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Of ECO-TOURISM
2011
In Pulau Payar
MARINE PARK
2011
DEC 2011
All right reserved. No part of this publication may be reproduced or stored in any form
that can be retrieved or transmitted in any form or by any means, electronic or mechanical,
including photocopy, recording or other means, without written permission from the
publisher.
Publisher:
Department of Marine Park Malaysia
Ministry of Natural Resources and Environment
Level 11, Wisma Sumber Asli
No. 25, Persiaran Perdana, Presint 4
62574 Putrajaya
Malaysia
ISBN 978-983-44311 - x - x
Bibliography Citation
Norlena Hasnan, Kamarruddin Ibrahim & et al, Department Of Marine Park Malaysia,
2012, Investigating Total Economic Value of Eco-Tourism in Pulau Payar Marine Park,
Ministry of Natural Resources and Environment, Putrajaya, Malaysia, xxxpp.
Cover courtesy:
Dr. Sukarno Wagiman
Printed by:
CETAKRAPI Sdn Bhd
No. 22, Jalan Sri Ehsan Satu
Taman Sri Ehsan, Kepong
52100 Kuala Lumpur
Tel: 603-6273 6391
Fax: 603-6273 6392
Editors
Dr. Norlena Hasnan
Universiti Utara Malaysia
Kamarruddin Ibrahim
Department of Marine Park Malaysia
Contributors
Prof. Dr. Rushami Zein Yusoff
Universiti Utara Malaysia
Assoc. Prof. Dr. Shahimi Mohtar
Universiti Utara Malaysia
Dr. Nor Hasni Osman
Universiti Utara Malaysia
Azhar Ahmad
Universiti Utara Malaysia
Munauwar Mustafa
Universiti Utara Malaysia
Hasnizam Hasan
Universiti Utara Malaysia
Abdul Ghaffar Salleh
Department of Marine Park Malaysia
Mohd. Zainudin Othman
Universiti Utara Malaysia
Mohd Azril Ismail
Universiti Utara Malaysia
Zulkufli Aziz
Universiti Utara Malaysia
Azahari Ramli
Universiti Utara Malaysia
Acknowledgement
Our heartfelt appreciation goes to all the Project Drafting Team who assisted in making this
research a reality.
We would like to extend our gracious gratitude to all users, stakeholders, agencies and
organization for their constructive comments and which have contributed in making this
study a valuable research and has given the sense of belonging to all who have participate
directly or indirectly. These include invaluable information and facts from the Department
of Marine Park Malaysia (JTLM) and Department of Fisheries that had contributed a lot to
the success of this study.
Editors
EXECUTIVE SUMMARY
Introduction
This work has highlighted the total economic value of the existing marine protected
area (MPA) system with intention, in part, to enhance the biodiversity conservation
activities in this country. In todays environment, even though the MPAs are
increasingly understood, increasing conservation decisions still require dire economic
justifications. However, the benefits of MPA have seldom been quantified, even
internationally, and neither have their opportunity costs. Understanding the costs and
benefits of Pulau Payar Marine Park (PPMP) is also particularly pertinent in view of
existing policies, strategies and action plans.
The aim of this project was to provide preliminary estimates of the costs and benefits
associated with PPMP, in particular, that could potentially lead to ability to estimate
how these costs and benefits might change under different scenarios of other MPA
size and components intensity.
This project works within a Total Economic Value (TEV) framework. TEV
comprises direct use value, indirect use value and non-use value. Direct use value
may be consumptive or non consumptive (e.g. diving). Indirect use value is where
Capture Fisheries
Using published report on landed fish at the access point surveys, the catches attribute
to the presence of fish in PPMP was valued. This was based on the estimated value
per fish to the recreational shore (RM140), The resultant economic value of fish
caught from PPMPs MPA along the Kedah coast was valued at RM123,332,493.30
million per year. This value is estimated to be around RM1.173 billion in 20 years
with 10% discount rate.
Tourism
PPMP has attracted a total of some 96,097 visitors during the 2010 financial year,
attracting total revenues in the region of RM480,485.00 which is the consumer
surplus for PPMP. This is the additional amount that visitors have paid for over
and above what they actually had to pay. For the next 20-year period with the same
conservation fee, the value is going to achieve RM3.7 million at 10% discount rate.
ii
The enjoyment of these nature reserves is derived from marine activities as translated
by 79.20% (snorkeling) and 57.50% (swimming). About 73% of the tourists had
decided to visit this nature reserve way back from their hometowns. Based on the
study, the total expenditure attributed to the PPMP is estimated to be RM19.219
million (96,097 x RM200.00), including consumers surplus.
Aesthetics
The Aesthetics values for PPMP are confined to coral reef and reef fish values. Due
to unavailability of information, the coral reef value was excluded from the TEV
calculations. However, the reef fish value surrounding the circumference of 2 nautical
miles of PPMP as per year was valued at RM50.6 million. At discount rate 10%, the
present aesthetic value over 20-year period is expected to be RM481.7 million.
Coastal Protection
By using Benefit Transfer method, for an estimated 0.251km2 of coral reef surrounding
PPMP, it was found that approximately the total value of coastal protection to conserve
coral reef in year 2010 was around RM217,256.19. The present coastal protection
value over 20-year period with 10% discount rate is estimated at RM2.07 million.
Bequest value
The bequest value of the MPA was determined using the Contingent Valuation Method
which elicits peoples willingness to pay to retain or improve an environmental
amenity or to prevent its loss. Respondents involved in the survey were predominantly
locals. Only 37% are foreign citizens including Europeans and East Asia. Since
the sample size was too small, the quantitative estimates only restricted to these
respondents. The survey also did not capture a significantly representative group in
terms of country of origin, income and race.
On average, the overall willingness to pay (as a once-off payment), meant to
conserve for future generations or equates the future value of the current system, was
iii
Carbon Sequestration
Considering the cost of USD2,700 per hectare per year as the basis for calculation,
it was identified that the cost for carbon sequestration in the PPMP region for 2010
was around RM213,206.08. At 10% discount rate, the carbon sequestration is valued
for 20 year period by RM2.03 million.
RM1,268,480.40 million. This figure could be translated into the willingness to pay
of an additional RM12.60 per person for local tourists and an additional RM14.30 per
person for foreign tourists or an additional RM13.20 in general. The average present
bequest value for the next 20-year period (discount rate at 10%) is going to increase
to RM12.1 million. It should be noted that this study should only be considered as a
preliminary estimate since the result was generated from a small sample size.
Management costs
For the financial year of 2010, the management cost (maintenance and research)
incurred on PPMP was approximately RM1.3 million which did not reveal economies
of scale. However, actual management costs are not the same as ideal management
costs, and these costs are low compared the global average. The expected present
value of maintenance cost over 20-year period is estimated at RM 913,302.12, where
as the present value of research and education cost is expected at RM 11.4 million for
the same time period at 10% discount rate.
Conclusion
This study has found that PPMP coast provide substantial value over and above the
value that other coastal areas would otherwise generate. The total economic value
of the PPMP includes the catchment of fish which add value to the commercial
fisheries in surrounding areas, is estimated to be RM174 million (USD55.3 million)
for year 2010. The non-use value of the PPMP, when estimated as an annual value,
is also substantially greater than the use value alone. This is a substantial cost,
which therefore requires that the overall costs and benefits are compared in order to
determine if increasing protection incurs an overall gain or loss in welfare.
iv
Using the findings reported in the preceding chapter, we estimated that the present
value of PPMP over a 20 year period, using a discount rate of 10% is RM1.7 billion
(USD 530 million). The most important note is that the costs of PPMP as an MPA
are outweighed by the benefits. This is in spite of the fact that both, the costs and
benefits were conservatively estimated.
Table of Content
Table of Contents
Executive Summary
List of Table
List Of Figures
xi
1.2 Ecotourism
8
9
2.0 Introduction
10
11
14
14
15
15
17
17
19
20
20
17
22
22
22
3.3.4 Aesthetic
22
23
23
23
24
24
24
24
25
vi
4.0 Introduction
26
26
27
28
29
29
30
31
31
33
33
36
37
b. Value of Tourism
37
38
d. Value of Aesthetics
39
40
40
41
42
Chapter 5 Conclusion
References
43
47-56
Appendices
Appendix A1: Present Value (PV) of Capture Fisheries at 5% discount rate for 5,
10 and 20 years respectively
Appendix A2: Present Value (PV) of Tourism at 5% discount rate for 5, 10 and 20
years respectively
Appendix A3: Present Value (PV) of Maintainance cost at 5% discount rate for 5,
10 and 20 years respectively
Appendix A4: Present Value (PV) of Research Cost at 5% discount rate for 5, 10
and 20 years respectively
Appendix A5: Present Value (PV) of Aesthetic Value at 5% discount rate for 5, 10
and 20 years respectively
Appendix A6: Present Value (PV) of Coastal Protection at 5% discount rate for 5,
10 and 20 years respectively
Appendix A7: Present Value (PV) of Carbon Sequestration at 5% discount rate for
5, 10 and 20 years respectively
Appendix A8: Present Value (PV) of Bequest Value (mean WTP) at 5% discount
rate for 5, 10 and 20 years respectively
A11-A11
vii
Appendices A
Appendices B
B1-B11
Appendix B1: Present Value (PV) of Capture Fisheries at 10% discount rate for 5,
10 and 20 years respectively
Appendix B2: Present Value (PV) of Tourism at 10% discount rate for 5, 10 and 20
years respectively
Appendix B3: Present Value (PV) of Maintainance cost at 10% discount rate for 5,
10 and 20 years respectively
Appendix B4: Present Value (PV) of Research Cost at 10% discount rate for 5, 10
and 20 years respectively
Appendix B5: Present Value (PV) of Aesthetic Value at 10% discount rate for 5, 10
and 20 years respectively
Appendix B6: Present Value (PV) of Coastal Protection at 10% discount rate for 5,
10 and 20 years respectively
Appendix B7: Present Value (PV) of Carbon Sequestration at 10% discount rate
for 5, 10 and 20 years respectively
Appendix B8: Present Value (PV) of Bequest Value (mean WTP) at 10% discount
rate for 5, 10 and 20 years respectively
Appendix B9: Present Value (PV) of Bequest Value (minimum WTP) at 10%
discount rate for 5, 10 and 20 years respectively
Appendix B10: Present Value (PV) of Bequest Value (maximum WTP) at 10%
discount rate for 5, 10 and 20 years respectively
Appendix B11: Net Present Value at Pulau Payar at 10% discount rate
Appendices C
viii
Appendix C1: Present Value (PV) of Capture Fisheries at 15% discount rate for 5,
10 and 20 years respectively
Appendix C2: Present Value (PV) of Tourism at 15% discount rate for 5, 10 and 20
years respectively
Appendix C3: Present Value (PV) of Maintainance cost at 15% discount rate for 5,
10 and 20 years respectively
C1-C11
Appendix C4: Present Value (PV) of Research Cost at 15% discount rate for 5, 10
and 20 years respectively
Appendix C5: Present Value (PV) of Aesthetic Value at 15% discount rate for 5, 10
and 20 years respectively
Appendix C6: Present Value (PV) of Coastal Protection at 15% discount rate for 5,
10 and 20 years respectively
Appendix C7: Present Value (PV) of Carbon Sequestration at 15% discount rate
for 5, 10 and 20 years respectively
Appendix C8: Present Value (PV) of Bequest Value (mean WTP) at 15% discount
rate for 5, 10 and 20 years respectively
Appendix C9: Present Value (PV) of Bequest Value (minimum WTP) at 15%
discount rate for 5, 10 and 20 years respectively
Appendix C10: Present Value (PV) of Bequest Value (maximum WTP) at 15%
discount rate for 5, 10 and 20 years respectively
Appendix C11: Net Present Value at Pulau Payar at 15% discount rate
Appendices D Questionnaires
ix
List of Table
Table 1.1 Number of visitors to Pulau Payar Marine Park
Table 3.1 Calculation of capture fisheries present value at 10% discount rate for 10 years 21
Table 4.1 Nationality of Tourists
27
32
32
33
37
38
39
39
40
40
41
41
21
27
Figure 3.2 The Total Economic Valuation (TEV) Model for Pulau Payar
32
32
33
37
38
39
39
40
40
41
41
xi
List of Figures
1.4
The Pulau Payar Marine Park Centre was open to public in 1989, with restriction
as fisheries prohibited area. This island was gazette as a marine park in 1994. The
establishment of this island as a marine park is the first step to conserve marine
resources from future impact of tourism on the island itself. Nowadays PPMP is
receiving pressure from influx of visitors. The total number of visitors to PPMP has
been increased in every year (as in Table 1.1).
COUNTRY OF ORIGIN
NUMBER OF VISITORS
LOCAL
19,944
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
LOCAL
FOREIGN
86,836
38,027
89,514
56,259
77,516
44,291
70,393
36,282
98,990
19,607
74,492
26,043
86,605
24,580
86,049
23,298
72,773
25,454
77,412
26,429
69,668
106,780
127,541
133,775
114,684
135,272
94,099
112,648
110,629
96,071
102,866
96,097
Research Impacts
1.8.1 Contributions to Economy
a. Able to draws a significant amount of visitors (domestic and foreign)
into PPMP
b. Able to identify total economic impact in terms of gross output
(i.e. revenue) and number of job opportunities (i.e. number of workers
and wages) in the existing economy related to PPMP per year.
c. Able to compare the growth of total economic impact to previous years
d. Able to enhance public awareness on the existence PPMP as a regional
economic growth center.
This study is deemed to identify some information on total economic values of PPMP
which has never been acknowledged before. This would translate, in isolation, the
values of direct and indirect marine inventory. Furthermore, this study will establish
a mathematical model that will be flexible enough to perform similar evaluations on
other Marine Parks in this country. The significance of these resources to Malaysia
will be analyzed based on:
1. Their contribution to the national economy (in terms of Gross Domestic Product
(GDP) percentage, and generation of Government revenue).
2. Their roles (beneficial and adverse) in the conservation of the environment.
(Basiron, 1995).
10
Tourism
Recreation
Research
Education
Aesthetic
Indirect Use
Biological support to :
Fisheries
Turtles
Sea birds
Non-use Value
Existence Value
Endangered species
Charismatic species
Threatened species
Cherished reefscapes
Physical protection to :
Ecosystems
Landforms
Navigation
Coastal extension
Global life support :
Calcium store
Carbon store
Decreasing tangibility of value to individuals
Use value can be divided into direct use and indirect use value (Yeo, 1998).
Direct use values refer to ecosystem goods and services that are used
directly by human beings. They include the value of consumptive uses such
as harvesting of food products, timber for fuel or construction, and medicinal
products and hunting of animals for consumption (Pagiola et al., October
11
12
In general, direct use values can be considered as the most easiest variable
to be measured, since they usually involve observable quantities of products
whose prices can usually also be observed in the market-place. Recreation
is also relatively easy to value as the number of visits is directly observable.
Assessing the benefit received by visitors is more difficult, but a large body
of literature has developed to tackle this problem, mainly using surveys
of tourists actual travel costs or of their stated willingness to pay to visit
particular sites.
Some argue that diverse ecosystems are more resilient and thus provide a kind
of natural insurance against climatic and other risks (Perrings, 1998). Others
suppose that the likelihood of finding useful products in nature varies with
the number of natural expressions considered or, in other words, that diverse
ecosystems are more likely to contain economically useful plants, animals or
biological compounds (Laird and ten Kate, 2002; Simpson and others, 1994;
Barbier and Aylward, 1996; Rausser and Small, 2000). Finally, there is some
13
14
Due to the nature of Pulau Payar as the protected marine park that prohibits
the consumptive uses of its resources, this research will focus on the
non-consumptive uses of its resources as suggested by Pugh (2008). However,
instead of holiday tourism, cruising and leisure craft services, this research
will focus on leisure snorkeling as the main non-consumptive uses; while
for research and development, the focus of this research will be on higher
education institutions research and public sector research for the purposes of
knowledge and public policy.
15
16
Indentify Objective
Framework
Literature review
(Workshop 3)
No
Unexpected
weather
conditions
Interview at Alor
Setar
May
Site Visit 1
1 day trip
Site Visit 2
Meeting identify
info needed
June
Interview at
Penang
Identification
Feasible variable
Trip 1-Distribute
Questionnaire at
PPMP
July
Contact Marziana
Fisheries Institute
Terengganu
Dept. of fisheries
Penang
August
Face to face
Interview at Dept of
Fisheries Putrajaya
Trip 2-Distribute
Questionnaire at
PPMP
Feasible research
Framework
Interim report
(Workshop 4)
Analysis data and
report writing
(Workshop 5)
Meeting Review interim
report
1st draft final report & presentation JTLM
Sept
Oct
17
Idea
Generation
(Workshop 1)
April
Nov
2011
18
Extractive
Capture
Fisheries
Non-Extractive
Tourism
Research /
education
Aesthetic
Indirect Use
NON-USE VALUE
Bequest Value
This model is an adaptation from Yeo (1998), where all the variables except captured
fisheries under sub-component extractive direct use had been considered under
different categories. It was due to specific policies applied to Pulau Payar that outlined
prohibitions for all catchments, harvest and related activities within Pulau Payar and
two nautical miles sea zone from the shore measured at the lowest low tide. In this
study, we identified coral reef and aquarium fishes as an aesthetic component which
fell under non-extractive category.
19
Figure 3.1: The Total Economic Valuation (TEV) Model for Pulau Payar
Investigating The Total Economic Value Of Eco-Tourism In Pulau Payar Marine Park.
JABATAN
TAMAN LAUT MALAYSIA
2011
3.2.1
TEV Mathematical
Model
3.2.1 TEV
Mathematical
Model
In
value of
of each research
research variables,
variables, this
this study
study employed
employed
In order
order to
to evaluate
evaluate the
the value
TEV
equation
(1) (1)
proposed
by OGarra
(2007) (2007)
which was
adopted
TEVmathematical
mathematical
equation
proposed
by OGarra
which
was
from
Boardman
et al.(2001).
This mathematical
equation
reflected
the costadopted
from Boardman
et al.(2001).
This mathematical
equation
reflected
the
benefit
analysis
which which
took in took
account
the gross
cost, discount
rate and
cost-benefit
analysis
in account
thebenefits,
gross benefits,
cost, discount
number
yearsofthat
explained
the areas
of study.
rate and of
number
yearssignificantly
that significantly
explained
the areas
of study. The
The
mathematical
mathematicalequation
equationcan
canbebeseen
seenasasfollows:
follows:
NPV =
netpresent
presentvalue
value
NPV
= net
B
= gross annual economic benefits, over n years, at a discount rate of i
=gross annual economic benefits, over n years, at a discount rate of i
i
= discount rate
i
= discount rate
C
= cost per year
C
=
per year
n
= cost
number
of years that we are interested
theofdiscount
used
in the valuations of marine resources
nEmpirically,
= number
years thatrates
we are
interested
ranged between 5% and 15% (Gustavson, 2000). The calculation of equation
Empirically, the discount rates used in the valuations of marine resources ranged
(1) utilized a few discount rates within that range.
between 5% and 15% (Gustavson, 2000). The calculation of equation (1) utilized
a few discount rates within that range.
20
Table 3.1: Type of benefits, source of data and valuation technique used
COMPONENTS
SUBCOMPONENTS
TYPE OF BENEFIT
/ COST
SOURCE OF
DATA
VALUATION
TECHNIQUE
USE VALUE
Direct Uses
1. Capture
Fisheries
2. Tourism
3. Research /
education
4. Aesthetic
Coral reef
Aquarium fish
Fishery
Department
JTLM
JTLM
Production
Approach
Production
Approach
Secondary data
based on
market prices
Production
Approach
5. Coastal
protection
6. Carbon
sequestration
Secondary data
based on
empirical study
Benefit Transfer
7. Bequest Value
Survey in Pulau
Payar
WTP
Indirect Uses
NON-USE
VALUE
Benefit Transfer
Table 3.1: Type of benefits, source of data and valuation technique used
3.3
21
3.3 Variables
Used (Operational Definitions)
3.3.1 Capture fisheries
3.3.1
Capture fisheries
The capture fisheries were defined as the catchment done outside the two
The
capture fisheries were defined as the catchment done outside the two
nautical mile sea zone from Pulau Payar shore measured at the lowest low tide.
nautical
milearea
sea for
zonethefrom
Pulaufisheries
Payar shore
measured
the lowest
low
The landing
captured
included
Kuala at
Kedah
and Kuala
tide.
landing
area for
thethat
captured
fisheries
Kualathe
Kedah
and
Muda.The
The
assumption
was
Pulau Payar
hadincluded
always been
breeding
Kuala
Muda.
assumption
wasfrom
thatcoral
Pulau
Payar
hadfishing
always
beenin the
place for
fishesThe
and would
move out
area
to many
areas
the
breeding
place forespecially
fishes andnearby
would Kedah
move out
fromThe
coral
area
many
fishing
Strait of Malacca
water.
data
ontothe
amount
of
areas in the Strait of Malacca especially nearby Kedah water. The data on the
amount of capture fisheries were based on secondary data obtained from the
21
Department of Fisheries in Kedah.
22
23
24
ECONOMIC VALUE
PER YEAR
Capure Fisheries
Benefit
Tourism
Benefit - Cost
Cost
Aesthetic
Coral
Aquarium fishes
Benefit
Coastal protection
Benefit
Carbon sequestration
Benefit
Bequest Value
Benefit
TOTAL
[........... , ...........]
The range of values presented = the lower bound and upper bound of
bequest values
25
PV (10-year
period, i=10%)
Percent
62.3
4.7
7.5
4.7
2.8
1.9
2.8
3.8
1.9
.9
1.9
1.9
.9
.9
.9
100.0
27
Country
Malaysia
China
India
Germany
Russia
Ireland
France
Great Britain
Singapore
Thailand
Australia
USA
Austria
Japan
Belarus
Total
28
93.4%
3.8%
0.9%
1.9%
Satun
Penang
Langkawi
Kuala
Kedah
82%
First
Time
Less than
3 time
Between
3-5 times
4%
More
than 5
time
29
9%
5%
Num. Of
Tourists
Percent
RM0.50
5.7
RM1.50
6.6
RM2.00
1.9
RM3.00
1.9
RM5.00
14
13.2
RM9.00
0.9
31
31
Investigating
The Total Economic
Of Eco-Tourism In Pulau Payar Marine Park.
JABATAN
TAMAN
LAUT Value
MALAYSIA
RM10.00
21
19.8
RM15.00
1.9
RM20.00
8.5
RM25.00
4.7
RM30.00
11
10.4
RM40.00
3.8
RM50.00
10
9.4
RM60.00
1.9
RM70.00
2.8
RM80.00
0.9
RM90.00
RM100.00
5.7
Total
106
100.00
Mean
2011
RM13.20
The result showed that the mode is RM10 with 21 number of respondents, followed by RM 5 (14
respondents), RM30 (11 respondents), RM50 (10 respondents), and RM20 (9 respondents).
The mean amount among the respondents is RM13.20 and this result includes both local and
foreign tourists.
32
Amount Of Fee
Percent
RM0.50
6.1
RM1.50
9.1
RM2.00
1.5
RM3.00
1.5
RM5.00
12
18.2
RM9.00
1.5
RM10.00
11
16.7
RM15.00
1.5
32
4.8
RM20.00
8.33
RM25.00
4.55
RM30.00
10.6
RM40.00
RM50.00
9.1
RM60.00
3.0
RM70.00
1.5
RM80.00
RM90.00
RM100.00
5.7
Total
66
100.00
Among local visitors, the mode for the highest user fee that they are willing to pay is RM5 with
12 number of respondents, followed by RM 10 (11 respondents), RM30 (7 respondents), RM50
(6 respondents), and RM1.50 (6 respondents). The mean amount among local visitors is
RM12.60.
4.9
According to Table 4.5, among foreign visitors, the mode for the highest user fee that they are
willing to pay is RM10 with 10 number of respondents, followed by RM 20, RM30, RM40, and
RM50, with 4 respondents each. The mean amount among foreign visitors is RM 14.30.
Amount of Fee
Num. of Foreigners
Percent
RM0.50
RM1.50
2.5
RM2.00
2.5
RM3.00
2.5
RM5.00
RM9.00
RM10.00
10
25
RM15.00
2.5
33
33
Investigating
The Total Economic
Of Eco-Tourism In Pulau Payar Marine Park.
JABATAN
TAMAN
LAUT Value
MALAYSIA
4.10
RM20.00
10
RM25.00
RM30.00
10
RM40.00
10
RM50.00
10
RM60.00
RM70.00
RM80.00
2.5
RM90.00
RM100.00
2.5
Total
40
100.00
2011
In this last section, findings on respondents perceptions on the level of attractiveness of Pulau
Payar Marine Park are being presented. There are four dimensions of attractiveness that were
being assessed. The four dimensions are the coral reef attractiveness, coral fish attractiveness,
avi fauna attractiveness, and flora attractiveness.
Figure 4.7 below shows that only 11 percent of the respondents among local and foreign
tourists answered high and very high for the influence of attractiveness of coral reef on their
decision to go to Pulau Payar Marine Park. The two highest percentages of respondents
choice were 44 percent for moderate and 30 percent for low.
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34
35
35
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2011
At almost the same percentage as the influence of avi fauna attractiveness on their decision to
go to Pulau Payar Marine Park, 43 percent of the respondents gave a moderate rating while 31
percent of the respondents gave a high rating for the influence of flora attractiveness on their
decision to go to Pulau Payar Marine Park.
All in all, the rating of the level of attractiveness of Pulau Payar Marine Park was at a moderate
level for all four dimensions of attractiveness. However, for coral reef and coral fish influence on
the decision of the respondents to visit the Marine Park, the next highest rating was at a low
level; while for the influence of avio fauna and flora on the decision of the respondents to visit
the Marine Park, the next highest rating was at a high level.
4.11
The total economic value (TEV) of Pulau Payar Marine Park (PPMP) is estimated based
on seven values of research variables.
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36
4.11.1
Capture fisheries are considered to have significant impact on the TEV of PPMP. Using
retail value of marine fish landings (Department of Fisheries, 2010) at Kedah coast the
catches attribute from the presence of fish in PPMP was valued. In 2009, the total value
of fish landings in Kedah was RM880,946,381.00. Meanwhile the contribution from
Pulau Langkawi was around 14% of the total capture fisheries in Kedah (Mahyam et.
al., 1998). Thus, this study used 14% as a basis in estimating the contribution
percentage of PPMP towards the total capture fisheries. Table 4.6 indicates the only
one extractive value under TEV component associated with present values (PVs).
Table 4.6: Present Value of Capture Fisheries
Present Value
PV over 10-year period (RM)
PV over 20-year period (RM)
i=5%
1,075,673,315.07
1,660,327,967.41
i=15%
742,309,741.46
895,311,450.64
The resultant economic value of fish caught from PPMPs MPA along the Kedah coast
is valued at RM 123,332,493.30 million per year (refer to Appendix B1). The PV is
estimated to be within RM 895 million to RM1.660 billion in 20 years at 5% - 15%
discount rate.
4.11.2
Value of Tourism
attracting total revenues in the region of RM480, 485.00 which is the consumer surplus
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PPMP has attracted a total of some 96,097 visitors during the 2010 financial year,
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for PPMP. This is the additional amount that visitors have paid for over and above what
they actually had to pay which is RM 5.00 per person. To preserve the environment and
maintain the cleanliness of PPMP, JTLM had spent almost RM8, 000 per month which
total-up the cost to RM96,000 yearly. The PV of gross benefit achieved from tourism
over 10 and 20 year period is ranging from RM2.9 million and RM3.5 million (at 15%
discount rate) to RM4.2 million and RM6.5 million (at 5% discount rate) for these two
consecutive periods. Whilst the PV of the maintenance cost over 10 and 20 year period
are within RM 577,802 and RM 696,896 (at 15% discount rate) to RM 837,287 and RM
1.2 million (at 5% discount rate) for the same two periods. The detail PVs are shown in
Table 4.7.
Table 4.6: Net Present Value of Tourism
Present value
i=10%
i=15%
4,190,662.81
3,432,857.33
2,891,928.04
6,468,390.14
4,571,124.66
3,487,999.88
837,286.55
685,878.44
577,801.79
1,292,372.19
913,302.12
696,895.82
3,353,376.25
2,746,978.88
2,314,126.26
5,176,017.94
3,657,822.55
2,791,104.06
Overall, the net present values (NPVs) over 10-year period are RM 3.4 million, RM 2.7
million and RM 2.3 million at 5%, 10% and 15% discount rates respectively.
Furthermore, the enjoyment of these nature reserves is derived from marine activities
as translated by 79.20% (snorkeling) and 57.50% (swimming), while, about 73% of the
tourists had decided to visit this nature reserve way back from their hometowns. Based
38
on the study, the total expenditure attributed to the PPMP is estimated to be RM19.219
million (96,097 x minimum RM200.00), including consumers surplus.
38
The research budget allocated to JTLM was around RM900, 000, while an expense on
education activities was RM 300,000 for a financial year 2010. Thus the total value is
expected to be RM 1.2 million a year. However the actual cost spends exactly to PPMP
is not available. Table 4.7 indicates PVs of the research and education cost.
Table 4.7: Present Value of Research and Education Costs
Present Value
i=5%
PV of cost over 10-year period (RM)
PV of cost over 20-year period (RM)
10,466,081.92
16,154,652.41
i=15%
8,573,480.53
11,416,276.46
7,222,522.35
8,711,197.77
The estimated PV of cost for 10 year period is within RM 7.2 million to RM10.5 million
and for 20 year period is within RM 8.7 million to 16.2 million within the three discount
rates.
4.11.4
Value of Aesthetics
The aesthetics values for PPMP are confined to coral reef and reef fish values. Due to
unavailability of information, the coral reef value was excluded from the TEV
calculations. According to Alias (2008), the average density of coral reef fish population
inside the PP protected area was 29,000kg/km2. Meanwhile the sea zone in the
protected area in km2 is approximately to be 50.43km2. Thus, based on the minimum
market price for reef fishes (USD11/kg = RM34.62/kg), the reef fish value surrounding
the circumference of 2 nautical miles of PPMP as per the year was valued at RM 50,
636, 375.68 (refer Appendix A5, B5 & C5). The estimated PVs for 10 and 20 year
period are illustrated in Table 4.8.
Present Value of Aesthetics
Present value
i=10%
i=15%
N/A
N/A
N/A
39
Table 4.8:
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Of Eco-Tourism In Pulau Payar Marine Park.
JABATAN
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MALAYSIA
N/A
2011
N/A
N/A
53,348,522.04
44,346,836.85
37,785,748.70
87,556,304.49
61,874,867.55
47,213,661.11
At 10 % discount rate, the present value for reef fishes to be around 62 million in 20
years.
4.11.5
Value of Coastal Protection
Based on Constanza et al (1997), the value of coastal protection provided by reefs was
at USD 275, 000 (RM 865, 562. 50 as at USD 3.1475 per RM1.00) per km2 of reef per
year. By using Benefit Transfer method, for an estimated 0.251km2 (LEK Report) of
coral coverage in PPMP, it was found that approximately the total value of coastal
protection by coral reef per year is around RM 217, 256.19 (refer Appendix A6, B6 &
C6). Thus, the present values for 10 and 20 year periods are shown in the Table 4.9.
i=10%
i=15%
1,894,850.88
1,552,201.41
1,307,614.73
2,924,748.49
2,066,880.58
1,577,134.68
At 10% discount rate, the coastal protection is valued for 20 year period at RM 2.07
million.
4.11.6
Considering the benefit of carbon sequestrated by coral reef which is valued at USD
2,700 (RM8, 498.25) per hectare per year (Emerton & Kekulandala, 2003), this study
transferred that benefit as the basis for calculation. For 25.1 hectares of coral coverage
40
in PPMP it was identified that the value for carbon sequestration in the PPMP region per
year is RM 213, 306.08. Table 4.10 indicates the PVs for both study periods.
40
i=10%
i=15%
1,860,399.04
1,523,979.57
1,278,725.01
2,871,571.25
2,029,300.94
1,542,290.34
At 10% discount rate, the carbon sequestration is valued for 20 year period by RM 2.03
million.
4.11.7
The bequest value of the MPA was determined using the Contingent Valuation Method
which elicits peoples willingness to pay to retain or improve an environmental amenity
or to prevent its loss. Respondents involved in the survey were predominantly locals.
Only 37% are foreign citizens including Europeans and East Asia. Since the sample
size was too small, the quantitative estimates only restricted to these respondents. The
survey also did not capture a significantly representative group in terms of country of
origin, income and race.
On average, the overall willingness to pay (as a once-off payment), meant to conserve
for future generations or equates the future value of the current system, was RM1,
268,480.40 million. This figure could be translated into the willingness to pay of an
for foreign tourists or an additional RM13.20 in general. It should be noted that this
study should only be considered as a preliminary estimate since the result was
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additional RM12.60 per person for local tourists and an additional RM14.30 per person
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generated from a small sample size. For economic value in 10 year and 20 year
periods, the values are illustrated in Table 4.11.
i=5%
11,063,349.81
17,076,549.96
419,066.28
646,839.01
i=15%
7,634,690.03
9,208,319.69
289,192.80
348,799.99
The economic value per year for each of components of TEV is shown in Table 4.12.
The results indicate that capture fisheries contribute almost 70% to the TEV and
followed by aesthetic value of 29%. Where as, other components only contribute for the
remaining 1% of the total economic value per year. This study found that the value is
within RM174 million (USD55.3 million) to RM175 million (USD55.7 million) per year. In
the next 20 year period, TEV for PPMP is estimated to be nearly RM 1.7 billion (USD
530 million) with 10% discount rate.
Table 4.12: Economic values of Pulau Payar Marine Park
Component of TEV
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Capture Fisheries
Tourism
Research / Education
Aesthetic
2,066,880.58
2,029,300.94
457,112.47
12,067,769.11
1,651,858,760.75
1,663,469,417.39
43
Coastal protection
Carbon sequestration
Bequest Value
min WTP
ave WTP
TOTAL
LOWER BOUND
UPPER BOUND
43
The goal of this study is to provide preliminary estimates of the costs and benefits
associated with Pulau Payar Marine Park, in particular, that could potentially lead
For the TEV, this study employed TEV mathematical model that concentrates on
the cost and benefit analysis. It is found that PPMP coast provides substantial values
illustrating the significance of the PPMP to the nation. The values involved can be
summarized as follows:
Capture Fisheries In this study the capture fisheries element is based
on the published report on landed fish at the access point surveys, the
catches attribute to the presence of fish in Pulau Payar Marine Park was
valued. The resultant economic value of fish caught from PPMPs MPA
along Kedah coast was valued at RM123,332,493.30 million per year.
This value is estimated to be around RM1.173 billion in 20 years with
10% discount rate.
45
In this study, the data collection method used was structured questionnaire that
covered direct use, indirect use and non-use value in terms of awareness and bequest
value in view of willingness to pay. All these dimensions measure the impact and
the effect of the Total Economic Value of Pulau Payar Marine Park. Series of survey
were carried out in 4 days on a total of 120 visitors. Since this study was a crosssectional study, 120 respondents are considered sufficient in representing the whole
population of Pulau Payar visitors. The tool used to analyze the data is SPSS 18 and
applied descriptive analysis in presenting the information.
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Tourism In 2010 financial year the total of 96,097 visitors had visited
Pulau Payar Marine Park which attracted gross revenues in the region
of RM480,485.00. This is the additional amount that visitors have paid
for over and above what they actually had to pay. For the next 20-year
period with the same conservation fee, the value is going to achieve
RM3.7 million at 10% discount rate.
Aesthetics Values This value confined to the coral reef and reef fish
values. For this study, the coral reef value was excluded from TEV
calculations model because of the unavailability of coral reef data.
However the reef fish value surrounding 2 nautical miles of PPMP as
per year is estimated at RM 50.6 million. At discount rate 10%, the
present aesthetic value over 20-year period is expected to be RM 481.7
million.
This study has provided a thorough outline of the role of Total Economic Value analysis
in promoting the sustainable management of marine protected areas in the PPMP.
The study started from a broad overview of issues surrounding marine ecosystems
and narrowed its focus to the PPMP. Strategies used to combat these problems were
discussed, including all components of Total Economics Value measurement. In
particular, marine protected areas were identified as having high conservation value
despite a number of underlying problems such as conflicts between conservation and
development needs, a lack of well-defined boundaries and scientific rationale and
insufficient funding sources. Economic analysis was presented as a vital strategy
to promote the sustainable management of marine protected areas. The idea of the
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Conclusively, using the findings reported in the preceding chapter, it is estimated that
the Total Economic Value (TEV) of PPMP over a 20 year period, using a discount
rate of 10% is RM1.7 billion (USD 530 million). The most important note is that the
costs of PPMP as an MPA are outweighed by the benefits. This is in spite of the fact
that both, the costs and benefits were conservatively estimated.
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