Estimating the value of biodiversity

One ground-breaking aspect of the Global Environment Outlook 2007 issued last week is the attempt to estimate the monetary value of biodiversity.
For instance, the value of coral reefs for fisheries and tourism is estimated at US$30 billion per year, and the value of the herbal medicine market at roughly US$43 billion in 2001 figures.
Although such estimates are often attempted at local levels, expanding the effort to a global level significantly inflates the figure, thus enhancing the shock value of the potential damage and giving it a greater sense of priority.
The authors of the Global Environment Outlook are clearly hoping to build on the success in calculating the economic value of travel and tourism as a job creator and foreign exchange earner, which has helped policy-makers create the conditions for generating phenomenal tourism growth in the last few decades.
They believe the same can be done by estimating the value of biodiversity and its value to tourism.
The report says: "Identifying economic values of ecosystem services, together with the notions of intrinsic value and other factors, will assist significantly in future decisions relating to trade-offs in ecosystem management."
Citing one example, the report says that the global net value of coral reefs relating to fisheries, coastal protection, tourism and biodiversity is estimated at US$29.8 billion oer year. It highlights the Caribbean, a popular tourist region, where human activities reportedly threaten nearly two-thirds of coral reefs.
The report also notes that countries are attempting new ways of raising revenues for environmental protection.
For example, it says, the Protected Areas Conservation Trust in Belize receives most of its revenue from an airport tax of about US$3.75, paid by all visitors upon departure, together with a 20% commission on cruise ship passenger fees. The British overseas island territory of Turks and Caicos designates 1% of a 9% hotel tax to support the maintenance and protection of the country's protected areas.
These so-called "green taxes", although opposed by industry interest groups, are putting pressure on the world's major polluters and environment destroyers, the report says.
At the same time, it says, Environmental degradation due to development raises deep ethical questions that go beyond economic cost-benefit ratios.
"The question of justice is perhaps the greatest moral question emerging in relation to environmental change and sustainable development. Growing evidence indicates that the burden of environmental change is falling far from the greatest consumers of environmental resources, who experience the benefits of development," the report says.
"Often, people living in poverty in the developing world, suffer the negative effects of environmental degradation. Furthermore, costs of environmental degradation will be experienced by humankind in future generations. Profound ethical questions are raised when benefits are extracted from the environment by those who do not bear the burden."
Both tourism and its first-cousin, the air transport industry, produce many economic benefits but are criticised for not doing enough on the ecological front.
Tourism is an economic mainstay in many parts of the world, especially island nations such as the Seychelles, as well as the Mediterranean coastal areas.
At the same time, it cites the urban sprawl of Las Vegas, the fastest-growing metropolitan area in the United States _ a reference that may soon be applicable to Singapore and Macau as they seek to develop their gaming industries on the Las Vegas model.
"As the (Las Vegas) gaming and tourism industry blossomed, so has the city's population," the report says.
"Population growth has put a strain on water supplies," it adds. "Satellite imagery of Las Vegas provides a dramatic illustration of the spatial patterns and rates of change resulting from the city's urban sprawl."
Another example is the state of Quintana Roo in Mexico, which is experiencing a significant growth in tourism infrastructure all along the Caribbean coast.
The conversion of mangrove forest into beachfront tourist resorts along the Mayan Riviera, south of Cancu{aac}n, has left the coastlines vulnerable. Playa del Carmen, at 14%, has the fastest growth in tourism infrastructure in Mexico. Threats to the aquifers come from increasing water use, of which 99% is withdrawn from groundwater and wastewater disposal, the report says.