Range of suitable index:
S1 highly suitable :
68.25 – 84 S2 moderately suitable
: 52.50 – 68.25
S3 marginally suitable :
36.75 – 52.50 N not suitable
: 21 – 36.75
3.1.4.2. Economic Valuation
Economic valuation is conducted to choose the best alternative for coral reef management of Ndana Island after site selection using GIS. The ultimate aim
of applying valuation technique to the ecosystem is to highlight the ways in which economic issues can be addressed, economic tools used and management
strengthens. Spurgeon 2003 said that Total Economic Valuation TEV is a useful
framework to help understand the full range of economic welfare benefits of coral reefs, which it measure the value of ecosystem services to people by estimating
the amount people are willing to pay to preserve or enhance the services. TEV is based on the theory that environmental assets give rise to a range of economic
values that include direct use values, indirect use values and non-use values. As based on World Bank definitions Munasinghe, 1993 in Spurgeon, 2003:
TEV = DUV + IUV +OV + EV + BV
where: TEV = Total economic value; DUV = Direct use value;
IUV = Indirect use value; OV = Option value;
EV = Existence value; BV = Bequest value.
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Direct use value is determined by the contribution an environmental asset makes
to current production or consumption. Such values may comprise net economic returns i.e. market revenues less “opportunity costs”, the cost of inputs in their
next best alternative use and “consumer surplus” i.e. the amount of satisfaction gained over and above the amount paid for. E.g. fuel wood or recreation and
tourism.
Indirect use value includes the benefits derived from functional services that the
environment provides to support current production and consumption e.g. coral reefs providing biological support to near-shore fisheries and a coast protection
function to shoreline assets.
Option value
is the premium that consumers are willing to pay for an unutilized asset, simply to avoid the risk of not having it available in the future e.g. marine
resources may be underutilized today but may have a high future value in terms of scientific, educational, commercial and other economic uses.
Non-use passive value: Existence value arises from the satisfaction of merely
knowing that the asset exists; although the value has no intention of using it e.g. People donate money to save endangered species even though they may only see
it in books or on television. Part of the motive can be for future generations, in
which case that element of value is known as “bequest value”. These values
capture some of the social value afforded by corals. There are various valuation techniques for estimated monetary values of
natural resources, i.e.: Travel Cost Method, Contingent Valuation Method CVM and Benefit Transfer. This study was using Benefit Transfer Analysis technique
for valuing the coral reef conservation area. The principle of benefit transfer is
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that the value of a natural resource or impact calculated in one location can be used to estimate the value of a similar resource or impact elsewhere. Considerable
care is needed in its application, for example to adjust the values appropriately, because most “site” and “impact” specific details are likely to vary considerably.
Unfortunately, at present few thorough valuation studies exist for coral reefs that can be effectively transferred Spurgeon, 2003.
This study estimated economic valuation of coral reef area based on research of Husni 2001 in Lombok Timur and Agus 2005 in Lombok Barat.
Husni 2001 calculated value of Total Economic Valuation of coral reef area for fishery and tourism activities while Agus 2005 only estimated value of fishery
activity in coral reef area. Characteristics of the area study can be seen in Appendix 1.
Indicators that used to evaluate decision rule of economic aspect are NPV Net Present Value, and BCR Benefit Cost Ratio. NPV is the present value of
all benefits, discounted at appropriate discount rate minus the present value of all costs discounted at the same rate. BCR is the ratio between discounted total
benefits and cost. n
NPV = ∑ Bt – Ct 1 + i
t
t=1 n n
BCR = [ ∑ Bt1 + i
t
] [ ∑ Ct1 + i
t
] t=1 t=1
where: NPV = Net present value
BCR =
Benefit cost
ratio Bt
= Benefits
Ct =
Cost
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t =
Year i
= discount
rate In most cases the NPV and BCR will give the same results and will
produce the same alternatives ranking. But in general, where the government is using some sort of target minimum or cut off rate of return on capital,
maximizing NPV should be the criterion with the BCR as a supplementary check Anonim, 2000. The alternative can be develop if NPV 0 or BCR 1 and the
best choice is maximize of NPV.
3.1.4.3.Development Alternatives
Four alternatives was made for sustainable management of Ndana Island, using economic valuation especially NPV. This because NPV is a tool that can be
used to determine if an alternative is viable or not and make comparison between alternatives and rank alternatives. Ranking alternatives or choosing between
mutually exclusive alternatives which all have a positive NPV, should be made on the basis of the highest NPV.
Table 6. Economic value of alternatives in coral reef area
Scenario Alternatives
Economic value
I Existing condition There is fishery
activity NPV1
II All for conservation area, not for other
activities NPV2
III Based on suitability analysis for
conservation and diving NPV3
IV Core zone + diving + fishery zonation
based on literature and own judgment NPV4
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3.1.5. Graphical User interface
