O PTION AND EXISTENCE VALUES - The Economic Value of Namibia s Protected Area System:

Option values are largely derived from the conservation of resources that have the potential to be valuable in future. This value is often associated with the genetic diversity of protected areas, the future potential of which is readily acknowledged but completely unknown. There are many examples of the discovery of new species or genetic material which have turned out to have enormous value in the global pharmaceutical industry. It has been estimated that the loss of 50 000 species in the world would mean the loss of 25 potential

new prescription drugs with a value of US$25 billion (Scott 1993). The horticultural industry may also derive substantial benefits from species conserved in Namibia’s protected areas. This is already evident in the collection of succulents for propagation from at least one of Namibia’s protected areas. Wild genetic resources are also important in the development of new agricultural crops and varieties. Option value cannot be estimated, however. The closest measure available is quasi-option value, which is equal to the amount that society is willing to pay to retain the option of using these resources in future.

Non-use values do not involve any current or future use of protected areas. The existence value of the protected system is the satisfaction or utility derived from the knowledge that the areas are protected, and bequest value is the satisfaction obtained from the knowledge that the resources can be enjoyed by future generations. Non-use values are theoretically reflected in society’s willingness to pay to ensure the continued existence of protected areas. Individual values are often reflected in the donations they make or are willing to make to conservation agencies.

Barnes et al. (1997) found that 72% of surveyed visitors to wildlife tourism areas were willing to contribute towards conservation in the form of a trust fund. For all tourists, including those who did not express an interest in paying, the average willingness to pay was N$104 per person. This equates to N$28.7 million for all Namibian tourists for the conservation of wildlife.

The willingness to pay by visitors represents only a small fraction of global willingness to pay for the protection of Namibia’s biodiversity. Research in South Africa suggests that citizens alone have an aggregate willingness to pay of R393 million per year for biodiversity conservation (Turpie 2003a). This does not include the additional willingness to pay by the international community. International willingness to pay is at least partly expressed by donor funding which is aimed at biodiversity conservation. International donors have provided varying amounts of funding for environmental projects in Namibia over the years, generally indicating a substantial willingness to pay on the part of the international community for biodiversity conservation and natural resource- linked management and use. Some N$54 million in donor funding was raised for conservation-related projects in Namibia in 2003-4, of which up to about N$2.5 million was specifically for use in protected areas (Turpie et al. 2004). This reflects a strong mandate in the donor community for projects which contribute to poverty alleviation, possibly coupled with a lack of realisation of the important links between protected area status and poverty alleviation.

5 IS

INCREASED

INVESTMENT

IN

THE

PROTECTED AREA SYSTEM ECONOMICALLY

JUSTIFIABLE?

5.1 I

NTRODUCTION

Although the protected area system can be shown to yield significant benefits to Namibian and global society, the maintenance of a protected area system also incurs costs to the economy. These include not only the direct costs associated with their establishment and maintenance, but also the indirect costs that they incur on surrounding populations, and the opportunity costs in terms of the foregone benefits from alternative uses of the land. These costs are described as far as possible in the following sections. Direct costs are separated into those associated with conservation and tourism, since these are undertaken by different institutions. Current costs are briefly evaluated in the light of the benefits currently generated by the protected area system.

Even if current costs are economically justifiable, the protected area system is not adequately meeting its conservation objectives. Brown et al. (2005) addressed the conservation priorities for Namibia and how best the protected area system might fulfill the country’s biodiversity conservation needs, and developed a vision for an effective protected area system. Booth et al. (2005) addressed the institutional structure and support required to facilitate the effective implementation of this vision. We thus address the question as to whether the increased investment required to realise this vision would be economically justified.

In document The Economic Value of Namibia s Protected Area System: (Page 45-47)