Total Economic Value of Maasai Mau, Trans Mara and Eastern Mau ...

5.0 DETERMINING, IN ECONOMIC TERMS, THE VIABILITY OF THE MAASAIMAU, TRANS MARA AND EASTERN MAU FOREST BLOCKS ECOSYSTEMThe economic viability of a forest can be assessed in terms of its ability to accrueadequate benefits to offset the costs of maintaining it. Cost–benefit analysis is ananalytical tool, similar to financial decision making in the private sector, that can bemodified to take into account the broader set of benefits and costs of the forest blocks.The benefit and cost approach is rooted in the theory of welfare economics that is basedon the Kaldor-Hicks principle of potential compensation. The principle states that if thegainers from an action could compensate the losers, the action is an improvementregardless of whether compensation is actually paid (Dasgupta and Pearce, 1986).The willingness to pay estimates were derived using various pricing techniquespresented in Section 3 of this report as annual values. The annual values could remainsteady if the forest stock is not changed, but if degradation continues the likelihoodexists that the marginal willingness to pay would increase. Another factor that wouldincrease willingness to pay in future is the incomes, i.e. when incomes increase, thewillingness to pay increases across all income groups. Kriström and Riera (1996) noteelasticity values should range from 0.2 and 0.3. For benefits with long analysis periods,their values could be adjusted for the long-term income effect. For this study, theincome effect was assumed to be too negligible to affect the final conclusion of thisstudy and was therefore not considered.Values assigned to the three forest blocks should reflect the best alternative use forresources or the true willingness to pay for the provision of all the goods and servicesthe community desires. The three forest blocks are legally established as gazettedgovernment forests (Trans Mara and Eastern Mau forests) and trust land (Maasai Mauforest). This means that under the current laws, the alternatives to forest use do notinclude the possibility of turning them into agricultural land or making them availablefor logging and selling timber based on demand and supply of timber products.Although the real opportunity costs associated with options that are permitted by law,agricultural land provides the best opportunity cost because it is the desire of the localcommunity that the forestland be made available for settlement. The area has alsoattracted a large number of illegal settlers who clear the forests and settle illegally.Indeed the options for the use of the Mau Forest Complex seem not to be directed bylaw as such, but by political processes and impunity of the communities.49