Emerton, Lucy

Furuta, Naoya

Inoue, Tsuyoshi

Oyama, Ryo

English

Hydraulic Engineering Repository

Article, Published VersionEmerton, Lucy; Furuta, Naoya; Inoue, Tsuyoshi; Oyama, RyoValuing mangroves as an economic part of coastalinfrastructureHydrolinkVerfügbar unter/Available at: https://hdl.handle.net/20.500.11970/109461Vorgeschlagene Zitierweise/Suggested citation:Emerton, Lucy; Furuta, Naoya; Inoue, Tsuyoshi; Oyama, Ryo (2019): Valuing mangroves asan economic part of coastal infrastructure. In: Hydrolink 2019/4. Madrid: InternationalAssociation for Hydro-Environment Engineering and Research (IAHR). S. 100-102. http://iahr.oss-accelerate.aliyuncs.com/library/HydroLink/HydroLink2019_04_a9d9sas0das9f.pdf.Standardnutzungsbedingungen/Terms of Use:Die Dokumente in HENRY stehen unter der Creative Commons Lizenz CC BY 4.0, sofern keine abweichendenNutzungsbedingungen getroffen wurden. Damit ist sowohl die kommerzielle Nutzung als auch das Teilen, dieWeiterbearbeitung und Speicherung erlaubt. Das Verwenden und das Bearbeiten stehen unter der Bedingung derNamensnennung. Im Einzelfall kann eine restriktivere Lizenz gelten; dann gelten abweichend von den obigenNutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte.Documents in HENRY are made available under the Creative Commons License CC BY 4.0, if no other license isapplicable. Under CC BY 4.0 commercial use and sharing, remixing, transforming, and building upon the materialof the work is permitted. In some cases a different, more restrictive license may apply; if applicable the terms ofthe restrictive license will be binding.100 hydrolink number 4/2019Why ecosystem undervaluation is a problemEven though the concept of ‘green infras-tructure’ has gained currency over recent years,it still tends to be accorded a low priority ascompared to more conventional ‘grey’measures. One important reason is the lack ofdemonstrable evidence as to how and whyecosystems offer an economically worthwhileinvestment choice. For the most part, calcula-tions of the relative returns to different land,resource and investment choices simply do notfactor in ecosystem costs and benefits. Giventhese informational and methodological gaps, itis perhaps hardly surprising that both public andprivate sector planners often remain uncon-vinced — or even unaware — about thepotential to harness the natural environment todeliver key infrastructure and developmentservices.Intensifying competition over scarce public andprivate investment funds, coupled withincreasing demands from shareholders andtaxpayers for information about how their moneyhas been spent, means that the need to demon-strate cost effectiveness and value for money isbecoming an ever-more pressing concern. Yet,while figures are readily available on the benefitsof hard engineering options, and are routinelyused to measure assets, inform investmentplanning and report on financial performance,much less information is on hand about thegains and economic opportunities frominvesting in nature-based solutions.Ecosystem valuation can provide a powerful toolfor placing green infrastructure on the agenda ofinvestors, planners and policy-makers[1]. Yet,although it has increasingly started to enter thelexicon of public sector decision-makers, as yetthere remain far fewer examples of ecosystemVALUING MANGROVES AS ANECONOMIC PART OF COASTALINFRASTRUCTUREBY LUCY EMERTON, NAOYA FURUTA, TSUYOSHI INOUE & RYO OYAMAA general lack of evidence about environmental costs and benefits means that it is often difficult to make a strongbusiness case for investing in green infrastructure. In an effort to overcome these information gaps, one of Japan’slargest insurance companies has been piloting an innovative system of corporate ecosystem valuation. The aimis to account for and report to the company’s customers, shareholders and other stakeholders on the economicimpacts of its investments in mangrove restoration and rehabilitation. A community mangrove nursery in Tar Ton Son village, ThailandMangrove planting site in Bedono Village, Indonesia. The sign reads “one mangrove = saves 5 lives inthe coastal area”GREEN COASTALINFRASTRUCTURE101hydrolink number 4/2019global economy. This poses a real risk of under-mining the support and funding that is requiredto sustain TMNF’s mangrove planting activitiesinto the future.With a view to overcoming these informationgaps, in 2015 TMNF commissioned an initialstudy to value the ecosystem servicesgenerated by its Mangrove Planting Project[3].The intention was to account for and report tothe company’s customers, shareholders andother stakeholders on the economic returnsfrom mangrove restoration and rehabilitation.Four years later, just after the project had cometo the end of its fourth phase and twentiethyear, the study was repeated and updated[4].Valuing mangrove ecosystem servicesThe question of how to ascribe values toecosystem services has long posed somethingof a challenge to economists. The easiest andmost straightforward way, and the method usedconventionally, is to look at their market price:what they cost to buy or are worth to sell.However, as ecosystem services very oftenhave no market price (or are subject to priceswhich are highly distorted), these techniquesobviously only have very limited application.However, over the last two decades or so, asuite of methods has emerged with which tovalue goods and services that cannot be calcu-lated accurately via the use of marketprices[5,6,7]. These have now come into wideacceptance and common usage amongenvironmental economists.The TMNF study drew on this ‘toolbox’ ofmarket and non-market ecosystem valuationtechniques. It followed three interrelated steps:first identifying mangrove ecosystem servicesand their stakeholders at the project sites, goingon to assess baseline economic values, andthen modelling the changes in ecosystemservice benefits resulting from mangroverestoration and rehabilitation. As wellconducting a macro-level analysis of theeconomic impacts of mangrove planting acrossall nine countries, micro-level case studies ofspecific mangrove ecosystem service valuesand beneficiary groups were carried out at threeplanting sites: Bedono Village in Indonesia,Đồng Rui Commune in Viet Nam and MueangRanong District in Thailand.The returns to investing in mangroverestoration and rehabilitationThe study found that the vast majority of thecoastal population in the project planting sitesdepend in some way on mangroves for theirlivelihoods and economic wellbeing. Nineecosystem services were found to be ofparticular socio-economic importance (Figure 1):mangrove fishery, wood-based fuel andconstruction, other non-wood/non-fishmangrove products, support to off-site fisheriesproductivity, coastal protection and hazardmitigation, water quality regulation, mitigation ofclimate variability and change, recreation andinformation, and cultural and aesthetics. It follows that a large number of local communities have benefited directly from theMangrove Planting Project. These include morethan 1.4 million people or almost 350,000families, many of whom face high rates ofpoverty, live in extremely precarious economicvaluation being used in a corporate context. It isagainst this backdrop that Tokio Marine &Nichido Fire Insurance Co., Ltd.(TMNF), one ofJapan’s largest insurance companies, initiatedan innovative study to look at the economicvalue of mangrove ecosystem services – one ofthe most productive, and valuable, componentsof the ‘natural’ infrastructure base in coastalzones. The Mangrove Planting ProjectAs part of its commitment to a safe, secure andsustainable future, TMNF has a long-standingcorporate environmental and social responsi-bility programme. One of the core componentsis a Mangrove Planting Project. Between 1999and March 2019, TMNF has worked with anetwork of non-governmental organisations andlocal partners to plant  10,930 hectares ofmangroves in nine countries in the Asia-Pacificregion: Bangladesh, Fiji, India, Indonesia,Malaysia, Myanmar, Philippines, Thailand andViet Nam. As well as contributing to corporate responsi-bility and reputational goals, the MangrovePlanting Project helps to secure importantecosystem services – ‘the benefits peopleobtain from ecosystems’[2]. The intention is tosupport local community development,strengthen climate change mitigation andadaptation, assist in disaster risk reduction, andcontribute towards biodiversity preservation. Yetmany people – both within and outside thecompany – remain unaware of the wide-rangingbenefits that the company’s investments inmangrove planting have had on local liveli-hoods, national development, and even theIAHRFigure 1. Mangroves provide a wide range of economically-valuable ecosystem servicesGREEN COASTALINFRASTRUCTURE102 hydrolink number 4/2019conditions, and are subject to recurrent shocks,stresses and pressures. In addition, many townsand industries further afield depend on thedisaster risk reduction services provided bymangroves, and even global stakeholdersbenefit from the climate change mitigationoffered by the 1.25 million tCO2e stored inmangrove forests and soils in the projectplanting sites.The economic impact is substantial. The studycalculated that mangrove ecosystem servicesworth USD 125 million* are being generated inthe year 2019 alone. This figure will continue toincrease into the future – in another 20 years, by2038, the annual value of mangroves planted isprojected to reach almost USD 150 million. Intotal, the project is estimated to have addedecosystem services with a value of USD 1.2 billion over its first 20 years of operation – anaverage of USD 6,256/ha/year (Figure 2, Table 1). It is worth noting that a large proportionof this value – more than half – is accounted forby disaster risk reduction and other coastalprotection services.By the end of 2018, TMNF had invested aroundJPY 1.23 billion in the Mangrove Planting Project(equivalent to almost USD 14 million at currentprice levels). Comparing this figure with thevalue of ecosystem services added over thecourse of the first four phases of the projectsuggests that, to date, each USD (or JPY) ofTMNF’s investment has generated 87 Dollars (or Yen) of economic benefits for coastalcommunities, surrounding areas and the globalcommunity. This figure has risen steadily overtime, in line with the growth in planted area, andas mangroves have increased in maturity andthus in the level of ecosystem service benefitsthey are able to generate. The return oninvestment is impressive: over its first fourphases, the Mangrove Planting Project displays an economic internal rate of return(EIRR) of 157%.AcknowledgementsThis study was supported and funded by TokioMarine & Nichido Fire Insurance Co., Ltd.,through Mitsubishi Research Institute, Inc. as athird-party evaluation partner for TMNF’smangrove planting project. nReferences[1] Emerton, L. (2013) Using valuation to make the case for economicincentives: promoting investments in marine and coastalecosystems as development infrastructure. In Essam, M. (ed)Economic Incentives for Marine and Coastal Conservation:Prospects, Challenges and Policy Implications. Earthscan Press,London.[2] Millennium Ecosystem Assessment (2005) Ecosystems andHuman Well-being: Synthesis. Island Press, Washington DC.[3] Tokio Marine Holdings, Inc. (2016) Economic Value and Impact onLocal Communities from Mangrove Planting, Tokio Marine GroupSustainability Report 2016 [4] Tokio Marine Holdings, Inc. (2019) Economic Value and Impact onLocal Communities from Mangrove Planting, Tokio Marine GroupSustainability Report 2019[5] WBCSD (2011) Guide to Corporate Ecosystem Valuation: aframework for improved corporate decision-making. WorldBusiness Council for Sustainable Development, Geneva.[6] Emerton, L. (2017) Valuing the Benefits, Costs and Impacts ofEcosystem-based Adaptation Measures: a sourcebook ofmethods for decision-making. Deutsche Gesellschaft fürInternationale Zusammenarbeit (GIZ) GmbH, Eschborn.[7] TEEB (2010) The Economics of Ecosystems and Biodiversity:Mainstreaming the Economics of Nature. A Synthesis of theApproach, Conclusions and Recommendations of TEEB. UnitedNations Environment Programme (UNEP), Nairobi.Figure 1. Mangrovesprovide a wide range ofeconomically-valuableecosystem servicesEcosystem services                                                                       Total value                   Average annual               Benefits per unit                                                                                                         (USD million)                   value (USD/ha)        of investment (USD)                                                                                                                                                                                                                                Mangrove fishery & other product harvests                                    144.97                                         752                                          11Support to off-site fisheries productivity                                          360.95                                      1,872                                          26Shoreline stabilisation & erosion control                                         258.13                                      1,924                                          19Shelter against extreme weather                                                       128.20                                         956                                            9Wastewater treatment & sediment trap                                           168.17                                         872                                          12Prevention of saline intrusion                                                             134.06                                         695                                          10Carbon sequestration                                                                              11.55                                            60                                            1TOTAL                                                                                                        1,206.0                                      6,256                                          87Table 1. The economic value and return on investment from mangrove planting 1999-2019Lucy Emerton is anenvironmental economistspecialising in ecosystemvaluation, finance and incentives.Over the last 30 years she hasworked as an adviser to a widevariety of governments, non-governmental organisations,United Nations agencies, research institutes and privatesector companies, across more than 70 countriesworldwide. Lucy is currently Conservation Economicsand Finance Director of the Environment ManagementGroup, a consultancy group and think-tank providingpolicy and planning advice and technical support inenvironmental sustainability.Naoya Furuta is a coordinator atIUCN Japan Liaison Office and aprofessor at the Institute ofRegional Development, TaishoUniversity, Tokyo, Japan. Sincethe Great East Japan Earthquakein 2011, he involves in variousprojects and publishes manyarticles on Eco-DRR and green infrastructure toadvance national and global policy and to providetechnical support for governments, NGO and theprivate sector.Tsuyoshi Inoue is a consultantwith experiences in disaster riskreduction and climate changeadaptation. Over the pastdecade, he has worked withcustomers in public and privatesectors in risk analysis andmodelling projects. He iscurrently employed by a Mitsubishi Research Institute,Inc. as a senior consultant.Ryo Oyama is a consultantworking for Mitsubishi ResearchInstitute, Inc. Through over 100 projects for governmentalorganisations and private sectorcompanies, he has worked as a researcher in the fields ofenergy and the environment and economic evaluation.  * All values in the study were expressed at constant 2019 price levels, in international USD. This accounts for the effects of inflation, and also adjustsfor differences in real prices and values between the countries in which the Mangrove Planting Project was carried out. I thus allows for costs andbenefits generated in different years and places to be directly compared, combined and aggregated. GREEN COASTALINFRASTRUCTURE

Valuing mangroves as an economic part of coastal infrastructure

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Valuing mangroves as an economic part of coastal infrastructure

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