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Valuation of the Contribution of the Ecosystems of Northernvelebit National Park and Velebit Nature Park to Economic Growth and Human Well­Being: Croatia

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Valuation of the Contribution of the Ecosystems of Northernvelebit National Park and Velebit Nature Park to Economic Growth and Human Well­Being: Croatia Valuation of the Contribution of the Ecosystems of NorthernVelebit National Park and Velebit Nature Park to Economic Growth and Human Well­being: Croatia October 2011 Prepared by Marlon Flores1 Ivana Ivicic2 1 Ecologic Institute, Washington DC, Team Leader 2 Consultant. 1 Table of Contents Summary and key findings ............................................................................................................................ 5 1. Introduction ............................................................................................................................................. 11 1.1 Study background and methodology overview ................................................................................. 11 1.2 Protected Areas, Ecosystems and Ecosystem Services ................................................................... 14 1.3 The economy of Croatia and Licko-senjska County .......................................................................... 16 1.4 Protected areas in Licko-senjska County .......................................................................................... 18 1.5 Threats, pressures, and financial challenges to protected areas ...................................................... 20 2. The value of the contribution of ecosystems to growth ........................................................................... 23 2.1 Tourism and nature–based tourism ................................................................................................... 23 Coastal tourism .................................................................................................................................... 29 Inland tourism ...................................................................................................................................... 32 Winter tourism ...................................................................................................................................... 37 Golf tourism .......................................................................................................................................... 40 The multiplier effect of tourism ............................................................................................................. 42 2.2 Hydropower ....................................................................................................................................... 42 2.3 Agriculture ....................................................................................................................................... 46 Pollination ............................................................................................................................................ 47 Fruit production .................................................................................................................................... 50 Berries and traditional liquors .............................................................................................................. 55 2.4 Brewing .............................................................................................................................................. 57 2.5 Fisheries ............................................................................................................................................ 59 2.6 Forests ............................................................................................................................................... 64 Soil erosion prevention ........................................................................................................................ 67 Carbon storage .................................................................................................................................... 68 3 Human well-being .................................................................................................................................... 70 3.1 Fresh water ........................................................................................................................................ 70 3.2 Disaster prevention and mitigation .................................................................................................... 72 3.3 Contribution to poverty alleviation ..................................................................................................... 73 Grasslands, livestock and dairy production ......................................................................................... 73 Honey production ................................................................................................................................. 78 Crops.................................................................................................................................................... 80 Additional income to local people ........................................................................................................ 81 Conclusions and policy recommendations .................................................................................................. 81 4.1. Conclusions ...................................................................................................................................... 81 4.2 Recommendations ............................................................................................................................. 86 Research and information needs ......................................................................................................... 86 2 PA policy and finance .......................................................................................................................... 86 Institutional (public and private) ........................................................................................................... 87 Annexes ...................................................................................................................................................... 88 Annex 1. Methodology (Sector Scenario Analysis) ............................................................................. 88 Annex 2. NorthernVelebit National park’s income and expenses 2010 .............................................. 92 Annex 3. Fresh water ecosystems in VNP .......................................................................................... 94 3 Acknowledgments The authors wish to thank all of the people and public and private institutions who made contributions at the various stages of the development of this document. We also acknowledge the collaboration of the Ministry of Culture of Croatia, WWF Mediterranean Programme, and the managers and staff of both the NorthernVelebit National Park and Velebit Nature Park. The authors are also thankful to WWF Mediterranean Programme, which went to great lengths to facilitate the procurement process, support, and excellent arrangements made to facilitate research material and other related information, arranging meetings in Zagreb and Licko‐senjska County, and by providing office space for the team. The Ecosystems Valuation Team Marlon Flores, Team Leader Stella Satalic Senior Fellow, Environmental Economics & Project Manager Finance WWF Protected Areas for a Living Planet ‐ Ecologic Institute, Washington DC Dinaric Arc Ecoregion Project marlon.flores@ecologic‐institute.us Radnicka cesta 41, 10 000 Zagreb, Croatia [email protected] Ivana Ivicic Consultant Ivana Korn Varga [email protected] Project Assistant/Researcher [email protected] 4 Summary and key findings The valuation of the contribution of ecosystems of Northern Velebit National Park and Velebit Nature Park to economic growth and human well‐being was supported by WWF’s Dinaric Arc Ecoregion Project. The study has two main objectives. First, inform environmental fiscal reform (EFR) specialists, decision makers, and business professionals about the risks and opportunities of undertaking productive activities that use and are impacted by services provided by ecosystems in and around protected areas (PAs); and second, provide a analytical tool to enable stakeholders to assess the role of ecosystem services (ES) in productivity and incorporate ES into sector‐level development and investment policies. The World Conservation Union defines a protected area (PA) as “An area of land and/or sea especially dedicated to the protection of biological diversity, and of natural and associated cultural resources, and managed through legal or other effective means.” Ecosystems in PAs provide critical ES that support human prosperity and survival: clean and abundant water, flood and storm control, nursery grounds and replenishment zones for fish stocks, pollination services, and carbon sequestration. Ecosystem services are the conversion of natural assets – such as trees, snow cover, and soil fertility – into valuable benefits such as wood products, winter tourism, and arable land (Schroter et al., 2005). PAs provide the best continuous natural habitats for ecosystems to be able to function and continue to deliver critical services. The study uses an innovative methodology, SSA (Sector Scenario Analysis), which includes two generic concepts as a basis for assessing the economic values of the ES of PAs in terms of growth and human well‐being: The benefits from sustainable ecosystem management (SEM) ecosystems in PAs are known to be broadly distributed, long‐term, and non‐market (although some are market‐ driven such as tourism, water, and carbon sequestration),
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