Coral Reef: $142,000 per acre

Coral Reef: $142,000 per acre

A tropical island has valued its natural assets in a bid to retain a conservation-friendly tourist market.

Under the blazing Caribbean sun basks an island no smaller than my own Ontario community. The island of Bonaire and the county of Norfolk share few other similarities. Yes, you can scuba dive in both places. No, not a lot of people have heard of either locale.

So when our dive club visited this Dutch island, it was surprising to see the installation of sewer pipes for the first time in history.

A new treatment plant worth US$35 million is starting to draw waste from resorts, businesses and homes along Bonaire’s coast and inland. Funds from the Netherlands are building a sewage system to European standards.

It seems the environmentalists of the island have miraculously joined forces with the developers to allow for new economic activity while protecting the precious coral reefs that attract millions in tourism revenue each year.

The case of Bonaire’s rebirth in an economic downturn may help the rest of us train our political masters to stop chasing smokestacks and “low hanging fruit”. Investing in infrastructure that supports food production and tourism while simultaneously improving our natural environment may be the better option.

In Bonaire, researchers put a price on conserving nature by gathering opinions from residents and tourists on the value of the land and sea around them.

Bonaire

It’s always 32 C in Bonaire

A Dutch professor, Dr. Dolf de Groot, led an international team to develop the financial value of ecosystems. Backed by a major European university, his team’s new database of natural assets pegged the annual financial contribution of a coral reef at US$142,000 per acre. By comparison, an acre of grassland was valued at US$1,100.

The project led to the expression of a total estimated value of nature in Bonaire as US$105 million per year. De Groot’s project estimated tourism spending in Bonaire at US$125 million annually, 80% of which comes from overnight tourists. Most of the “better spenders” are divers or people with a passion for protecting the marine environment. The remaining tourists arrive on cruise ships for a few hours then leave.

The team asked the lucrative overnight tourists if they would return to Bonaire should the coral reefs deteriorate. No surprise: about half said they would go somewhere else.

The research team went even further, asking hundreds of consumers to put a price on changes to the natural and built environment.

On average, individuals were willing to pay US$21 per month to improve coral reefs from poor to high quality. They were willing to pay US$8 per month to improve beach access by 50%. On Bonaire, grazing wild goats cause soil erosion resulting in pollutants entering the sea and spoiling coral reefs. Respondents were willing to pay US$15 per month to cull the wild goats.

Armed with this information, the researches deduced that “fees for using the nature on the island could be increased without negatively affecting the visitation rate in Bonaire”.

The study criticizes an assumption by politicians that cruise ships encourage repeat visitation. In fact, very few cruise ship passengers return to Bonaire to stay over for longer vacations. In a nutshell, cruise ship patrons admitted to researchers that they could care less if the island deteriorates. Dutch politicians are in love with the island, escaping their damp northern climate as often as possible to assess the situation down south.

Bonaire is not Norfolk County. Since tax regulations were changed by the Netherlands over the past 18 months, income taxes are set at a flat rate. businesses on Bonaire pay zero profit tax and 5% tax on dividends. The island is now one of the Caribbean’s major banking centers, alongside the Bahamas, Cayman Islands, Bermuda and Panama. Among them, these tax havens retain almost $2 trillion in US debt.

Even with that advantage, locals feel less represented, continue to complain that taxes are still too high and entrepreneurs are stifled. They have a point: the new tax regime collected 18% more revenue than the old one. Themandatory sewer hookups are perceived as a burden and the treatment plant is getting mixed reviews.

The lesson from Bonaire is not new: retaining an existing client base is less expensive than attracting a new one. Keep your current clients happy by investing in the quality and reliability of the product that they buy from you. For communities, improving the economic environment for local residents will come from actively improving the natural environment. Our customers in the tourism industry will reward us for it.

As a diver who enjoys Bonaire, you can bet I will return. Not just for a view of the Caribbean, but to explore the breathtaking wonderland of fish and coral below the surface.

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Photo (top): The author Clark Hoskin diving in Bonaire. This Caribbean island frequently receives critical acclaim as a worldwide diving destination by media such as Scuba Diving magazine. Photo by Tracy Haskett.

Clark Hoskin is Manager of Tourism and Economic Development for Norfolk County, home of Long Point Bay, where many Lake Erie shipwrecks can be found by divers. © 2012 Clark Hoskin

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