The Economic Value of Water and Ecosystem Preservation

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4. Estimating the Value of Freshwater Inflows Supporting Ecotourism 4.1. Introduction Economics is typically described as the science of allocating scarce resources among competing end uses. There is a long and well-developed list of literature describing the foundations of social welfare analysis and public choice. The most commonly accepted approach is that inputs and outputs are monetized in order to provide a common metric by which various allocations and outputs can be compared. The problem with environmental goods is that they are typically public goods and no market exists by which to observe market prices used to monetize these goods. Economists have expended much effort to develop theories and methods by which to value these non-market goods. This study makes use of two approaches: i) the Travel Cost Method and ii) a production function approach. This economic analysis examines the value of freshwater inflows on ecotourism on the San Antonio Bay Region. While there are many definitions of ecotourism, some related to the idea of sustainability, ecotourism in this study refers primarily to tourism which is based on natural or ecological attractions (Mathis, 2004b). There are two main questions of importance. The first question concerns the value of current sectors (e.g. tourism) that are supported by the freshwater inflows. This first question yields information on the value of current activities, which can be useful in comparing different activities supported by the same resource, but it doesn’t yield insights into possible tradeoffs. A second question concerns possible tradeoffs resulting from alternative management scenarios. This question yields information on what the economic impact on a given sector will be if the current management situation is changed (e.g. inflows are reduced). A fundamental component for the economic analysis is the ecology of the bay and estuary, which is a complex system made up of interdependent elements (e.g. water, flora, land, etc.). The element of interest to this analysis is the freshwater inflows to the estuary. Beneficial inflows are defined in the Texas Water code (sec. 11.147) as a “salinity, nutrient, and sediment loading regime adequate to maintain an ecologically sound environment in the receiving bay and estuary system that is necessary for the maintenance of productivity of economically important and ecologically characteristic sport or commercial fish and shellfish species and estuarine life upon which such fish and shellfish are dependent.” However, a complexity of the science underlying the understanding of freshwater inflows on marine and river ecosystems has led to much infighting resulting in little progress on the issue (Korosec, 2007). This study attempts to more fully develop the economics behind freshwater inflows and ecotourism in order to better inform the ongoing debate on environmental flows.
4.2. Key Site Details for the Analysis The study region is formed where the Guadalupe River meets the Guadalupe Estuary. This intra-coastal ecosystem has an area of about 100 square miles and serves as a critical habitat for many species. Freshwater flows into the bay system from runoff from land after rain events and from surface water courses including the San Antonio and Guadalupe Rivers. These two rivers have historically provided 79.6% of the total freshwater inflows into the estuary (Longley, 1994). A modeling study by Texas Parks and Wildlife Department (TPWD) indicates that the Guadalupe Estuary has a direct response to freshwater inflows on a seasonal basis and indirectly on a total annual basis (TPWD, 1998). The Guadalupe Estuary’s fisheries biota has a critical need for suitable salinity condition during May and June. Inflows during July and August are typically the year’s low flow period, but can have minimal negative impact if earlier flows are adequate. During drought years, a study by Texas Parks and Wildlife Department (TPWD) predicts a significant decrease in wetland productivity and fisheries harvest (TPWD, 1998). The study further expressed that “any exacerbated increase in the severity, frequency or duration of droughts will alter the ecosystem structure” resulting in reduced biodiversity (TPWD, 1998). The TPWD study further recommended managing the river’s flow pattern to maintain historical low flows at the same frequency as experienced historically by avoiding increases in the size or duration of low flows/drought conditions. The freshwater inflows are essential to maintaining the ecosystem of the bay and are important in terms of quantity, quality, and timing. The marginal impact that water has on the quality and quantity of ecosystem services which support ecotourism cannot be modeled with precision due to the complexity of the ecosystem. However, a study on the San Antonio Bay and Guadalupe Estuary estimated a minimum annual inflow of 1.03 million acre-ft/year and a maximum inflow of 1.29 million acre-ft/year (TPWD, 1998). This same study recommended a maximum inflow of 1.15 million acre-ft/year as the lowest target value to meet the biological needs of the bay and estuary. 4.3. Travel Cost Method - Analytical Approach and Description The study makes use of the Travel Cost Method for estimating the value of freshwater inflows on the eco-tourism sector operating in the San Antonio Bay area. The Travel Cost Method uses actual expenditure data to estimate a ‘value’ for the natural resource services which support the ecotourism service that is consumed. The Travel Cost Method (TCM) is an indirect revealed preference approach in that values are derived from actual purchasing behavior, but indirect as the purchase is for related goods (National Research Council, 2004).The Travel cost method yields a maximum estimate of willingness-to-pay for the ecosystem services provided by freshwater inflows. This measure is termed by economists as ‘consumer surplus.’ 33
Page 1 and 2: Final Report to the Texas Coastal M
Page 3 and 4: 5.2.2. Sources / Data .............
Page 5 and 6: Executive Summary The San Antonio B
Page 7 and 8: ecotourism included in the model. T
Page 9 and 10: 1. Overview of San Antonio Bay Regi
Page 11 and 12: and shellfish species and estuarine
Page 13 and 14: According to the Rockport-Fulton Ch
Page 15 and 16: effect is limited by assimilative c
Page 17 and 18: freshwater inflow acts as a mechani
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Page 25 and 26: 3. Characterization of Ecotourism i
Page 27 and 28: Contributes actively to the conserv
Page 29 and 30: Figure 3-1. Public Protected Areas
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Page 39: impact. It is necessary to conduct
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Page 67 and 68: Table 5-5. Employment Shift-Share A
Page 69 and 70: Fishing and related activities. The
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Page 75 and 76: Calhoun Calhoun County’s experien
Page 77 and 78: an advantage, particularly in oyste
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Page 81 and 82: However, due to the lack of consist
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Page 85 and 86: for fresh product. This fishery wil
Page 87 and 88: Elliot, D. (2007). Competitive Adva
Page 89 and 90: Pearce, D. W. (1994). The MIT Dicti
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