Valuation of Biodiversity Benefits (OECD)

The importance of indirect use value can be illustrated in the context of mangroves. Bann(1998) lists the potential benefits of a mangrove resource as shown in Table 2.3 (with slightmodifications). The table reveals the wide range of functions that can be served by any one ecosystem.In each case, the ecological functions have economic value.Table 2.3 Economic value of a mangrove resourceUse valuesDirect value Indirect value Option valueNon-usevaluesTimber, fuelwood,charcoalShoreline, riverbankstabilisationFuture direct andindirect valuesCultural,aestheticFisheriesForest products:food, medicine,wildlife etcAgriculturalresourcesWater supplyWater transportGroundwaterrecharge/dischargeFlood and flow controlWaste storage and recyclingBiodiversity maintenanceProvision of migrationhabitatSpiritual,religiousGlobalexistencevalueGenetic resourcesTourism andrecreationNursery/breeding groundsfor fishNutrient retentionHuman habitatInformationSource: Bann (1998) (with modifications).Coral reef maintenance andprotectionPrevention of saline waterintrusionTable 2.4 provides monetary estimates for one mangrove system in Surat Thani in SouthThailand [Sathirathai (1998)]. The notable feature of these estimates is the dominant role played byindirect use values. Local use values relate to the use of the mangrove to supply fish, timber, andfuelwood. The offshore fishery benefit relates to the benefit that the mangrove has for the productivityof the offshore fishery. The coastal protection benefit is estimated by what it would cost to replace thebeneficial protection function produced by the mangrove, i.e. what it would cost in coastal defences.This ‘replacement cost’ approach assumes that if the mangrove was not there then the protectivefunction would have to be replaced, and this somewhat begs the question of the whether coastaldefence would be worthwhile. Nonetheless, the use of replacement costs is quite widespread in38