Examples of these untestable laws are the law of

diminishing returns and the law of demand.12

4. Tests of models are not tests of theories. Models must be developed in order to

test a theory. Given that it is always possible to construct several models to

represent any theory, the falsification of any single model does not necessarily

falsify the theory. Therefore, the falsification of theories is impossible m

economics.

5. Empirical data may not accurately represent theoretical constructs. In economics,

like in other disciplines, data are often unreliable and present problems of

aggregation. As a result, they normally do not closely represent the theoretical

construct that is being tested. Therefore, it is normally possible to show that the

data are not sufficiently 'clean' and the results of tests cannot be interpreted

12 The untestability of the law of demand is also discussed by Hutchinson (1977) and Hausman (1992). 55

unambiguously. Thus, a falsification test cannot be carried out in a straightforward

way.

The decline of positivist philosophy together with the inapplicability of falsificationism may appear to leave a void in terms of the methodological basis of economics. This condition is similar to that of any other discipline. In fact, the rejection of positivism has not coincided with the rise of another widely accepted philosophy of science. Rather, there has been a proliferation of philosophical positions

(e.g. post-positivism, constructivism, critical theory). It is not the objective of this chapter to review all recent developments in the philosophy of science. As remarked in Section 3.1, the scope of the chapter is to present the paradigm adopted in the thesis. The present dissertation is carried out within the emerging discipline of ecological economics. Therefore, a prominent position on the methodology of ecological economics is considered in the following section.

Before proceeding with the analysis, it is worthwhile to warn those who, as a result of the problems faced by falsi:ficationism, may think of taking refuge in

Friedman's (1973) instrumentalist position (that asserts that all that matters in economics is prediction rather than explanation, and that the reality of assumptions is irrelevant), that this stance has been almost unanimously rejected by methodologists.

This rejection is justified on two counts. Firstly, explanation rather than prediction is considered to be the goal of science. Secondly, even if prediction was accepted as the the goal of science, Friedman's position is untenable. If the working of a system is not understood (explained), then when a theory fails to predict correctly it is impossible to know how to adjust or change the theory. Furthermore, it has been noted that false 56

assumptions are more likely to generate false predictions than are good assumptions. 13

3.3. Methodology for ecological economics

The study of the paradi~m of a discipline may address two distinct issues.

Firstly, it may attempt to detail those aspects that constitute the paradigm of the discipline as normally practiced. Secondly, it may be prescriptive. That is, it may propose certain characteristics that should be part of the paradigm. For ecological economics, a study of the first kind has been prepared, for example, by Sahu and

Nayak (1994). Issues relating to this aspect are considered in Chapter Four.

Prescriptive issues have been considered particularly by Funtowicz and Ravetz (1991,

1993a, 1993b, 1994). The methodological issues raised by Funtowicz and Ravetz are considered below.

3.3.1. Nonnal science

Funtowicz and Ravetz (1991; 1993a; 1993b; 1994)14 propose that ecological economics should be a post-normal science. The concept of post-normal science has been construed by Funtowicz and Ravetz by building on that of normal science, first developed by Kuhn {1970). Let us first outline the concept of normal science.

Kuhn's analysis provides a sociological explanation of how science evolves, of how scientists operate. Kuhn's work not only describes how science evolves; it also

advances a specific methodology that should be endorsed by scientists.

13 See Caldwell (1982), Hausman (1992) for criticism of Friedman's methodology, and Pope and Pope (1983) on assumptions. 14 Hereafter, these studies are simply referred to as Funtowicz and Ravetz. 57

Normal science is the kind of scientific inquiry that is 'normally' undertaken by the vast majority of scientists. It is the hallmark of science. Normal science is research carried out within a specific paradigm. The values that underlie the paradigm are normally unspoken. A paradigm structures the research problem by providing implicit rules regarding what issues are relevant, how to proceed in the analysis and what analytical tools may be employed in addressing research questions. Normal scientific activity is a puzzle-solving activity. To qualify as a puzzle, a problem must have more than one assured solution. Also, there must be rules regulating the type of solutions that are acceptable and the procedure by which the solutions may be attained.15

Kuhn praises normal· scientific research for its essential contribution to the progress of science. By carrying out normal science, scientists are able to delve into problems with a detail and depth otherwise impossible. However, he also recognises the limitations of normal science. Kuhn (1970) stresses that noirnal science:

'seems an attempt to force nature into the preformed and relatively inflexible box that the

paradigm supplies. No part of the aim of normal science is to call forth new sort of

phenomena; indeed those that will not fit the box are often not seen at all.' (p. 24).

And:

'To a great extent these are the only problems that the [scientific] community [subscribing to

the specific paradigm] will admit as scientific or encourage its members to undertake. Other

15 According to Kuhn, there are three major areas of empirical investigation which may be classified as puzzle-solving. Firstly, there is the investigation of facts that the paradigm has demonstrated to be important in the explanation of things. In this case, research aims at determining these facts with a greater precision and in a large variety of conditions. Secondly, investigations consider those facts that may be compared with the prediction from the theory espoused by the researcher. In other words, there is an attempt to demonstrate correspondence between theory and reality. Finally, there are investigations aiming at solving some of the ambiguities of the theory and also seeking to solve problems that had only been mentioned but never received in depth consideration. 58

problems, including many that had previously been standard, are rejected as metaphysical, as

the concern of allother discipline, or sometimes as just too problematic to be worth the time.

A paradigm can, for that matter, even insulate the community from those socially important

problems that are not reducible to the puzzle form, because they cannot be stated in terms of

the conceptual and instrumental tools the paradigm supplies.' (p. 37; emphasis added).

To summarise, Kuhn (1970) proposes that normal science is the hallmark of science. Scientists should undertake puzzle-solving activities because this contributes enormously to scientific development He also acknowledges the limitations of normal science, and points out that when scientists encounter anomalies that cannot be dealt with within the existing paradigm, a crisis may arise and research becomes extraordinary rather than normal. In other words, it may lead to changes in the paradigm.

Kuhn's characterisation of scientific development is not without critics, nor is its methodological proposal. Reviewing criticisms of the former point is beyond the scope of this chapter. The latter point is dealt with indirectly by considering the position expressed by Funtowicz and Ravetz.

3.3.2. Ecological economics as a post-normal science

Funtowicz _and Ravetz coin the neologism 'post-normal' to differentiate their conception of scientific activity from that of normal science and also to emphasise that the concept of post-normal science has evolved from that of normal science. They stress that post-normal science and normal science are complementary. According to them there are, however, important differences between the two approaches to scientific work:

'post-normal science is a development from and extension of traditional science, appropriate

to the conditions of the present age. Its essential principal is that uncertainty and ignorance, 59

even in practice based on science, can no longer be expected to be conquered; instead they

must be managed for the common good.' (Funtowicz and Ravetz, 1993b p. 102). ·we adopt

the term "post-normal" to mark the passing of an age when the norm for effective scientific

practice could be a process of puzzle-solving in ignorance of the wider methodological, social,

and ethical issues raised by the activity and its results. The scientific problems which are

addressed can no longer be chosen on the basis of abstract scientific curiosity or industrial

imperatives. Instead, scientists now tackle problems introduced through policy issues, where,

typically, facts are uncertain, values in dispute, stakes high, and decisions urgent.'

(Funtowicz and Ravetz, 1991 p. 138, emphasis added).

Funtowicz and Ravetz firstly provide a framework for defining the problems that pertain to nonnal science and those that should instead be classified as post- normal ones.16 Then, they proceed to explain their post-normal methodology that focuses on problem solving strategies. These issues are considered in tum. Before doing this, however, it is useful to remark that Funtowicz and Ravetz, according to our reading of their work, equate the concept of normal science with that of 'positive nonnal science'. That is, nonnal scientific work carried out according to the tenets of positivist philosophy described above (e.g. scientific work is value-free).

The demarcation between a normal science problem and a post-normal science one is based on two aspects of the specific issue being considered: (a) the intensity of the uncertainty; and (b) the intensity of the decision stakes. Funtowicz and Ravetz define three levels at which uncertainty may be managed. These three successive levels are (in order of increasing degree of uncertainty): (i) the technical level, where standard routines such as statistical methods may be used to deal with uncertainty; (ii)

16 They also define the characteristics of those problems that pertain to the professional Consultancy area. 60

the methodological level, at which values are disputed and personal judgements depending on higher-level skills are required; (ill) the epistemological level, where irremediable uncertainty is involved, such as 'ignorance of ignorance'. The term decision stakes refers to the 'costs, benefits, and commitments of any kind by the parties involved' (Funtowicz and Ravetz, 1991 p. 144). The meaning of these two concepts may be better understood with specific examples. Normal scientific research deals by definition with puzzle-solving problems that present low levels of uncertainty. This level of uncertainty may be managed technically by standard statistical techniques. In normal scientific research decision stakes are also low. This kind of research is curiosity-motivated, and a failure in addressing the problem will not have repercussions on the wider community.

When a problem presents a high degree of uncertainty and/or high decision stakes it befits post-normal science. This kind of problems should be dealt with according to the methodology of post-normal science. Given that post-normal science concerns itself with issues that present diversity of perspectives (i.e. values held by the various stakeholders about the high stakes involved) and large uncertainties, its methodology aims at dealing with these specific issues. This methodology focuses on the management of both uncertainty and the quality of information. These two issues are considered in tum.

Funtowicz and Ravetz (1994) note that in the mature quantitative sciences uncertainty is simply managed by the scientists on the basis of their inherited

(presumably from other scientists?), unself-conscious craft skills. To improve on this state of affairs, that is to increase transparency and quality of information, Funtowicz and Ravetz develop a system that provides guidelines for the presentation and 61

management of information displaying a high degree of uncertainty. The notation

system has five categories: (i) numeral; (ii) unit of measurement; (iii) spread (i.e.

random error provides a measure of the degree of precision); (iv) assessment (i.e.

systematic error relates to the degree of accuracy); and (v) pedigree describes the

degree of ignorance concerning highly uncertain information.

In relation to the management of the quality of information, Funtowicz and

Ravetz propose that the guiding principal should be that the values involved in post-

normal scientific analyses should be made explicit To do this, scientific argument

should not be based on 'formalized deduction' but on 'interactive dialogue'. They

stress that post-normal scientists should not claim ethical neutrality and push forward

their arguments on the basis of the prestige of 'objective research', nor should they be

indifferent to the policy consequences of their arguments.

To guarantee a higher quality of information Funtowicz and Ravetz advance

three inter-linked methodological recommendations. Firstly, traditional peer review of

the quality of scientific research is not sufficient any more in the presence of large

uncertainties and high decision stakes. A wider debate of the issues investigated is

warranted. This leads to the second methodological suggestion. The stakeholders

with interest in the issue being investigated should take part in the process of quality

assessment of information and, possibly, in the actual research process. The latter may

take place through the process outlined in the third methodological suggestion: 'post- normal science may well include investigative journalism and related techniques'

(Funtowicz and Ravetz, 1994 p. 205).

After having outlined the position of Funtowicz and Ravetz, let us consider critically some methodological aspects of their discourse. 62

3.3.3. Comments on the Funtowicz and Ravetz proposal

FuntowicZ and Ravetz importantly point out the relevance of stating values explicitly. This is not a novel contribution but an important reminder (e.g. see also

Tisdell, 1983). It has already been stressed above, while considering the criticisms of positivism, that value-free science does not exist. Reminders such as those of

Funtowicz and Ravetz will help in making this argument flow through to natural and social sciences.

They also point ecological economists towards an important direction on the road to the improvement of their methodology. Researchers should not only attempt to include the views of the stakeholders in their research. Proper social processes for the inclusion of the latter in the actual research should be devised. Reasons justifying this statement will be provided in the next section.

A further important contribution made by Funtowicz and Ravetz to the methodological development of ecological economics is to have stressed that the choice of a particular methodology employed in addressing an issue depends on the context specific to the issue. When high stakes are involved a methodology different from that adopted when the stakes are low may be appropriate. Clearly, this is a departure from the unity of science view held by positivist philosophers.

Some comments on the important issue of quality of information will be provided after a description of the constructivist paradigm in the next section.

After recognising the significant contribution made by Funtowicz and Ravetz, it is now time to consider a weakness of their proposal. This weakness relates to the methodological proposal of including the various stakeholders in post-normal science research. As noted above, Funtowicz and Ravetz suggest that the various 63

stakeholders should be involved in the review of scientific information. Therefore, this process is extended beyond the traditional peer review. Stakeholders may also be involved in producing 'extended facts' that may be collected, for example, through investigative journalism. This suggestion goes in the right direction of defining a research process extended to various parties. However, it falls short of satisfactorily outlining how this process may be carried out. By saying that the review of scientific research is extended to other stakeholders, and that other 'information that will not usually be in the traditional scientific form' (Funtowicz and Ravetz, 1991 p. 150) should be considered, they appear to: (i) define a policy process in which the views of the different stakeholders are taken account of; and (ii) state that not only traditional scientific information is valid: They do not consider how a researcher may go about carrying out research incorporating the views of the stakeholders both in order to define the research problem and to make explicit the views and interests of the stakeholders. This aspect of Funtowicz and Ravetz' s methodology is due to the fact that their approach to research is rooted in the natural sciences. This is evidenced by the fact that the examples reported by Funtowicz and Ravetz are primarily concerned with computer applications and model building.I7

It has been stressed by Funtowicz and Ravetz that a range of methodologies may be required in addressing environment/economy related issues. The methodology that they propose may be suited to those issues that require a research approach rooted in natural science methodology. When the issues being investigated are in the

17 For example: 'Science cannot always provide well-founded theories based on experiments for explanation and prediction, but can frequently only achieve at best mathematical models and computer simulations' (Funtowicz and Ravetz, 1991 p. 139). 64

area of social sciences, ecological economists may be in need of a methodology different from, or that may complement, that proposed by Funtowicz and Ravetz.

Constructivism, a research paradigm alternative to the positivist one, is presented in the next section. It is argued below that there is scope for exploring the possible complementarity of constructivist and post-normal methodologies.

3.4. An alternative research paradigm

3.4.1. Constructivism

Constructivism is considered here because it presents an ontological basis that seems to be more consonant than positivist ontology with the multiple realities view described in Section 3.2.2. The development of constructivist methodology has reached a stage that abandoning the positivist epistemological tenet of objectivity and falsificationist methodology (that, it is important to reiterate, cannot be unambiguously applied) does not result in lack of rigour in the research process.

Constructivism has evolved over the last three decades. It has its roots in the works of scholars from various disciplines such as education, sociology, and human ecology (e.g. Jackson, 1968; Weber, 1968; Geertz, 1973). A description of the evolution of the constructivist paradigm and of its different strands may be found in

Schwandt (1990).

The constructivist paradigm has been summarised by Egon Guba, one of the foremost contributors to the development of this paradigm.

'Ontology: Relativist - realities exist in the form of multiple mental constructions, socially

and experimentally based, local and specific, dependent for their form and

content on the persons who hold them. 65

Epistemology: Subjectivist - inquirer and inquired into are fused into a single (monistic)

entity. Findings are literally the creation of the process of interaction between

the two.

Metlwdology: Hermeneutic, Dialectic - individual constructions are elicited and refined

hermeneutically, and compared and contrasted dialectically, with the aim of

generating one (or a few) constructions on which there is substantial

consensus.' (Guba, 1990 p. 27).

The basis for the adoption of a relativist ontology has already been suggested in the previous sections. Here, attention is devoted to the epistemology and methodology of constructivism. These are presented by closely following Lincoln and

Guba (1985).

Constructivist epistemology recognises that inquiry is value-bound. The research process is influenced, for instance, by the inquirer's values (e.g. they may determine the choice of the problem), by the theory used to collect and analyse data, and to interpret the findings. Constructivism also asserts that the inquiry cannot be. an objective, detached process. Moreover, it also claims that the inquiry process should not be an objective and detached process in the positivist sense. Let us consider these two latter issues in tum.

Inquiry cimnot be objective. The absence of one single reality clearly precludes a priori that inquiry may be objective. However, even if it can be agreed that there exists a reality, there are at least three factors that stand on the way of objective social research. These are reactivity, indeterminacy, and interaction. 66

Reactivity refers to the respondents • knowledge of being investigated. Eve~ if

. the respondents are well intentioned and cooperative, their behaviour may confound the data.18 In this case, research may be said to disturb the researched.

Indeterminacy refers to the fact that what is observed is seen through the specific perspective derived from the methodology of investigation adopted. The situation being studied can only be seen by creating a disturbance through the use of the research methodology. In this case, research shapes the researched.

Interaction relates to the bidirectional influences in the relationship between the inquirer and the subject of research. These mutual influences occur, for example, both in survey questionnaires or direct interviewing. What is meant here is that the researcher's conduct is influenced, for example, by his expectations about the respondents' attitudes and reactions, and vice versa in the case of the respondents.

Since interaction of the researcher with the researched cannot be eliminated,

Lincoln and Guba (1985) argue that it should be actively used to improve the quality of research.

Inquiry should not be objective-detached. Several items tend to indicate the importance of research interactions. Three of these are highlighted below.

The unambiguous choice of a theory and. the explanation of facts based on strictly technical processes such as falsification is not viable. It has already been stressed above that several theories may explain a set of facts, and a set of facts may

18 Four categories of reactive behaviour have been noted: (i) awareness of being tested; (ii) role selection (in responding, the respondent may do so according to one of the several 'selves' all of which are true); (iii) measurement as a change agent (for example, submitting a subject to one questionnaire may influence the respondent's answers tp subsequent tests); (iv) response sets (for example, respondents tend to prefer strongly worded statements to weakly stated'<>nes). (See Lincoln and Guba, 1985 ch. 4). ·· · 67

support a variety of theories. Informed, sound judgment is required to provisionally

accept a theory and to assess the degree to which a set of facts supports the theory.

To pass this kind of judgment, an in-depth knowledge of the phenomenon being

studied is required. This may only be achieved through interaction.

The process of change is continuous and inevitable. Social science research

that attempts to understand change has to highlight the contradictions and conflicts

that characterise the process of change. Dialectical social science research cannot be

carried out without constant and sensitive interaction with the human beings under

study.

People always interact with each other and also with the investigator. The forced exclusion of these relationships from the research process would create distortion in the data and their meaning would be partly destroyed. If the people being

researched do not understand and cooperate in the research process, findings of social science research may be vitiated.

After presenting important epistemological aspects, the analysis turns to methodological issues.

Positivist methodology is based on proposing laws (generalisations) that support theories. Hypotheses are derived and tested according to the hypothetico­ deductive model. Constructivism rejects this approach and it proposes an alternative approach: the working hypothesis.l9

There are always local and unique conditions that limit the usefulness of time and context free generalisations which are characteristic of the positivist

19 This concept was frrst suggested by Cronbach (1975). 68

methodology. However, the researcher may derive time and context-specific generalisations, or working hypotheses, using his in-depth knowledge of the specific situation gained through the extended, interactive research process. Working hypotheses come late in the research process and are tentative both for the particular condition in which they are developed and for other contexts. Working hypotheses may be transferable to other situations. However, the degree to which this is possible depends on the similarity between the different contexts. This may be judged by comparing the conditions specific to the context in which the working hypothesis was developed (information that should be provided in the study reporting the hypothesis) with the conditions prevailing in the alternative context. This description of the specific conditions is referred to as thick description.

The constructivist research process differs to a great extent from the conventional positivist one. 20 Therefore, it is useful to outline the salient features of the former research process. 21 l. Natural setting. Research is carried out in the context of the entity being studied

because (a) realities cannot be understood in isolation of their context, and .Cb)

knowledge of the specific context is determinant in deciding whether or not the

fmdings may be extended to other situations.

2. Qualitative methods. These methods are used to a larger extent than quantitative

methods because (a) they are more suited to dealing with multiple realities, and

20 The positivist approach is composed of the following steps: (i) defme the problem to be studied; (ii) specify the hypothesis to be investigated; (iii) identify the variables to be included; (iv) note the expected relationships between variables; (v) outline the methodology of data collection and analysis; (vi) test the hypothesis; (vii) accept or reject the hypothesis. 21 Because of space limitations, these can only be summarised here. 69

(b) they are more adaptable to the various influences arid value patterns

encountered in the field.

3. Inductive data analysis. This is preferred to deductive data analysis because (a) it

is better suited to fully describe the research con text and to provide information

about the transferability of the findings, and (b) to identify the mutu~y shaping

influences present in the research context

4. Grounded theory. 22 It is preferred to have the theory emerge from the data

because (a) the realities that may be encountered cannot be fully described by a

priory theory, and (b) a priori theory is based on generalisations that may poorly

fit the specific context encountered.

5. Emergent design. The design of the research process is allowed to unfold while

research is carried- out because (a) it is unlikely that enough could be known in

advance in order to fully define the research design, and (b) the interactions

between the researcher and the researched tend to influence ·the outcomes in ways

that are not predictable.

6. Negotiated outcomes. The interpretation of the data is negotiated with the people

from which the data have been derived because (a) it is their views about the

specific context that the inquirer seeks to describe, and (b) the working hypothesis

that might apply to a specific context is best confirmed with the people who

belong to the context in question.

22 See Glaser and Srrauss (1967) for an early discussion of grounded theory. 70

7. Idiographic interpretation. The data is interpreted in terms of the specific case (i.e.

idiographically) rather than made into lawlike statements.23 This is because (a)

different realities may warrant different interpretations, and (b) the interpretations

are determined to a large extent by the particulars of the specific context, such as

the interactions between the researcher and the researched.

The constructivist paradigm described above is well suited to a research approach that is policy driven and aims at implementing the research findings through the participation of the stakeholders in the research process. Another important issue to be considered is how a rigorous research process may be maintained while ' adopting this alternative approach. These questions are considered in tum below.

3.4.2. Action and rigour in the constructivist paradigm

The research process described above may be used to conduct both curiosity- motivated research or policy oriented research. In the first case, the researcher may aim at simply presenting the views of the different stakeholders or may also derive his or her own interpretations of the issues being researched. In the second case, where the implementation of the research findings is an important component of the process, the various stakeholders have to participate both in the research and implementation processes. The features of the constructivist research process that are particularly important in facilitating the participation of the stakeholders in this process (and the possible adoption of the fmdings) are the location of research in the natural setting, the adoption of qualitative methods, inductive data analysis, allowing the research

23 However, it bas been noted above when discussing the concept of working hypothesis that consttuctivists do not completely refrein from making generalisations. Certainly, they are more circumspect in doing so than positivists are. 71

design to emerge, and the negotiation of outcomes. It is appropriate to anticipate that the participatory research approaches discussed in Chapter Six suit and complement the constructivist paradigm presented in this chapter.24

The rigour of the research process may be maintained by setting criteria aimed at guiding a 'disciplined inquiry' process (Lincoln and Guba, 1985). A set of such criteria has been developed, discussed and revised in a series of studies (Lincoln and

Guba, 1985, 1986; Lincoln, 1990; Marshall, 1990; Pretty, 1994; Smith, 1990). Nine major criteria are listed below.

1. Prolonged and/or intense engagement. This is used by the researcher to

understand the specific context, to build trust with the local people, and to allow

the local people to assess whether their input into the process will be valued or

not.

2. Persistent observation. It is used to understand the context and the issues being

studied.

3. Triangulation. Multiple sources, methods, and investigators are used and .are

involved in data collection and analysis.

4. Analysis of difference. A range of agents are involved in the research process in

order to guarantee that the different realities are detailed.

5. Peer debriefing. This takes place during the research process. It helps in

maintaining honesty in the research process and in guiding the emergence of the

research design.

24 For example, one of these research tools (or approaches) is action research, which aims at modifying the situation being researched. Action research has been adopted in education, industry and agriculture (Kemmis and McTaggart, 1988; Whyte, 1991). 72

6. Member checks. The data, interpretations, and conclusions are checked with the

members of the stakeholders' groups that participated in the research process.

This is the most fundamental test because the members have. to recognise as their

own the reconstructions provided by the researcher.

7. Reports with working hypotheses and thick description. This allows other

' researchers or interested people to judge the transferability of the research

findings to other contexts.

8. Impact on stakeholders' capacity to know and act. A successful research process

aimed at producing change should result in an enhanced understanding, on the

stakeholders' side, of the different realities and how to act upon them.

9. Inquiry audit. This takes place at the end of the research process. It aims at

assessing whether or not the conclusions drawn by the inquirers are supported by

the data. It may take the form of conventional peer review of reports and/or may

be carried out in a workshop (the latter should be the preferred means).

Before concluding the presentation of constructivism, it is important to comment on two of its aspects.

Firstly, it has been noted that grounded theory means the research process attempts to let the theory emerge from the data. It should be obvious from the arguments presented in this chapter that some 'view' of the world is required in order to go and find out more about the specific context. Developing grounded theory is interpreted here as up dating one's view of the world, and possibly even totally changing it, if this need emerges from the research process. In tum, this implies that some theory (or considerations) have to be developed before going into the field. 73

Secondly, Guba's (1990) summary of the constructivist paradigm, reported

above, states that the 'inquirer and the inquired into' are a single entity. Here, the

constructivist paradigm is adopted, but with the view that there is a distinction

between inquirer and inquired to. This separation, however, is far from being the

totally detached state typical of positivism. The position adopted here is compatible

with accepting the fact that the findings of the research process are generated by the

interaction of inquirer and inquired into.

Finally, it is worthwhile to consider the relationship of the constructivist

paradigm with the position advanced by Funtowicz and Ravetz. The research

methodology espoused by the constructivist paradigm needs not be considered as a

substitute for the research process outlined by Funtowicz and Ravetz. The

constructivist approach provides rather detailed guidelines about the conduct of

participatory research that are lacking in the Funtowicz and Ravetz proposal.

It would appear that there are elements of complementarity between the

Funtowicz and Ravetz proposal and constructivism in relation to the question of

quality of information. Funtowicz and Ravetz stress explicitly the need to address the

question of quality. This issue has not been explicitly considered within the

constructivist paradigm. It should be noted, however, that some of the suggestions made by Funtowicz and Ravetz to improve the quality of information closely parallel

elements of constructivist research methodology.25 Given the arguments discussed

above, there is scope for further considering how these two research approaches may

enrich each other.

25 For example: values should be made explicit; scientific argument should be based on interactive dialogue; scientists should not advance their arguments on the basis of the prestige of 'objective research'. 74

3.5. Conclusion

The positiVist view of scientific activities has had important implications for the economists' work. a) It has lead many economists to eschew inquiry into ethical questions in the name

of value-free science. b) It has directed many economists to attempt to undertake 'objective' (detached)

research. In some situations this has meant that research has had little relevance to

social entities and/or did not contribute to the improvement of problematic

situations. c) It has prompted the claim that economic research that does not attempt to apply

falsificationism cannot be regarded as scientific work.

Some final comments about these three issues are in order.

First point. In this chapter, the positivist stance that it is possible to conduct scientific work without making value judgements has been deemed untenable. Value judgements are always made at several stages of the inquiry process. Therefore, it is preferable to openly deal with these considerations. Any attempt at hiding the values implicit to any analysis is a misleading and dishonest practice. Openly addressing the sets of values involved in any research problem can only improve the quality of the research output.

Second point. It seems to not be viable to try to carry out objective, detached analysis. Attempting to do so may create two major shortcomings. Firstly, research that attempts to present one objective reality actually presents the researcher's reality.

The various stakeholders' realities are thus omitted. Secondly, when the research 75

process considers policy issues, detached analysis may result in irrelevant analysis and/or policy inaction.

Third point. The problems of falsificationism have been noted in the chapter.

Because of these problems, if falsificationism is the 'true' demarcation line used to distinguish between science and non-science, then it would appear that there is no natural or social discipline that can be considered scientific. At best, falsificationism can provide guidelines for disciplined inquiry. However, the provision of these guidelines is not exclusively the precinct of falsificationism. Some criteria guiding research in a paradigm alternative to falsificationism have been presented above.

Research conducted within those criteria cannot be considered any less scientific than that which attempts to implement falsificationism. There are no 'objective' criteria (or meta-criteria) that may be used in choosing between two research paradigms (Kuhn,

1970).

It is essential to remark that presenting the adoption of a specific paradigm, as this chapter has done, does not imply that only one paradigm should exist. This is the positivist view. The recognition that there are multiple realities appears to lead to the acceptance of the fact that multiple paradigms exist. The existence of multiple paradigms seems important to the development of science. Therefore, this diversity should be maintained (Norgaard, 1.985). Diversity of paradigms is to the development of knowledge as biodiversity is to the development of life on Earth.

This chapter has discussed paradigmatic elements regarding the reseach

process. Elements of the paradigmatic basis of the thesis in relation to environmental­ economic issues are considered in the following chapter. Chapter 4 Economic Paradigms and Environmental Decision-Making

4.1. Introduction

The previous chapter has discussed the paradigmatic basis of the dissertation with regard to the research approach. This chapter considers the paradigmatic basis of the thesis in relation to environmental-economic issues.

The objective of $is chapter is to provide some of the theoretical elements required for the development of the framework for the assessment and establishment of

PAs. The framework will be completed in Chapters Five and Six. Features of the ecological economics paradigm and of the environmental economics paradigm are considered in this chapter.

Given that the paradigmatic basis of the dissertation rests in the discipline of ecological economics (ECE), tenets of its paradigm as described in recent studies are outlined first. It is noted that ECE is concerned with sustainability, distribution and allocation issues. The latter concern is shared with neoclassical environmental economics (NEE).

Because of the overlap between ECE and NEE, it is useful to consider in detail relevant aspects of NEE. The latter is a more established discipline relative to ECE. A clear understanding of NEE, of its contradictions and shortcomings provides useful background information for the development of the framework concerning the dissertation.

76 77

In neoclassical economics, which underlies NEE, individuals are regarded as only legitimate source of values. This chapter focuses, therefore, on the image of

Homo oeconomicus assumed by neoclassical economics and its implications for the decision-making process envisaged by neoclassical economists. The neoclassical model provides important insights into human behaviour and it is useful in deriving implications in regard to the environment It is argued, however, that the neoclassical approach presents several shortcomings. By integrating the image of Homo oeconomicus with the depiction of human behaviour presented in the writings of institutional economists and social economists, a description of what is termed here the human behavioural space is presented. This human behavioural space attempts to present a fuller image of the behaviour of actual individuals and of institutions, and of the factors that influence their behaviour. The implications for environmental decision­ making of this expanded human behavioural will be expounded in the chapter.

The chapter proceeds as follows. Tenets of ecological economics are outlined in Section 4.2. Then, the paradigmatic basis of environmental economics is considered in Section 4.3. In Section 4.4, the implications that the neoclassical paradigm has for environmental decision-making are analysed. Section 4.5 builds on the neoclassical model of human behaviour through the writings of institutionalists and social economists in order to define an expanded model of human behaviour. The implications of this model for environmental decision-making are considered in the concluding section.

Before proceeding in the analysis three issues deserve comment

First, it is important to stress that the analysis will concentrate on the decision­ making framework proper of NEE (that is based on neoclassical economics) rather 78

than on what environmental economists (people whose work is mainly based on neoclassical economics) see as a useful or proper decision-making framework. The importance of making this distinction is better explained with an example. While NEE concerns itself with the efficient allocation of resources, there are environmental economists who consider relevant the issue of sustainability. NEE is a specific paradigm. Environmental economists work primarily within the environmental economics paradigm but may also draw on other paradigms.

Second, it is recognised that there are schools of thought which have their origins in neoclassical economics and may be applied to environmental decision­ making (e.g. new institutionalism and public choice theory). However, the following analysis focuses on neoclassical economics because it is the paradigmatic basis of environmental economics, currently the most influential approach within the academic world to economic decision-making in relation to environmental issues.

Third, the important contributions of NEE to a better understanding of, and solution of, several environmental problems is recognised. The criticisms raised here aim at improving our understanding of the issues at stake and at designing a framework appropriate for the case considered in the dissertation.

4.2. Ecological economics

Ecological economics is a relatively new field and its paradigmatic position is still evolving. Methodological issues regarding ECE were discussed in the previous chapter. An outline of what has been described to constitute ECE is presented here.

Costanza et al. (1991 p. 3) describe ECE as:

'a new transdisciplinary field of study that addresses the relationships between ecosystems and

economic system in the broadest sense.... By transdisciplinary we mean that ecological 79

economics goes beyond our normal conception of scientific disciplines and tries to integrate

and synthesise many different disciplinary perspectives. ... No discipline has intellectual

precedence in an endeavour as important as achieving sustainability. While the intellectual

tools we use in this quest are important, they are secondary to the goal of solving the critical

problems of managing our use of the planet .•. Ecological economics will use the tools of

conventional economics and ecology as appropriate. The need for new intellectual tools and

models may emerge where the coupling of economics and ecology is not possible with the

existing tools.'

From this citation it is clear that the analysis of sustainability and its achievement are the centrepieces of ECE. ECE is issue-driven. To address better the issues of interest, it maintains transdisciplinarity and attempts to avoid that the framing of problems be dictated by the available tools. ECE may use the tools of neoclassical economics, 1 but it recognises that new approaches may also be needed. Other surveys of ECE have tended to emphasise the differences between ECE and NEE to a greater extent than Costanza et al. (1991) have done. This issue is considered below.

However, before proceeding in the analysis, it is necessary to expound on the concept of sustainability.

Many definitions of sustainability and sustainable development have been proposed.2 Sustainability has been used in relation to the natural environment, to the economic system, and to the social system; furthennore, all these concepts have been analysed at different geographical levels (facconi and Tisdell, 1993). Sustainability may be regarded as a general principle guiding resource management However, one

single, unifying definition of sustainability cannot be provided. This is not just due, for

1 In the quotation reported above, Costanza et al. (1991) speak of conventional economics. By reading their paper it is clear that they refer to neoclassical economics. 2 See, for example, Pearce et al. (1989) for a collection of defmitions. 80

example, to a lack of knowledge about ecosystem functions or how to measure social sustainability. The existence of multiple realities (which has been noted in the previous chapter) precludes the possibility of actually developing one all inclusive definition of sustainability. It has been noted that:

'positivists are inevitably frustrated and confused when faced with the notion of

sustainability. In as much as they believe an independent reality exists, then so must it be

possible precisely to defme sustainability in value-free terms .... But no scientific method will

ever be able to ask all the right questions about how we should manage resources for

sustainable development, let alone fmd the answers.' (Pretty, 1994 p. 38).

Sahu and Nayak (1994) describe NEE and ECE as occupying niches that are in some respects complementary and in other competitive. These authors present a description of ECE and a classification of the similarities and differences between the

ECEand NEE.

Table 4.1 below summarises some of the tenets of ECE and of NEE. The table is derived from Table 1 of Sahu and Nayak:'s (1994, pp. 15-16).3 Sahu and Nayak

(1994) provide a useful characterisation of NEE and of ECE.4 Here it is, however, useful to comment further on some aspects of ECE.

From Table 4.1 it is clear that there are significant differences between NEE

and ECE. This view is also put forward by Soderbaum (1992) and Opschor (1994).

These authors, however, argues that ECE has roots in· institutional economics, draws

on biophysics and ecology, and also borrows from 'modem evolutionary economics'. 5

3 Table 4.1 presents only some of the points considered by Sahu and Nayak. These are the points that the present author considers as the salient ones. 4 See Martinez-Alier (1987) for a comprehensive analysis of the development of ecological economics. Also, Perrings et al. (1995) provide an up to date review of ECE. 5 Opschor (1994) describes 'modem evolutionary economics' as a hybrid of neoclassical economics and nco-Austrian economics. Then, according to this defmition of modem evolutionary economics, it follows that ECE must also draw to some extent on neoclassical economics. 81

Due to its roots in institutional and evolutionary economics, ECE uses simulation models more than optimisation models. These roots also imply that ECE considers

'institutionalised bounds to the domain of economic rationality and the scale of

economic activity' (Opschor, 1994 p. 12). ECE searches for coevolutionary

development 6 Swaney (1987a; 1987b) remarks that the concept of coevolutionary

sustainability means that development paths posing serious threats to continued

compatible evolution of social and ecological systems should be avoided.

Table 4.1. Tenets of environmental economics and ecological economics.

Dimension Environmental economics I Ecolollical economics Main theory Neoclassical economics Biophysical plus physiocratic and classical economics Approach Allocation of resource use Scale, distribution and allocation of resource use World view Mechanistic-reductionist Evolutionary-holistic Knowledge-acquisition process Positivist, supposedly value-free Subjectivist, reflecting values and ideology Character Monodisciplinary Multidisciplinary Scarcity perception Relative Absolute View of future Technological optimism Prudent pessimism Problem-solving orientation Based on market system Based on laws of nature Focus Short-term Long-term Methods of (e)valuation CBA' EIS, positional analysis, carrying capacity analysis* Dominant theme Anthropocentric Anthropocentric with attempts to include .biocentric and ecocentric considerations

11 CBA: cost-benefit analysis; CBA is used here to refer to the whole array of tools that employ both market and non-market information. * EIA: environmental impact statements; positional analysis has been developed in the writings of SOderbaum's (e.g. 1987; 1993; 1994). Source: adapted from Sahu and Nayak (1994).

A characteristic that ECE has derived from institutional economics is that there

exist societal values that are not just the sum of the individual values. Institutional

6 See, for example, Norgaard (1984). 82

economics asserts that there is a hierarchy of values. For instance, in this hierarchy values related to continuity of life or social reproduction are above the daily needs and wants of individuals (e.g. Sawney, 1987).7

In relation to the classification of values, Ramstad (1989) notes that some institutionalists adhere to the 'instrumental value paradigm' (e.g. Tool, 1986). Ramstad

(1989) notes that instrumental value is construed both as a tool of analysis and a

'normative compass'. Instrumental values are values that are 'good'. Instrumental values are needs to be clarified through scientific inquiry (Tool, 1986). Ramstad (1989) stresses that the instrumental paradigm suffers several shortcomings. A most important one is that it seems difficult to reconcile the instrumental paradigm with a commitment to democracy.8 Nothing more will be said here about the instrumental value paradigm.

It is now important to comment on two entries of Table 4.1 describing the ecological economics paradigm.

The entry 'Problem-solving orientation' describes ECE as 'based on laws of nature'. This is a rather generic definition which does not fully represent the 'problem- solving orientation' of ECE and unduly accentuates the differentiation between ECE and NEE. In fact, the market system plays an important role not only in the 'problem- solving orientation' of NEE but also of ECE. This has been stressed by Page (1991).

He outlines the features of a two-tiered ecological economic approach. The first tier defines the circumstances under which the second tier operates. For example, the constitution of a country is part of the first tier. The second tier includes legislatures,

7 A practical reason explaining the deviation between individual values and societal values is the fact that society has a longer life expectancy than individuals (Opschor, 1994). 8 Ramstad (1989) points out that Tool appears to rely on the elite with 'reliable knowledge' to decide what the instrumental values are. 83

courts and markets. The first tier should contain sustainability rules that would contribute to define the boundaries within which markets would operate. An important point made by Page (1991) is that the principle of non-interference should be adopted.

'The idea is that instruments implementing the conditions of the first tier should be broad. avoiding minute control in the day-to-day workings of markets and the ordinary second tier institutions.' (Page. 1991 p. 70).

In respect to the 'Methods of (e)valuation' entry, two points should be made.

The first has to do with the distinction between· evaluation and valuation. Valuation here refers to the application of CBA to resource allocation problems. While

evaluation refers to a decision-making process that considers issues concerning . . sustainability, distribution and allocation. The tools adopted in this process may include

CBA as well others. such as those characteristically used in participatory analysis

(further considered in Chapter Six). The second point is that the sharp distinction

between the tools employed within NEE and ECE, as implied by Sahu and Nayak

(1994 ), is probably incorrect For instance, CBA studies are being published by the

journal Ecological Economics. This seems to show that CBA may be used in

ecological economic analysis. This is due not only to the fact that ECE seeks to remain

a non-dogmatic discipline open to various contributions. but also to the fact that

allocative efficiency is accepted as an indicator to be used (together with scale and

distribution) in environmental decision-making. Certainly, the ECE position that

efficiency is one of the factors to be considered differs from NEE that takes efficiency

as its guiding rule. It follows that CBA is only one of the possible tools to be employed

in ECE. The specific role of CBA within ECE will be further discussed below. 84

At this point it is important to state the position adopted in the dissertation.

Sustainability, distribution and efficiency are all considered important factors to be

addressed in the decision-making process relating to environmental-economic issues.

This position is certainly based on the specific value judgements inherent to ECE ·and

endorsed by the author. Value judgements are no less important in influencing other

researchers' position that only efficiency should count

In devising the decision-making framework, object of this dissertation, it is now

useful to consider relevant aspects of NEE, whose main concern is efficiency.

4.3. Neoclassical economics and the environment

Neoclassical economics has been applied to ecosystem management in the two

distinct fields of environmental economics and resource economics. Cropper and Oates

(1992) stress that the boundary between the two fields is fuzzy. However, they note

that resource economics concerns itself mostly with the allocation of renewable and

non-renewable natural resources (e.g. forests, minerals). Environmental economics

concerns itself with 'the regulation of polluting activities and the valuation of

environmental amenities' (Cropper and Oates, 1992 p. 678). Environmental economics

has its roots in externality theory, public goods theory, general equilibrium theory and

CBA (Kneese and Russell, 1987). Given the ubiquitous presence of externalities, some

authors have noted that environmental economics studies the causes of and solutions

to market failure (e.g. Common, 1988). NEE appears to be increasingly focusing on valuation issues (Vatn and Bromley, 1994 fn. 1).

NEE applies neoclassical economic theory to environmental issues. To understand the paradigmatic position of NEE it is useful to start by presenting a 85

summary of the neoclassical paradigm. Then, specific aspects of this paradigm of

particular relevance to this study, will be·addressed.

Before proceeding with the analysis it is useful to outline the decision-making

framework underlying NEE. NEE relies on the market to achieve an efficient allocation

of resources. 9 However, given that several factors inhibit the achievement of an

efficient allocation of resources (e.g. externalities), there is a necessary but not

sufficient case for government intervention. The latter may occur through market

mechanisms (e.g. taxes) or through direct intervention (e.g. establishment of protected

areas). The merit of government intervention can be assessed with CBA in order to

ascertain whether sufficiency conditions for intervention exist (i.e. intervention is

superior to non intervention).

The neoclassical paradigm may now be summarised. to

1) The subject matter of economics is the study of the allocation of scarce means to

given ends.

2) The economy may be reasonably described as being in competitive equilibrium.

3) Individuals are the decision-making units: neoclassical economics adopts

methodological individualism.

4) Individuals repeatedly face the same, or similar, choice situations.

5) Individuals have stable preferen~es and thus may evaluate the outcomes of choices

according to stable criteria.

6) Individuals seek to maximise own utility.

7) Individuals act rationally.

9 According to the fJtst theorem of welfare economics, a competitive equilibrium is Pareto optimal. 10 Etzioni (1988), Gee {1991), North (1990), and Winter {1986) have been especially useful in deriving this summary. 86

8) Given repeated exposure, individuals can recognise and seize any available

opportunity for improving outcomes.

9) It follows that there exists no equilibrium in which individuals fail to maximise their

utility, subject to income constraints.

10) Positivism is adopted as the methodological basis.

It is worth noting that many neoclassical economists would probably subscribe to the view that Homo oeconomicus is not intended to describe actual human behaviour, 11 but it is a model which is useful in understanding and predicting human economic behaviour. This position is often justified by adopting Friedman's (1973)

view that what matters in building a model is its predictive power rather than the

'realism' of assumptions. This position has already been criticised in the previous

chapter.

4.3.1. Methodological individualism

Methodological individualism is the general methodological principle, or

'touchstone', of neoclassical economics (Arrow, 1994; Hausman, 1992).

Methodological individualism makes no reference to objects and phenomena not

definable in terms of human individuals, and it considers only laws of individual

behaviour or laws that may be reducible to laws of individual behaviour (Mathien,

1988; Elster, 1982). Decisions made at the society level are regarded as the sum of

decisions made by atomistic individuals.

Arrow (1994), who for his own admission puts forward the case most

favourable to individualism, finds that social relations are always present in mediating

11 There are economists who regards Homo oeconomicus as a correct description of real people (e.g. Allen, 1982; Phelps, 1985). 87

individual behaViour and 'social variables, not attached to any particular individual, are essential in studying the economy or any other social science system' (p. 8).

Methodological individualists do not see the need to consider the influence of social factors on individual economic behaviour. This is because their models posit the figure of a rational agent with given preferences and social factors do not influence the process of rationalisation and preference formation.

Hodgson (1988) remarks that methodological individualism should not be

replaced by a position that attempts to explain social phenomena only in terms of

collective events. Rather, he stresses the positive contribution of methodological

I individualism to the understanding of individual and social processes. However, the

role of factors, external to the individual, in moulding individual choices should be

considered.

4.3.2. Preferences and the Pareto criteria

The assumption of stable, unchanging preferences, 12 together with the

assumptions of maximising behaviour and market equilibrium form 'the heart' of the

neoclassical economic approach (Becker, 1976).13 It is important to consider the issue

of stable preferences because 'taking preferences as fixed would be as crippling as if in

12 Individuals are said to have rational preferences if these are complete and transitive. Completeness requires that agents be able to compare all options (i.e. bundles of commodities and services). Preferences are complete if for any option x. and y, the agent prefers x to y, or prefers y to x, or is indifferent between x andy. Transitivity requires that for options x, y and z, if the individual prefers x toy and y to z, then he prefers x to z. If the agent is indifferent between x andy, andy and z, then he is indifferent between x and z. Completeness and transitivity together provide a preference ordering for any fmite set of options. For an infinite number of options, preference continuity is required to derive an ordering. Complete, transitive and continuos preferences can be represented by continuous ordinal utility functions. 13 See also Stigler and Becker (1977), West and McKee (1983), and Becker (1992). 88

an economics context our model were unable to deal with changes in prices.'

(Margolis, 1982 p. 25).

Weizsacker (1971, p. 346) notes that the 'efficiency and Pareto optimality

properties of general equilibrium models rest on the assumption of fixed tastes .... One

.of the reasons why economists did not very deeply discuss this question may be that

that their present concepts of Pareto optimality and efficiency possibly are not flexible

enough to cope with endogenously changing tastes.' Some authors have dealt with the

issue of changes in preferences under different assumptions (e.g. myopic expectations),

but these attempts to model endogenous changes in preferences are far from ' satisfactory (cf. Hahnel and Albert, 1990).

The Paretian approach to social choice holds that: (i) the individual knows

what is best for her own welfare, and that (ii) the welfare of all the members of a

society should be accounted for (Gibbard, 1986; Hahnel and Albert, 1990). The

existence of stable, exogenously detennined preferences confers the status of

inviolability to the notion of consumer sovereignty, which is advocated on the basis of

premise (i). If individual preferences are not unchangeable, there is no apparent

motivation to maintain the inviolability of consumer sovereignty. 14 Notice also that if

individual preferences may be moulded by social factors, the adoption of

methodological individualism is untenable (e.g. Hodgson, 1988).

It has been noted that an important factor behind the continued assertion of

stable individual preferences is the 'fear' in the libertarian camp that abandoning this

14 This has been expressed by neoclassical and non-neoclassical authors; e.g. 'the Pareto concepts lose their normative appeal if people's preferences reflect indoctrination or psychological foibles rather than what is of value to individuals' (Hausman, p. 61 fn 9), and it 'is not clear what Pareto optimality means if people perception's of their own well-being are to some extent malleable.' (Earl, 1983 p. 13). 89

postulate would open the door to government intervention and possibly dictatorial regimes15 (Etzioni, 1988; Hodgson, 1988). It should be noted, however, that rejection of the view that individual goals may be influenced by social forces may actually result in negative impacts on individuals. 1hls is because total lack or regulation could

actually result in external forces been able to exert freely theirimpact on individuals.16

Many neoclassical economists do conceivably subscribe to the view put

forward by Robbins that economics is the study of the allocation of scarce means to

achieve given ends and it 'is not concerned at all With ends as such' (Robbins, 1952 p.

30).17 It is the assumption that preferences are given, that allows the neoclassical

economist to assume that ends are given (Hodgson, 1988). Then, on the basis that the

ends are given, the neoclassical economist can purport to be able to carry out positive

economic analysis.

To predict economic behaviour and to apply valuation tools that posit to

replicate the individual's approaCh to choice, assumptions about the actual content of

individual preferences have to be made. This issue is considered in the following

section.

4.3.3. Utility maximisation

The classical economists of the material welfare school, such as Pigou and

Pareto, used the term utility to refer to the usefulness of goods and services (Cooter

15 The motto 'what a person prefers is always better for him' was launched under the banner of anti­ paternalism (Gibbard, 1986). See also West and McKee (1983), who defend the stable preferences hypothesis and consider the implications of alternative hypotheses for 'social manipulation'. 16 For example, recognition of the role of advertising in determining consumer demand has lead to industry regulation and self-imposed code of practice. 17 This view had previously been well expressed by Walras (1977). He remarked that it is irrelevant to economics whether a drug is demanded by a doctor or by a murderer to kill his family; what is relevant is that the drug is useful and it may be more useful to the murderer than to the doctor. 90

and Rappoport, 1984). A commodity was said to be useful when it contributed to the

satisfaction of human physical needs. Pareto (1971) emphasised the distinction

between needs and desires. He referred to the satisfaction of needs as the satisfaction

of utility; the satisfaction of desires was referred to as the satisfaction of ophelimity. In the parlance of these economists, interpersonal comparison of utilities was synonymous

of interpersonal comparison of material, physical well-being.18

Robbins (1952) remarked that utility could not be observed and therefore,

under the influence of logical positivism, he asserted that interpersonal comparisons of

utility are outside science (Cooter and Rappoport, 1984). Following Robbins, other

economists revised consumer theory ridding it of any reference to concepts related to

cardinality. The concept of marginal utility of goods was replaced by the marginal rate of substitution (Hicks and Allen, 1934). The concept of utility employed in contemporary microeconomics theory is based on the work of these economists and is referred to as ordinal utility. Utility does not have any reference to intensity of sensations. 'A utility function is simply a way to represent or summarize a preference ordering. The numerical magnitudes of utility levels have no intrinsic meaning.'

(Varian, 1993 p. 69).19

At this stage, the distinction between utility theory and consumer choice theory has to be made.

Hausman (1992) remarks that utility theory requires only: (a) complete, transitive and continuous preferences, and (b) that choices express preferences. Utility

18 Note that material welfare economists attempted to compare the well-being of social groups, but refrained from comparing the utility of individual persons. The latter was deemed to be infeasible (Cooter and Rappoport, 1984). 19 See also Hausman (1992, p. 18). 91

theory does not specify anything about commodities or about people's goals.

Individuals may be self-interested or altruistic. In addition to requirements (a) and (b), consumer choice theory also requires: (c) consumerism20, and (d) diminishing marginal rate of substitution. Self-interest is required in the theory of consumer choice.

Consumerism implies self-interest, therefore individual choice is based essentially on greed. The implications of these arguments will be considered later on. Now, the question of 'measurement' of utility is addressed.

The philosophical foundations of welfare economics are traced back to

Bentham's utilitarianism. CBA is presented as the tool used to operationalise this philosophy.21 Three requirements are at the basis of utilitarianism (Sen, 1987). Firstly, only utility has intrinsic value. Hence, utility is the only measuring rod needed to judge the goodness of some action (welfarism). Rights do not have an intrinsic value.22 They are only instrumental to the achievement of utility. Se-condly, utility is measured by considering only the total of all utilities (sum-ranking). Utilitarianism does not attribute intrinsic value to social and economic equity (e.g. Harsanyi, 1985); the goodness of

equity is judged on the basis of its contribution to an increase in total utility. Thirdly,

choices are based on the goodness of the consequent outcome (consequentialism).23

20 In Hausman's terminology (1992), consumerism groups the following three assumptions about individual economic behaviour: (i) bundles of commodities are the objects of individual's preferences; (ii) interdependencies between individual preferences are excluded; and (iii) larger commodity bundles are preferred to smaller (satiation). 21 'Here, at last, was an empirically applicable criterion [the potential Pareto improvement test] by which the utilitarian concept of "the greatest good for the greatest number" could be implemented. BCA is strictly a test for potential Pareto-improvements. • (Randall, 1984 p. 68). 22 For example, see Stigler (1984) who stresses that fairness and justice do not have an established meaning in neoclassical economics. 23 'Consequentialism ... demands, in particular, that the rightness of actions be judged entirely by the goodness of consequences, and this is a demand not merely of taking consequences into account, but of ignoring everything else.' (Sen, 1987 p. 75). 92

It seems that an attempt to operationalise utilitarianism requires that 'some kind' of utility may be measured and also summed. But contemporary microeconomics rules out the measurability of utility and is therefore inconsistent with making utilitarianism operational. Thus, what do valuation studies measure? This will be considered in the next section.

It is now time to consider some issues concerning altruism. First of all, altruism has to be defined. Self-regarding behaviour may be distinguished from other-regarding behaviour (Hausman and McPherson, 1993). Self-regarding behaviour refers to those actions that the individual carries out to benefit other individuals, but he also derives benefits from doing so.24 Other-regarding behaviour does not provide any benefit to the individual that carries out the action, and it may even be disadvantageous.

Neoclassical analysis of altruism have been confined to self-regarding behaviour in relation to the supply of public goods (e.g. Margolis, 1982; Andreoni, 1990). For example, Margolis (1982) constructs a dual-utility function to include altruism in the form of 'participation altruism' {the individual benefits from the act of giving resources away) and 'goods altruism' (the individual benefits from an increase in the welfare of the individuals receiving the resources). Both categories imply self-regarding behaviour. It should be stressed that even the introduction of self-regarding behaviour in a neoclassical model concerned only with public goods creates certain problems. 25

The inclusion in the neoclassical model of other-regarding behaviour in the provision of public goods (and especially of private goods) would result in a neoclassical

24 This differs from self-interested behaviour, that is concerned solely with one's own welfare. 25 It is difficult to explain which ranking of the different choices will take place in which situations (Hausman and McPherson, 1993). 93

deductive model empty of predictive power (Etzioni," 1988; Lutz and Lux, 1988;

Przeworski, 1985).

4.3.4. Rationality

The assumption of rational behaviour is part of the 'hard-core' of neoclassical economics; as such, it cannot be removed or tested (Caldwell, 1982; Hausman, 1992).

Individuals are assumed to be fully rational (in the sense defined below) and do not exhibit non-rational behaviour. In utility theory, rationality is defined as consistency of choice. As it was detailed in Section 4.3.2, individuals are assumed to have rational preferences and choose according to these preferences. 26

Rationality as used in economics is defined by Simon (1986) as substantive rationality, since rational behaviour is seen in terms of the choices it produces. He remarks that three main aspects set apart neoclassical economics from other social science in relation to the treatment of rationality. Economics: (i) is silent about the content of goals and values; (ii) postulates global consistency of behaviour; and (iii) postulates objectively rational behaviour in relation to the total environment 27 Instead, other social sciences: (a) attempt to analyse values; (b) consider the processes that lead to the selection of specific aspects of 'reality' and how these become the 'factual bases' for reasoning about action; (c) seek to understand the computational strategies adopted in reasoning about complex realities under the constraint of limited information processing capabilities of the human brain; and (d) consider how non-

26 Rational behaviour has also been interpreted by some economists as self-interested behaviour (e.g. Frank, 1988). This conception of rationality has been rejected by Sen (1987), who remarks that while maximisation of self-interest is a reasonable objective, arguing 'that anything other than maximizing self-interest must be irrational seems altogether extraordinary' (p. 15). 27 On the basis of the positivist philosophy which underlies neoclassical economics, it is possible to see the world as one, exactly specified reality. 94

rational processes, such as emotions and sensory stimuli, influence the definition of the

'factual bases' used in the rational processes. Because of the particular focus on the

processes underlying rational behaviour, the conception of rationality adopted in

psychology is defined as procedural rationality (Simon, 1986).

The individual of the neoclassical model, is required to be able to process an

amount of information equal to that that a central planner has to analyse (Arrow,

1986). The concept of ·global rationality that is at the basis of this model has been

criticised by Simon (1982), who has put particular emphasis on the computational

limitations of the hwnan brain. Simon rejects the view that individuals are global

maximisers and proposes an alternative model in which decisions are rational but

bounded. Given the limited computational powers of the brain, the individual cannot

deal with all the information required to attain a maximwn. Simon (1957; 1982)

proposes the alternative model of 'satisficing'. The individual does not maximise, but

attempts to reach acceptable minima It should be noted that if Simon's criticism of rationality in economics is accepted, the whole neoclassical model is put into question. 28

The analysis turns now to considering how the aspects of neoclassical theory discussed above affect the study of economic-environmental issues.

28 An attack on the concept of unbounded rationality has to be considered as an attack on the value of neoclassical equilibrium analysis, given that in neoclassical economics the notions of global rational maximisation and equilibrium are 'intimately connected' (Hodgson, 1988; Tisdell, 1976). 95

4.4. Implications for the study of environment-economy relationships and the

valuation of ecosystems

The particular theoretical features of neoclassical economics described above determine how the neoclassical researcher frames the problem to be studied and how the study is carried out. In considering some of the implications for the study of environmental issues that these theoretical features hold, it is useful to list these implications under the specific theoretical assumption. However, more than one assumption (e.g. methodological individualism and positivism) may determine the specific feature under consideration.

4.4.1. Methodological individualism

The adoption of methodological individualism has several implications.

Firstly, there is no legitimate source of values apart from individuals. Thus, valuation studies attempt to ascertain only the values assigned to the environment by individuals. No consideration is given to the fact that other social entities may assign values to the environment that differ from the sum of the values hold by the individual members of these entities.

Secondly, to assign values to the environment, the individual decision-making

processes have to be assumed by the researcher. This creates a peculiar circular

process. It was remarked above that many neoclassical economists regard the Homo

oeconomicus construct as a fiction, useful in predicting economic behaviour. Usually,

it is not thought that this model reflects actual behaviour. However, what valuation 96

studies do is to adopt this model of individuals and tell what human economic

behaviour towards the environment should be on the basis of this fictional model. 29

Thirdly, the emphasis on the individual results in an apparent accent on

individual rights. For example, it has been remarked that the adoption of the potential

Pareto improvement test implies the rejection of 'paternalism - the notion that the

government, scientists, or any other "elite" group knows best what should be done to increase an individual's utility' (Mitchell and Carson, 1989 p. 22). However, this

rhetoric is contradicted by practice. Through the use of questionnaires, individuals are not allowed to express the full range of their values and concerns on a specific project

Also, it is well known that the adoption of the sum-ranking principle requires interference in individual affairs whenever 'total utility' can be increased by doing so

(Hahnel and Albert, 1990; Randall, 1987).

Fourthly, no consideration is usually accorded to the inner working of decision- making processes that occur at aggregation levels higher tlian the individual (e.g. government, non-government organisations). Environmental issues are addressed in terms of allocation of scarce resources (e.g. air, water) among atomistic individuals

(see e.g. Tietenberg, 1988).

4.4.2. Preferences

The important role that the assumption of stable preferences plays in the neoclassical framework has already been noted. Here, one further issue should be noted. If preferences were given, there would not be any need to question whether an education campaign focusing on the issues to be assessed in a CBA study (e.g. impact

29 It is recognised here that this model may at times reflect actual behaviour. A point made here is that it cannot be assumed that this is always the case. 97

of air pollution on health) could actually change individual preferences. If it was possible for pref~rences to be changed as a result of the campaign, the appropriateness of undertaking a questionnaire survey of individuals that have not had the opportunity to be exposed to specific education should be questioned.

It is important to note that contingent valuation studies have shown that the provision of information affects respondents' behaviour. In particular it appears to increase their willingness to pay. This raises the question of how much information should be provided. A further important issue relates to the form in which this information should be provided. For instance, the assumption of a rational individual

(as defined above) would imply that any amount of information could be provided at once. The individual would be able to process it without any problem. This issue is further pursued below.

4.4.3. Utility and Pareto optimality

It is claimed that the concept of cardinal utility is rejected in CBA studies and that contemporary microeconomics is the theoretical basis adopted (Mitchell and

Carson, 1989; Randall and Peterson, 1984). However, it was noted above that contemporary microeconomics employs the concept of utility as a simple index of preferences. Any number attached to the utility ranking has purely an ordinal meaning.

Clearly, it is not viable to aggregate ordinal numbers but aggregation is required in CBA studies. Thus, in practice these studies are said to measure 'utility levels' enjoyed by individuals (Mitchell and Carson, 1989). Changes in these utility levels are at times referred to as 'money-valued gains' (or losses) (Randall and

Peterson, 1984). Are these money-valued gains (losses) indices of preferences or actual monetary values? If money-valued gains (losses) arising from contingent market 98

studies are taken as indices of preferences they cannot be aggregated across individuals and. furthennore, they cannot be summed to values derived from actual markets. 30 On the other hand, if money-valued gains (losses) are interpreted as actual monetary values they may be aggregated across individuals and summed to values arising from actual markets. However, this interpretation is not consistent with the view of contemporary microeconomics that utility cannot be measured. 31 It is obvious from the above discussion that the resource allocation option that maximises total utility cannot be pinpointed by CBA. What CBA indicates is the option that maximises the net present value in monetary terms. In fact, the particular concept of efficiency adopted in

CBA is the one in which 'resources are put to their most productive (high valued) use'

(Mitchell and Carson, 1989 p. 21 fn. 9).32

CBA studies are applications of the potential Pareto improvement test33

(Kaldor, 1939; Hicks, 1939). This test was developed to allow economists to make recommendations without recourse to interpersonal comparisons of utility. It has been stated that '[r]ecognition of this limited public role of BCA in no way undermines the importance of complete and accurate benefit cost analysis. While an empirical test for potential Pareto-improvements has a limited role, it is nevertheless essential that such a test be as complete, accurate, and faithful to the relevant economic theory as is

30 A full CBA study of a project may require the assessment of the total economic value (1EV) that may be composed by use values (UV) and by non use values (NUV): 1EV = UV + NUV. Market information is often available to assess UV, but to estimate NUV (that include existence values, option values and quasi-option values) hypothetical markets are designed. 31 Notice that it may be claimed that CBA studies measure changes in welfare. This claim must be based on the assumption that monetary values are a good proxy for welfare. This is clearly disputable. 32 This definition is germane to that of 'efficient depletion' of resources, interpreted as that pattern of resource use which results in the maximisation of the present value of net benefits from resources (Fisher, 1981). · 33 A state A is a potential Pareto improvement over B, if those who gain (in moving from B to A) could compensate the looser and have something left for themselves. 99

feasible.' (Randall. 1984 p. 70) It is interesting to note, however. that in describing the economic theory that underlies CBA (e.g. Mitchell and Carson, 1989; Randall. 1984) no mention is made of the fact that the potential Pareto improvement test has been shown to be flawed (Scitovsky, 1941; Samuelson, 1950; Gorman, 1955). A question arises here: is it really 'essential' to carry out a test that has been shown to be flawed?

This issue will be further addressed later on. However, a short note on this argument is worthwhile considering here.

The weaknesses of CBA have been noted not only by those who are against its use. Also scholars that practice CBA (e.g. Bennett, 1993; Randall. 1984) argue that ' CBA should not be seen as providing the only (and final) decision rule to be adopted in public decision-making. Rather it should regarded as a useful information system providing an indication of efficiency implications of policies. The results of a CBA study would be only one component of the decision-making process. It should be noted that this view departs from the standard welfare economics view that the potential Pareto improvement test should guide economic decision-making.34 In relation to PAs, the view that efficiency as measured by CBA should be the deciding rule to be applied is suggested by Dixon and Sherman (1990).35 Finally, an issue that is not clarified by authors supporting the view that CBA should be used as an information system is the place that efficiency should have in the decision-making framework. This question will receive further attention below.

34 See, for example, Feldman (1980) for a review of welfare economics. It may be noted that in welfare economics decisions should be made according to social utility functions. However, given that these present notorious problems, efficiency is the issue normally being considered. 35 Dixon and Sherman's (1990) view is particularly relevant to this dissertation and will be considered in detail in Chapter Six. 100

Before concluding this section it is important to note two implications of CBA

(or efficiency) for distdbution and sustainability.

First, it has to be remarked that the attempt to maximise total monetary benefits may result in inequitable policies. In fact, CBA •is indifferent as to whether the gainers are those already well off and the losers already badly off, or vice versa.' (Randall,

1987 p. 42). It should be added that due to the discounting processes adopted in CBA, long-term costs and benefits are accorded little weight in the final result of a CBA study. This may affect negatively future generations.

Second, an efficient allocation of resources may well be a pattern of resource use that is not sustainable (e.g. Bishop, 1993). Given that there infinite efficient allocation of resources which depend on the specific distribution pattern, there appear to be scope for seeking those patterns of resource use that are sustainable, acceptable from a distributive point of view and efficient.

In concluding the section it is worthwhile noting that other-regarding behaviour cannot be accounted for in CBA. There is, therefore, a need to establish decision­ making processes (of which valuation studies are only one component) that enable eventual other-regarding behaviour to be expressed.

4.4.4. Rationality

The assumption that the human brain has unlimited computational powers holds several implications. Firstly, it implies that individuals can actually use all the available information to rank all the possible alternatives and make complex trade-offs when asked, for example, their willingness to pay for the conservation of an ecosystem.

Thus, it seems possible to identify the option that maximises social welfare. Secondly, this assumption denies that market failure could arise from information overload or 101

from the lack of capacity to process the information available. This suggests that the list of possible sources of market failure considered in neoclassical economics should be expanded. 36

The assumption that the human brain has unlimited computational powers coupled with that of stable preference (and given ends) leads economists to attempt to carry out analyses of environmental issues in a 'snapshot approach'. That is, the analysis is carried out at a certain point in time by, for example, submitting questionnaires that can be answered by globally rational individuals with set preferences. In contrast, if individuals are not assumed to have unlimited computational powers nor given preferences, it would seem that a 'process approach' to valuation and decision-making should be preferred as it would help problem rationalisation and, eventually, preference updating and modification of ends. This issue will be further considered below.

· From the assumptions that individuals are globally rational and that it is possible to describe the world objectively as it really is, it ensues that there is no difference between how the individuals perceive the 'real' world and how this 're3ny is' (Simon, 1986). Therefore, it is possible to predict the choices that a rational agent will make simply from our knowledge of the real world, once his or her utility function is known. 37 After having assumed the content of the utility function (which in CBA appears to correspond to the maximisation of monetary benefits, as described above),

36 It was noted in Chapter Two that market failure may originate from lack of information. This category is different from that advanced here that market failure may originate from information overload. 37 Arrow (1986) stresses that the assumption of rational behaviour would have limited implications were it not coupled with the further assumption of broad homogeneity of utility functions across individuals. 102

it is possible for the economist to indicate the resource use option that 'is' preferred by the individuals, without the direct involvement of the stakeholders in the decision­ making process.

After having detailed the implications of the neoclassical paradigmatic positions for the economic analysis of environmental question we turn to consider what are the aspects of what is termed here an expanded human behavioural space. Then the implications for the economic analysis of environmental issues will be considered.

4.5. Expanding the human behavioural space

The human behavioural space developed in neoclassical economics, and adopted by environmental economists, has been detailed above. Here, it is argued that there are other dimensions of the human behavioural space that should be taken into account in the economic approach to the study of environmental questions. This expanded human behavioural space, which includes the one e~ployed in neoclassical economics, is depicted in Figure 4.1. The dimensions of the human behavioural space presented in Figure 4.1 is based on the arguments advanced by institutional economists and socio-economists. Figure 4.1 is used as a visual device to chart the arguments presented here. First, a brief initial description of the meaning of Figure 4.1 is provided.

As already noted in section 4.2.3, behaviour may range from self-interested to other-regarding. At the aggregation level, decision-making may occur from the individual level (the unit of analysis in neoclassical economics) to societal level. The types of decision-making processes adopted by individuals and institutions are grouped under the label 'behaviour mode'. Rational behaviour of Figure 4.1 corresponds to that 103

adopted in neoclassical economics. At the other end of behaviour mode is normative behaviour. This category is defined by Etzioni (1988) as normative/affective behaviour.

It refers to that behaviour that is guided by values (e.g. need for equality) rather than rational calculation. This will explained in details below.

Figure 4.1. Human behavioural space

Aggref:Dtlon level

A normative rational Behaviour mode

The model presented in Figure 4.1 is used here to describe the different types of behaviour that individuals and institutions could adopt, and the factors influencing them. This model could also be used to chart the frequency and occasion of specific types of actual behaviour, c.onsidered at various aggregation levels (e.g. how often and when did individuals behave in nonnative and self-regarding behaviour?).

The hwnan behavioural space of neoclassical economics is essentially confmed to vertex B. The rational, self-interested individual is the decision-making unit. Models 104

such as those of Margolis (1982), Andreoni (1990), and Common et al. (1993),38 may be located at intermediate points along the axis BC. Because of the reasons described in the previous section, models within the NEE paradigm cannot be expanded beyond this space.

It is not the intent of this chapter to argue that individuals act in other- regarding ways rather than in a self-interested way, or that specific institutions should be the focus of the analysis instead of the individual. Nor it is attempted to identify a point in Figure 4.1 that corresponds to actual human behaviour or that is the ideal focus of analysis. Rather, it is argued that each individual and institution may present irrational and rational behaviour, self-interested and other-regarding behaviour, and that there is a continuous interaction between the lower aggregation level (the individual) and higher aggregation levels. This interaction shapes and re-shapes rules, behaviour and goals. This 'variety' of behaviour should be accounted for in the decision-making process, and in the design of tools employed for the economic analysis of ecosystem use.

4.5.1. Behaviour mode

Behaviour mode refers to the type of process underlying the choice of goals and means made by individuals and institutions. Etzioni (1988) proposes a behaviour mode broader than that assumed in the neoclassical model (i.e. global rationality in choosing means). He asserts that 'normative and affective' values are the most important bases for the choice of ends and means. Normative values is a category that

38 These authors consider some implications for contingent valuation studies of adopting the view, borrowed from Sagoff (1988), that individuals may respond as 'citizens' rather than 'consumers' in valuation studies. 105

includes both moral values (e.g. do not kill, do not steal) and social values (e.g. freedom, justice). Affective values refers to emotions such as love, hate and stress.

Affective values are particularistic (i.e. apply to a restricted personal basis), whereas normative values have wider claims that extend beyond the personal level.

Etzioni (1988) suggests that the behaviour mode may be considered as a continuum that may be divided into three different zones.

In the first zone, the 'exclusion zone' (Ax, Figure 4.1), only normative and affective values determine choice. Rational calculation, or logical and empirical factors in Etzioni's terminology, are not used. In this zone, means that could be considered on a logical-empirical basis, ·are excluded a priori on a normative and affective basis. The concept of 'committed' behaviour proposed by Sen (1982, 1987) is germane to

Etzioni' s exclusion zone. Commitment reflects the desire t<> abide to certain rules, to follow a code even if this may be endangering one's own welfare.

In the second zone, the 'infusion zone' (xy, Figure 4.1), normative and affective values are the main factors influencing choice, however, logical and empirical factors are also used. In this zone, normative and affective factors influence the decision-making process in two ways: by loading and intrusion. Firstly, normative and affective factors 'load' (i.e. colour) the interpretation of facts and the inferences made from them. Choices resulting from the subsequent logical and empirical calculations are therefore loaded by normative and affective values. 39 Secondly, intrusion is said to take place when normative and affective factors hinder the proper conclusion of the cycle of

39 Neoclassical economics 'makes no distinction between sense data, information, and knowledge, and assumes that information or knowledge are provided from experience independently of beliefs, concepts or theories of the observer.' (Hodgson, 1988 p. 83). 106

logical and empirical analysis (e.g. data collection, interpretation, derivation of

inferences). For example, stress increases random behaviour and error rates.

In the third zone, the 'indifference zone' (yB, Figure 4.1), logical and empirical

calculation is deemed a suitable basis (according to the held normative and affective

values) for decision-making. Normative and affective values do not influence choice in

this zone; they demarcate the zone. Other factors affect logical and empirical

calculation in this zone (and also in the infusion zone). The consequences of the limited

computational powers of the brain, pointed out in the work of Herbert Simon, are an

important factor in limiting rational decision-making in this zone, and have already

been discussed in the previous section. Intra-cognitive limitations also affect rational decision-making. Their relevance has been stressed in the work of scholars such as

Nisbett and Lee (1980), Kahneman et al. (1982), Thaler (1980). Several biases in

decision-making under uncertainty have been reported. For example, people tend to over-estimate the frequency of events that they can remember more easily; they adopt a starting point to estimate a value but then fail to adjust their estimates as more information becomes available; they find it very difficult to assess low probability events; they see patterns that do not exist and are affected by the form in which probabilities are expressed, instead of considering what these probabilities actually are.

Because of all the factors noted above, global rationality, if it exists at all, should therefore be regarded as the exception rather than the rule, according to Etzioni

(1988), who takes sub-rational decision-making as the rule. He stresses that this position is also supported by the fact that rational decision-making is not effortless. It 107

requires that energy be used to carry out rational decision-making because of the

several steps involved in this process. 40

4.5.2. Morality

Morality is used here to refer to the range of behaviour that spans from self-

interested to other-regarding behaviour. Here, it is not ·implied any ranking of

behaviour from a moral point of view (e.g. other-regarding behaviour is superior to

self-interested behaviour). Aspects of self-interested and self-regarding behaviour have

already been discussed above. Here, the conception of other-regarding behaviour

Cwhich, unlike self-regarding behaviour, does not imply benefits for the agent that

carries out the action) is presented through the work of various authors.

Sagoff (1988) proposes that individuals act not only as consumers (self-

regarding behaviour) but also as citiZens (other-regarding behaviour). The citizen is

concerned with the public interest and judgment is based on historical, ideological,

aesthetic, sentimental and moral values. The individual faces an internal conflict

between the consumer-self and the citizen-self. However, according to Sagoff, people

act as citizens when deliberating on social questions such as environmental problems. It

should be pointed out that Sagoff appears not only to attempt to understand how

people make decisions about the environment In his writings there appears to be a

rather strong emphasis on the fact that people ought to decide on environmental issues

as citizens (Jacobs, 1994). Acceptance of the fact that people may act as citizens does

not of course imply the endorsement of the ought to position.

40 Some of the steps are: (i) wide-ranging assessment of alternatives; (ii) analysis of the range of objectives; (iii) assessment of consequences; (iv) search for new information (Janis and Mann, 1977; cited in Etzioni, 1988). 108

That the individual has a 'dual self has also been advanced by Lutz and Lux

(1988 p. 18), who state: 'Humanistic economics aims for a more complete image of the person. In addition to the self-interest side it posits a mutual interest side or, put it in other terms, in addition to advantage seeking it posits the existence of truth or fairness seeking.'

Etzioni (1988) asserts that other-regarding behaviour is also an important feature of market transactions. That is, it applies not only to social issues, as argued implicitly by Sagoff (1988). For example, firms' concern with fairness in market transactions has been documented by Kahneman et al. (1986).

4.5.3. Aggregation level

On the basis of methodological individualism, the individual is the only relevant unit of analysis in neoclassical economics. However, there are other units at higher aggregation levels that make decisions which cannot be regarded as the simple sum of individual decisions.

It is useful at this stage to provide some definitions. In an all encompassing

VIew, an institution may be defined as 'a social organisation which, through the operation of tradition, custom or legal constraint, tends to create durable and routinized patterns of behaviour.' (Hodgson, 1988 p. 10). This definition, which emphasises the factors that shape institutions, includes both 'immaterial' institutions such as habits and 'rules of the game' (e.g. property right system), and institutions intended as actual organisations. Several types of organisations, forming aggregation units higher than the individual, may be identified. For, example, based on the distinction between two forms of interaction (hierarchical and network type) and three interaction rationales (calculative, idealistic and genuine), Sjostrand (1992) identifies 109

six institutions: the corporation, the market, the association, the social movement, the clan and the circle.

Institutions have several functions, some of which are of specific interest here.

They contribute to the formation of the conceptual framework employed by agents in the interpretation of 'reality' (Hodgson, 1988), and influence the perception of what constitute the agent's self-interest (Etzioni, 1988; Hodgson, 1988). Institutions, by establishing routinized .behaviour, provide information to agents, thus reducing uncertainty and reduce the demands on the limited capacity of the human brain

(Hodgson, 1988; Runge, 1984; Sjostrand, 1992). Finally, those institutions that make ' decisions (such as the corporation and the clan) have larger cognitive powers than the individual, and may be able to carry out decision-making processes of a higher rational degree than the individual (Etzioni, 1988). Of course, this does not exclude the fact that organisations may make decisions on the basis of normative factors, or that they. do not face limitations in carrying out rational decision-making processes.

The analysis carried out in this section and in the previous ones has highlighted several issues that may have considerable influence on the decision-making framework regarding forest and biodiversity conservation. It is now time to draw these issues together and consider their implications for research. This will be done in the final section.

4.6. Conclusion: implications for the decision-making framework

Sustainability, distribution and efficiency. It was noted that there may be efficient allocations that are not compatible with the sustainable use of ecosystems and may also be inequitable. The standpoint adopted here is that resource use patterns 110

should be chosen on the basis of their sustainability and distributional aspects together

with the efficiency aspects. This would not appear to conflict with the neoclassical

view that resource allocations should be efficient The two positions would only be in

conflict if the particular neoclassical view that the resource use option that provides the

highest monetary benefits should be chosen.

Distribution. The positivist view that it is possible to carry out value-free

science has resulted in the progressive separation of economics from ethics has already

been noted in the previous chapter. Neoclassical economists have tended to shy away from openly addressing ethical issues. This has resulted, of course, in taking ethical

positions by default. It is important to note that not addressing the question of the distribution of resources. the implicit ethical position is that equity issues are irrelevant

Distribution may refer to the distribution of resources between generations or within a generation. Both aspects are of particular interest to biodiversity conservation policies.

Intergenerational distribution will be considered in the next chapter.41 Aspects of distributional issues with respect to the current generation will be considered in

Chapter Six.

Decision-making process. It has been argued above that preferences and ends may change. That individuals and institutions may show behaviour ranging from selfish to other-regarding. That their behaviour may be ranging for rational to normative. That individual influence institutions and vice-versa. All these elements have important

41 It may be noted here that the lack of consideration of intergenerational issues by neoclassical economists is also partly due to two widely held views: (a) technical progress will take care of natural resource shortages; (b) current markets reflect future as well as current demands through the actions of speculators. 111

implications for the study of environmental-economic issues in general, and for the assessment of forest and biodiversity conservation initiatives in particular.

Firstly, it is argued that the focus of the analysis should not only be on the individuals and goods but also on institutions. Institutions provide the framework within which ecosystem use decisions are made. The existence of appropriate institutions has particular importance in determining whether ecosystem use patterns may be sustainable, equitable and efficient

Second, the decision-making process should enable individuals and institutions to update their goals, to express their 'selfish to other-regarding' views, and to facilitate the logical decision-making process. It is put forward here, and will be further detailed in Chapter Six, that a participatory process approach to decision-making may go a certain way towards better addressing the above points compared to a 'snapshot' approach to decision-making. This has particular influence for the role of the researcher, as already noted in Chapter Three.

Vatn and Bromley (1994, p. 145) conclude their paper by affirming that 'the most fundamental environmental choices will continue to be made without prices - and without apologies.' The standing questions are: How can these choices be made? What is the role of economics in the environmental decision-making process? The next two chapters delve deeper into these questions, with specific focus on future generations, rural people, forests, biodiversity and protected areas. ChapterS Implications of Intergenerational Equity for Biodiversity Conservation Policies

5.1. futroduction

It was remarked m Chapter Two that biodiversity contributes to the

maintenance of ecosystem functions that support life and contribute to human well-

being. All generations stand to benefit from ecosystems services. If it is recognised that

future generations have rights, then consideration should be given to how these rights

may be protected and to the implications for ecosystem management

This chapter explores these issues. In particular, it explores the question of

what constitutes intergenerational equity in natural resources use. The implications for

the economic analysis of biodiversity and specifically for the assessment of PAs are

considered.

The analysis takes as given that future generations have rights. This

acknowledges the principles stated in the Rio Declaration on Environment and

Development, ratified at the United Nations Conference on Environment and

Development (UNCED) in June 1992. The objectives of the declaration are the

conservation of biodiversity, its sustainable use for the benefit of both current and

future generations, and the equitable sharing between countries of the products derived

from genestocks. Three principles adopted in the final declaration of the conference

make explicit the preferred underlying approach to biodiversity policies. These

principles state that: a) the right to development should be achieved by equitably

meeting the developmental and environmental needs of the current and future

112 113

generations; b) environmental protection shall constitute an integral part of the

development process so that sustainability may be achieved; and c) the precautionary

approach should be widely adopted to protect the environment.

The analysis proceeds by firstly reviewing in Section 5.2 some economic

aspects of biodiversity and some economic studies that hav.e dealt with biodiversity

issues. As stressed in Chapter Two, biodiversity has an important role in maintaining

viable economic systems and thus in supporting life on Earth. Biodiversity is an

important attribute of natural capital (NC). Thus, the implications for biodiversity

conservation policies of seeking. to achieve intergenerational equity are analysed by ' addressing the wider issue of the use of NC. Section 5.3 discusses relevant aspects of

NC. The contractarian theory developed by Rawls (1972) is discussed in Section 5.4.

The implications of intergenerational equity for biodiversity conservation policies and

for the economic analysis of PAs are considered in Section 5.5. Ftnally, the conclusions

are drawn.

Before proceeding with the analysis, it is worthwhile to clarify two issues

relating to the approach to ethics adopted in this chapter.

First, the deductive approach to the development of ethical rules adopted in

this chapter may appear to be in contradiction with the positions taken in Chapters

Three and Four. The arguments developed in those chapters suggest an approach to the generation of ethical rules for environmental management based on community participation. The deliberations of this process of participation could be expected to be rules that are 'grounded' in the ethical base of the nation. The adoption of the deductive approach taken here is, however, justified In fact, it may be anticipated here, the Constitution of Vanuatu recognises future generations' rights to benefit from 114

the environment of the country. The analysis carried out here attempts to operationalise this principle of the Constitution in terms of the economic analysis of conservation initiatives, and partiularly of PAs.

Secondly, an ethical basis other than contractarianism could be used in considering the implications of intergenerational equity for resource use, and how this may be achieved. Rawls' theory of justice is adopted here because it is believed that it produces less demanding requirements than, for example, (Naess, 1989) or the land ethic (Leopold, 1970). By taking this approach, the analysis cannot be criticised on the basis that it overstates the duties of the current generation towards future ones.

5.2. The economics of biodiversity

Irreversibility and uncertainty relating to ecological processes characterise the study of biodiversity. These will be considered before addressing the issue of the economic valuation of biodiversity. Then, the application of the precautionary principle and of the safe minimum standard (SMS) of conservation will be dealt with.

5.2.1. Irreversibility and uncertainty

Irreversibility is typical of biodiversity loss as once a species has become extinct it cannot be restored. Similarly, an ecosystem may collapse with irreversible effects when its ecological functions fall below a threshold level. Ciriacy-Wantrup (1963) refers to this kind of irreversibility as a technical one. He also stresses the importance

of economic irreversibility. An economic irreversibility is said to occur when the cost

of restoring a certain environment, in order to continue or resume the previous land

use, is higher than the benefits of such an action. 115

Ciriacy-Wantrup (1963) is concerned about the kind of irreversibilities noted above due to the implications they may have for society. An irreversibility may cause

'immoderate losses' which, in the worst case scenario, may threaten the continuity of a social group. Irreversible processes may have significant implications for evolution:

'irreversibility ... limits opportunities of adaptation and narrows the potential development of a

society. Both the biological and social sciences have come to the conclusion that such a

limiting and narrowing force directs development towards specialization rather than

diversification. Such a direction has been held responsible for retarded and abortive growth ...

stagnation, and death of species and civilizations.' (Ciriacy-Wantrup, 1963 p. 252).

If the point at which a process becomes irreversible is known, appropriate management rules could be devised. The fact is that threshold levels are most often unknown. The presence of uncertainty renders the management problem more complex.

Uncertainty may be firstly categorised into social and natural uncertainty

(Ciriacy-Wantrup, 1963; Bishop 1978). Uncertainty refers to the lack of knowledge about future income levels, technologies, institutions, needs, and wants of current and future generations that will influence society's development patterns and pressures on the environment Natural uncertainty refers to the lack of knowledge about ecological processes. This lack of knowledge about many aspects of biodiversity has been emphasised in Chapter Two.

An important classification of uncertainty, which applies to social and natural

uncertainty is provided by Wynne (1992). Uncertainty may be classified as follows:

a) risk: the probability distribution of the event is known;

b) Knightian uncertainty (Knight, 1921): the probability distribution is unknown;

c) ignorance: the relevant facets of the issue are not known; 116

d) indeterminacy: questionable appropriateness and sufficiency of scientific

knowledge.

The fonnulation of biodiversity policies is particularly problematic because

biodiversity is characterised by irreversibilities and, mainly, by indetenninacy and ignorance. The presence of uncertainty and irreversibility points to the conclusion that

the conservation of biodiversity cannot be left to the market alone. When a market

does exists,1 uncertainty and irreversibility may cause market failure. Uncertainty and

irreversibility also create serious problems for the application of valuation techniques,

as detailed below.

5.2.2. The economic value of biodiversity

What is the value of biodiversity? This is a question that economists have considered in relation to biodiversity policies. To date, it appears that no satisfactory

answer has been provided.

Some authors have recommended the use of CBA for the valuation of

biodiversity (e.g. Randall, 1988; Pearce and Moran, 1994). Some theoretical

shortcomings of CBA have been considered in Chapter Four. Here, it is useful to consider some of the limitations of CBA in regard to biodiversity valuation.

First, even advocates of the CBA approach have recognised that CBA is ill suited to decision-making that involves intergenerational issues: when 'considering events that may greatly restrict the opportunities of future generations, it seems that discounting theories based on the logic of ordinary investment are simply out of their depth.' (Randall, 1987 p. 240). Second, CBA cannot deal satisfactorily with

1 It was pointed out in Chapter Two that markets are missing for many environmental services. 117

uncertainty. This is treated as if it were risk.2 Third, specific techniques such as contingent valuation are deemed suitable by researchers and practitioners to value goods that are familiar to the consumer (Mitchell and Carson, 1989). This does not seem to apply to biodiversity. It was noted in Chapter Two that even scientists have limited knowledge of many aspects of biodiversity. Last, and probably most crucial problem facing any attempt to measure the value of biodiversity in a CBA framework, is the lack of knowledge about the functions of biodiversity and about the implications for ecosystem services of modifications in these functions.

At this point it is important to recall that the term biodiversity refers to the diversity of life at all levels, and it also comprises the linkages between these different levels of the biological hierarchy. The diversity of genes, species and ecosystems cannot be equated to the actual biological resources.

It is the value of biological resources that CBA studies have assessed, rather than the value of biodiversity. This is due to two main reasons. Earlier economic studies confused biological diversity with biological resources. This is not surprising given that studies such as McNeely et al. (1990) used the term biodiversity in the all encompassing meaning of totality of biological resources. Later studies have continued to value biological resources as a proxy for the value of biodiversity because it was found impossible to value the latter. This is exemplified by a book titled The Economic

Value of Biodiversity (Pearce and Moran, 1994). These authors speak of 'value of biodiversity'. However, all the references they cite, and the calculations they make, for

2 Bis~op (1978) notes that it is at times suggested that the problems of irreversibility and uncertainty may be solved by assessing option values. However, he remarks, when there are significant natural and social uncertainties, option values cannot be known beyond one or two decades. We might add that the inclusion ofoption values does nothing to solve problems of ignorance and indeterminacy. 118

example, in relation to the value of medicinal plants and carbon absorption functions, consider (for their own admission) values of biological resources.

In conclusion, economic valuation currently does not appear capable of providing estimates of the benefits of biodiversity. It may provide estimates of (a) the benefits derived from biological resources, (b) the costs of implementation of biodiversity conservation initiatives; and (c) the foregone benefits of alternative uses of areas to be conserved.· Some problems involved in these applications of economic analysis will be considered in Chapter Six.

Due to the problems faced by standard economic valuation techniques, it has been suggested that the precautionary principle and the SMS of conservation should be adopted for the management of both biodiversity and biological resources. These are considered in the following two sections.

5.2.3. The precautionary principle

The precautionary principle emerged in Germany in 1980, when it was first used in relation to marine pollution (cf. Harding and Fisher, 1992). Since then, it has been included in several international treaties, including the Rio Declaration adopted at the UNCED conference. 3 It has been noted that:

'the precautionary principle asserts that there is a premium on a cautious and conservative

approach to human interventions in environmental sectors that are: (a) unusually short on

scientific understanding, and (b) unusually susceptible to significant injury, especially

irreversible injury.' (Myers, 1993 p. 74).

3 See Harding and Fisher (1992) for a list of the international treaties which include the precautionary principle. 119

International treaties, such as those signed at the World Climate Conference, held in

Geneva in 1990, and at the UNCED Conference, have stated that when the two conditions outlined by Myers (1993) apply, lack of full scientific knowledge should not be used as a reason for postponing cost-effective measures to prevent environmental degradation (Myers, 1993; Harding and Fisher, 1992).

It is fair to say that there have been several definitions of the precautionary principle and its exact meaning is still unclear (see Harding and Fisher, 1992). In relation to biodiversity policies, it has been interpreted by Myers (1993) as a principle that shifts the burden of proof from the 'conservationist party' onto the 'potential developer'. As it will be noted below, this interpretation is similar to that given to the

SMS of conservation. However, the precautionary approach differs from the SMS.

This may be seen by considering the example presented by Myers (1993).

In relation to forest management, the conservationists currently have to prove that the exploitation of a specific ecosystem has negative environmental implications.

The application of the precautionary principle would shift the burden of proof onto the loggers. They would have to prove that their actions do not cause environmental degradation. The precautionary principle could be operationalised by introducing a bonding system (Costanza and Perrings, 1990). The loggers would pay a bond equal to the value of the largest estimated environmental damage that could be caused by their activities. The bond would be refunded if damage did not take place. In case of limited damage, the loggers would either repaire it or part of the bond would be forfeited in order to compensate for the damage.

In relation to biodiversity, this approach presents two major shortcomings.

First, it has been noted above that there is no study which has successfully assessed the 120

value of biodiversity. Thus, it cannot be seen how the potential environmental damage

could be estimated. Second, when an irreversible damage occurs, compensation of

current and future generations could only take place if the services provided by the

irreversibly damaged ecosystems could be substituted, for example, by human-made

capita14 (Barbier et al., 1994). However, substitution is not always possible,, as detailed

in Section 5.3.

Because of the limitations of the precautionary principle in relation to

biodiversity management, the introduction of SMSs of conservation may be more

appropriate for the conservation of biodiversity .

. 5.2.4. The safe minimum s~dard of conservation

From a dynamic, evolutionary standpoint the assessment of allocative efficiency

is not the main focus of the analysis, contrary to the case of studies concerned with the

valuation of biodiversity. 'In a world of uncertainty, no one knows the correct answer

to the problems we confront ... The society that permits the maximum generation of

trials will be most likely to solve problems through time' (North, 1990 p. 81). Two

relevant matters are contained in this passage. First, in an environment characterised by

uncertainty, flexibility may be maintain~d by keeping open a wide range of options.

This enhances the probability that a system is sustained in the event of failure of one or

more of its components (be they ecological or social). Second, diversity leads to

different patterns of experimentation. These may result in a further increase in diversity

and new ways of solving problems. This is of particular relevance to the economic

process. Marshall (1910; cited in Carlsson and Stankiewicz, 1991) recognised that the

4 This will be defmed in Section 5.3. 121

tendency of individuals to variation is a major source of progress. The opportunity to innovate is supported by a high degree of diversity in the natural resources available.

This can lead to the diversification of the goods and services produced, which is a major cause of economic change (Carlsson and Stankiewicz, 1991).

Biodiversity not only contributes to the maintenance of life support functions.

It is also a prerequisite for economic adaptability and provides a diversity of options for economic development. A decrease in biodiversity may cause a technical as well as an economic irreversibility. On these propositions, it may be argued that the economic analysis of biodiversity should not underestimate the fact that the diversity of natural resources per se contributes to the evolution of economic systems over time.

The concept of a SMS of conservation was introduced by Ciriacy-W antrup

(1963) with the explicit purpose of dealing with problems of uncertainty and irreversibility. Ciriacy-Wantrup regarded the SMS of conservation as an approach that would help in (a) maintaining flexibility with respect to the options of economic use of ecosystems, and (b) avoiding the occurrence of 'immoderate losses' due to irreversibility. He stressed that the SMS could be defined for , plants, and ecosystems. The SMS may be achieved by avoiding the resource's critical zone.5

The SMS approach was firstly reviewed and modified by Bishop (1978; 1979).

Among other problems, he noted that the characterisation of the SMS in a game theoretic framework assumes that the probabilities of the outcomes are unknown, but the outcomes and their values can be foreseen. This is not a realistic assumption given the existence of uncertainty. Thus, he proposed that the adoption of the SMS could

5 The critical zone is a threshold level that delimits the reversibility of the process (see Ciriacy­ Wantrup, 1963 p. 39). Recall that he considered irreversibility both in physical and economic terms. 122

not be based on unknown gains and losses. Rather, the SMS should be adopted 'unless the social costs are unacceptably large'. The definition of what are unacceptably large costs, Bishop (1978) remarked, should include considerations relating to intergenerational equity. However, he deemed economics ill suited to deal with the definition of unacceptable costs.

After a period of relative neglect, the need to address the issues of uncertainty and irreversibility inherent to biodiversity policies has revived the interest in the SMS.

In fact, Perrings et al. (1992) remark that SMSs might be essential elements in a biodiversity conservation strategy.

Tisdell (1990b) considers the policy outcomes of adopting either CBA or the

SMS in order to set priorities for the conservation of species under a given availability of funds. If CBA is applied, the species or set of species selected for preservation is the one which would yield the maximum net present value. In the case of the adoption of the SMS, considering both the minimax loss approach and the minimax regret approach, it is found that the species would be selected for preservation, in decreasing order, on the basis of the highest ratio of possible benefits (i.e. avoided losses) to costs

(of adopting the SMS) of conservation. The SMS approach considered by TISdell

(1990b) is obviously subject to the critique formulated by Bishop (1978) against the minimax principle, as outlined above. As Tisdell (1990b) recognises, the SMS approach which adopts the minimax loss or minimax regret strategies faces a problem of infonnation availability. To the extent that for many species the benefits of conservation are not known, the ranking methods considered are not practically applicable. 123

Randall (1991) and Randall and Thomas (1991) consider how to value species or ecosystems in situations of conflict between conservation and modification of the environment The valuation framework suggested is based on the application of CBA to account for individuals' willingness to pay (WTP) for conservation, integrated with the SMS of conservation. This approach is aimed at avoiding outcomes that could be regretted. On the assumption that the value of conservation is given by the sum of individual WTP, the policy alternative chosen is the one that yields the maximum net present value. Choices are however constrained by the adoption of the SMS. It is recognised that individual,preferences may be myopic, and might lead to ecological irreversibilities. Randall (1991) and Randall and Thomas (1991) see the introduction of the SMS as necessary in order (a) to supplement the inability of CBA to deal with uncertainty, and (b) to protect future generations' interests, which may be disregarded by the discounting process characteristic of CBA.

The contribution that this approach may provide to a biodiversity conservation strategy is rather limited. Firstly, it has already been noted that CBA presents more shortcomings than usual when employed to value biodiversity. Secondly, this approach, similar to those adopted by Tisdell (1990b) and Randall and Farmer (1995)

(discussed below), can only deal with 'the disappearance of a chip of biodiversity here and a chunk there' (Randall, 1988 p. 222). This is a rather limited contribution to a biodiversity strategy that has to face potential mass extinction of species and extensive degradation of ecosystems.

Randall and Farmer (1995) address two important questions. These have to be answered if the application of SMSs is to contribute to biodiversity conservation. First, how should the SMS be set? Second, what should be considered an intolerable cost? 124

They address the first question in terms of levels of resource use. That is, they consider the level of resource use which is adequate to the satisfaction of each generation's needs. This approach differs from previous ones, which have considered

the minimum threshold level for the conservation of the resource a la Ciriacy-W antrop.

Randall and Farmer (1995) suggest that the SMS of use should be set at that level that

guarantees a sustainable and adequate level of consumption to different generations

(Dmin). 6 If a sigmoid resource regeneration function is adopted, the chosen SMS (stock

of resource conserved) results greater than the one that would have been adopted by

setting the SMS on the basis of minimum threshold level.

The issue of intolerable cost is addressed by Randall and Farmer (1995) in

terms of the level of SMS adopted. They note that what constitutes intolerable cost

depends on the specific ethical theory endorsed. 7 However, they note that the three

ethical approaches converge on the same level of intolerable cost when resource

degradation threatens the existence of human society. Each generation should limit its

resource use to Dmm 'and bear whatever costs that entailed'. It would be considered

intolerable for each generation to use less than Dmm. None of the three ethical stances

considered would demand sacrifice beyond that

Randall and Farmer's (1995) analysis is theoretically interesting and enriches

the debate about the application of the SMS. However, the application of their theory

faces problems. Also, similar to previous contributions to the theory of the SMS, the

SMS tool as developed by Randall and Farmer (1995) may prove to be of limited

6 A generation that uses less than Dnia would suffer extreme deprivation (Randall and Farmer, 1995). 7 They consider consequentialism (e.g. Bentham, 1970), moral duty approach (e.g. Ehrenfeld, 1988), and contractarianism (e.g. Rawls, 1972). 125

relevance in the current extensive loss of biodiversity. These issues are considered in turn.

Firstly, this approach requires detailed data about regeneration characteristics of each specific resource in order to set the appropriate SMS leveL The information available for the limited number of species that have been studied exemplifies the fact that there is a great uncertainty about the levels of minimum viable populations and habitats requirements (Hohl and Tisdell, 1993). For the large majority of the species and ecosystems there is a significant lack of information on their regenerative capacity.

Secondly, this approach is applicable only to those resources that come under human use. Most of the species that become extinct or endangered are not directly used. In many cases they contribute indirectly. It seems unlikely that the type and amount of information required to gauge their indirect contribution to life support functions and to economic activity and then set the appropriate SMS level will ever be available.

This leads to the third point This approach to the determination of SMS levels suffers from the same problem noted above for previous studies. It can only address localised problems in biodiversity conservation. That is, it is a piece-meal approach to biodiversity conservation in that it looks only at 'bits and chunks' of biodiversity: it considers individual species and ecosystems (if their regenerative functions can be assessed). To face the challenge of reducing the rate at which biodiversity is lost, a strategic approach to biodiversity conservation is required (World Commission of

Environment and Development, 1987; WRI et al., 1992). Thus, a different approach to the establishment of SMSs may be required. 126

PAs are an important component of a biodiversity conservation strategy (WRI et al., 1992). The adoption of a system of PAs by a country may be regarded as the adoption of a SMS for the conservation of biodiversity. Attempting to achieve intergenerational equity has implications for the economic assessment of PAs and for judging what may be considered an intolerable cost of conservation. These issues will be considered below.

The arguments developed above, and in Chapter Two, suggest that biodiversity is an integral attribute of natural capital. To assess in a holistic fashion the implications of intergenerational equity for biodiversity conservation, this issue is approached in the wider context of the distribution and use of NC.

5.3. Issues on the concept of natural capital

Classical economists such as Malthus (1982) and Jevons (1865) analysed the significance of natural resources for economic development However, twentieth century models of economic growth have mainly considered labour and manufactured capital (MC) as factors of production. This is because the latter was .assumed to be a nearly perfect substitute for NC (Nordhaus and Tobin, 1972). The debate on sustainable development has brought back into focus the contribution of NC to the economic process and to societal development Some aspects of an ecological-social system and the question of substitutability or complementarity between NC and MC are explored below.

5.3.1. The ecological-social system

The economic system can be described as being embedded in the ecological­ social system (Figure 5.1). The ecological-social system is constituted by NC and by 127

human capital (HC). HC comp1ises the people living in the specific time and space with their culture, skills, knowledge and the institutions which regulate social and economic life (e.g. Berkes and Folke, 1992). NC is described by Costanza and Daly (1992) as being composed of renewable natural capital (RNC) and nonrenewable natural capital

(NNC). RNC is self-sustained through the chlorophyll photosynthesis of solar energy and includes, for example, trees, fish, and ecosystems. NNC is seen as 'inactive' and includes resources such as minerals. The structure and diversity of ecological systems are crucial attributes of RNC, since they contribute to maintaining functional ecosystems.

The ecological system can exist independently of the presence of the social system, but the social system cannot exist without the ecological system. Nonetheless, there exists a coevolutionary interdependence between RNC and HC (e.g. Norgaard,

1984). HC adapts to the existing RNC and to changes in it RNC too changes as a result of the influence of HC. The functional relationships occurring in the system and the flows of goods and services are depicted in Figure 5.1.

HC is applied to RNC and NNC to produce MC, other goods and services. MC is operated by HC for the extraction and transformation of RNC and NNC in order to provide goods. Services are also provided by HC with the use of MC. The production of any piece of MC and of other goods is mainly a process of transformation of NNC and/or RNC through the application of HC.

5.3.2. On the substitutability between natural capital and manufactured capital

If NC and MC were perfect substitutes, an increase in the stock of MC which generates an equivalent decrease in the stock of NC, and a (temporary) increase in income would not pose a problem. The total capital stock (TC = NC + MC) would be Figure 5.1. The economic system as pari of the ecological-social system.

---1-• ,...._Waste J Thermal ':>0"'4 " Degraded I > energy Goods energy and Economic Services

. Economic System

LEGEND HC: human capital RNC: renewable natural capital NNC: non-renewable natural capital MC: manufactured capital ~ f unctiona.l relationship . :::::::? flow of goods and services

Modified from: Penings et a.l. (1992); Costanza and Daly (1992).

IV -00 129

left unchanged. Hence, from an Hicksian standpoint (Hicks, 1946) this would represent an improvement in economic welfare for the current generation and would not affect future generations. They would receive an equivalent capital stock.

Pearce (1988b) takes the view that NC and MC are complements in the early stages of economic growth, whereas in industrialised economies substitutability applies above a certain minimum threshold level of NC. The latter is needed to sustain life support functions. It seems that Pearce's claim of complementarity-substitutability is based on differences between industrialisation stages. Pearce argues that industrialised countries appear to be less dependent on the natural resource base than LDCs and to have a higher degree of resilience to environmental shocks. However, industrialised countries' use of natural resources in absolute terms, and per capita, is far greater than that of LDCs (Sachs, 1992). Notwithstanding the actual dependence of different countries on natural resources, the relative dependence on natural resources does not imply a different relationship between NC and MC.

Winpenny (1991) suggests that some NC may be characterised as 'critical'.

This type of NC is described as irreplaceable and non-substitutable (e.g. the ozone layer). He asserts that the remaining NC, which includes renewable and nonrenewable natural resources, can be 'replenished or substituted' by MC. This approach is similar to that of Pearce's because it sets a threshold of NC (i.e. critical NC) that has no substitute. However, Winpenny grounds the notion of substitutability and complementarity on the physical properties of the resources. How MC might replace

NC is not expounded by Winpenny.

The argument that MC can be a substitute for NC has been rejected by

Costanza and Daly (1992) on three counts. First, if MC is a substitute for NC, then 130

there woliltt be no reason to produce MC given that NC is, by defmition, naturally available. Second, MC is created by combining NC with HC, hence it is a contradiction in terms saying that MC can substitute for NC. Third, in the production process. MC and HC are combined to transform NC into products; MC is created to process an increased amount of NC, not to decrease the use of NC. 8

The issue of complementarity or substitutability of NC and MC may be better understood by considering the major functions that they fulfil. From Table 5.1 it is obvious that both NC and MC have a variety of functions, which differ to a great extent. Ufe support functions, raw materials, and waste assimilation can only be provided by NC. One of the important functions of MC is the processing of raw natural materials. Another significant function of MC, jointly with HC, is the provision of economic services.

The processing function of MC implies that in specific industries MC would not be of use in the production process without the existence of NC. The implication is that they are complements in production. NC is at times replaced with MC in the production process. This should not be confused with the possibility of substitution between NC and MC in physical terms. The 'substitution' of NC with MC in the production process is in fact a substitUtion between one type of NC and another type of NC, to which HC has been applied in order to transform it into MC.

The application of MC cannot create physical matter but it may provide access or make useable elements of NC otherwise not amenable to human use. This means that an increased availability of economic resources may be derived from increases in

8 This point is not in contradiction with the possibility of increasing the technical efficiency of MC, which results in a reduction of NC input per unit of output. 131

the stock of MC and improvements in its technical efficiency. Thus, MC may enhance the stock of NC while not substituting for NC.

Table 5 .1. Functions of natural capital and of manufactured capital.

Natural capital Manufactured capital Ecosystem life support functions Inputs in the economic process Inputs in the economic process - provision of raw materials (renewable and non­ renewable) - processing of raw materials - processing of raw materials - waste assimilation - waste treatment (e.g. recycling) - provision of aesthetic services -provision of aesthetic services - provision of economic services (produced by -provision of economic services (produced by combining NC, MC and HC) combining NC, MC and HC)

To summarise this section, NC may be subdivided into NNC and RNC, with the latter composed by critical RNC and other RNC. It has also been argued that MC is not asubstitute for NC, however MC and HC can be used to extend the life of NNC and to restore the stock of RNC.

Decisions about the distribution and allocation of natural capital, such as the establishment of PAs, are based on specific ethical viewpoints. Ethical issues are addressed in the next section.

5.4. Ethics and intergenerational equity

The ethical underpinnings of utilitarianism have been outlined in Chapter Four.

Their implications for intergenerational equity are briefly outlined below. Then the contractarian theory developed by Rawls (1972) is considered. Rawls' theory starts 132

from the same human behavioural model proper of neoclassical economics but it arrives at substantially different conclusions in regards to intergenerational equity.

Before proceeding, it is worthwhile making explicit that the issue of the optimal population policy is abstracted away in the following analysis. The major reason for doing so is that the availability of natural resources is only one of the many factors that may influence population growth (i.e. the number of individuals who will be born in each generation).

5.4.1. Utilitaria,n ethics

Utilitarianism does not attribute intrinsic value to social and economic equity

(e.g. Harsanyi, 1985). The goodness of equity is judged on the basis of its contribution to an increase in total utility. lit relation to intragenerational equity, if it is assumed that all people have the same utility function, which is increasing aild concave in income, 9 total utility would be maximised by an exactly equal distribution. Of course, this case is only hypothetical given the differences that exist in peoples' preferences. Sen (1982,

Ch. 16) notes that individual preferences differ, and that a utilitarian· approach would attribute less income to a person A who receives less utility at any income level than another person B. This distribution would maximise total utility.l0 However, A would be worse-off than B, because she receives less income than B and further obtains less utility from that level of income when compared with B.

Sen's example can be extended to an intergenerational context. If the objective is the maximisation of total utility, a generation G, which receives less utility at any

9 Acknowledgement is given to one reviewer of the journal Ecological Economics for making this point 10 The utilitarian income distribution pattern would result in B having greater total utility than A. However, their marginal utility would be equalised. 133

given level of resource use than generation J, would be ~signed a lower resource endowment than J. Hence, utilitarianism could lead to solutions which are dubiously equitable.

Even if it is assumed that there was agreement on the ethical basis of utilitarianism, it is obvious that it would be difficult to apply such an ethic to intergenerational matters. Welfare functions are elusive constructs with regard to current time questions, and this is more so in relation to issues relating to the future, as the needs and values of future generations are unknown. 11 The consideration of self- regarding behaviour (see Chapter Four) might lead to distribution patterns more ' equitable then those arising from a model grounded on selfishness. However, these resource distribution patterns would reflect only the current generation's 'selfish altruism' (Page, 1977). That is, there would be no assurance that future generations' wants and even needs were satisfied.

5.4.2. Rawls' theory of justice

The agents considered by Rawls (1972) are rational self-interested individuals.

However; this contractarian theory is developed as an alternative to utilitarianism as it seemed unlikely to Rawls that utilitarianism would be adopted as a rule for the basic structure of society. The reason proposed by Rawls is that it is implausible that rational self-interested persons would embrace a principle which may require personal sacrifice, in order to maximise the total utility of society, and which does not guarantee personal

11 It is important to note that a welfare function is a concept proper of neoclassical economics. Some discrepancies between utilitarian philosophy and its application in neoclassical economics have been noted in Chapter Four. 134

self-respect to everybody. The latter is seen as necessary if people are 'to pursue their

conception of good with zest and to delight in its fulfilment.' (Rawls, 1972 p. 178).

The two principles of justice, which Rawls specifies as the constitution of a

society and will regulate all further agreements, are agreed upon in the 'original

position' (0P).12 They affirm, lexicographically, equality of rights in basic liberties

among individuals, and that choices are to be made so that they benefit the least

advantaged in society and provide for equal opportunities. In Rawls' OP, individuals

are brought together and are assumed to be under a 'veil of ignorance'. They do not

know the position they occupy in society or their endowments. However, they do

know basic facts about society such as political, economic and psychological

principles. This sets up a fair procedure which leads to the adoption of principles

which can, therefore, be considered just.

Given that the original agreement is drawn under uncertainty, Rawls suggests

that rational agents would adopt a strategy that maximises the minimum state, that is, J. the maximin strategy. In the OP, the maximin rule applies because: (a) there is no 1l 'l I knowledge of the likelihood of the possible outcomes; (b) the principles of justice

provide a satisfactory minimum, given that they result in a workable theory of justice

compatible with the demands of efficiency; and (c) the principles of justice provide a

satisfactory minimum when compared to the possible outcomes arising from the

application of utilitarianism (Rawls, 1972). The principles adopted will benefit the least

well off and will not be regretted, once the veil is lifted and the the agents' position in

society revealed.

12 For a discussion of Rawls' work see Kukathas and Pettit, (1990). 135

In Rawls' theory, equity is expressed in terms of primary goods. These are goods which are regarded by Rawls as things that every rational individual is assumed to desire.

Primary goods include not only income and wealth but also rights, opportunities and the social basis for self-respect. As stressed above, basic rights are afforded priority over other primary goods. Hence, trade-offs between basic liberties and social and economic goals are not allowed. Rawls' theory differs from utilitarianism as advantage is not measured in terms of utility, but by considering an index of primary goods. Also, rights have an intrinsic value. whereas utilitarianism simply affords them instrumental value. Notice that rights also determine the opportunities open to people, and equality in outcomes is related to, but differs from, equality in opportunities.

Rawls noted that each generation should preserve natural assets, the 'gains of culture and civilisation', and just institutions. However, he addresses intergenerational justice as a question of determining a fair saving rate, where saving may take various forms, such as manufactured capital and education. Rawls stresses that saving is not required just to make future generations better-off, but it is a condition needed to bring about a just society.

However, focusing on saving formalises the question of intergenerational justice in terms of making future generations better-off. This misses the fact that, during this process of accumulation, disruptive ecological effects may occur and could negatively affect future generations. This approach to intergenerational equity does not recognise that the obligation to avoid harm may be more vital than attempts to improve well-being (Barry, 1977).

Rawls assumes that the persons gathered in the OP are contemporaries. To extend the analysis (which is mainly concerned with intragenerational justice) to 136

intergenerational justice, a motivational assumption is introduced. Rawls assumes that agents in the OP do care for their offsprings. This creates a problem of consistency in the theory. The aim of the theory is to derive 'all duties and obligations' from a rational approach. However, assuming that rational self-interested individuals are concerned for the welfare of their direct descendants inputs in the model the actual answer to the problem that Rawls seeks to solve (cf. Barry, 1977; Richards, 1983).

An application of Rawls' theory to intergenerational distribution of natural resources is due to Page (1977), who avoids the problem just discussed by assuming that the agents in the OP are from 'all generations' and that they are ignorant about which generation they will belong to. It is suggested by Page that in the OP agreement would be reached on (a) the provision of the conditions needed for permanent livability

(which may be taken as the assurance that life support functions would not be disrupted), and (b) the need for generational intertemporal self-sufficiency.

One criticism of the application of Rawls' theory to intergenerational justice, of particular relevance here, is that there seems to be a problem of circularity. That is, the principles adopted in the OP may detennine how many generations will exist and consequently how many generations will be represented in the OP. This argument is part part of Parfit Paradox (Pasek, 1992; Turner, 1988). The above issues are now considered.

5.4.3. Some critical issues in intergenerational equity

Two questions are addressed. First, how are the patterns of resource-use which will allow the existence of future generations chosen in the OP? Second, how much do the interests of the present generation diverge from those of the future ones? 137

Page (1991) asserts that it is necessary to keep the resource base intact in order to achieve intergenerational equity. However, it was noted above that MC and HC may be used to enhance the stock of NC. Hence, modifications of the resource base do not necessarily imply intergenerational inequality. Moreover, problems may be encountered in achieving the target suggested by Page. A non-decreasing stock of RNC may be maintained by definition, while taking advantage of the flow of its services, but the stock of NNC is reduced when extraction occurs. This could possibly limit the number of generations that will inhabit the planet, if RNC alone cannot provide sufficient resources. If the rights to the use of a finite stock of NNC are extended to infinite generations, the share of each generation will tend to zero, assuming away recycling.

All generations would forgo the benefits that could be derived from the use of NNC.

This does not appear to be a satisfactory solution. Hence, what should be done with

NNC?

Three alternative principles may be considered for adoption. Each generation could be asked to replace the NNC used by investing in RNC (Costanza and Daly,

1992). The latter authors regard this compensation as a prudent condition to guarantee sustainability. The problem with this resource-use pattern is that it is difficult to see on what principles the compensation should be based. A second approach may be to limit the rate of NNC consumption to the rate of improvement in technical efficiency achieved in its use. However, this resource use pattern presents implementation problems. It is not known in advance the rate of technical progress that will be 138

achieved by a generation. Also, this policy would require a particularly interventionist approach.13

A possible alternative is the adoption of a more general principle which specifies that policies should be adopted in order to facilitate the transition to an economic system that relies almast entirely on renewable . resources. This may be implemented by: a) introducing depletion taxes on NC, eventually counterbalanced by a decrease in income tax (Costanza and Daly, 1992); and b) shifting the focus of research for development from NNC-based activities to RNC-based activities.14

In relation to the sustainable use of RNC, it should be noted that the problems posed by uncertainty and irreversibility in devising sustainable practices should not be underestimated. Poi" instance, while the need to shift to sustainable forest management is often advocated, it appears (but it is debated) that no proven ecologically sustainable management logging scheme exists (Aplet et al., 1993; Keto et al., 1990; Poore, 1989;

Vanclay et al., 1991).

Having examined the above approaches to NC management, it is obvious that, given the existing degree of uncertainty, it is not possible to guarantee that the chosen resource management conditions will allow the existence of an infinite number of generations. The fact of the matter is that due to ecological, economic, and social uncertainties, it is impossible to define exactly the conditions that will lead to the indefinite existence of human beings, if this is indeed possible. It is only through a

13 It has bee argued that the question of equity in intergenerational distribution of NC is better addressed on a per capita basis (Young, 1992). This position appears to be valid if the population size of future generations is determined essentially by previous generations' activities. However, if future generations' size is partly (or to a large extent) independent of, say, the current generation's activities, this position has a more limited appeal. 14 See also Young (1992) for a thorough analysis of policies regarding the use of RNC and NNC. 139

cautious, incremental and adaptive learning process15 that the use of NC will be tuned so as to facilitate the existence of future generations.

A Rawlsian approach to intergenerational equity is useful in deriving general principles of justice and to decide on the potential resource patterns to be followed to achieve intergenerational equity. However, it cannot provide definitive answers to questions of intergenerational resource distribution. It is impossible to know the exact conditions which will allow the certain existence of future generations. In this respect, the critique of circularity levelled against the Rawlsian theory is of limited practical relevance.

A further weakness of the Rawlsian approach as developed by Page relates to the framing of the problem. The question of intergenerational equity is formulated as one of having to decide on the distribution of a limited quantity of resources across generations. This is obviously correct in relation to NNC. For RNC the distinction between the interests of different generations may not be so stark. It may be both in the interests of the present and future generations to maintain a non-decreasing RNC.

Some examples, derived from World Bank (1992), may exemplify the case canvassed here.

About one third of the world's arable land is affected by elevated salt concentrations. Soil degradation and erosion negatively affects agricultural product and water quality, and causes the siltation of dams. In some tropical LDCs, soil loss is thought to cause economic losses ranging between 0.5% to 1.5% of GDP. This list

15 The learning process approach 'presumes that neither the ends nor the means of social interventions can be fully known in advance, and that understanding and consensus on them must be built through practical experience.' (Uphoff, 1992 p. 12). 140

could continue on (see World Bank, 1992), but it suffices to show that the interests of different generations do not always conflict

5.5. bnplications for biodiversity conservation

The arguments of the previous sections may now be brought together to draw the implications they hold for the distribution of NC across generations, for biodiversity conservation policies, and especially for the assessment and establishment of PAs.

5.5.1. Three degrees of intergenerational equity

Choosing a pattern of resource distribution between generations is not only a question of finding the one which is most equitable. The agents in the OP 'will not enter into agreements they cannot keep, or can do so only with great difficulty.'

(Rawls, 1972 p. 145). In terms of the problem addressed here, this implies that it is necessary to identify which resource distribution pattern can actually be achieved. This is influenced by several factors such as the conditions of a specific country and the knowledge of the factors which make the sustainable use of ecosystems possible. This implies that one, 'optimal' (from an intergenerational equity point of view) resource use pattern cannot be identified. Three patterns of resource use are outlined below and are referred to as degrees of intergenerational equity. The specification of multiple resource use patterns is suitable to an incremental and adaptive learning process. It also facilitates the identification of objectives to be adopted in the 'real-life' political process.

Three degrees of intergenerational equity in resource distribution may be distinguished. 141

(i) Extensive intergenerational equity, requiring equitable access to NC. This may be achieved by not reducing the stock of RNC and by progressively facilitating the substitution of NNC with · RNC in the economic process. This degree of intergenerational equity roughly corresponds to the Lockeian principle that each generation should bequest to the following generations at least an equivalent resource base (Kavka, 1978).

(ii) Intermediate intergenerational equity, requiring only non-negative changes in the stock of RNC. This could imply that the stock of NNC is progressively depleted without consideration of the impact on future generations.

(iii) Minimal intergenerational equity, requiring the maintenance of critical

RNC which provides life support functions. 11ris concept of intergenerational equity is the one that is closer to the obligation not to harm future generations.

It may be observed that it is in the case of minimal intergenerational equity that the interests of the current generation and of future ones coalesce the most, as it is indisputable that all generations need life support functions. Also, different generations may not have diverging interests in maintaining a non-decreasing level of RNC.

The implications that the arguments developed throughout this chapter have for conservation policy and P A assessment and establiShment may now be drawn.

5.5.2. Implications for conservation policy and protected area assessment

Biodiversity is a critical factor in securing the continuing functioning of life support systems. The conservation of biodiversity at the bioregionallevel (see Chapter

Two) would mean that considerable progress in achieving intennediate

intergenerational equity would be made. In fact, protecting biodiversity at the

bioregional scale implies that RNC is managed on a sustainable basis. While PAs may 142

be regarded as providing important contribution to the protection of biodiversity, they represent only a partial insurance against biodiversity loss. Efforts by countries in protecting rare and representative ecosystems and species in PA systems would thus contribute to the conservation of part of their critical RNC. This would, therefore, comply only partially with the requirement for the achievement of minimal intergenerational equity.

The establishment of PA systems may be regarded as a SMS for the conservation of biodiversity at the national level. Unlike other approaches to the SMS, the one outlined here deals not only with endangered or threatened species, and with species that are used by humans. By aiming at the protection of ecosystems, it attempts to conserve the species that are used and those that are not, the species that are unknown, and the representative and unique ecosystems. Information on the optimal

design of a PA system may be lacking. However, this should not be used as a reason for postponing conservation initiatives that contribute to the achievement of a minimum degree of intergenerational equity. Conservation initiatives may start at a

sub~optimallevel, and be improved as further information becomes available.

Other studies on the economics of biodiversity conservation have addressed the

question of how to allocate a given budget for the preservation of species. They have

noted that neoclassical economics cannot provide a basis for deciding the amount of

resources to be assigned to the conservation of species (Randall, 1986). The task of

deriving an ethical basis for determining the resources to be allocated to biodiversity

conservation has been attempted here. The adoption by a country of the principle that

future generations have rights (and most countries have done so by signing the Rio

Declaration), seems to imply that they ought to at least plan and fund the attainment of 143

minimal intergenerational equity. On this basis, it may be affirmed that the cost of

establishing P A systems should not be regarded as 'unacceptably large'.

The above argument implies that the approach to the economic assessment of

PAs should be reconsidered. The establishment of PA systems fulfils, at least partially,

the ethically and ecologically based requirement that society has for conserving critical

RNC. At this conceptual level, it would appear, therefore, that economic analysis

should not be used to decide if P A systems should or should not be established, as it is

implied, for example, by Dixon and Sherman (1990). This question would necessarily

be answered in the affirmative on the basis of the interests of future generations, which

at this level tend to coalesce with those of the current generation. Economic analysis

should investigate the most cost effective way of establishing the P A. Depending on

the specific type of P A, CBA could be eventually used to assess economic activities

that may be carried out inside the P A within specified ecological constraints. Other

issues regarding the economic assessment of PAs will be discussed in the next chapter.

5.6. Conclusion

The foregoing analysis has been carried out by following a rationalist approach

grounded on self-interested individual choice. The adoption of the ethical stances

presented, for example, by Leopold (1966) and Naess (1989) would result in far

reaching requirements for the conservation of natural capital and biodiversity.

Therefore, the requirements derived here for the fulfilment of intergenerational equity

should be regarded as 'lower bound' requirements.

It is recognised that the ethical basis derived here for assessing natural

resow·ces distribution questions may not be transferable to different countries and/or 144

cultures. What is important to stress is that because of the separation of economics from ethics, due to the positivist influence noted in Chapter Three, the ethical implications of economic analysis are often not made clear or understood. The ethical underpinnings of economic analysis and the policies which may result should be exposed. These should be compared to the ethos of the specific society to which they are applied. This process could facilitate the identification of dissonances (which may binder the successful application of the policies) and could provide viable alternatives.

With respect to Vanuatu, the analysis carried out in this chapter sought to

operationalise, in terms of biodiversity conservation, the constitutional requirement of

protecting the rights of future generations. The consonance of this analysis to local

peoples' views will receive further attention in Chapter Seven.

Fmally, concern has been expressed about the dominance of the preservationist

approach in environmental policy-making, because it pays little attention to the needs

of the local people (Adams, 1990). The emphasis of this chapter on intergenerational

equity does not imply that the needs of local people are overridden by the needs and

rights of future generations. The analysis presented in this chapter is only one part of

the framework for the assessment and establishment of PAs that will be applied in Part

Ill of the dissertation. The case for participation in research and decision-making has

already been stressed in the previous three chapters. The next chapter considers the

issues of participation and evaluation in the context of forest ecosystems. Chapter6 Rethinking the Economic Analysis of Forests and Protected Areas: Theory and Practice

6.1. Introduction

· Chapter Four considered some theoretical aspects of decision-making processes and evaluation. The analysis of these theoretical issues, together with ethical aspects of decision-making has been furthered in Chapter Five. That chapter specified what is required to attain intergenerational equity in natural capital use, and derived some implications for biodiversity conservation policies and for the assessment and establishment of PAs. It concluded by noting that intergenerational equity is only one

of the issues to be addressed in assessing and establishing PAs. As emphasised in

Chapters Four and Five, equity in the distribution of resources between the members of

the current generation needs also to be considered.

The objective of this chapter is to complete the framework for the assessment

and establishment of PAs. It details how it may be possible, in practice, to deal with·

distributional and allocative issues in relation to forest resources.

A recent study attempts to summarise the CBA approach in order to set out

some guiding principles for the economic valuation of tropical forests. The author

concludes: 'Proper valuations of tropical forests are necessary to make judicious use of

the forest.' (Godoy, 1992 p. 178). It is argued here that evaluation, as defined in

Chapter Four, is a necessary step in the decision-making process regarding the use of

145 146

resources. However, several factors determine what constitutes a proper evaluation.

The theoretical basis, the ethical stand and practical applicability are all factors that determine what may be considered a proper evaluation process. These issues are considered below in relation to forest ecosystems.

Details of the application of the NEE approach to forest valuation and PA assessment are discussed in Section 6.2. Some theoretical aspects of this approach have already been discussed in the two previous chapters. Here, some aspects of the theory as it relates to forest valuation are considered. However, the focal point of the analysis is the practical problems faced in valuing forest resources and PAs. Section

6.3 discusses some of these practical problems and addresses the issue of resource distribution. The alternative approach to distribution and allocation of forest resources proposed in the dissertation is defined in Section 6.4. The conclusions of the chapter and a summary of the framework for the assessment and establishment of PAs developed in Part II of the dissertation are presented in the last section.

It may be noted that this chapter, like C~apter Four, presents a detailed critique

of CBA This critique is not developed in order to reject completely CBA. The critique

intends to highlight shortcomings of CBA in order to understand better the role that

this tool could play is the decision-making framework. It is argued that CBA has its

place in the decision-making framework developed here and this place is delineated.

6.2. Neoclassical economic valuation of forests and protected areas

First, this section presents the general CBA framework that has been proposed

for the valuation of forests. Then, the application of this framework proposed by

Godoy (1992) is reviewed. This review is carried out with two main objectives. First, 147

Godoy's work is used as a medium to introduce some of the issues and variables that have to be considered in a CBA study of forest ecosystems. Second, it is demonstrated that his use of this framework is flawed. This is important because if decision-makers used his framework they would adopt incorrect policies. An alternative formulation of the framework is outlined. (The shortcomings of this latter framework will be discussed in Section 6.3). The neoclassical economic approach to the valuation of PAs is considered in the last part of this section.

6.2.1. The CBA framework for the valuation of forests

The CBA approach to decision-making about forest use may be summarised as

follows. This approach compares the net present value of the land use that results in

the modification (partial or total, reversible or irreversible) of the forest ecosystem

(hereafter NPVMOD), with the net present value of the land use that conserves the

forest ecosystem (which may or may not include human use of the area) (hereafter

NPVCON). Modification of the forest ecosystem will take place if:

(1) NPVMOD- NPVCON > 0

The theory that underlies the CBA framework just described is not specific to

the analysis of forest land use. It has been partly discussed in Chapter Four and it

applies to any application of CBA. Specific to forest valuation are the forest values

that need to be included in NPVCON.

The adoption of the Total Economic Value (TEV) for the valuation of forests

has been proposed by Pearce (1990). The TEVis defined as:

(2) TEV =DUV +IUV + OV +EV 148

where DUV is direct use values, IUV is indirect use values, OV is option values, and

EV is existence values.

Direct use values account for the products and services derived from the forest. They may be consumed or used as inputs in the production of other goods and services. Indirect use values relate to ecosystem functions that support life and that enter indirectly in the economic system. Option values refer to the willingness to pay for leaving open the possibility of using the forest in the future. Existence value represent the benefits derived by an individual from knowing that a certain species or ecosystem exists. A further category that may be recognised is that of quasi-option values. These refer to the willingness to pay to postpone development in order to acquire further information. This category is mentioned by Pearce (1990) but not included in his framework. For simplicity, Pearce's description of TEV is followed here.

A description of the above value categories in relation to forests is reported in

Table 6.1.

Table 6.1. Total economic value of forests.

Direct value Indirect value Option value Existence value Sustainable timber Nutrient cycling Future use of direct and Includes cultural and Non-timber products Watershed protection indirect value heritage value, of Recreation Air pollution reduction value to the individual, Medicine Micro-climate as gift to others, as Plant genetics bequest Education Human habitat

Source: Adapted from Pearce (1990). · 149

Pearce (1990) remarks that in applying CBA to forest valuation the problematic pa.tt is the measurement of the values listed in Table 6.1. He stresses the fact that there are tra.de-offs between different forest uses. These tra.de-offs should be considered before aggregating the various values. Pearce (1990) wruns that the TEV approach should be used with care. 1 In relation to NPVMOD, he is confident that the costs and benefits to be accounted for this option may be calculated without many complications. 2

The following analysis will consider both some theoretical problems inherent to the application of CBA and practical ones in measuring the components of TEV.

Evidence also shows that NPVMOD is not so easily appraised as purported by Pearce

(1990).

6.2.2. Godoy's application of the CBA framework

Godoy (1992) advocates the application of CBA to the valuation of forests. His proposal presents several shortcomings.

Godoy (1992) proposes that the benefits that may be derived from a forest are as follows:

(a) timber extracted on a sustainable yield basis;3 timber extraction produces an

economic rent (1R);

1 Bateman and Turner (1993) point out two significant limitations of the TEV approach: (i) use and non-use values cannot be easily aggregated because there may be trade-offs between them; (ii) use values may be dependent on the level of services attributed to non-use values, therefore, a clear-cut separation of use values from non-use values is rather dubious. 2 Note that the NPVMOD scenario implies modification of the forest by definition. However, some of the benefits listed in Table 6.1 may also be derived under scenario NPVMOD. 3 Godoy appears to confuse sustainable yield logging with some other notion of sustainability (e.g. ecosystem sustainability) when he assumes that sustainable yield logging 'produces no negative externalities, either in the forest or downstream.' (Godoy, 1992 p. 173). For the application of the TEV, it is important to reit,erate that it appears (but it is debated) that no proven ecologically sustainable management logging scheme exists (Poore, 1989; Keto et aL, 1990; Vanclay et al., 1991). 150

(b) non-timber forest products (NTFPs), such as rattan and nuts; which may be

consumed or sold, thus providing a benefit (NTB);

(c) benefits from net positive externalities (PE), such as protection from soil

erosion;

(d) net benefits from tourism (BT) and less tangible benefits to the tourists (LTB),

such as the pleasure they may receive in visiting a unique environment;

(e) benefits derived from the preservation of biological diversity (BIO).

Godoy (1992) proposes that the net present value (NPV) of the above mentioned benefits should be used by the government to set an appropriate royalty

' rate, r, or a lump-sum sale value that would allow the government to recoup the forgone social benefits. In mathematical form, Godoy (1992) suggests to calculate the following:

n Lt=l TRt + NTBt +PEt+ BTt + LTBt +BlOt (3) T= (1 +i)t

where T is the total NPV of the benefits that may be derived from the forest, and i is

the discount rate.

T would be used to determine r, in order to extract the equivalent of T from

the company that intends to carry out logging operations.

Godoy (1992) claims that the application of this approach would reduce forest

clearance. This follows from the fact that, he argues, the 'proper social valuation' of

forests would decr~ase the private profitability of logging activities. In effect, if

Godoy's suggestion was to be applied, all logging activities could cease. This is

because his application of CBA is flawed, as detailed below. 151

Godoy (1992) suggests to add the benefits NTB, PE, BT, LTB, and BIO to TR

(and then calculate their NPV) in order to derive the appropriate r. Let us consider in details the implications of this proposal. TR is an economic rent. that is, 'a value in excess of the total costs of bringing trees to the market as logs or wood products, including the cost of attracting the necessary investment.' (Repetto, 1988 p. 17). The financial pre-tax profit (FP) that a logging company could earn may be defmed as:

(4) FP=TR-NPL

where NJ?L represents the normal profit4 from logging activities.

If the company is charged a royalty rate r calculated in order to extract TR from the

company, then FP = NPL. In this case the company would continue to operate.

However, Godoy (1992) suggests that the company should be charged an amount

greater than TR as a compensation measure for the foregone social benefits (i.e. the

net present value of NfB+PE+BT+LTB+BIO). In this case, the company's financial

profit would be lower than the normal profit. Therefore, the company would cease its

operations.

The application of CBA to the analysis of forest management strategies is

better cast in terms of the assessment of the allocation of resources to competitive

uses. In these terms, the aim of the analysis is defined as the discovery of the

management strategy that maximises the NPV of monetary benefits.

4 A normal rate of profit for a company may be derived by adding the rate of return on capital investment (e.g. chosen to equate some reference rate such as the USA Prime Interest Rate) to a Risk Premium. A normal rate of proftt is required in order to ensure the company's financial viability. 152

For example, asswne for ease of argument that logging activities exclude the derivation of other benefits from the forest. The choice is between the two management options of 'logging' and 'conservation'.

a) Logging would yield net present monetary benefits NPVMOD equal to:

n Lt=l TRt- NELl (5) NPVMOD= (1 +i)t where NEL represents negative externalities produced by logging activities.

b) Conservation would yield net present monetary benefits equal to:

n Lt=l NTBt + BTt + LTBt +BlOt+ PEt- NECt (6) NPVCON= (1 +i)t where NEC represents positive externalities produced by conservation activities.

If NPVMOD > NPVCON, logging would be chosen as it yielded the largest

NPV. The issue of setting royalty rates, central in Godoy's (1992) work, is in this context a marginal one. Certainly, royalty rates may be used to influence the pattern of allocation of forest resources to competitive uses and the distribution of rents between stakeholders (i.e. government, firms, landowners). However, in a CBA framework, allocation decisions have to be cast in terms of the relative values of the alternative uses being considered.

It is important to stress that the logging and conservation options presented

above are only the extremes of a spectrum of management possibilities. If appropriate,

other options could also be considered, e.g. logging cum tourism, logging cum N1FPs.

In fact, the concept of Multiple Use Forestry tends to emphasise that there are 153

intermediate combinations where total social benefits are maximised. and none of the potential benefitS is presumed to be zero. Thus, managers seek to find ecosystem use combinations that allow, for example, wood production, water conservation. tourism development and biodiversity conservation. Godoy's (1992) formulation is decidedly unhelpful in this regard.

6.2.3. The economic analysis of protected areas

It has been proposed that the CBA approach to natural resource allocation outlined above should be used for the valuation of PAs (e.g. Dixon and Sherman,

1990). The steps suggested by the latter authors for the economic assessment and ' decision-making about PAs may be thus summarised (see Dixon and Sherman, 1990 p.

53).

1. Estimate the net present value of quantifiable benefits of conservation

(NPVCON).

2. Determine non quantifiable benefits of conservation m qualitative terms

(NQBCON).

3. If NPVCON + NQBCON are small, reject the protected area option.

4. If NPVCON + NQBCON are large, estimate the net present value of quantifiable

opportunity costs, that is the foregone benefits that would be derived from

changing the land use of the area (e.g. land clearing for agricultural use)

(NPVMOD).

5. If NPVMOD are small, establish the protected area.

6. IfNPVMOD are large but less than NPVQB, establish the protected area. 154

7. If NPVMOD > NPVCON, compare (NPVMOD- NPVCON) to NQBCON; a

political decision is required.

This framework parallels the decision-making framework described in Section

6.2.1. However, it may be noted that part of the above interpretation of the CBA framework is incorrect The absolute amount of costs and benefits is irrelevant to this type of analysis. It is the size of costs relative to that of benefits that should be considered. Therefore, steps (3) and (5) presented above are irrelevant to the analysis.

Dixon and Shennan (1990) propose that the CBA framework should be adopted· whenever data are available. They note that the assessment of conservation benefits, especially in relation to biodiversity is particularly problematic. When data on conservation benefits are not available, they note, the cost-effectiveness approach should be adopted. It may be argued that their position 'when data is not available' may converge on the same outcome of the position advocated in Chapter Five, i.e. the establishment system of PAs should not be based on an efficiency basis. The difference between these two approaches is that one is based on a specific ethical theory, the other on a problem of difficult practical implementation of the theory available. The problems faced by CBA in the presence of uncert:aiilty and irreversibility have already been discussed in the previous chapter. Other problems regarding the application of

CBA to forests and PAs decision-making are considered below.

6.3. Implementation problems faced by CBA

The problems faced in the implementation of CBA are discussed below mainly in terms of the variables detailed in Equation (3). The difficulties encountered in the monetary valuation of biodiversity (BIO) have already been discussed.in Chapter Five. 155

6.3.1. Distribution, non-timber'forest products, and tourism

CBA is concerned with the efficient allocation of resources. Resource

distribution is either considered of no interest or is seen as the outcome of the process

of efficient allocation of resources, as discussed in Chapter Four.5 However, equitable

development is one of the goals of the over-arching concept of sustainable

development. If governments and development agencies are concerned with

sustainable development, the equity of a policy or project would also concern them.

The issues of national and international resource distribution are examined in turn.

lVationalduhibution

N1FPs provide at times sizeable benefits to the local people who have

traditionally consumed and traded these products. Access to these resources is usually

regulated by institutional rules which determine who has the right to collect the

produce. These rights may be vested with a community, a clan or an individual. The

clearing of a forest, for example by logging operations, may be an activity that is in

competition with the gathering of N1FPs. A decision to allocate the forest to N1FPs

collection or to logging activities will have totally different outcomes depending on the

institutional and socio-economic situation of the specific area. Several hypothetical

combinations of these factors could be considered. Only one, which reflects the actual

condition of several tropical forest areas, is considered here as an example.

5 It has to be noted that there have been attempts, at the theoretical level, to deal with them within a CBA framework. However, the theory is fraught with problems (e.g. Stewart. 1975) and distributional questions are not normally considered in applied CBA (Squire, 1988). 156

Assume that a community owns a forest which provides it with NTFPs. A logging company applies to the government to be granted a logging licence in the community's forest. A CBA valuation of whether to log the forest could obviously result in a conclusion in favour of logging or against it. If the findings are against logging, the .status quo would be preserved. A decision in favour of logging would

mean that the community, which had the right to control the resources, would lose this

right and its resources.6 Whether the community would receive compensation depends

on the specific institutional setting. 7

It is important to stress that these resources may be the basis of the

community's livelihood. In some cases, depriving a community of N1FPs could imply

that the existence of the community itself is threatened. Indeed, de Beer and

McDermott (1989) notes that when N1FPs are an important component of livelihood,

such as in the case of some subsistence economies, physical indices of dependence on

these products may be more appropriate than the monetary values factored in the CBA

equations. The question whether the livelihood of a community should be traded-off

against pecuniary benefits clearly has ethical and distdbutional implications. These

issues cannot be simply reduced to a problem of efficient allocation of resources.

In relation to the actual monetary valuation of N1FPs, it may be noted that

several attempts (e.g. Peters et al., 1989; Cassells, 1992; Grimes et al., 1994) have not

produced satisfactory results. The often cited article by Peters et al., (1989) has been

criticised on several grounds (e.g. Myers, 1990). For example, Peters et al. study

6 Clearly, this would happen if the government has the power to modify the existing structure of propeny rights. 7 If the potential Pareto improvement test is applied, actual compensation would not be required. 157

considered only one hectare of forest. Given the diversity of tropical forests, it appears inappropriate to generalise the results obtained from one hectare to large forest areas.

If this generalisation is undertaken, diminishing marginal value should be taken into account. The high per hectare value of NTFPs recorded in Peters et al. (1989) study would be expected to decline. However, few NTFPs are widely marketed and data on price elasticities are normally not available. Given the considerable resources required to assess even one hectare of forest, it is difficult to see how the resources required to assess accurately large areas of forest could be mobilised.

International distribution

Development economics has extensively debated the question of international distribution of resources, and international conferences on the environment and development have started to consider this issue. Little has been. done on this subject in relation to the valuation of natural resources, and of forests in particular. Exceptions are Ruitenbeek (1992), Flatley and Bennett (1994), Kramer et al. (1994).

The CBA framework presented above should assess all possible benefits from a forest, including those from tourism. The latter may be subdivided into economic benefits to the country from tourist expenditures (BT) and the intangible benefits to the tourists arising from the visit to a unique environment (LTB). Intro.ducing benefits BT and LTB in the calculation of alternative management options presents both theoretical and empirical problems.

The intangible benefits, which may be included in LTB, have been classified into the distinct categories outlined above: option values, existence values, bequest values and quasi-option values. The reliability of estimates of these values is still very much disputed (Bennett, 1992; Common et al., 1993). 158

Given that many tourists visiting tropical countries are foreign citizens, it would be necessary to assess the willingness to pay for the conservation of forests of the citizens of at least all the countries whose citizens choose the country in question as a holiday destination. Obviously, it could also be argued that countries whose citizens do not currently visit the country in question should be surveyed. Its citizens may well have existence values relating to the forest area. Taking this approach presents important theoretical problems.

Two of these problems stand out. Firstly, each individual should be presented with a broad range of choices in order to choose between the allocation of resources for the protection of domestic environments and of several foreign ecosystems. The capacity of individuals to make these kind of choices is at least questionable, due to the arguments presented by Simon (1986) and already discussed in Chapter Four.

Secondly, there is the problem of choosing the population to be considered by the survey. Should only the countries whose citizens visit the area in question be surveyed, or should all countries be surveyed?

There are also more pragmatic problems. Introducing the seemingly innocuous dimension of intangible benefits enjoyed by foreign visitors raises the question of what constitutes 'the society' for which the CBA is carried out. It would appear that with the introduction of NTB, 'society' could refer to the world community. The question is: should a government be concerned about the intangible benefits held by foreign citizens to the point of foregoing substantial economic benefits (e.g. derived from logging activities)?

There appear to be no firm theoretical grounds to answer these questions.

Because of the arguments developed above and in Chapters Four and Five, CBA does 159

not appear to be readily and reliably applied to the valuation of forest ecosystems. It may be argued that CBA has a role in the evaluation of forest ecosystem, but it should be used with due care.

6.3.2. Royalties, alternative land uses, and centralised planning

As exemplified by Pearce (1990), it is often assumed that in applying CBA to land use choices regarding forests, the problematic part is the measurement of the benefits derived from forest conservation. Furthermore, indirect values, option values and existence values appear particularly difficult to assess in comparison to direct values of forest conservation. Values of alternative land use options (e.g. agricultural production) are thought to be 'fairly readily calculated' (Pearce, 1990). However, there is evidence that these views may not be correct.

In Equations (5) and (6), the variable that may appear to be relatively simple to assess is the economic rent from logging activities (TR). Timber is a widely marketed good, unlike many NIFPs. The value of timber may be measured without recourse to questionnaire surveys as it is the case when attempting to assess existence and option values. However, the ·determination of the value of the economic rent that may be derived from logging activities is particularly difficult, and assessments of this variable have been very imprecise. In fact, attempts to determine the economic rent on the basis of the residual stumpage approach have not been very successful and alternative approaches are being implemented. 8 It is sufficient to note here that timber prices are subject to wide variations. This could lead to a situation in which, during a period of buoyant timber price, Equations (5) and (6) could suggest that logging would be the

8 The residual stumpage approach seeks to measure the economic rent generated by logging activities and described in Section 6.2.2. For a more detailed discussion of these issues see Tacconi (1994). 160

favoured option. Conservation would be favoured during a period of relatively lower timber prices. It is relevant to note that CBA provides an estimate at a certain point in time. As soon as the conditions change (and in many cases market conditions change rapidly in timber markets), a re-assessment of the options should be carried out. This is unlikely to be viable because of resource constraints. Notice that in theory re- assessment could take place if the conservation option had been favoured. However, if

logging had been undertaken, an irreversible ecosystem change may have taken place

and conservation would be foreclosed.

The evidence regarding the application of CBA to projects for the production

of marketed goods and services (which should be more readily evaluated in

comparison to the benefits derived from forest conservation) does not show a large

degree of success. There appears to be great divergences between estimated rates of

return and ex post rates of return (Pohl and Mihaljek, 1992; Porter et al., 1991; Ttffen,

1987).

A final and important issue to be considered is the extent to which CBA could

be used and the implications for market processes. The question of concern here may

be introduced with a citation. In discussing biodiversity conservation policies, Randall

(1986) recognises the issue of species interdependence. Taking the argument that

every species is interdependent to the extreme, he observes that if:

'the loss of any species initiates processes leading to eventual ecocastrophe, some choice can

be made, by scheduling the disaster so as to maximize the net present value of aggregate

human benefits between now and the end.' (Randall, 1986 p. 101).9

9 The author would like to note that Alan Randall is cited here simply to exemplify that the specific issue being discussed is not just a 'straw-man'. Randall's important contribution to environmental- 161

In other words, CBA could be applied in a global way to all the resource allocation decisions taken by society. Resources would be allocated through planning, which, according to this view, is a rational and objective allocation process (see

Kornai, 1979). The application of CBA to all the significant resource allocation decisions would imply that the economy is centrally planned. The attractiveness of such an approach is, to say the least, doubtfuL The concluding section of the chapter will provide further consideration of this issue.

To conclude this section, it may be noted that advocates of CBA posit its use,

implicitly or explicitly, on a site-by-site basis. Implicit in this approach is the

assumption that each valuation may be considered as an independent endeavour. Also,

there is no recognition of the specific social, institutional and ecological features which

have shaped the use of forest resources in a country or region. For example, CBA

would be applied in the same way irrespective of the fact that a country may already

have an extensive PA system or may have no PAs whatsoever. It would be applied in

the same fashion to a forest area populated by forest dwellers with acquired rights to

the area or to a totally depopulated forest.

The arguments developed above and throughout Chapters Four and Five

suggest that a shift away from a marginalist approach to forest management is called

for. To summarise, this is due to the existence of:

a) intergenerational and intragenerational distribution questions;

b) large uncertainties about the problems being analysed;

c) iiTeversibility of many changes in ecological systems;

economic issues, and a change in his position, is exemplified by his work on the SMS of conservation discussed in Chapter Five. 162

d) limitations of the CBA framework.

The following section presents further elements of the decision-making framework suggested here. These elements, jointly with the arguments developed in the previous three chapters complete the research and decision-making process proposed in the dissertation.

6.4. An alternative to marginalist decision-making

Land use planning and the macro-environmental standards approach (Lal,

1991), which is an extension of the former, recognise that multiple demands on resources have to be satisfied and attempt to formula~ resource use plans in ways that allow the different needs to be satisfied. An example is aptly described for Brunei

Darussalam by Wong (1992).

There, the Forest Estate is subdivided into Stateland Forest. destined to be cleared for other uses (e.g. agricultural), and Forest Reserves which will remain forested for conservation, preservation or production purposes. Within the Forest

Reserves, forests 'are classified into three broad groups: (1) protection forests, usually located in areas where physical resources are critical to the environment. eg. watershed areas and in places of very steep terrain; (2) conservation forests, where recognised representatives of elements of Bruneian forests exist and are to be kept in their natural state as national monuments for posterity and also act as gene-banks and (3) recreation forests set aside near urban centres to provide for recreational outlets for the people.' (Wong, 1992 p. 63).

Although specific to the institutional and historical situation of Brunei, some

crucial points arise from the above passage. Decisions about forest resources · 163

management require the adoption of several criteria. The efficiency of resource allocation is only one of them, as noted in Chapter Four. Fairness to future generations requires that ecologically important forest ecosystems be conserved, as noted in

Chapter Five. Similarly, watershed protection should be an explicit goal of forest management as it guarantees the sustainable use of agricultural and forest lands. These policies may serve the interests of both the current generation and of the future ones.

The adoption of land use planning principles in forest management is also required for pragmatic reasons. It has been noted above that the lack of data about physical factors such as soil erosion, the hydrological cycle and biodiversity ' characteristics limits the practical applicability of CBA (e.g. Barbier, 1993). Hence, land use planning may be adopted in order to carry out forestry activities while miirimising negative environmental effects.

Standard land use planning and the macro-environmental approach adopt a form of constrained CBA to identify the economic activities to be carried out in each

specific land use area (cf. Lal, 1991). It is argued in the next. section that the identification of suitable economic activities for each area should be based on

participatory appraisal rather than only on a CBA basis.

There are several factors that point to the fact that participatory planning may

deliver better results than standard land use planning, which is a top-down approach to

planning. These are considered below.

6.4.1. Participatory evaluation

Participatory approaches to decision-making have received particular attention

by authors active in what is termed here the people centred approach to development 164

(PECAD).IO The agenda of PECAD is concerned with poverty alleviation, people's empowerment through active participation, gender issues and importance of people's knowledge (Oakley et al., 1991; Scoones and Thompson, 1993). Of particular relevance here is how this approach views the social environment, the role of the researcher and that of the people, and the scientific stance adopted.

According to Scoones and Thompson (1993), five tenets underpin PECAD.

1. Communities and rural people have differentiated interests and goals, power and

access to resources.

2. The learning process approach is adopted; planning is carried out with dynamic and

adaptive implementation of negotiated outcomes; collaboration requires

negotiation and empowerment

3. The outsider is a visible actor in process learning and action, and is a facilitator,

initiator and catalyst

4; The insider is an active participant in the process and is a creative investigator and

analyst.

5. A post-positivist11 stance of investigation is adopted. Participatory research is

favoured.

Various methodologies of participatory research and decision-making

processes have been developed and may be integrated into land use planning. For example, these methods are represented in the writings of Davis-Case (1990) and

10 Some of these authors are, for example, Cernea (1991), Chambers (1994a) and Uphoff (1992). 11 In order to maintain coherence in the terms used in the dissertation it is important to note that Scoones and Thompson (1993) do not adhere to post-positivist philosophy of science as represented, for example, by Phillips (1991). The latter author's version of post-positivism differs only to a limited extent from the positivist paradigm described in Chapter Three. Rather, they appear to lean toward constructivist philosophy. In fact, other authors working within the PECAD approach endorse the constructivist paradigm (e.g. Pretty, 1994). 165

Whyte (1991). Chambers (1994a; 1994b; 1994c) presents a comprehensive overview of the methods and a review of the issues and challenges involved in participatory research.

It is useful to summarise some developments in participatory research. The early 1980s saw the development of rapid rural appraisal (RRA) methods and, as a result. a decrease in the use of survey questionnaires. The development of RRA changed the methodology of information collection. However, as with survey questionnaires, in RRA it is mainly 'the outsiders' (e.g. researchers) who conduct investigations, analyse and own the information. Since the late 1980s, methods of participatory rural appraisal (PRA) have been developed. Some of the assessment tools adopted in RRA are also tised in PRA. The major difference between RRA and PRA rests in the fact that in the latter it is mainly the local people that own, analyse and use the information collected. In PRA, the outsiders act essentially as facilitators. In RRA the research mode is extractive, whereas in PRA it is empowering (Chambers. 1994a).

These methodologies allow the stakeholders to express their views and to participate in the decision-making process. It is apparent that this epistemological position is coherent with the one advanced by constructivist philosophers and detailed in Chapter

Three.

The above features of the participatory approach to decision-making are of particular importance.

First, it can be argued that it is a right of every citizen and community to be enabled to participate in making decisions which may have an impact on their own livelihood. Even when decisions do not affect their livelihoods, the maintenance of

democracy requires that people be consulted. This is the same concern at the basis of 166

the neoclassical economic approach that endorses consumer sovereignty, as noted in

Chapter Four. However, it appears that the participatory approach is better suited to reflecting the actual views of the people. Their views are not derived through a model of simplified individual behaviour, but rather by directly involving them in the decision­ making process. Tlus is a characteristic that should appeal to those economists who are really concerned with the maintenance of democratic processes.

Second, participation allows the stakeholders to express their actual objectives

(ends) and to decide how these may be better achieved (means). NEE assumes that the

ends are given (i.e. maximisation of net present monetary value) and that the choice of

means is not constrained by cultural and moral values. Cultural and moral values may

however detennine not only which are acceptable means but also which are desirable

ends, as detailed in Chapter Four.

Third, participatory research allows people to evaluate the alternative

ecosystem uses according to their specific needs and rationales. Byron (1991) notes

that the net present value of a project is only one of several decision criteria to chose

among projects. Other criteria such as the maximin rule or the minimum regret rule are

no less reasonable approaches than the net present value, an index which is appropriate

when the objective is the maximisation of monetary value. For example, income

stability, food security and avoidance of dependence on others are other criteria

adopted by farmers in evaluating alternative options (Maxwell, 1990). Through

participatory decision-making people may be enabled to express fully their views

ranging from the selfish ones to the other-regarding ones. In this context, CBA may be

applied to assess issues regarding the efficient allocation of resources. It would provide

to the experts and the people important information. It would constitute one of the 167

indicators to be used together with other indicators to make the final decision in relation to the issue of concern.I2

Fourth, a participatory process may help in making decisions of a higher logical content than those made in a 'snapshot' approach, characteristic of questionnaire surveys. Different from questionnaire surveys, participatory decision-making facilitates interaction between individuals and between individuals and institutions. This process may result in a re-conceptualisation and better understanding of the problem faced, in exchange of information and in depth analysis of the problem and data. External experts can provide useful information and help in processing complex data. This interactive process appears to offer support to the' limited computational powers proper of each individual's brain.

. Fifth, participatory evaluation may help in empowering the local people in making better use of their environment and in controlling external forces which may positively or negatively affect their livelihood. It is recognised that local people have an extensive knowledge of their environment However, population changes, technological changes and institutional changes may influence the way the environment is used and some members of the community may not be aware of the possible impacts on the environment For example, a recurrent problem during logging operations is that contractors do not respect environmental safeguards specified in the contract, but local people are not aware of this, nor are they capable of controlling the operations. A participatory evaluation may raise the awareness of the local people about these issues.

12 For example, Conway (1985) proposes four indices. '[i] Productivity is the yield or net income per unit or resource. [ii] Stability is the degree to which production is constant in the face of small disturbances .... [iii] Sustainability is the ability of a system to maintain productivity in spite of a major disturbance .... [iv] Equitability expresses how evenly the products of an agroecosystem are distributed among its human beneficiaries: (Conway, 1985 p. 35). 168

Finally, sufficient scientific data about environmental processes are often lacking and also expensive to collect. These data may be successfully integrated with indigenous traditional knowledge through participatory land use planning (Tacconi and

Tisdell, 1993). This would provide a better information base available for use in planning.

In concluding this section it is important to note that it is not assumed that participatory planning at the local level would necessarily lead to sustainable ecosystem use. It has been noted by Tacconi and Tisdell (1992) that, under certain conditions, participatory decision-making might lead to peoples' empowerment and self-reliance but could create environmental degradation. Therefore, in designing conservation initiatives it is important to assess the local peoples' needs and wants and to determine how these may be linked to ecosystem conservation. Local peoples' needs and wants may or may not coalesce with the interests of other people of the current generation

(who do not live close to the areas being considered for conservation) or with the interests of future generations. Mechanisms to enable these interests to coalesce and/or to resolve conflicts need to be. defined on a case by case basis. The case studies conSidered in Part III of the dissertation exemplify how this has been done in Vanuatu.

This experience may be useful to other countries.

6.5. Conclusion and summary of Part II

Sustainability, distribution and efficiency are important issues concerning the

society at large. A society ought to defme explicitly the targets to be achieved in its

development. These objectives are usually multiple and stem from an interactive

processes between the individuals and institutions. A participatory planning approach 169

can provide a framework for matching the several competing demands which are directed at ecosystems.

Throughout Part ll the shortcomings of the neoclassical economic approach have been outlined. Because of these shortcomings, an alternative decision-making framework to be adopted for the design of forest and biodiversity conservation initiatives, and particularly for the assessment and establishment of PAs, has been

developed. It has been argued that CBA can find useful application within this

framework. However, it would not dictate the values that should be adopted by

society, but it would be used in such a fashion that it serves the values which have been

articulated through a process of conSultation.

The framework for the assessment and establishment of PAs that arises from

the analysis carried out in Part ll of the dissertation may be summarised as follows.

• Ecosystem use patterns should be chosen on the basis of their sustainability and

distributional aspects together with their efficiency aspects. ·

• Systems of PAs should be established in order to achieve, at least partially,

minimal intergenerational equity.

• Intragenerational equity requires the correction of the asymmetrical distribution of

the costs and benefits arising from the establishment of PAs.

• The institutional features relevant to the specific environmental-economic issues

being analysed should be considered.

• The decision-making process should be participatory and action oriented.

This framework has been applied to the assessment and establishment of PAs in

Vanuatu. Part Ill of the thesis details how such a framework may be put into practice.

It considers also practical issues that may enhance the possibility of a successful 170

application of such a framework. Particular attention is devoted to questions relating to: a) different modes of participatory research and decision-making; b) different forms of compensation that may be adopted in correcting asymmmetrical

distributions of costs and benefits; c) institutional influences on ecosystem use and implications for conservation

projects.

One of the stated objectives of the framework developed here is that it should

be suitable to practical implementation and able to impact on the situation being

considered. Part ill of the dissertation, detailing the application of the framework,

provides an assessment of the achievement of such an objective. Chapter 7 Institutions and Stakeholders in Forest Management in Vanuatu

7.1. Introduction

A theoretical framework for the assessment and establishment of PAs has been developed in Part II of the dissertation. In Part ill, the application of. this framework to

Vanuatu is presented.

Part ill starts in this chapter with details of the geographical and institutional

aspects that characterise the forest sector in V anuatt:i. The following two chapters are primarily dedicated to the analysis of the first case study, the Erromango Kauri Protected

Area. The second case study, a sequence of PAs in the island of Malekula is considered in

Chapter Ten. The conclusions for the dissertation are drawn in Chapter Eleven.

Detailed analyses of the forest management options faced by the stakeholders, some of their views and decisions will be presented in the following chapters. Before proceeding with those analyses, an initial understanding of the institutions, of the possible positions that the stakeholders may adopt and of some of their views is required. It was noted in Chapter Three that an in depth knowledge of the context being studied is required. It is the principal objective of this chapter to present the information that was used to gain an understanding of the Vanuatu context. This information should also be beneficial to other researchers and decision-makers in assessing the transferability of the results of the research process described in the following chapters.

Special attention is given in this chapter to landowners' attitudes towards forest

172 173

conservation. The relevance accorded to landowners' attitude is due to the following reason. The p3.rticipation of landowners in the process of assessment and establishment of

PAs is a significant component of the theoretical framework developed in Part II of the dissertation. Therefore, it is important to obtain a general understanding of the factors that may guide landowners' choices. In Vanuatu, the importance of landowners' participation in the process of assessment and establishment of PAs is reinforced by the fact that all the forests are owned by landowners. The Government of Vanuatu does not own forest areas.

A view widely held by conservationists is that if the local rural people own the forest they will protect it. This view is considered in detail. In fact, if this assertion was correct, there would be no need for external intervention in order to ensure 'appropriate' levels of forest conservation in Vanuatu, given that the forests are owned by local rural people. In considering this argument, particular attention will be given to the role played by forests in ni-Vanuam peoples' livelihoods, to local peoples' attitudes towards conservation and towards future generations.

The chapter proceeds as follows. The geographical background is provided in

Section 7 .2. The institutions that have a relevant role in forest management are considered in Section 7 .3. A view held by conservationists in relation to the attitudes of rural people to forest conservation is presented in Section 7.4. The attitudes of rural ni-Vanuatu people regarding forest management are considered in Section 7.5. The conclusions for the chapter are presented in the fmal section.

7 .2. Geographic background

The Republic of Vanuatu is located in the Western Pacific ocean (Map 7.1). It is a 174

Y shaped archipelago comprising more than one hundred islands and islets which extend

2 about800 km North to South. The total land area is about 12,270 km •

7.2.1. The climate

The climate gradually changes from tropical in the North of the country to sub­ tropical in the South. The Southern islands experience cooler weather than the Northern islands. Mean annual rainfall is normally greater than 2000 mm for all islands, with the

Northern islands reporting a higher annual rainfall than the Southern islands. Most islands receive more annual rainfall on the windward sides than on the Western and North­

Western lee sides. On the leeward sides, total annual rainfalls of less than 1800 mm and greater degrees of rainfall seasonality are recorded. At Port Vila, the national capital situated on the central island of Efate, the average humidity is about 80 per cent and average yearly rainfall is about 2300 mm. During the rainy season, from December to

April, all islands of the archipelago may experience cyclones.

7.2.2. The population

Approximately half of the islands and islets of Vanuatu are inhabited. The last national census (1989) recorded the total population at 142,944. Contact with Europeans in the 19th century resulted in a decline in total population because of the introduction of exotic diseases and 'black-birding', whereby local people were 'recruited' to work in sugar and cotton plantations in Queensland (), Ftii and New Caledonia. It is very difficult to give even an approximate estimate of pre-European contact population in

Pacific countries (Scarr, 1990). However, it is thought that the pte-contact population was several orders of magnitude greater than that present in the country in the 1940s and 175 Map 7.1 The Re,public of Vanuatu

-1 166' 0 ~. HIU 168' 170' :0 p :0 II rn 9 ~.., Ul 0 1-1:; {2 VANUA LAVA J:A IS' ~-va& () Q .,. N i4' ~ 14 ~ GAUAO 0 (jl

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16'

. . EPI~. q tiJ .o

0 100

16() ·. 180' ...

"" ... ~-. . • · .... ~· ERROMANGO FIJI . VANUATU' J ,. : ':·.:.:...... ~ ~ . NEW CALEDONIA FUTUNA TANNA' •

'NEW ZEALAND 20' 20 ....____. ANEITYUM 160' }:;:. eo· Q)170' 176

1950s when it was in the range of 40,000 to 50,000 (Government of Vanuatu, 1991).

MacClancy (1980) notes that about 3,500 people lived on the island of Aneityum in 1850, but by 1905 that population had fallen to 435 (in 1989, the population was 543). Before the discovery of sandalwood in 1825, about 4,500 people lived on Erromango but by 1930 only about 500 people inhabited the island (in 1989, the population was 1,254).

Total population doubled between 1967, when the first full census was conducted

(77 ,988 inhabitants), and 1989 (142,944 inhabitants). Despite the high population growth rate of 2.4% per annum between 1979 and 1989, the crude population density is still

2 relatively low: 11.6 inhabitants per km • The population: is distributed unevenly across the ' country, with some small islands having a population density of more than 100 inhabitants

2 perkm.

The population is mainly concentrated along the coastline (see CSIRO and DPI,

1993). This is partly due to the strong migration flows from inland areas to coastal areas, a phenomenon which began with the arrival of Europeans in the 19th century. Ni-Vanuatu were attracted to the coastal areas by the presence of missions, health facilities, schools and trading posts.

Vanuatu is one of the linguistically most diverse countries in the world. With about one hundred and ten languages spoken, it has the highest ratio of languages to total population. French and English are both widely spoken across the country. Bislama

(Vanuatu pidgin, mainly derived from English) is the lingua franca.

7.2.3. Forests and biodiversity

Because of the relative geological youth of the country and its isolation, forest 177

ecosystems in Vanuatu are not as diverse as those found in South-East Asian countries,

Papua , and New Caledonia. In general, they present a relatively low rate of endemism (Schmid, 1978). The vegetation structure has been

extensively influenced by volcanic activities, cyclones and by centuries of human interaction with the environment. The secondary forests and thicket formations which cover extensive tracts of depopulated inland areas are partly due to the shifting cultivation

activities of the pre-contact population.

Before presenting the data available, the definition of forest adopted here and the limitation of data available must be noted. The defmition of forest given in the computer­ based Vanuatu Resource Information System (VANRIS) (see Bellamy, 1993) is employed here. The term forest refers to those ecosystems where vegetation cover is primarily composed by trees of height greater than ten metres.

The inventory of forest resources (completed in 1993) is based on aerial photographs taken during the period 1984-86. The forested land area and the extension of the various forest types are overestimated, given that the deforestation caused by logging and agricultural activities carried out during the period 1984-86 to 1993 are not accounted for.

Vegetation types and their areas are presented in Table 7 .1. This table shows that just over one third of the country is forested, with thicket formations approximately matching the forest cover.

The forests of Vanuatu reach lower heights than those of South-East Asia,

New Guinea and the Solomon Islands. They rarely exceed 30 metres in height. Forests with trees taller than twenty metres (hereafter midheight forests) occupy less than 17% of 178

the total land area. A further 19% of the land area is covered by low forests (tree height between ten and twenty metres).

Table 7.1. Vegetation coverofVanuaw.

Vegetation type Area Percentage of (ha) land area Midheight forest (20-30m) 205307 16.73 Low forest (10-20m) 234089 19.08 Woodland (<10m) 386 0.03 Thickets (3-8m) 433941 35.37 Scrub (<3m) 45018 3.67 Grassland 51128 4.17 Swamp communities 2261 0.18 Mangroves 2519 0.21 Other (a) 252256 20.56 Total land area 1226905 100.00

(a) Bare ground or human made.

For Vanuatu, forest types have been described by several authors (Schmid, 1978;

Dahl, 1980; Barrance, 1988) and may be thus summarised:

(a) Low land raii:lforest:

(1) climax closed canopy high forest, which is mainly found on windward wetter

slopes;

(2) cyclone-perpetuated two-storeyed closed canopy high forest, such as the kauri

( macrophylla) forest on Erromango;

(b) semi-deciduous forest, mainly found on leeward drier slopes, such as those forests

found on Malekula;

(c) altitude-influenced forest (montane and cloud forests), found for instance on Santo and 179

Tanna;

(d) riverine and swamp forest;

(e) forest.

The fact that the forest ecosystems of Vanuatu are not as diverse as those of some neighbouring countries does not imply that they have a low conservation value. Dahl

(1986) found that, from an ecological standpoint, several islands of the Vanuatu archipelago are of conservation importance for as a region.

There is a dearth of infonnation on the ecological characteristics of forest ecosystems in Vanuatu. What follows is, therefore, a brief summary of the zoological and botanical infonnation which indicate the variety of species which may be supported, directly or indirectly, by the nation's forest ecosystems. It has to be stressed that this is a very partial list of species inhabiting Vanuatu. As taxonomic research proceeds, new species are being discovered. A list of species which may be supported by the forest ecosystems includes (Bregulla, 1992; Chambers and Bani, 1988; Darby, 1992):

• 12 species of , 1 endemic;

• 121 species of birds, 7 endemic;

• 21 species of reptiles, 3 endemic;

• 80 species of , 3 endemic;

• 22 species of earthworms, 11 endemic;

• 12 species of ants and termites, 5 endemics;

• 73 land snails, 60 endemics;

• 700 species of mosses;

• 900 species of plants, 135 endemics. 180

Proposals for the protection of forest biodiversity in PAs have been put forward since the 1970s (e.g. Dahl, 1980; Lee, 1975). In July 1992, when research for this dissertation began, none of these suggestions had yet resulted in the establishment of PAs in Vanuatu. Therefore, no forest ecosystems were formally protected.

7.3.1nstitutions and forest management in Vanuatu

The Constitution, adopted at independence in 1980, is an appropriate starting point.! According to Article 7(d), one of the fundamental duties of every citizen of

Vanuatu is: 'to protect the Republic of Vanuatu and to safeguard the national wealth, resources and environment in the interests of the present generation and of future generations'. It is opportune to recall that the analysis carried out in Chapter Five, regarding intergenerational equity and resource distribution, aimed at making operational this article of the Constitution in terms of the economic analysis of conservation initiatives, and particularly of PAs. Further attention to the issue of future generations is given in

Section 7 .5.2.

7.3.1. Land tenure in Vanuatu

Chapter 12 of the Constitution deals with the issue of land. The first three sections of that chapter state the fundamental principles guiding the post-independence land tenure system. They respectively affmn that: (i) all land belongs to the indigenous custom owners and their descendants (section 71); (ii) custom rules are the basis for the ownership and

1 Until 1980, Vanuatu was a colony ruled jointly by and the through a Condominium Government 181

use of land (section 72); (ili) only indigenous citizens2, who have acquired land in accordance to custom rules, can have perpetual ownership of the land (section 73).

A first-hand explanation of the process of adopting the Constitution is provided by

Narokobi (1981), who worked with the Constitutional Planning Committee. He points out that the particularly strict principles regarding land tenure established in the Constitution are the outcome of two main factors: (a) the strong bond that ni-Vanuatu have with their land; and (b) the episode of land alienation experienced under European rule.

The relationship between ni-Vanuatu people and their land is a fundamental and permanent aspect of Melanesian culture, which colonisation and recent history have not been able to change (Bonnemaison, 1984). In the words of the first Minister of Lands of the independent Republic of Vanuatu, Mr Sethy Regenvanu, 'it is with the land that he [a ni-Vanuatu] defines his identity and it is with land that he maintains his spiritual strength.'

(cited by Van Trease, 1987 p. xi). These sentiments are reflected in the fact that land is not normally sold in Vanuatu. Land is:

'at the heart of the operation of the cultural system. It represents life, materially and spiritually.

A man is tied to his territory by affinity and consanguinity. The clan is its liwd, just as the clan is

its ancestors. Each man must have a place, some land which belongs to him, which is his

territory. If he does not control any land, he has no roots, status or power. In the most extreme

case this means he is denied social existence.' (Bonnemaison, 1984 p. 1).

In relation to the colonial experience, Narokobi (1981) notes that, at the end of the

1960s, indigenous people held about 64% of the land. Europeans, who formed about 3%

2 According to Article 9 of the Constitution, an indigenous citizen is 'a person who has or had four grandparents who belong to a tribe or community indigenous to Vanuatu'· or ' a person of ni-Vanuatu ancestry who has no citizenship, nationality or the status of an optant'. 182

of the population controlled about 30% of the land and a greater percentage of the best

agricultural land. Most of the alienated land was acquired with transactions which could hardly be described as fair. The boundaries of the transactions where most often not identified and the legitimate owners not ascertained. Furthermore, the implications of the

transactions were not explained to the 'vendors' and probably not understood by them,

given that the concept of permanent alienation of land did not exist in ni-Vanuatu culture

(Van Trease, 1984; 1987).

The rights of landowners to their land are attenuated by the constitutional Articles

76 and 77. They enable the Parliament to legislate in relation to land ownership. They

assert that compensation should be paid to those persons whose interests are adversely

affected by such a legislation. The Land Acquisition Act No. 5 was passed by Parliament in

1992. This Act gives to the government the power to declare any area in the country

public land, if it is recognised to be of public importance. In theory, this legislation could

be used by the government in order to acquire land to be used for conservation purposes,

provided that appropriate compensation was paid to the rightfullandowner(s). However,

it seems rather unlikely that the government would be willing to face the negative political

consequences arising from the enforcement of this legislation with the objective of

establishing PAs. Because of the strong attachment that people appear to have to their land, an enforcement of this legislation could result in social and political unrest

Before proceeding in the analysis it is important to clarify the concept of customary ownership of land as it applies to Vanuatu. Customary ownership means that 183

custom rules regulate. land issues, such as control and inheritance. 3 In Vanuatu, land

ownership is normally entrusted to individual landowners or to the members of a family

(e.g. father and son, cousins). Customary ownership should, therefore, not be confused

with common property. The land tenure system of Vanuatu differs substantially from that

of and the Solomon Islands, where the land is owned by clans usually

under a common property regime (Rodman, 1987). This has important implications for the

management of natural resources, and for the eventual form of the economic incentives to

be provided to the local people in order to establish a P A This issue will be considered in

detail in Chapters Eight and Ten.

The land certainly is not the only resource the control of which is important. For example, resources such as trees and fish appear to provide an important contribution to

the livelihood of ni-Vanuatu people. The structure of.control over these various resources varies across the country. Rather than making broad generalisations, the specific property

regime will be outlined when considering the specific case studies in the following

chapters.

7.3.2. Formal and informal organisations and their role in forest management

This section outlines the role of formal and informal organisations in the process of forest management in Vanuatu.

The Department of Forests

According to the Forestry Act of 1982 (and successive revisions), the Minister for

Agriculture, Livestock, Forestry and Fisheries has the political and administrative

3 See Keessing and Tonkinson (1982) for a discussion about the meaning of custom. Larmour (1984) covers a range of issues in relation to land tenure in Vanuatu. 184

responsibility for forestry. The Minister is responsible for the 'proper management and development of the forest resources of Vanuatu.' (Article 2(1) of Forestry Act.) The

Minister normally exercise these powers through the officers of the Department of

Forests.

Any timber utilisation operation4 carried out in Vanuatu requires a timber licence, which is issued by the Minister. Any utilisation operation undertaken without a timber licence constitutes a criminal offence. It should be noted, however, that people cutting trees on their land do not need a timber licence.

Formerly, the Forestry Act (Article 21) provided the Minister with the power to forbid or restrict utilisation operations in order to: a) prevent soil erosion and water pollution; b) preserve the ecology of a specific area; c) conserve an area of scenic, cultural, historical or national interest; d) preserve the land for recreation purposes.

However, articles 2l(c, d) have been repealed after Parliament passed the National

Parks Act No.7 of 1993. As it has been noted by Forster (1991), Article 21 did not give the power to the Minister to establish PAs. Indeed, before the introduction of the National

Parks Act, Vanuatu did not have any law enabling government or private organisations to establish PAs. It is important to note, however, that traditionally landowners and chiefs have the capacity to declare a particular site (or resource) a taboo area (resource). This prerogative has been used extensively throughout the country. However, it appears that

4 Utilisation operation refers to the felling of trees for purposes such sale of logs and sawmilling (Forestry Act, Article 1). 185

the traditional rights of landowners and chiefs are being eroded in several areas of

Vanuatu. This issue will be further discussed in Chapter Ten.

After detailing the statutory position of the Minister and of the Department of

Forests a few remarks on their informal positions regarding forest conservatio~ are in order.

First, it may be noted that the conservation aspect of forest management has normally been attributed a low priority within the Ministry and the Department of Forests.

1bis is exemplified by the fact that, to the author's best knowledge, all the foresters employed by the Department of Forests during the last ten years had all been trained in forest utilisation and plantation. No forester had formal training in conservation issues.

Furthermore, the Department of Forests' organigram did not provide for any departmental section to deal specifically with conservation issues (see Republic of Vanuatu, 1987).

A verbal exchange between two high ranking forestry officers, occurred at one of the last staff meetings of the Department of Forests that the author attended in June 1995, characterises well the point made above.

First officer: 'I get cross when people describe us [Department of Forests] as

promoting logging. I think that the Department of Forests is just trying to

mediate between the landowners and the companies'.

Second officer: 'Maybe this view is due to the fact that the previous director and

minister pressed hard for logging to take place'.

During the two and half years (January 1993 - June 1995) that the author spent in the Department of Forests working for the ACIAR funded project, the Research Assistant

(Mr Livo Mele) and the author were considered to constitute 'the conservation section' 186

of the Department of Forests. At the end of the ACIAR funded project, a Conservation

Section has been set up by the fonner research assistant, the forest botanist and the

curator of the herbarium.

The Environment Unit

The Environment Unit is currently part of the Ministry for Natural Resources. The

Unit has undergone a continuous series of changes of Ministries. Forster (1991) notes that

the Environment Unit u5ed to be part of the Ministry of Lands, then it was moved to the

Ministry for Home Affairs. At the time when Forster (1991) prepared his report, the

Environment Unit had only two professional staff. In 1995, the Environment Unit had four

professionals. Forster (1991) notes that the Environment Unit advises the government on

the environmental impacts of proposed projects, monitors the status of natural resources,

promotes environmental education and also looks after the adoption by the Government of

Vanuatu of international treaties.

It may be noted, however, that the Environment Unit not only appears to be

understaffed in order to undertake the above tasks. It also lacks resources for the limited

staff to carry out their duties effectively. This is exemplified by the fact that the Unit does

not have a single vehicle. The continuous shifting of the Unit between Ministries jointly

with under-staffmg and limited resources available would seem to point, at least in the

past, towards a lack of government interest in relation to environmental issues.

In 1993, the Environment Unit produced the Vanuatu National Conservation

Strategy (Environment Unit, 1993) with the assistance of South Pacific Regional

Environmental Programme, the Australian Agency for International Development and the

World Conservation Union. The Conservation Strategy was prepared through a process 187

of consultation with the people through meetings in various islands and a series of workshops attended by community representatives. The Conservation Strategy presents a comprehensive review of the environmental issues faced by Vanuatu and sets conservation goals and priorities. However, it does not specify what resources will be used to achieve the goals. Another significant question is that the goals and priorities laid out in the

Conservation Strategy are not binding for the various government departments that are supposed to implement those recommendations. Fmally, and of particular relevance to this study, the Conservation Strategy states that PAs should be established in Vanuatu.

However, it does not identify any area that should be given priority consideration for conservation status.

It has already been noted above that in 1993 the National Parks Act was passed by parliament The Minister of Natural Resources is responsible for national parks. The Act provides for a Board of National Parks with advisory role to the minister. The heads of several. departments and units comprise the Board. Currently, the Director of the

Department of Forests is the chairman of the Board. More details about the National

Parks Act will be considered in Chapter Ten.

The Local Government Councils

Forster (1991) reports that Local Government Councils (LGCs) have a number of

direct and indirect5 environmentally-related powers. They may:

a) regulate fishing activities with one nautical mile seaward of the low-water mark (direct

power);

5 Direct powers means those powers that are attributed the LGC in its own righL Indirect powers are those exercised in cooperation with and as an agent for the national government (Forster, 1991). 188

b) allocate agricultural priority areas, provide agricultural extension services and protect public health (indirect powers).

In 1994, the Bill for the Decentralization and Local Government Regions, Act No.

1 of 1994, was passed by parliament This Act expands the powers of the LGCs in several areas. Of particular interest, here, is the fact that a LGC can now make by-laws to:

'Outline, create and draw up regulations governing the environmental protection

zones (natural parks, natural reserves or tourist-attraction areas) subject to any

legislation creating environmental protected areas in the national interest'. (Section

20(9), Act 1 of 1994).

As it will be stressed in Chapter Ten, this institutional change influenced the approach adopted for establishment of PAs in the second case study.

The Chiefs

Chiefs still have an important place in the Vanuatu society.

Their role is recognised in the Constitution. Chapter 5 of the Constitution provides for the establishment of the National Council of Chiefs. The members are chiefs elected by peers in their respective District Council of Chiefs. The National Council has an advisory role to the parliament and the government It may be consulted, and may make recommendations, on any question but especially on issues relating to custom. Chiefs may also sit in the Supreme Court and in the Court of Appeal, when requested by the parliament They are the backbone of village and island courts that normally deal with custom issues. Of particular importance, the island courts are the first step in addressing land disputes. 189

A major infonnal role of a village chief is that of mediator, for example in the case of a dispute. He also represents the village community in several situations, like customary and official events.

Chiefs have a role in the approach to conservation developed in this dissertation.

This will be outlined especially in Chapter Ten.

Mter having outlined the geographical and institutional background, the analysis can now proceed to consider some issues concerning the views and role of the local people in relation to conservation questions. Before considering the specific case of

Vanuatu, it is useful to summarise a view widely held among conservationist in relation to local peoples' role and attitudes to conservation.

7.4. Peoples' role and attitudes in relation to conservation

An influential view among conservationists regarding local peoples' attitudes to, and their'role in, conservation is that exemplifred by Colchester (1994). He argues that it is important for the conservation of forests that these should be subjected to local control.

Given that local peoples' livelihood depends on the forest, the argument goes, they would conserve them. Colchester recognises that factors such as population growth and social and technological change may influence the capacity of local people to manage forests.

However, he seems to hold strongly to the view that if people were in control the forests they would conserve them. This is exemplified by the fact that he uses the case of Papua

New Guinea, a Melanesian country whose forest resources are customary owned, to 'test' his views.

This issue is particularly relevant to this study. If the Colchester position (i.e. that 190

if local people control the forest they would conserve if') is correct, it would mean that in

Vanuatu, a country whose forest resources are controlled by local people, there would be no need for intervention in the forest sector in order to protect (part of the) forests. It is apparent, therefore, that it is useful to consider Colchester's (1994) arguments in some detail. To do so, let us quote him at some length.

'In Papua New Guinea, collective land rights are strongly protected by the law, making this a

crucial testing ground for such arguments. On the face of it, the situation is not encouraging.

Despite secure land rights, New Guinean communities have frequently negotiated away rights over

their lands, by leasing them to logging and mining companies in exchange of royalties. Only later

have they come to regret the massive damage that their environments have sustained from such

operations.' (Colchester, 1994 p. 86).

But the hypothesis may still be saved.

'However, closer examination reveals that the issue is not so simple. Imprecisions in the law have

meant that, while the principle of collective landown~p is clearly recognized, the law does not

make clear who has rights to negotiate land deals. Outside enterprises have taken full advantage of

this loophole, by such means as creating fake landowner companies, exploiting internal divisions

within the societies, bribery, extortion and debt leverage' (p. 86). But some problems still remain:

'even once these examples are discarded, there remain cases where apparently representative

landowner associations have allowed their lands to be exploited' (Colchester, 1994 p. 86).

However, there are two factors probably specific to Papua New Guinea that may have caused this to happen.

6 It is important to stress that it is not questioned the need for local peoples' involvement in planning and management of forest resources. Part II of the dissertation has in fact argued for participation in decision­ making processes. What is doubted here is the 'black and white' view that if people control the forest they will conserve it 191

'Perhaps the principle reason is that many Papua New Guineans are very inexperienced in the cash

economy and even less aware of the s

enterprises .... Another factor ... is that the rate of social change has been unusually rapid. As a

result many New Guineans have unreal expectations about what is achievable. Crucially, many no

longer believe that their own future, much less that of their children, lies on the land.' (Colchester,

1994 pp. 86-87).

Colchester (1994) then goes on to remark that land use decisions, such as logging, in certain cases may be taken by the local community leaders who act on their own interest rather than in the community's one.

Colchester (1994) concludes his analysis by noting that the state should divest itself of control over the land and transfer it to the local communities that would have, therefore, decisive voice in planning. It has already being noted in this chapter and in the previous ones that stakeholders' participation in decision-making is a fundamental element of the decision-making framework developed in the dissertation. It is, however, important to stress that it should not be assumed that if the state divests itself of control over forest ecosystems in favour of local communities, or if forests are managed by the local people who already are the owners, this will result in sustainable management and/or forest conservation. Individual preferences, availability of information, capacity to process information and existence of appropriate institutions are some of the factors that influence the pattern of resource distribution between stakeholders and allocation to different uses.

This implies that each case has to be considered in its own right and the factors that influence forest management identified.

A position that is complementary to Colchester's (1994) is that expressed by

Swaney and Olson (1992). They argue that the livelihoods of indigenous people are 192

threatened because the ecosystems on which they rely are being destroyed by activities such as ranching, mining, and logging. One solution they suggest is that Western consumers should refrain from purchasing the products that are derived by activities such as the above mentioned ones that contribute to the destruction on indigenous peoples' ecosystems.

The view stated above raises important questions to be considered in the Vanuatu case. Will ni-Vanuatu people conserve (part of) the forests without external intervention?

If they appear not to do so, why? What are the factors that seem to drive deforestation?

These questions will be addressed initially in the following section and in more detail in the · following chapters .

.7.5. People and forest conservation in Vanuatu

Peoples' views about, and knowledge of, logging operations, the contribution of

NTFPs to local peoples' livelihood and their views about conservation are all factors that influence decisions concerning the allocation of forest ecosystems to different uses. These issues are considered in this section mainly with the aim of providing provisional answers to the questions raised at the end of the previous section. The following analysis also complements that carried out in Chapter Five and provides background knowledge for the analysis to be presented in the following chapters.

The views of the local people are detailed below by relying mainly on local peoples' answers to a questionnaire (reported in Appendix 7 A). 7 The interviews addressed

7 The problems faced by the falsificationist approach have been considered in Chapter Three. The analysis presented here should be regarded as providing background knowledge in relation to the phenomena studied. It is not intended to test hypotheses. For example, it is used to provide an indication of whether the analysis presented in Chapter Five is sharply dissonant with the views of the local people. It does not 193

a series of issues relating to forest management The information collected through the questionnaire was also used to: a) gain a better understanding of the pattern of forest ecosystems use and of the issues

related to logging activities - this provides useful background knowledge for the

analysis reported in following three chapters; b) gain a better understanding of the view of the inhabitants of the island of Erromango in

relation to the proposed establishment of a PA on their island - this provides useful

information for the process of establishment of the P A considered in Chapter Eight c) derive information relating to sandalwood - this information is useful in the analysis

presented in Chapter Nine.

The questionnaire was tested by carrying out twelve interviews (three in the island of Efate and nine in the island of Erromango ). The questionnaire was administered in the island of Erromango during the period between 7 November and 17 November 1993. It was prepared after gaining some knowledge of the local environmental and socioeconomic characteristics through a two-week visit to the island of Erromango during the period June

- July 1993.8 Seventy-five household heads were interviewed. This sample represents about thirty-four per cent of the households enumerated in Erromango during the 1989 national population census (Vanuatu Statistics Office, 1991). The interviews were carried out in Bislama by Livo Mele (Research Assistant) and the author. Mr Mele took part in all

intend to provide the basis for a generalisation of the form 'rural people care for future generations'. The analysis carried out with the support of the questionnaire survey is also used to generate working hypotheses such as in the case of NTFPs. 8 During that visit, the author undertook research regarding the assessment of the Erromango Kauri Protected Area. This will be discussed in detail in the next chapter. 194

interviewing sessions and helped to clarify the issues being discussed. He did not administer questionnaires on his own.

It is important to note that the island of Erromango has the second largest stock of merchantable timber in Vanuatu after the island of Espirito Santo.9 The total population of the island has been estimated at 1,254 inhabitants (Vanuatu Statistics Office, 1991). The

2 pop·ulation density is low: 1.4 inhabitants/km •

7 .5.1. Views and knowledge about logging activities

This section considers landowners' views and know ledge of issues relating to logging activities. These are presented by first considering landowners' answers to some of the questions contained in the questionnaire.

Of a total of 75 respondents, 28 respondents did not own land with merchantable logs. Landowners' classified in the latter group tended not to answer some of the questions relating to logging activities that are considered below. Therefore, only the views of the landowners owning forests with merchantable timber are considered in this section (47 respondents).

Only four respondents had logging operations carried out on their land in the past

(Question 3). In two case logging had occurred when the respondents were young boys.

In the other two cases, logging operations took place on a very limited part of the respondents' land. The income was very small and no new income generating activities were started as a result of logging.

9 Various estimates of the merchantable timber available in Erromango have been presented. At the time when the author was based at the Department of Forests of Vanuatu, forestry officers appeared to accept 3 an estimate of about 400,000 m • 195

Landowners' views and knowledge about issues regarding logging activities are summarised in Table 7 .2.

Most landowners had either signed a logging contract (78.7%) or were contemplating to sign one (12.8%). Only four landowners had not signed a logging contract because of their aversion to logging activities. Two of the landowners that had signed logging contracts indicated that they had reconsidered their decision and did not want logging to go ahead.

A relatively large number of landowners (19) did not have plans for the use of the land where logging was proposed to take place. Probably, this is partly due to the availability of land in Erromango, to the difficult access of certain areas, and to a lack of access to markets. However, the majority of the landowners indicated that they had plans to use parts of the areas due to be logged. Smallholder cattle grazing and replanting of logged over areas appear to be the most popular proposed post-logging activities. It has to be stressed that the landowners indicated that they hoped that the company would carry out the replanting activities.

Landowners appear to have a reasonable degree of understanding of the potential positive and negative aspects of logging activities. It should be noted, however, that this seems to be more so in relation to positive aspects (only 3 'do not know') than in relation to negative aspects (10 'do not know').

With respect to the positive aspects, the income generating potential of logging activities appears to be the main concern. This was, however, often cited together with the expectation that the logging company would build a road. Currently, the majority of the villages in Erromango do not have road access and pack animals are not available. In the 196

Table 7 2. Views and knowledge about logging activities (Number of respondents: 47).

Have you recently signed a logging contract? (Question 4.)

Yes 37 (78.7%) Not yet 6 (12.8%) Not interested 4 (8.5%)

How do you plan to use the area once it has been logged?

ACTIVITY NUMBER OF PERCENTAGE CITATIONS No current-plan 19 33.9 Cattle project 16 28.6 Replant logged areas 10 17.9 plantation 4 7.1 Plant sandalwood 4 7.1 Plant kava* 1 1.8 Plant coffee 1 1.8 Make szarden 1 1.8

What are the positive aspects of logging? (Question 5.) ' POSITIVE ASPECI'S NUMBER OF PERCENTAGE CITATIONS Donotknow 3 4.2 I do not like logging, no positive aspects 3 4.2 It generates income 27 38.0 The logging company will build a road 25 35.2 Sawn timber will become available 7 9.9 Logging brings employment 3 4.2 The company will replant trees 2 2.8 The company will build a school 1 1.4

What are the negative aspects of logging? (Question 6.)

NEGATIVE ASPECI'S NUMBER OF PERCENTAGE CITATIONS Donotknow 10 13.7 No negative aspects 1 1.4 Some damage, but it is ok if distant from village 1 1.4 It pollutes rivers 24 32.9 Trees left standing are damaged 11 15.1 It damages the environment 7 9.6 Fish dies 6 8.2 The soil is negatively effected 3 4.1 It damages custom sites 3 4.1 It pollutes the sea 2 2.7 It creates problems for the birds 2 2.7 It damages fruit trees and other useful plants 2 2.7 Timber cut is left in the forest 1 1.4

* Piper methysttcum. 197

words of a landowner 'this makes life on the island very hard'. Many landowners indicated that having a road built was their main reason for signing a logging contract Notice that

Southgate et al. (1991) indicate that insecurity of land tenure and the existence of roads contribute to tropical deforestation. However, the data presented above suggest that deforestation may occur even in the presence of land tenure security, and that the need for roads is actually a driving factor in landowners' decisions to have their areas logged.

The landowners appeared to recognise most of the negative environmental impacts associated with logging activities. Most of their concern seems to be directed at river pollution10 and damage to the trees that are not being logged. Other concerns such as ' potential damage to custom sites (e.g. graves) and soil compaction were also cited.

Landowners' awareness of the implications of logging operations are partly due to the indirect or direct experience that some of them have gained during previous logging operations in the island.11 It is useful to consider the issue of landowners' awareness in more detail. This is done by first considering the findings of a report, then by presenting a fact relating to the author's direct experience.

Nalial and Wyatt (1995) consider the level of knowledge that Erromangan landowners held in relation to the content of the pro-forma logging contracts (Schedule

Two, Forestry Act) they had signed. Through their village meetings and interviews, they find that 'landowners do not feel that they have enough information about the Logging

Agreements that they have signed.' (Nalial and Wyatt, 1995 p. 13). They recommend that

10 This could be due to the fact that Erromangan people, like most people in Vanuatu, rely on rivers for their daily water requirements. I I Logging operations took place on the island during the late 1960s and early 1970s, and during the late 1980s and early 1990s. 198

the Department of Forests should devote more resources to a more detailed explanation of

logging agreements when these are being signed. Note, however, that the fact that the landowners' do not have enough knowledge of the logging agreements does not imply

that they have a limited understanding of the issues concerning logging activities.

It is useful here to detail the facts related to an attempt aimed at increasing landowners' awareness of logging issues.

In 1993, the Vanuatu Association of Non-Government Organisations (V ANGO), decided to provide support to the Erromangan landowners in raising their awareness about the possible negative (environmental) impacts of logging activities. To achieve this goal,

V ANGO organised a visit by four Erromangan landowners to logging operations in the

Solomon Islands.l2 The author (who was due to visit Erromango, and because of his previous contacts with the local people) was asked to select the four landowners. The author, after carrying out the interviews partly detailed above, asked the local people to select their own representatives to visit the Solomon Islands, if they were interested in doing so. The four landowners from various areas of Erromango were selected. Later, one decided not to go. The reason for the withdrawal was that he was on the Board of a company that was being established by the landowners (with the support of a foreign company) with the aim of better controlling logging activities, and in the hope of increasing their revenues from these activities.

12 The decision to send the landowners to the Solomon Islands was partly based on the fact that one of the logging companies that at the time intended to operate in Erromango was also operating in the Solomon Islands. The logging standards of this company were regarded as rather destructive by foresters in the Solomon Island Department of Forestry. 199

Three landowners and one staff from the Vanuatu Cultural Centre (who recorded the visit on video) visited the operations in the Solomon Islands. The group then returned to Erromango. The landowners reported their impressions to the local communities. There has been no formal assessment of the impact that this event may have had. It may be safely assumed that it did increase the knowledge held by (some) landowners in relation to the impacts of logging activities. However, logging activities are still scheduled to take place in Erromango.

The view that the local people, who own the land, may agree to logging activities out of ignorance of their potential negative impacts is put into doubt by the evidence presented above.

The analysis turns to considering another issue relevant to local peoples' decisions regarding the allocation of forest ecosystems: the use of NTFPs.

7.5.2. The use and collection of non-timber forest products

·Potential and actual uses of NTFPs have been found to be sizeable by several studies (e.g. Cassells, 1992; de Beer and McDermott, 1989; Grimes et al., 1994; Peters et al., 1989). However, other authors have questioned the economic viability of NTFPs collection as an option to be undertaken on a large scale or even at the micro-level

(Browder, 1992; Pinedo-Vasquez et al., 1992).

For Vanuatu, Olsson (1991) notes that the use ofNTFPs is decreasing, but:

'the cost of acquiring through cultivation and cash purchase l,lll the products that are currently

obtained from the forest would be considerable. In addition, the poor, the old and women - people

who depend most heavily on forest products- would be affected with disproportionate severity.'

(Olsson, 1991 p. 30). 200

However, Olsson's claims require further assessment because of three shortcomings which are evident in her study. Firstly, agricultural crops, such as coconut (Cocos nucifera), and fruit trees which are mainly planted, such as breadfruit (Artocarpus Altilis), have been included among NTFPs.13 Secondly, it is not specified where NTFPs are actually collected. If they are collected from gardens around the villages or in .thicket areas, 14 logging operations would probably have limited impact on the current availability of these products. Thirdly, no information is presented by Olsson in relation to the pattern of collection. A detailed assessment of who collects NTFPs, and who relies on them would be needed in order to establish the distribution across the local community of negative impacts arising from a decrease in the availability of NTFPs.

Community uses and· preferences of wood for house construction and fuel have been considered by a statistical study (Lilles¢ et al., 1992)15 and by a rapid rural appraisal study carried out on Espirito Santo (Thistlethwaite, n.d.). Lilles{l1 et al. (1992) find that the majority of the most preferred species are derived from secondary forests, with only a few species being collected in primary forests. The Thistlethwaite study, which is more specific about vegetation types, reports that the bulk of wood used by the surveyed communities comes from garden areas (currently cultivated or under fallow) which are mainly classified as thickets. Thistlethwaite (n.d.) also remarks that wood is generally collected in an area within 30-60 minutes walking distance from the village and the species used are mainly

13 Copra has been for many years the most important export item for Vanuatu. Coconut plantations have also replaced lowlands rainforest ecosystems. 14 'Garden' refers to areas cultivated under a shifting cultivation system. Thicket formations are often secondary growth found in fallow areas. 15 This sb.Jdy covers the whole country. Questions about the local uses of plants for house construction and frrewood were asked in the course of the National Agricultural Survey in 1990. 201

non-commercial ones. The results of this study are influenced by the fact that only two of the six villages included in the sample had significant forest resources within a radius of three kilometres form the village. Thistlethwaite's findings appear, however, to be supported by Statistics Office (1991). The latter report states that, at a country level, the major source of firewood was: (i) wood derived from garden clearing for 40% of households; (ii) dead wood from the bush16 for 38% of the households; and (iii) trees cut specifically for burning (location not specified) for 22% of the households.

The frequency of collection of N1FPs and the location where this occurs were considered by the author in the questionnaire administered in ErromangoY The question relating to NTFPs aimed at ascertaining if local people made extensive use of closed canopy (or relatively undisturbed) forests (i.e. 'dark bush'). These are the forests that may be of greater conservation value and richer in timber relative to disturbed forests. The latter are normally closer to villages and have been used for gardening purposes.

The answers to the question concerning the collection of NTFPs are tabulated in

Table 7.3. This question also considered visits to the forest for 'recreation' purposes.

It appears from Table 7.3 that the majority of the respondents do not. provide themselves with custom and firewood in the 'dark bush'. They collect custom leaves and building material in the 'dark bush' only sporadically.

The majority of the respondents never collects fruits and nuts in the forest Those

16 In Bislama. 'bush' refers to thicket areas and re-growth forest. i.e. secondary vegetation. Forested areas with a closed canopy are usually referred to as 'dark bush'. 17 The issue of NTFPs was also considered through RRA. This is detailed in the following chapter. 202

who collect these products in the forest do so rather sporadically. It should also be noted that some respondents in the latter group reported to have collected oranges in several instances. Orange trees are exotic and found close to abandoned village sites. The respondents indicated that they often collect fruit and nuts while in the forest for ·other purposes.

Table 7 .3. Respondents' frequency of visit to the 'dark bush' for collection of NTFPs and recreation.

Purpose I Individual -freQuency of visit Number of I Dailv Weekly Monthly Biannually Yearly Never resoondents Custom leaves (a) 2 14 58 74 (4.1) (18.9) (78.4) (100) • Building materials 14 59 73 (b) (19.2) (80.8) (100)

Firewood 73 73 (100) (100)

Hunting (c) 24 21 5 1 23 74 (32.4) (28.4) (6.8) (1.4) (31.1) (100)

Fruit and nuts 5 26 41 72 (6.9) (36.1) (56.9) (100)

Prawns and fish (d) 23 13 3 34 73 (31.5) (17.8) (4.1) (46.6) (100)

Rest(e) 4 9 7 53 73 (5.5) (12.3) {9.6) (72.6) (100)

Legend: (a) Medicinal plants and other plants that are used for customary uses, e.g. spiritual. (b) Used for the construction of traditional housing, e.g. thatched huts. (c) Wild pigs and wild cattle. (d) Fresh water ones (e) The Bislama word used in the interview was 'spell', which refers to 'rest' and 'relaxation'. Percentages in parenthesis.

The majority of respondents appears to visit the forest to hunt and to collect fresh 203

water prawns and fish. fu Erromango, people often go in the forest to hunt wild cattle.

Pigs are reported to be rather numerous and are also found in cultivated areas. They often

damage food crops.

In relation to visits to the forest for recreation purposes, it is clear that very few

respondents appear to be interested in this activity. They often stated that they go to the

forest when they need something. Some respondents noted that they prefer 'to rest' near

the sea.

The general picture emerging from Table 7.3 is that the majority of the

respondents visits rather sporadically the 'dark bush' with the aim of collecting the NTFPs

considered above. The explanation of this behaviour, provided by several respondents

both during the questionnaire survey and infonnal interviews, is that N1FPs are nonnally

available (wild or planted) in garden areas or in secondary vegetation near the villages.

This evidence supports the findings of the studies by Ulles~ et al. (1992) and

Thistlethwaite (n.d.), and appears to contradict the view expressed by Olsson (1991).18

It is also opportune to comment on Olsson's (1991) view about the importance of

NTFPs to old people. This position appears to be incorrect. During the questionnaire

survey canied out by the author (and the further fieldwork described in the following

chapters), the older people clearly noted that they were not going to the forest (e.g. to

hunt, to collect fish) as much as when they were younger. They felt they did not have enough energy and/or good eye-sight any more.

18 This view is support by the evidence presented by Vienne (1984), who conducted anfhropological research in the island of Mota Lava, located in the northern part of Vanuatu. 204

The above analysis indicates that local people do not derive many NTFPs from the

'dark bush'. Several products, such as firewood, are colleted in forest and garden areas that are closer to villages than the 'dark bush'. This fact implies that if logging operations were carried out in the 'dark bush', the availability of N1FPs would not be reduced. This argument is strengthened by the fact that clear felling operations do not take place in

Vanuatu. This implies that wild pigs and wild cattle could still live and be hunted in logged forests.

The analysis turns to detailing peoples' views about conservation. Special attention is devoted to their attitudes towards future generations.

7.5.3. Views about conservation and future generations

Peoples' views were sought in relation to their attitudes to conservation and the motivations guiding their views.

Their views about future generations received particular attention. The implications of intergenerational equity for the economic analysis of conservation initiatives were considered in Chapter Five. A question that may be asked at this stage is: what do local people think about the importance of the forest for future generations? The need to address this issue has been raised by Redclift (1992). However, to the author's best knowledge, it has never been considered in studies dealing with social and economic aspects of natural resource management in LDCs.19 In order to gauge whether the analysis

19 Studies regarding natural resources and the attitudes of people living in rural areas of LDCs have considered peoples' attitudes towards (a) the environment, (b) protected areas, (c) income generating activities carried out with park areas, (d) resettlement from park areas, and (e) wildlife (e.g. Hackel, 1990; Infield, 1988; Mkanda and Munthali, 1994; Newmarket al. 1993; Parry and Campbell, 1992; Styoos and Duarte, 1994). 205

presented in Chapter Five could be dissonant with local peoples' views, their views on this issue were sought.

Five questions in the questionnaire dealt directly with forest conservation.

The first question addresses the question of conservation in general terms. The respondent was asked:

• 'Do, you think that it is important to keep some unlogged 'dark bush'?' (Provide

reasons.) (Question 7.)

This question was drafted with the objective of ascertaining peoples' views in relation to conservation within a 'real world' framework. That is, logging operations are being carried out in Vanuatu. The author assumed that this would continue and that the

landowners being interviewed may be interested in having logging carried out at least in

part of their land.

Later in the questionnaire the respondent was asked in succession:

• 'Do you know that the government intends to set up a protected area in Happy Land?' (Question 22.)20

• 'Do you think that it is a bad idea to establish a protected area to conserve the. kauri trees?' (Explain) (Question 23.) • Could you tell us whether you think that it is: Not important Of little Don't Know Important Very important importaiice that the government establishes a protected area for the children to see the kauri trees'. (The respondent was shown the scale of answers.) (Question 24.)

20 Happy Land is a village in Erromango. This is the village closest to the Erromango Kauri Protect Area. This is the PA considered in the next chapter. 206

The answers to Question 7 are reported in Table 7 .4. It should be noted that the reasons explaining the intent of the respondent 'not to log' part of the forest, and tabulated in Table 7 .4, are reported, as closely as possible, according to the wording originally expressed by the respondent. Categories that may be interpreted as providing siniilar reasons have been grouped together in Table 7.4. Some respondents provided multiple reasons to explain their interest in avoiding logging in part of the forest

A2 and A3 reasons in Table 7.4 appear to express no interest in the long-term conservation of forests that hold timber resources and are accessible. Reason Al appears to express interest in logging activities provided that the logging company can be expected not to adopt destructive logging practices. Group A accounts for only 4.2% of the cases adduced to explain interest in.not logging part of the forest

In Group B are included the reasons that appear to indicate interest in conserving part of the forest for its direct values (Bl and B2) and indirect ones (B3). Oearly, future utilisation of the forest for gardening activities would result in a modification in the forest structure with respect to the current state. This Group of reasons accounts for more than one quarter of the cases.

The respondents seem to associate avoidance of logging activities with potential tourist activities (Group C) in relatively few cases (7% ). The answers that appear to express an interest in the conservation of the environment are listed in Group D. The 207

answers listed in this group could express a variety of values.21 They account for 28.2% of the reasons.

Table 7 .4. Attitudes towards avoiding logging in part of the forest

'Do you think that it is important not to log part of the forest?' No 1 Yes 67 Don'tknow7 (Number of respondents: 75)

Reasons for not logging part of the forest ('yes' answers only)

No reason given 8

Totals Percentage Group A A1: Wait and see if the logging company operates well 1 A2: Do not log in areas which are difficult to access 1 3 4.2 A3: I would conserve the forest that is not good for logging 1

GroupB B1: Keep some forest as resource for the future (e.g. garden, timber) 8 B2: Conserve some areas to protect timber and fruit trees 7 20 . 28.2 B3: Conserve forest close to village, rivers and sea 5

Groupe C1 Tourists may want to visit 5 5 7

GroupD D1: It is good for the environment 10 D2: I like the forest the way it is 2 20 28.2 D3: Protect birds and animals 8

GroupE E1: To conserve our heritage 3 E2: Our children will see the forest 16 23 32.4 E3: Our children will have good areas to make gardens, to collect seed 4

TOTAL 71 100

Group E seems to express a clear interest in not logging part of the forest in order to ensure conservation that would benefit part of the current generation (the children

21 The respondents could have expressed self-interested behaviour (i.e. 'protect the environment because I like it') or purely disinterested behaviour (i.e. 'protect the environment because other species have the right to exist'). 208

already'bom) and future generations. It may be noted that reason E3 does not necessarily imply that there is an expectation from the respondent's point of view that the forest bequested will be conserved in the future. The reasons listed in Group E represent the majority of the cases (32.4% ).

The data presented in Table 7.4 indicates that the majority of the respondents

(Group D +GroupE= 60:6%) supports the conservation of part of the forest on the basis of reasons indicating their concern for the environment and for the benefit of future generations. 22

The other questions addressed the issue of conservation with a more direct

approach. . First, the respondent's knowledge of the government's intention to establish a PA

in Happy Land (Question 22) was sought. The large majority of the respondents {64

respondents out of 75; 85.3% of total) had knowledge of this fact. This question provided

an opportunity to ascertain the understanding of the meaning of the concept of PA among

the people of Erromango. It provided the author with a basis on which to form an opinion

about the degree to which the answers to the following question were based on informed

judgment The author and the research assistant discussed the concept of PA with the

respondents, when they requested clarifications.

The views expressed with regard to the establishment of a PAin Erromango are

presented in Table 7 .5. As for Table 7 .4, the reasons given by the respondents to explain

their answers have been reported by adopting, as closely as possible, the original wording.

22 It could be argued that reasons listed in Group B could also be added as they may imply benefits for future generations. 209

The number of 'Do not know' answers (13 respondents) closely parallel the number of respondents who were not aware of the government intention to establish a PA in Erromango.

Only one respondent thought that it was not good to establish a P A. The answer was based on his concern for the landowners' children's rights to the land. He thought that their rights to the land may be weakened by the establishment of a P A.

Table 7 .5. Views concerning the establishment of the .Erromango Kauri Protected Area.

'Do you think that it is a bad idea to establish a protected area to No 61 Yes 1 Don'tknow 13 conserve the kauri trees?' (Number of reSPOndents: 75)

Reasons supporting the establishment of protected area ('no' answers only) Totals Percentage Group A AI: The protected area will generate income for the landowners 7 7 9.2

GroupB B 1: Protect trees and plant them 2 B2: Produce 5 7 9.2

Groupe Cl: Tourists may want to visit 20 20 26.3

GroupO Dl: Protect trees 3 02: Protect the environment 6 10 13.2 03: Protect birds and animals 1

GroupE El: To conserve our heritage 12 E2: Our children will see the kauri trees/forest 20 32 42.1

TOTAL 76 100

The potential of the P A to generate economic benefits appears to be a significant 210

motivation underpinning the respondents' support for the establishment of the P A. The reasons listed under Groups A, B and C, that appear to express interest in the income generating potential of the PA, account for 44.7% of the reasons provided by the respondents.

Interest in the conservation of the environment (Group D) accounts for 13.2% of the reasons provided by the respondents. Group E, reasons concerning cultural heritage and future generations, account for 42.1% of the reasons. Jointly, Groups D and E account for the majority of the reasons (55.3%) explaining agreement to the establishment of the PA. This figure is of the same order of magnitude as the sum of Groups D and E in

Table 7.4.

The data presented above show that the people of Erromango are interested in conserving the forest, among other things, for the benefit of their current and future children. This view appears to be supported by the fact that the respondents reported their interest in this issue without actually being asked directly. Their responses to the question that directly sought their views concerning the importance of establishing a PA to enable the children to see the kauri trees (Question 24) are reported in Table 7.6 below. The answers to this question appear to corroborate the data presented in Tables 7.3 and 7.4.

The large majority of the respondents thought that it was either 'very important' (72%) or

'important' (8%) to establish a PA so that the children will see kauri trees.

The evidence presented above appear to exclude that the analysis presented in

Chapter Five, in relation to future generations and biodiversity conservation initiatives, is dissonant with the views of the local rural people. It is opportune to remark that the above 211

analysis has cortsidered only the people of Erromango. Unfortunately, it was beyond the means of this study to undertake a similar analysis for the rest of Vanuatu.

Table 7.6. Importance of establishing a protected area to enable the children to see the kauri trees.

'Could you tell us whether you think that it is not important. not rehlly important. do not know, important. or very important. that the government establishes a protected area for the children to see the kauri trees'. (Number of respondents: 75)

Not important Of little importance Don't know Important very important 0 0 15 6 54 (20%) (8%) (72%)

The implications of the arguments presented above may be now brought together

in the concluding section.

7.6. Conclusion

This chapter has presented the information that was used to gain an initial

understanding of the Vanuatu context. It has described the geographical background and

has outlined some of the existing institutions which influence forest management in

Vanuatu. Particular attention has been devoted to the views and possible positions that the landowners may adopt

It has been argued that there are factors (e.g. income, roads) that make the landowners inclined to allow their forests to be logged. The decision to allow logging activities in their forests may be partly due to the fact that the local people appear to make rather limited subsistence use (i.e. collection of NTFPs) of forests that are relatively 212

distant from the villages. This latter statement should be considered as a working hypothesis and will receive further attention in the following chapter.

Although not all the landowners may be fully aware of the contents of the logging contracts they have signed, it appears that they are indeed aware of the possible negative environmental implications of logging activities. The fact that they have decided to sign logging contracts does not, however, necessarily imply that they generally consider the benefits of logging activities to outweigh the potential environmental damages (even if this may be so for some landowners). The logging contracts that they have signed contain specific guidelines that the logging contractor has to respect in order to minimise the environmental impact of logging. During the interviews, and in the author's successive visits to Erromango and to other islands, the landowners expressed their interest in having the Department of Forests monitor the logging operations to ensure they followed the agreed guidelines.

The analysis has shown that the landowners appear interested in conserving part of the forest in order to maintain a certain stock of resources for the future, to protect the environment . and to benefit their current and future children. This evidence has two relevant implications.

First, the analysis undertaken in Chapter Five does not appear to be dissonant from the views of the local rural people. It has been shown in this chapter that among the local people there is strong support for the establishment of a P A aiming at conserving the trees for the benefits of their children.

Second, the landowners' interest in conserving part of the forest for the benefit of the environment ill itself and for the benefit of their children could, in some cases, 213 \ outweigh their expected monetary and subsistence uses of the forest. This could result in landowners taking the decision to conserve (part of) the forest. Clearly, this may not eventuate. Landowners' could decide to have their forests logged. Notice also that even if some of the landowners' conserved (part of) their forest, this could result in a system of

(formal or informal) PAs that may not be adequate from an ecological point of view.

The above analysis implies that there is need for external intervention in order to ensure that part of the forests are being conserved in Vanuatu. Some of the issues that need to be taken into account in considering specific initiatives for the conservation of forests in Vanuatu have been discussed in this chapter. In the following chapters two case ' studies are considered, where some of the issues raised in the present chapter will be addressed in more detail. The processes that may be required in order to account of the issues considered here (e.g. landowners views) and the mechanisms that may be adopted to conserve the forest will receive particular attention. 214

QUESTIONNAIRE, ERROMANGO 1993 (English translation)

VILLAGE DATE NAME

1) Do you have land with 'bush'? 1.1 YES 1.2NO 2) Do you have land with 'dark bush'? 2.1 YES 2.2 NO (Go to 4) 3) Have you had logging on your land? 3.1 YES 3.2 NO (Go to 4) 3.1.1 Have you started any project on the logged land?

3.1.2 Have you left any unlogged forest? Why?

3.1.3 Did you use the money from logging for a specific activity?

3.1.4 How much money?

4) Have you signed a logg~g contract? 4.1 NO Why?

4.2YES 4.2.1 How do you plan to use the logged area?

5) What are the positive aspects of logging? 215

6) What are the negative aspects of logging?

7) Do you think it is important to keep some unlogged 'dark bush'? 7.1 NO (Go to 8) 7.1 YES Why?

8) Do you go to the dark bush for some of the following reasons, and how often?

Daily Weekly Monthly 6Months Yearly Never Custom leaves Building material Firewood Hunting Fruit and nuts Fish Rest

9) Have you planted trees during the last year? 9.1 NO 9.2 YES Species Purpose (eg. house poles) Location

10) Have you planted medicinal plants during the last year? 10.1 NO 10.2 YES 216

11) Have you cured diseases with custom medicine last year? 11.1 NO 11.2 YES

12) Have you seen other people to cure you with custom medicine? 12.1 NO 12.2 YES

13) Did you pay for the cure? 13.1 NO 13.2 YES How much:

14) Did you go to the dispensary before using custom medicine? 14.1 NO 14.2 YES

15) Do you know any man from Erromango who has sold his land? 15.1 NO 15.2 YES

16) If you sell your land, how much do you want?

17) Have you planted any cash crop such as cocoa or coconut?

18) How much did you earn last week? (From sandalwood: )

19) How much did you earn last month? (From sandalwood: )

20) How much did you earn last year from sandalwood?

21) Does the village council influence your decisions about the use of the land? Explain: 217

22) Do you know that the government intends to set up a protected area in Happy Land? 22.1 NO 22.2 YES

23) Do you think that it is a bad idea to establish a protected area to conserve the kauri trees? Explain.

24) Could you tell us whether you think that it is:

Not important Of little Don't Know Important Very important importance ' that the government establishes a protected area for the children to see the kauri trees.

25) If they establish a protected area, who do you think should manage the protected area? 25.1 Landowners 25.2 Government -25.3 Chiefs 24.4 Other: (or a mix of the above) Why?

26) AGE: 26.1) 13-20 26.2) 21-30 26.3) 31-40 26.4) + 40

27) EDUCATION (years in school) 27.1) 0 27.2) 1-3 27.3) 4-6 27.4) 7-10 27.5) + 10 Chapter 8 The Process of Assessment and Establishment of the Erromango Kauri Protected Area

8.1. Introduction

. An ecological economics framework for the assessment and establishment of PAs has been developed in Part ll of this dissertation. The objective of this chapter is to detail how this framework may be applied to a specific PA

When the research presented here was carried out, there was no portion of forests • that was protected in Vanuatu. This implied that any critical natural capital could be exploited with potentially detrimental effects on the current and future generations. It is on this basis that the establishment of the Erromango Kauri Protected Area (hereafter EKP A) may be seen as contributing to the achievement of minimal intergenerational equity.

Therefore, it is taken as given that the EKPA should be established. This position will be substantiate by considering ecological studies of the area. This chapter deals with (a) the assessment of the intragenerational aspects of PA assessment and establishment, (b) the institutional features that influence resource use and the management of the EKPA, and

(c) the kind of participation involved in the assessment and establishment process.

It is within the institutional context detailed in Chapter Seven that, since about 1986,

the Department of Forests has been discussing with the landowners and the people of

Happy Land, a village on the island of Erromango, the feasibility of establishing a PA for

the conservation of Agathis macrophylla (kauri). Smce the inception of this consultation

process, it has been proposed that the Government would lease the land from the custom

218 219

owners. I It has to be stressed that the Department of Forests initiated the consultation process with the view that it would lease the land from the landowners and Department itself would manage the PA. This is important because the process of assessment and establishment of the P A presented here found specific pre-existing conditions. It was the

Department of Forests that had suggested the establishment of the EKPA, and, by suggesting to take up a lease on the land, had created certain expectations in the landowners. Given this background, the kind of participation adopted in this specific case involved: a) landowners's involvement in the process of assessment of the local costs and benefits

of the EKPA, and in the choice of the eventual form of compensation to be provided -

RRA and PRA were used; b) an attempt to have the landowners actually managing the area, rather than being

managed by the Department of Forests.

The analysis proceeds as follows. Previous proposals concerning the establishment of the EKPA are reviewed in Section 8.2. In Section 8.3, the geographical characteristics of the area are described. The socioeconomic features of the study area are dealt with in

Section 8.4. Section 8.5 reports the assessment of the commercial and subsistence benefits that may be derived from the forest. Section 8.6 details the kind of agreement and the level of economic incentive in the form of compensation payments to be provided to the landowners for the establishment of the EKPA. Section 8.7 concludes the chapter.

1 For this purpose, in 1989 the European Union (then the European Community) provided partial funding for the establishment of the EKP A. 220

8.2. Previous proposals and surveys of the Erromango Kauri Protected Area

The establishment of the EKPA was suggested in 1971 by the members of the Royal

Society - Percy Sladen expedition. 'Members of the Expedition have submitted a proposal to the British and French administration in the New Hebrides for the preservation of this area, and the proposal has been supported by the Royal Society and by the International

Union for the Conservation of Nature.' (Lee, 1975 p. 275). At the time of the proposal, the logging company Societe Agathis was operating on Erromango. However, Societe

Agathis discontinued its operations in 1974 without having logged in the EKPA site. This decreased the urgency of establishing a EKPA

Since 1980, four reports have been prepared on the need and/or feasibility of establishing the EKPA. These are reviewed below.

Neil (1985) reviews ecological aspects of Agathis macrophylla and puts forward a proposal for the establishment of the EKPA. He suggests the conservation of about 1,500 ha, because this would protect one of the most promising species of Agathis for plantation purposes. A PA would conserve the species in its natural habitat and would also allow further ecological studies to be undertaken. Neil (1985) stresses that the EKPA would be of international importance, given that there are no PAs in which A. macrophylla is found.2 (A. macrophylla also occurs in Fiji and the Santa Cruz islands in the Solomon

Islands.) He remarks that compensation for the landowners, although difficult to assess, should probably reflect the foregone logging royalties.

2 According to James Paine, World Conservation Monitoring Centre, the establishment of the EKPA would be a 'unique and important step' in the conservation of A. macrophylla (pers. comm., letter 19 July 1993). 221

Gillison and Neil (1987) further review the ecological status of Agathis and report on a survey of the EKPA carried out to assess the size of area needed to maintain a viable population of kauris. They conclude that an area of approximately 3,000 hectares should be considered for conservation status. They further note that: a) the area should be considered for inclusion in the World Heritage List; b) the issue of compensation should be further considered; c) in order to assess the amount of compensation to be paid, and to attract funding from

donor agencies, a forest inventory and a further ecological study should be undertaken.

A consultancy report commissioned by the Food and Agriculture Organization

(FAO) affirms that the conservation value of the area has already been established and that the further studies suggested by Gillison and Neil ( 1987) would only further extend the assessment process that started in 1971 and had used up considerable resources (Leaver and Spriggs, 1989). They remark that attention should be directed to (a) determining the appropriate conservation status of the area, (b) making the EKPA part of a national P A strategy, (c) devising a management plan for the area, (d) seeking appropriate international recognition, and (e) establishing a compensation framework.

In relation to the latter item, they criticise the suggestion that compensation should be tied to the value of foregone royalties from logging activities. Leaver and Spriggs

(1989) note that (a) the timber is not being used and will actually be returned to the landowners if the eventual lease agreement is tenninated, and (b) the landowners see the value of not logging the area. The question of compensation for the case of Erromango is recognised by Leaver and Spriggs (1989) as a fundamental one, as, they assert, it will probably determine the pattern for conservation decisions in Vanuatu. 222

The question of compensation is further dealt with by Barrance (1989), at the time

Forest Research Officer with the Department of Forestry. He reports that the proposal of compensating the landowners on the basis of 'an arbitrarily chosen percentage' of the foregone timber royalties was abandoned because of the problems faced by landowners. in areas such as Erromango, in managing lump sums. (It should be noted that this may be considered a paternalistic approach and Barrance later remarks that it is not fair to assume that landowners will not be able to manage their financial resources.) Compensation based on foregone royalties is, however, criticised by Barrance on other grounds. He argues that compensation based on foregone royalties would overestimate the actual opportunity cost to the landowners for at least two reasons: a) the landowners value the forest in its undisturbed state, as it provides the opportunity

for hunting, fishing, firewood collection. building materials, medicinal and food plants;

it also provides more intangible benefits such as pride in having large kauri trees and

providing children with the opportunity to see these trees; b) the forest in its undisturbed state prevents soil erosion.

8.3. Geographical characteristics of the protected area

The protected area is located on the western coast of Erromango (Map 8.1). The village of Happy Land, situated outside the southern boundary of the EKPA, is located at about latitude 18°.91' South and longitude 169°.07' East The total area of the EKPA, as of the boundaries proposed is approximately 3,257 ha. The EKPA comprises the upper catchments of the Lampunari river and of the Pongki.l river. The highest peak is Mount

Vet Pop at 802 m above sea level (a.s.l.) and the lowest altitude occurs along the 223

Lampunari river (which delimits the southern boundary of the EKP A) at about 150 m a.s.l.

The EKP A area is presented in Map 8.2.

The upper slopes of the area experience a wet climate with average annual precipitation between 2000 and 2500 mm and relatively low rainfall seasonality. The lower slopes present an intermediate climate with an average annual rainfall of 1800-2000 mm and a short dry season.

According to data from the computer-based Vanuatu Resource Information System

(VANRIS), in the EKPA area there are five different vegetation types3•

• Midheight forest with Agathis-Calophyllum (FmeAgCl): presents a moderately dense I

canopy; the main tree species recorded are Agathis macrophylla, Calophyllum neo-

ebudicum, Hemandia moerenhoutiana, Weinmannia denhamii, Syzygium spp. and

Bischofia javanica.

• Midheight forest with Calophyllum-Agathis (FmeCIAg): identical to FmeAgCl except

that Agathis occurs sporadically.

• Low, montane forest with -Weinmannia (FlMW): an even canopy with

emergent Ficus spp, Metrosideros collina and Weinmannia spp

• Low forest with an open canopy, dominated by Acacia spirobis (FloAs), associated

with patches of the vegetation type 'low scrub of Vaccinium-Cyperaceae' (SV)4.

Some of the species in the canopy include Alphitonia zyzyphoides, Mangifera minor,

Dysoxylum amooroides, Canarium indicum, Syzygium spp. and Pterocarpus indicus.

3The following description of vegetation types is based on Bellamy (1993). 4 In VANRIS, the proportion of the first vegetation type is between 50% and 80% of the area of the RMU. 224 Map 8.1 Location of the Erromango Kauri Protected Area

166' ...;0 ~ HIU 170'

'!]'!] " 0 ~ q 0 ~ VANUA LAVA A

~1--o& {) Q N 14' 14

GAUAQ

~ MAEWO AM47 ~

16' \ 16 ~MBRYM

'·~ .o~ ()_ EPI~. q tiJ. .()

~ .. 0'----4---1.J.00---'----20_.0~T VI~FATE 16S 166 ·. 180' ·.. PROPOSED KAURI PA ·.·

'~ ERROMANGO

Q FUTUNA TANNA\) •

~NEW ZEALAND 20 ANEITYUM 160' 180' ~170' 225 Map 8.2 The Erromango Kauri Protected Area

/ .... -- ...... / ---- ( I \ I I I I A I I I l \ \ \ I I I I I I I I I ( ( I I (

18. 54'

Lampunari River N

Umpon Yelong (Happy Land) •

Potlusi • 0 Kauri Forest A:· Area owned by lU1 Scale 1:50000 B: Area under dispute --. Boundary -:River

169 .. 04' 226

• and/or herbaceous communities (G), locally known as 'white grass'. Schmid

(1975) suggests that the dominant species in these herbaceous communities might be

Chrysopogon aciculatus, however detailed surveys of the area have yet to be

undertaken.

Detailed information on the vegetation types of the EKPA and some physical

parameters are reported in Table 8.1.

Between the southern border of the EKPA and the sea lies an extensive area of

forest which, as it is close to the villages, is used for slash and bum agriculture. This forest

type is classified as:

• Midheight forest with an open canopy (Fmo): some of the common species include

Ficus spp., Antiaris toxicaria, Endospermum medullosum, Dendrocnide latifolia and

Sy:zygium spp.

Vegetation types FmeAgCI. FmeCIAg and FlMW are primary rainforests; Fmo and

FloAs are forests disturbed by human and/or cyclone activities; grassland (G) is a fire sub­

climax.

The dominant ·landforms of the EKPA area: are 'deeply dissected older volcanic

cones' and 'finely dissected volcanic footslopes', mostly presenting very steep slopes

(above 20 degrees). Basaltic and andesitic pyroclastic rocks are the dominant rock type.

Soil types of the area have been described by Quantin (1977) and are classified according to their agricultural potential as: very poor and poor (in the upper slopes) and mediocre in

the lower slopes. The former are described in V ANRIS as humitropets, and the latter as 227

Table 8.1. Description of the Erromango Kauri Protected Area.

RMU'If Vegetation Area Forest area Strata Slope Loggable type * (ha) (ha) (degree) area %

316 FlMW 424 424 > 30 0 323 FmeCIAg 5 5 17 20-30 0-20 324 FmeClAg 20 20 17 10-20 80 325 FmeAgCI 821 821 17 20-30 0-20 326 FmeAgCI 125 125 17 10-20 80 327 FmeAgCl 139 139 16 10-20 80 328 FloAsSV 49 32 13 20-30 0 329 FmeAgCI 90 90 16 2-10 90 330 FmeClAg 42 42 21 2-10 90 331' FmeCIAg 268 268 >30 0 333 FloAsSV 85 55 12 10-20 80 336 FloAsSV 7 5 10 10-20 80 338 G 41 0 10-20 0 339 FloAsSV 10 7 12 10-20 80 340 G 238 0 20-30 0 341 FmeAgCl 27 27 15 20-30 50-70 342 FloAsSV 202 131 11 10-20 70 344 FloAsSV 6 4 9 10-20 80 345 FloAsSV 33 21 >30 0 346 FloAsSV 548 356 12 10-20 80 347 FmeAgCl 36 36 15 10-20 50-70 356 FloAsSV 27 18 411 >30 0 369 FmeCIAg 14 14 423 >30 0 Total 3,257 2,641 #Resource Mapping Unit (RMU) adopted in the design of the Vanuatu Resource Information System (Bellamy, 1993). *FIMW: Low, montane forest with Metrosideros- Weinmannia. FmeClAg: Midheight forest with Calophyllum-Agathis. FmeAgCI: Midheight forest with Agathis-Calophyllum FloAsSV: Low forest with an open canopy, dominated by Acacia spirobis, associated with patches of the vegetation type low scrub of Vaccinium-Cyperaceae. G: Grassland and/or herbaceous communities. Source of vegetation types: Bellamy (1993). 228

dystropepts (soil order: inceptisols)S.

8.4. Socioeconomic characteristics of the study area

8.4.1. The village economy

Small human settlements are situated along the southern border of the EKPA. The

1989 national census found that the four villages had a total of 32 households and 143 inhabitants. Happy Land was the larger village with 13 households and 82 inhab~tants. At the time of the survey conducted for this study6 15 households and 77 inhabitants were enumerated. Of these households, only two did not have gardens. One household had its gardens in another village, and the teacher did not have gardens. The area has a low population density: one inhabitant per 1an2.

The village of Happy Land was founded in 1942/43 when the people living in sparse settlements decided to move to a centralised location in order to be serviced by a doctor sent to Erromango by the Condominium Government (ie. the joint British and French colonial administration). The settlement is located at about forty minutes walk (about 3 km) from Pongk:il Bay (the nearest landing for a small boat) and about four to five hours walk (about 14 km) from Dillon's Bay. There is no road access to the village. This is a constraint on the development of the agriculture sector7•

The economy of Happy Land is subsistence based. Traditional gardening is practised in the area. In the traditional gardening farming system (Weightman, 1989) there are no

5 The defmitions of landforms, rocktypes and soils used here are derived from Bellamy (1993). 6 Field work in Erromango was undertaken from 27/6/1993 to 9n/1993, and from 22/10/1993 to 19111/1993. Livo Mele (Research Assistant) took part in this field work. Further trips to Erromango were needed in 1995 to fmalise the lease agreement detailed below. 7 In the course of village meetings and individual interviews, it was ascertained that this is also a widespread opinion within the local population. 229

cash crops associated with traditional crops such as taro, yam, sweet potato, manioc and breadfruit; banana and sugarcane are also produced but for own consumption only. This farming system is not common in Vanuatu any more, as most farmers combine traditional crops with cash crops such as coconut, kava, coffee and cocoa. The climate, the soil type

(see description of the EKPA) and the lack of roads are the two main factors contributing to the persistence of the traditional farming system in the area. The latter three crops where reported by the farmers as not growing well in the area. would grow along the coastline but would not be very productive if planted close to the village, which is located at about 329 m as.l.

The garden area of the village was surveyed in order to ascertain whether the establishment of the EKPA, according to the boundaries detailed here, would conflict with subsistence farming. 8 The gardens located close to the village are established on 'red soil' and those further away from the village, towards the Lampunari river, are on 'black soil'

(these ·are the soil categories as described by the farmers). Black soil is reported to be suitable for all the different crops, whereas red soil is not suitable for yam. Also, while bananas planted on red ground produce for only one year, those planted on black soil are productive for two years. The minimum fallow period needed to have good regeneration of trees and thus allowing a satisfactory production of garden crops was reported to be of four years. The gardens are located at a maximum wa1king distance from the village of about 20 minutes (it takes about 30 minutes to reach the Lampunari river). Gardens are also established on the terraces towards the sea; these gardens are located at a greater walking distance from the village (up to one hour). The fallow period is preferably not

8 This survey took place during the period 24-26/10/1993. Livo Mele (Research Assistant), and the landowners helped in carrying out the survey. 230

longer than eight to ten years. A longer fallow period would involve more work in clearing the area from relatively large trees, which would have developed as a result of the long fallow period.

At the time of the survey, the thirteen households had a total of 98 gardens (7.5 per household). In order to assess the total area of garden land, 44 gardens, belonging to ten of tlle thirteen households were surveyed. The mean size of a garden was found to be

537.88 m2 (standard deviation 275.87). The total area of gardened land was derived by multiplying the number of the garden which had not been measured by the mean and adding this to the actual area of the 44 gardens which were assessed. This gives a total yearly gardened area of 54,326 m2 (about 4,178 m2 per household). Assuming an average fallow cycle of five years, the-area required for gardening is about 271,630 m2 (27.163 ha). The villagers have about 1,100 ha of land south of the EKPA. Even if it is assumed that only 50% of this area is suitable for agricultural activities, there appears to be sufficient land to be used for agricultural enterprises. This reflects the opinion of the villagers. Without a numerical quantification of the land available, they affirmed that for the foreseeable future, at the current growth rate of the village population, the land outside the EKPA could meet villagers' demand for land.

The sale of sandalwood was the main source of income declared by the villagers.

Trade in sandalwood is problematic for two main reasons. There are few mature trees in the forests in the area of Happy Land. When harvested, these trees have to be carried by hand from the forest to Pongkil Bay. This may take several hours. The income earned in

1992 from the sale of sandalwood varied from household to household: it ranged from a 231

few thousand vatu to a maximum reported of 75,000 vatu,9 for a household who cut sandalwood in northern Erromango.

Expenditures are also very limited. There are no taxes or fees for primary school students to be paid. The few goods used, such as lamp fuel, sugar, tobacco and tea, have to be purchased at the cooperative store in Dillon's Bay. A weekly market takes place in the village but only the local people take part and the few things for sale are food crops, fish and cooked food. They sell for prices that are about one tenth of those registered at the market in Vila

8.4.2. Tenure and natural resource management

The institutional setting determines how resource use is distributed across the individuals and groups, and thus who has the right to control and/or use the resources available in the area. The understanding of these features is needed both for the economic assessment process and for the development of new and appropriate institutional arrangements that are eventually required for managing resources (the EKPA in this specific case).

The area proposed for protected status on Erromango is under the control of two land owning units. One section, approximately 2042 ha, is owned by two cousins, hereafter land owning unit 1 (LUI). The other section, approximately 1215 ha, is currently under dispute10. According to the local customary rules, landowners have extensive control over the resources. This is exemplified by the notice reported below. This was

9 The exchange rate vatu/US$ fluctuated during the period 1992-1995 between 110 and 117. 10 One of the landowners involved in the land dispute had signed a logging contract that included the disputed area. 232

written by LUl as a reprisal following a l~d dispute concerning the area of the village school. It applies to LU 1's land, that constitutes about two-thirds of the EKPA.

Public Notice

Following [village] court sitting on 23/9/92, we two do not agree with the decision of the court. We

are the custom owners ofNampunari [that includes the EKPA]. We want to stop people from using

Nampunari in the following ways:

1) Do not ask to go walk about [hunting]

2) Do not go to the river to fish

3) Do not take to Nampunari

4) Do not fish Naura [fresh water prawns]

5) Do not take wood or bamboo

6) Do not use the road through Nampunari

7) People going to Dillon's Bay should only use the road through the village

8) 3,000 vatu fme applies to people breaking the above iules

9) If a person does not pay the fine, the village chief will pay for him/her

May 1993 signed [LUI]'. [Translated from Sie, local language.]

This notice shows the several claims to resources that landowners have. They control the use of the land and of the resources on that land (i.e. trees, fish and water) and the rights of access to the area. These rights are recognised and accepted by the people in the area.

One feasibility study on the EKPA noted: the 'local community, including the customary owners, expressed a strong wish that the area not be logged and retained for enjoyment, traditional use and to educate their children. This is a classic community conservation aspiration and· as such has an acceptable "cost" to that community in terms of revenue from resources foregone.' (Leaver and Spriggs, 1989, p. 8). The important point 233

that arises from the above described institutional structure is that it is the landowners, and

not the community, who will have to forego certain resource use benefits, if the EKPA is

established. This, of course, has to be taken into account when addressing the issue of

actual compensation for the establishment of the EKPA.

The specific institutional setting has also to be considered in devising the process of

participation in decision-making for the establishment and management of the EKPA.

Another study on the establishment of the EKPA reports:

'Lease negotiation meetings ... took place ..• in a village adjacent to the reserve [EKPA], and they were

open to all members of the community .•.• In the discussions the landowners were represented by the

overall chief of the several villages ~f the area: they had liute direct input themselves . .•• [T]he fact

that one of the landowners, who lives in Vila [the capital city], waited until he returned to Vila before

raising objections to some points in the lease, implies that he felt restricted in the community meeting

from making his views felt' (Barrance, 1989, p. 131; emphasis added).

The participation of the landowners in all phases of the decision-making process is

of fundamental importance to the successful implementation of any conservation project in

Vanuatu. The extent of the customary owners' rights to the land require their full

agreement to the establishment of the EKPA. Aware of the problems arising from a

misdirected participation process, particular attention was given, during the research

process described here, to obtain the views of the landowners and of the people trusted by

them (e.g. one village chief).

8.5. The economic assessment of the protected area

A first important question to be addressed is: without the intervention of the

Government of Vanuatu, would the landowners themselves conserve the forest that has 234

been proposed as a PA? It is obvious that a positive reply would avoid the need for direct government intervention. This issue is addressed below.

It could be expected that the landowners would not conserve the forest proposed for inclusion in the EKPA if they did not receive, from this land-use, benefits that are at least equivalent to those arising from alternative uses of the same area (e.g. logging). One of the parties involved in the land dispute over about one third of the EKPA, had previously signed a contract to allow a logging company to operate in the forest. This could be taken as providing some evidence that the landowners would not conserve the area. However, there is a need for a more detailed assessment of the current and potential benefits derived ' at the local level from the forest. This could help the landowners to better assess their land-use options. Moreover, it can indicate the type and extent of the government intervention eventually required.

The benefits that could be derived from the forest by the local people include (a) direct use values (subsistence and commercial use), (b) indirect use values (soil run-off control and water quality maintenance), and (c) non-use values (e.g. existence and bequest values). The landowners of the EKPA can capture only part of the above benefits. They can capture the direct use values and benefit from part of the indirect use values and non- use values. In assessing the benefits derived by the landowners, the following analysis considers only direct use values. This is for two reasons. Firstly, to assess indirect use values, data on the physical characteristics of the area is required, but it is currently unknown. Secondly, the assessment of non-use values would require the use of techniques such as contingent valuation. Several problems faced by this approach have been noted in previous chapters. Furthermore, this approach is particularly prone to problems of 235

inaccuracy or bias when such small numbers of beneficiaries are involved (i.e. four

landowners in this case) (Bennett and Carter, 1993).

To the landowners, royalties from logging operations are, potentially, the most

important commercial value of the forest to be included in the EKPA. In order to conserve

the forest, landowners would have to forego logging royalties, The value of these royalties

is presented below.

8.5.1. Commercial benefits from the forest

The assessment of timber volumes in tropical forest ecosystems is notoriously difficult and the accuracy of the results of any such enterprise is highly uncertain. This 1s evident for the case of Erromango in the study undertaken by Johnson (1971). This study was commissioned by the Condominium Government in order to assess the economic potential of the timber resources of that island. It was a very detailed study. The fieldwork was carried out over the period of one year (1966/67) and covered an area of 14,100 ha.

The area presently considered for protected status was surveyed by the Johnson's team

(Section 2, Subsection 0, Ridge Unit No. 16, part of No. 15 and part of No. 17 in the

Johnson's report). The results from this study are presented in Table 8.2. (Tamanu is the local name for Callophyllum neo-ebudicum). .

The data presented by Johnson cannot be directly used to estimate the royalties foregone by the landowners. The frequency of cyclones in Vanuatu may have affected the volumes of timber occurring in the area. Also, a complete data set for the area is not provided by Johnson (1971). Furthermore, the merchantable timber volume was derived by Johnson by applying an ad hoc reduction factor to account for inaccessibility. One third of the forest area was considered inaccessible. The information from V ANRIS, however, 236

allows a more detailed specification of the areas which are inaccessible, or of difficult

accessibility, and in which only part of the timber could be extracted.

Table 8.2. Volumes of merchantable timber (60 em diameter at breast height: d.b.h.)

Ridge Unit# Total Species Mean Standard Percentage Reliable No. area volume error standard error minimum estimate* (ha) (m3/ha) (m3/ha) (m3/ha)

15 544 Kauri 7.0 11.3 161.7 -4.3 Tamanu 36.0 19.3 53.6 16.7 Other species 12.2 4.3 35.0 7.9

Alls~es 55.1 17.2 31.1 37.9

16 1266 Kauri 16.9 17.6 104.0 -0.7 Tamanu 27.1 17.6 64.7 9.5 Other species 16.9 11.5 68.1 5.4 All species 60.9 22.3 36.6 38.6

17 345 Kauri 0.0 0.0 0.0 0.0 Tamanu 29.8 15.7 52.5 14.1 Other species 15.3 8.4 54.9 6.9 All species 45.1 19.9 44.2 25.2

#Mapping area adopted in Johnson's study * Reliable minimum estimate = mean - standard error Notice that Johnson accepts a negative minimum estimate. However, it is clear that the volume of timber found in the forest cannot be negative. Source: Johnson (1971).

Rather than carrying out another full survey of the area (at a considerable cost and

with the likelihood of obtaining data with a large statistical variability as in the case of 237

Johnson's), the information already provided by Johnson, that collected during the

National Forest Resource Inventory (NFRI), the information made available by V ANRIS and that derived from a small supplementary survey11 is consolidated.

The large standard errors for the estimates of stocking volumes for kauri (Table 8.2) arise because of the uneven distribution of this species (Johnson, 1971). Kauris occur in scattered groups, so some transects show high volumes of kauri whereas other transects present low volumes. To overcome this problem, the supplementary survey measured the stocking volumes of kauri by placing six transects in areas designated as 'kauri forest' in the Johnson's vegetation map. This is thought to provide a more accurate estimate of the stocking volume of kauri. Six more transects were also placed in other forest areas of a different vegetation type to supplement the data already available through the NFRI.

The slope and 'loggability' parameters reported in Table 8.1 are of particular

importance for the determination of the merchantable volume of timber standing in the

EKPA. Logging on slopes with inclination greater than thirty degrees is not allowed in

Vanuatu. The analysis excludes therefore RMUs with slope greater than thirty degrees.12

The landform and rock type, together with slope, determine the loggability parameters.

For instance, deeply dissected landforms associated with steep slope contribute to a low

loggability parameter. The parameters presented in Table 8.1 are derived from Baldwin et

al. (1993). In the table, some RMUs exhibit two parameters. Some of the parameters

given by Baldwin et al. (1993) may appear too restrictive to some. For these parameters a

higher value is considered in order to carry out sensitivity analysis. In the following tables,

11 This survey would have been impossible without the assistance of Japeth Hidson (Forestry Officer with tbe Department of Forests, Vanuatu). The survey was carried out during tbe period 1-7n/1993. 12 See Table 8.1 for the defmiti.on ofRMU. 238

the timber volumes derived from the application of the two sets of parameters are referred to as Low range Oow loggability parameters) and High range (high loggability parameters).

Six transects were established in kauri forests. The mean values derived are:

• kauri: 37.985 m3/ha (standard deviation 8.608)

• tamanu: 18.820 m3/ha (standard deviation 6.742)

• other species: 4.800 m3fha (standard deviation 3.000).

Table 8.3 reports the volumes of kauri, tamanu and other species in dense kauri forests. Timber volumes for other forest types are presented in Table 8.4. ' Data collected during the national forestry inventory provides the basis for the ass~ssment of merchantable timber standing in the other forest areas. For each RMU, the area of dense kauri forest (evenmally found in the RMU) is subtracted to the area of forest Then, the loggability parameter is applied This gives the loggable area for the

RMU.

The timber volumes derived in Table 8.3 and Table 8.4 are combined in Table 8.5.

The value of royalties accruing to landowners is derived by applying royalty rates current at the time of the survey. These are: 1300 vatu/m3 for kauri, 1000 vatu/m3 for tamanu and

600 vatu/m3 for other species. The value of timber royalties derived in Table 8.5 forms the basis of calculations carried out to determine the economic incentive by way of compensation provided to the landowners in order to reach an agreement on the establishment of the EKPA. 239

Table 8.3. Merchantable timber in kauri forest.

RMU Area Loggability Kauri Tamanu Other species (ha) % (m3) (m3)' (m3)' 324 8 80 243 96 25 325 233 0 0 0 0 20 1170 701 179 326 8 80 243 96 25 327 29 80 881 349 89 328 10 0 0 0 0 20 76 30 8 346 9 80 273 108 28 347 13 50 246 98 25 70 345 137 35 Total Low range 1886 747' 192 High range 3831 1517 389

# A reduction factor of 20% is applied to allow for defects. 240

Table 8.4. Merchantable timber for the other forest types.

RMU Loggable Kauri Kauri Tamaou Tamanu Other Other spp. area* (ha) m3/ha total m3 m3/ha totalm3# spp. total m3# m3/ha

323 0 2.65 0 32.29 0 5.27 0 1 2.65 2.65 32.29 26.32 5.27 4.22 324 9.6 2.65 25.44 32.29 247.99 5.27 40.47 325 0 2.65 0 32.29 0 5.27 0 117.6 2.65 311.64 32.29 3037.84 5.27 495.80 326 93.6 32.29 2417.87 5.27 394.62 327 88 9.07 638.53 1.51 106.30 329 81 9.07 587.74 1.51 97.85 330 37.8 5.07 153.32 0.50 15.12 333 44 2.09 73.57 336 4 339 5.6 2.09 9.37 341 13.5 8.88 95.90 18.9 8.88 134.27 342 91.7 10.70 784.95 2.44 223.75 344 3.2 346 277.6 2.09 464.15 347 11.5 8.88 81.7 16.1 8.88 114.37 Total Low range 25.44 5555.09 878.10 High range 339.73 8690.29 1378.13

*See Table 8.1 for loggability parameters. # A reduction factor of 20% is applied to allow for defects. 241

Table 8.5. Value of timber royalties (vatu).

Kauri Value Tamanu Value Other spp. Value Total value (m3) (m3) (m3)

Low range 1911.44 2484872. 6302.09 6302090 1070.10 642060 9429022 High range 4170.73 5421949 10207.29 10207290 1767.13 1060278 16689517

The sale of sandalwood is a further commercial benefit that the landowners can derive from the forest. The establishment of the EKPA would not cause the loss of this resource to the landowners because they would be allowed to extract sandalwood.

Logging operations may damage the stock of this resource. This depends on the characteristics of the specific logging operation. The people of Happy Land consider the sale of sandalwood an important source of income. However, according to their opinion, this resource presents a limited stock. In 1992, only three trees were apparently cut in the forest .to be included in the EKPA, for an approximate value of 50,000 vatu. Currently, landowners sporadically plant sandalwood in the garden areas close to the village. The potential economic benefits from sandalwood cultivation will be discussed in Chapter

Nine.

8.5.2. Subsistence benefits from the forest

The benefits that the local people derive from the forest in its non-logged state are considered below. Information on this topic is needed in order to (a) understand the current resource use patterns (eventually to be incorporated in the 1p.anagement plan for the EKP A), and (b) assess the eventual economic incentive to be provided to the landowners in order to reach an agreement on the establishment of the EKP A. 242

If subsistence use of forest resources provides a significant contribution to the

landowners' livelihood, then it could be expected that they would have an incentive to

conserve the forest. However, as noted in Chapter Seven, logging operations in Vanuatu

have not involved clear felling. Thus, some of the subsistence benefits could be enjoyed

even if the forest area was to be logged.

· In relation to the N1FPs found in the EKPA, it should be noted about two-thirds of

the forest area are currently 'closed off' because of the land dispute .mentioned above.

Thus, the natural resources found in this area are not presently being exploited by the local

people, with the exception of the landowners. The assessment of the uses of forest

resources relates to past use and potential use of these resources. This assessment was

carried out adopting RRA tools: a) village meetings; b) group interviews; c) individual

open ended questioning; d) analysis of aerial photographs carried out together with the

villagers; e) walks through the forest area close to the village and through the forest to be

included in the EKPA

Subsistence gardens

It was noted in Section 8.4.1 that the forest area outside the EKPA appears to be

sufficient for the requirements of the village population. If the forest to be included in the .

EKPA is logged, this would not imply costs in terms of lost garden production.

Firewood

Several species of timber are being used as firewood. However, five species have

been reported as being favourites and most commonly used: Nilaru (Elattostachys falcata), Nangal (Cupaniopsis spp.), Netor (Syzygium spp.), Novou (Macaranga spp.),

and Pongnut (Ficus adenosperma). 243

With the exception of netor, these species grow in the garden areas. Novou is the first to grow after a garden is abandoned, followed by nilaru and nangal after four to five years. Pongnut is normally found in garden areas that have been abandoned for a long period of time (ie. ten years or more).

Questioning about the place of collection showed that firewood is collected in the garden areas and in the secondary forest close to the village. In the words of one of the villagers 'the dark bush is too far away for collecting firewood'.

From the species used and from the declared pattern of collection, it is apparent that the forest area to be included in the EKPA, which is considered 'dark bush', cannot be considered a primary source of firewood.

Building materials

All the houses in the village are built with plant material with the exception of the school and three houses, whose roofs were made of corrugated iron.

The most used species for the posts is Namariu (Acacia Spirobis) (which is found in garden areas and secondary forest close to the village) because it does not rot and can last for many years (a strongly built house may last between 15 and 20 years). Netor, novou, and namariu are commonly used to make rafters. The roof and the side walls are made with Deniun (a cane species to be identified) and also with leaves of the sugar cane.

Deniun grows wild in the gardens. It is also planted in order to produce ·larger and stronger canes.

The gardens and the forest close to the village provide building material sufficient for current use and reasonable projections of growth. 244

Medicinal plants

The assessment of the contribution of medicinal plants to local livelihood is a difficult task for several reasons. First, people often guard their knowledge on medicinal plants and it is therefore difficult to assess whether the information collected reflects the actual use of medicinal plants. Secondly, medicinal plants are not used on a recurrent basis as is, for example, firewood. Therefore, long periods of direct observation would be involved if a reliable estimate of their consumption was to be derived (whether this is indeed achievable is difficult to say, given the constraint mentioned above). As for the previous resource categories, a derivation of the pattern of use of medicinal plants was attempted.

A list of plant species with their scientific and local language names was read to two respondents, knowledgeable of plant names and their uses. They recognised all the names of plants (135) which had been collected on the west coast of Erromango by forest botanists13 and gave their generic use (eg. firewood, medicinal).

Forty-three plants were reported as having medicinal use. The locations (as defined. by the respondents) where these plants could be collected can be subdivided into five categories.

1) 'Dark bush': it refers to closed canopy forest essentially found in the EKPA and

similar forest types not included in the EKPA but at significant distance from the

village.

2) 'Bush close up': it indicates secondary forest close to the village.

3) 'White grass': it indicates the grassland area that is found in the EKPA.

13 The botanists were Caballion P. and Sam C. (Office de Ia recherche scientifique et technique outre-mer: ORSTOM), Curry P. (Department of Forests). 245

4) 'Garden': medicinal plants that are commonly planted are listed in this category; some

plants included in the next category are also found in garden areas.

5) 'Everywhere': several plant species were widespread throughout the various

vegetation types and their location was thus described by the informants.

The location of the medicinal plants used in the village is summarised in Table 8.6. It may be noted that it is likely that the answers provided by the informants about the location of the plants do not fully describe the distribution of these plants in the local environment A bias towards the places of most frequent collection may exist This, however, does not create a problem for the analysis, which attempts to extrapolate the pattern of resource use.

Table 8.6. Place of collection of medicinal plants and their frequency distribution.

Location

'Dark bush' 'Bush close up' 'White grass. 'Garden' 'Everywhere'

Only* 1 9 2 8

3 9 1 2 16

* Only one location was given for the plant #Two locations were given for the plant

It is evident from Table 8.6 that only a very limited number of the medicinal plants used in the village is collected in the areas to be included in the EKPA. Just three out of forty-three plants can only be found in locations associated with the EKPA. 246

Food

Wild pigs are a major food item that can be derived from the forest included in the

EKPA. Currently, they cannot be hunted inside the EKPA because of the ban mentioned above. However, they can be hunted in other forest areas and around the garden areas, where they are hunted with dogs or caught in traps set to limit the damage caused to crops.

Other food products can be obtained from the forest included in the EKPA. These are fresh water prawns, nuts (eg. Canarium spp.), edible leaves and wild yam. Villagers reported using wild yam after the occurrence of cyclones.

It should be noted that wild yam, nuts and edible leaves are also found in gardens and the forest close to the village. It is difficult to assess whether the eventual loss of access to those located in the EKPA would have a negative impact on the villagers' livelihood. However, it appears that a negative impact could be excluded. In fact, the ban imposed on the utilisation of the resources from the forest included in the EKPA does not appear to affect the villagers.

The foregoing analysis shows that the ecosystems to be included in the EKPA appear to have very limited importance to the subsistence activities of the villagers of

Happy Land and to the landowners of the EKPA. This suggests that the landowners of the

EKPA might not have an economic interest in conserving the forest in its current state.

The benefits to the landowners from conserving the forest are not sufficient to outweigh the costs of doing so. These costs are the foregone logging royalties. It seems therefore that there is a need for external intervention in order to conserve the forest area.

Furthermore, from the analysis presented in this section, it is also possible to affinn that 247

the establishment of the EKPA does not appear, at present, to be likely to conflict with subsistence activities of the people living in the surrounding area. Moreover, given the relatively limited pressure currently exerted on resources, there would seem to be no negative ecological implications from the continuing use of the EKPA by the local people for their subsistence activities.

8.6. Determining the economic incentive for the landowners

The question that now needs to be addressed is: what type of external intervention is required in order to conserve the area?

The Department of Forests had proposed to lease the land from the landowners. At the outset of the research process it was not evident, however, that this was the option favoured by the landowners. Also, it was unclear to both the landowners and to the

Department of Forests whether or not lease payments would be a sufficient compensation for the benefits foregone by the landowners. The alternative mechanisms by which a

EKPA could be established are now considered.

The possibility of attempting to develop an income generating project was discussed with the landowners. The government, or a donor agency, could provide financial and technical support to develop income generating activities in exchange for an undertaking by the landowners to protect the forest. They did not favour this option. They argued that the development of economic activities in the area is constrained by the lack of roads and access to markets (i.e. shipping facilities). Also, it is obvious that, for the landowners, an income generating project is riskier than a lease agreement A lease agreement provides a steady income stream. An income generating project could be successful, but it may also fail. 248

Following the example of approaches adopted in several PAs around the world that attempt to develop conservation related income generating activities, the potential for the development of these activities was however considered. Unfortunately, no viable short­ term economic activity was found. Only sandalwood, a long-term activity, was identified and will be discussed in Chapter Nine.

· The option of building a road to link Happy Land to the airstrip and boat landing of

Ipota (on the Eastern coast of Erromango) was then considered. The government (or a donor agency) could build the road in exchange of the landowners' commitment to conserve the forest area. One of the landowners noted that this option would have been accepted, if it was put to a village meeting. However, he did not agree with it. He is the owner of the land and the ·road project would not provide him with the benefits he expected.

It is noteworthy that a 'project for rain forest conservation swap' approach has been attempted in Western Samoa (Cox and Elmqvist, 1991). In orie case a village school was built in exchange of the agreement by the village to protect a rainforest for fifty years. This approach faces, however, several problems. It has been noted that, as with project aid, it could produce a dependency mentality, thus stifling local initiatives, and it may create needs that cannot be satisfied once the assistance ends (Peteni, 1993). However, the greatest weakness of this approach is probably the difficulty of enforcing compliance to the agreement. Peteru (1993) remarks that it is unlikely that the government, or a donor agency, would take the villagers to court in the case they decided not to honour the agreement once the project had taken place. 249

Once the options detailed above were discussed with the landowners, they indicated a preference for a land lease agreement. It was not clear, however, what the lease rate should be, and if a lease agreement cum foregone logging royalties compensation should be paid to the landowners. The agreement that was reached is detailed below.

It was pointed out to the landowners that if they allowed logging operations to go ahead on their land, they would receive logging royalties but they would not be able to lease their land after these operations. Apart from the fact that there is very limited demand for land on Erromango, their land has poor agricultural potential. This would be further reduced by logging operations. Thus, their land use options were: a) signing a lease agreement with the government;I4 or b) allowing logging operations to go ahead, without the possibility of leasing the land afterwards.

Table 8. 7 presents the discounted values of the alternative options open to the landowners. The value of the land lease is based on the current rate, set by the Department of Lands, for unimproved agricultural land on Erromango. This is 100 vatu per hectare per year. Some islands of Vanuatu, that are more developed than Erromango, exhibit relatively higher rates (e.g. unimproved agri~ulturalland on the island of Efate, where the capital Port Vila is located, may be leased at 500 vatulha/year). If it is assumed that as economic development in Erromango accelerates, the opportunity cost of land would rise.

Eventually, the leasing rate would also increase over time. Table 8.7 presents the discounted value of the lease for the EKPA calculated at the fixed rate of 100 vatu/halyear and a hypothetical scenario in which this rate increases by 25 vatulha/year every decade.

14 At this stage of the negotiation, details of the lease had not being exactly defmed. However, it had been made clear that the EKPA could be used for subsistence pwposes and that the landowners would be involved in the management of the area. 250

Table 8. 7 also shows the present value of royalties (reported in Table 8.5) that would be paid if the forest in the EKPA were to be logged. It is assumed that logging will take place in three years time, given that the current infrastructures (i.e. roads) do not permit immediate access to the area. (This is a realistic assumption. At the end of 1993, a company had submitted a ·logging plan envisaging that logging would take place in the proposed EKPA in three years time. The competent Ministry, however, ruled out logging operations within the EKPA) It is assumed that the area could be logged in one year. It is further assumed that the forest could not be harvested again during the next 75 years. This assumption has been made given the poor regeneration rates that occurred in Erromango following the logging operations undertaken by Societe Agathis during the late 1960s and early 1970s.

Both logging royalties and the lease are discounted at three different rates. The rate of 0 reflects the real bank deposit rate of Vanuatu, which averaged at 0.1 per cent during the period 1983-90, and -1.5 per cent and 0.2 per cent respectively in 1991 and 1992

(Reserve Bank of Vanuatu, pers. comm.; Hillilan and Athy, 1993). The other two rates of

4 per cent and 8 per cent are also considered in order to assess better the impact of higher real market rates, and also to account for the fact that the landowners might have positive discount rates.

From Table 8. 7 it appears that when the 4 per cent discount rate is adopted, the discounted value of a lease agreement is comparable to that of logging royalties, in the low range scenario. If the high range scenario is considered, payment of a lease would be sufficient to counterbalance foregone royalties only when the discount rate adopted is 0. It may be noted that under the high range scenario logging will take place on steep slopes 251

(more than 20 degrees) and deeply dissected landforms. While this is legal in Vanuatu,

logging on this kind of terrain may be expected to cause substantial soil erosion. During

the consultation process, the landowners (and the villagers at large) expressed concern

about the potential environmental damage that could be caused by logging activities. 1bis

seems to indicate that it is the low range scenario that should be adopted as a reference

point for discussions on the level of the eventual compensation to be paid to landowners.

Table 8. 7. Present value of the protected area lease and timber royalties (vatu: vt).

Land area 3257 ha

Discount rate 0 4% 8%

Present value of:

Fixed rate lease (100 vtlhalyear; 24,427,500 8,021,217 4,383,261 75 years)

Increasing rate lease (1 00 vtJha/year and 44,376,625 11,364,178 5,303,464 25 vtJha/year increase every 10 years; 75 years)

Low range 9,429,022 8,382,366 7,485,062 Royalties High range 16,689,517 14,836,920 13,248,677

The landowners' views about the acceptable level of compensation and the status of

the consultation process are detailed below.

8.6.1. The current status of the Erromango Kauri Protected Area

The landowners have decided that a land lease agreement satisfies their economic expectations. The lease agreement was signed on May I, 1995. The land lease rate

adopted is I 00 vatu/ha/year. The parties to the land dispute concerning about one third of 252

the EKPA have also agreed to the leasing of the land. The lease payment for the disputed land has been deposited in a trust account. This will be released once the land dispute is solved.

The lease agreement is initially for a trial period of five years. This will allow the landowners to test the compatibility of the establishment of the EKPA with their lifestyles.

According to the wishes of LUl, the government has actually paid the value of their five year lease in a lump-sutn. Because of this lump-sum payment, the lease rate for the first five years is fixed. If the lease agreement is renewed for a longer period, it is expected that the lease rate will be periodically revised in accordance with any increases in lease payments for unimproved agricultural land on Erromango decided by the Department of

Lands. It should be noted that a further lump-sum payment is not expected to take place, if the lease is renewed for a longer term after the five year trial period. Annual payments would be made as a safeguard against contravention of lease conditions. Under the current agreement, the Department of Forests can enforce the lease agreement It is that department that must authorise any logging plan in Vanuatu and can, therefore, guarantee that no logging activities will take place in the area

This chapter has shown that the EKPA is, potentially, the object of very limited subsistence use. It was noted above that this is due to the fact that the villagers mostly use the resources located close to their residences. The establishment of the EKPA does not conflict with these activities. The lease agreement (drafted in the village of Happy Land together with the landowners, one of the two village chiefs, the representative of the youth and the representative of women) allows, within limits, the use for subsistence purposes of the EKP A. These activities would be regulated by the management committee of the 253

EKPA. The structure of the management committee is such that the landowners maintain their customary control over the EKPA. (The lease agreement is presented in Appendix

The European Union has provided funds to finance the five year lease agreement. If the lease is to be renewed, then more funds will be needed to establish a trust fund that would generate the annual returns required to make the lease payments. 16

8.7. Conclusion

This chapter has applied the framework, developed in Part IT of this dissertation, for the assessment and establishment of PAs.

It has been argued that compensation had to be provided to the landowners. This is required in order to counter-balance the negative intragenerational impact arising from the establishment of the EKPA. The benefits to the landowners from conserving the forest are not sufficient to outweigh the costs of doing so. These costs are the foregone logging royalties. It is useful to note that it was found that the importance of direct use of NTFPs collected from the 'dark bush' is very limited. This supports the working hypothesis presented in Chapter Seven that direct use of NTFPs has limited weight on the decisions made by the landowners about the allocation of those forest ecosystems described as 'dark bush'.

15 This final draft of the lease is based on a previous draft developed by the Vanuatu Department of Forests. It should be noted that the size of the EKPA set out in the lease agreement is 3,205 ha. This is the size of the EKPA estimated by the surveyor who carried out the boundary survey and drafted the map to be attached to the lease agreement, as required by Vanuatu legislation. Throughout this chapter, the size of EKPA was reported to be 3,257 ha. This figure was estimated during the initial stage of study of the EKPA and was used during the process of consultation with the landowners. 16 The draft of a trust fund deed has been developed in collaboration with Pacific International Trust Company Ltd. This draft is currently being examined by the Government of Vanuatu. A copy of the draft deed is available on request from the author. 254

Viable short-term income generating activities (that could substitute the income

derived by landowners from logging royalties) were not found. Therefore, it was

suggested that a lease contract between the Government of Vanuatu and the landowners was the option to be adopted in order to establish the P A. The research approach adopted

here has resulted in the implementation of the research findings: the lease agreement for the establishment of the EKPA has been signed.

It is important to note that land lease agreements appear to be useful instruments in

mitigating the negative intragenerational impacts often caused by pAs. They may also

contribute to the achievement of intergenerational equity by providing financial benefits

that can be enjoyed by the descendants of the current landowners. Leasing agreements

have positive features. It has to be stressed, however, that the exploitation of income

generating opportunities arising from the establishment of (or in connection with) PAs should always be considered. In so doing, the scarce funds available for conservation

could be directed to those initiatives that are ecologically iniportant but not financially viable.

In order to enhance the long-term prospects of financial viability of the EKPA, the following chapter will consider the viability of sandalwood cultivation. This could be promoted as an income generating activity to be carried out in connection to the EKPA.

In concluding this chapter, it is important to note that the type of participation process adopted was partially dependent on the conditions pre-existing the on set of the research process described above. Two of these conditions are particularly significant

Firstly, the decision to establish the EKPA had been initiated by actors other than the landowners. This decision was based strictly on ecological considerations. Secondly, since 255

the inception of the consultation process in 1986, the Department of Forests of Vanuatu

proposed that the Government would lease the land from the custom owners. Tiris

influenced the expectations of the landowners and, in tum, the consultation process

discussed in this chapter. Chapter Ten will consider in details these two issues.

Particularly, it will expound on the implications of adopting a 'research starting point' (for

the identification, assessment and establishment of PAs) different from that pre-existing the research process described in this chapter. 256

APPENDIX SA

MINISTRY OF NATURAL RESOURCES

AGREEMENT FOR THE LEASE OF LAND

FOR THE

ERROMANGO KAURI RESERVE

This Agreement is made between

Messrs Andrew NAMA! and Isaac UTWOHOR of Happy Land, being the duly identified true custom land owners of land lease title No. 14/0524/002 and,

Hon. Paul B. TELUKLUK, Minister of Natural Resources acting in accordance with section 8 of the Land Refonn Act Cap 123 on behalf of Messrs Jerry LOVO and Joe NAHOR and any other claimants of land lease title No. 14/0524/003 the lessors, on the one part,

Mr Aru Mathias, Director of Department of Forests, acting for and on behalf of the Government of the Republic of Vanuatu, the lessee, on the other part,

1. The Agreement is for a lease of the land known as the 'Erromango Kauri Reserve' situated on the island of Erroniango measuring in: area 3205 hectares and shown in the . sketch plan annexed as leasehold title No. 14/0524/002 (2,000 hectares) and No. 14/0524/003 (1,205 hectares).

2. The Lessors declare that they are the duly authorised representatives of the custom owners of the said land.

The Lessors agree to grant and the lessee agree to take a lease of the said land on the following tenns: a) the annual rental payable under the Agreement is three hundred and twenty thousand five hundred vatu (VT 320,500) and this amount is apportioned in the following manner: 200,000 vatu is in respect of leasehold title No. 14/0524/002 and the other 120,500 vatu is in respect of leasehold title no. 14/0524/003 AND FURTHER THAT the rentals are to be paid in advance on the 1st of May every year, and the first payment to be made on the commencement date of this Agreement 257

b) the lease will be for Five (5) years commencing on 1st May 1995. c) the lessors will indemnify the lessee and his successors in the title from any claims that the money for the rent has not been properly paid out. d) the land is to be used only for the purpose of a 'Kauri Reserve' and all other activities as specified in the schedule to this Agreement 258

SPECIAL LEASE

ERROMANGO KAURI RESERVE

1. PAYMENT AND RENTAL REVIEW

The lessee shall pay during the term of this lease to the lessors, or into a bank account nominated by the lessors and shall keep receipts for all such payments for inspection by the Minister responsible for lands if required at any time, a yearly rent free from all deductions and to be paid in advance, of one hundred vatu per hectare (VT 100/ha ).

2. DEFINITION

The lessors and the lessee hereby acknowledge and agree that for the purpose of this lease 'Reserve' is synonymous with 'Erromango Kauri Reserve' and that by the signing of this lease the Erromango Kauri Reserve is established as of 1 May 1995, and furthermore that Kauri within the terms of this lease shall mean all individuals of kauri (Agathis macrophylla) of any age however regenerated growing anywhere within the Reserve.

3. OBJECTIVE

The lessors and the lessee hereby acknowledge and agree that the objectives of the establishment and management of the Erromango Kauri Reserve hereinafter referred to are as follows and that not withstanding any of the clauses contained within this lease neither the lessee nor the lessors shall at anytime carry out any activity which is in conflict with the pursuance of these objectives: i) To safeguard the future of the Vanuatu kauri in its natural environment by allowing all kauri trees within the reserve to grow and regenerate without disturbance either to them or to the other trees and plants growing in the reserve; ii) Subject to objective i) above, to ensure that the indigenous ni-Vanuatu inhabitants of Erromango and their descendants retain the opportunity to follow their chosen lifestyle without erosion of their cultural significance occurring thereon, from degradation; iii) Subject to objectives i) and ii) above, to provide opportunities for scientific study of environmental, ecological and social cultural values of the Reserve; iv) Subject to objectives i), ii) and iii) above, to ensure a source of seed of kauri sufficient genetic diversity, to carry out research activities in order to allow full realisation of the plantation potential of the species, by ensuring that adequate numbers of trees of a range of ages are left upon the Reserve to be able to breed together to produce a continuing supply of variable seeds and seedlings from which high quality individuals can be selected. 259

4. MANAGEMENT OF THE RESERVE

The lessors and the lessee hereby acknowledge and agree that: a) Management Committee

A management committee shall be set up and will consist of one representative of the National Park Board, one representative of the landowners of the Reserve, one representative of the competent Provincial Government, . one representative of the customary chiefs of the area, and one representative of the Vanuatu National Council of Women; b) Management according to objectives

The management committee shall use its best endeavours to manage the whole of the Reserve at all times in accordance with the objectives of the Erromango Kauri Reserve as stated in clause 3 above, and to use its best endeavours to prevent any other parties from I carrying out any activities which may conflict with these objectives; c) Control Visitors

The management committee shall use its best endeavours to ensure that only such people as have been given permission are allowed to enter in the Reserve, and shall use its best endeavours to ensure that such people shall refrain from causing waste, refuse or disturbance to the local inhabitants, either in the Reserve or its environs; d) Prevent Erosion

The management committee shall mange the Reserve in such a manner to prevent soil erosion, or disruption or pollution of stream flow; e) Prevent Squatters

The managem~nt committee shall use its best endeavours to prevent squatters entering or residing in the Reserve.

5. EXEPTIONS AND RESERVATIONS

The lessors and the lessee hereby acknowledge and agree that: a) Traditional Use

The lessors, and such persons authorised by them who have traditionally bee allowed access to the Reserve be allowed to pursue activities in the Reserve which are consistent with the pursuance of their normal lifestyle namely: i) hunting of wild fowl, flying foxes, wild pigs and other game; 260

ii) collection of fish, freshwater prawns (naura) and other aquatic animals; iii) collection of such quantities and kinds of such plants and tree material as may reasonably be judged to be adequate to satisfy the normal requirements of the lessors and inhabitants of the area adjacent to the Reserve in pursuit of their normal activities; iv). collection and sale of sandalwood in quantities that do not exceed the regenerative capacity of the species.

b) Rights of Way

All rights of way of any hitherto used or enjoyed across any part of the Reserve by the lessors and such further rights of way as may be determined to exist by any competent court shall continue for the benefits of the lessors and any persons authorised.

c) Power to enter

The lessors shall have the right for themselves to enter on foot or on horseback only upon any part of the Reserve for the purposes of exercising any of the rights hereinbefore excepted and reserved.

d) Use of Water

The lessors and all persons authorised by the management committee shall have the right to bath in the natural waterways, and to take and carry away water therefrom by means of pipes otherwise, provided that written consent by the management committee and by the Department of Rural Water Supply is given.

6) AGREEMENT BY THE LESSORS

The lessors agree with the lessee as follows:

a) No Commercial Operations

Not to carry out or grant permission to or enter into any agreement or undertaking with any other party to carry out any commercial operation or any other activity of a commercial nature or any part of the Reserve, without the written consent of the Management Committee. b) No Fires

Not to cause or allow at any time fire to be lit within any part of the Reserve and to us their best endeavours to prevent fires from occurring within the Reserve, and in the event of a fire howsoever caused occurring within the Reserve to use their best endeavours to extinguish such a fire and to alert the lessee as to the occurrence of the such ftre. 261

c) No Mechanical Apparatus

Not to introduce or grant pennission to any party to introduce any mechanical apparatus such as power saws, motor vehicles or boodlers upon any part of the Reserve without the pennission in writing of the Management Committee, and in the event of receipt of such permission to restrict the said mechanical apparatus to those parts of the Reserve indicated in writing by the Management Committee. d) No Livestock

Not to introduce or grant pennission to any other party to introduce at any time any livestock upon any part of the Reserve (except for used for transport by the lessors in exercise of their rights as detailed in Section 4 a) b) and c) above, and kept under strict control at all times). e) Not to Construct

Not to construct or grant pennission to any other party to construct any roads,- paths, cement or iron roofed buildings or other edifices apart from small bush material constructions upon any part of the Reserve, without the consent in writing of the Management Committee, and in the event of receipt of such consent to construe such roads and other edifices only in such locations, and to such standards, as may be specified in writing by the Management Committee. f) Not to Cause Ecolo~cal or Cultural Disruption

Not to carry out any activity upon any part of the Reserve likely to cause soil erosion, disruption or pollution of stream flow, or likely to diminish the cultural or scenic value of the Reserve. g) Allow to Enter

To allow the lessee or his representatives to enter upon any part of the Reserve at any time for the purpose of conducting work of any nature directly in pursuance of the furthering of the objectives of the Erromango Kauri Reserve as noted in Section 3 above.

7. AGREEMENT BY THE LESSEE

The Lessee agrees with the Lessors as follows: 262

a) To Pay Rent

To pay promptly the rents hereby reserved or any new rent substituted therefor in accordance with the provisions of this Lease; b) To Pay Rates

To pay promptly all lawful imposed rates and assessments (including service rates) now or hereafter payable in respect of the Reserve unless the same are exclusively payable by the lessors by virtue of any Law; c) Not to fell trees

Not to fell or allow to be felled any trees upon any part of the Reserve without the permission in writing of the Management Committee; d) Constructions

To construct or allow to be constructed upon the Reserve only such roads, paths, buildings or other edifices. as may be consistent with the Objectives of the management of the Kauri Reserve as detailed in Section 3 above, and provided that written consent of the Management Committee is given. e) To repair buildin&s

To repair or replace as required, and to keep in good repair all buildings together with all constructions and fixtures and upon the Reserve or which during the tenancy may be erected or provided thereon; t) To take the risk

To take the risk of all operations undertaken in the Reserve and to indemnify the lessors against any action, claim, cost, damage or proceeding howsoever caused arising either directly or indirectly from the lessee's activities provided however that the lessors shall exercise their rights under Clauses 5 a) i) , ii), iii), iv), b), c) and d) of this schedule at their sole risk; g) To deliver up at the end of the lease

On expiration of the term of the lease or other sooner determination of the lease peaceably and quietly to deliver up vacant possession of the Reserve including all improvements thereon to the lessors. 263

8. CUSTOM OWNERS

The lessors hereby represent and confirm to the lessee that they are the du1y authorised representatives of the Custom Owners entitled to create leasehold interest on and otherwise deal with the Erromango Kauri Reserve.

9. RE-ENTRYPROVISIONS

If there shall be any breach of the conditions or obligations hereby imposed or implied or by any Law imposed on the lessee, the provisions of The Land Leases Act CAP 163 shall apply.

10. REGISTRATION OF LEASE

All costs and disbursements howsoever arising in respect to the Stamp Duty and Registration of this lease at the Vanuatu Land Records Office shall be borne by the Lease.

11. DETERMINATION OF DISPUJE

If any dispute or difference shall arise between the lessors and the lessee concerning any matter within this lease, it shall be referred to The Lands Referee appointed under The Lands Referee Act CAPS 148. ·

12. GOVERNED BY VANUATU LAWS

This lease shall at all times be governed by the Laws of The Republic of Vanuatu. Cbapter9 Financial Aspects of Sandalwood Cultivation in Relation to the Erromango Kauri Protected Area

9 .1. Introduction

It was noted in Chapter Eight that the land lease agreement for the EKPA covers initially a period ·of five years. There is, therefore, a need to develop a longer term strategy to ensure the continued protected status of the area. While the lease agreement may be extended for a longer period, it is also important to assess whether ' income generating activities (that are compatible with the conservation of the forest) can be developed in the area. The establishment of income generating activities would decrease the need to rely on external funding for the payment of the lease agreement.

This would improve the sustainability of the protected area and could free funds for other conservation projects that do not generate income.

The objective of this chapter is the assessment of the potential of sandalwood as an income generating activity to be established in conjunction with the EKPA. While carrying out the assessment of the EKPA, it became clear that the owners of the land to be included in the EKPA, regarded sandalwood ( austrocaledonicum) as an important resource in terms of its contribution to their income. For this reason, the proposed land lease contract, agreed between the landowners and the Government of

Vanuatu for the establishment of the EKPA, allows the landowners to extract sandalwood from the area. However, due to the exploitation of the resource carried · out over the years, there is currently little sandalwood left in the forest to be included

264 265

in the EKPA. The obvious impoverishment of the resource, lead to the question of whether sandalwood planting could be a viable economic activity, from the landowners' perspective, and if this could be done within the EKPA or in its vicinity.

The status of sandalwood in Vanuatu is considered first. In Section 9.3, the research methods adopted in this study are presented. Sandalwood growth rates and heartwood yields derived from data collected in the island of Erromango are detailed in

Section 9.4. In Section 9.5, the financial aspects of a smallholder sandalwood

plantation is examined. Some issues concerning actual sandalwood cultivation

activities by rural people are considered in Section 9.6. In Section 9.7, the implications ' for the development of sandalwood cultivation in connection with the EKPA are

outlined. The conclusions of this chapter are considered in the last section.

9.2. Sandalwood and its status in Vanuatu

The economic value of sandalwood is due to the oil contained in its

heartwood.1 The scented wood is utilised to produce oil, incense and handicraft such

as carvings. The oil is principally concentrated in the heartwood. Applegate et al.

(1990) report that S. austrocaledonicum, S album and S. spicatum have low oil

content in their sapwood. However, Nasi (1995) reports that there is no oil in the

sapwood of S. austrocaledonicum. Heartwood yield is an important variable in

determining the economic returns that may be obtained from sandalwood cultivation.

There is, however, rather limited knowledge about the process of heartwood

formation. Writing about India, Rai (1990) remarks that it is not very well understood

what triggers the formation of heartwood. What is known is that certain factors

1 Notice that only the heartwood of the sandalwood is traded. In the text, heartwood trade and sandalwood trade are used interchangeably. 266

relating to stress, such as gravelly, dry soil and insolation, appear to provide conditions conducive to heartwood fonnation.

In 1825, Peter Dillon arrived in Erromango and became aware of the existence of sandalwood on the island. The extraction and trade of the resource began during the

1840s and continued until 1865 (Shineberg, 1967), when little was left of the original stock of sandalwood. Sandalwood extraction took place on the islands of Santo, Efate,

Erromango, Aniwa, Tanna, Futuna and Aneityum.

Trade statistics are available only since 1977, but it is believed that small quantities of sandalwood were traded throughout the late 1800s and the first half of this century (Bule and Daruhi, 1990). Between 1977 and 1987, about 726 tonnes of sandalwood were exported, for a total value of 67 million vatu (vt) (Bu1e and Daruhi,

1990). A five-year moratorium on sandalwood extraction and trade was introduced in

January 1987. According to Bu1e and Daruhi (1990) the moratorium had the following objectives: a) protect the remaining sandalwood stock; b) allow time to carry out an inventory to calcu1ate sustainable annual cut yields; c) allow the Research Section of the Department of Forests to study the ecology of the species; and iv) allow time to the

Research Section to organise an extension program. By the end of the moratorium, two sandalwood plots had been established. Unfortunately, at the end of the moratorium the inventory and the extension program had yet to be implemented.

In 1992, sandalwood trade opened again and 37 tonnes of sandalwood heartwood, valued at vt 11,667,000, were exported; in 1993, exports amounted to 80 tonnes for a total value ofvt 22,099,000 (Vanuatu Statistics Office, pers. comm.). The survey conducted in Erromango, and described below, revealed that in 1992 and 1993 the price paid to villagers for the heartwood ranged between 100 and 250 vtlkg. The 267

price was not determined on the basis of a grading system. Most villagers, with practically no knowledge of market prices, simply accepted the price offered by the buyers. During the period December 1993 to March 1994, trade was opened again for the islands of Santo, Malekula and Erromango. In Erromango, buyers purchased the heartwood for 420 vt/k:g. The buyers usually bore the cost of transporting the heartwood by boat from the various collection points along the coast to the main villages (e.g. Dillon's Bay). When the sellers paid for land transport by truck, they received 430 vt/k:g. In Santo, prices for the heartwood ranged between 250-280 vt/k:g.

During the month of March 1994, sandalwood extraction and trade was opened also for the islands of Tanna, Aniwa and Aneityum. In Tanna and Aniwa, traders purchased sandalwood at prices ranging between 200 and 300 vtlk:g. No sales were reported from

Aneityum.

9.2.1. Sandalwood prices in Vanuatu

Details of the pricing of sandalwood in Vanuatu are considered in this section.

The information presented here will be used as a basis for the economic analysis of sandalwood cultivation addressed later in this chapter.

Currently, there is no available independent information on the price that the heartwood exported from Vanuatu commands on international markets. Data from the

Department of Customs show that in 1994 one export transaction of sandalwood took place at a Free on Board (FOB) price of 583 vtlk:g (5 US$/kg at an exchange rate of vt!US$ 116.59).2 Two other export transactions registered FOB prices of 275 vtlk:g and 356 vtlk:g. For these two transactions, it is likely that under-declaring of the FOB

2 In this transaction, chips and small branches were sold at 1 US $/kg. 268

export price occurred. The trader involved is known to have paid 420 vtlkg for heartwood from Erromango.

Prices for sandalwood exported from other countries may be used in order to estimate, although roughly, whether the prices paid by the traders to the villagers in

Vanuatu reflect the actual value of the commodity.

In 1989-90, export prices for S. spicatum from Western Australia ranged between 4.26 US$/kg and 5.6 US$/kg (Applegate et al., 1990). At the average exchange rate for 1990 of vt/US$ 116 (Reserve Bank of Vanuatu, pers. comm.), prices would be vt 494 and vt 649. For 1994, Radomiljac (1995) reports that export prices for S. spicatum from Western Australia ranged between 7.65 A$/kg (for chips) and 10

A$/kg (for logs) (at the exchange rate of vt/A$ 83, these are respectively vt 635 and

830 vt). Considering that the sandalwood from Vanuatu appears to be of a better quality than that from Western Australia (Frank McKinnell, Department of

Conservation and Land Management of Western Australia, pers. comm.), it could be

expected that export prices for sandalwood from Vanuatu could increase to the

Western Australian level, provided that proper marketing arrangements are put in

place.

The 1994 prices for sandalwood purchased in Vanuatu appear to be below

those commanded by this commodity in other markets. This is especially true in the

case of the heartwood purchased in the islands of Tanna and Aniwa where, in certain

cases, prices less than half than those paid in Erromango were registered. From this

evidence, it appears that there is some rationale for government intervention to

maximise the prices obtained by the villagers of Vanuatu who sell sandalwood. 269

During the fieldwork undertaken for this study, villagers often asked whether the Department of Forests could set a 'recommended' price for sandalwood so that buyers would be 'forced' to pay higher prices. This thinking follows the current practice for some important agricultural products in Vanuatu (e.g. copra and cocoa).

Rather, the Department of Forests is considering the establishment a system of tender for the sale of sandalwood as suggested by Tacconi (1995).

9.3. Methods

The information used in this study was collected during two distinct periods of fieldwork. The type of information collected and the methodology are described in tum.

To derive information on sandalwood growth rates in a timely manner, it was decided to measure some of the sandalwood trees planted by villagers in Erromango.

During a period of four weeks, in October-November 1993, one hundred and twenty one sandalwood trees were measured. 3 Measurements were taken only when villagers had an accurate knowledge of the age of the specific tree. The information collected includes age of trees, diameter at breast height and at twenty centimetres from the ground, the existence of a fork in the tree below breast height, and whether the tree appeared to have grown in association with a host plant or not (see Survey Sheet,

Appendix 9A). Information was also sought on the time required for the formation of the heartwood, eventual problems faced in planting and maintaining trees, and on prices obtained during the 1992 harvest season. Information on sandalwood planting

3 This sandalwood survey was carried out at the same time as the survey detailed in Chapter Seven. 270

and selling activities was also collected through the questionnaire presented in Chapter

Seven.

Limited data on heartwood yields for S. austrocaledonicum are available for

New Caledonia (Cherrier, 1993). For Vanuatu, these data are. not available. In order to

derive heartwood yields, a second period of fieldwork was carried out in Erromango

between 22 February and 18 March 1994. Sandalwood trade in Vanuatu opened

during the period December 1993 to March 1994. When the survey was initiated, most

of the landowners had already terminated sandalwood extraction which limited the

sample to 35 trees.4 These trees were 'natural' (i.e. they had not been planted by the I villagers).

9.4. Sandalwood growth rates and heartwood yields

The diameter growth rates and heartwood yields are considered in turn. The

information presented in this section fonns the basis of the economic analysis carried

out in Section 4. Throughout the discussion, 'growth rate' means 'average annual

growth rate'.

9.4.1. Growth rates

The girth growth rates derived from a sample of 111 trees are presented in

Table 9 .1. 5 The table also reports the maximum, minimum and average size of the trees

4 Livo Mele (Research Assistant) assisted in taking measurements during the firSt fieldwork phase. He took the measurements in the second fieldwork phase. In the second fieldwork phase, the Survey Sheet reported in Appendix 9A was used. 5 The total sample was 121. Ten trees were excluded from the final sample because of doubts about the accuracy .of the measurements. Table 9.1. Annual average growth rates of sandalwood (girth at 20cm from ground; total sample 111).

Age (years) 2 5 6 7 8 9 10 11 12 13 14 18 20 26 28 33

Sample size 5 11 18 2 17 6 6 12 6 3 7 2 4 7 3 2 Maximum size (em) 17.50 28.60 35.80 45.50 47.40 46.20 38.90 52.10 48.40 62.80 54.00 59.40 63.70 69.10 81.70 85.10 Minimum size (em) 12.00 9.40 9.40 35.50 20.90 33.60 23.40 22.00 32.30 39.00 34.30 53.60 38.90 33.00 50.60 44.90 Mean size (em) 14.38 18.57 22.54 40.50 30.68 39.48 29.63 39.00 39.22 54.77 46.59 56.50 53.30 51.61 65.67 65.00 Growth rate (em) 7.19 3.71 3.76 5.79 3.84 4.39 2.96 3.55 3.27 4.21 3.33 3.14 2.67 1.99 2.35 1.97

------~------~

!j ...... 272

for each age class measured. The growth rates for the age classes between five and

eighteen years included, are about three centimetres per year or more. For the age classes between twenty and thirty three years, growth rates range between 1.97 em and

2.67 em. These growth rates are well above those reported by Cherrier (1993) for S.

austrocaledonicum growing in natural stands in New Caledonia. He found.that growth

rates ranged between 1.2 em and 1.5 em. It should be noted that the trees included in

Cherrier's sample had a girth (at twenty centimetres from the ground) ranging between

40 em and 130 em. Therefore, it seems that the trees considered in Cherrier's study

were more mature than those included in the sample reported here. This may be one of

the reasons explaining the higher growth rates derived on Erromango. It is worthwhile

to remark that although growth rates for other sandalwood species (i.e. S. spicatum

and S. album) are also reported to average between 1 em and 1.3 em in girth,

cultivated trees of S. album in India have been found to grow at rates up to 5 em in

girth (Rai, 1990). Hence, the fact that the trees included in the ·Erromango sample had

been cultivated may be another factor detennining the relatively fast growth rates

observed. Obviously, environmental factors specific to Erromango may also determine

the higher growth rates registered in this study. The influence of different environmental conditions on sandalwood growth should be examined with more

detailed field studies.

9.4.2. Heartwood yields

The information derived from the sample of 35 trees measured on Erromango is presented in Table 9.2. For comparative purposes, this table also presents yield data reported by Cherrier (1993). 273

Heartwood yields, derived from the sample taken in Erromango, show a large variation around the mean value (Table 9.2). 'This could be caused by the small sample size. However, the New Caledonia sample tends to confirm the existence of a large degree of variation in heartwood yields. For the girth size classes above 50 em, all the minimum and maximum heartwood weights derived from the Erromango sample are within those derived from New Caledonia, with only one exception. Given the large deviation around the mean of heartwood weight and the small samples collected, it is not surprising that there are some large differences in the mean weights derived from the two samples. Wide deviations around the mean limit the accuracy of estimates of ' expected financial returns from sandalwood cultivation.

Together with the qualitative information described below, the sample from

Erromango provides information on small-sized sandalwood trees. This information is useful both for the management of the natural stand and for cultivation purposes. In relation to the latter issue, sandalwood can be, in some instances, a very slow growing tree, needing 50 to 100 years to reach merchantable size (Applegate et al., 1990). This has been an important factor in limiting the interest on sandalwood cultivation (Newell,

1990). Sandalwood extraction and trade is not limited only to large sized trees. Trees as small as 24.8 em in girth have been cut and have yielded heartwood, even if in small quantities. It is important to note that small sandalwood trees are not necessarily immature trees. A small tree may have suffered stress and developed heartwood.

The relatively fast growth rates of sandalwood (Table 9.1) and the presence of heartwood in relatively small-sized trees suggests that sandalwood cultivation in

Erromango may involve time spans much shorter then 50 to 100 years. This conclusion relies on the assumption that relatively small-sized trees grow at rates similar to those Table 9.2. Heartwood yields in Erromango and New Caledonia.*

Girth at 20 em (em) 24-29.9 30-39.9 40-49.9 50-59.9 60-69.9 70-79.9 80-89.9 90-99.9 100-109.9

Erromango

Sample size 2 5 10 8 3 2 3 1 1 Maximum weight (kg) 33.50 22.50 96.00 121.00 165.00 176.00 153.50 168 285.00 Minimum weight (kg) 15.50 11.50 12.00 45.00 39.00 139.50 110.00 Mean weight (kg) 24.50 17.90 43.30 83.88 100.67 157.75 127.33 Standard deviation 13.44 7.63 40.13 48.79 71.24 79.29 66.10

New Caledonia

Sample size n.a. n.a. 3 12 33 43 27 11 8 Maximum weight (kg) 54 146 469 321 554 395 555 Minimum weight (kg) 22 30 44 55 67 148 166 Mean weight (kg) 33 75 134 162 185 271 320

*For New Caledonia, the data was derived from Cherrier (1993). The lower limit of each girth size class corresponds to the single value used by Cherrier to defme his girth size classes.

~ .j::>. 275

of larger trees (e.g. 2 to 3 em in girth per year). This assumption cannot be assessed from the quantitative data collected for this study. None of the trees included in the sample collected to determine heartwood formation had been planted. However, qualitative information collected during the survey conducted to assess sandalwood growth rates provides useful insights on the time spans involved in sandalwood

cultivation on the island of Erromango. For this qualitative information we rely on the knowledge that the local people often have of their natural environment.

For the Dillon's Bay area, two informants were of the opinion that 15-year-old

trees are often ready to be cut. During the growth rate survey in Tamsal village, a • discussion with a group of four villagers revealed that about 17 to 18 years are

required for sandalwood to mature. For example, in 1992 two trees planted in 1975

were sold and yielded a total of 54 kg of heartwood. One tree planted in 1982

measured 50 em in girth at the time of the survey and, according to the owner, will be

ready for harvesting in about six years time. In South River village, two trees that had

apparently been planted in 1984, yielded a total of about 50 kg of heartwood in 1992.

In the same year, in Antioch village, about 70 kg of heartwood were extracted from a

twenty-one-year-old tree. In the course of the growth rates survey in Ipota village, two

tree~. measuring 49 em and 67 em in girth, had been planted in 1973 and were

identified by the owner as 'ready to be sold'. One villager thought that in Ipota area

sandalwood matured in about twenty years. In Ifo village, sandalwood is reported to

have matured in fifteen years; four trees planted in 1968-69 were harvested in 1992

yielding a total of 160 kg of heartwood. Fmally, in Pon Narvin area sandalwood

growing on red soils may mature between 20 and 25 years of age; sandalwood

growing on black, rich soils takes longer to develop heartwood. It was also reported 276

by informants in Dillon's Bay village and South River village that sandalwood growing on poor and rocky soils develops heartwood faster than that growing on rich soils. In fact, the rocky coastline of Erromango is reported to be an environment leading to relatively fast development of heartwood.

9.5. Financial aspects of sandalwood cultivation

The financial analysis of the potential benefits that may be derived from sandalwood plantations was earned out by using cost-benefit analysis. The returns that could be derived from a sandalwood plantation are presented in terms of their NPV.

The financial analysis of forest plantation activities may either determine the optimal harvesting time (in the case when harvesting is a single event and replanting is not considered) or the optimal rotation period (in an infmite-horizon model that considers successive replanting and harvesting activities) (see Tietenberg, 1988). In order to carry out these types of analysis, well-defined yield functions are needed. These are not currently available for sandalwood. This is a major reason that justifies the specific approach taken here to assess the financial viability of sandalwood cultivation.

The information on growth rates and heartwood yields presented in the previous sections can be used to provide an indication of possible, although approximate, financial returns that may be obtained from sandalwood cultivation. The objective of this financial assessment is to use the best financial information available at the current time in order to assess whether sandalwood cultivation could be a viable economic activity to be established in conjunction with the EKPA. 277

9.5.1. Costs of a sandalwood plantation

The costs detailed below refer to a hypothetical plantation of 10 hectares. It is

2 assumed that planting takes place every year on 5,000 m • The plantation is thus based

on a twenty year rotation cycle; the assumption that sandalwood reaches maturity in

·twenty years is based on the qualitative evidence presented above.

2 To ensure the availability of about 500 seedlings to be planted over 5,000 m ,

about 1,000 seeds would be germinated in the nursery. Nursery activities are estimated

to require 30 person/day/year.6 The costing of nursery bags, seeds and labour is

presented in Table 9.3.7

Sandalwood would be planted at 3x3 meters spacing, as currently

recommended by the Extension Section of the Department of Forests. Some clearing

. of the established vegetation cover will take place when planting sandalwood; it is

estimated that this would take about 10 person/day. About 500 seedlings

2 (approximately six months old) would be planted annually over 5,000 m • It is

estimated that planting requires 10 person/day/year. After planting, sandalwood needs

occasional maintenance work for the first five years in order to keep the tree free of

climbing vines; this work is estimated to amount to another 10 person/day/year.

Further labour costs are involved in the harvesting of sandalwood. Currently,

data on harvesting costs from plantations is not available. The input of labour involved

in harvesting sandalwood naturally occurring in the forest can provide only very limited

guidance to the estimation of the labour inputs required in plantation harvesting.

6 E.g. 30 person/day/year implies that 30 work days are required per year. If logistically required, this work could be carried out by two people in 15 days. 7 Costs such as administration and overheads are not considered here, given that the analysis focuses on a smallholder plantation in an almost subsistence economy. 278

Table 9.3. Summary of costs for the establishment and maintenance of a sandalwood plantation.

Capital costs (fencing of 5 ha)

Barbed wire 8 rolls (500 m each) @ 7,700 vt 61600 Posts 180@ 200 vt 36000 Staples 3000 Wages 50 person/day @ 500 vt 25000

Total capital cost 125600

Annual nursery costs

Nursery bags 600@5vt 3000 Seeds 1000 @ 3 3000 vt Wages 30 person/day @ 500 vt 15000

Total 21000

Annual labour costs for planting activities

Vegetation clearing 10 person/day@ 500 vt 5000 Planting 10 person/day @ 500 vt 5000

Total 10000

Other annual labour costs

Fence maintenance 5 person/day @ 500 vt 2500 Tree maintenance* 10 J;?erson/day @ 500 vt 5000.

Total 7500

Total operating costs in year I 38500

* Tree maintenance will require a maximum of 50 person/day per year when five plots have to be attended to in the same year.

To harvest sandalwood in the forest of Erromango, groups of four, six or even more men camp in the forest or along the coastline for several days. A group of four men may harvest one or two trees per day. They have to go into the forest searching for the next tree to harvest, cut the tree, remove the sapwood, then carry the 279

he~ood to a place where it will be loaded on a boat or truck to be transported to \ the main collection place (e.g. Dillon's Bay). Obviously, plantation harvesting would be less labour intensive than the harvesting of natural stands. Transport would also be facilitated by the concentration of sandalwood in a relatively small area. During the survey carried out in Erromango, the time required to cut a tree varied between thirty minutes and one hour. The time required to remove the sapwood also varied, depending on the size of the trees, from one hour to two hours.

It is assumed here that one person/day is required to cut three trees and to remove the sapwood.

9.5.2. Benefits of a sandalwood plantation

The total weight of heartwood derived depends on tree size, heartwood yield per tree and survival rates. A projection of the range of possible sandalwood yields is presented in Table 9.4. The tree size is derived from Table 9.1. The two alternative tree sizes are the minimum and the mean size for 20-year-old trees. Heartwood yields are those presented in Table 9.2. For heartwood, the minimum, mean and maximum yields are considered. The minimum size of a twenty-year-old tree (38.9 em) falls into girth class 30-39.9 em, whereas the mean tree size falls into girth class 50-59.9 em.

Thus, the minimum, mean and maximum heartwood yields for these classes are adopted in Table 9 .4.

The assumed survival rate of 10% is derived from research undertaken in Fiji

(Jiko, 1993). For the Fijian experiment, seedlings were planted at a spacing of 3x3 m with mixed host species. After four years, only ten percent of the seedlings had survived. It is not clear, however, if the experimental trial carried out in Fiji was representative of the natural growing conditions of sandalwood in that country and, of 280

course, little can be said about its representativeness in regards to the particular \ conditions in Erromango. The survival rate of 40% is based on the assumption that after 3 years from planting, 80% of seedlings survive; it is then assumed that the remaining trees would suffer a 50% mortality rate over the following 17 years. 8 The survival rate of 60% was derived in a similar way, but it was assumed a higher probability of survival after the third year.

Table 9.4. Heartwood yields (after 20 years) and financial returns fx:om a 5000 m2 sandalwood plantation.

Tree size Heartwood Survival Number of Total Heartwood (em) yield (kg) rate(%) remaining heartwood value* trees weight (vatu) (kg)

Minimum 10 50 515 241500 11.5 40 200 2300 966000 60 300 3450 1449000

Mean 10 50 895 375900 Minimum 17.9 40 200 3580 1503600 38.9 60 300 5370 2255400

Max 10 50 1125 472500 22.5 40 200 4500 1890000 60 300 6750 2835000

Minimum 10 50 2250 945000 45 40 200 9000 3780000 60 300 13500 5670000

Mean 10 50 4190 1759800 Mean 83.8 40 200 16760 7039200 53.9 60 300 25140 10558800

Max 10 50 6050 2541000 121 40 200 24200 10164000 60 300 36300 15246000

* Market price as in 1993/94 for heartwood from Erromango: 420 vatu/kg.

8 Andrew Tolft, former Principal Extension Officer (Department of Forests, Vanuatu) regarded the 10% rate as a minimal survival rate and suggested to test the effect of adopting a survival rate of 40%. 281

The data presented in Tables 9.3 and 9.4 are used to calculate the NPV derived from a smallholder sandalwood plantation based on a twenty year cycle, with planting activities ending in year sixty from the beginning of the project. The operating costs occur on a yearly basis. Nursery and planting costs would accrue from year one to year sixty. The first sandalwood harvest is assumed to take place at year twenty and the last one at year eighty.9

Table 9.5 presents the NPVs for eighteen heartwood yield scenarios combined with three alternative scenarios relating to the structure of costs and benefits accruing from the plantation. The real discount rates applied here are the same as those used for the assessment of the present value of timber royalties and of the lease agreement for the EKPA. The adoption of similar discount rates facilitate the comparison of the benefits derived from sandalwood cultivation with the value of timber royalties and that of the lease agreement.

The heartwood scenarios have been derived from Table 9 .4. For example, the heartwood yield scenario 'MinMin 40% survival' is the combination of 'minimum tree size', 'minimum heartwood yield' and hypothetical survival rate of 40%. The expected heartwood value for this combination of factors at a price of 420 vtlkg is vt 966,000.

This is assumed to be the gross annual value of the harvest derived from the plantation and would accrue from year twenty to year eighty.

9 This time horizon was chosen to make the returns from a sandalwood plantation comparable to those from the lease for the EKPA. Notice that the length of the lease considered in the previous chapter is 75 years (this is the maximum length for a lease in Vanuatu). There is, therefore, a gap of five years between the length of the lease and the length of the scenario for sandalwood considered here. However, this does not constitute a practical problem in comparing the lease case with the sandalwood case. The discounted value (at 4%) of five years of lease payments, occurring from year 76 to year 80, is only about 75,000 vatu (about US$ 680). 282

The alternative costs and benefits scenarios are derived as follows. The

Benchmark scenario adopts the costs and benefits presented in Tables 9.3 and 9.4. The exception to this is the fact that the cost of nursery bags and seeds is supposed to accrue to the 'sandalwood project'; that is, it is supposed that external funding is provided to the rural people undertaking the project In scenario Sensitivity 1 the price of heartwood is assumed to decrease by 25% (it is in this case 315 vtlkg instead of 420 vt/kg). It should be noted that the 1993 heartwood price is thought to be lower than the potential price that sandalwood from Vanuatu could command. This fact, jointly with the strength of international demand for sandalwood and the limited international supply available (Applegate et al., 1990) suggest that the price of sandalwood from

Vanuatu is unlikely to decline as much as assumed in scenario Sensitivity 1. Scenario

Sensitivity 2 assumes an increase in costs by 25%, and heartwood price of 420 vtlkg.

The first conclusion that may be drawn from Table 9.5 is that there are only two negative NPVs for the hypothesised smallholder sandalwood plantation. These occur when the trees harvested fall in the minimum size tree class and the minimum heartwood yield class, with a survival rate of just 10% (heartwood yield scenario:

MinMin, 10% survival) and the discount rate applied is 8%. In all other cases the NPV is positive. Therefore the results presented in Table 9.5 tend to indicate that under a wide range of conditions, sandalwood cultivation would be a profitable activity to be undertaken by smallholders.

In concluding this section, it is worthwhile noting that the NPVs presented above provide only a partial indication of whether smallholders might adopt sandalwood plantations as an income generating activity. Other factors may influence sandalwood cultivation, as noted below. Table 9.5. Net present value of output from a ten hectare sandalwood plantation.

Benchmark case Sensitivity 1 Sensitivity 2 Discount rate 0% 4% 8% 0% 4% 8% 0% 4% 8%

Heartwood yield scenarios:

MinMin: 10% survival 11774000 1532845 69154 8091125 855878 -117979 11034625 1239089 -100690 40% survival 54443500 9376136 2237260 39712000 6668266 1488729 53322875 9012300 2048044 60% survival 82839000 14595653 3680081 60741750 10533848 2557284 81451500 14182761 3477305

MinMean:

10% survival 19972400 3039833 485728 14239925 1986119 194452 19233025 2746077 315883 40% survival 87237100 15404089 3903556 64307200 11189231 2738451 86116475 15040254 3714340 60% survival 132029400 23637582 6179525 97634550 17315296 4431867 130641900 23224691 5976748

MinMax: 10% survival 25865000 4122981 785140 18659375 2798480 419011 25125625 3829225 615296 40% survival 110807500 19736680 5101206 81985000 14438675 3636688 109686875 19372845 4911990 60% survival 167385000 30136470 7976000 124151250 22189461 5779223 165997500 29723578 7773223

N 00 Vl Table 9.5. continued.

Benchmark case Sensitivity 1 Sensitivity 2 Discount rate 0% 4% 8% 0% 4% 8% 0% 4% 8%

Heartwood yield scenarios:

MeanMin:

10% survival 54687500 9420987 2249658 40276250 6771984 1517399 53948125 9127231 2079814 40% survival 226097500 40928703 10959277 168452500 30332692 8030241 224976875 40564868 10770060 60% survival 340320000 61924504 16763106 253852500 46030487 12369553 338932500 61511613 16560330

MeanMean: 10% survival 104390300 18557103 4775138 77553350 13624071 3411509 103650925 18263347 4605293 40% survival 424908700 77473170 21061195 317560900 57741042 15606680 423788075 77109334 20871978 60% survival 638536800 116741203 31915983 477515100 87143011 23734211 637149300 116328312 31713207

MeanMax: 10% survival 152043500 27316473 7196474 113293250 20193598 5227511 151304125 27022717 7026629 40% survival 615521500 112510648 30746539 460520500 84019150 22870688 6t4400875 112146812 30557322 survival 60% 924456000 169297420 46443999 691954500 126560174I 34630223 923068500 168884529 46241222

Legend: MinMin: minimum tree size class, minimum heartwood yield class (see Table 9.4). MinMean: minimum tree size class, mean heartwood yield class. MinMax: minimum tree size class, maximum heartwood yield class. MeanMin: mean tree size class, minimum heartwood yield class. MeanMean: mean tree size class, mean heartwood yield class. MeanMax: mean tree size class, maximum heartwood yield class. Benchmark: costs as from Table 3 (nursery bags and seeds provided by project); benefits as from Table 9.4. Sensitivity 1: heartwood market price vatu 315 per kg (a decrease in price of25% is assumed). N 00 Sensitivity 2: increase in costs by 25%. ~ 285

9.6. Rural people and sandalwood

The financial analysis of smallholder activities does not account for all the factors that might influence their decision in relation to the adoption of a specific eco~omic activity. To assess whether sandalwood cultivation will be adopted by smallholders, it is useful to consider what they are actually doing in ·relation to sandalwood planting activities.

From the interviews conducted during October-November 1993 in Erromango, fifty-two of the seventy-five interviewees had planted sandalwood in the previous year.

Of the twenty-three interviewees that had not planted sandalwood in the previous year, eight reported having planted it in the past, six did not have land close to their house where they could plant, and two were planning to plant in the current year; seven respondents had not thought about planting sandalwood.

Sandalwood is normally planted as part of gardening activities. A few trees

(e.g. five to ten) are planted in the garden area and in the forest close to the garden.

Only three of the fifty-two interviewees who reported planting sandalwood, had planted more than 100 trees in one year. They had undertaken sandalwood planting as a specific activity, distinct from gardening activities.

It is worthwhile reporting briefly on what could be called a small 'sandalwood project'. During fieldwork, it was found that one villager had started a small sandalwood nursery. He expressed interest in upgrading his nursery and establishing a plantation. Therefore, in January 1994, about vt 240,000 was provided by the

Australian High Commission in Port Vila to purchase materials to upgrade the nursery and to purchase barbed wire to fence off land for two plantations in North 286

Erromango.1o The barbed wire for fencing was shared by the villager who had started the nursery and two other villagers who were interested in planting sandalwood. They had agreed to help in the nursery in exchange for sandalwood seedlings.

At the time of a subsequent visit by the author in May 1994, sandalwood seedlings were being raised in the nursery. One of the three villagers mentioned above was in the process of erecting a fence and had also planted sandalwood in the area.

This smallholder has been planting sandalwood intercropped with orange trees. The rationale for doing so is that he hopes to derive greater benefits from the fenced off area by harvesting oranges while waiting for the sandalwood to mature.

This experience tends to indicate that a sandalwood project, eventually established in connection with the EKPA, should take into account the short-term cash requirements of the people who carry that project.

The next section considers some issues relating to the eventual establishment of sandalwood cultivation within, or in the vicinity of, the Erromango Kauri Protected

Area.

9.7. Implications for the Erromango Kauri Protected Area

The establishment of a sandalwood plantation within the boundary of the

EKPA (or in its vicinity) could provide the landowners of the EKPA with an alternative source of income to logging royalties. As a result, this may ease the pressure on the landowners to allow logging activities to take place in the EKPA

It should be stressed, however, that there is only a weak link between the establishment of sandalwood cultivation activities and the conservation of the forest

1°Fencing is required in Northern Erromango to protect sandalwood seedlings from wild cattle and wild horses. 287

located in the EKP A. It cannot be excluded that the landowners could choose to establish sandalwood planting activities and, at the same time, allow logging to take place. In fact, logging could take place in areas of the EKPA where sandalwood is not grown. Sandalwood cultivation at a smallholder scale would conceivably require a relatively small land area, as detailed below.

A further issue to be considered is the impact of sandalwood cultivation on the ecology of the EKPA. Sandalwood planting, when carried out at the currently recommended spacing of 3x3 m, appears to lead to a substantial clearing of the established vegetation. If this activity was to be carried out on a large scale inside the

EKPA, it would conflict with the maintenance of the ecology of the area. It is therefore important that if an area suited to the cultivation of sandalwood is located within the

EKPA, the EKPA lease should be amended to allow for some regulation of clearing activities.

Sandalwood cultivation may be initiated in the area with two distinct objectives. One is to complement the income provided by lease payments for the

EKP A. In an alternative case, sandalwood cultivation would be introduced with the objective of replacing the income generated by lease payments. The latter case is considered below.

The potential of sandalwood cultivation to provide an alternative to the income generated by the lease agreement (or derived from logging royalties 11), can be assessed by considering Tables 8.5 and 8.6 (Chapter Eight).

11 Logging royalties and lease payments are mutually exclusive in the case considered, as outlined in Chapter Eight. 288

Table 9.5 shows that, given the current knowledge of the production of

sandalwood, the expected NPVs of a sandalwood plantation are spread over a large

range. Even if only one discount rate in considered (e.g. 8%), the NPVs varies (in the

Benchmark case) from a minimum of vt 69,154 to a maximum of vt 46,443,999. This

large variation in values indicates that currently there is an inherent substantial risk in

undertaking sandalwood plantation activities. This risk factor has to be accounted for

in defining the objectives and the mode of operation of an eventual sandalwood project

established in conjunction with the EKP A

Comparing the data from Table 9.5 and Table 9.6, it seems that the benefits ' generated by sandalwood cultivation in a situation of 'average yield' (e.g. MeanMean

40%: mean tree size class, mean heartwood yield and intermediate survival rate) and at -

a discount rate of 8% could match (from a landowner's point of view) those generated

by the lease payment or by logging royalties. It is obvious that the survival rate has a large influence on the NPV for sandalwood cultivation.

In conclusion, it appears that because of the risk factor currently involved in sandalwood cultivation, and because of the long time span involved in this activity, it cannot be expected, at the current stage, to be a substitute for a lease payment

Initially, sandalwood cultivation could be established by the landowners with the objective of generating additional income. Over the long-term, if it proves to be successful, consideration could be given to the possibility of having sandalwood cultivation replace lease payments. Given the weak link between the conservation of the forest in the EKPA and sandalwood cultivation activities, this option presents important institutional difficulties. For instance, how could the provision of support for 289

the establishment of sandalwood planting be directly related to the continued

maintenance of the EKP A status of the forest?

A final caveat to this analysis should be made. It was shown above that the

NPV of sandalwood cultivation may match, under certain conditions, that of logging

royalties. It is important to note, however, that the totality of logging royalties would

accrue to the current generation of landowners, whereas lease payments and benefits from sandalwood cultivation would be distributed across different generations. The

landowners' choice between the different options will be therefore influenced by their

attitudes towards future generations and their needs for immediate monies. '

9.8. Conclusion

The research on the production aspects of sandalwood cultivation presented in

this chapter shows that sandalwood in Erromango may be harvested in shorter time than that reported for other countries. This is an important factor contributing to the

apparent profitability of smallholder sandalwood cultivation evidenced by the financial

analysis presented above. It is important to stress the fact that rural people have been, and still are, actively planting sandalwood. However, only two cases of .landowners planting on the scale hypothesised here are known. This may imply that factors such as labour and capital availability, and knowledge of sandalwood cultivation practices could be constraining the development of sandalwood smallholder plantations.

The evidence presented tends to indicate that sandalwood is an income generating activity that has the potential to supplement the income of the people owning the EKP A and of the other people living in the neighbouring areas. However, it seems that, at least over the next twenty years, growing sandalwood could not 290

substitute for a land lease agreement. Indeed, whether sandalwood cultivation replaces a lease agreement over the long-term depends on the institutional setting that will be developed to strengthen the 'weak link' existing between sandalwood cultivation and the continued maintenance of the protected status for the EKPA.

This chapter concludes the application of framework developed in Part II of the dissertation to the first case study. The next chapter will apply this framework to the second case study. 291

Appendix9A

ERROMANGOSANDALWOODSURVEYSHEET (English translation)

1) Tree No._ 2) Location: _____ 3) Soil type [circle]: 3.1) Black 3.2) Red 3.3) Stony 4) Plant Association [circle]: 4.1) Open garden 4.2) Old garden 4.3) Bush - Bush type, ____ 5) Visible host plant: YES I NO 5.1) If Yes: Species------6) Have you planted this tree? YES I NO 6.1) If Yes: year ___ 7) Has this tree been measured before? YES I NO

8) Measures of sandalwood tree

Diameter Girth Diameter (20 Girth (20 Height Forked breast breast cmfroin em from (yes/no) height height ground) ground) at em

9) Time needed to fell tree (minutes): __ 10) Time needed to clean heartwood (min): __

11) Measures of heartwood logs from the above tree

Log No Diameter Diameter Length ' (bottom) (top) 1 2 3 4

12) LOG heartwood kg __ 13) ROOTS heartwood kg __ 14) Price/kg __ 15) Mean of transport.____ _ 16) Destination------17) Transport cost ___ (per trip) 18) Kilograms per trip------Chapter 10 Conservation Planning in Malekula Island

10.1. Introduction

This chapter presents the second case study considered in the dissertation. It applies the framework for the assessment and establishment of PAs developed in Part

II of the thesis to sites on Malekula Island. Tiris application differs from the case of the

EKP A, considered in the previous two chapters, for reasons that will be explained below. Both approaches have a place in the conservation of forests and biodiversity in

Vanuatu. Their specific role and how they may be integrated to provide an overall strategy for forest and biodiversity conservation in Vanuatu are discussed in Chapter

Eleven.

The approach to the assessment and establishment of individual PAs adopted in

Malekula was designed to establish PAs that are consistent with local peoples' needs and wants in relation to ecosystem conservation. The individual PAs considered in

Malekula have been identified and assessed through the process of participatory planning described in Chapter Six.

In order to implement this approach to conservation, the appropriate institutional structure has to be devised. Therefore, the institutional background specific to Malekula and the specific institutional formula for the establishment of PAs are considered. It is proposed that the PAs could be declared protected by the Local

Government Council (LGC) upon a request presented by the landowners. It is

292 293

important to note that one of the objectives of the conservation legislation developed is to strengthen the customary rights that landowners have on their resources. During fieldwork carried out in Malekula it became apparent that these rights were being eroded. A substantial erosion of customary rights could result in an open access regime. It was noted in Chapter Two that open access regimes lead to over­ exploitation of resources. In that chapter, it was also pointed out that attempts carried out by governments to replace private or communal property regimes with state property regimes .have on occasion actually resulted in open access regimes.

Consideration of these issues played an important role in the development of the conservation legislation presented in the chapter.

One of the aspects ·of the framework developed in Part II of the dissertation is its focus on implementation of research outputs. Therefore, before proceeding with the analysis it is opportune to put the research presented in this chapter into its policy context. In February 1994, the LGC of Malekula recognised the need to establish PAs on the island of Malekula. In a letter addressed to various ministries and departments of the Government ·of Vanuatu and to the present author, the LGC requested assistance in establishing PAs (see Appendix lOA). The work presented in this chapter attempted to fulfil, at least partially, that request.

The chapter proceeds as follows. General features of the process of assessment of PAs are considered in Section 10.2. That section details also the specific approach adopted in Malekula. Geographical details of the island of Malekula are provided in

Section 10.3. In section 10.4, the institutional background specific to Malekula is

considered. The conservation legislation developed for the implementation of the

approach to conservation described in this chapter is also discussed in Section 10.4. 294

The specific PAs considered are presented in Section 10.5. The conclusions are drawn in the fmal section.

10.2. Protected area identification and assessment

10.2.1. Protected area identification

Several criteria are normally adopted for the selection of PAs (MacKinnon et al., 1986; Smith and Theberge, 1986). These criteria refer to ecological characteristics of the area (e.g. species richness and diversity, ecosystem typicalness) and opportunities for conservation (that is, the socioeconomic and political situation inherent to conservation activities). MacKinnon' et al. (1986) stress that in selecting the area to be protected, it is important: a) to identify areas which have significant ecological features; b) to consider the socioeconomic and political conditions affecting the establishment

and the continued viability of these areas as PAs.

MacKinnon et al. (1986) suggest that if the socioeconomic and political conditions do not favour the conservation of an area that has been attributed high priority on an ecological basis, it is advisable to attempt to protect an alternative area of lower ecological importance, but which shows favourable socioeconomic and political conditions.

The above principles for the identification of PAs have been partly applied by

Maruia Society (1990) and Maruia Society and Royal Forest and Bird Protection 295

Society (RFBPS) (1989) in a Melanesian context 1 It is useful to consider in detail the selection and design criteria adopted by these studies.

In relation to point (a) above, the biological criteria adopted are:

(i) include habitat examples from major centres of diversity and endemism;

(ii) include examples of all significant forest types;

(iii) include all significant land ecosystems;

(iv) wherever possible, include intact forested ecoclines from the sea to the

highest point on the island concerned, and enclose the catchment area;

(v) design each PA to include a representative sampling of habitats of the region ' where the PAis located.

In relation to point (b) above, the social and economic criteria adopted in the design of PAs are:

'i Responsibility for forest protection has, where possible, been spread throughout all the

provinces.

ii Allowance has been made around each village site near to or inside protected forest areas for

exclusion zones into which gardens may be expanded and where timber may be felled for

village purposes.

iii Densely settled areas have been avoided.

IV Areas identified as agricultural opportunity areas have been avoided.

v Forests where advanced negotiations with logging companies are under way, have been

avoided.

vi Where {proposed PAs] were near to important tabu sites, boundaries were extended to

include them if this was desired by landowners.

1 includes the following countries: Papua New Guinea, Solomon Islands, Vanuatu, Fiji, and New Caledonia. 296

vii Boundaries of protected forest areas must remain flexible until all land owners have the

chance to fully discuss the recommendations in this chapter .' (Maruia Society, 1990 p. 20).

The approach detailed above (hereafter referred to as the Maruia!RFBPS approach) seeks to identify PAs on the basis of biological criteria. Then, it adjusts the areas earmarked for conservation according to the specified social and economic criteria. The authors of the two studies recognise that the establishment of PAs thus designed may involve costs for the landowners of the areas, for other people living near or within the areas, and for the government. They point out that specific projects, aimed at providing (partial) compensation to the affected parties, should be developed.

It should also be stressed that this approach seeks to address the issue of equitable distribution of conservation costs by spreading them across the different geographic areas of a country.

Before discussing the Maruia/RFBPS approach, it is useful to note that two altem~tive scenarios for the establishment of PAs are possible. In the first scenario, a

PA may be set up by the landowners and/or local community if the benefits that they receive from this land use option are higher then their costs. In the alternative scenario, when the local costs are higher then the benefits, the PA may be funded by national and/or international institutions.

Two features of the Maruia/RFBPS approach are important. Firstly, proposing to landowners that a P A should be established on their land because their area is important from an ecological viewpoint, may raise their expectations for financial gains from the initiative. This may influence the process of evaluation of the P A. For example, this approach makes it difficult to ascertain the values that the landowners attach to the area in question. They may tend to indicate that they do not attribute 297

significant conservation values to the area consideted for conservation status. This would cause an under-estimation of conservation benefits which, in turn, would result in the over-estimation of the compensation to be provided to landowners.

Alternatively, it is possible that an increased awareness of the ecological significance of the specific area may increase the landowners' willingness to protect the area on their own initiative. The final decision may be expected to depend on the 'behaviour mode' and 'moral stance' (discussed in Chapter Four) guiding the behaviour of the landowners.

Secondly, the development of compensation packages implies that funds are actually available for this purpose. Funds for conservation initiatives are limited or may not be available. Therefore, .it is , necessary to attempt to minimise the use of any available funds for each specific conservation initiative. In relation to funding, it may be noted that LDCs often rely on international conservation organisations and development agencies to fund conservation initiatives. These organisations may attach a higher funding priority to conservation initiatives focusing on .areas presenting ecological features of international conservation relevance. As a result, when designing conservation initiatives of local relevance in a LDC, it seems to be important to develop an approach that minimises funding requirements.

The provision of compensation to landowners is certainly an important cost factor in the establishment of PAs, as discussed in the previous two chapters. If PAs were also designed to satisfy landowners' conservation needs, this cost would be

avoided or reduced. A possible way to do this is to discuss with the landowners their

conservation interests and to ascertain whether these may be conducive to the

establiShment of PAs. 298

This is the approach adopted in Malekula and is discussed in the next section.

10.2.2. The process of protected area assessment

In order to contrast the process of assessment carried out in Malekula with that undertaken in the case of the EKPA, it is useful to recall some significant steps of the latter.

The issues researched and the research methodology adopted depended partly on the historical conditions existing at the beginning of the research process described in Chapter Eight. Firstly, the area to be included in the EKPA had already been identified by ecological assessments. The latter did not consider socioeconomic factors in the identification of the PA and its boundaries. Secondly, as a result of negotiations undertaken before the onset of the research process, the landowners expected the

Government of Vanuatu to lease their land in order to establish the EKPA. This influenced the approach to the assessment of local conservation needs and the design of a compensation framework.

Given that the landowners had already been offered an agreement to lease, it appeared that it would have not been in their interest to reveal whether they would protect the forest without government intervention. In fact, this would have reduced the likelihood of receiving compensation payments. The assessment of their conservation needs through PRA methodology was, therefore, not appropriate. As a result of this, it was assessed whether the landowners would conserve the forest without external intervention. This assessment was carried out by considering the contribution of subsistence uses of forest products to the local peoples' livelihood and by determining the potential value of logging royalties. The former were assessed with 299

RRA methods. It was found that the landowners did not appear to have an economic interest in protecting the forest. Thus, a compensation package had to be devised.

The approach to the assessment and establishment of individual PAs adopted·in

Malekula was designed to establish PAs that are consistent with local peoples' needs and wants in relation to ecosystem conservation. The individual PAs considered in

Malekula were identified and assessed through the process of participatory planning using PRA rather th!lfl RRA. No mention was made, at any stage, of compensation to be paid in exchange for the establishment of PAs.

Whether a PA should or should not be established, its boundaries, the resource use rules to be applied, and the term of the PA were defined through meetings with the landowners and chiefs. These meetings were held with those landowners who: a) had approached the LGC, or the author, asking for assistance in establishing a PA; or b) have rights to areas that had been indicated as potential PAs by the LGC.

Following the request for assistance from the LGC, visits to some of the areas proposed for conservation status2 were carried out during the period 12-15 December

1995. The objectives of these visits were: a) introducing the research team;3 b) outlining the objective of the visit; c) identifying some of the owners of the areas of interest, d) finding out whether the landowners where interested in pursuing some form of

conservation.

2 Not all the areas proposed for conservation status by the LGC were assessed. The reasons that led to the exclusion of some areas are detailed in Section 10.5. 3 Livo Mele (Research Assistant) took part in this phase of the fieldwork with the author. 300

In every case the response appeared to be positive. Arrangements were made to visit the areas to carry out detailed work.

At the beginning of the first meeting (for each PA), it was stressed that the objective of our work was to help landowners in assessing their conservation needs and wants, if they were interested in doing so. At the beginning of these meetings, it was noted that: a) the LGC was interested in establishing PAs, and it had identified certain areas; b) one objective of the visit was to assess with the landowners whether they were

interested in protecting these areas, or other areas, and to find out what other ' conservation issues they needed to pursue.

In presenting point (a), it was made clear that there was no intention to impose any decision on them. It was also stressed that the LGC did not have the power to do so.4 It was emphasised that landowners would be helped in protecting their resources, if it was found that they needed to do so.

In the further visits to each of the areas, meetings were carried out to assess conservation needs and ways of achieving these. The following issues were discussed before actually proceeding with the detailed assessment of local conservation needs: a) positive and negative aspects of logging operations, both in relation to ecological

and socioeconomic impacts; b) meaning of the concept of resource conservation; c) meaning of the concept of protected area

4 This helped in starting the discussion in a more relaxed environment Peoples' trust in our explicitly stated points and work appeared to increase during our permanence in the villages. 301

The specific assessment of conservation needs and wants, and of the allocation of resources, was carried out through open ended discussions. The major issues addressed were:

• Should logging activities be allowed in the area, or part of the area (controlled by

the landowners taking part in the meeting)? If yes, in which areas?

• Should agricultural activities be carried out in any part of the area being

considered?

• Should water sources be protected? How should they be protected?

• Should specific forest resources and/or marine resources be collected for

commercial and/or subsistence purposes? Should the use of some of these

resources be banned?

• Should some of the ,resources, considered above, be left for the use of future

generations?

• Should a PA be established? What area should it include? What is the term of the

PA?

• Are the resources allocated to consumption sufficient for the population (current

and future) living near to the area?

The results of this assessment process are detailed in Section 10.5 for each specific area. Here, it is important to note that the assessment process described above resulted in:

1) modifications to the boundaries of some of the areas proposed by the LGC;

2) identification of new PAs;

3) provision of resource use rules and period of existence specific to each PA. 302

The general features of the process of assessment and establishment of PAs adopted in Malekula have been presented above. The analysis may now proceed to consider the details relating to the Malekula situation. Details of the geography of the island are presented before the discussion of relevant institutional aspects.

1 0.3. Geographical background

The island of Malekula is situated in the central part of Vanuatu. With a land area of about 2,067 km\ Malekula is the second largest island of the archipelago. The

19,289 inhabitants (Statistics Office, 1991) live mainly along the coast and on the smaller islands found along the coast of Malekula. The average population density is

2 2 9.3 inhabitantslkm , which is lower then the national average of 11.6 inhabitantslkm •

The Eastern coast of the island is more densely populated than the Western coast.

Details of the vegetation cover of Malekula are reported in Table 10.1. From the table, it appears that about 40 per cent of the island is covered in low and medium height forest. A further 45 per cent is covered in thickets vegetation. The forests of

Malekula hold an estimated 300,000 m3 of merchantable timber.5 This represents about

8 per cent of the total merchantable timber found in the forests of Vanuatu. 6 The forest areas that are considered not to be loggable are detailed in Map 10.1.7 There is very limited information on the ecological aspects of the forests of Malekula 8 Only two surveys, detailed in Section 10.5., have attempted to identify forest conservation needs for the island of Malekula.

5 Information provided by the Utilisation Section, Department of Forests of Vanuatu. 6 Incoll (1994) indicates that there are about 3, 727,000 m' of merchantable timber in the forests of Vanuatu. This figure relates only to forests with timber stocking of more than lOm'lha. 7 These areas were derived from a map prepared by a logging company intending to operate on Malekula. 8 A few remarks on the vegetation of Malekula are made by Chew (1975). 303

In relation to marine species and ecosystems, Thorsell (1989) provides a list of areas in the Oceanian realm that are of national, regional, and international importance.

The island of Malekula is listed as being of regional and international importance for the conservation of turtles. South Pacific Regional Environment Programme (1994) reports that the presence of the green turtle (Chelonia mydas), the hawksbill turtle

(Efetmochelys imbricata) and the leatherback turtle (Dermochelys coriacea) has been confirmed in Vanuatu; that report notes that there have been no confirmed sighting of the olive ridley turtle (Lepidochelys olivacea). In relation to Malekula, it should be noted that the first three species have been recorded there; the fourth species has been ' sighted by villagers in Wiawi (West coast Malekula). It is also important to note that a recent survey of the Vanuatu Environment Unit (1994) found the loggerhead turtle

(Caretta caretta) nesting in the area ofWiawi.

Table 10.1. Vegetation cover of Malekula. Vegetation type Area (ha) Percentage of land area Midheight forest (20-30m) 11,998 5.8 Low forest (10-20m) 70,472 34.1 Thickets (3-8m) 93,527 45.2 Grassland 942 0.5 Swamp communities 30 Mangroves 1,841 0.9 Other* 27,946 13.5 Total land area 206,756 100.0

* Bare ground or human made.

The leatherback turtle, the green turtle, and the hawksbill turtle are found throughout the South Pacific; the loggerhead turtle and the olive ridley turtle are less 304

common in the South Pacific (South Pacific Regional Environment Programme, 1993).

IUCN (1990) lists the latter four species as endangered.

1 0.4. Institutional setting

In 1994, the LGC of Malekula identified a number of areas that should be considered for conservation status. These areas were identified on the basis of (a) the councillors' and the Regional Development Planner's (Kaltok Massing) knowledge of the island,9 and (b) one landowner's request (Nagha mo Pineia Area). The areas proposed for conservation status at that time are reported in Map 10.1.

As it is made clear by the ietter copied in Appendix lOA, the impending logging operations played an important part in bringing about the LGC' s decision to establish

PAs. As noted in Chapter Seven, timber licenses are issued by the Ministry of

Agriculture, Livestock, Forestry and Fisheries. The LGC may influence forestry operations only by withholding a business license. to

At the time when the LGC made the decision to set up a PA system, one logging company had been granted a timber license on the island for a maximum

3 annual harvest of 70,000 m • Given the volumes of merchantable timber found in

3 Malekula (300,000 m ), a license of that size would have meant that the whole island would have been logged in a few years. Before the company could start operations, the license was suspended by the Government of Vanuatu. It was then re-issued in

December 1994 for a maximum annual volume of 35,000 m3 and a minimum annual

9 All the councillors of the Malekula Local Government Council and the Regional Development Planner were people born on the island. 10 A business license is required to undertake any commercial activity in Vanuatu. It should be noted that if a LGC refuses to issue a business license, in order to stop logging operations from going ahead, a company could take the LGC to court on the basis that it is not within the powers of the LGC to deliberate on logging and sawmilling matters. There are no precedent court cases in Vanuatu in relation to this kind of problem. 305 Map 10.1 Proposed protected areas and non-loggable areas of Malekula

Legend:

The area between the line and the coast does not hold commercial timber resources.

Area not loggable because of lack of timber resources, or lack of landowners interest in logging . • Proposed protected areas.

Lasenuwei

8 Maskelyns Islands Tomman Is.

Map not to scale 306

3 volume of 15,000 m • At that time, a second company was also negotiating with the government for an additional logging license. Notice that an annual harvest of 35,000 m3 implies that all merchantable timber .would be exhausted in about eight years.

Logging operations carried out at the minimum annual harvest of 15,000 m3 would extract all the island's merchantable timber in twenty years.

In 1994, when the LGC decided to develop the PA system, it did not have the legal powers to establish PAs. This situation changed during the course of 1994, when the Bill for the Decentralization and Local Government Regions, Act No. 1 of 1994, was passed by the Parliament of Vanuatu. This Act expands the powers of the LGCs in several areas. As noted in Chapter Seven, a LGC can now make by-laws regulating, among other issues, the establishment of PAs.

Following the introduction of this legislation, the author suggested to the

Council of the MALAMPA Regionll the adoption of a specific kind of by-law for the establishment of PAs. The type of by-law suggested aims at providing the legal framework for the establishment of PAs designed according to the participatory land use planning approach discussed in Section Three. The draft of the by-law for the establishment of PAs to be adopted by the LGC of MALAMPA is presented in

Appendix lOB (hereafter, the MALAMPA protected areas by-law is simply referred to as the by-law). This by-law was modelled on The Isabel Province Conservation Areas

Ordinance 1993 (Solomon Islands). Changes to the mentioned Ordinance were required to (a) make the legislation suitable to the land tenure regime found in

Vanuatu, (b) make it suitable to the specific conservation needs of the ni-Vanuatu

11 Following the introduction of the Act 1 of 1994, the LGC of Malekula was abolished and the Local Government Region of MALAMPA was instituted. This region includes the islands of Malekula, Ambrym and Paama. 307

people, (c) adapt the by-law to the legislation of Vanuatu, and (d) introduce provisions

for the establishment of management committees for the PAs. 12

The intent of the by-law is to enable the landowners to request the LGC to

declare PAs whose boundaries, rules for resource management, and term of existence

are to be devised by the landowners themselves.

It is apparent from the Article 2 of the by-law, that its purpose is rather broad.

It enables the protection of areas that may be considered significant on the basis of

stringent ecological criteria, but also on the basis of other criteria, such as custom and

amenity purposes. The general statement that resources may be protected for

'conservation purposes', implies that areas (or resources) important for their

contribution to peoples' livelihood can receive protected status. It is not necessary for

these resources or ecosystems to be of outstanding ecological importance in order to

be protected.

An important feature of the by-law is that it strengthens the customary rights that landowners have over their resources. For instance, during the assessment of the individual PAs, several landowners noted that in many cases people did not respect the landowners' customary rights to regulate the use of resources. A weakening of customary rights may result in resource over-exploitation. During the process of assessment of the PAs, the landowners expressed explicitly that their intention to protect their resources from over-exploitation was an important factor contributing to the decision of establishing a P A.

12 Many thanks to Raewyn Peart, a New Zealander lawyer, who prepared the Isabel Ordinance and kindly supplied a copy of the same to the author. The draft of the by-law is the result of the joint effort of the MALAMPA Council, Ham Bulu (Principal Legal Officer, Legislation, Attorney General's Chamber's of the Government of Vanuatu) and the author (see letter in Appendix C). 308

A further feature of the by-law is the requirement for the landowners to specify the tenn that applies to a P A. Future resource needs and resource availability are uncertain. The fact that resources within the P A may be allocated to a different use at the end of the tenn allows the landowners to face uncertainties by maintaining a degree of flexibility in resource planning. It should be noted that, throughout the term of a PA, landowners may also apply to the LGC to amend the rules, the term, and the boundaries of the PA. These modifications are, however, subject to the approval of the

LGC.

The by-law, unlike The Isabel Province Conservation Areas Ordinance, I provides for the establishment of committees for the management of PAs. The structure of the committee defined in the by-law attempts, partly, to respect the structure of the customary decision-making processes. The structure of the committees prescribed by the by-law takes into account the discussions held on the issue of management with the landowners of some of the PAs presented in Section 10.5.

According to customary rules regulating resource tenure, a landowning unit

(that is, an individual or a group of individuals that have rights to an area of land and/or reef) normally has very extensive powers about the allocation of resources found in their area. Normally, the chief does not have rights to the land or reef areas of different landowning units unless the latter has willingly granted the chief specific rights. It is for this reason that the by-law specifies that if the area included in a PA is controlled by one single landowning unit, it is this unit that takes decisions in relation to the control of the P A.

A major role of a village chief is that of mediator, for example in the case of a dispute. He also represents the village community in several situations, like customary 309

and official events. For this reason, the by-law provides that when more than one landowning unit have rights to the area that constitutes a P A, the committee ~ formed by two representative of each landowning unit and two chiefs whose area of authority includes land within the P A. In this case, the chiefs may mediate between landowners and make specific proposals about the management of the PA. However, the landowners will always be in majority. Ultimately, they are the ones who take the final decision.

In concluding this section, it is appropriate to note that the by-law is intended to complement the National Parks Act No.7 of 1993.

Firstly, the purpose of the Act is to protect areas which: (a) have unique ecosystems and resources; or (b) constitute the habitat of threatened species; or (c) have outstanding natural beauty; or (d) are of archaeological, or scientific importance

(Article 2). Unlike the by-law, the Act does not provide for the protection of areas that do not have important ecological features but are significant for their contribution to peoples' livelihood.

Secondly, the Act provides for the appointment of a local management committee (Article 13). In this committee, the landowners are in the minority. They have only one member out of five. This committee structure is perhaps suited to PAs established by the payment of compensation to the landowners. However, if one or more landowning units intend to protect their resources because these are important to their livelihood, then it cannot be expected that they relinquish control of their resources. In this situation, the structure of the management committee defined by the by-law is more appropriate. 310

The specific areas considered for protected status in Malekula are described in the next section.

1 0.5. The areas considered for protected status

It may be noted that only some of the areas that had been earmarked for protected status by the LGC (see Map 10.1) have been assessed during the research work presented here. This is due to a number of reasons. The Brenuei area was not considered as, at the time, it was the subject of a court case involving the landowners and the Government of Vanuatu. The landowners sued the government for damages caused by a contractor who was building an electricity transmission line. Two of the areas had been proposed in order to protect marine resources (Maskelynes Islands and

Tomman island): these were outside the scope of the research project, which focuses mainly on forest resources. The South West Bay area did not appear to be under threat, and due to time limitations it was not investigated. Tune limitations also prevented the assessment of the Crab Bay area.

All the cases discussed below have been identified and assessed according to the process described above. The only exception is the Lasenuwei area. This is discussed first

10.5.1. The Lasenuwei area

The Lasenuwei area (Map 10.2) was identified as a possible site for protected status on the basis of the information derived by the author from V ANRIS. According to V ANRIS, Malekula has about 5,850 ha of closed canopy forest. In V ANRIS, the

Malekula closed canopy forest is described as 'Midheight forest with Kleinhovia hospita'. This vegetation type is found only in Malekula. This forest is located on very 311

accessible terrain. Only 1% of this forest is situated in areas inaccessible to logging operations. Thus, if logging were to be carried out, only 60 ha of this forest type would survive. It is on the basis of this information that the Lasenuwei area. where an area of 'Midheight forest with Kleinhovia hospita' type forest is located, was eannarked as an area to be considered for conservation status. 13

Two landowning groups with interests in the area were approached in May

1993.14 During the initial stage of consultation, the nature of this research project, the work which had been carried out in Erromango in relation to conservation, and the specific approach to conservation adopted in the latter case were discussed with the landowners (i.e. it was explained that in Erromango the Government of Vanuatu intended to lease the land from the owners). It was explained to the landowners that in order to decide whether to establish a PA or not, ecological surveys should be carried out in order to assess the ecological significance of the area. The landowners agreed to have these surveys carried out on their land.

Both landowning groups noted that they were not interested in having logging companies operating on their land. A major factor influencing that decision appeared to be the fact that they regarded logging activities as having significant negative effects on the agricultural potential of the land.

A fauna survey and a flora survey were carried out in the area (Flux and

Maturin, 1993; Curry et al., 1994). The fauna survey recommends that the Lasenuwei area be protected. This recommendation is based on the representativeness of the area

13 The area considered for conservation status covers about 1,000 ba 14 Research work in the Lasenuwei area had started before the LGC's initiative for the establishment of a system of PAs. Field work in the area took place in the following periods: 21 August - 3 September 1993; 12/12/94; 2112/95. Map 10.2 The Lasenuwei area 312

.; .,.,,.,.;; 11,"; .Vil;;f Tt

cora1 rock

coasta1

1imeston.e nmakll Mehndra Creel<

Scale 1:50,000 313

in terms of its fauna. The survey recorded: (a) 55 per cent of the bird species of

· Vanuatu; (b) 36 per cent of the species of Vanuatu; (c) 69 per cent of the lizard

species of Vanuatu. The vegetation survey does not state whether the area should be

protected or not. This is probably due to the fact that the authors did not have enough

information to compare the specific site considered with other areas of Malekula15 and

of Vanuatu. Therefore, they could not judge the representativeness of the site.

The results of the surveys were discussed with the landowners. It was pointed

out to them that the results of the surveys were not conclusive. That is, the surveys did

not provide a clear indication of the fact that the area should be conserved because of

its ecological importance. Therefore, it could not be envisaged that, at that stage, the

Government of Vanuatu could take a land lease to protect the area, as in the case of the EKP A. During this consultation process, one of the landowners remarked that he

would be interested in pursuing the conservation option. He asked whether small scale tourism could be developed in the area. This option was considered but it was considered to be not viable at the time.

At that stage, the consultation process was interrupted. The landowner, who was interested in tourism, did not have a specific reason to formalise his control over his land by establishing a P A. The establishment of a P A would constrain his options for the use of the land. Given that his ownership and control of the land resources are not threatened, it is advantageous from his perspective to leave open the option of converting the forest area to other uses, such as the production of cocoa. It should be noted that this does not imply that the forest will certainly be cleared. During the last

15 This fact was noted by Curry and co-authors in a draft of the report. However, this issue is not mentioned in the final report. 314

phase of the consultation process, the landowner noted that he had been asked by the owner of a portable sawmill16 if he would allow limited logging on his land. However. he had refused because he wanted to conserve the trees on his land.

10.5.2. The Nagha mo Pineia Protected Area

Research in the N agha mo Pineia Protected Area was initiated on the basis of a request of support that the landowners of the area directed to the LGC of

MALAMPA The reasons for the landowners' request and the research carried out in the area are outlined below. A more detailed account of the issues presented here is contained in Wiawi Village Coinmunity and Tacconi (1995), on which this section draws.

In 1993, the representative of a logging company visited Wiawi village and asked chief Timothy Nehapi (the head of the family owning the land to be included in the Nagha mo Pineia Protected Area) to sign a logging contract with their company.

The chief said that he had to consult with the family before making any decision. A family meeting was held. At this meeting it was decided that logging was not a good resource use option for the Nagha mo Pineia area. It was decided that other activities may provide income over a longer period of time than logging. Logging was regarded as a short tenn activity. At the family meeting it was also noted that: a) logging may result in severe damage to the land; b) reduction in forest cover may result in a decrease in rain and water availability;

16 This type of equipment is also known as 'walkabout sawmill'. It may be operated by four to six workers to saw timber directly in the forest with relatively minimal environmental impact, if properly operated. 315

c) the interests of the children, who will need land, water and trees, should be taken

into account.

Following the meeting, one representative of the family visited the Environment

Unit in Port Vila and asked for assistance in the protection of the environment in the area. The Environment Unit organised a turtle survey and helped in drafting a letter

(reporting the decision to protect the Nagha mo Pineia area) that was sent to various

Government Departments and community groups.

An outline of some characteristics of the natural resources of the area is provi_ded below. Then, the resource use rules for the proposed P A are presented. • Marine wildlife. The most important feature of the marine ecology appears to be the existence of turtle nesting sites. In two surveys conducted by the Environment

Unit, two species of turtles were recorded in the area: Loggerhead turtle (Caretta caretta) and Green turtle (Chelonia mydas). The Olive ridley turtle (Lepidochelys olivacea) and Hawksbill turtle (Eretmochelys imbricata) have been sighted by the people of Wiawi.

Birds. Several species of birds are found within the Nagha mo Pineia area

Detailed surveys of the relative frequency of the different species have not been carried out. By looking at drawings and photographs, the people in Wiawi identified all the species (with the exception of two species that could not be recognised in the material available) found in the Nagha mo Pineia area. A list of these species is reported in

Wiawi Village Community and Tacconi (1995). Of the 121 bird species present in

Vanuatu, 57 species have been sighted in the Nagha mo Pineia area.

Vegetation. According to V ANRIS, the following vegetation types are found in the area. 316

• 'Thicket dominated by Leucaena and Acacia spirobis', mixed with 'Low forest

with a high proportion of deciduous trees'. This is the main vegetation type of the

area.

• 'Thicket dominated by Hibiscus tiliaceus', mixed with 'Low forest with

emergents'.

• 'Low forest with a high proportion of deciduous trees'.

A survey carried out in the area revealed that this description of vegetation types is not exhaustive of the existing forest types. According to the above description, in the area there would not be forests that could come under commercial exploitation.

However, the field survey revealed that within the area there are various forest types that could be commercially exploited. An approximate description of these forest types is presented in Map 10.3. A list of the plant species identified by Chanel Sam

(Herbarium Curator, Department of Forests) within the area is presented in Wiawi

Village Community and Tacconi (1995).

The resources found within the boundary of Nagha mo Pineia are the primary source of livelihood for the people of Wiawi, and are also used by people in neighbouring villages. Before drawing a management plan for these resources, it was important to see how they were being used.

Water. In Wiawi, a tank collects rain water for drinking; a well provides water for other uses. The creeks located within and along the boundary of Nagha mo Pineia are important sources of water for the villages of Wiel and Wiliekh. The availability of water in the area depends of course on the amount of rain received. Over recent years, it has been noted a decrease of the quantity of water in the area. Some creeks that run permanently, now have water only when it rains. Three in the area are dry most 317 Map l-0.3 The Nagha mo Pineia Protected Area

Scale 1:65,000

---Legend: Instia bijuga, Pterocarpus indicus, Kleinhovia hospita, Garuga Floribunda, Pleigynum timoriense. Veitchia sp.

Kleinhovia & Acacia spirobis

Castanospermum australe

Leucaena foister

Bambusa sp.

Callpphyllum inophyllum, Hemandia peltata, Terminalia sanroensis. T. catarpa, Guettenda speciosa, Acacia simplex

T: Totally protected turtle nesting zone

F: Protected forest zone

G: Garden and plantation zone

R: Reef zone 318

of the time; different species of birds that used to be seen periodically around them, do not stay in the area any more. The maintenance of water availability is a major concern for the villages in the area and one of the reason contributing to the decision to establish the PA.

Subsistence products. The most important sources of subsistence products are the gardens and the reef area. Use of marine resources will be detailed below. Forest

areas do not constitute an important source of food. Also, firewood and building materials are all collected in the vicinity of the village.

Marine resources. Marine resources in the area are important for their

subsistence use and for their commercial value. Firstly, it should be noted that almost

all the people in Wiawi belong to the Seventh Day Adventist Church (SDA) and do not

consume shellfish and crustaceans (turtles are also taboo). Various fish species are

consumed in the village. People in the villages of Wiel and Wiliekh do consume

shellfish and crustaceans. Marine resources are one of the most important commercial

resources in Wiawi. The shells of green snail and trochus are sold to traders. People

from neighbouring villages are allowed to collect these species in the Wiawi customary

reef area. The collectors retain the meat for consumption and sell the shells to the

custom owners for a stipulated plice. Lobsters are present on the reefs of Wtawi but

currently are not being exploited.

Other resources. Cattle grazing and a taxi business are the major sources of

income in Wiawi, together with the exploitation of marine resources. Copra production

also takes place.

Four resource use zones have been defined within the PA and are reported in

Map 10.3. They are: a) turtle nesting zone; b) protected forest zone; c) garden and 319

plantation zones; and d) reef zone. The rules regulating the use of these zones are

detailed below.

The resource utilisation mles detailed below will apply for ten years following

the declaration of protected status for the area. The total area of the Nagha mo Pineia

Protected Area is about 1,050 ha.

Turtle Nesting Zone (T).

In Vanuatu, the nests and eggs of all species of turtles are fully protected; the

trade or export of Hawksbill (Eretmochelys imbricata) shell is prohibited.

Consumption and sale of turtle meet is not regulated.

Within the Nagha mo Pineia Protected Area, nests, eggs and live turtles are

fully protected. The area marked in Map 10.3 as Totally Protected Turtle Nesting Zone

is fully protected. This zone extends from the reef edge to 100m inland from the shore

line. In this zone, the following rules apply.

a) The vegetation may not be subject to alterations.

b) Collection of firewood or any other wood product is prohibited.

c) Fires may not be lit

d) Buildings of any kind may not be erected.

e) Earthworks of any kind are prohibited.

Protected Forest Zone (F).

This zone is subject to the following rules.

· a) Any resource from this zone may be used for subsistence use.

b) Persons other then those belonging to the Wiawi community need to ask

permission to the chief of Wiawi before taking any resource from this zone. 320

c) Trees with diameter at breast height less than 40 em and more than 60 em shall not

be cut. However, if a tree of natora (Intsia bijuga) greater than 60 em is needed for

customary purpose (e.g. carving of tam tam), the chief of Wiawi may grant

permission to cut the tree, :if one cannot be taken elsewhere. The person that is

granted permission to cut the tree will have to pay for. it according to custom

requirements to be agreed with the chief of Wiawi. d) Gardens and plantations shall not be established in this zone. e) No earthworks may be carried out in this zone, with the exclusion of those

eventually required for the construction of a road.

Garden and plantation zones (G).

Two garden and plantation zones are marked in Map 10.3. The Northern zone is used by the people from the community of Wiliekh. The Southern zone is used by the people from Wiawi and also from Wiel.

The following rules apply to these zones.

a) The people from Wiliekh and Wiel who are currently using these zones for

gardening may continue to do so.

b) The people from Wiliekh and Wiel who currently have plantations in these zones

may continue to work them. However, they are not allowed to extend them. At the

end of the life span of the current plantations, they shall not replant them.

Reef Zone (R).

The Reef zone is regulated as follows.

a) Turtles are fully protected in the reef zone. 321

b) People from other communities than that of Wiawi, may take marine resources

from this zorie only for personal consumption, and only if authorisation to do so

has been granted by the chief of Wiawi. c) The chief may declare specific areas of this zone to be taboo areas. In these areas,

collection of marine resources by any person is prohibited.

10.5.3. The Vendik Dik (Bamboo Bay) Protected Area

The conservation of the Bamboo Bay area, as marked in Map 10.1, was firstly suggested by the Malekula LGC in 1994. The establishment of the area was designed to conserve the forest and the marine resources.

Meetings were held with the landowners to discuss their vtews about conservation and the proposai advanced by the LGC to establish a PA on their land.17

The landowners noted that they had been told by a councillor that the LGC intended to protect the area, but they had not been consulted. They noted that part of the area earmarked for protected status was being used for gardening. They did not intend to have a logging company operate on their land They con.Sidered their land

'not very big~ and wanted to make sure that enough land, with non-disturbed soil, would be available for future gardening needs. The landowners noted that they were interested in conserving their forest but also remarked that the land was required for gardening needs.

The author asked the landowners whether they had an area of forest that they were interested in conserving for the protection of the forest itself and as a bird habitat

17 Fieldwork in the Bamboo Bay area (Vendik Dik protected area) and the adjoining Dixon Reef area (Lakorombanga protected area) took place during the following periods: 13-17 February 1995, 6-10 March 1995, 16 May 1995, 3-4 June 1995. 322

A discussion about the possible area to be protected followed. The zone marked in Map 10.4 was identified as the area to be protected. The landowners noted that there were good stands of timber in that area and there were no gardens within the same area. According to them, the area was, therefore, worth protecting. The landowners decided that, in the future, gardens would be located in the area North of thePA.

The question of marine resources use was then addressed. The landowners pointed out that an increasing amount of resources were being taken from the reef areas controlled by them. Turtle eggs and turtle meat were collected in the area.

The situation of turtle species was discussed. It was pointed out to them that according to Fisheries Regulations, turtle eggs were totally protected in Vanuatu. They could not be collected for consumption or sale. Then, it was remarked that the number of turtles throughout the South Pacific had declined as a consequence of fishing and alteration or destruction of the habitats where turtles lay eggs. The landowners discussed these issues at length and decided that:

(i) they will enforce the Fisheries Regulation prohibiting the collection of turtle eggs;

(ii) in the reef and beach areas controlled by them, turtles would totally protected.

In relation to the term of the P A, the landowners initially decided that this would be ten years. However, at a later stage the landowners communicated to the author that they had decided to reduce the tenn of the P A to five years.

The landowners have decided that the following rules will apply, within the PA

(see Map 10.4 ). 323 Map 10.4 The Vendik Dik protected area

Scale 1 :50,000

Legend: PF: Protected Forest PR: Protected Reef 324

Protected forest (PF).

In this area. there will be no gardening, no logging of any form, no lighting of fires and no earthworks. Hunting of pigs. wild cattle and birds is permitted but only with the approval of the landowners.

Reef Area (R).

Along the seashores and the beaches of the P A, turtles are totally protected.

Fish. trochus and other marine resources are permitted to be collected only with the approval of the landowners.

The area of the protected forest is about 260 hectares. The length of the reef subject to the rules specified above is about 8 km.

10.5.4. The Lakorombanga Protected Area

The conservation of the Lakorombanga catchment area had not been suggested by the LGC. In December 1995, a meeting was held in the village of Tavendrua (also known as Dixon Reef) to identify the landowners of the Bamboo Bay area. In the course of the meeting, the landowners noted that they were interested in protecting the

Lak:orombanga river from logging operations. Since 1987, when a cyclone destroyed part of the forest in the catchment area, they have noted a decline in the level of water in the river. They thought that if the remaining forest was going to be cleared, this would further reduce the water level. Given that the river is an important source of water for the village, they wanted to prevent any potential further decline in water availability.

Three subsequent meetings were held in the village. During the first meeting, the issues of protecting the river from the potential negative impacts of logging 325

operations. and the need to protect the forest in order to safeguard the habitat of birds and flying foxes were discussed. The question of how large the PA around the river should be was addressed. The author remarked that, when carrying out logging operations, the logging companies must leave a vegetation buffer on both sides of watercourses.18 The landowners decided to define the area to be protected in terms of a buffer around the river. Distances in metres were considered. To visualise the concept of buffer around the river, several distances (e.g. 100 metres) were paced with the landowners in the village. The landowners decided that the vegetation buffer, on each side of the main course of the Lakorombanga river should be 500 metres. The vegetation buffer for the minor streams should be 100 metres.

A further two meetings were held in order to consider the issue of agricultural activities within the area designed as buffer zone during the first meeting. The landowners noted that they needed land to carry out gardening activities. It was decided that agricultural activities should be excluded from a buffer zone of 50 metres on each side of the tributaries to the Lakorombanga river. For these tributaries, the buffer zone for logging activities was set at 500 metres each side.

The total area that the landowners intend to be protected from logging activities is about 4,390 hectares. Within this area, an area of about 1,360 hectares is also protected from gardening activities. The landowners decided that the term to be applied to the Lakorombanga Protected Area should be ten years.

Within the inner PA (see Map 10.5) the following rules will apply.

18 According to the draft of the new Code of Conduct for Logging, the buffers range between 10 and 30 metres in width, starting from tbe point where the vegetation is at least 10 metres in height. Map 10.5 The Lakorombanga protected area 326

Scale 1:65,000

Legend:

-- Boundary of buffer zone

- Boundary of protected area 327

a) There will be no gardening, earthworks and cattle development 500 metres of

either side ofLak:orombanga river and 50 meters of either side of all tributaries that

run into Lak:orombanga river. b) There will be no logging 500 metres of either side of the Lak:orombanga river and

all tributaries that run into Lakorombanga river.

10.5.5. The Pankumo Protected Area

The establishment of a P A in South-East area of Malek.ula , as marked in Map

10.1, was firstly suggested by the Malekula LGC in 1994. It should be noted that the area so demarked included all the villages and cultivated land in the area. It is also clear, from Map 10.1, that the coastal area would not come under logging activities as it is not considered to be commercial forest For these reasons, it was decided that a more appropriate area to focus on was the catchment area of the Pankumo river (see

Map 10.6).

During the first round of consultation with the landowners, it was emphasised by them that the Pankumo river was rich in fish resources that they wanted to be conserved.19 They also wanted to ensure that the quality of the water was not negatively affected by development operations. It is important to stress at this point that the landowners appear to have a strong attachment to the land and the conservation of the resources seems to play an important part in the local culture. For

19 Fieldwork in the Pankumo area took place in the following periods: 27 March- 6 April 1995, 15- 26 May 1995. 328

example, the landowners in the village of Bankir noted that they have 'large areas', located in the forest, that are taboo.2o In these taboo areas, every resource is protected.

During the first round of consultations, the author described to the landowners the work carried out with the landowners of the other areas considered for protected status in Malekula. They thought that they could adopt the same approach to conservation chosen by the landowners of the Lakorombanga area. That is, they would establish forest buffer zones around the Pankumo river and its tributaries: the PA would extend 500 metres either side of the Pankumo river and 100 metres either side of the tributaries. Rules regarding fishing and hunting activities were also discussed, and are described below.

Once the boundaries of the P A, as proposed by the landowners, were drafted on the map it appeared that it would be rather difficult and resource consuming to mark the boundaries of the PA in the field. Also, and most importantly from an ecological point of view, it would be more appropriate if the whole catchment of the

Pankumo river was protected. Therefore, it was decided to sketch on the map the boundaries of the catchment area and further discuss with the landowners whether they thought the whole catchment area should and could be protected. 21

20 The landowners themselves described this taboo areas as large. Due to time consttaints, these areas could not be surveyed. It would be important (especially if logging operations take place in the area) to survey and demark these taboo areas. 21 To ·enable the landowners to visualise the catchment area of the Pankumo river, a survey of the boundary of the catchment area was conducted. This survey aimed at identifying the custom names of the hills that delimit the catchment area. The landowners know their land, and once the custom names were reported on the map, it was possible for them to visualise the area that was being considered for protected status. Jean Paul Batick (from the Vanuatu Cultural Centre) carried out the field survey with the help of five landowners. 329 Map 10 · 6 The Panku mo ProtectedAr ea

Scale 1:100,000 330

During the second round of consultations, it was discussed with the landowners whether logging, gardening and other agricultural projects, such as cattle grazing, should take place within the catchment area of the Pankumo river.

All the landowners said that the catchment area of the Pankumo river, as marked on the map presented to them, should be protected from logging activities.

They noted that part of the land included in the catchment area may be needed for' gardening and other agricultural activities. For this reason, they decided that gardening and other agricultural activities should be allowed within the catchment area. However, all activities would be excluded from the vegetation buffers on either side of the

Pankumo river (500 metres buffer area) and of its tributaries (100 metres.buffer area).

They also noted that gardening, carried out in the catchment area, does not require burning. Therefore, it has a lower impact on the existing vegetation than gardening that involves burning of existing vegetation.

The detailed rules to be applied to the Pankumo Protected Area are as follows. a) All wildlife resources can be used for local consumption only. b) Fishing is permitted but only with the approval of the landowners. c) All methods of fishing may be used in the PA with the exclusion of nets and

explosives. d) Hunting of birds, pigs and wild cattle is permitted but only with the approval of the

landowners. e) Fires shall not be lit f) Earthworks of any kind are prohibited. Roads may be built with the approval of the

Management Committee. 331

g) There will be no gardening or livestock development 500 meters of either side of

the Pankumo river and 100 metres of either side of the tributaries joining the

Pankumo river. h) Logging operations are not allowed within the PA.

The term to be applied to the P A is ten years. The total land area included in the Pankumo Protected Area is about 11,500 hectares. The land area from which agricultural activities are excluded is about 5,090 hectares.

10.5.6. The Nevnal (Leviamp) Protected Area

The Leviamp PAhad not been suggested by the LGC. In May 1995, durin& the last visit to the Nagha mo Pineia PA, the chief of Wiawi village mentioned that the chief of Leviamp village had asked information in relation to the process of PA establishment The chief of Leviamp had heard on Radio Vanuatu (the national radio station) an interview with the chief of Wiawi concerning his area and the need to establish PAs in Vanuatu. 22 The chief of Leviamp had asked the chief of Wiawi to be put in contact with the Department of Forests, as he was interested in setting up a PA on his land.

A meeting with the chief of Leviamp village was held on 19 May 1995. He noted that he had previously had logging operations carried out on part of his land.

These operations had taken place in an area that was going to be used for gardening.

He thought that rather than burning the timber, it was preferable to sell it. However, he had not been very pleased with the logging operations. Trees were cut but not

22 The interview was recorded by Mr Livo Mele. Several interviews with landowners were recorded during the period of the work presented here. These interviews were broadcasted during the weekly forestry information programme. 332

removed from the land. Only part of the total royalties owed by the logging company

for the timber extracted had been paid.

He was interested in setting up a P A on his land (i) to avoid further pressures

from logging companies, and (ii) to protect some of the marine resources that were

coming under increased pressure from the local people.

He decided that an area of forest that had not been gardened or logged should

be protected. Specific rules would also apply to the water courses located in the area

destined to agricultural activities. The specific rules to be applied to the P A are listed

below.

The term for the P A should be ten years. The total area of the PA is about 530

hectares. The area of protected forest is about 180 hectares (see Map 10.7).23

Within the PA, the following rules will.apply.

Protected Forest (PF).

a) Trees shall not be cut.

b) Fires shall not be lit

c) Earthworks of any kind shall not be carried out

Water Streams (located in the Protected Forest and in the Garden Area (G)).

a) Crayfish and ftsh can be taken but only with the approval of the landowner.

b) Hunting is permitted but approval must be sought from the landowner.

Reef Area (R).

a) Turtles are totally protected.

b) Other marine resources may be taken but only with the permission of the landowner.

23 The boundary of the PA presented in Map 10.7 is only a rough approximation of the actual boundary. A survey has to be carried out to mark the boundary of the area owned by the chief of Leviamp village. 333 Mqp 10.7 The N evnal (Leviamp) protected area

)

I I \ I / '~u . .: N /,:jl· Scale 1:50,000 '\__ T; ... _ Wonmagtr ·.~ ...... _. ... I I -.... ~-:;:':~-~ / Legend: ....."ff\Jl ~--'. t., > PF: Protected Forest G: Garolem Area 334

Details of the PAs that were assessed in Malekula have been presented above.

These areas have not yet been declared formally protected. The Malekula LGC is due to meet to pass the protected area by-law.24 Once the by-law has come into force, the landowners may apply to the LGC for the establishment of the PAs.

10.6. Conclusion

This chapter has presented the general features of the process of assessment and establishment of PAs adopted in Malekula. It is now worthwhile summarising the features of this approach and commenting some of its general aspects. In the concluding chapter, it, is discussed how the approach adopted in Malekula may be integrated with that adopted in the case of the EKPA in order to provide an overall approach to conservation in Vanuatu.

The approach adopted in Malekula may be summarised as follows. Some of the

PAs had been first identified by the LGC. However, the decision whether to establish them and the determination of their boundaries were made by the landowners through a process of consultation that focused both on the requirements of ecosystem conservation and economic needs of the local people. The cost-effectiveness aspect of the Malekula conservation initiative was taken into account by having the landowners actually establish the PAs without external financial support (that is, without compensation payments). In Malekula, the landowners themselves expressed their interest in establishing the PAs through the process of participatory planning. This appears to reduce the likelihood of generating negative intragenerational equity impacts.

24 Livo Mele, pers. comm., 10 December 1995. 335

There are two possible negative aspects of the approach to PA assessment and establishment adopted in Malekula.

Firstly, there is the issue of long-term permanence of the areas. The PAs described above, once declared, will have a (renewable) term of ten years (only one area will have a term of five years). This is a relatively short period. The long term, continued existence of these PAs depends on whether the landowners derive continued net benefits from them. This points to the fact that monitoring of these PAs has to take place. New institutional arrangements may have to be developed in order to guarantee the continued existence of the PAs. However, this situation is no different from that of any other P A. Even national parks, normally established on state land with long-term security, require monitoring and, at times, modification of management plans.

It has been noted above that the approach adopted in Malekula addresses intragenerational distribution issues. This is because the landowners themselves decide to establish a PA and benefit from it. However, the establishment of a PA could make people other than the landowner worse off. For example, this may happen if the establishment of a P A enables the landowner to enforce his rights to resources, and other people are interdicted from using resources they consumed prior to the existence of the P A. In this case, the PA causes changes to the de facto intragenerational distribution of resources. Certainly, these changes are negative ones from the perspective of the people other than the landowner. The latter would regard them as positive changes. It is clear that what is at stake here is an issue of rights. If the protection of the landowner's rights is considered 'a good thing', then the establishment of the P A could not be said to produce negative intragenerational effects. 336

It was noted in Chapter Five that the interests of the current generation and

future ones tend to coalesce, at the level of critical natural capital. A positive aspect of

the participatory approach to conservation presented here is that the establishment of

PAs, designed on the basis of landowners' needs, contributes to this convergence of

interests between generations.

The participatory planning approach has proved to be beneficial in terms of

helping the landowners' decision-making process. Although not documented in the

chapter, it appeared, during the assessment sessions in some of the villages, that the

participatory assessment provided the landowners with a better understanding of the

issues involved in conservation and development activities. This has implications for

the 'mode' that could be adopted in further implementing, throughout Vanuatu, the

approach to conservation detailed in this chapter. An active mode and a responsive

mode may be distinguished.

In the responsive mode, the central government departments and the LGCs

wait for the landowners to come forward asking for assistance in establishing PAs. In

the active mode, exemplified by the work presented in this chapter, the local and

central government agents not only wait for the landowners to come forward. They

also initiate and organise participatory assessments in specific rural areas. The active

mode should be favoured because, at times, landowners may not be fully aware of

ecological, social and/or economic aspects relating to conservation and development issues. Alternatively, they may be aware of them, but do not have the means to address

fully the issues. In these cases, they might not approach external organisations in order

to seek support in solving the specific problems. 337

The approach to conservation presented here is relevant not only to Malekula, but also to the rest of Vanuatu. Proof of this is that some landowners in the Northern island of Espirito Santo have approached the Department of Forests seeking assistance, in order to protect their resources. The competent LGC has been provided with the by-law presented here. The President of the LGC has expressed the intent of the LGC in adopting the by-law. The by-law has also been adopted the SHEFA LGC, which administers the Shepherds Islands and the island of Efate, where the national capital Port Vila is located.

This chapter completes the application of the framework developed in Part IT.

The conclusions for the dissertation are presented in the final chapter. Chapter 11 Conclusion

11.1. Introduction

The objective of this final chapter is to summarise the research findings of the thesis and to assess their implications. In the following section, the ecological economic framework developed in the thesis is summarised and its application to

Vanuatu is discussed. The policy implications arising from the research presented in the thesis are drawn in Section 11.3. Some elements required for an assessment of this study according to constructivist criteria are presented in Section 11.4. In Section

11.5, the significance of the thesis is outlined. Some limitations of the research work presented here are discussed in Section 11.6. The last section considers some indications for further research.

11.2. Research findings and their application

Part II of the thesis is concerned with the development of an ecological economic framework for the assessment and establishment of PAs. Issues regarding research methodology, economic paradigms for the study of environmental questions, and applied methods for decision-making about the distribution and allocation of ecosystems and resources have been discussed.

In Chapter Three, it is argued that positivist philosophy of science presents several weaknesses. Therefore, alternatives to positivism are explored. The methodological proposal for a 'post-normal' ecological economics science is

352 353

considered in detail. That proposal is an important contribution to the methodological development of ecological economics. In post-normal methodology it is stressed the importance of making-values explicit, of adapting the research approach to the research context (i.e. situations where stakes are high may require a research approach different to that used in situations where stakes are low), of including the stakeholders ln. the research process. However, constructivist philosophy of social science is preferred to 'post-normal' methodology as the methodological basis of the research process followed in this thesis. This adoption is explained by the fact that the ontology, epistemology, and methodology of constructivism appear to avoid some of the shortcomings faced by the positivist paradigm. Also, contrary to post-normal methodology, constructivism provides rather specific guidelines aimed at ensuring a disciplined research process which includes and regulates, to a certain degree, stakeholders' inputs in the research process.

The paradigmatic aspects of ecological economics and of environmental

economics are considered in Chapter Four. It is noted that ecological economics is concerned with sustainability, distribution and allocation issues. The latter concern is

shared with environmental economics. Because of the overlap between ecological

economics and environmental economics, the environmental economic approach to

decision-making is considered in detail. Two important points outlined in the analysis

are (a) that the picture of human behaviour underlying environmental economics

presents several shortcomings (which are outlined in detail), and (b) that CBA presents

several limitations in representing the views of the agents (despite the endorsement of consumer sovereignty). An expanded model of human behaviour, which is based on the

writings of institutionalists and socioeconomists, is presented. It is noted that in order 354

for the decision-making process to better account for non-rational and other-regarding behaviour, as well as for the reciprocal influences between institutions and individuals, an evaluation framework broader than CBA is required. Further details of the evaluation framework are spelled out in Chapters Five and Six.

Intergenerational distribution issues are addressed in Chapter Five. The implications of intergenerational equity for biodiversity conservation policies (and particularly for the assessment and establishment of PAs) are analysed in the wider context of the use of natural capital and by drawing on contractarian ethics. Three degrees of intergenerational equity are derived (i.e. extensive, intermediate, and minimal). It is argued that the establishment of PA systems fulfiJs, at least partially, the ethically and ecologically based requirement that society has for conserving critical renewable natural capital. Therefore, efficiency analysis should not be used to decide if

P A systems should or should not be established 1 This question would necessarily be answered in the affirmative on the basis of the interests of future generations, which at this level tend to coalesce with those of the current generation. The ethically based requirement of establishing P A systems, which constitutes a safe minimum standard of biodiversity conservation at the national level, may be considered as providing a basis for asserting that the cost of establishing P A systems cannot be considered unacceptably large.

In Chapter Six, it is argued that the evaluation of distributional and allocative questions regarding forest ecosystems should be based on a participatory planning approach. It is noted that participatory evaluation (a) respects and enhances

1 Notice that this relates to a system of PAs rather than to the specific PAs that make up the system itself. 355

democratic processes, (b) allows the stakeholders to express their actual objectives

(ends) and to decide how these may be better achieved (means), (c) allows people to evaluate the alternative ecosystem uses according to their specific needs and rationales,

(d) may help in making decisions of a higher logical content than those made with a

'snapshot' approach, and (e) may help in empowering the local people in making better use of their environment and in controlling external forces which may positively or negatively affect their livelihood. The framework for the assessment and establishment of PAs that arises from the analysis carried out in Part II of the dissertation may be summarised as follows.

• Ecosystem use patterns should be chosen on the basis of their sustainability and

distributional aspects together with their efficiency aspects.

• Systems of PAs should be established in order to achieve, at least partially,

minimal intergenerational equity.

• Intragenerational equity requires the correction of the asymmetrical distribution of

the costs and benefits arising from the establishment of PAs.

• The institutional features relevant to the specific environmental-economic issues

being analysed should be considered.

• The decision-making process should be participatory and action oriented.

This framework has been applied to the assessment and establishment of PAs in

Vanuatu.

A thick description of the Vanuatu context is presented in Chapter Seven. An analysis of landowners' views about forest ma11:agement is presented in that chapter.

The large majority of the landowners appears to be interested in having logging activities on their land. They are interested in logging mainly because they recognise 356

logging as a potential source of income and hope that logging activities will bring roads to their island. They do, however, recognise that logging also presents negative aspects. Landowners appear to be mainly concerned with river pollution and damages to the trees left standing. It is also found that local people in Erromango do not make significant subsistence use of the 'dark bush'. They collect most of the NTFPs from forests close to villages and in garden areas. It is argued that this may be a factor that contributes to landowners' decision to allow logging in their forests. Despite this positive interest in logging activities, landowners have shown interest in conservation activities. Most of the interviewees responded that they were interested in conserving part of the forests (a) as productive resources for the future, (b) to protect the environment, and (c) to benefit their children. One relevant aspect of this evidence is that -the analysis presented in Chapter Five, regarding the implications of intergenerational equity, does not seem to be dissonant with local peoples' views held.

. In Chapter Eight, the framework developed in Part ll is applied to the first case

study. Due to the specific historical situation, part of the research process was carried

out by using RRA tools. These tools implied a limited participation of the local people

in the research process. However, once the analysis of the data from the RRA survey

and from the timber survey was completed, the options available to the landowners and

to the Department of Forests were examined together with the stakeholders.

Consensus was reached on the institutional arrangements that were deemed as

appropriate by the stakeholders. The approach to research adopted here has resulted in

the application of the research findings. The EKPA has been established.

The potential of sandalwood cultivation is analysed in Chapter Nine with the

objective of assessing whether it could be carried out in order to improve the long- 357

term viability of the EKPA Sandalwood cultivation appears to be interesting from a financial point of view. The fact that some landowners in Erromango are already cultivating sandalwood is also a positive sign regarding the potential for adoption of this activity. However, it is noted that some institutional aspects will have to be considered in order to link sandalwood cultivation to the maintenance of the EKPA.

The second case study shows how different historical conditions influence the application of the framework developed in Part TI. In Malekula, there had not been previous activities related to the establishment of PAs in the areas considered in this study. There had been no offers of compensation to landowners in exchange for the establishment of PAs. PRA carried out with the landowners resulted in the identification of five PAs. Rules for the management of these PAs were developed and the term of the PAs defined. The consideration given to national and local formal institutions, and to local informal institutions has resulted in the drafting of

conservation by-law. This by-law is aimed at providing an· institutional means of

improving the chance of long-term viability of the PAs. The PAs proposed in Malekula

have yet to be formally established. This can only happen once the LGC has approved

the by-law presented in Chapter Ten. Therefore, in relation to the second case study, it

cannot be said, as yet, that the research presented here has met with full success in

terms of application. It will also take several years to assess whether the approach for

the establishment of PAs adopted in Erromango and Malekula (if the areas in the latter

island are formally declared) leads to sustainable development in the areas.

Some policy implications arising from the research presented in this thesis have

already been discussed throughout the chapters. It is useful here to consider some

general policy implications. 358

11.3. Policy implications

The approaches to conservation adopted in the cases of Malekula and the

EKPA have their specific roles in a national forest and biodiversity conservation strategy in Vanuatu.

It is important to note that in Vanuatu there is a dearth of ecological information. In order to design an adeq"Qate system of PAs in Vanuatu, a biodiversity assessment of the whole country should be carried out. A detailed study of the biodiversity of a country is a long-term project. However, a rapid biodiversity assessment could be carried out as a first phase. This would provide an indication of the priority areas that should be considered for protected status.

The first step towards the implementation of a system of PAs may be carried out by establishing PAs through a process of participatory planning such as that adopted in Malekula. This process may lead to the establishment of PAs that are consistent with local peoples' needs and wants in relation to ecosystem conservation.

The PAs thus established should be regarded as the first component of a complete PA system. Once these PAs are established, the next step should be a 'biodiversity conservation gap' assessment 2 That study would identify ecosystems that should be granted protected status on the basis of ecological criteria, but that have not been covered by the PAs established in the participatory planning phase. If gaps exist, these should be filled by establishing other PAs. If the establishment of these latter areas

2 If the biodiversity assessment noted above has been carried out. the biodiversity conservation gap assessment does not require further field studies. If the biodiversity assessment has not been carried out, the biodiversity conservation gap assessment has to include fieldwork to assess, on a rapid basis, the biodiversity features that deserve consideration for protected status. The proposed system of PAs thus derived would be compared with the existing system of PAs. Thus, the gaps existing between the 'optimal' PAs system and the existing one could-be indicated. For example, see Scott et al. (1991). 359

conflicts with landowners' interests, then PAs should be established by following the approach adopted in the case of the EKPA. That is, compensation should be provided to the parties that have been made worse off by the establishment of a P A.

At the time when research was completed in Vanuatu, the author suggested to some staff of the Department of Forests that there is a need to undertake a biodiversity survey of the country. This suggestion has been adopted. In Vanuatu, there are neither the resources nor the people with appropriate skills to carry out a biodiversity survey.

The forestry staff were, therefore, preparing a proposal to be submitted to donor organisations for funding.

An issue that arises from the Vanuatu experience, and one that applies to conservation projects, is the role of lease agreements. It has been noted in Chapter

Eight that land lease agreements (a) appear to be useful instruments in mitigating the negative intragenerational impacts often caused by PAs, and (b) may contribute to the

achievement of intergenerational equity by providing financial benefits that can be

enjoyed by the descendants of the current landowners.

It is useful to note at this point that leases agreements provide a certain security

that P A will be actually sustained. It has been noted in Chapter Eight that one

approach to the establishment of PAs has consisted of offering local people a school or

a road in exchange for the agreement by the landowners to · conserve the forest.

Another approach is that of the Integrated Conservation and Development projects

(ICDPs). The latter attempt to support, or to develop, local economic activities either

in exchange for an agreement to conserve a particular ecosystem or simply in the hope

that the creation of alternative sources of income will reduce exploitation pressures on

the area of interest. A problem with these approaches is that because of the weak link 360

that often exists between the project activities and conservation, there is no guarantee that, even if the development activities are successful, conservation will actually take place and be sustained. Local people could benefit from the newly developed activities and at the same time exploit (to a degree not tolerable from a conservation point of view) the ecosystems that are of interest for conservation purposes. A lease on the land is clearly tied to the conservation of the specific area. If the rules regulating the use of the area are not respected, then the lease payment could be stopped. This would provide an incentive for those owning or controlling the area to abide by the rules of the lease.

Two further issues regarding lease agreements are worth considering. Firstly, the establishment of a lease agreement does not imply that projects aiming at bringing economic development in the area could not be set up. Therefore, a lease agreement approach is compatible with an ICDP approach. The lease could contribute to ensuring that the area is actually conserved. Secondly, it is important to note that a lease agreement directs the financial resources required for the conservation of a specific area to the people that actually own or control the area. Contrary to lease agreements, it is well known that in the case of development projects the largest share of funds go to 'project activities' such as the salaries of project personnel. Therefore, lease agreement could prove to be cost-effective means of achieving the establishment and maintenance of PAs. This question warrants further consideration. 361

11.4. Elements for a constructivist assessment of this study

This section is aimed at providing the reader with information required to form an opinion about the rigour of the present study according to constructivist criteria for disciplined inquiry (see Chapter Three).

1. Prolonged engagement. It is stated in Chapter One that the author was based in

Vanuatu for two and half years. This time was allocated as follows. About two and

half months were spent on Erromango island. About four months were spent on

Malekula island. Approximately two months were spent on other islands visiting

locations as potential research sites (during the initial stage of the research project) ' and carrying out research that has not been included in this dissertation. About

seven months were spent either in Australia (visits to meet with the

supervisor/Australian Project Leader and libraries) or other countries (conferences,

research, holidays). The remaining time was spent in Port Vila organising research,

analysing information, writing, and interacting with various government

departments and aid donors in order to facilitate the implementation of the research

findings.

2. Persistent observation. This cannot be quantified. It is related to the length of

engagements and also to the continuity with which certain issues are addressed.

3. Triangulation. It has been stated that PRA and RRA were adopted in gathering

data and analysing the issues discussed in Part III of the dissertation. Various RRA

tools were used and have been listed in Chapter Eight. A limited questionnaire

survey was also administered. Quantitative data for timber volumes assessment and

for sandalwood growth rates were deiived partly by measures taken in the field and

partly on computer databases. Mr Livo Mele (Research Assistant), with his 362

knowledge of the local culture and environment, and continued engagement in field

research, helped in cross-checking whether some inferences drawn by the author

were sound. PRA and RRA call for multidisciplinary teams. Logistically, it was not

possible to have this type of teams.

4. Analysis of difference. With the exclusion of the local people who took part in

resource planning for the specific PAs considered in this study, there were no other

researchers involved in the fieldwork. This is a shortcoming of the study because

some realities may have not been perceived by the author.

5. Peer debriefing. This has mainly taken the form of debriefing by the supervisor.

6. Member checks. It has been detailed in Chapters Eight and Ten that the data,

interpretations, and possible solutions to the questions being analysed (in relation

to the specific PAs) have been discussed with the stakeholders.

7. Reports with working hypotheses and thick information. Part of the material

presented in this thesis has been published in academic journals, working papers

and conference proceedings. It is hoped that those publications, together the

material presented in this thesis, will provide some guidance in relation to the

transferability of the research findings to other contexts.

8. Impact on stakeholders' capacity to know and act. There has not been a formal

assessment of this aspect. This is a shortcoming of this study. The author can only

note that: (1) if the Malekula LGC and/or other councils approve the conservation

legislation detailed in Chapter Ten, then the means available to the landowners' to

take action would be expanded; (2) the Department of Forests of Vanuatu is in a

better position to act on conservation issues due to the fact that the work carried

out for this project appears to have increased (i) the awareness about conservation 363

issues among forestry staff, and (ii) Mr 'Livo Mele's knowledge of conservation

issues and planning (through fonnal and informal training). Mr Mele has set up,

with the support of other staff, a Conservation Unit within the Department of

Forests.

9. Inquiry audit. A workshop in Vanuatu, held on 3 October 1995, concluded the

·activities of the ACIAR project in that country. Representatives of LGCs, of donor

organisations, of NGOs, staff of the Department of Forests and one landowner

from the Nagha mo Pineia area in Malek:ula took part in the workshop. The

workshop was presented by the thesis supervisor, NProf Jeff Bennett, the

Research Assistant, Mr Livo Mele, and the author. Some of the issues presented in

this thesis were discussed. Unfortunately, however, it was not possible to discuss

the full range of the results presented here. Therefore, the overall assessment of the

present work is left to be carried out by the examiners of the thesis.

11.5. Significance of the thesis

This thesis is a contribution to the methodological development of the emerging discipline of ecological economics and to its practical application. It is also a contribution to knowledge regarding the factors that influence forest and biodiversity conservation and the establishment of PAs.

The methodological proposal of post-normal science has been critically reviewed. Constructivism has been drawn to the attention of interested researchers. It has been demonstrated how constructivist methodology may be integrated into an ecological economic framework that, for its application, has also been enriched by tools derived from rural development studies. 364

An ecological economic framework for the assessment and establishment of . \. PAs has been developed in the thesis. ThiS framework represents an alternative to the mainstream neoclassical appro~ch, which is simply based on CBA. It is argued that

CBA may be used in the framework developed here. However, the application of CBA constitutes only part of the overall framework. Intergenerational and intragenerational distribution issues are considered, as well as sustainability questions and institutional aspects.

In relation to the specific knowledge about forest and biodiversity conservation, several new aspects have been highlighted.

Firstly, contrary to some conservationists' view, local rural people have been shown to be interested in having their forests logged. Local people are interested in earning cash income and hope that logging will also result in the construction of roads.

Several studies have noted that the value of forests is under-estimated because of a failure to account for N1FPs. In Erromango, it has been shown that forests further away from villages are normally not used for the collection of N1FPs. There is, therefore, a strong case for caution in suggesting that N1FPs are a significant element that may contribute to the conservation of forests.

Secondly, it has been shown that local people are also interested in conservation in order to protect the environment and to ensure their offsprings' welfare.

Thirdly, it has been demonstrated how different approaches to the establishment of PAs may be integrated into an overall country strategy. 365

11.6. Limitations of the thesis

The participatory approach to planning outlined in Chapter Six does not

provide 'hard and fast' rules\ aimed at detennining how resource and ecosystems

should be distributed among stakeholders and allocated to different uses. 3 Some may

argue that this aspect is a limitation of the approach proposed here. However, the

author does not regard it as such. Firstly, it should be noted that even the neoclassical

approach cannot provide 'hard and fast' rules for the allocation of resources (e.g.

Arrow, 1950). Secondly, even outside the neoclassical economic arena where Arrow's

impossibility theorem does not apply, it will never be possible to define

incontrovertible rules for the allocation and distribution of resources. This is mainly

due to (a) the impossibility of achieving perfect knowledge of specific problems, (b)

the fact that it may be impossible to reconcile fully the interests of different

stakeholders, and (c) the fact that is unlikely that an agreement on a unique ethical

basis for the distribution of resources will ever be reached.

Some shortcomings of this research work according to constructivist criteria

have already been considered in Section 11.4 and are not considered further here.

Some issues relating to the analysis of ethics and related implications for the

conservation of ecosystems are considered first

The analysis undertaken in Chapter Five considered the implications of

intergenerational equity for biodiversity conservation only from one ethical perspective

(i.e. contractarian ethics). As noted in that chapter, the implications for biodiversity

conservation policies of adopting ethical view-points different from contractarianism

3 I thank Donato Romano, Universita di Frrenze, for raising this point 366

could be considered. 4 Not having carried out such an analysis is a limitation of this thesis. Such an extended analysis would provide decision-makers with a broader range of alternative conservation policies.

In Chapter Five, it is noted that P A systems should be established in order to achieve minimal intergenerational.. equity. Hence, it is argued that countries should fund \. the establishment of P A systems. A weakness of this suggestion is that the relative cost-effectiveness of PA systems has not been compared with that of other initiatives aimed at conserving biodiversity outside PAs (e.g. biodiversity conservation in fanning areas). Although it may be argued that both approaches to biodiversity conservation • are needed, a comparison of the cost-effectiveness of different policies could find that, in the allocation of scarce financial resources, biodiversity conservation outside PAs should receive priority over conservation inside PAs.

This study presents at least one more limitation relating to methodological aspects. A rather detailed criticism of established valuation methodology (i.e. CBA), both in tenns of its theory and its application to the valuation of forests, PAs, and biodiversity has been carried out. A participatory evaluation approach (which provides a set of participatory assessment tools) has been suggested in order to replace, in part, mainstream valuation methods. However, this study lacks an assessment of the potential shortcomings of these methods.

Several shortcomings of this thesis relate to the applied part

The analysis of peoples' views, forest use patterns, and options faced in the allocation and distribution of ecosystems and resource has concentrated on men's

4 Ethical view-points that are based on rights and duties of human beings and also those ethical view­ points that attribute rights to non-human species should be considered. 367

views.s This is due to the fact that both the research assistant and the author are males.

Because of the local cultural environment. in order to carry out interviews and

participatory analysis with women, it was required to have a woman in the research

team. This was not viable because of resource constraints. It is possible that the

inclusion of women's perspectives in this study could have resulted in different

research findings.

In Chapter Two,· it was noted that, in order to enhance the contribution of PAs

to the conservation of biodiversity, PAs should be designed so that they are integrated

with the...surrounding landscapes. This thesis has paid some attention to the use of areas

surrounding the PAs considered in the case studies (e.g. garden areas have been

considered in defining the boundaries of the PAs in Malekula). However, there has

been no assessment of the socioeconomic implications at the bioregional level of

establishing the specific PAs. This is a limitation of the study. However, this is mainly

due to the lack of ecological information about Vanuatu.

The integration of the approaches to conservation adopted in the two case

studies, presented in the thesis, has been put forward in Section 11.3. This integration

is aimed at defining a national approach to conservation in Vanuatu. The suggested

integration presents a weakness. The establishment of lease agreements, such as that in

Erromango, could induce landowners to refuse to take part in participatory planning

such as that undertaken in Malekula. 6 They may be disinterested in disclosing their

conservation needs in the hope that the government would lease their land. This option

would provide them with an income source that would not be available in the case of

5 A woman participated in the meetings held for the drafting of the lease document for the EKP A. 6 Also, they could take part but could avoid to detail their views. 368

the voluntary establishment of PAs as proposed in Malekula. If this situation emerges, it would clearly create difficulties for the implementation of the integrated approach to

PA assessment and establishment suggested above.

Finally, two issues that can constrain the implementation of the participatory approach to research should be considered.

Firstly, the implementation of meaningful participatory research that follows constructivist guidelines is likely to require a relatively significant amount of funds. For example, the criteria of prolonged engagement, triangulation, and analysis of difference imply relatively extensive, and costly, allocation of resources to the specific research project. While this may not be a limitation for projects that are financed by large organisations, it appears to be an important constraint for research projects such as research conducted for a PhD degree. It was only because of ACIAR funding that this

PhD project was made possible. The adoption of participatory research within universities could, therefore, be hindered by resource constraints.

Secondly, in order to carry out meaningful participatory research with the stakeholders there must be 'stakes for the holders'. That the stakeholders need to have an interest in the research project is an obvious requirement. (They could hardly be called stakeholders if that was not the case.) It is less obvious that the stakeholders may not participate in research because they perceive that the research process cannot deliver them the benefits they hope to receive. This point is better clarified with an example. Landowners may be willing to participate in research in the hope of setting up a PA, either on a voluntary basis or through a lease agreement. However, they may perceive that the researchers do not have the influence required to develop the needed institutional arrangements and/or the necessary resources needed to fund a lease 369

agreement. In this case. the landowners may decide that it is not worthwhile entering the research process. Therefore, if the researchers cannot provide the stakeholders with a certain degree of confidence that the 'stakes might be there', it is possible for a participatory research process to face severe limitations.

In concluding this dissertation it is worthwhile indicating some issues that deserve further attention in future research.

11.7. Indications for further research

Some of the shortcomings of the present work provide also an indication of issues to be considered for further research. Given that they have been considered in the previous section they are not detailed again here.

In relation to the development of research methodology for ecological economics, there is scope for considering if and how constructivist and post-normal methodologies may be integrated or may enrich each other.7. This could result in an improved methodological basis for the emerging discipline of ecological economics.

A further methodological issue deserving attention concerns the relationship between bureaucratic procedures regulating research funding and the application of constructivist methodology. Constructivism favours emergent design. The research process is allowed to unfold while research is being carried out. This implies that some research objectives may become clear only when the research process is under way.

Organisations that fund research favour projects that have clearly stated objectives, hypotheses, and methods. This is partly due to the fact that these organisations need to be accountable for the funds they allocate. Research projects with clear objectives.

7 Jerry Ravetz pointed out this possibility to the author (Jerry Ravetz, per. comm., November 1995). 370

hypotheses, and detailed methods are perceived to stand a better chance of success.

Also, if these research projects fail, the funding organisation can justify its funding of the failed project on the basis that the project proposal followed accepted standards and set forth goals that seemed to be achievable. Research proposals for projects adopting constructivist methodology may not appear to provide the required criteria for judging the chance of successful completion of the project. Lincoln and Guba

(1985) have considered some of the aspects relating to the funding constraints faced by constructivist research projects. However, further work is required in order to consider how the requirements of accountability of funding organisations could be met by ' constructivist projects. Further research could also consider how funding organisations could adjust their guidelines for project proposals in order to facilitate the submission of constructivist research projects.

The human behavioural model presented in Chapter Four could be further refmed by conducting research aimed at assessing the factors that appear to dominate

'actual' human behaviour. This type of research faces, however, some constraints. A most important one concerns the difficulties faced by the falsificationist model. Any attempt aimed at testing the factors that influence human behaviour would be faced with the shortcomings characteristic of falsificationism.

Finally, there are examples of participatory activities carried out at a scale much larger than the one undertaken for this dissertation (e.g. Uphoff, 1992). However, the problems faced by the extension of participatory analysis and management to large scale contexts need to be researched in detail. This could prove useful in attempting to expand the benefits of participatory decision-making to more stakeholders than is currently attempted. Appendix lOA 339

:J u r R c! r : ~~ . 6/ 417

llulph n~oenvanuo Dated: 17th May 19S4 Vunustu Cultural & Histuric~l Site Survey Vanuetu Cultural Centre P.n..EJax - 184 Ponr vru:..

Denr ~. negenvanue, MALEKULA llESERVE PARKS.

LtHICJ f·ieE tir;g hlo;:g Ex::cutive ;;Jnd F in·ance Committee mo Full l}ilLlflSI?l !...!long ~aleku:~a Local GOI.iEl"n:ner;t blt..!ng rEb:><.;o:;:·y ~:?9!.;., N.on.bG/ 1bln lukluk long possibility blang allagatem Several !mpartant Sites long Halekula blong re~ervem olsem Mala~ula Reserve.Parks .•

ll:;~·son uJhy t·ti3lek.ula local GovErnment Council ibin <;:onside:rem REse~ve prr~s ia rna endorsem olgeta hemi from nawea igat.fulap Dev~lrij:I!:,ents ali stap wantem kir<~p long M-alekula, particul;:;rly loyging ~Gmp~nies we ali stap gat Fulap interest long Malekula. 01 develnpments ia nli puttum Environment blong Malekula long wan bigfel::J threat rna d'lngerous situation.

Nno frum tingting olsem imEkem Halekul~ Lscal Government inllog~tem several parks long Malekula blong pro~e~tem Flora and Fauna and Marine Resources.

P1•rpase blong :rcetem letter ia ikam long yu nawea hemi blono r1s::em lang· yu sc:pos yu save legalisem Reserved Are·~s ia ll}O t.lrnh.Ji.!lil houndry lin:::s long clgeta. Mi c::ttachem wan copy blong pra~osad reserve Parks ia wetem letter ia blong information blong yu, r.ltflClugh hemi no gud tumas from hard tumas blong readim from cuntour lines ali no bin included~ ·

l:.li~ges t ·p;;;:rks Wtec.tem hemi lang Pankumo River, hemir lan~ South East Malekula. Evri catchment ares ~lcng Ps~kum0 r.ivP.r 1~1 includem ~vri smal branch we ilink wetem, hemi stap under· i:ese:rved ~·.rea. Reserve Elrea ir:~ hemi no stap long Pankumo noma b1.1t 11cn,i ex ter1d to part ~ andwich/Lamap area mo ikafremap ki:isern Ckui mo off shore Islands of Maskulines etc ...

Iy:.t two narfalo big reserved area long Nbrth West Malekwl~, Unmet ;·.rea and Wi~wi Area but mi belive se tufala area ia., .. igat registrztion blang tufala finis. 340

•• / 2

I~:·t nr,r2 2re2 istart long Litzlitz mo off-shore Islands go k~sem ~~rmette/Rensari too hemi stqp under lang Reserve. Igat n3r2 ~reas long 8atb~ng/South Malekula, Lembinwen Lagoon long s.:;:.t:Jny rna long LCJwa kasem Dixon reef too ali stap under Reser-ve t1:-ea.

Iii 2tt~chem wan prap~se Hap blang Malekula blona brieflv exfllo.in:::rn al reserve pc;rks ia. Ho'·Jever, olsem mi tall em finis ~E m::-[1 i~~ hemi no reo:lly gud and helpful tumas from ina oat c~ntaur lines blong helrem yumi blong indentifyem stret boundry linr.:s blcng ol parks ia.

:·.r.vt~J~Y by 111ift:~l?. i';]l:::.r! tumes ~~pas yu save materealisem conce;::Jt hl~ng nl p~rks i~ leg~lly.

8v copy bl~ng letter ia, mi ~rldressem lang Environment Unit, Di!sctrr blong Forestry rna Luk2 Ta~coni lang Forestry Department SPpas oU. sc-ve hel!J -too lang some___ ,!~;:;ys or another blarig processem r=:gis t;.·,··tiCln blong Rese:;::ve perks i;:L . Tao mi mi addressem copy long li:::n~Ju:r:Jble Prime Hinister, Deputy Prime Minister, Honourable Minister of ~?tur~l resources, Har1nur2ble Minister of Ecucatian, Horr a u r ~ b .1. e f'ii n i s t 8 r a f Ham e .C1 f f 2 i r s r.1 o S e n i a r P l an n in g 0 f f i c e r b l a n g Loc2l Government Department blong information blang olgeta.

No tao sapos ali s2ve help lang some ways or another blong leg~lly m~terialisem al p~ks ia.

3~~b~i mifaln igl?d tumas sapos yufale isava respond long rr.';u!::st ic:: rna mifala iwet newea blong lukim final. stage blong product ic ina lang t2em ma thank yu tumes.

:

cc: The Director/Environment Unit Vila Director/Forestry Dept. Vila - .,._ ·Lu\a Teccani/Fareistry Dept. Vila.' -.~·-Ha~~urable ·Prime... ~l-ifiister · · ·.... Hcnaurable Deputy Prime Minister Honourable Minister of Natural Resources Honourable Minister of Education Vila Honourable Minister of Home Affairs ~ Senior Plc::nnlng Officer/Dept. of Local:GaDt. Vila. 341

English translation of the letter copied above

Our Ref: M. 6/417

Ralph Regenvanu 17th May 1994 Vanuatu Cultural & Historical Site Survey Vanuatu Cultural Center P.O. Box- 184 Port Vila

Dear R. Regenvanu,

MALEK.ULA RESERVE PARKS.

Following the meeting of the Executive and Finance Committee, and the full Malekula Local Government Council on February 1994, the Council has considered the possibility of declaring some important sites in Malek:ula as Reserve Parks.

The reason why the Malekula Local Government Council has considered establishing these areas as Reserves Parks is because of the rapid developments that are occurring in Malekula Logging companies are particularly interested in starting operations in this island. These developments pose a significant threat to the environment of Malekula.

For this reason, the Malek:ula Local Government Council has allocated several parks in Malekula to protect the flora, fauna and marine resources.

The purpose of this letter is to ask you if you can legally establish these Reserve Parks and demarcate their boundaries. I have attached a map of the proposed Reserve Parks for your infonnation. The map is difficult to read because the contours have not been drawn.

The biggest area that we intend to protect is that of the Pankumo river, which is located in the South East part of Malekula The whole catchment of the Pankumo river should be protected. This Park extends from Pankumo to Port Sandwich, Lamap, Ikafremap, Okai and the Maskalines islands.

There are two other large Parks in North West Malekula, Unmet and Wiawi but I hope these areas have already been registered.

There is another area starting from Litzlitz and its offshore islands down to Saramette and Ransari. Other areas include Batbang, (South Malekula) Lembinwen Lagoon in the South West bay area, Lawa and Dixon reef. 342

I have attached a map of Malekula to indicate roughly the reserve areas. However, as stated earlier, this map is not really helpful as the contours are not shown.

We will be pleased if you can assist in establishing these areas as Parks.

A copy of this letter will be sent to the Environment Unit, the Director of Forests and Luca Tacconi. (Department of Forests), to ask whether they can assist us in any way to get these areas established. Copies of this letter will also be sent to the Honourable Prime Minister, Deputy Prime Minister, Honourable Minister of Natural Resources, Honourable Minister of Education, Honourable Minister of Home Affairs and the Senior Planning Officer for the Local Government Department for their information, and to ask whether they can assist in any way in the establishment of these areas.

We will be pleased to hear from you in relation to this request, and we are looking forward to the successful completion of this project. Thank you very much.

Yours faitbfully,

K. Massing RD.P. [Regional Development Planner] Lakatoro/Malekula

cc: The Director I Environment Unit -Vila : The Director I Forestry Dept. - Vila : Luca Tacconi I Forestry Dept - Vila : Honourable Prime Minister : Honourable Deputy Prime Minister : Honourable Minister of Natural Resources : Honourable Minister of Education : Honourable Minister of Home Affairs : Senior Planning Officer I Dept. of Local Government - Vila 343

Appendix lOB

REPUBLIC OF VANUATU

MALAMPA LOCAL GOVERNMENT

To provide for the establishment of protected areas. IN EXERCISE of the powers conferred on the Council by section 20(a) of the Decentralization And Local Government Regions Act No. 1 of 1994, the MALAMPA LOCAL GOVERNMENT COUNCIL, makes the following By-laws:-

DEFINITIONS 1. In this By-law, unless the context otherwise requires­ "Council" means the MALAMP A Local Government Council; "protected area" means an area established under By-law 4; "customary land" means any land lawfully owned, used or occupied by a person or community in accordance with current customary usage; "Executive" means the MALAMPA Provincial Executive or the Cabinet; ''land" includes land covered and uncovered by ordinary spring tides, reef areas and land covered by freshwater; "owner'' or "owners" in relation to a registered interest in land means the person or persons in whose name the interest is registered; in relation to customary land, means the person or persons who is or are according to current customary usage, regarded as the owner or owners of the land; "person" means any person and includes any public body, company or association, or right holding group and any other body of persons whether incorporated or not; "public officer'' means any person from time to time posted to the MALAMPA Local government region and holding a paid position in the public service of the National Government; "serve" means either:- (a) delivering personally to the person; or (b) delivering or sending by prepaid post to the usual or last known place of residence or business of the person; "term" in relation to a protected area means the period of time during which the protected area status may not be amended or removed pursuant to By-law 4; 344

"village chief' means the person who according to custom is regarded as the head of the village or other local community concerned and where there is no such customary head of a village or local community, means a person regarded by the people within such village or local community as their leader in relation to the matter concerned.

PURPOSE 2. The purpose of this By-law is to assist owners of marine resources and owners of land to protect and manage their marine resources, land and land based resources for conservation, custom, spiritual and amenity purposes.

MAKING AN APPLICATION 3. (1) Any owner of land may apply to the Executive for a declaration that part or all of the land the subject of the application be set aside as a protected area. (2) An application under paragraph (1) must be in Form 1 in the Schedule 1, or to the like effect, and must - (a) include a description of the boundaries of the land the subject of the application; (b) include a copy of the rules which are proposed to apply to the use of the protected area; (c) specify the term of the protected area. (3.) The application must be signed by - (a) every owner of land within the proposed protected area, or person authorized to sign on behalf of such owner or owners; (b) the Chairman of the Area Council of Chiefs certifying that to the best of his knowledge the application complies with paragraph (2) and subparagraph (a) of this paragraph. (4) An application made under paragraph (1) shall be lodged at the Council Office and must be accompanied by a plan defining as accurately as practicable the boundaries of the proposed protected areas.

DECLARATION OF PROTECTED AREA 4. (1) Mter receipt of an application under By-law 3, the Executive may, subject to By-law 10, declare the land, or any part of the land, specified in the application to be a protected area. (2) In deciding whether or not to make a declaration under paragraph (1), the Executive must take into account whether or not making the declaration will further the purposes of this By-law. (3) A declaration under paragraph (1) must- (a) state rules which are to apply to the use of the protected area; 345

(b) specify the term which is to apply to the protected area; (c) be in Form A in Schedule 2. (4) Any declaration made under this section must have no bearing whatsoever over the issue of ownership of any land.

AMENDMENTS TO OR REMOVAL OF, PROTECTED AREA STATUS 5. (1) Any owner of land which has been declared a protected area may .apply to the Council to- (a) amend the rules or term which apply to the protected area; or (b) to declare part of the land to cease to be a protected area; or (c) to declare. additional land to be part of the protected area. (2) Application under paragraph (1)(a) or (b) must be made within 6 months of the expiry of the term of a protected area. (3) Where no application is made under paragraph (1)(a) or (b) within 6 months of the expiry of the term of a protected area, a further term will automatically apply to the protected area. (4) An application under paragraph (1) must be in Form 2 in Schedule I, or to the like effect, and must contain -

(a) a descrip~on of the land declared to be a protected area; and (b) where the application seeks an amendment to the rules or term applying to the protected area, the amendments sought; and (c) where the application seeks to remove land from, or add land to, a protected area, a description of the land proposed to be removed or added; and (d) · the reasons why the application should be approved; and (e) the signatures required under By-law 3(3). (5) An application under paragraph (1) shall be lodged at the Council Office. (6) On receipt of an application under paragraph (1), the Executive may, in accordance with the application, declare additional land to, or the removal of land from, a protected area. (7) In deciding whether or not to make a declaration under paragraph (6), the Executive must have regard to - (a) the reasons stated in support of the application; and (b) the matters set out in By-law 4(3)(a) and (b). (8) A declaration - (a) under paragraph (l)(b) shall be in Form Bin Schedule 2; (b) under paragraph (1 )(c) shall be in Form C in Schedule 2. 346

WHEN A PROTECTED AREA WILL COME INTO EFFECT 6. (1) A protected area will come into effect 1 month after a declaration is made under By-law 4(1), or at such later time as is stated in that declaration. (2) Any amendments to, or removal of, a protected area will come into effect 1 month after a declaration is made under By-law 5(6), or at such time as is stated in that declaration.

NOTIFICATION OF DECLARATION 7. (1) Following the making of a declaration under By-law 4 or 5, the Executive must as soon as practicable - (a) publish notice of the declaration in the Republic of Vanuatu Gazette; and (b) serve a copy of the declaration on the applicant, a public officer or any other person whom the Executive considers proper to receive a copy. (2) The Executive, shall, as soon as practicable - (a) serve a copy of the notice on all Village chiefs within the Area Council of Chiefs area of jurisdiction and display a copy of the notice within such area, where it can be readily seen by members of the public; and (b) hold a public meeting in the village closest to the protected area to describe the protected area and the rules applying to the use of it. (3) A declaration made under By-laws 4 or 5 will have full legal force irrespective of any failure to carry out the notification required under paragraphs ( 1) and (2).

REGISTRY 8. (1) A register to be known as the "Register of Protected Areas" shall be established and maintained by the Council (2) There shall be entered in the Registry - (a) the name of every protected area; (b) the names of every custom owners of land in the protected area; (c) date of establishment of each protected area; (d) the term of .each protected area; (e) the location of each protected area; (f) any easement or right to continue to be enjoyed by the custom owners or others authorized by custom owners in a protected area; (g) the reasons for establishing each protected area; (h) the date each protected area or part thereof ceases to be such; (i) any other matters which the Council considers fit 347

(3) The Registry shall be available for public inspection at the Council Offices during regular business hours.

RECORDS, ETC. 9. (1) The Council shall keep- (a) records of each protected area that define as accurately as practicable the boundaries of such protected area; and (b) a copy of the rules which are to apply to the use of each protected area; and (c) maps marked with the places protected under this By-law. (2) The matters referred to under paragraph (1) must be open for public inspection at the Council Offices during regular business hours. (3) The Executive shall cause a copy of every declaration and any other information required to be furnished to the director of Land Records and the Environment Unit of the National Government within 3 months of each protected area being declared.

OWNERSHIP DISPU1ES 10. (1) The Executive may not declare any land to be a protected area, if it has knowledge of any dispute over the ownership of the land, unless bona fide representatives for all disputing owners have signed the application under By­ law 3(a). (2) Where any customary land has been declared a protected area and it is subsequently established by agreement between the affected parties, or by a court order, that the correct owner or owners of the land, or representatives of such owners, did not sign the application under By-law 3(3) (a), one bona fide representative of each correct owner of the land may at any time, notwithstanding By-law 5(2), apply to remove, or make amendments to, the protected area under By-l~w 5(1).

OFFENCES 11. Subject to subsection (2), any person who contravenes, or permits a contravention of, any of the rules applying to the use of a protected area, is guilty of an offence against this By-law and will be liable to the penalties set out in By-law 12.

LIABll.JTY OF COMPANY OFFICERS 12. Where a company commits an offence against this By-law, every director and every person concerned in the management of the company, will be guilty of the same offence if it is proved - 348

(a) that the act that constituted the offence took place with his or her authority, permission, or consent, or (b) that he or she knew, or could reasonably be expected to have known, that the offence was to be, or was being, committed and failed to take reasonable steps to prevent or stop it.

PENALTIES 13. (1) Where the person committing the offence- (a) is an individual, that person shall be liable to imprisonment for a term not exceeding 6 months or to a fine not exceeding VT 50.000. (b) is a company, that person is liable to a fine not exceeding VT 50.000 and the officers of the company are also liable to imprisonment for a term not exceeding 2 years.

(2) In addition to the penalties set out in paragraph (1), the Court may order that­ (a) any property used in the commission of an offence and any proceeds from the offence be forfeit to the Council; (b) any business licence held by the offender, authorizing the carrying out of any business activity within the local government region, be suspended and that the offender be disqualified from obtaining a new licence for up to 5 years.

ENFORCEMENT 14. (1) The primary responsibility for enforcing the rules governing the use of a protected area is with the owner or owners of the land. (2) It is lawful for any owner of the land, police officer, village chief, an employee of the Council or a public officer to make enquiries at a reasonable time to ascertain whether any offence under this By-law is being, or has been committed.

MANAGEMENTCOMMTITEE 15. (1) The Council may appoint for every protected area a local management committee. (2) (a) In respect of land in the protected area owned by one family only, the local management committee, shall be that family. (b) In respect of land in the protected area owned by more than one family, the local management committee, shall consist of- (i) 2 representatives of each owning family; (ii) 2 chiefs whose area of authority includes land in the protected area 349

(3) (a) A committee established under paragraph (2)(a) may appoint the head of the family to be the chairman. (b) A committee established under paragraph (2)(b) shall appoint a custom owner to be the chairman. (4) Every committee must, subject to this By-law, be responsible for the control and management of the protected area in relation to which it is appointed. (5) Every committee must determine the quorum for and the procedure to be followed at the meetings of such committee. (6) Every committee must, in relation to the protected area it is appointed for, submit a written report to the Council once a year on the management of the protected area. . (7) The term of office of the members of a committee shall, subject to By-laws 4 and 5 be such periods as is specified in the instrument of appointment

JURISDICTION TO IIVIPOSE PENALTIES 16. The Magistrates Court will have full jurisdiction under this By-law to impose the penalties set out in By-law 13.

PAYMENT OF FINES 17. (1) Unless specified otherwise in this By-law, all fines must be paid to the Council. (2) All fines imposed under this By-law are recoverable as a debt due to the Council. (3) Where a Court imposes a fine under this By-law, it must direct that part of the fine be paid to the owner or owners of the affected land. (4) When determining what portion of a fine will be paid to the owner or owners of the affected land under paragraph (3), the Court must take into account the extent of damage suffered by such owner or owners as a result of the offence.

Passed by the MALAMPA Provincial Council this day of 1995.

Clerk to Council

Assented to this day of 1995.

Minister of Home Affairs Appendix lOC 351

M~L~KULA LOCAL GOVT. P.e:

REPUBL!C OF VANUATU R!::PUBUOUE DE VANUATu

lviALA\APA PROVINCIAL GOVERNMENT COUNCIL CONSEIL PROVtNClAL DE MALAMF'A POST OFFICE BOX 22 BOlTE POSTAL!: 21 LAKATORO 1...1\KATo;::w MALEKULA NIALL! COLO VANUATU I:LEPHONE: 48491 &. FAX 40422 VANUATU

At=orney G~ne"~l May 2., 1995. Atto~ney General Chambers

Attention: Mr. E~~ Bulu

Dear S:!.r,

I hereby authorise: Mr. L11ca Tacconi, Economist Specialising on Eorstry ~lat:ters tc make anY ame.ndmencs he 'Nishes to in Tbe Dr~£c By-Law. called "Con~e:-Ya'tion.A.::~" to be< examined by MUamp.a Provincial Council sess:!..on of May, 1995.

ptank- YO'l for your kind cooper~tion.

Ray Liennial Council Clerk.

cc: Mr. Luca Tacconi Econo!l!ist Forestry Department 371

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