Faculty of Earth and Life Sciences, VU University · 2016-12-17 · Faculty of Earth and Life...

Faculty of Earth and Life Sciences, VU University

Environment and Resource Management

7

Economic valuation of Bonaire coral reefs Master Thesis – Environment and Resource Management

Lidia Muresan - 2205073

13 July 2012

Supervisor: Pieter van Beukering

2nd

assessor: Elissaios Papyrakis

468017 ERM Research Project (18 ec)

Word count: 17,000


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Copyright © 2012, Institute for Environmental Studies

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Economic valuation of Bonaire coral reefs

Foreword

This study represents the Research Project carried out for the Master in Environment

and Resource Management. The project was conducted at the Institute for

Environmental Studies (IVM), in the department of Environmental Economics. The

purpose of this study was to determine the total economic value of Bonaire's coral reefs

by modeling their ecosystem using dynamic simulation. IVM has a range of projects

which debate diverse environmental problems both from social and economic

perspectives. Moreover, the department of Environmental Economics focuses on

understanding the interaction between economy and environment.

This project helped me become experienced with economic valuation processes and

turned me into an advanced user of the Stella software, the program I have used to build

the simulation model.

First of all I would like to thank my project supervisor, Dr. Pieter van Beukering,

environmental economist and associate professor at IVM. He helped me define the

purpose of the study and construct the model in a realistic manner. Moreover, he

advised me about the assumptions I had to make when it was necessary and supported

every decision I made.

Second of all, special thanks to Esther Wolfs, from WKICS, which helped me identify the

most significant scenarios to be analyzed in this paper. Furthermore, she was in touch

with the stakeholders and provided important data.

Many thanks to former students Ingrid van Beek (Wagenigen University) and Francielle

Lacle (VU University-ERM) for the data they have provided for the ecological module

and Bonaire’s demographics.

Gratitude for current students Stijn Schep (VU University-ERM) and Jorge Amrit Cado

van der Lely (University of Groningen) that gave me their junior expert advises to

calculate the fisheries value and make assumptions regarding ecological interactions as

close as possible to reality.

I am also very grateful to my colleagues Angela Nichols and Jillian Student who spent a

significant amount of time proofreading my thesis and provided me with important

feedback.



List of abbreviations:

CPV – Coastal Protection Value

CT – Cruise Tourists

GDP – Gross Domestic Product

N – Nitrogen

NPV – Net Present Value

P – Phosphorus

SOR – State of the reef

SOT – Stay-over Tourists

TEV – Total Economic Value

TIN – Total Inorganic Nitrogen

WTP – Willingness to Pay



Contents

List of abbreviations: 4

Summary 7

1 Introduction 11

1.1 Purpose of the study 11 1.2 Outline of the paper 12

2 Background 13

2.1 Bonaire 13 2.2 Bonaire ecosystems 15 2.3 Marine ecosystems: Threats and Impacts 16 2.4 Intervention methods 19 2.5 Boundaries and limitations 19

3 Methodology 21

3.1 Overall approach 21 3.2 Ecological benefits of coral reefs 22 3.3 Economic benefits of coral reefs 23 3.4 Valuation techniques and data collection 25

4 The model 27

4.1 Ecological module 27 4.2 Recreational sub-module 38 4.3 Biodiversity sub-module 42 4.4 Fisheries sub-module 44 4.5 Amenity sub-module 44 4.6 Coastal protection sub-module 46

5 Results 47

5.1 Baseline scenario 47 5.2 Scenario 1 – Increase in the number of tourists 55 5.3 Scenario 2 – Lionfish eradication 60 5.4 Scenario 3 – Construction of a sewage treatment plant 66

6 Conclusions 71

7 Recommendations 75

References 77


Economic valuation of Bonaire coral reefs 7

Summary

Coral reefs are one of the oldest marine ecosystems in the world and are well known

due to their capacity to support high numbers and varieties of aquatic species and to

offer recreational and research opportunities (NOAA, 2011). More than 20% of the

world's corals are damaged and have no chance of recovery. The main reasons behind

this are anthropogenic activities, such as unsustainable fishing, pollution, sedimentation,

physical destruction or climate change, as well as natural events such as storms,

hurricanes or coral diseases (NOAA, 2011). Despite this, the coral cover of Bonaire was

well conserved and represents one of the healthiest in the entire Caribbean. The best

explanation for this trend is the existence of Bonaire National Marine Park (BNMP)

established in 1979, which has the role to conserve and manage the waters around the

island (Parsons and Thur, 2007).

The final aim of this project is to provide transparent and critical information that assists

policy makers and government officials in taking high-quality regulatory measures for

nature conservation, protection and management of their resources.

In order to reach this goal, first a dynamic simulation model is build which illustrates the

ecological interactions of Bonaire's coral reef and establishes their total economic value

(TEV). For this case, the Stella software was used to model the relation between

ecology and economy provided by coral reefs (Costanza & Voinov, 2001; Costanza &

Gottlieb, 1998) (see Figure 1).

Furthermore, the study will focus on the following research question:

"To what extent will economic development and nature management influence the

marine ecosystem services in Bonaire, and vice versa?"

The marine ecosystem consists of corals, fish and algae. An analysis done for the reefs

of Bonaire and Curacao revealed that their main threats are human activities,

marine-based pollution, and coastal development.

Future scenarios and the baseline will be analyzed for a time period of 30 years. This

period is enough for the impacts on ecosystems to show their effects and from an

economical point of view it is short enough to make predictions. These management

options are:

1. Construction of a sewage treatment plant in order to reduce the amount of

nutrients released into the water. The government already has plans to build this.

2. Eradication of lionfish which represent a direct threat to coral reef fish. Since

they were first observed in the Caribbean, a lot of awareness programs were developed

explaining their existence and threat. A number of programs to encourage their catch

are in progress nowadays.

3. Increase the number of tourists by increasing recreational activities on the

island. For realize this there are plans to construct 10 recreational piers on the leeward

part of the island.

The general dynamic simulation model of coral reef ecosystem is represented in Figure

1.


8 Summary

Figure 1 – General dynamic simulation model of coral reefs

Coral reefs provide a range of services such as: physical structure services for coastal

protection (CP), biotic services within and between ecosystems for maintaining the

habitat, bio-geo-chemical services for nitrogen fixation and CO2 control, information

services for climate and pollution control and social and cultural services for tourism,

recreation and cultural values (Cesar et al, 2002).

Every good or service provided by coral reefs has an attached economic value. The

services analyzed in this paper are: recreational, biodiversity, fisheries, amenity and

coastal protection. By summing up their values, the total economic value of coral reef

ecosystems is obtained. The TEV represents the value of an ecosystem which brings

benefits to people.

For the baseline scenario it is expected that the TEV will increase from $39.5M in 2012

to $43.6M in 2042, while an increase in the number of tourists will increase the TEV of

coral reefs by 13% in 2042 compared with the baseline scenario.

The complete eradication of lionfish proves to be the best management option for the

ecosystem and for the economy of Bonaire. If this management option will be

accomplished, the state of the reef is expected to increase from 0.66 to 0.7 and the TEV

will increase from $43.6M to $47M.

The third scenario analyzed proved to be beneficial from both an economic and

ecological perspective. After a reduction in the concentration of nutrients released into

the sea, the state of the reef will reach 0.55 in 30 years compared with the baseline

where it is probably to arrive at 0.49.

Ecological

module

Recreational

submodel

Amenity

submodel

Fishery

submodel

Biodiv ersity

submodel

Coastal

protection

submodel

Economic benef its

of the reef s

Exogenus

v ariables

Threats to

coral reef s

Cost of

interv ention

Management

options

State of

the reef

Net Present

Value

Economic benef its of the

reef s af ter interv ention

Step 1 - Ecological Description

Step 2 - Economic

Description & Valuation

Step 3 - Threats

Step 4 - Ecological Effects

Step 5 - Management Intervention

Step 6 - Economic Effects

Step 7 - Evaluation



To conclude and answer the first part of the research question, an economic

development in Bonaire will degrade the marine ecosystem below the medium quality

and the coral cover will be 88% lower than current values. However, the TEV of coral

reefs will be higher than the current value due to an increase in the generated revenues

from tourists as a consequence of a higher number of tourists.

From an ecologic perspective, both scenarios will increase the economic value placed

on coral reefs from $39M in 2012 to $47M in 2042 if lionfish are eradicated and

respectively from $39M in 2012 to $44M in 2042 once the sewage treatment plant is

constructed.


10 Summary



1 Introduction

Coral reefs are one of the oldest marine ecosystems in the world and are well known

due to their capacity to support high numbers and varieties of aquatic species and to

offer recreational and research opportunities (NOAA, 2011). Over the world, coral reef

ecosystems are declining. In 2000, about 27% of the world’s coral reefs were destroyed

and it is expected that this number is going to increase in the future (Parsons & Thur,

2007). About 8% of the world’s coral reefs occupy a surface of 26,000 km2

and are

located in the Caribbean Sea. Out of 70 different species of hard corals that can be

found in the Caribbean, about 65 species were identified in 2011 in the waters of

Bonaire Island occupying a surface of 2,700 hectares (IUCN, 2011; Alevizon, 2009).

More than 20% of the world's corals are damaged and have no chance of recovery. The

main reasons behind this are anthropogenic activities, such as unsustainable fishing,

pollution, sedimentation, physical destruction or climate change, as well as natural

events such as storms, hurricanes or coral diseases (NOAA, 2011). A meta-analysis

done for the Caribbean Sea by Gardner et al. (2003) for 263 sites revealed that the from

1970s until 2003 there was a high decrease of coral cover from ~50% to ~10%. Despite

this, the coral cover of Bonaire was well conserved and represents one of the healthiest

in the entire Caribbean. The best explanation for this trend is the existence of Bonaire

National Marine Park (BNMP) established in 1979, which has the role to conserve and

manage the waters around the island (Parsons and Thur, 2007).

About 30 million people in the world depend entirely on reefs. As an underwater

structure, coral reefs provide coastal protectors against storms, hurricanes and erosion.

They are an important source of food, due to the fish banks they sustain, and also

provide a decent source of income from tourism. Moreover, because of their diversity,

corals are studied by diverse scientists and pharmaceutical companies as sources for

possible new medicines. They have a high economic value and contribute each year to

the world’s economy with approximately $29.8billion (NOAA, 2011). Besides the

fisheries and tourism sectors, the prices for houses located near coral reefs and the

mitigated damage due to costal protection are important factors that contribute to define

their total economic value. This paper will calculate an economical valuation of goods

and services provided by coral reef ecosystems.

1.1 Purpose of the study

This study presents the research conducted at the Institute of Environmental Studies for

my final thesis of the program entitled “Environment and Resource Management”. The

paper is a part of the project "What's Bonaire nature worth?" which seeks to provide a

socio-economic valuation of the ecosystem services and biodiversity of Bonaire by

putting a monetary value on them (Wolfs, 2010).

The first objective of this study is to develop a dynamic simulation model that links the

ecology and economy of the Bonaire coral reef ecosystem using the Stella software1.

Within the model, the threats to coral reefs will be specified as well as their ecological

and economic impacts. To do so, a monetary value will be placed on the goods and

1 Stella Software is simulation model that makes possible the process of building complex

numerical models and offers the chance of visualize how these models work. It also answers to the intriguing question "What if?" by providing the option of analyzing different scenarios (IseeSystems, 2012).


12 Introduction

services provided by corals. The second goal is to present a socio-economic valuation

of coral reefs in the baseline scenario and run the model for a time period of 30 years.

The third objective is to analyze future scenarios that target the nature and economic

development in Bonaire and calculate their costs and benefits. The interventions taken

into account will be: 1) lionfish eradication, 2) construction of a sewage treatment plant

and 3) increase in the number of tourists through building recreational piers. The final

aim is to provide transparent and critical information that assists policy makers and

government officials in taking high-quality regulatory measures for nature conservation,

protection and management of their resources.

In order to reach this goal, the paper will focus on the following research question:

"To what extent will economic development and nature management influence the


The following sub-questions will be answered to facilitate the response to the main

question:

1. What is the total economic value of Bonaire coral reefs in the present state?

2. What is the net present value of the current state of Bonaire coral reefs for a

time period of 30 years at 5% discount rate?

3. What future plans can be devised for nature conservation and economic

development?

4. What are the total economic value and the net present value of Bonaire coral

reefs over 30 years regarding these plans?

In conclusion, this research encompasses a literature study on coral reefs ecosystem

services and future plans for the nature of Bonaire, plus the construction of an integrated

model that brings together ecology and economy.

1.2 Outline of the paper

This project is structured in 7 chapters as follows.

Chapter 1 presents the research question and the purpose of this study. Chapter 2

provides some background information about the island of Bonaire, the current

ecosystem services found there, a more detailed explanation of the current threats on

coral reefs plus the boundaries and limitations of this project.

Further, chapter 3 will describe the overall approach for building the dynamic simulation

model of coral reefs ecosystem along with their ecological and economic benefits, then

chapter 4 will describe in detail the construction of the model and each sub-module.

The results obtained for the baseline scenario and the three other scenarios will be

presented in chapter 5, while the conclusions and the recommendations will be drawn in

chapter 6 and 7 respectively.



2 Background

This chapter provides information about the location studied, as well as a description of

its available biodiversity. However, as the marine ecosystem is the central piece in this

paper, a detailed explanation of coral reefs plus their threats and impacts will be

provided. The chapter will conclude by presenting the boundaries and limitations of this

project.

2.1 Bonaire

The Caribbean Archipelago includes the Netherlands Antilles (800 km2), which are

divided in two groups of islands: the leeward group which incorporates the islands of

Aruba, Bonaire and Curaçao, also known as the ABC islands, and the windward group

which consist of the islands of Saba, Sint Eustatius and Sint Maarten (see Figure 2)

(CBS, 2010).

Figure 2 – Bonaire in relation to other Dutch Caribbean Islands (source: CBS, 2010)

Bonaire is located 46 km east from Curaçao, 80 km north of Venezuela and 129 km east

from Aruba. The surface of Bonaire is 288 km2 plus another 6 km

2 for its additional

island Klein Bonaire. It measures 38 km from North to South and a maximum of 11 km

wide from East to West (Wolfs, 2011; CBS, 2005). Due to its position, Bonaire is

situated outside the hurricane belt. One of the last hurricanes which caused significant

damage especially on the windward site was Hurricane Ivan in September 2004

(STINAPA-Bonaire, 2008).

Bonaire is part of the Kingdom of the Netherlands and the capital is Kralendijk, the

biggest city on the island. Population count varies from source to source. According to

the Centraal Bureau voor de Statistiek (2012), after the census from 2010 there were

15,666 people living on the island.


14 Background

This number varies due to immigration and emigration. The total number of immigrants

registered in 2010 was 1,200 while the number of emigrants was approximately 1,028.

The principal country both for immigrants and emigrants is the Netherlands (CBS, 2011).

About 86% of Bonaire residents are Dutch, while the rest of 14% have different

nationalities such as Dominicans, Venezuelans, Colombians and Peruvians (CBS,

2005). As a result, the official language is Dutch. However, the local language is called

Papiamentu, and includes elements of English, Spanish, Portuguese, African and Dutch.

This language is common in Bonaire, as well as in Curaçao and Aruba (CBS, 2010).

The number of households in Bonaire is 5,336 according to CBS (2010), but this number

is expected to increase. In 2009, approximately 296 building permits were issued (CBS,

2010).

The Bonaire's GDP in 2003 was 164.2 million USD (CBS, 2005). Bonaire's principal

economic pillar is represented by the tourism sector which increases fast from a year to

another (CBS, 2005).

Visitors are attracted by the unique combination of terrestrial and marine ecosystems

and the variety of activities they can enjoy on the island, such as diving, snorkeling,

kayaking, windsurfing, sailing, bird watching, etc (InfoBonaire, 2012). As a result of the

high number of visitors, the construction sector almost doubled and there are plans to

further increase the number of houses and accommodation (DEZA, 2004). The sectors

which contributed the most to the island income are presented in Figure 3 (CBS, 2005).

Figure 3 – Contribution of different sectors to Bonaire's GDP in 2003 (source: CBS,

2005)

Bonaire's industry includes oil trans-shipment, salt production and rice refining

(WRI.com). The climate is arid tropical, fairly constant throughout the year with low

rainfall (about 463.3 mm/year registered) and high temperatures during the year, varying

between 26.6˚C and 28.4˚C (MSNA&A, 2008). This climate allows the existence of large

and diverse ecosystems.



2.2 Bonaire ecosystems

The island of Bonaire has 5 Ramsar sites: Klein Bonaire, Pekelmeer, Salina Slagbaai,

Gotomeer and Lac, and two National Parks (see Figure 4) (CBS, 2005).

Figure 4 – Bonaire Ramsar sites and the WSNP (source: CBS, 2005)

The terrestrial park, Washington Slagbaai National Park (WSNP), established in May

1969, has a surface of 5.6 km2 and protects approximately 17% of the total land area of

Bonaire. Different species of birds and reptiles, such as parrots, flamingos and iguanas

can be found within the park (STINAPA-WSNP, 2012; Wolfs, 2011).

Figure 5 – The Lora, endangered species, and the Green Iguana (source: K.de Meyer)


16 Background

The Bonaire National Marine Park (BNMP) was established in 1979 and is recognized

by the International Coral Reef Initiative as "one of the best-managed marine parks in

the world". It surrounds the island of Bonaire and Klein Bonaire up to 200 m from the

coast and 60 m in depth. There can be found more than 350 species of fish and over 50

species of stony coral (STINAPA-BNMP, 2012; Wolfs, 2011). The park consists of 2,700

ha of fringing coral reef, seagrass and mangrove ecosystem. BNMP is managed by a

local NGO, called STINAPA, which provides education, monitoring, and research of

Bonaire's biodiversity. To manage the park, an annual admission fee was established in

1992, for divers and snorkelers of $25 and $10 respectively (WRI.com; Thur, 2010).

The vegetation on Bonaire is drought resistant, and adapted to its climate. Most of the

plants have thick leafs, water storage tissues or change their angle to avoid direct

sunlight. Table 1 presents some species of plants, terrestrial fauna and birds specific to

the island of Bonaire (STINAPA-Bonaire, 2008).

Table 1 – Plants, fauna and birds specific to the island of Bonaire

Nr. Plant Species Terrestrial fauna Birds

1 Cacti Lizards Bananaquit

2 Acacia Green iguana Southern Mockingbird

3 Mesquite Bonairian Anole Yellow Warbler

4 Caper plants Land snails Amazon Parrot

5 Brasia Whiptail lizard Caribbean Flamingo

6 Lantana Goats and Donkeys Cayenne Terns

7 Croton Insects: Drosophila and Tenebrinoid

beetles; ants and some other Diptera

sp.

8 Red, White &

Black Mangrove

Arthropods: scorpions and spiders

9 Buttonwood

*adapted from STINAPA-Bonaire (2008).

Bonaire's marine ecosystem is unique with regard to its species. Nevertheless, coral

reefs present the fundamental structure for the majority of marine ecosystems such as

fish and algae. From a total number of 450 species of reef fish, the most common are

Blue Tang, Bicolor Damsel, Stoplight Parrotfich, Brown Chromis and Bluehead Whasse.

Different species of algae such as Sea Pearl and Mermaids Tea Cup can also be found

in Bonaire's waters (IUCN, 2011).

According to IUCN (2011) there are about 65 species of stony corals. Due to their

diversity they also represent the main source of economic development and coastal

protection of the island. However, they are threatened by terrestrial activities such as

sediments, pollution and nutrients (STINAPA-Bonaire, 2008).

2.3 Marine ecosystems: Threats and Impacts

The marine ecosystem consists of corals, fish and algae. For the economic development

of Bonaire, this is very important due to high number of tourists attracted by this habitat.



However, it is threatened by both natural and human activities. An analysis done for the

reefs of Bonaire and Curacao, revealed that their main threat are human activities,

marine-based pollution, and coastal development, (see Figure 6). Beside this, there are

other threats for the coral reef, mentioned as follows (WRI.com):

Figure 6 – Main threats for Netherlands Antilles coral reefs

• Overfishing

Fishing techniques, like the use of explosives and overfishing of specific species,

contribute to a decline of coral reef over the world (NOAA, 2008).

The Caribbean has lost many of its reef fish species over time. One third of the reefs

around Bonaire and Curacao are threatened by overfishing. Less information is

available about the effect that overfishing might have on species diversity, while a bigger

attention is focused on the effect of overfishing on the trophic level. A study done by

Arias-Gonzales et al (2004) in the Mexican Caribbean proved an expected outcome:

unprotected areas have a higher rate of exploitation compared with a protected area.

Due to the practice of fishing down the food web, sharks and manatees were depleted.

Nowadays, the focus is on smaller predators such as groupers and herbivores like

parrotfish (Burkepile & Hay, 2008). As a result, there is an increase in the amount of

algae that puts the corals under stress, contributes to their death and makes them more

vulnerable to diseases (ICRI; Debrot & Bugter, 2010).

Overfishing occurs as a result of high demand for aquarium reef fish and for commercial

purposes. High levels of fishing can reduced genetic variation (due to specific species

being overfished), alter ecological balance on the reef and change the trophic interaction

(McGinley & McClary, 2010; WRI.com).

• Physical destruction

The tourism sector is another threat to the marine ecosystems of Bonaire. Due to the

activities performed by tourists, such as diving and snorkeling, approximately 2.7% coral

reefs are damaged every year (De Mayer, 1998). These activities have a direct impact


18 Background

on corals as a result of their direct contact or illegal anchoring, but also an indirect

impact due to the nutrients loaded into the water from hotels through wastewater

(WRI.com).

• Sedimentation

Sedimentation is mainly caused by the dredging associated with construction of different

types of buildings and development of infrastructure. As an impact, the sediments

released in water can affect the food web by killing the corals and other organisms

essential for fish. Sediments also reduce the photosynthetic activity and light availability,

and in high amounts they can even bury the reefs (Roger, 1990; Wieggers, 2011).

• Nutrients

Nitrogen and phosphorus are the most important nutrients. Their presence causes

eutrophication, an excessive growth of algae which are in strong competition with the

corals (Wieggers, 2011).

The sewage water of Bonaire is collected in septic tanks and leaches into the sea

through groundwater, without being treated properly. In their paper, Kekem et al (2006),

mentioned the main reason for coral reef decline to be the inflow of surface and

subsurface water, partly untreated. Besides wastewaters, the manure of goats and

donkeys also represent a source of nutrients (Kekem et al, 2006).

A study done by Dailer et al (2012) analyzed the effect of N and P on diverse species of

algae, using different concentrations of nutrients. The outcome of this study revealed

that the growth rate of algae increases with the percentage of wastewater affluent

added.

• Lionfish

Invasive species such as lionfish became a problem after human expansion. Lionfish

represent a threat to reef fish due to their diet composed mainly by young fish. They are

characterized by rapid expansion as a result of the limited number of natural predators

they have. Until now, groupers are the only known predators of lionfish. However it is not

an easy choice to control lionfish using groupers due to the unknown consequences

they may have on corals. In the Bahamas, lionfish damaged 79% of the coral reefs

(Vermeij, 2012). The first lionfish captured in Bonaire was in October 2009. Since then,

their numbers have increased. Known as predators, they cause disruptions to the

function and diversity of coral reefs. Many programmes have been developed to raise

awareness and ask tourists to report their presence. (Mumby et al, 2011).

• Climate change

Sea level rise, increased water temperature, a higher frequency of hurricanes and an

increase in ocean acidity are part of the IPCC scenarios2 for climate which represent

serious threats for coral reefs. Global warming can make coral reefs more vulnerable to

diseases and affect their resilience capacity and can also kill the corals (Debrot &

Bugter, 2010). The rate of corals’ death due to bleaching varies from 0 to 100%. An

example is from 1982 and 1994 in Indonesia and the Pacific when almost half of the

bleached corals died (Hoegh-Guldberg, 1999).

The water temperature increased in the past 50 years by less than 2˚C and triggered a

decrease in the healthy coral cover. It is considered that coral reefs are already at their

2 Scenarios proposed by IPCC include an increase in average air temperature with 1.1˚C to

6.4˚C; an increase in the level of precipitation in some parts, and decrease in others; sea level

rise by 18-59cm and an increase in ocean acidity by 0.14-0.35pH.



thermal limits and a further increase will lead to their bleaching, disease and mortality

(Hoegh-Guldberg et al, 2007). In tropical environments, usually coral reefs experience

water temperatures between 18˚ and 30˚C. Below and above this temperature, coral

reefs are affected and are threatened by overgrown macroalgae (Hoegh-Guldberg,

1999).

2.4 Intervention methods

The impacts of anthropogenic threats mentioned above can be avoided or mitigated if

good management options are taken. In this paper, some possible management options

will be analyzed and compared with the baseline scenario. The result of this analysis

can influence policy makers and improve the general state of the reefs.

Some of the possible interventions are:

1. Construction of a sewage treatment plant in order to reduce the amount of

nutrients released into the water. The government already has plans to build

this.

2. Eradication of lionfish which represent a direct threat to coral reef fish. Since

they were first observed in the Caribbean, a lot of awareness programmes were

developed explaining their existence and threat. A number of programmes to

encourage their catch are in progress nowadays.

3. Reduce fishing rate through building more zones where fishing is forbidden

and/or limit for specific seasons or specific species.

4. Include more programmes to make tourists aware of their impact due to

recreational activities on coral reefs. Such programmes are available in other

areas where the divers and snorkelers have to watch an educational movie

after they rent the equipment and before they go into the water. These

educational movies serve the purpose of making them aware about the impacts

of touching the corals.

In this paper, the first two interventions methods will be analyzed plus another scenario

which will analyze the effect of an increase in the number of tourists.

2.5 Boundaries and limitations

This study will analyze in the first part the marine ecosystems of Bonaire and their

biggest threats, followed by the economic benefits gained due to the services they

provide, and the calculation of the total value of coral reefs. Future scenarios and the

baseline will be analyzed for a time period of 30 years. This period is enough for the

impacts on ecosystems to show their effects and from an economical point of view it is

short enough to make predictions.

The area studied represents the total area of Bonaire Island. However, because the

highest amount and the healthiest reefs are on the leeward side, most of the threats and

interventions will focus on this part.

Limitations regarding the data used:

Data availability – some of the data are collected from 5 or 10 years ago and a baseline

is missing, so no comparisons can be made. Moreover, due to different groups which

analyzed these ecosystems, some of the data are available only for specific locations of

the island. To overcome this, some data were extrapolated to the entire reef area.


20 Background

Data accessibility – Some of the data is available only in the private sector and the

reports are not available. Governments are not willing to share their data. As a result

some data were transferred from studies done on other islands.

Data quality – Some of the data available are questioned due to the lack of resources

while gathering the data and the type of sample analyzed.



3 Methodology

The purposes of the project are to build a dynamic simulation model to illustrate the

ecological interactions of Bonaire coral reefs and to establish their total economic value

(TEV). In order to do so, a literature study was conducted about the island of Bonaire, its

marine ecosystem, the goods and services provided by coral reefs and their economic

value.

This chapter will provide more information about the model used, and a description of

the ecological and economic benefits of coral reefs.

3.1 Overall approach

Coral reef ecosystems generate a range of goods and services, known as benefits for

Bonaire's society. These benefits are measured through valuation techniques. However,

the corals are threatened by various factors, and different management options should

be taken into account to respond to these threats. But different interventions have

varying costs. As a result the perfect ones will be those which bring higher economic

development and an improvement in the general state of the reef.

To reach the final purpose of this study a dynamic simulation model was build to present

the relationship between ecology and economy. For this case, the Stella software was

used to model the relation between ecology and economy provided by Bonaire coral

reefs (Costanza & Voinov, 2001; Costanza & Gottlieb, 1998). As a simulation model it

analyzes the impacts of different variables and gives the opportunity to perceive real

world behavior. The choice for a dynamic model is due to its capacity to vary the

parameters over time, while a static model assumes that the parameters remain

unchanged over time (Prevost et al, 2005).

Figure 7 represents the general framework of this model. In the first step the ecological

indicators and the current interactions of ecosystems that contribute to the state of the

reefs are going to be analyzed and combined in a single indicator, called the state of the

reef indicators. The general state of the reef represents the quality of the reef

ecosystem. The second step plans to define the economic benefits of the coral's

existence and sum them up to calculate the total economic benefits of the reefs. The

third and fourth step will identify the current threats and measure their effects on

ecological indicators and on the economic value of corals over a time period of 30 years.

Moreover, exogenous variables such as the global economy and an increase in

Bonaire's population are also analyzed. Further, possible intervention measures are

identified, and their influence on ecological condition and economic value is determined

and compared with the baseline. For any management option, their cost and benefits

are mentioned in order to calculate the net present value of management intervention.


22 Methodology

Figure 7 – General framework of the dynamic simulation model

3.2 Ecological benefits of coral reefs

Around the world, the presence of coral reefs offers a range of goods and services for

people living close to them. Bonaire is one of the islands that benefit from the goods and

services provided by coral reefs (see Figure 8).

As mentioned in Cesar et al (2002), goods provided by coral reefs can be seen as

renewable and non-renewable. Renewable goods can be fish, seafood or seaweed, and

non-renewable goods are represented by sand and corals extracted and used as

building materials.

Coral reefs also provide a range of services such as: physical structure services for

coastal protection (CP), biotic services within and between ecosystems for maintaining

the habitat, bio-geo-chemical services for nitrogen fixation and CO2 control, information

services for climate and pollution control and social and cultural services for tourism,

recreation and cultural values (Cesar et al, 2002).

Ecological

module

Recreational

submodel

Amenity

submodel

Fishery

submodel

Biodiv ersity

submodel

Coastal

protection

submodel

Economic benef its

of the reef s

Exogenus

v ariables

Threats to

coral reef s

Cost of

interv ention

Management

options

State of

the reef

Net Present

Value

Economic benef its of the

reef s af ter interv ention

Step 1 - Ecological Description

Step 2 - Economic

Description & Valuation

Step 3 - Threats

Step 4 - Ecological Effects

Step 5 - Management Intervention

Step 6 - Economic Effects

Step 7 - Evaluation



Figure 8 – Goods and Services provided by coral reefs

3.3 Economic benefits of coral reefs

Every good or service provided by coral reefs has an attached economic value. By

summing up their values, the total economic value of coral reef ecosystems is obtained.

The TEV represents the value of an ecosystem which brings benefits to people. To put

an economic value on the goods and services provided by coral reefs it was necessary

to do an extended study of the literature and projects done in past years to analyze

Bonaire's benefits, along with a close communication with relevant stakeholders.

The value placed on a good or service represents the level of preference of individuals

on that good or service. The commonest units that express this value are the "money"

(van Beukering et al, 2007b). Even goods without a market price can be expressed in

monetary terms by using monetary values such as willingness to pay (WTP), willingness

to accept (WTA), market and non-market value, financial and economic value, costs and

benefits, producer and consumer surplus, etc (van Beukering et al, 2007b).

The TEV is calculated by summing the use and non-use value of coral reefs, which are

defined by the type of their use (see Figure 9).

• Use values are defined by direct and indirect use of coral reefs.

Direct use values represent those goods and services that can be directly used by

humans and have a market price. They can be consumptive (extractive) and non-

consumptive (non-extractive). Extractive uses are represented by the goods which once

consumed are not returned to the ecosystem, such as timber, fish for food and aquarium

trade. Non-extractive uses are services provided by the ecosystem that are not

extracted, for example recreation and education.

Indirect use values are more difficult to value and are represented by diverse benefits

provided by the ecosystem in an indirect way. Some examples are biological support to

fisheries and turtles, physical protection of coast, carbon storage, etc.

Goods Services

Bio-geo-chemical services

Physical structure services

Information services

Biotic services

Non-renewable

(e.g. sand and corals for buidings)

Renewable

(e.g. fish, seafood, seaweed)

Social and cultural services


24 Methodology

Figure 9 – The TEV of coral reef ecosystem

• Non-use values are divided in bequest and existence values.

Non-use values illustrate the value place by people on different goods and services by

taking into account any present or future use of them.

Bequest values express the benefits that a good and service have for future

generations, such as avoided damage due to climate change, while existence values

represents the benefits of knowing that a good or service exists, for example, simply the

existence of certain species gives happiness to some people.

A combination between use and non-use value result in a new sub-category, the option

value. This value shows the significance a good or service have in the present for a

potential future use. An example is the potential to derive a remedy for cancer from the

substances found on reefs (van Beukering et al, 2007b).

The services analyzed in this paper that bring economic benefits to the island and

contribute to the TEV of coral reefs are the following:

Recreational activities: Tourists are the major contributors to the total recreational

value of coral reefs, followed in a small part by locals. Tourism industry has developed a

lot in the recent years in Bonaire, and represents the main pillar of economic

development. The best explanation for this is the large and healthy cover of coral reefs

from the Caribbean (Groenenboom & Krul, 2009).

There are two types of tourists: stay-over tourists (SOT) and cruise tourists (CT). Both

types contribute to the recreational value of coral reefs. Stay-over tourists generate

direct revenues by paying the fee for recreational activities such as diving and

snorkeling, and indirect revenues through hotel and food costs. Cruisers only produce

direct revenues through expenses they have on diverse activities and souvenirs they



buy. Moreover, locals contribute as well to the TEV of coral reef by providing direct

revenues through recreational activities they undertake such as snorkeling and diving.

However, tourism has not only positive sides. It represents also a threat though waste

disposal and physical destruction of corals while diving.

Biodiversity: Bonaire is known as having the largest amount of healthy coral reefs in

the Caribbean. Moreover, it provides home to a high number of corals and fish species.

The money spent on projects for studying the corals and the potential for discovering a

new drug from corals are taken into account for determining the biodiversity value of

coral reef. Non–use values are also included in this section by determining the WTP of

locals and Dutch population for improving or conserving the coral reef ecosystem.

Fisheries: Commercial, recreational and aquarium fishing is important for the economy

of Bonaire. The total fish caught for sale depends on variables such as the fishing effort,

the season and the fish stock. Approximately a quarter of the catch represents reef

dependent fish, while about 70% of the total fish caught is sold in Bonaire (personal

communication Stijn Schep). The coral reef value due to fisheries is considered to be

equal with the percentage of coral reef dependency multiplied with the total profit of

fishermen.

Amenity value: The presence of houses on the coast near coral reefs is a factor that

contributes to the value of the house. A nice view with healthy coral reefs increases the

price of the house with a certain percentage. On the opposite, damaged corals will

decrease the price for a house, as the amount of algae is going to increase and with

their disintegration will trigger a bad smelling and unpleasant view. The value added or

discounted as a result of coral reefs existence represents the value placed on their

existence, called the amenity value (Bervoets et al, 2010)

Coastal protection: One of corals functions is their capacity to protect the coast against

hurricanes and erosion. Due to their structure, corals act as wave breakers mitigating

the impact of waves on coast and protecting the properties placed on the coast. Coral

reefs protect the shoreline within 2000m and represent 29% of the Caribbean coastline

(van Beukering et al, 2007). For this paper was considered that the total damage

avoided of the properties that lies on the coast as a result of coral reefs existence

represents the coastal protection value of coral reefs.

Cesar et al (2003) calculated the annual worldwide coastal protection value at $9 billion.

From this value, $720M was attached to the Caribbean. Sarkis et al (2010) calculated

the annual coastal protection value of coral reefs around Bermuda. The NPV they

obtained was $266M. The coastal protection value of USVI's coral reefs was calculated

to be $6.72M per year. The method used to determine it utilized avoided damage cost.

Based on insurance data, the damage per property was valued to be 16.6% of the

average house value (van Beukering et al, 2007).

The TEV of Guam's coral reef was determined to be $127.3M per year, with 75%

contributing the tourism sector (van Beukering et al, 2007).

World's net benefits of coral reefs were determined by Cesar, Burke and Pet-Soede,

(2003) to be around $29.8 billion per years. The biggest share of this is due to tourism

and recreation with $9.6 billion, followed by coastal protection with $9 billion.

3.4 Valuation techniques and data collection

For valuing the goods and services provided by coral reefs different valuation

techniques are used. Some of the most frequent techniques applied for this kind of


26 Methodology

valuation are presented in Table 2. The data collected are both secondary data, from

literature, and primary data from surveys that are conducted in the present.

Table 2 – Techniques used to valuate goods and services provided by coral reefs

Technique Goods and Services

Market price Tourism and recreation

Contingent valuation method Biodiversity

Market price Fisheries Hedonic pricing Amenity

Stock (houses) at risk Avoided damage cost

Property-value

Coastal protection



4 The model

In order to make predictions on the effect a decision may have, models are used to

analyze their outcomes. There are two types of simulation models: static and dynamic.

Prevost et al, (2005), made a comparison between a static and dynamic simulation

model to forecast the abundance of salmon in the River Bush (North Ireland). The

results obtained from these two models revealed that dynamic models are a better

choice for predicting ecological indicators because they are more flexible.

The model described in the previous chapter was built in order to present the interaction

between the ecology and economy of coral reefs. This model is formed from different

sub-modules that are connected with each other (see Figure 10), and are going to be

explained in the following part.

Figure 10 – Sub-modules forming the general dynamic simulation model

4.1 Ecological module

Coral reefs are a valuable ecosystem for the nature and society of Bonaire. As coral

reefs support fish habitat, it can be stated that they represent a source of food and

income for locals. Coral reefs are also important due to the services they provide, such

as coastal protection, amenity, support for fish species diversity, etc. They also attract

tourists that enjoy their beauty through diving and snorkeling (McClanahan, 1995).

However, coral reefs are under pressure which triggers a great concern to those who

depend on them from a social and economic point of view (Cesar et al, 2003).

The coral reef community in the Caribbean has degraded over time as a result of human

activities. Anthropogenic factors such as overfishing, nutrient loading, sedimentation and

Ecological module

Recreational sub-module

Amenity sub-module

Fisheries sub-module

Biodiversity sub-module

Coastal protection sub-

module


28 The model

climate, plus natural stresses such as storms and hurricanes have made some changes

in the reefs ecosystem and benthic cover. Some of the most important changes are the

reduction of fish stock and the change of benthos dominance from coral to algae

(Newman et al, 2006; Sandin et al, 2008)).

The ecological module of coral reefs is very difficult to model in a realistic manner due to

a high number of interdependencies and variables that threaten the ecosystem.

Because it is impossible to model all the factors that contribute to the quality of the reef,

for this project the most important indicators are taken into account. All possible effort

was put in order to draw a model as close to reality as possible and to use data

available for the island of Bonaire.

To have an overview of the whole ecological module see Figure 11.

The model consists of six main ecological indicators that contribute to the quality of the

reef. They are: coral cover, coral diversity, fish stock, fish diversity, algae cover and

sand and rubble cover. Each indicator has a rate of increase and decrease per year as

well as different variables that threat their existence. Also discussed are the most

significant threats which include the lionfish, rate of sedimentation, overfishing, nutrients

loaded into the water, physical destruction and temperature increase.

Further, the construction of every indicator, its relations with other factors and their

threats will to be explained.

• Coral Cover and Coral Diversity

Out of 2,700ha, the current coral cover is 28.6% (IUCN, 2011). It embodies both soft

(8.8%) and hard corals (19.8%). Coral cover depends on different factors that contribute

to their increase or decrease. When no external factors are present the maximum

expansion rate of coral cover, which also includes their resilience3 property, is 50% per

year (Tanner, 1995; Bak et al 2009). However, this expansion is limited by a carrying

capacity. Using the result from a report done by IUCN (2011) which measured the coral

cover, the carrying capacity was calculated to be the maximum cover found in Bonaire,

equal with 60%. Factors that contribute to the decline of coral cover are physical

destruction, influenced by the number of stay-over tourists, the rate of sedimentation,

amount of nutrients loaded into the water, a change in the temperature and the increase

of algae cover which overgrow the corals and kill them (see Figure 12).

The present number of coral species is 65 according to IUCN (2011). Compared with

2001, this number increased by 20 (Thur, 2007). Extrapolating these two years a

maximum increase of coral species of 0.55% per year was calculated. The maximum

number of species that can exist was decided together with a junior marine expert to be

equal with 70. Factors that contribute to a decline in the number of coral species are

considered to be the rate of sedimentation and the concentration of nutrients loaded into

the sea (see Figure 12).

3 Resilience of coral reefs represent coral reef's capacity to return to their state of equilibrium after

a disturbance (Mumby & Steneck, 2011)



Figure 11 – Ecological module of coral reefs ecosystem

Fish Stock

Increase of

Fish Stock

Maximum

Reproduction

Rate

Carry ing capacity

Fish Stock

Decrease of

Fish Stock

Fish

Div ersity

Increase of

Fish Div ersityDecrease of

Fish Div ersity

Maximum Increase

of Fish Div ersity

Maximum

Fish Div ersity

Recreational submodel.Nb of SOT

Decrease of f ish div ersity

due to LF

~

Coral Cov er

Rate of Algae Cover

decrease due to Herb Fish

~

Increase and Decrease of

Coral Cov er

Maximum

ExpansionRate

Coral Cov er

Carry ing capacity

Coral Cov er

Coral decrease

due to Algae cov er

increase

~

Algae Cov er

Variation in phy sical

destruction

~

Coral Cov er

Decrease f rom

Sedimentation

Algae Increase

due to Coral Cov er

decrease

~

Coral Div ersity

Increase of

Coral Div ersity

Decrease of

Coral Div ersity

Coral Div ersity

Decrease f rom

Sedimentation

Maximum Increase

of Coral Div ersity

Maximum

Coral Div ersity


Algae Cov er

Maximum

Expansion Rate

Algae Cov er

~

Carry ing capacity

Algae Cov er

Rate of Algae Cov er


~

Coral cov er

decrease f rom

Nutrients


Sand and Rubble

Cov er

Fish stock

presence rate

Fish biodiv

presence rate

Coral cov er

presence rate

Coral biodiv

presence rate

Algae cov er

presence rate

State of the reef

+

Coral Cov er

Score

Coral Biodiv ersity

Score

Fish Stock

Score

LIONFISH STOCK

Biomass herbiv ores

Fish Biodiv ersity

Score

Algae Cov er

Score

TEMPERATUREFISHING RATE NUTRIENTS

Decrease of f ish stock

due to Lionf ish

~

Variation in nutrients

due to SoT

~

Total surf ace Coral surf ace

+

Sand and Rubble surf ace

+

Algae surf ace

+

SEDIMENTATION RATE

Coral Div ersity

Decrease f rom

Nutrients

PHYSICAL DESTRUCTION RATE

Coral cov er decrease

f rom temperatue

~


30 The model

Figure 12 – Description of coral cover and coral diversity interactions

Nutrients:

Groundwater represents the source of nutrients loaded into the sea. The major causes

of nutrient enrichment in Bonaire are improper land use and the lack of a sewage

treatment plant (Slijkerman et al, 2011). Untreated sewage consists of high amounts of

nitrogen and phosphorus, important nutrients which contribute to sea water

entrophication4, coral reefs degradation and a decrease in coral species (Kekem et al,

2006). The average concentration of inorganic nitrogen (TIN; NH4+NO3 + NO2) in

Bonaire waters was measured by Slijkerman et al (2011) to have a value of 1.51 ± 1.36

µM. In order to model, the standard error was ignored.

In their study about economic valuation of Hawaiian reefs, Cesar et al (2002) revealed

the following equations for calculating the total decrease of coral cover and coral

diversity due to the concentration of nutrients loaded.

4 Euthrophication represents the process by which a high concentration of nutrients is loaded in

water and produce excessive growth of algae. Once the algae decompose they occupy the surface of the water depleting the oxygen and causing death to other organisms such as corals and fish (Art, 1993).


Coral Cov er


Coral Cov er

Maximum

ExpansionRate

Coral Cov er

Carry ing capacity

Coral Cov er

Coral decrease

due to Algae cov er

increase

~

Variation in phy sical

destruction

~

Coral Cov er

Decrease f rom

Sedimentation

Coral Div ersity

Increase of

Coral Div ersity

Decrease of

Coral Div ersity

Coral Div ersity

Decrease f rom

Sedimentation

Maximum Increase

of Coral Div ersity

Maximum

Coral Div ersity

Coral cov er

decrease f rom

Nutrients


TEMPERATURENUTRIENTS

Variation in nutrients

due to SoT

~

SEDIMENTATION RATE

Coral Div ersity

Decrease f rom

Nutrients

PHYSICAL DESTRUCTION RATE

Coral cov er decrease

f rom temperatue

~



(1) Coral cover decrease due to nutrients = 15.5*NUTRIENTS/30

(2) Coral diversity decrease due to nutrients =10.8*NUTRIENTS/30

A variation in the amount of nutrients loaded into the water depends on the number of

tourists. An increase in the number of tourists increases N load. As no data was

available about how much does the number of tourists influence the level of nutrients, it

was assumed that if the number of SOT will double the level of nutrients loaded will

double as well, following the trend from Figure 13. For the current state, it was

considered that the amount of nutrients loaded is 1.51 as this is the only value known

until now (Slijkerman et al, 2011).

Figure 13 – Variation rate in the amount of nutrients due to SOT

Sediments:

High levels of sediments can bury the corals or damage them, making them vulnerable

to diseases. Not only coral cover is threatened, but coral biodiversity as well. Bak et al

(2005) mention that sediments are an important factor that contribute to coral mortality,

considering that most coral species don't have the capacity to remove the sediments

brought by hurricanes and deposited upon them.

A study done to represent the influence of sedimentation on coral cover and coral

diversity in Hawaii, Cesar et al (2002) used the following relations to represent the effect

of sedimentation on coral cover and diversity.

(1) ln Coral Cover (%) =3.17-0.013*Sedimentation Rate(mg/cm2*day)

(2) ln Coral Species =4.97-0.018* Sedimentation Rate(mg/cm2*day)

To insert these equations into the model and calculate the decrease in coral cover and

cover diversity, they were transformed into the following equations:

(1)Decrease Coral cover=Coral_Cover-EXP(3.17-0.013*SEDIMENTATION_RATE))/30

(2)Decrease Coral Div.= (Coral_Div.-EXP(4.25-0.018*SEDIMENTATION_RATE)) /305

5 These equations were divided to 30, the time period studied in order to determine the total

decrease in coral cover per year.


32 The model

Physical destruction:

Tourists and the activities they perform have a direct negative impact on corals. Through

diving and snorkeling they are tempted to touch the corals, which decrease their

resistance to diseases and make them more vulnerable to bleaching and possible death

(WRI.com). According to De Mayer (1998), recreational activities such as diving and

snorkeling, damage approximately 2.7% of coral reefs per year. A variation in the

number of SOT is assumed that will influence the damage upon coral reefs with 50% as

presented in Figure 14.

Figure 14 – Influence of SOT on physical destruction rate

Temperature influence on the coral cover:

An increase in water temperature due to global warming will cause bleaching of coral

reefs, loss of their natural colour due to death of their symbiotic algae. Once a coral is

bleached it is more vulnerable to diseases and its growth and regeneration functions are

reduced (Debrot & Bugter, 2010).

The most frequent diseases that bleached corals encounter are "black-band",

"white-plague" and "yellow-band". Their impact can result in death of the affected corals.

For example, Ancropora species have been decimated in the Caribbean as a result of

diseases (Wieggers, 2011).

It was considered that at the current water temperature the rate of decrease in coral

cover is 3.5%. A change in the temperature is expected to change this rate as

represented in Figure 15.



Figure 15 – Rate of decrease in coral cover due to temperature change

Algae influence on coral cover:

There is a direct competition between corals and algae for the same space (Vermeij et

al, 2010; McClanahan-1995; Edwards et al, 2010). Algae abundance threatens the

existence of coral reefs due to their capacity to overgrow or block corals space,

hampering their growth and expansion. According to Box & Mumby (2007), macroalgae

and turf algae cause hypoxia on coral tissues, reduce coral fecundity and inhibit larval

settlement. Once a reef becomes dominated by macroalgae beyond a certain value,

there is a high tendency to reduce coral cover (Williams & Polunin, 2001).

After years of research, evidence was gathered to prove that corals are affected by

algae as a result of algal release of organic carbon that increases the local activity of

microbes (Barott et al, 2011). Dissolved organic carbon affects the coral reefs by

increasing the level of pathogens, which makes them more vulnerable to coral diseases

and coral death and will allow the microbes and algae to invade and overgrow them

(Barott et al, 2011).

The direct effect of algae growth on coral cover was assumed to follow the trend from

Figure 16. The maximum possible decrease of coral cover was considered to be 50% as

their maximum expansion rate, judging that a maximum algae cover will inhibit their

growth. The decrease in algae cover was not considered to be linear because small

decreases in algae cover influence the decrease of coral reefs in a lower percentage.


34 The model

Figure 16 – Influence of algae cover on coral cover decrease

• Algae cover:

Algae are an important part of the benthic community. The current algae cover is 42.4%

of the benthic cover. It is formed mainly by turf algae which cover death corals (38.2%)

and macroalgae (4.2%) that grow on the surface of the water. As explained before they

are an important regulator of coral cover. Their growth is sensitive to water temperature

and is influenced by a decrease in coral cover, while their only major threat is

considered to be herbivore fish (see Figure 17). However, their growth is also limited by

their carrying capacity calculated to be 82.2%, the maximum algae cover determined by

IUCN (2011).

Figure 17 – Factors that contribute to algae cover indicator

Rate of Algae Cover


~

Algae Cov er

Algae Increase

due to Coral Cov er

decrease

~


Algae Cov er

Maximum

Expansion Rate

Algae Cov er

~

Carry ing capacity

Algae Cov er

TEMPERATURE



Temperature:

The normal water temperature for Bonaire is 29˚C (Davis, 2011). At this value algae

cover will increase by 50% (Vermeij et al, 2010). It was assumed that a fluctuation in

temperature will increase the rate of algae cover as represented in Figure 18.

Figure 18 – Influence of temperature on expansion rate of algae cover

The main reason that can contribute to an increase in temperature is global warming, an

important stress factor for corals, which can cause bleaching and even the death of

corals (Edwards et al, 2010).

Even tough, algae cover have a high growth rate which increases with a raise in water

temperature, algae also have natural threats, the herbivorous fish.

Herbivore fish:

Herbivore fish are a threat to algae cover due to their diet formed by algae and sea

grass. In one of their studies, Newman et al (2006) and Edwards et al (2010)

demonstrated that there is a negative and linear relation between herbivorous fish

biomass and algae biomass. Mumby et al (2006) revealed that parrotfish can graze a

maximum of 30% of the seabed in 6 months, meaning a maximum of 60% of algae

being grazed in one year. As the herbivore fish present in the water of Bonaire are not

just parrotfish, the maximum algae decrease at the carrying capacity for herbivore fish

was established to be 50% (see Figure 19).

Figure 19 – Influence of herbivores of the rate of algae cover decrease


36 The model

Fish Stock and Fish Diversity:

Fish biomass and fish diversity are important parameters for Bonaire's inhabitants as

they represent a source of food and income. There are two types of fish in Bonaire's

reefs: herbivores and predators. A study done by IUCN (2011) in different locations in

Bonaire discovered the average biomass for herbivore fish to be 7,319 g/100m2, while

the one for predators was 5,290 g/100m2. To include the total biomass in the model

these two values were summed, so the total biomass of fish in the BNMP was calculated

to be 3,404.43 tones.

The increase in fish stock is influenced by their reproduction rate. Myers et al (1999)

calculated the maximum reproduction rate of different fish species to vary between 1

and 7. Because Bonaire has approximately 450 fish species, the maximum reproduction

rate was considered to be 0.35. The maximum carrying capacity for the fish stock was

calculated to be equal with 5,600t, by taking into account the maximum amount of fish

found by IUCN (2011) in diverse locations of Bonaire.

To determine the maximum increase in fish diversity, the data from 2001 and 2009 were

analyzed, and the rate of increase between these two years was determined to be 4.2%

(Parsons & Thur, 2007; IUCN, 2011).

However, like the other indicators the fish stock is also threatened by diverse factors,

such as overfishing and the presence of lionfish (Dew, 2001) (see Figure 20).

Figure 20 – Factors that define the fish stock and fish diversity

Fishing rate:

Fishing rate contributes directly to the decline of reef fish stock. Overfishing can have

impacts on the trophic level by removing species that are essential for algae control

(Bruckner et al, 2010). For the ecosystem, less grazing fish will trigger an increase of

algae which will become dominant and reduce the coral cover. In contrast, a lower

fishing rate will increase fish biomass and can also alter the ecosystem balance. That is

Fish Stock

Increase of

Fish Stock

Maximum

Reproduction

Rate

Carry ing capacity

Fish Stock

Decrease of

Fish Stock

Fish

Div ersity

Increase of

Fish Div ersityDecrease of

Fish Div ersity

Maximum Increase

of Fish Div ersity

Maximum

Fish Div ersity

Decrease of f ish due to LF

~

LIONFISH STOCKFISHING RATE

Decrease of f ish stock

due to Lionf ish

~



why, in order to avoid a modification of the ecosystem, it is necessary to define a

compromise rate of fishing.

For Bonaire, the total reef dependent fish catch represents 25% from the total catch.

Compared with the fish stock this represents 1.3% from the current stock (personal

communication Stijn Schep).

Lionfish:

Lionfish are an invasive species which represent a big threat to the fish stock and fish

diversity due to their appetite for small-bodied and young reef fish. As a result of their

ability to invade multiple habitats and reproduce very fast they are considered very

dangerous. Furthermore, due to their venomous spines they are protected against

predators (Mumby et al, 2011). A study done by Vermeij (2012) revealed that at a depth

of 15m the presence of lionfish in Bonaire is of 3 g/m2. By multiplying this value with the

total surface of the BNMP, the current biomass of lionfish is equal to 81 tones.

In their study, Cote & Maljkovic (2010) discovered that an adult lionfish (350g)

consumes 8.5g fish per day. Calculating what it means for a year, it proved that 21% of

fish stock decreases at the current biomass of lionfish, and it is assumed that this

decrease is linear with the increase in lionfish stock. The direct relationship between the

existence of lionfish and fish stock is represented in Figure 21.

Figure 21 – Influence of lionfish on fish stock rate of decrease

The same trend is followed for the decrease in fish diversity as a result of lionfish

existence. However, according to Albins (2011) the maximum decrease is 1% per year.

An important relation in this model is the one between corals, sand and algae as

represented in Figure 22. They form the benthic cover of coral reef, equal to 2,700ha.

However, they compete for the same space, so a decrease in coral cover signifies an

increase in sand and rubble cover as a result that dead corals will decompose at the

bottom, (Holmes & Johnstone, 2010). Furthermore, as explained before, a decline in

algae cover gives the opportunity for algae to expand their surface.


38 The model

Figure 22 – Benthic cover composition

All these indicators are collected into one indicator, the state of the reef which reflects

the general quality of coral reef ecosystem. To calculate the state of the reef, a common

indicator with values between 0 (worse scenario) and 1 (best scenario) was built

following the next steps. First, for every indicator the rate of their presence was

calculated through dividing their present amount (kg or %) to their maximum possible

amount. Second, according to their importance, each indicator was assigned with

different scores, as follows: coral cover-0.3, coral biodiversity-0.2, fish stock-0.2, fish

biodiversity-0.15, and algae cover-0.15. The scores were taken from Cesar et al (2002),

and are based on expert opinions. Finally, in order to calculate the state of the reef,

each score was multiplied with their corresponding existence rate and the results were

summed up. The total sum was divided by the sum of the scores, which in this case is

equal with 1, obtaining the value of coral reef quality.

Once the state of the reef is defined, the next step is to calculate the total economic

value of the coral reef which is influenced by the reef's quality, among others.

4.2 Recreational sub-module

The tourism sector represents the pillar of Bonaire's economy. There are two types of

tourists: stay over tourists that come with planes or yachts and spend a few days on the

island, and cruise tourists which spend just a few hours on the island. From one year to

another the number of tourists has increased considerably. The current number of SOT

is 74,342 and CT are 229,228 (CTO, 2011). Through the expenses on the island they

contribute to the total revenues of Bonaire and to the TEV of coral reefs.

The principal factors that contribute to the growth rate of tourists are considered to be

the global economy and the state of the reef. To represent the global economy, the

current GDP, approximately equal with 4%, was taken into account (World Bank, 2012),

while the state of the reefs is the one determined in the ecological module.

The growth rate of SOT, influenced by the GDP, is currently 0.8%, and based on past

trends it is assumed it can increase or decrease with a maximum of 2% when the GDP

varies between -1 and 6% (see Figure 23). Meanwhile, the present growth rate of CT is

double that of SOT, being equal with 1.6% and increasing or decreasing with a

maximum of 4% when the GDP varies between -1 and 6% (see Figure 23).

Coral Cov er


Coral Cov er

Maximum

ExpansionRate

Coral Cov er

Carry ing capacity

Coral Cov er

Algae Cov er


Algae Cov er

Maximum

Expansion Rate

Algae Cov er

~

Carry ing capacity

Algae Cov er

Sand and Rubble

Cov er



Figure 23 – Influence of world GDP on the growth rate of SOT (left) and CT (right)

The same trend is used to express the influence of the state of the reef on the growth

rate of SOT and CT, with a maximum variation of 1 and 2% respectively, when the state

of the reef indicator fluctuates between 0 and 1 (see Figure 24).

Figure 24 – Influence of the state of the reef indicator on the growth rate of SOT (left)

and CT (right)

When attempting a model to be as realistic as possible, it is important to consider that a

high number of CT may decrease the number of SOT, as the last group will not enjoy

the beauty of the island due to a high number of cruise ships and visitors. Even though

this relation was drawn into the model, due to the lack of data it was assumed to be zero

and let the possibility to be filled in once this information will exist. Figure 25 shows all

the variables and the relations between them, plus the factors that contribute to the TEV

of coral reefs due to recreational activities.

Stay over tourists brings revenues to the island as a result of their direct and indirect

expenditures.

a. Direct expenditures are due to the fees they pay to enjoy recreational activities

directly linked with corals, such as diving or snorkelling. From the total number of

tourists, 50% go diving on the island and pay a fee of $25, while the rest go

snorkelling and pay a fee of $10 per stay. All these expenses form the total revenues

from direct expenses of SOT. As assumed in the report of Cesar et al (2002), only

25% of this value can be considered as value added to coral reefs.


40 The model

b. Indirect expenditures, represented by food or hotel payments, also contribute to the

value of coral reefs. The average stay of a tourist is 9 nights with a cost of $500 for

accommodation per tourist per stay and $150 for food (Annual Statistics Report,

2008). From the total revenues gained, according to Cesar et al (2002), only 25% are

considered as value added to the coral reef.

On the other hand, cruise tourists bring revenues only from direct expenditure. Due to

the fact that they do not need any accommodation and food, the only way to spend

money are through diving, snorkeling or buying souvenirs. However, it is important to

bear in mind that not all cruise tourists will chose either to dive or snorkel. They may just

have a walk on the beach and chose to buy souvenirs. Cruisers spendings on the island

are about $60 per tourist per stay, which is only a few hours (Annual Statistics Report,

2008). From the total revenues gained through direct expenses of CTs, only 1.4% is

considered as value added to the TEV of coral reefs (van Beukering et al, 2011).

Moreover, besides tourists, Bonaire inhabitants contribute as well to the total

recreational value of coral reefs. Their contribution is not so much compared with the

tourism industry, but it is still an important factor when calculating the total recreational

value of the coral reefs. A growth rate of 1.6% per year was considered in the number of

Bonaire inhabitants, because local government presented their plans to increase their

number from 15,666 to 25,000 in the coming 25 years. To calculate their total expenses

on activities attached to corals it was considered that inhabitants pay a fee of $25 per

year for scuba diving or other recreational activities that contribute to the TEV of coral

reefs.



Figure 25 – Recreational module

Nb of SOT

Growth rate

stay ov er tourists

~

Change in the nb

of SOT per y ear

Snorkellers

Total INDIRECT expenses of SOT

Price f or div ers

Coral reef v alue f rom SOT

DIRECT expenses

Price f or snorkelling

Growth rate

Cruise tourists

~

Div ers

Total DIRECT rev enues f rom CT

Extra Growth rate

due to piers

Coral reef v alue f rom CT

DIRECT expenses

Price f or f ood and others

Nb of CT

Total DIRECT

rev enues f rom locals

Change in the nb

of CT

Ecological submodel.State

of the reef

CT expenses

Growth rate of SOT

due to GDP

~Growth rate of CT

due to GDP

~

Total recreational

v alue of coral reef

+

Bonaire populaton

Changes in the nb

of population

Decrease of SOT

due to CT

~

Locals direct expenses

Total Recreatonal Rev enues

+

Coral reef v alue f rom SOT

INDIRECT expenses

Coral reef v alue f rom locals

DIRECT expenses

Price f or accommodation

EV.GDP

EV.Growth rate of population

Total DIRECT expenses of SOT


42 The model

4.3 Biodiversity sub-module

The quality of Bonaire coral reefs is known as being the highest in the Caribbean. With

the healthiest corals, Bonaire can also be proud of the highest number of different

species. Until now, there are about 65 species of corals and 354 species of fish known

in the waters of Bonaire, which generate economic benefits (IUCN, 2011). The benefits

determined by a vast biodiversity to Bonaire are modeled in Figure 26.

Figure 26 – Biodiversity module

The total biodiversity value is formed by the sum of the scientific value, bioprospecting

value, cultural importance and non-use value.

The scientific value, also known as research value represents the budgets assigned to

diverse institutes or researchers for studying the coral reef ecosystem of Bonaire in this

case. The amount assigned depends in principle by the global GDP, but as this data is

missing it is considered to have no influence in this case. After analyzing the budgets

allocated for the year 2011 for different institutions to study the corals, the total value

was determining to be $500,000 (personal communication Esther Wolfs).

Bioprospecting value refers to the revenues that pharmaceutical companies can obtain

as a result of discovering important drugs that can be obtained using molecules from

corals. It is calculated by multiplying the probability of discovery with coral diversity, total

surface, probability of discovery and the value placed per species (Brock et al, 2011)

Bioprospecting value = Probability_of_discovery*Coral_Diversity* Total_surface* 7775

The probability of discovery depends on the state of the reef. In accordance with Pearce

and Puroshothaman (2009), the mean probability considered is 0.0005. A healthy and a

high diversity of corals will increase the chance to discover new substances that can be

further used as drugs. The average value placed on species of coral is considered to be

$7.775 in concordance with Ruitenbeek & Cartier (1999).

The non-use value of coral reefs is determined by the WTP of people for goods and

services they do not use in a direct way. In this case, the WTP of Dutch households to

maintain the state of the reefs was taken into account.

Dutch householdsWTP of

households

~

Bonaire households

Cultural v alue Bonaire

citizens

Probability of discov ery


of the reef

Bioprospecting v alue

Change in WTP

due to GDP

~

EV.GDP

Biodiv ersity v alue

WTP of Dutch

households

~

Change in WTP of locals

due to GDP

~

Nonuse v alue Dutch

households

Change in scientif ic v alue

due to GDP

~

Ecological

submodel.Coral Diversity

Total scientif ic v alue

Ecological

submodel.Total surface



A survey was conducted in order to determine the WTP of Dutch citizens for improving

the state of the reef. The outcome of the survey revealed that Dutch citizens have a

WTP of $25 to improve the state of the reef. This value was assigned for three islands

from Caribbean, Bonaire, Saba and St. Eustasius (Botzen, van Beukering and Wolfs,

2012). Lacle (2012) determined that the WTP of Dutch citizens depends on the quality of

the reef. To determine the WTP for the island of Bonaire, this value was divided by 3

and it was decided that it follows the trend obtained by Lacle (2012) (see Figure 27). As

a result a more than medium quality will bring a higher WTP from Dutch citizens

compared with a degraded state of the reef.

Figure 27 – Influence of the SoR on WTP of Dutch households

The cultural value is determined by the WTP of Bonaire households to improve the

quality of the coral reefs. Locals are aware of the fact that corals provide them coastal

protection and economic benefits, and as a result they will place a higher price on their

improvement. A survey done by Lacle (2012) presented that the WTP of locals to

improve the state of the reef from poor to high is $21.8 per month. This value was

determined to vary according to the state of the reef as represented in Figure 28.

Figure 28 – Influence of the SoR on WTP of Bonaire households


44 The model

4.4 Fisheries sub-module

Fishing activities are defined by their purpose: commercial fishing, subsistence fishing,

aquarium fishing and recreational fishing. For our case study, only commercial and

subsistence fishing are going to be analyzed because there was no available data about

the other two types.

To calculate the value of coral reefs due to fisheries the following steps were followed:

First, the total revenues from fish selling were calculated. The fishing rate on Bonaire

was established to be 5.4% of the total stock (personal communication Stijn). However,

from this amount only 70% is sold at an average price of $12 per kg (personal

communication Stijn Schep). Second, the cost for fishing was calculated by multiplying

the average cost for boat maintenance, $8,169, with the total number of boats, 38. Third,

the profit of fishermen was calculated by extracting the costs from the total revenues,

and last, the value of coral reefs was determined to be equal with 60% of the total profit,

because was assumed that 60% of the total fish sold is reef dependent (Cesar et al

2002).

Figure 29 shows the elements constructing the module that define the value of coral

reefs due to fisheries.

Figure 29 – Fisheries module

4.5 Amenity sub-module

The value added to the house price as a result of coral reef existence is called amenity

value. Houses close to the coastline are more valuable due to their view than those that

are far from the coast. A clean beach and healthy coral reefs will raise the price of a

house when it has to be sold, as a result of the beautiful view. On the other hand,

unhealthy corals will decrease the house price (van Beukering et al, 2007).

The elements contributing to the amenity value of coral reefs are represented in Figure

30.

Nb of boats

Coral reef dependency

Fishing cost

Fish catch

Fish price

Reef associated

Fishery v alue

Ecological submodel.Fish Stock

Total Fishing prof it

Fish catch f or sale

Fish Rate



Figure 30 – Amenity module

Amenity value calculated from the cost of houses and the number of houses sold, which

are influenced by the state of the reef and the world GDP.

The average price of a house and the average number of houses sold influenced by the

world GDP, were defined by analyzing their values in the last 8 years and establishing

the following relations between them.

Average house price= 19603*GDP+168804

Average houses sold= 3.4829*GDP+26.192

The influence of reefs' quality on the price of a house was defined by Cesar et al (2002)

who mention that a presence of coral cover between 10 to 50% change the house price

with 1.3% following a S shape, as shown in Figure 31.

Figure 31 – Influence of the SoR on house price variation

As mentioned in Cesar et al (2002), from the total value of houses sold, only 1.5% is

considered to be the amenity value of coral reefs.

Amenity v alue

EV.GDP

Av erage house price Number of Houses soldHouse price v ariation

due to state of the reef

~

Total Houses cost


of the reef

Real house price

Coral reef v alue

of the total price


46 The model

4.6 Coastal protection sub-module

Coral reefs provide coastal protection and as a result that they have the capacity to

dissipate wave energy and protect the shoreline against storms, hurricanes and erosion.

Healthy coral reefs prevent damage to the infrastructure and houses developed on coast

during extreme events. To value this function it is necessary to know how the absence

of coral reefs will influence the value of houses and infrastructure and the necessary

costs to prevent shoreline damage, by constructing wave breakers or providing coastal

nourishment (van Beukering et al, 2011).

Due to the lack of reliable data, in this model the coastal protection value of coral reefs

is calculated only through assessing the damage cost avoided to the properties close to

the coast in case of no coral existence.

The factors contributing to the CPV are presented in Figure 32.

Figure 32 – Coastal Protection module

According to Cesar et al (2002), the avoided cost damage per property was established

to be 16.6% from the total house price for Hawaii. As no data were available for Bonaire

this value was transferred to this study as well. Moreover, for a more reliable result, the

avoided cost damage was multiplied with hurricane frequency considered by Blackwood

et al (2011) to be 1 in 30 years, and with the number of houses on the coast equal to

20% of the total houses.

Hurricane f requency Damage per property v alue

due to coral extinction

Houses

on the coast

Amenity submodel.Real

house price

CPV



5 Results

In this chapter the baseline scenario plus another three possible management options

will be analyzed by taking into account the ecological indicators and economic valuation

of coral reefs. The three scenarios will focus on 1) investigating the influence of an

increase in the number of tourists on reefs quality and value, 2) analyzing the effects of

lionfish eradication on the ecology and economic benefits of the reef and 3) providing

information about the effect of sewage treatment plant construction on the state of the

reef and their TEV.

The purpose of this analysis is to determine how the state of the reef is going to be

affected 30 years from now by representing the path it follows during this period, to

calculate the TEV of coral reefs for every year during this period. Moreover, in order to

establish which the benefits of the society are, a sensitivity analysis using different

discount rates will be conducted to determine the NPV. However, a discount rate of 5%

was selected for this study, according to ecologist and economists that attach this value

for small countries (Meindertsma, n.a)

5.1 Baseline scenario

The baseline scenario assumes that no changes are going to happen in the selected

time framework and that the current indicators and interactions between them will

remain constant.

Ecological indicator:

The ecological module will define the state of the reef indicator by taking into account all

ecological factors that contribute to the general state of the reef. These factors are fish

stock, fish diversity, coral cover, coral diversity and algae cover. The effect of the current

threats on each factor and the general state of the reef indicator are going to be

analyzed. The main threats identified for coral reef ecosystem are the presence of

lionfish, fishing rate, amount of nutrients released into the water, accumulation of

sediments and physical destruction and a change in water temperature.

If the present state remains stable over the next 30 years, the fish stock is expected to

decrease. As presented in Figure 33, there will be a rapid decline in the first 6 years,

followed by a steady decline until year 30 when the fish stock reaches a population of

1400t. The presence of lionfish represents the reason for this trend, because as they

consume young fish, they reduce the fish stock which triggers a decline in the total

reproduction rate of reef fish per year (Albins & Hixon, 2011).

In the same way, the current amount of lionfish will affect the amount of fish species. It is

expected that by 2042, there will be 50 species which decrease fish diversity following

the trend presented in Figure 33.

As mentioned in section 4.1, the amount of herbivore fish influences algae cover due to

their diet and algae cover further influences coral cover. Morover, algae compete with

corals and sand for occupying the benthic cover.


48 Results

Figure 33 – Fish stock and fish diversity variation in time for the baseline scenario

As of 2012, the benthic cover is dominated by algae with 42.6% coverage, followed by

corals, 28.6%, and sand plus rubble, 29% (IUCN, 2011). If all values of ecological

indicators and their interaction will suffer no change in the following 30 years, the

benthic cover will experience a modification as shown in Figure 34. Even though algae

cover constantly expands, it will remain dominant and its value will increase to 65.4%

benthic cover until year 30, while coral cover is expected to decrease to 6.9%. As a

result of more coral deaths, the sand cover will increase and will cover 27.7% of the

benthic surface by year 30.

Figure 34 – Benthic cover variation in time for the baseline scenario

In order to observe the effect of a change in the water temperature, a sensitivity analysis

was conducted at different temperature values as represented in Figure 35. It can be

noticed that if the current water temperature (29˚C) will increase with 3˚C the coral cover

will disappear in 23 years. Furthermore, as expected, a higher increase to 36.3˚C or

40˚C of the water temperature will eradicate the corals in less than 5 years. At the same

time with the increase in water temperature, algae cover will expand. As a result, they

will overgrow the corals and contribute to their decline. However, as mentioned before,

algae and an increase in water temperature are not the only threats to coral reef, but

sedimentation, nutrients and the number of tourists that produce physical destruction

also contribute to coral cover decline.

1.50

2.00

2.50

3.00

3.50

0 10 20 30

Fish

Sto

ck [t

*100

0]

Year

Fish Stock

370

390

410

430

450

470

0 10 20 30

Fish

div

ers

ity

[nb

. of

spe

cie

s]

Year

Fish Diversity

0

10

20

30

40

50

60

70

0 5 10 15 20 25 30

% o

f co

ver

Year

Benthic Cover

Coral Cover

Algae Cover

Sand Cover



Figure 35 – Temperature effect on coral cover

From the threats affecting the coral cover, the amount of sediments and nutrients loaded

into the sea contribute as well to a decline in coral diversity following a linear trend from

65 to 51 over a time period of 30 years.

All these ecological indicators define the general state of the reef and were explained in

the previous chapter. The present state of the reef has a value of 0.66, which place the

corals at a higher than medium quality. The effect of the current threats on the

ecological indicators will decrease the general quality of the reef at a rate of 1% every

year in the next 6 years, followed by a slower decrease until year 30 when it will reach

0.49, a value that will place the general marine ecosystem under medium quality (see

Figure 36).

Figure 36 – State of the reef indicator for baseline scenario

Recreational value:

The total expenses of tourists and locals on activities related to corals contribute to the

definition of the recreational value of coral reefs. As explained in the previous chapter,

the state of the reef and the world GDP determine a growth in tourism and the average

amount of money that tourists spend once they arrive on the island. It is expected that

the number of stay-over tourists will increase to about 99,500 by 2042, while the number

of cruisers will almost double if the current growth rate is maintained (see Figure 37).

Regarding Bonaire’s population, the growth rate is considered independent of any of the

0

5

10

15

20

25

30

35

0 5 10 15 20 25 30 35

Tem

pe

ratu

re [˚

C]

Year

Temperature effect on Coral Cover

25˚C

28.8˚C

32.5˚C

36.3˚C

40˚C

0.3

0.4

0.5

0.6

0.7

0 5 10 15 20 25 30

Stat

e o

f th

e re

ef in

dic

ato

r

Year

State of the reef indicator


50 Results

aforementioned factors, and is assumed to be constant at 1.6% per year according to

DEZA (2008) (see Figure 37).

Figure 37 – Change in the number of tourists and locals over 30 years

A higher number of tourists will increase the revenues on the island and as a result the

coral reef value. Figure 38 illustrates the increase in the value of coral reef due to

recreational activities from $16M in 2012 to $22M in 2042.

Figure 38 – Recreational value of coral reefs

Biodiversity value:

The existence of a high diversity of coral reefs generates economic benefits by means of

both direct use and indirect values. For this case study, it was considered that the

biodiversity value is determined by summing the scientific and the bioprospecting value

with the non-use and cultural value of Bonaire coral reef. Figure 39 illustrates the

variation of these values over the studied time period.

Assuming that 50% of Dutch households would agree to pay a monthly fee of

approximately $5 to protect Bonaire's coral reef, non-use value represents the largest

share to the total biodiversity value. During the next 30 years as a result of coral reef

degradation it is assumed that the WTP of Dutch citizens to improve reefs quality will

decrease, and as a result the non-use value will decrease with about $1.8M.

0.00

100.00

200.00

300.00

400.00

500.00

0 10 20 30

Nu

mb

er

of

tou

rist

s *1

000

Year

Number of tourists

SOT

CT

0.00

5.00

10.00

15.00

20.00

25.00

30.00

0 10 20 30

Nu

mb

er

of

loca

ls*1

000

Year

Number of Bonaire population

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

0 10 20 30

Rec

reat

ion

al V

alu

e [m

illio

n $

]

Year

Recreational Value



In contrast, the cultural value attribute to coral reef ecosystem by locals will increase in

the baseline scenario with $0.4M in 30 years.

Figure 39 – Values contributing to the total biodiversity value of coral reef

The bioprospecting value is expected to decrease with $0.14M as a result of a decline in

the number of coral species, while the budget allocated for research on coral reef

ecosystem was considered to remain at its present value of $0.5M per year.

Summing up all these values, the total biodiversity value of coral reefs is obtained. This

value decreases from one year to another as a result of a higher decrease in the

non-use value, following the trend shown in Figure 40.

Figure 40 – Biodiversity value of coral reef for the baseline scenario

Fisheries value:

To determine the value of coral reef from fisheries it is necessary to know the amount of

fish caught for sale. From the total amount of fish catch, which varies between 183t to

110t, only 70% is sold, as explained in the previous chapter. Figure 41 represents a

decrease in the amount of fish caught for sale from 128t to 73t, following a decrease in

the fish stock due to the presence of lionfish, their biggest threat.

0.00

200.00

400.00

600.00

800.00

1,000.00

0 20

Co

ral r

eef

val

ue

[$*

100

0]

Year

Coral reef values

Cultural value

Bioprospecting value

Scientific value 16.00

16.50

17.00

17.50

18.00

0 20

No

n-u

se v

alu

e [

mill

ion

$]

Year

Non-use value

18.20

18.40

18.60

18.80

19.00

19.20

19.40

19.60

19.80

0 5 10 15 20 25 30

Tota

l Bio

div

eris

ty V

alu

e [m

illio

n $

]

Year

Biodiversity Value


52 Results

Figure 41 – Variation in time of the amount of lionfish caught for sale

As a result of a decrease in the amount of fish caught for sale, the profit of fishermen will

decrease as well in the following 30 years from $1.2M to half of its value. Their profit

was calculated by extracting from the total revenues gained the cost for fishing

mentioned in section 4.4.

Because only 60% of the total profit was established to contribute to the TEV of coral

reef, the value of coral reef due to fisheries will decline to $400,000 in 2042, half of its

current value, following the same trend as for the amount of fish sold (see Figure 42).

Figure 42 – Value of coral reef due to fisheries

Amenity value:

According to Cesar et al, (2002), the state of the reef influences the variation in the

average house price by ± 1.3%. Beside this, the global GDP is the major contributor that

defines the price of a house. Currently, the average price of a house was calculated to

be $0.25M, and if the GDP will remain constant over the next 30 years it is expected that

this value will decrease very slightly to $0.24M as a result of a decline in the state of the

reef.

Considering that every year approximately 40 houses are sold and that the amenity

value represents 1.5% of the total price paid for all houses sold, the value of coral reef

as a result of their proximity to residential buildings will decline by $0.01M in 30 years as

illustrated in Figure 43.

0

50

100

150

0 10 20 30

Fish

cau

ght f

or

sale

[t]

Year

Amount of fish caught for sale

0.05

100.05

200.05

300.05

400.05

500.05

600.05

700.05

800.05

0 10 20 30

Val

ue

of

fish

erie

s [$

*100

0]

Year

Fisheries Value



Figure 43 – Amenity value of coral reef for the baseline scenario

Coastal protection value:

The ability of Bonaire’s coral reef to protect the coast is monetized by calculating the

avoided damage of properties close to the coast in case of a hurricane in the absence of

coral reef. With a once every 30 years hurricane frequency and a damage of 16.6% to

the total house value, as mentioned in section 4.6, the coastal protection value of coral

reefs will decline from $2.92M to $2.90M in 30 years following the path shown in Figure

44. Again, the reason for this decrease is the decline in the general state of the reef

explained in the beginning of this chapter.

Figure 44 – Coastal protection value of coral reef for baseline scenario

Total economic value of Bonaire coral reef for the baseline scenario:

In order to define the TEV of Bonaire’s coral reef, the final step is to sum up all provided

benefits which were determined in the previous steps. Figure 45 displays an increase of

the economic value from $39.5M in 2012 to $43.6M in 2042.

149.70

149.80

149.90

150.00

150.10

150.20

150.30

150.40

150.50

150.60

0 5 10 15 20 25 30

Am

en

ity

valu

e [

$*1

000]

Year

Amenity value

2,906.00

2,908.00

2,910.00

2,912.00

2,914.00

2,916.00

2,918.00

2,920.00

2,922.00

2,924.00

0 5 10 15 20 25 30 Co

asta

l Pro

tect

ion

Val

ue

[$*

100

0]

Year

Coastal Protection Value


54 Results

Figure 45 – TEV of Bonaire coral reef for the baseline scenario

The recreational value of coral reefs contributes the most to the TEV with a share of

49%, followed by the biodiversity value with 41%, while fisheries’ value contributes less,

with only 1% (see Figure 46).

Figure 46 – Share of different values to the TEV of Bonaire coral reef

However, this TEV is presented at a 0% discount rate. In the literature, several studies

(van Beukering, 2007; Cesar et al, 2002) used a discount rate that varied between 1%

and 10%. In order to see the impact of different discount rates, a sensitivity analysis was

conducted at different values, as represented in Figure 47. The value added to Bonaire

society will decrease at a discount rate varying from 1% to 10% with a range between

$1.3billion and $421M.

35.00

37.00

39.00

41.00

43.00

45.00

0 5 10 15 20 25 30

TEV

[m

illio

n $

]

Year

Total Economic Value

Recreational value 49% Biodiversity

value 41%

Fisheries value

1%

Amenity value

3%

Coastal Protection

value 6%




Figure 47 – NPV at different discount rates

5.2 Scenario 1 – Increase in the number of tourists

As the tourist sector is the most important for Bonaire’s economy and it also contributes

the most to the TEV of coral reefs, the effects of a higher growth in the number of SOT

and CT should be analyzed.

Bonaire's local government plans to increase the number of tourists, as a result of the

economic benefits they bring to the island. To accomplish this plan, there are current

debates to build ten recreational piers on the leeward coast of the island which will

provide a higher range of recreational activities and will increase the revenues (personal

communication Esther Wolfs). If all ten piers are going to be constructed, it is assumed

that the number of both types of tourists will increase by 0.85% compared with the

baseline until the touristic capacity of the island is reached. Consequently, in 30 years,

the number of SOT will reach 127,000 and the number of CT will be approximately

521,600 (see Figure 48).

Figure 48 – Number of tourists in scenario 1 and comparison with baseline

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

0 2 4 6 8 10

Net

Pre

sen

t V

alu

e [m

illio

n $

]

Discout Rate

Net Present Value at different Discount Rates

0.00

100.00

200.00

300.00

400.00

500.00

600.00

0 5 10 15 20 25 30

Nu

mb

er o

f to

uri

sts

*100

0

Year

Tourists number

SOT baseline

CT baseline

SOT

CT


56 Results

An increase in the number of tourists has negative impacts on ecosystem because they

contribute to the direct damage of coral reef through physical destruction while diving

and snorkelling. The main reason for this is tourist's lack of awareness about the

damage they produce by touching the corals. Figure 49 illustrates the decline in coral

cover as a result of an increase in the number of tourists. Coral cover will decline to

3.31% in 30 years, half of the value for the baseline scenario if the current plans of the

government are realized.

Figure 49 – Variation in coral cover for scenario 1

As a result of this decline in coral cover, as well as the deterioration resulting from

ecological indicators remaining constant, the general state of the reef indicator will follow

the same trend as in the baseline but with a more rapid degradation starting in year 12

(see Figure 50). In 30 years, the state of the reef will be with 4.2% lower than the

baseline scenario for an increase in the number of tourists with 0.85%.

Figure 50 – State of the reef variation for scenario 1

As mentioned at the beginning of this section, the main reason for increasing the

number of tourists is to increase the revenues, by increasing the number of tourists that

will come to the island. As a result of an increase in the revenues generated by tourists,

the recreational value of coral reef will increase as well (see Figure 51). The value of the

coral reef due to recreational activities will increase from $16.2M in 2012 to $27.8M in

2042, and exceeds the baseline value by $7M in year 30.

0

5

10

15

20

25

30

35

0 5 10 15 20 25 30

% o

f co

ver

Year

Coral Cover

Coral Cover baseline

Coral Cover

0.45

0.5

0.55

0.6

0.65

0.7

0 5 10 15 20 25 30

Stat

e o

f th

e r

eef

ind

icat

or

Year

State of the reef

SOR baseline

SOR



Figure 51 – Recreational value of Bonaire coral reef

Because an increase in the number of tourists will not modify a lot the state of the reef

compared to baseline, the biodiversity value of coral reef will follow that same trend for

the first 12 years and then it will separate slowly. The explanation for this trend is that an

increase in the number of tourists won't decline the quality of the reef starting from the

first year, as corals are characterized by an expansion and a resilience rate. Thus, it will

reach in year 30 a value of $18.1M, which is 1% lower than in the baseline scenario (see

Figure 52).

Figure 52 – Biodiversity value of the coral reef for scenario 1

The increase in the number of tourists brings no change in the value of coral reef from

fisheries which will follow the same path and will again vary from $0.7M to $0.37M in 30

years.

This does not apply to the amenity and coastal protection value. A decrease in reef

quality triggers a decrease in both of these two values. Even though the change in the

state of the reef is not very big, both amenity and CPV are expected to decrease by

0.16% (see Figure 53).

0.00

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00

0 5 10 15 20 25 30

Rec

reat

ion

al v

alu

e [$

*10

00]

Year

Recreational Value

Recreational value baseline

Recreational value

18.00

18.20

18.40

18.60

18.80

19.00

19.20

19.40

19.60

19.80

20.00

0 5 10 15 20 25 30

Bio

div

ersi

ty v

alu

e [m

illio

n $

]

Year

Biodiversity value

Biodiversity Value baseline

Biodiversity Value scenario 1


58 Results

Figure 53 – Amenity and coastal protection value for scenario 1

Finally, as the purpose of expanding the number of tourists was to increase the

revenues they generate on the island, it is expected that the TEV of coral reef will rise

too. As illustrated in Figure 54, this hypothesis proves true and the TEV of coral reefs

will be worth 13% more in 2042 compared with the baseline scenario. Therefore, it will

increase by $10M, from $39M to $49M.

Figure 54 – Total economic value of Bonaire coral reef for scenario 1

The contribution of every good and service provided by coral reef is represented in

Figure 55. Again, the recreational value contributes the most to the economy with

56.3%, a higher value than in the baseline, followed once more by the biodiversity value.

This time the amenity value has the lowest contribution compared with the baseline

when fisheries value brought the lowest benefits.

149.40

149.60

149.80

150.00

150.20

150.40

150.60

0 10 20 30

Am

en

ity

valu

e [

$ *1

000]

Year

Amenity value

Amenity value baseline

Amenity value scenario 1 2,900.00

2,905.00

2,910.00

2,915.00

2,920.00

2,925.00

0 10 20 30

Co

asta

l pro

tect

ion

val

ue

[$

*100

0]

Year

Coastal protection value

CPV baseline

CPV scenario 1

20.00

25.00

30.00

35.00

40.00

45.00

50.00

55.00

0 5 10 15 20 25 30

Eco

no

mic

Val

ue

[mill

ion

$/y

ear

]

Year


TEV baseline

TEV



Figure 55 – Share of each value to the TEV of Bonaire coral reef for scenario 1

The same sensitivity analysis was conducted for analysing the influence of different

discount rates on the total gains for Bonaire society. As Figure 56 illustrates, the NPV is

higher than in the baseline with about 35% and decreases once more with a higher

discount rate. At 5% discount rate the NPV for the baseline scenario is about $668M,

and for the 1st scenario it is $690M.

Figure 56 – NPV at different discount rate for scenario 1

Biodiversity value

36.76%

Fisheries value 0.73%

Amenity value 0.30%

Coastal Protection

value 5.88%

Recreational value

56.33%

Total economic value

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

0 2 4 6 8 10 12

Net

pre

sen

t va

lue

[$

*1

000]

Discount rate

Net Present Value

NPV

NPV baseline


60 Results

5.3 Scenario 2 – Lionfish eradication

Another scenario will analyze the effects of lionfish eradication on the TEV the general

quality of Bonaire’s coral reefs. The process of eradication involves workshops and

projects to make tourists aware of their existence and to train divers to catch them. It is

important to mention that there are a lot of volunteer divers that could help to catch

lionfish as they understand the threat posed on marine ecosystem. Furthermore, recipe

books were published about how to cook them in the hope that this will increase their

demand.

The eradication of lionfish will have the biggest influence on fish stock and fish diversity

as they are the first affected by their existence. Because of their diet consisting in young

fish, the total fish stock and biodiversity are under pressure.

Accordingly, Figure 57 shows the difference between the fish stock in the current state

and the fish stock when lionfish are eliminated. If the eradication of lionfish is

accomplished, the fish stock will be higher than the baseline scenario by approximately

3,000t.

Figure 57 – Fish stock variation in time for scenario 2

Eradication of lionfish has the same effect on fish diversity. If management actions to

eradicate the lionfish are taken into account, the number of fish species will increase

with a maximum of 80 until year 30 compared with the baseline (see Figure 58).

0.00

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

0 10 20 30 40

Fish

sto

ck [t

]

Year

Fish stock

Fish stock baseline

Fish Stock scenario 2



Figure 58 – Fish diversity variation in time for scenario 2

A higher and important change is noticed in the case of benthic cover. The surface of

algae and corals will be higher than in the baseline scenario. Because the lionfish will

not pose any other threat to the fish stock, the latter will continue to increase and as a

result more algae will be consumed by herbivorous fish. Algae cover will decrease by

14% in 30 years and more space will be left for coral to increase their cover from 28.6%

to 32.2%. Compared with the baseline scenario (see Figure 59) where the coral cover

will decrease until 7% in year 30, the eradication of lionfish proves to be an efficient

management option that will increase the coral cover from year 7 to year 30. The slight

decline in the first years proves that even though lionfish are not a threat anymore it

takes a while for algae cover to decrease due to the herbivorous fish and for the

expansion rate of coral cover to be noticable.

Figure 59 – Coral cover variation in time for scenario 2

By summing up the ecological indicators that contribute to the state of the reef, a new

indicator to express its quality is obtained. If in the current situation, the state of the reef

is expected to decrease from 0.66 to 0.49, the eradication of lionfish will increase the

400

410

420

430

440

450

460

470

480

490

0 10 20 30 40

Fish

div

ers

ity

[nb

of

spe

cie

s]

Year

Fish diversity

Fish Diversity baseline

Fish Diversity scenario 2

0

5

10

15

20

25

30

35

0 5 10 15 20 25 30 35

% o

f co

ver

Year

Coral cover

Coral cover scenario 2 - Lionfish eradication Coral Cover baseline


62 Results

quality of the reef to around 0.71 in the first 14 years then it will decline to 0.70 by year

30 as a result of the variation in coral cover (see Figure 60).

Figure 60 – State of the reef variation in time for scenario 2

Because of a higher state of the reef compared with baseline, the growth rate of SOT

and CT is expected to increase as well and follow the trend explained in section 4.2. The

number of SOT will vary from 74,000 to 108,000, while the number of cruisers will

increase by approximately 250,000 in 30 years. This increase in the number of tourists

will trigger higher revenues for the island, and as a result a higher recreational value will

be placed on coral reefs. As presented in Figure 61, the difference in the total

recreational value of coral reef between the baseline and the scenario when no lionfish

are on the island, is $1.9M year 30.

Figure 61 – Recreational value of coral reef for scenario 2

The situation is not different for the biodiversity value either. As explained in the baseline

scenario, higher revenues are expected to come from the non-use and cultural value, for

which the Dutch citizens and Bonaire residents have a certain WTP. As their WTP is

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0 5 10 15 20 25 30 35

Stat

e o

f th

e r

eef

ind

icat

or

Year

State of the reef

SOR scenario 2

SOR baseline

10.00

12.00

14.00

16.00

18.00

20.00

22.00

24.00

26.00

0 5 10 15 20 25 30 35

Rec

reat

ion

al v

alu

e [

mill

ion

$]

Year

Recreational value


Recreational value scenario 2



positively correlated to the state of the reef, and as management actions will contribute

to the improvement in the state of the reef, the total revenues summed up into

biodiversity value will follow the trend from Figure 62. The trend increases until year 14

and then experiences a slight decrease. The values vary between $19.5M to $19.7M.

The explanation for the trend is that it follows the same path as the state of the reef

indicator that first increases to 0.71 and then decreases with 0.01.

Figure 62 – Biodiversity value of coral reef for scenario 2

If lionfish are going to be eradicated, the fish stock will increase and as a result, the fish

catch and the amount of fish sold will be higher and will provide higher benefits for

fishermen. If more revenues are going to be gained from fisheries, the value of coral reef

due to fisheries will also be higher. In this situation the value of coral reef due to

fisheries will be 3.5 times higher than the baseline.

Figure 63 – Variation in the value of coral reef from fisheries for scenario 2

A very small change is noticed in the case of amenity and coastal protection value. An

improvement in the quality of coral reefs will have no big effects on their value but this

18.20

18.40

18.60

18.80

19.00

19.20

19.40

19.60

19.80

20.00

0 5 10 15 20 25 30 35

Bio

div

ers

ity

valu

e [

mill

ion

$]

Year

Biodiversity value



0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

0 5 10 15 20 25 30 35

Fish

ery

val

ue

[mill

ion

$]

Year

Fishery value

Fishery value baseline

Fishery value scenario 2


64 Results

trend was recognized in the other scenarios as well. In 30 years, the amenity value is

expected to increase with 0.5% while coastal protection value will increase with 1%

compared with the baseline, see Figure 64.

Figure 64 – Amenity and coastal protection value of coral reef for scenario 2

All values determined in this scenario contribute to the TEV of coral reef in case of

lionfish eradication. As represented in Figure 65, over a time period of 30 years, the TEV

of coral reef will increase from $39.6M to $47.8M compared with the baseline when the

TEV increases to $43.6M.


The share of each value that contributes to the TEV of coral reef follows the same

structure as in the first scenario, having the recreational and biodiversity value bringing

most benefits and the amenity value the least.

149.60 149.70 149.80 149.90 150.00 150.10 150.20 150.30 150.40 150.50 150.60 150.70

0 20 40

Am

en

ity

valu

e [

$ *1

000]

Year

Amenity value

baseline

scenario 2 2.91 2.91 2.91 2.91 2.91 2.92 2.92 2.92 2.92 2.92 2.93 2.93

0 20 40

CP

V v

alu

e [

mill

ion

$]

Year


baseline

scenario 2

30.00

32.00

34.00

36.00

38.00

40.00

42.00

44.00

46.00

48.00

50.00

0 5 10 15 20 25 30 35

TEV

[ m

illio

n $

]

Year


TEV baseline

TEV scenario 2



Figure 66 – Share of each value contributing to the TEV of coral reef for scenario 2

The same sensitivity analysis was done to determine how a different discount rate will

influence the present benefits for the Bonaire society. As represented in Figure 67, a

discount rate varying between 0% and 2% will pose a lower value in the present than

the baseline scenario, while a higher value will bring more benefits. However, the

difference between scenario 2 and the baseline is not so big and both of them follow the

same path, having a decrease in the NPV for a higher discount rate.

Figure 67 – NPV at different discount rates for scenario 2

Recreational value, 49.58

Biodiversity value, 41.21

Fisheries value, 2.68

Amenity value, 0.31

Coastal Protection value, 6.11

Total Economic value

0.00

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

0 2 4 6 8 10 12

NP

V [

mill

ion

$]

Discount rate

Net present value

NPV baseline

NPV scenario 2


66 Results

5.4 Scenario 3 – Construction of a sewage treatment plant

There are plans to construct a waste water treatment plant in Bonaire near Kralendijk in

order to reduce the amount of nutrients, especially N and P that loads into the sea every

year. Rresearch done by Slijkerman et al (2011) determined that the amount of TIN in

the sea has a concentration of 1.51µM. It is expected that once the sewage system will

be built, this concentration will be not higher than the threshold of 0.5 µM, as the

nutrients will continue to load into the sea from agricultural activities through

groundwater. This scenario will analyze the effect of building this plant on the ecological

and economic indicators of coral reef ecosystem.

The change in the amount of nutrients has no direct effect on the fish stock and

diversity. However, the benthic cover is expected to suffer small changes in the coral

cover which will get to 13% in the end of the studied period, while algae cover will

decrease by 2.5% (see Figure 68).

Figure 68 – Coral cover variation in time for scenario 3

This slight change will influence the state of the reef ecosystem, which as seen in Figure

69 is expected to decrease from 0.66 to 0.55. Even though the state of the reef is

degrading during the period studied, it is an improvement compared to the baseline

scenario where the decrease is expected to reach 0.49.

Figure 69 – State of the reef indicator for scenario 3

0

5

10

15

20

25

30

35

0 5 10 15 20 25 30

% o

f co

ver

Year

Coral cover

Coral Cover baseline

Coral Cover scenario 3

0.4

0.45

0.5

0.55

0.6

0.65

0.7

0 5 10 15 20 25 30

Stat

e o

f th

e re

ef in

dic

ato

r

Year

State of the reef

SOR baseline

SOR scenario 3



Because the state of the reef will improve compared to the baseline once the amount of

nutrients loaded into the water will be reduced, the value of coral reefs due to

recreational activities is expected to be higher than without any sewage management

option. Figure 70 shows how the recreational value of coral reef will increase by $6M in

the next 30 years, as it is influenced by the increase in the number of SOT and CT. In

year 30, this value will be with 2% higher than the baseline scenario.

Figure 70 – Recreational value of coral reef for scenario 3

For the biodiversity value of coral reefs, the situation is similar with the previous

scenario. A higher state of the reef will increase the WTP of Dutch citizens and Bonaire

habitants for preserving and increasing their quality, and as a result the biodiversity

value of coral reef will follow the path from Figure 71. Compared with the baseline

scenario, after the sewage treatment plant will be constructed, the biodiversity value will

be higher by $0.4M in year 30.

Figure 71 – Biodiversity value of coral reef for scenario 3

14.00

16.00

18.00

20.00

22.00

24.00

0 5 10 15 20 25 30

Rec

reat

ion

al v

alu

e [

mill

ion

$]

Year

Recreational value


Recreational value scenario 3

18.20

18.40

18.60

18.80

19.00

19.20

19.40

19.60

19.80

0 5 10 15 20 25 30

Bio

div

ers

ity

valu

e [m

illio

n $

]

Year

Biodiversity value




68 Results

The fisheries value is not going to be affected by the construction of a sewage treatment

plant as it has direct effects only on corals. Thus, the value of coral reefs from fisheries

has the same value as in the baseline scenario, of $0.37M.

Amenity and coastal protection value follow once again the same trend, decreasing over

30 years by a small amount. However, compared with the baseline scenario, the

amenity value will have a final value higher by $328 and CPV by $6,400 in year 30, as

shown in Figure 72.

Figure 72 – Amenity and coastal protection value variation in time for scenario 3

The total economic value in this case will be very similar with the one determined in the

baseline scenario (see Figure 73). Its value will be $0.86M less than in the baseline

case for the last year.


The share of each value to the TEV of Bonaire coral reef will be similar with the share of

the TEV in the case of scenario 1 (see Figure 74).

149.60 149.70 149.80 149.90 150.00 150.10 150.20 150.30 150.40 150.50 150.60

0 10 20 30

Am

en

ity

valu

e [

$ *1

000]

Year

Amenity value

baseline

scenario 3 2,906.00 2,908.00 2,910.00 2,912.00 2,914.00 2,916.00 2,918.00 2,920.00 2,922.00 2,924.00

0 10 20 30

CP

V [

$ *1

000]

Year


baseline

scenario 3

20.00

25.00

30.00

35.00

40.00

45.00

50.00

0 5 10 15 20 25 30

Eco

no

mic

val

ue

[mill

ion

$]

Year


TEV baseline

TEV with management



Figure 74 – Share of each value to the TEV of Bonaire coral reef for scenario 3

The net present value of coral reefs at different discount rates was established to be

0.2% lower than the baseline scenario. As the difference is not observed on the graph,

Table 3 was built for representing these values.

Table 3 – NPV of Bonaire coral reef at different discount rate

DR NPV scenario 3

[million $] NPV baseline

0 1,277 1,280

1 1,101 1,104

3 841 844

5 664 667

8 494 497

10 418 421

Recreational value, 50.19 Biodiversity

value, 42.09

Fisheries value, 0.83

Amenity value, 0.34

Coastal Protection value, 6.55



70 Results



6 Conclusions

The coral reef ecosystem of Bonaire is considered to be important because it sustains

both life and the economic development of society by means of goods and services

such as tourism, fisheries, amenity, coastal protection or scientific services. Even though

nowadays it is believed that Bonaire’s coral reef cover is the healthiest in the Caribbean,

over the time its quality has degraded. Moreover, corals are continuously threatened by

factors such as sedimentation, nutrients, physical destruction or temperature.

The aim of this study was to provide an economic valuation of Bonaire marine

ecosystem in order to provide transparent information for policy makers, so that the

most appropriate measures are taken for improving the ecosystem and stimulating the

economic development. The research question of this project was formulated as

follows:

"To what extend will economic development and nature management influence the


In order to reach the aim of this study, several activities have been performed:

1. A literature study about marine ecology with a specific on coral reef ecosystem

and the procedure to build a dynamic simulation model using Stella software.

2. Construction of a dynamic simulation model that links the ecology of coral reefs

with the economic benefits they provide.

3. An extended process of finding specific data to fill in the model , plus close

communication with the supervisors to check the reliability of the data and make the

most accurate assumptions where it was required.

4. Run the model using a time framework of 30 years by changing several

parameters and interpreting the results.

5. Summarize all findings and give recommendations for future research.

An analysis of the marine ecosystem services from an ecological point of view, keeping

the values of the current threats constant for the entire period of 30 years, shows that

the quality of the reef will decrease below a medium value, from 0.66 to 0.49 (see Figure

75). Among all indicators that contribute to define the general state of the reef, coral

cover will suffer the biggest change, decreasing from 28% to 6.9% (see Figure 76). It is

important to avoid this, as coral reefs generate most revenues for the island by means of

providing goods and services.

An economic analysis of the baseline scenario shows an increase in the TEV of

Bonaire’s coral reef from $39M in 2012 to $43M in 2042, with the tourism sector

contributing the most. The baseline scenario will bring a net present value of $668M at

5% discount rate. Every studied scenario predicts that in the following years the

economic value of coral reefs will slowly increase while the state of the reef and the

coral cover will steadily decrease unless important measures are taken.

The first scenario analyzes the effects of the economic development on the nature of

Bonaire. The local government plans to stimulate the economy of the island by

increasing the number of tourists. For instance, they plan to build 10 recreational piers in

Leeward site of the island to determine tourists to spend more time on the island and

undertake a variety of recreational activities. The rate increase in the number of tourists

was estimated to be 0.85% per year for the following 30 years. Due to this increase, the

state of the reef indicator will decline in the following 30 years from 0.66 to 0.47. This


72 Conclusions

decline is larger compared to the baseline value 0f 0.49. If more tourists will come on

the island, the level of nutrients loaded into the water will increase. Furthermore, tourists

will contribute to the degradation of coral cover through physical destruction during

diving or snorkelling. As a consequence, by 2042, the coral cover will represent only

3.31% of the marine surface in Bonaire, 50% lower than the value of 6.9% predicted if

the number of tourists will have a negligible increase.

An economic analysis of the first scenario (rise of tourists’ number) shows an increase in

the TEV of Bonaire’s coral reef from $39M in 2012 to $47M in 2042. As the economy of

Bonaire will develop in the following years, the net present value at 5% discount rate

was determined to be $690M (see Figure 77).

To conclude and answer the first part of the research question, an economic

development in Bonaire will degrade the marine ecosystem below the medium quality

and the coral cover will be 88% lower than current values. However, the TEV of coral

reefs will be higher than the current value due to an increase in the generated revenues

from tourists as a consequence of a higher number of tourists.

The 2nd

and the 3rd

proposed scenarios analyze the effect of two different management

options that plan to combat the threat of lionfish presence and the increase in nutrients’

quantity loaded into the sea.

From an ecological point of view, both scenarios present an increase in the quality of the

reef compared with values of the baseline scenario. Looking at the second scenario, the

eradication of lionfish will increase the state of the reef from 0.66 to 0.7 as a

consequence of higher fish stocks and less algae. Moreover, the coral cover is expected

to slightly increase from 28% to 32%. Analyzing the third scenario, reducing the amount

of nutrients released into the sea by building a sewage plant will decrease the coral

cover from 28% in 2012 to 13% in 2042. It can be observed that the value of 13% coral

cover is almost double than the value of 6.9% estimated for the baseline, in absence of

a sewage plant. However, just by reducing the amount of nutrients released into the sea

alone, will not lead to an improved state of the reef and collateral measures should be

implemented.

From an economic perspective, both scenarios will increase the economic value placed

on coral reefs from $39M in 2012 to $47M in 2042 if lionfish are eradicated and

respectively from $39M in 2012 to $44M in 2042 once the sewage treatment plant is

constructed (see Figure 78). This change will generate a net present value of $710M for

the 2nd

scenario and $664M respectively for the 3rd

scenario, at a discount rate of 5% in

both cases.



Figure 75 – State of the reef variation for different scenarios

Figure 76 – Coral cover variation for different scenarios

Figure 77 – NPV at 5% discount rate for different scenarios

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

SOR baseline SOR scenario 1 -Nb of tourists

SOR scenario 2 - Liofish eradication

SOR scenario 3 - Sewage plant

Stat

e o

f th

e r

eef

ind

icat

or

State of the reef variation Year 1

Year 30

0

5

10

15

20

25

30

35

Coral Cover baseline Coral Cover scenario 1 - Nb of tourists

Coral cover scenario 2 - Lionfish eradication

Coral Cover scenario 3 - Sewage plant

% o

f co

ral c

ove

r

Coral cover variation Year 1

Year 30

640

650

660

670

680

690

700

710

NPV baseline NPV scenario 1 NPV scenario 2 NPV scenario 3

NP

V [

mill

ion

$]

Net Present Value at 5% DR


74 Conclusions

Figure 78 – TEV variation for different scenarios

0.00

10.00

20.00

30.00

40.00

50.00

60.00

TEV baseline TEV scenario 1 - Nb of tourists

TEV scenario 2 - Lionfish eradication

TEV scenario 3 - Sewage plant

TEV

[m

illio

n $

]

Total Economic Value variation Year 1

Year 30



7 Recommendations

Worldwide, many people depend on coral reefs because of their provided ecosystem

services such as fisheries, coastal protection, tourism, etc. However, as the coral cover

has declined all over the world in the past years and it is constantly under threat, it is

important to take effective decisions to stop its decline and improve it as much as

possible.

It is very difficult to predict the future especially for an ecosystem that is affected by so

many factors, where everything is interconnected in ways that are still not understood.

However, as far as human imagination allows it, there have been multiple attempts to

simulate various ecosystems. Dynamic simulation models proved to be the best way to

try to determine the impact that a certain decision may have on diverse factors. It should

be bared in mind that a realistic model is impossible to construct, as it is very difficult to

predict future unexpected events, such as a drop in world economy or eradication of

certain species.

For this paper, a dynamic simulation model was constructed to try to evaluate the

marine ecosystem services provided by coral reefs in a specific location, the island of

Bonaire in this case. However, this model can be used for any other location as the

benefits provided by coral reef are similar everywhere.

For future research I would recommend some changes regarding the construction of

the model, other possible scenarios and the process of defining the data.

As a fact that the number of cruise tourists is expected to double in the following years it

is essential to investigate and include in the recreational module the influence they may

have on the number of SOT. There is a possibility that they may discourage SOT to

come and spend a long time in Bonaire as they will overcrowd the island and will disturb

the relaxing environment. When I constructed the model I included this variable, but due

to lack of data it was assumed that it has no influence. To determine this more

accurately it is recommended to have interviews with relevant stakeholders.

For a more extended analysis of the ecological module I suggest that a detailed

evaluation of fish species and their fishing rate to be made, as not all species are

targeted at the same level. This is a very complicated step, but it can provide more

accuracy when defining the state of the reef.

To determine the non-use value of coral reef biodiversity the tourist industry should be

involved in the development of coral reefs. There are current surveys taking place that

try to determine the WTP of Bonaire tourists to preserve or improve the quality of the

reef. Once the data will be available it would be interesting to see how the TEV of coral

reef is influenced.

It is advised to do a more detailed analysis when calculating the amenity and coastal

protection value of coral reef. For calculating the amenity value, it was considered that

every year a certain number of houses will be sold, but the proximity to coral reefs was

not taken into account. The same assumption was made when calculating the avoided

damage in case of a hurricane and a lack of corals to protect the coast.

Other scenarios should be also investigated in order to analyze the different impacts of

possible decisions that may affect the TEV of coral reefs. Because the marine

ecosystem suffers changes most of the time and because these changes do not happen

one at a time, a scenario where more than one management option is considered

should be analyzed as well. For example, it would be interesting to see how the TEV


76 Recommendations

and the coral cover will be affected after the construction of the sewage treatment plant

and lionfish eradication, combined with an increase in the number of tourists. Moreover,

there are rumors that the local NGO, Stinapa, plans to restore the coral cover by

planting new corals. It is interesting to see how this plan will evolve.

A change at a global level in the world economy is very difficult to predict. However, a

sensitivity analysis for different GDPs values should provide some information about

how a decline or an increase in the world economy will change the TEV of Bonaire coral

reef.

Finally, refining the model by using advanced correlations and interdependencies, as

well as more specific data for the island of Bonaire will increase the accuracy of the

predictions of the model.



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