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Economic values of protected areas: Guidelines for protected area managers

TitleEconomic values of protected areas: Guidelines for protected area managers
Publication TypeReport
Year of Publication1998
AuthorsIUCN ESU-, on of of the IUCN TFEBPAWCPA-
Keywordsagriculture, biodiversity, conservation, Costa Rica, economic value, forest, management, policy, protected area, protection, sandy beach, tourism, wetland

Protected areas contain some of the world's most beautiful scenery and outstanding natural and cultural landscapes. These feature wildernesses, mountains and volcanoes, rain forests, untouched crystal-clear marine waters, white sandy beaches and unique cultural sites - to mention but a few.The natural and near-natural features of protected areas offer attractions which in many countries have become the cornerstone of tourism and recreation. However promoting tourism for the economy is not the primary role of most protected areas. Their primary role is the conservation of species biodiversity, and provision of a rich natural resource which permits scientists, educators and the community at large to meettheir various needs. Generally speaking, however, the market alone does not support a system of protected areas - hence society, through its various levels of government, must provide environmental protection as a public service in the same manner that it provides health, education, defence and legal systems. Failure to provide these public services impoverishes the quality of life for individuals and indeed for entire nations.The debate over environmental protection is often about the balance between leaving areas in their natural or near-natural state, and developing and exploiting them. This choice is fraught with tension - for example should a forest be left uncleared, or logged and converted to agriculture? Should wetlands and mangroves be left in their natural state or cleared and developed?These Guidelines are intended to help answer such questions. Part I gives an overview of how the economic values of protected areas can be assessed, provide newinsights and inform the debate. The case studies in Part II identify those sites where protecting the environment has made a significant contribution to the economy - increasing national wealth, national incomes and levels of national economic output. Public policy has a broad focus on the welfare of the community, and much work hasbeen done by economists systematising the evaluation of welfare benefits from protected areas. The current political process largely focuses, however, on the economy and monetary returns. It is hoped that the awareness developed through these Guidelines can help to place environmental protection issues nearer the centre of the economic policy argument.The Guidelines reveal that protected areas are often significant revenue-earning entities and can make an important contribution to local economies. For instance recent studies indicate that Canada is expected to create $C6.5 billion dollars in annual Gross Domestic Product from the expenditure of participants in wildlife-related activities; this sustains 159,000 jobs and creates $C2.5 billion in tax revenue each year. Australiareceives over $A2 billion in expenditure from eight national parks - at a direct cost to Governments of some $A60 million. In Costa Rica, about $US12 million is spent annually to maintain the national parks but foreign exchange generated in 1991 was more than $US330 million with 500,000 overseas visitors; park-generated tourism is the second largest industry in the country.Numerous other examples abound. In Tanzania, poaching and uncontrolled hunting of elephants to the south-east of Tarangire National Park led to an increase in woody plants within the park, causing in turn an increase in tsetse flies and hence livestock losses; conservation of elephants would have enhanced the productivity of the livestock industry. Zaire (now Democratic Republic of Congo) receives 75% of animalprotein from wild sources; 40% of the diet in Botswana comes from animal protein produced by wild sources; firewood and dung provide 90% of the energy needs in Tanzania, Nepal and Malawi, and exceed 80% in other countries. In Australia, water production in the Upper Thompson dam in Victoria was found to be more valuable than timber production from the same land. Tourism and fishing are more economically valuable than logging in the Philippines. Fijian mangroves are more valuable for firewood collection, fishing and sewage disposal than when cleared as agricultural land. The destruction of US coastal estuaries between 1954 and 1978 cost the US economy $200 million in fish production on an annual basis. In Italy, the Abruzzo National Park has been so popular that it has regenerated the economy of a poor area that previously suffered from severe depopulation. In each of these cases, the economy is demonstrably receiving a boost from the existence of protected areas, wildlife and natural and near-natural landscapes.There is a clear message from the above that investment in protected areas can provide a significant benefit to national and local economies. Far from being locked up and lost to local users, these areas represent an opportunity for sustainable industries and for the generation of financial returns. The concept of total economic value (TEV) identifies the goods and services or "products" protected areas offer and which aresuitable for capturing revenues for the protected area. With proper management, the "product" on offer can be sold over and over again without diminishing its value and revenues can be used to maintain the protected area. Unlike extractive industries, the string of returns can be maintained over a long period for the benefit of a wide range of users and stakeholders. Managers need to prepare business plans for parks and reservesso as to assess and capture these potential benefits, and thus ensure the long-term financial sustainability of protected areas in their care. Case studies reviewed in this report show that the different approaches to valuation can lead to inconsistent reporting of outcomes. The Guidelines therefore recommend a standardised valuation methodology, based on the concept of TEV, which is described in the text. The methodology provides sound guidance for those unfamiliar with measuring costs and benefits. The adoption of a standardised approach will reduce the incidence of impacts remaining unvalued and unappreciated. Measuring the benefits of protected areas in a standard way also enables comparisons and aggregations to be made of studies in different parts of the world.

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