The Economic Value of Water and Ecosystem Preservation

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egion for ecotourism purposes does not exist hampering the estimate of their economic impact. Regardless of these difficulties in measuring ecotourism production and impact, existing evidence indicates that ecotourism is playing an important role in the local economy. However, despite the growth of the ecotourism industry, the Bay’s fragile estuarine ecosystem is facing pressure from other economic activities. The increased pressure on both surface water and groundwater resources upstream by agricultural production, industry, and a rapidly growing urban population in San Antonio has altered the timing and volume of river inflow to the Guadalupe estuary. This delicate estuarine system is deteriorating because upstream water users rarely consider the water needs of an ecosystem. Need for Economic Analysis An important obstacle to more widespread recognition of the ecosystem’s water needs is that the economic value of using water to sustain the regional ecosystem has never been quantified. Without ‘economic representation’ of this value, it is difficult for water managers, planners, and users to consider the ecosystem, along with agriculture, industry, and municipalities, when making water use decisions. A fundamental element of 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.). However, the complexity of the science underlying the understanding of freshwater inflows on marine and river ecosystems has led to infighting resulting in little progress on the issue (Korosec, 2007). Ultimately, if the unique ecosystems of the San Antonio Bay are to survive, they must be recognized as a valuable natural asset as well as an economically important water user (Mathis, 2004a). This study attempts to more fully develop the economics behind freshwater inflows in order to better inform the ongoing debate on environmental flows. Travel Cost Method The Travel Cost Method was used to estimate 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 analysis showed that the average visitor (who resided in Texas) experienced a consumer surplus of $273 dollars per visit, while the average reported expenditure per Texas resident was $231. The consumer value is the economic benefit received in excess of actual travel expenditures indicating a high value of freshwater inflows. Production Function Approach An ecotourism production function was estimated as a function of inflows and other key variables. This function was then used to calculate a marginal value for freshwater inflows. For this study, the freshwater inflows are the only input to vi
ecotourism included in the model. The output, ecotourism, is equated with the number of visitors to the Aransas National Wildlife Refuge. There are several problems with using a production function approach to estimating the value of freshwater inflows to the production of ecotourism. The primary problem is the complex relationship between inflows and the status of the ecosystem. The inflow regime poses particular problems because: • Inflows are continual rather than applied in discrete amounts; • Inflows vary across the year with important high and low flow periods; • Inflows experience periods of flood and drought which are also useful to maintaining the ecosystem; and, • The resulting ecosystem services are not simply an increasing function of freshwater inflows Therefore, the present model is viewed as an initial step in addressing this issue and not as a definite conclusion. The estimated tourism-water production function indicated that freshwater inflows have a positive relationship with visitor numbers up to a flow rate of 2,400 cfs. The average flow rate from the data was calculated as 1,995 cfs. An incremental increase of 100 cfs was modeled as an increase of 25 visitors for an incremental increase of $12,700 in eco-tourism expenditures. This should be interpreted as an early indicator that freshwater inflows have a positive impact on the ecosystem services that tourists use. Socio-economic Environment of the San Antonio Bay The socio-economic environment of the San Antonio Bay was examined with a particular concern on the status of the fishing industry. The socio-economic analysis looked at Aransas, Calhoun, and Refugio counties. The analysis used Shift-Share analysis and input-output analysis. Shift-Share Shift-Share analysis was conducted to study the competitiveness and growth and decline of local industries. This study used employment changes from 2001 to 2005 to identify the sources of growth and decline in local areas. Input-output Analysis Input-output modeling was used to reveal the complete impact on the economy of employment change in a particular sector. The input-output model uses a matrix representation of a nation’s (or a region’s) economy to predict how changes in one industry will affect other industries. Aransas, Calhoun, and Refugio counties have many issues in common and several that are unique to the county itself. Fishing employment in Aransas has eroded at a much faster rate during the time period under study than Calhoun. A negative competitive share in Aransas and zero value for Calhoun suggests that the county does not have a comparative advantage in this sector. Given that the vii
Page 1 and 2: Final Report to the Texas Coastal M
Page 3 and 4: 5.2.2. Sources / Data .............
Page 5: Executive Summary The San Antonio B
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
Page 19 and 20: sulfide. Heavy metals bounds to sed
Page 21 and 22: inflow levels and populations of se
Page 23 and 24: and could potentially make the cran
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
Page 31 and 32: 1987 and then purchased in 1991. Pr
Page 33 and 34: 3.3.2. The Economics of Multiple Na
Page 35 and 36: Table 3-2. Average Willingness to P
Page 37 and 38: Table 3-3. Personal Income and Prod
Page 39 and 40: impact. It is necessary to conduct
Page 41 and 42: 4.2. Key Site Details for the Analy
Page 43 and 44: approach allows examination of ques
Page 45 and 46: This average number of trips from t
Page 47 and 48: occasional flood and drought events
Page 49 and 50: The results of the regression yield
Page 51 and 52: gallons, which results in a value o
Page 53 and 54: Aransas distinguishes itself from C
Page 55 and 56: thresholds vary according the size
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The total number of full-time and p
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The County also shows a lower educa
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Refugio shows a rapid decrease in t
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IM t+ n ic = E t ic ⎡⎛ E × ⎢
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included an economic analysis of th
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Table 5-5. Employment Shift-Share A
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Fishing and related activities. The
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Figure 5-15. Employment change by s
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5.3.2. Input-Output Analysis The in
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Calhoun Calhoun County’s experien
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an advantage, particularly in oyste
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Impacts on the Freshwater Inflows t
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However, due to the lack of consist
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This implicitly assumes that flows
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for fresh product. This fishery wil
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Elliot, D. (2007). Competitive Adva
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Pearce, D. W. (1994). The MIT Dicti
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The Nature Conservancy. (2002). "Na
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