Saipan reefs worth $61M a year to economy

Everyone that lives here already knows it, and everyone that visits eventually discovers it: Coral reefs are one of the CNMI’s most valuable assets. Ask any visitor why they came, and chances are extremely high that they will mention our marine environment. Whether visiting Managaha, fishing, SCUBA diving, or enjoying other water sports in the calm waters of the lagoon, tourists and residents alike partake daily in activities that directly depend on the reefs. But until recently, we had no idea of the total financial value of our coral reefs. That has now changed, thanks to the Coastal Resources Management Office.

CRMO contracted a team of economists to study the total economic value of Saipan’s coral reef ecosystem, and the report has just been released to the public. Even if you’re not an economist, it’s pretty easy to determine the value of a house—just try to sell it and the market decides what it’s worth. But how do you determine the value of a natural ecosystem that belongs to everyone and cannot be bought and sold? How do we account for the value of all the many functions our reefs provide? Can we put numbers on the pleasure we get from diving in clear waters, from the fulfillment we get in fishing in the same way our parents and grandparents have done, or for the medicinal value of reef plants and animals that have yet to be discovered? According to the team of Pieter van Beukering and Herman Cesar, the answer is yes.

In collaboration with local partners Ivan Groom, John Gourley, and local students, the team interviewed 400 different local households about the way they use the reefs and the value they place on the ecosystem. 800 tourists were also given an exit survey at the airport, 30 hotels and operators were interviewed, and the team spoke with numerous key informants working in the government. After performing a series of complex economic calculations, the team was not only able to calculate a dollar figure for our reefs, but also found some other interesting findings.

First, people’s concerns about the marine environment are linked to their use of that environment. Since most residents interviewed like to snorkel, swim, or wade, it is no surprise that anything impacting those activities was cause for great concern. Therefore, most people cited a decline in water quality as their greatest worry. Following that were issues such as fish abundance, size, and diversity; sedimentation; and decline in coral abundance. Over half of all families surveyed believed that there had been substantial environmental degradation in these areas. Residents were also willing to pay for better protection of the resources. When asked if they would consent to higher taxes if they resulted in environmental improvements, most said “YES!” They would pay for better water quality, more fish, and enhanced recreational experiences.

Second, fishermen in Saipan value the experience of fishing for more than just the food it provides or the income they might make from selling their catch. Fishing is not just a job for most; it’s a lifestyle.

Families were asked, “if you were the governor, what would YOU do to protect Saipan’s reefs?” Enforcement came out as one of the highest ranking items, along with education and improving sewage infrastructure. Interviewees suggested stronger enforcement of both development and fisheries, and higher penalties for violators.

The study also confirmed what we all already know…coral reefs are a prime reason that tourists come to Saipan. Over 69 percent of visitors surveyed had been to Managaha, 17.5 percent participated in SCUBA diving, 17.5 percent in snorkeling, and 20 percent in other water sports, such as parasailing or banana boating. Water-based activities were the ones most appreciated by visitors.

So, let’s get down to the real meat of the study. How much ARE reefs worth? Drum roll please…the total economic value is over $61 million per year! Most of this is based on the value of reef-based tourism. Although the direct value of recreational activities by tourists and locals only comes to about $5.8 million, associated expenditures such as hotel stays and restaurant visits adds up to a total of $42 million! Additionally, reefs help to protect our coasts from storms and erosion. Without them, we would have to somehow replace their services with expensive construction projects. The value of coastal protection was estimated at $8 million annually. The value of fisheries was relatively low, at $1.2 million, while the “amenity” value, or the increased value of real estate due to its proximity to healthy coral ecosystems, was estimated to be $3 million. Our reefs also bring in research funding to the tune of $0.8 million per year. Coral reefs, therefore, are crucial resources to the Saipan economy.

This is yet another example which proves something the administration has stated: Tourists are our “platinum resource.” And if what tourists want is a clean, healthy marine environment, we had better listen. But where should we invest our limited funds? The study looked not only at the total value of the reef ecosystem, but also investigated which specific areas are the most valuable. No surprise here: Managaha Island topped the charts, followed by the Laulau, the Grotto, Obyan, and Bird Island. In fact, when compared with over 100 studies the group has done, Managaha ranks as one of the world’s ten most valuable reefs, at $71,240 per hectare!

With such a world-class attraction in our backyard, are we truly giving it the attention it deserves? According to the economists, not at all. Currently approximately $1 million per year is collected by the Marianas Public Lands Authority in landing fees from visitors. Amazingly, none of that is re-invested into the resource which generates the funds—the island itself. Instead, the money is used for projects such as a head-start center, the construction of the canoe house, and “public sculptures.” All worthy causes, to be sure, but if we do not protect our revenue source, what will we have left? There are many improvements that could and should be made to our management of Managaha. For example, implementing a management program, increasing enforcement, improving the sewage system and other infrastructure, and constructing a visitor’s center are all activities which could be funded by the landing fees.

The study also suggested additional potential sources of funding for improvements. User fees have been used very successfully in countries around the world to generate revenue. Despite the fact that Managaha has one of the highest values in the world per hectare, user fees are among the lowest in the world. Increasing landing fees on Managaha or implementing a fee for divers that visit the Grotto or Laulau could fund many needed projects without decreasing the numbers of tourists that visit our island.

The study had four final recommendations. First, invest in Managaha by implementing a management plan and developing a self-sufficient financial system using the landing fees. Second, address pollution issues from sewage, sedimentation, and urban runoff. Third, capitalize on the importance that residents place on marine ecosystems by involving local communities. And finally, generate financial resources by implementing user fees.

So, next time you get out on a boat, or look out at our lagoon, remember that the reefs are not just beautiful places, they are our island’s greatest resource. (Qamar Schuyler)

(Qamar Schuyler is a Coral Outreach Specialist at the CNMI Division of Fish and Wildlife.)