Coastal Services Center

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Analyzing the Cost and Benefits of Human Activities for Indonesian Coral Reefs

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Purpose of Study

Coral reefs in Indonesia have been depleting rapidly because of destructive fishing processes, coral mining, marine pollution, and sedimentation. Aspects such as weak legislation, poor enforcement, and strong incentives have intensified the problem.

The Coral Reef Rehabilitation and Management Project (COREMAP) was created to maintain the coral reef ecosystems and habitats, and this study was conducted to identify and quantify the threat these practices pose to the ecosystem.

Tools Used

Cost-Benefit Analysis
This analysis was used to estimate economic benefit to individuals and loss to society. Calculations were dependent on coastal construction, fisheries, and tourism potential. The cost was the loss to society in terms of reductions in tourism, fisheries, and coastal protection due to the depletion of the reef. The benefit was the total amount of net earning by indiduals over the time period. Comparisons of values between reefs and activities were facilitated by using cost or value per square kilometer.

Predictive Modeling
This tool was used to determine the impact of current destructive activities over a 25 year period. The assumption was made that the level of activity, e.g. cyanide fishing or coral harvesting, would remain constant over that time period. Researchers then calculated the level of the depletion of the reefs over time based on the depletion rate. These calculations were used to determine the long-term costs to society of the destructive activities.

Outcomes

• Each of the five activities researched (poison fishing, blast fishing, coral mining, sedimentation/pollution, and overfishing) showed a negative net benefit to society over the projected time span.
• In some cases, the costs to society were 50 times higher than the total benefits.
• Foreigners and foreign demand were largely responsible for reef decline from cyanide fishing.
• Domestic demand was mostly responsible for reef decline from coral mining, blast fishing, and overfishing.
• These results indicate an immediate need for government action.
• Depending on the issue, management needs to be a community-based initiative, an integrated coastal zone management (ICZM) scheme, or a form of centralized national governance.

Additional Resources

This project was conducted by Herman Cesar of Cesar Environmental Economics Consulting (CEEC) and the Institute for Environmental Studies (IVM), Free University, Amsterdam. He can be contacted at herman.cesar@ivm.vu.nl.

Articles and Books

Cesar, H. 1996. Economic Analysis of Indonesian Coral Reefs. International Coral Reef Initiative. Work in Progress.

Cesar, H., C.G. Lundin, S. Bettencourt, and J. Dixon. 1997. “Indonesian Coral Reefs: An Economic Analysis of a Precious but Threatened Resource.” Ambio. Volume 26, Number 6. Pages 345 to 350.

Web Sites

Indonesia’s Coral Reefs
A brief summary of key points related to Indonesian coral reefs. Included are descriptions of human interactions with the reef, anthropogenic threats, and coral reef management. From the Terangi Indonesian Coral Reef Foundation.

Reefs at Risk in Southeast Asia – Indonesia
This World Resources Institute article reviews the impact of both human and nonhuman factors on Indonesian coral reefs.