valuing wetlands as infrastructure: examples from Asia Lucy Emerton Environment Management Group

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1 valuing wetlands as infrastructure: examples from Asia Lucy Emerton Environment Management Group

2 valuation is a means to an end, not an end in itself

3 valuation is a means to an end, not an end in itself

4 wetlands should be counted, valued and invested in as an economic part of infrastructure

5 To say that infrastructure development has impact is to state the obvious. No industrial country has advanced to such status without developing solid infrastructure facilities. And no low-income country has managed to escape poverty in the absence of infrastructure. There is no question that, for a developing country, infrastructure investment will pave the way for growth and thus poverty reduction Improving the Welfare of the People through Infrastructure Development: Keynote Address by Liqun Jin, Vice President Operations, Asian Development Bank. Asia-Pacific Business Forum 2006, Seoul

6 Global spending on water infrastructure is World Bank portfolio of active water, sanitation and flood control projects is worth ADB Water Financing Program plans to spend more than a year on water and sanitation OECD DAC donors provide a year in assistance to the water sector Humanitarian and Emergency aid spending on water and sanitation is more than a year annual budget for Ramsar Convention global activities a year

7 defining infrastructure the stock of facilities, services and equipment that are needed for the economy and society to function properly

8 what does this miss? the natural ecosystems which support, sustain and safeguard production and consumption, and uphold human wellbeing

9 wetlands as infrastructure inseparable from other parts of economic infrastructure just like built capital and assets, investment in wetland conservation and wise use yields tangible returns and cost savings their maintenance and upkeep require an equal or even greater investment priority

10 the problem of under-valuation the calculations which inform decision-making remain flawed and fundamentally incomplete in the absence of information about wetland values, substantial misallocation of resources has occurred immense costs have often been incurred and opportunities for growth and development have missed

11 the cost of under-investment wetland infrastructure has remained largely absent from investment equations at the worst, has actually been negative investment undermines profits and causes losses across the whole economy

12 wetland values: assessment to capture 1. IDENTIFY and ASSESS the full range of ecosystem services and people affected 2. ESTIMATE and DEMONSTRATE the value of ecosystem services 3. CAPTURE the value of ecosystem services and seek SOLUTIONS TEEB The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature.

13 recalculating profit and loss the problem is not that wetlands have no value rather that wetland costs and benefits are not adequately reflected in decision-making we are now seeing more efforts to factor wetland ecosystem values into economic planning

14 Ream mangroves Cambodia That Luang swamp Lao PDR Muthurajawela marsh Sri Lanka Tuul River watershed Mongolia

15 Ream mangroves, Cambodia Ream NP threatened by both commercial encroachment and strict protection how to justify wetland conservation in the face of land conversion to other uses? how to make the economic case for locally-based wise use of the protected wetlands?

16 1,500 1, $ 000/year Forest Farm Fish Total more than 85% of households depend on wetland livelihoods: opportunity costs of strict protection > 50% of local income cost-benefit analysis of mangrove restoration vs. shrimp farming: shows net loss of almost US$1 million a year, which far outweighs short-term gains from conversion local use 66% storm protection 6% coastal erosion control 24% carbon sink 4% Emerton, L. (2002) Bokor, Kirirom, Kep and Ream National Parks, Cambodia: Case Studies of Economic and Development Linkages. Review of Protected Areas and their Role in the Socio-Economic Development of the Lower Mekong Region, ICEM, Brisbane.

17 That Luang swamp, Lao PDR situated in the heart of Vientiane, That Luang is being rapidly reclaimed and encroached how to demonstrate the necessity of factoring wetlands into urban planning and zoning? how to make the case for investing in wetland conservation as part of flood management measures?

18 annual damages avoided due to That Luang: US$ 2.8 million, or US$ 1,400/ha Infrastructure 56% Personal assets 26% Traffic 1% Income 4% Health 2% Crops 2% Other 9% Flood event Reduction 1 year 100% 5 year 72% 10 year 48% 20 year 38% 50 year 25% Gerrard, P. and L. Emerton (2004) That Luang Marsh, Lao PDR: the importance of wetlands for urban populations. WWF Lao PDR Country Programme, Vientiane and IUCN Asia Environmental Economics Programme., Colombo

19 Muthurajawela marsh, Sri Lanka industrial and urban estates discharge wastewater loads into wetland before it enters the sea how to make the case for extending Wetland Sanctuary boundaries and buffer zone? how to show that investment in wetland conservation helps to meet a key gap in access to sanitation and clean water?

20 treats wastes and assures water quality for more than 30,000 households, 3,000 fisherfolk and 150 industries : value of wetland services exceeds US$ 2.3 million or US$ 1,300/hectare/year Industrial wastewater treatment Domestic sewage treatment Freshwater supplies Protection of downstream fisheries $1.80 mill $0.15 mill $0.15 mill $0.22 mill $2.3 million or $1,300/ha per year Emerton, L. and B. Kekulandala (2003) The Economic Value of Muthurajawela Wetland, Sri Lanka. IUCN Asia Regional Environmental Economics Programme and Sri Lanka Country Programme, Colombo

21 Tuul River watershed, Mongolia water supply Ulaanbaatar s water supply depends entirely on the Tuul River a large injection of funds into water supply infrastructure is being planned, due to the looming urban water crisis how to convince planners and donors that investment in the upper watershed is key to the future functioning and cost-effectiveness of these water sector developments?

22 if the Upper Tuul ecosystem continues to be degraded, the loss of watershed services will cost Mongolia s economy a minimum of US$ 275 million over the next 25 years Tug billion degradation US$ 639 mill conservation US$ 914 mill every US$1 invested in conservation would generate water benefits of US$15 over the current situation Emerton, L., Erdenesaikhan, N., de Veen, B., Tsogoo, D., Janchivdorj, L., Suvd, P., Enkhtsetseg, B., Gandolgor, G., Dorjsuren, Ch., Sainbayar, D. and A. Enkhbaatar (2010) The Economic Value of the Upper Tuul Watershed Ecosystem in Mongolia. The World Bank, Washington DC.

23 where do we go from here? the need to take valuation beyond the realms of a purely academic exercise valuing wetlands as productive assets so as to demonstrate the returns to conservation and wise use and the costs and losses they help to avert using valuation strategically: to respond to real threats and management needs communicating values to support better and more informed decision-making

24 Thank You

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