Designing and Implementing Designing and Implementing Valuation Studies in the GCLME Valuation Studies in the GCLME

RegionRegion

Preliminary Report on Economic Preliminary Report on Economic Valuation Valuation

of Ecosystem Services of GCLME of Ecosystem Services of GCLME

Outline of PresentationOutline of Presentation

• Estimates of the direct output value of goods Estimates of the direct output value of goods and services for each of the relevant marine and services for each of the relevant marine sectors of the 16 countries bordering the sectors of the 16 countries bordering the Guinea Current Large Marine Ecosystem Guinea Current Large Marine Ecosystem (LME). (LME).

• Estimate the scale of resource rents that Estimate the scale of resource rents that could be obtained from the economically could be obtained from the economically optimal management of the marine resources optimal management of the marine resources of the case studies of the case studies

• Work in progress on economic valuation of Work in progress on economic valuation of the GCLMEthe GCLME

Functions and Attributes of Functions and Attributes of GCLME to be ValuedGCLME to be Valued

ConsumptConsumptive Use ive Use valuesvalues

Non-Non-consumptivconsumptive use e use valuesvalues

Indirect Indirect use valuesuse values

Option Option ValueValue and and Non Use Non Use ValueValue

Captured Captured fish species, fish species, non-timber non-timber forest forest products products from from mangrove mangrove locations, locations, medicinal medicinal products products from from mangrovesmangroves

Minerals, Minerals, Recreation Recreation for tourists for tourists including including beach going, beach going, novel novel products, products, fuel and fuel and fiber, water fiber, water transport transport (shipping)(shipping)

Detoxification, Detoxification, storm protection, storm protection, biodiversity biodiversity regulation, regulation, ground water ground water recharge recharge mangrove), mangrove), nutrient cycling, nutrient cycling, air quality and air quality and climate, flood climate, flood and flow control, and flow control, biological biological support (sea support (sea birds and birds and turtles), other turtles), other ecological ecological

functionsfunctions

OptionOption

Value-Value-Biological Biological diversity, diversity, cultural cultural

heritageheritage Non use Non use value- value- Existence Existence value, moral value, moral convictionconviction

Estimates of direct output Estimates of direct output value of goods and services of value of goods and services of

relevant marine sectors of relevant marine sectors of GCLMEGCLME• Available methodology for Available methodology for

estimation: estimation: – Direct Output Impact (DOI)- Product of Direct Output Impact (DOI)- Product of

physical quantities of goods and physical quantities of goods and services flowing from marine activitiesservices flowing from marine activities

– Total Economic Value (TEV): Total Economic Value (TEV): estimation estimation of the net benefits from each nation’s of the net benefits from each nation’s marine activities and sums all the marine activities and sums all the benefits across all activities benefits across all activities

Approach Used and Relevant Approach Used and Relevant marine sectors of GCLMmarine sectors of GCLM

• DOI (Prices in International Market were used)DOI (Prices in International Market were used)• Fisheries, some NTFP and Mining activities. Fisheries, some NTFP and Mining activities.

Tourism and Timber were considered although Tourism and Timber were considered although actual calculations were not done. actual calculations were not done.

• Data sources: FAO data sets, World Bank (World Data sources: FAO data sets, World Bank (World Development Indicators 2004), US Department of Development Indicators 2004), US Department of the Interior (2005), Oil and Gas journal Data Book the Interior (2005), Oil and Gas journal Data Book (2004) Nigeria Federal Department of Fisheries, (2004) Nigeria Federal Department of Fisheries, Data collected through a questionnaire from some Data collected through a questionnaire from some GCLME countries made available by Dr. AjaoGCLME countries made available by Dr. Ajao

• In estimation of fish landing value for the GCLME In estimation of fish landing value for the GCLME countries, landings were aggregated for 1999-countries, landings were aggregated for 1999-2003 and market prices were used2003 and market prices were used

Value of Marine Fish Value of Marine Fish Landing in GCLME Landing in GCLME

ItemItem ValuesValues

Total Marine Fish Landing Total Marine Fish Landing (metric tonnes) (metric tonnes)

1,221,934.41,221,934.4

Estimate of total value of Estimate of total value of marine fish landing in GCLME marine fish landing in GCLME (1999-2003 Average)=(1999-2003 Average)=

$14,458,000$14,458,000,054,054

Estimate Illegal, Unreported, Estimate Illegal, Unreported, Unregulated Fishing (IUU) Unregulated Fishing (IUU) (30%)(30%)

$4,337,400,$4,337,400,016016

Total ValueTotal Value $18,795,400$18,795,400,070,070

Value of Offshore Oil Value of Offshore Oil ProductionProduction

ItemItem ValuesValues

Total (bbl/Day)Total (bbl/Day) 1,168,7621,168,762

Value of Production /DayValue of Production /Day $81,813,340$81,813,340

Total (bbl/Year)Total (bbl/Year) 426,598,130426,598,130

Total Value of Production/YearTotal Value of Production/Year $29,861,869$29,861,869,100,100

Summary of Returns from Summary of Returns from Different Mining ActivityDifferent Mining Activity

Product from MiningProduct from Mining Values ($)Values ($)

SandSand 10,560,00010,560,000

SaltSalt 2,660,660,2,660,660,

GraniteGranite 98,362,11098,362,110

Phosphate/LimePhosphate/Lime 243,200,000243,200,000

TotalTotal 354,782,770354,782,770

NTFPsNTFPs

• Major NTFPs in the mangrove are Major NTFPs in the mangrove are Periwinkle, Periwinkle, Rhizophora Rhizophora spp and spp and MudskipperMudskipper

• Total amount realised from periwinkle= Total amount realised from periwinkle= $1,941,273,740 (Shadow Prices - market $1,941,273,740 (Shadow Prices - market data from Nigeria adjusted to reflect data from Nigeria adjusted to reflect exchange rate fluctuations)exchange rate fluctuations)

• Countries are Benin, Cameroon, Countries are Benin, Cameroon, Côte d’Ivoire, Equatorial Côte d’Ivoire, Equatorial Guinea, Gabon, Ghana, Nigeria, and Sao Tome and PrincipeGuinea, Gabon, Ghana, Nigeria, and Sao Tome and Principe

Summary of Value of Some Summary of Value of Some Outputs from GCLMEOutputs from GCLME

ItemItem Value ($)Value ($)

Marine FisheryMarine Fishery 18,795,400,07018,795,400,070

Offshore Oil ProductionOffshore Oil Production 29,861,869,10029,861,869,100

NTFP (one major)NTFP (one major) 1,941,273,7401,941,273,740

Mining (Mining (Angola, Ghana, Guinea Angola, Ghana, Guinea and Togo)and Togo)

354,782,770354,782,770

Total for GCLMETotal for GCLME 50,953,325,68050,953,325,680

Estimates of Resource Rent Estimates of Resource Rent and Effect on Fish Resourceand Effect on Fish Resource•Estimation was done using Estimation was done using

Lange (2003) estimation Lange (2003) estimation procedure which estimated procedure which estimated resource rents as total resource rents as total revenues minus average cost revenues minus average cost assuming a normal profit of 30 assuming a normal profit of 30 percent as one element of percent as one element of average costaverage cost

Scale of resource rents Scale of resource rents without and with GEF without and with GEF

funding funding ItemItem ArtisanArtisanal (with al (with hookshooks

ArtisanArtisanal al (with (with nets)nets)

Semi Semi industriindustrial al fishingfishing

Trawling Trawling companies companies (annual/tra(annual/trawler wler

Landing Landing value of value of GCLMEGCLME

Annual Rent Annual Rent without GEF ($)without GEF ($)

800.8800.8 133133 66,393.66,393.66

73,623.273,623.2 2,076,006,2,076,006,275275

Annual Rent Annual Rent with GEF ($)with GEF ($)

968.8968.8 233.8233.8 79,833.79,833.66

119,579.6119,579.6 3,088,066,3,088,066,282282

DifferenceDifference 168168 100.8100.8 13,44013,440 73,623.273,623.2 1,012,060,1,012,060,007007

Work in Progress/Planned Work in Progress/Planned ActivitiesActivities

• Valuation of non-market ecological services as Valuation of non-market ecological services as to obtain TEVto obtain TEV

• assessing the social and economic costs of the assessing the social and economic costs of the nypa palm infestation on affected nypa palm infestation on affected communities communities – Developing a dynamic model of the biological Developing a dynamic model of the biological

growth of two competing coastal timber species, growth of two competing coastal timber species, mangrove and nypa palm mangrove and nypa palm

– Setting-up a nonlinear program that seeks to Setting-up a nonlinear program that seeks to optimize the relative shares of mangrove and nypa optimize the relative shares of mangrove and nypa palm in the region palm in the region

– providing estimates of the optimal distribution of providing estimates of the optimal distribution of species and the levels and time-paths of investment species and the levels and time-paths of investment required to implement a policy that seeks to required to implement a policy that seeks to achieve the optimal distribution of speciesachieve the optimal distribution of species

Thank you for Listening