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Economic Valuation of Provisioning and Cultural Services of a Protected Mangrove Ecosystem: a Case Study on Sundarbans Reserve Forest, Bangladesh

Md. Shams Uddin
Environment and Forest, Bangladesh Water Development Board (BWDB), House no. 7/4, Block A, Lalmatia, Dhaka 1207, Bangladesh

E. de Ruyter van Steveninck
Department of Environmental Resources, UNESCO-IHE, PO Box 3015, 2601 DA Delft, the Netherlands

Mishka Stuip
Department of Environmental Resources, UNESCO-IHE, PO Box 3015, 2601 DA Delft, the Netherlands

Mohammad Aminur Rahman Shah
International Union for Conservation of Nature (IUCN), Bangladesh Country Office, House-16, Road-2/3, Banani, Dhaka 1213, Bangladesh

Abstract/ Executive Summary:

The Sundarbans Reserve Forest, the world's largest mangroves covering 6000 km2in Bangladesh, provides a variety of ecosystem services. The real contribution of the Sundarbans Reserve Forest to the national economy has not been evaluated so far. This study aims to provide an economic estimation of the provisioning and cultural services of the Sundarbans. Official records of revenue collected by the forest Department were the sources of information used in the economic valuation of the forest. The major provisioning services of the Sundarbans are timber, fuelwood, fish, thatching materials, honey and waxes. And the main culture service is tourism. The provisioning and cultural services provided by the Sundarbans contributed to the revenue of the Forest Department on an average US$ 744,000 and US$42,000 per year respectively during the financial year 2001–2002 to 2009–2010. The revenue collection from the forest products and tourism showed an increasing trend over the study period, except for the timbers. The Forest Department produces economic benefits out of the ecosystem services without knowing the optimum limits and how long they can harness the economic benefits. A comprehensive economic valuation of the total stock and potential of all the ecosystem services of the Sundarbans as well as defining limits of sustainable yield of the services under different socio-economic and climate change scenarios would be necessary to enhance sustainable management of the forest.

Keywords: Economic valuation, Ecosystem services, Mangrove Sundarbans, Reserve Forest, Bangladesh

Location: Sundarbans Reserve Forest, Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Non-commodity: Profitability

Objectives:

This paper presents the economic valuation of provisioning and cultural services of the Sundarbans Reserve Forest which will be guiding in developing a sustainable management system for the forest.

Methodology:

Economic valuation of ecosystem services can be obtained through‘ Direct’ and ‘Indirect’ estimation methods as applied by Millennium Ecosystem Assessment (MA, 2005).‘Direct’ valuation method would be applicable to the marketable products or services, whereas the services for which market does not exist are evaluated by‘ Indirect’ valuation methods (De Groot et al., 2002). In this study, we consider the valuation of the provisioning and cultural services of the Bangladesh Sundarbans Reserve Forest which has real markets using ‘Direct’ valuation methods. Since Forest Department, being the custodian of the SRF, determines the revenue from different types of forest products including tourism, the real competitive market does not exist for the first stage selling point, i.e. from the forest department to the resource collectors, hence the economic value of the services can only be determined from the revenue obtained for each service, rather than the real market price which is substantially higher than the revenue received by the Forest Department. For the forest Department, the revenue earned from the services would be the economic benefits only, rather the higher economic value of the services when they enter the local and national market which does not bring any economic benefits to the Forest Department. Therefore, the economic value of the provisioning services including timber, fuelwood, thatching materials, fish, crab, and honey was estimated using the aggregate of annual revenue earned by the Forest Department from all types of providing services of the Sundarbans over a fiscal year. Historical records of revenues earned from each of the provisioning services were retrieved from the sales documents maintained by the FD for the financial years 2001–2002 to 2009–2010. The total stock of different types of provisioning service such as timber, fish, is not evaluated in this study because two reasons: one is the unavailability of realistic information on the stocks; the other reason is that the estimated economic value of the total stock would not give any indication how much economic benefit the SRF can provide to FD annually, whereas the possible annual yield of resources would be more important to FD to determine the potential economic benefitfromSRF.Similarly, the economic value of cultural services was estimated for tourism - the only marketable cultural service of the Sundarbans. Both domestic and international tourists were the sources of tourism income from the Sundarbans. The annual revenue earned from tourism service in a particular fiscal year was considered as the economic value of tourism over that year. Available records on a total number of domestic and international tourists who visited the Sundarbans and annual revenue earned during the 2001–2002to 2009–2010 years were collected from the Forest Department. The original data of revenue taken in local currency (Taka) was converted to US$ with appropriate conversion factors for corresponding years of the study period, which allowed to estimate the changes of economic value over the period.

Source of Information: Ecosystem Services 5 (2013) e88–e93

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The Sundarbans Reserve Forest provides a wide range of provisioning and cultural services that are similar to those in many other mangroves around the world. The generation of economic benefit from the forest products is purely controlled by the Forest Department through a revenue-permit system, which does not reflect the market price of the products. There is no account of setting the limit of permits that would allow the sustainable production of services. In such a context, the economic value of the provisioning and cultural services of the Sundarbans Reserve Forest received by the Forest Department was increasing over the recent years, except the revenue from timbers. The Forest Department is making economic benefits out of the ecosystem services without knowing the optimum limits and how long they can harness the economic benefits. The economic benefits can be drawn from the non-consumptive services like tourism, carbon credit instead of acquiring from the consumable provision services. This study would facilitate the forest managers to conceptualize the economic and environmental importance of the Sundarbans ecosystem and undertake future strive towards sustainable management of the ecosystem services. Further research on the economic valuation of the total stock and potential of all the ecosystem services of the Sundarbans Reserve Forest as well as optimum limits of sustainable yield of the services under the different socio-economic conditions and climate change scenarios would be necessary to enhance sustainable management of the forest.

Knowledge Management: Journal