Seminar on Environment and Development in Vietnam

Friday and Saturday, December 6-7, 1996

Common Room, University House,
and J G Crawford Building, National Centre for Development Studies,
Australian National University

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Cost benefit analysis of a marine park in Vietnam

Mr Jay Roop,
ESSA Technologies, Ltd.

Abstract

The Great Barrier Reef Marine Park Authority and World Conservation Union are assisting the Government of Viet Nam design a Viet Namese Marine Protected Area (MPA) system. One of the first steps to building this system is the identification of potential MPA pilot sites. A number of sites have been proposed, and Cat Ba Island is one of the most strongly supported by Viet Namese national agencies. Situated approximately twenty kilometres east of Viet Nam's northern port of Hai Phong, the proposed site boasts limestone islands, coral reefs, tremendous marine and terrestrial values, commercial fishing values, and ecotourism opportunities.

Although the GOV recognises these values, the economic valuation of Cat Ba as a MPA has yet to be undertaken. As one step to moving towards an economic valuation, this report aims to provide a framework for undertaking a cost-benefit analysis (CBA) of Cat Ba Island as a marine protected area. In designing the CBA framework, this report explores some of the challenges that the analyst will encounter when calculating the economic value of the MPA. These include: 1) difficulties associated with identifying and valuating non-market costs and benefits; 2) intellectual challenges in modelling the physical/ecological impact of the MPA at local and international levels; 3) selection of an appropriate discount rate which truly reflects the opportunity cost of undertaking this project; and 4) dealing with risk and uncertainty within the economic analysis.

As with any CBA, the key designing an accurate and valuable analysis for the proposed Cat Ba Island MPA is to recognise specific areas of weakness, then customise the analysis such that weaknesses are minimised and strengths are maximised. In keeping with this philosophy, this report provides a number of suggestions on how to minimise weaknesses created by challenges such as those mentioned above.

Mr Jay A. Roop
International Division
ESSA Technologies Ltd.
Suite 300, 1765 West 8th Avenue
Vancouver, BC Canada V6J 5C6

Tel: +1 (604) 733-2996
Fax: +1 (604) 733-4657
Email: jroop@essa.com