Assessing, demonstrating and capturing the economic value of marine & coastal ecosystem services in the Bay of Bengal Large Marine Ecosystem Lucy Emerton September 2014 DRAFT A draft report for the BOBLME Project Contract No. CST-RAPRD 492/6/2014 Contents Executive summary.............................................................................................................................................. i 1 Background: study context and aims ......................................................................................................... 1 2 Introduction to marine & coastal ecosystem valuation: rationale, conceptual underpinnings and practical applications ................................................................................................................................. 2 Why marine and coastal undervaluation is a problem ............................................................................................... 2 A stepwise approach to identifying, estimating and capturing marine & coastal ecosystem values ......................... 4 Frameworks for identifying and assessing ecosystem values ..................................................................................... 6 Techniques for estimating and demonstrating the value of ecosystem services ........................................................ 7 Instruments for capturing the value of ecosystem services and seeking solutions .................................................... 8 3 Scope, methodology and assumptions: how ecosystem services were valued ........................................ 9 Study steps and questions .......................................................................................................................................... 9 Defining the study boundaries and coverage ............................................................................................................. 9 Measuring the current economic value of ecosystem services ................................................................................. 13 Modelling the economic consequences of ecosystem change .................................................................................. 15 Constraints and data limitations .............................................................................................................................. 17 4 Ecosystem-economic linkages and stakeholders: who and what depends on biodiversity & ecosystem services ..................................................................................................................................................... 19 Summary of ecosystem-economic linkages and stakeholders .................................................................................. 19 Fisheries .................................................................................................................................................................... 20 Non-fish mangrove products .................................................................................................................................... 22 Land and water protection ....................................................................................................................................... 23 Climate mitigation .................................................................................................................................................... 24 Tourism and recreation ............................................................................................................................................. 24 5 The current economic value of ecosystem services: what marine & coastal resources and habitats are worth 26 Summary of baseline ecosystem service values ........................................................................................................ 26 Capture fisheries and aquaculture ............................................................................................................................ 27 Fish breeding and nursery habitats .......................................................................................................................... 27 Household-level harvests of non-fish mangrove products ........................................................................................ 28 Shoreline stabilisation and erosion control ............................................................................................................... 28 Shelter against extreme weather ............................................................................................................................. 29 Regulation of waterflow & quality............................................................................................................................ 29 Climate mitigation .................................................................................................................................................... 30 Marine & coastal tourism and recreation ................................................................................................................. 30 6 The economic consequences of ecosystem change: comparing the gains and value-added from conservation with the costs of resource degradation ............................................................................. 32 Economic costs, losses and damages from continuing business as usual................................................................. 32 Making the economic case for the BOBLME Strategic Action Programme .............................................................. 35 7 Needs, niches and options for economic instruments: securing incentives and finance for the sustainable management of marine & coastal resources in the BOBLME .............................................. 37 How ecosystem benefits and costs are distributed and captured ............................................................................ 37 Potential economic instruments for the sustainable management of marine and coastal resources...................... 39 8 Recommendations and next steps: incorporating the findings of the ecosystem valuation study into the implementation of the BOBLME project and SAP .................................................................................... 46 References 48 Annex 1: Bibliography of marine & coastal valuation studies carried out in BOBLME countries .................. 58 Annex 2: List of administrative units in the BOBLME coastal zone ................................................................. 63 List of Figures Figure 1: Three-tiered approach to identifying, estimating and capturing ecosystem service values ............. 5 Figure 2: Marine and coastal ecosystem services and human wellbeing ......................................................... 6 Figure 3: The total economic value of marine and coastal ecosystems ............................................................ 6 Figure 4: Commonly-accepted ecosystem valuation methods ......................................................................... 7 Figure 5: Study steps and questions .................................................................................................................. 9 Figure 6: Map of Bay of Bengal Large Marine Ecosystem ............................................................................... 10 Figure 7: Marine and coastal ecosystem services considered in the valuation study .................................... 12 Figure 8: Baseline, Business as Usual (BAU) and Strategic Action Programme (SAP) scenarios ..................... 15 Figure 9: Distribution of coastal population between BOBLME countries...................................................... 20 Figure 10: Distribution of mangrove and coral reef cover between BOBLME countries ................................ 21 Figure 11: Mangrove and coral-dependent species contribution to fisheries catch ...................................... 22 Figure 12: Percentage of households harvesting other mangrove products .................................................. 23 Figure 13: Share of BOBLME and marine & coastal tourism in national leisure and recreation numbers ..... 25 Figure 14: Baseline value of marine and coastal ecosystem services ............................................................. 26 Figure 15: Coastal zone population growth 2014-39 ...................................................................................... 32 Figure 16: Mangrove-adjacent population under BAU 2014-39 ..................................................................... 32 Figure 17: Change in mangrove and coral reef area and coastline under BAU 2014-39 ................................ 32 Figure 18: Marine and coastal ecosystem values for the BOBLME region 2014-39 (2014 international USD billion) .............................................................................................................................................................. 33 Figure 19: Marine and coastal ecosystem values for BOBLME countries 2014-39 (2014 USD billion) ........... 33 Figure 20: Annual loss of ecosystem service values under business as usual for the BOBLME region 2014-39 (2014 international USD billion) ...................................................................................................................... 35 Figure 21: Cumulative loss of ecosystem service values under business as usual for the BOBLME region 2014-39 (2014 international USD billion) .......................................................................................................