Department of Water and Environmental Studies
Reliability of Payment for water Resources as an Environmental Service
towards the sustainable management of watershed forests in Zanzibar,
Tanzania: (A Case study of Kiwengwa - Pongwe Forest Reserve)
Thesis Presented to obtain the Degree of Masters of Science in Water
Resources and Livelihood Security – December 2007
Abstract
Currently, there is a great rampage among conservationists looking for useful approaches that can be used to bring efficiency towards conservation of global natural ecosystems. But which approach can be really effective to halt destruction of a particular natural ecosystem where the local people depend on the same ecosystem resources for their livelihoods? Do the local communities accept to refrain themselves from using natural ecosystem resources (loss of free access), which they believe is under their local territory since they are born, without having alternatives that will replace and improve economic gain of their livelihoods? Are the consumers who benefited from the ecosystem services always willing to compensate local communities around natural ecosystem as a means of replacing what they lose?
This study looks at the reliability of Payment for Water Environmental Services (PWES) approach at Kiwengwa-Pongwe Forest Reserve (KPFR) as a device aimed at promoting the sustainable management of KPFR watershed resources without undermining livelihoods of the Kiwengwa-Pongwe local communities. Hoteliers along the Kiwengwa-Pongwe Tourist Area (KPTA) are the potential customers benefiting from water resources found in the KPFR, which is claimed to be deteriorated by the intensity of the livelihood activities of Kiwengwa-Pongwe (KP) local communities. Based on Contingent Valuation Method (CVM), KPTA hoteliers were asked about the amount they would be willing to pay as maximum (WTP) for improvement of water services through sustainable management of watershed areas in KPFR. On the other hand, KP communities were asked what level of compensation they would be willing to accept as minimum amount (WTA) for a loss of free access to KPFR.
Both hoteliers (75 %) and KP communities (91 %) agreed on the establishment of the PWES system. However, there were differences between amount accepted by KP communities (10 US$ per 200 litres) and the amount claimed to be paid by hoteliers (1US$ per 200 litres), thus giving a gap of 9US$. Based on the overall study findings and experiences from other parts of the world where similar systems have been implemented, this issue is negotiable. It is upon existing KPFR management team and proposed board from Zanzibar water authority to launch a constructive dialogue between stakeholders to reach the amount that can be used as compensation causing no harm to both parts and without compromising the sustainable management of KPFR.
Key Words: Zanzibar, Kiwengwa-Pongwe Forest Reserve, Payment for Watershed Environmental Services, Sustainable Management, CVM, WTA and WTP.
Declaration
I, the undersigned, hereby declare that this thesis, submitted for the Master of Science degree in Water Resources and Livelihood Security at the Linkoping University (LIU), is my own work and has not previously been submitted to any other institution of higher education for award of any degree. Furthermore, all sources that I have used or quoted have been indicated or acknowledged by means of a comprehensive list of references.
Signature……….. Date………. (Iddi Hussein Hassan)
Dedication
To my parents,
Fatuma Juma Khamis
And
The late Mr. Hussein Hassan Suleiman,
My wife,
Amina Kombo Mohammed,
My children,
Hamad Iddi Hussein,
Yussra Iddi Hussein,
and
Asya Iddi Hussein,
And my brother
Kombo Hussein Hassan
Acknowledgements
I am very grateful for the support, patience and guidance of some people and institutions during my studies, without which this study would not have been completed successfully. It is to them that I owe my deepest appreciation. For this, I wish to express my genuine gratitude and appreciation to my supervisor, Associate Prof. Hans Holmen, whom despite his many other academic and professional commitments, spared time to guide me to the right direction of my work. His wisdom and commitments to the highest standard enthused and motivated me. Also, I would like to thank Assoc Prof Åsa Danielsson, Dr Julie Wilk, Prof Jan Lundqvist, Prof Lars Rahm, Dr. Mattias Hjerpe, Susanne Eriksson, Ian Dickson and other staff in TEMA, for facilitating my studies at Linkoping University.
I am thankful to the Swedish Institute (SI) and the Swedish International Development Cooperation Agency (SIDA) for providing me with the financial support that enabled me to pursue this Master programme. I also appreciate the support from Department of Water and Environmental Studies at LIU (TEMA) which enabled me to carry out my field work properly.
My special appreciation goes to DCCFF management particularly, Dr. Bakar S Asseid, Mr. Kassim H. Madeweya, and Mr. Makame Kitwana for their assistance and advice during my field work. Mr. Abbas J. Mzee, Mr. Tahir Abass Haji, Mr. Ali Kassim, Mr. Othman, Mr. Jaffar (driver), Mr. Maulid Masoud and Silima Ame, Shehas of Kiwengwa and Pongwe; as well as Mr. Vuai Ame Juma and Vuai Ame Kondo, local assistants; for their assistance in data collection. My gratitude to the Kiwengwa–Pongwe household heads, key informants, DCCFF and Water department staff, and hotel management in the KiwengwaPongwe Tourist Zone for providing the required information and data for this study.
The utmost appreciation goes to Amina my dear wife, without whom this effort would have been worth nothing; my children Hamad, Yussra, and Asya; my mother, brothers and sisters for their encouragement and constant support throughout the period of my studies. Special thanks goes to my friends and fellow students in the programme of Water Resources and Livelihood Security at LIU; particularly Emmanuel, Kinaro, and Yvonne; for their support. My sincere gratitude is extended to all people who contributed directly or indirectly to the completion of my studies.
I wish to thank GOD Almighty for all the privileges he has been giving me. For this I say ‘Praise be to God, Lord of the worlds’.
Table of Contents Page Abstract___________________________________________________________________________i Declaration ________________________________________________________________________ii Dedication________________________________________________________________________ iii Acknowledgements_________________________________________________________________ iv Table of Contents __________________________________________________________________ v Unit of Conversion_________________________________________________________________ vi List of Figures____________________________________________________________________ vii List of Tables ____________________________________________________________________ vii List of Plates _____________________________________________________________________vii List of Annexes___________________________________________________________________viii List of Acronyms and Abbreviations __________________________________________________viii Definition of Terminologies _________________________________________________________viii
CHAPTER ONE: INTRODUCTION_________________________________________________ 1
1.1 BACKGROUND_______________________________________________________________1 1.2 JUSTIFICATION OF THE RESEARCH PROBLEMS_________________________________4 1.3 PROFILE OF THE RESEARCH SITE _____________________________________________5 1.3.1 Geographical Location of the Study Area________________________________________ 5 1.3.2 Scope of the Study__________________________________________________________ 8 1.3.3 Population_________________________________________________________________8 1.3.4 Socio-economic Activities____________________________________________________ 8 1.3.5 Ecology and Climate_________________________________________________________8 1.4 SIGNIFICANCE OF THE STUDY________________________________________________ 9 1.5 LIMITATIONS OF THE STUDY_________________________________________________ 9 1.6 ORGANIZATION OF THE THESIS______________________________________________10
CHAPTER TWO: RESEARCH OBJECTIVES AND METHODOLOGY__________________11
2.1 OBJECTIVES OF THE STUDY_________________________________________________ 11 2.1.1 General Objective__________________________________________________________11 2.1.2 Specific Objectives_________________________________________________________11 2.2 METHODOLOGY USED IN THE RESEARCH____________________________________ 11 2.2.1 Research Design___________________________________________________________11 2.2.2 Research Data Sources______________________________________________________12 2.2.2.1 Secondary Data Collection________________________________________________12 2.2.2.2 Primary Data collection_________________________________________________ 13 2.2.2.2.1 CVM in Collecting WTA and WTP information____________________________13 2.2.2.2.2 Sample Size and Sample Techniques_____________________________________14 2.2.2.2.3 Data Collection Tools_________________________________________________15 2.2.3 Data Treatments, Analysis and Interpretation___________________________________ 16
CHAPTER THREE: LITERATURE REVIEW________________________________________17
3.1 GLOBAL PERSPECTIVES ON MANAGEMENT OF WATERSHED AREAS____________17 3.2 PAYMENT FOR ENVIRONMENTAL SERVICES APPROACH IN THE SUSTAINABLE
MANAGEMENT OF NATURAL ECOSYSTEM____________________________________18 3.3 PAYMENT FOR WATERSHED ENVIRONMENTAL SERVICES (PWES) _____________ 19 3.4 PWES APPROACH IN THE MANAGEMENT OF WATERSHED IN TANZANIA________21 3.5 APPLICATION OF CONTINGENT VALUATION METHOD (CVM) __________________22
3.5.1 Uncertainties of Contingent Valuation Method____________________________________23 3.5.2 Pros and Cons of Contingent Valuation Method___________________________________24 3.5.2.1 Advantages of Contingent Valuation Method__________________________________24 3.5.2.2 Disadvantages of Contingent Valuation Method________________________________25 3.5.3 Reducing Bias when Applying Contingent Valuation Method________________________26
CHAPTER FOUR: RESULTS AND DISCUSSION____________________________________ 27
4.1 HOUSEHOLDS SOCIO-ECONOMIC CHARACTERISTICS__________________________27 4.2 EXISTING POTENTIALS AND CHALLENGES AROUND KPFR_____________________33 4.2.1 Existing Potentials for the Execution of PWES system at KPFR______________________33 4.2.2 Existing Challenges Facing KPFR_____________________________________________ 36 4.3 WILLINGNESS TO ACCEPT COMPENSATION___________________________________39 4.3.1 Responses of WTA from Community___________________________________________39 4.4 WILLINGNESS TO PAY FOR WATER COMPENSATION___________________________43 4.4.1 Sources and Amount of Water used by Hoteliers along KPTA________________________43 4.4.2 WTP from KPTA Hoteliers___________________________________________________45 4.4.3 Distribution of WTP Bids by KPTA Hoteliers____________________________________46 4.5 INSTITUTIONAL FRAMEWORK AND PAYMENT MODALITY IN COLLECTING AND
DISTRIBUTING COMPENSATION PAID TO THE LOCAL COMMUNITIES___________47 4.5.1 Mode of Payment to Collect Compensation______________________________________47 4.5.2 Proposed Payment Routine for Collection of Compensation_________________________48 4.5.3 Institutional Framework of PWES System at KPFR_______________________________ 49 4.6 THE STUDY SUMMARY OF THE MAJOR FINDINGS_____________________________ 50
CHAPTER FIVE: RECOMMENDATIONS AND CONCLUSION________________________53
5.1 RECOMMENDATIONS_______________________________________________________ 53 5.2 CONCLUSION_______________________________________________________________56 REFERENCES__________________________________________________________________58 ANNEXES_____________________________________________________________________ 62 Unit of Conversion
1 barrel of water = 200 litres
List of Figures Page
Figure 1.1: Map of the United Republic of Tanzania showing location of Zanzibar ………...6
Figure 1.2: Map of Unguja Island showing the location of study area in the North Region………7
Figure 1.3: Map of Kiwengwa - Pongwe Forest Reserve in Unguja Island……….7
Figure 3.1: Conceptual Model Comparing PES to other Conservation Approaches………..19
Figure 3.2: Model Identifying Potential Financing Sources for a Conservation intervention…………20
Figure 4.1.1: Kiwengwa Pongwe Households’ Education level……….28
Figure 4.1.2: Households’ main Occupations………..28
Figure 4.1.3: Major Sources of Income of the Kiwengwa Pongwe Local Communities………30
Figure 4.1.4: Households’ Total Income per Year in Tanzania Shilling……….31
Figure 4.4.1: Maximum WTP by KPTA Hotels………..45
Figure 4.4.2: Distribution of WTP Bids by KPTA Hotels………..46
Figure 4.5.1: Propose use of the Compensation by the Communities………49
List of Tables Page Table 4.1.1: Distribution of Main Occupations of the Households Based on Shehia and Gender…….29
Table 4.1.2: Major Source of Income Divided by Shehia and Gender………...31
Table 4.1.3: Total Income of Respondents /Year in Tanzania Shillings Based on Shehia and Gender. 32 Table 4.2.1: Reason for not Participate in Conservation Programs as per Communities and Hoteliers.34 Table 4.2.2: Experience of the Local communities on Compensation based System……….35
Table 4.3.1: Response of WTA by Communities for Compensation to Maintain and Manage KPFR Per 200 litres used by Hoteliers………..40
Table 4.3.2: Mean, Standard Deviation and Coefficient of Variation for WTA by Communities and Hoteliers………..41
Table 4.3.3: Response on How PWES can help the KPFR Communities to Solve Socio-Economic Problems………..41
Table 4.3.4: Negative Impact of PWES for Future Socio-Economic and Livelihood of Communities. 42 Table 4.4.1: Sources and Amount of Water used by Hotels per day………...44
Table 4.4.2: Amount of Water in Litres Extracted Directly from KPFR Grounds and Amount of Water Fees (US $) paid to ZAWA………45
Table 4.4.3: Mean, Total, Standard deviation and Coefficient of Variation of WTP by KPTA Hotels as Compensation to KPFR local Communities……….. 46
Table 4.5.1: Distribution of Mode of Payment to be used in Collecting Compensation as per KPTA Hoteliers and Local Communities………. 47
Table 4.5.2: Proposed Payment Routine and Distribution of the Compensation Paid to Communities.48 List of Plates Page Plate 4.1: View of the Low Tide Sea of the KP beach which is suitable site for Seaweeds farming…..32
Plate 4.2: Sea shells for Sell along Kiwengwa Pongwe Beach, which is mostly done by Women…….32
Plate 4.3: Women Harvesting Seaweeds at Kiwengwa Pongwe Beach………...33
Plate 4.4: Seaweeds drying at KP Beach Prepared for Sell……….33
Plate 4.5: Temporary Shelters under Shifting Cultivation and the Patch left after Cutting Dense Natural Forest of KPFR………..37
Plate 4.6: Forest Guard Shows Machine and Pumps’ Houses outside the Mwanampaji Cave………...43
List of Annexes Page
Annex 1: Frequency tables for Households’ questionnaires output ………...62
Annex 2: Frequency tables for Hoteliers’ questionnaires output ………70
Annex 3: List of Hotels that are found along Kiwengwa Pongwe Tourist Area (KPTA)…………...76
Annex 4: Agreement of Water Abstraction……….77
Annex 5. Research Questionnaires for Hoteliers at KPTA………..78
Annex 6. Research Questionnaire for WTA for Kiwengwa-Pongwe Households ……….82
Annex 7. Interviews guide for Natural Resources Management Officials, key Informants, village elders and Village Conservation Committee (VCCs)………..88
Annex 8. Interviews guide for Zanzibar Water Authority (ZAWA) Officials………89
List of Acronyms and Abbreviations
CBNRM: Community-based Natural Resources management CEPF: Coastal Forest of East Africa
CNR: Commission for Natural Resources CTM: Cost Travel Method
CVM: Contingent Valuation Method
DCCFF: Department for Commercial Crops, Fruits and Forestry GOVT: Government
GoZ: Government of Zanzibar HPM: Hedonic Pricing Method
ICDP: Integrated Conservation Development Project JFM: Joint Forest Management
KP: Kiwengwa-Pongwe
KPFR: Kiwengwa-Pongwe Forest Reserve KPTA: Kiwengwa-Pongwe Tourism Area NGOs: Non-Governmental Organisation(s) PES: Payment for Environmental Services PFM: Participatory Forest Management
PWES: Payment for Watershed Environmental Services
SMZ: Serikali ya Mapinduzi ya Zanzibar (Revolutionary Government of Zanzibar) Tz Shs: Tanzanian Shillings
URT: United Republic of Tanzania VDC: Village Development Committee VLA: Village Local Authority
WTA: Willingness to Accept WTP: Willingness to Pay
WWF: World wide Fund for Nature ZAWA: Zanzibar Water Authority
ZWRMB: Zanzibar Water Resources Management Board
Definition of Terminologies
Community/Communities means Kiwengwa Pongwe Local Communities Government means Government of Zanzibar (GoZ)
CHAPTER ONE: INTRODUCTION 1.1 BACKGROUND
Lack of appropriate and effective approaches for the management of forested watershed areas is a colossal challenge facing the developing world in its ambition to realise both environmental protection and local community livelihoods security. Coase (1960) argued that the common belief is that local
communities inflict harm on natural ecosystem supplying water services and therefore the former must
be restrained from causing harm to the latter. He further suggested that this is a wrong interpretation because we are dealing with a problem of a reciprocal nature, such that in avoiding harm on natural ecosystem would inflict severe harm on local community too.
Management of natural resources demands involvement of important stakeholders, particularly local community around the natural ecosystem. If rural poor community are given these opportunities and technical resources, they can not only reverse environmentally degrading impacts of past land-use practices but also invest in the enhancement of valuable environmental services that ensure sustainable economic gain (Rosa et al., 2004). Consecutively, many practitioners suggest that failure of the public or national institutions to compensate local community as land managers for conserving and provision of environmental services is a key contributory factor to the rapid and environmentally damaging changes in land use that are taking place globally (Pagiola et al., 2005).
Various conservation approaches have been used for management and protection of environment, including command-and-control, Joint Forest Management and production (JFM), Social Market and Integrated Conservation Development Project (ICDP) amongst others. Despite considerable measures undertaken to promote more sustainable use of natural resources around the world, we have yet to witness a reversal in the general trend of environmental degradation (Wunder, 2005). Because of these poor conventional approaches, humans continue to consume more environmental goods and services than nature can sustain, and more harmful substances are discharged into ecosystems than can be naturally absorbed (Pagiola et al., 2005).
In Tanzania, assessment shows that a participatory approach, that involves local communities in development and management of natural resources, has proved to be a more promising way to manage natural resources than continued reliance on protection by centralized government (Alcorn et al., 2002). In this context, participatory forest management (PFM) approach has emerged to be more preferred in the management of natural resources. PFM is a decentralized approach that introduces commitment to
equity in forest management between government authorities and local community with main objectives of ensuring that forest resources, including watersheds products, make real contribution to secure local livelihoods and that by doing so they also secure their future existence.
PFM has varying facets reflecting varying degrees of involvement of local communities in the management of forest resources. PFM has two main scenarios in Tanzania, Joint Forest Management (JFM) whereby villagers and the government jointly manage the forest, and Community Based Forest Management (CBFM) whereby management of the forest is vested wholly in the hands of the local communities. This approach helps to ensure that local people can gain shares in the benefits of natural resources (forestry) and can take decisions about resource matters that affect their lives (Zahabu et al; 2005). For example, carbon sequestration being practiced in Tanzania under CBFM as one kind of payment for environmental services projects, have potentials to earn about 6,500 US$ per year per village and at the same time ameliorate the watershed areas that could also be explored as another source of income for the local communities as environmental services (Zahabu and Jambiya, 2007).
In the Zanzibar islands on other hand, PFM comes forward due to insufficient government resources in terms of manpower and funding that could enable effective and sustainable natural resources (forest) management. For a long time, the Department for Commercial Crops, Fruits and Forestry (DCCFF), which is the mother department responsible for the management and protection of forest resources, has faced a number of implementation problems due to insufficient funds allocated for that purpose. This situation made these natural resources suffer from deterioration. Based on that, DCCFF has adopted the PFM approach (CNR, 1995) as a tool for management and rescue of natural resources including Kiwengwa-Pongwe Forest Reserve (KPFR), which possesses high biodiversity potentials and values. Based on the nature and sensitivity of KPFR, Joint Forest Management which encompasses DCCFF and KPFR surrounding communities as core partners, has been adopted to implement the participatory forest management.
Despite its efficacy, PFM in Zanzibar has revealed weakness on benefit sharing component, which in the case of Tanzania mainland has been incorporated in PFM projects. Lack of incentives for the participating communities has been a weak point of implementing PFM and it is proposed that new ways and institutional set-ups to provide required incentives through market-based environmental services payments have to be developed (Zahabu et al; 2005). Therefore, conservation approaches that
focus on direct payment as compensation for conservation opportunity costs are given more priorities in the management of natural resources in the country.
Kiwengwa-Pongwe forest reserve, which is the focal point of this research, embraces valuable natural resources that accommodate a number of big natural caves with water reservoirs and also has immeasurable protective cover for wildlife, which also contributes to the national economy through ecotourism (Hassan, 2004). However, the forest reserve encountered several obstacles in its management due to insufficient community involvement and lack of benefit sharing mechanism, which lead to deterioration if its environment. This problem could be exacerbated by prevailing climatic condition. Due to the strong solar radiation, Zanzibar as part of east Africa experiences higher evaporation rate per unit area than other regions in the world (Holmen 2003; FAO 1987) which reduces the water level in the ground which usually form aquifers and water springs.
This situation places the island to be vulnerable to any change of its natural ecosystem including forested watersheds and thus accentuates demand for effective strategies to prevent further destructions of its natural resources as well as improving local community livelihoods without harming natural ecological units. Furthermore, forest destruction and illegal extraction of resources from KPFR has been a common practice that jeopardizes the potential services of the forest. The main reason being the fact that most surrounding communities depend on the forest for their livelihoods through hunting, wood cutting (including fuel wood, seaweeds sticks, building poles), lime making, medicinal plant collection (herbalists) and many others.
Payment for water resources, as an ecosystem service recognizing the basic need of stakeholders while protecting the watershed, can be an appropriate tool to tackle existing environmental and socio-economic problems facing KPFR. Under this system, the idea is to set the mechanism whereby those who receive and buy water services (downstream communities) could contribute some payment as compensation to producers of environmental services (upstream communities). The downstream include water service users, and in this case study are Kiwengwa-Pongwe Tourism Area (KPTA) hotels while upstream could be Kiwengwa-Pongwe (KP) communities and institutions responsible for KPFR watershed management.
Unsustainable environmental conservation projects resulted from failure of conventional approaches which did not consider the basic needs of surrounding communities (Pagiola, 2003). This lesson leads
to a search for new perspectives and holistic approaches towards sustainable management of natural ecosystems. The challenging subject is to integrate environmental conservation and economic gain for the environmental conservators (communities) in management of natural resources elements. To solve this dual goal of environmental conservation and economic gain, there is a need of a participatory, multi-sectoral and multidisciplinary approach that addresses and recognizes the linkages between livelihood, land use and watershed conservation.
People cannot protect environment without realizing direct tangible benefits, especially when the protection of concerned ecosystem involves regulating people’s livelihood activities and patterns. Moreover, PWES implementation requires extra care and thorough investigation of their applicability upon prevailing factors like local environment, existing institutional/governmental capacity, political will, nature of the ecosystem, land use practices by local people at the upstream. In this context, it is important to know the willingness and the basic requirements of the concerned stakeholders including preferred institutional framework prior to the establishment and implementation of any conservation approach.
1.2 JUSTIFICATION OF THE RESEARCH PROBLEMS
Kiwengwa-Pongwe forest reserve (KPFR) represents a wider natural ecosystem of coastal forest of East Africa (CEPF, 2005). It is a coral rag forest with high biodiversity resources including varieties of floral and faunal species of rare and endemic status (Hassan, 2004). It also possesses rich water reservoirs that supply water to tourist hotels and communities surrounding the forest. KPFR has big caves of which some are very deep connected with ground water level, where those hoteliers extract water (see front page and plate 4.7). Local communities on the other hand, depend on the same forest for their livelihood activities such as farming, hunting, wood cutting and lime making to get their daily basic needs, thus accelerate the rate of forest destruction and reduce the capacity of the forest to provide ecosystem services.
Department for Commercial Crops, Fruits and Forestry (DCCFF), as the department mandatory for management of natural resources, has been using different strategies to protect KPFR due to its national and international importance. Joint Forest Management (JFM) is one of the tools employed. DCCFF and the surrounding communities are managing this natural forest, which is the only one of its kind in the northern east coast zone of Zanzibar. Moreover, the PFM for benefit sharing is emphasized in the
1997). In addition, communities around KPFR have always contested to blame the government (through DCCFF) for giving priority to conservation issues and ignoring the basic livelihood needs of the community surrounding the conservation areas (Hassan, 2004).
When KPFR surrounding communities have already shown collaborative interest by implementing JFM with DCCFF (Hassan, 2004), it is now the right time to establish market systems as benefit sharing-mechanism which can be incorporated in the existing system as component to hasten and improve local communities’ livelihoods as well as biodiversity status of the forest. However, it is not possible to establish the Payment for watershed environmental services (PWES) system before having basic information concerning a PWES market-based model.
A suggested by Pagiola (2003), PWES is a very important approach towards meeting sustainable economic development of the community at local level and reaching environmental conservation goal with less conflict among stakeholders. Therefore, it is important to have the baseline information that is required for the establishment of payment for water services as ecosystem services in place including the acceptance of the system among stakeholders based on local environment and existing settings for PWES to be executed. The information from the study provides knowledge that enable us to figure out how much PWES is accepted, and if not what are the reasons behind and what next towards conservation endeavour of KPFR. Therefore, this study examines the reliability of payment for water resources as an environmental service in Zanzibar, as the case of Kiwengwa-Pongwe forest reserve.
1.3 PROFILE OF RESEARCH SITE
1.3.1 Geographical location of the Study Area
Zanzibar, which comprises two main islands of Unguja and Pemba and several small islets, is located between latitude 4˚ and 6˚ south and between 39˚ and 40˚ east (Figure 1.1). The islands, which are part of the united republic of Tanzania, lie in the Indian Ocean about 35 km from the Dar es Salaam city coast (Tanzania mainland).
The study was carried out in the north region of Unguja Island (Figure 1.2). Kiwengwa–Pongwe Forest Reserve (KPFR) communities, which is the study area, is located about 37 km north from Zanzibar town (Figure 1.3). KPFR is surrounded by fifteen villages including Kairo, Gulioni, and Kumbaurembo (Kiwengwa), Ndudu, Pongwe, Pwani Mchangani, Kandwi, Kinunduni, Mchekeni, Mgonjoni, Kibuteni, Upenja, Gamba, Mwadudu and Chokaani.
Source, http://www.planet-tz.itgo.com/destinations.html
Figure1.1. Map of the United Republic of Tanzania, showing Zanzibar Islands (Unguja and Pemba) as pointed by arrow.
Source: DCCFF files 2004
Source: Institute of Marine Sciences GIS Unit (2005) Figure 1.3: Map of Kiwengwa Pongwe Forest Reserve in Unguja Island Figure 1.2: Map of Unguja Island showing the location of study area in north region.
Kiwengwa-Pongwe Forest Reserve
UNGUJA ISLAND
KPFR AREA
1.3.2 Scope of the study
Based on the closeness, commitments and dependability towards the Kiwengwa-Pongwe Forest Reserve resources, this research was confined to two shehias (village local authority) of Kiwengwa and Pongwe. These form five villages of enumeration to include Kairo, Gulioni and Kumbaurembo (Kiwengwa) and Pongwe and Ndudu (Pongwe). Information were collected from hoteliers, local authorities, community based groups and other associated stakeholders as the main target groups of the research.
1.3.3 Population
According to the Tanzanian national census of 2002 (URT 2003), the shehia of Kiwengwa dwell in the total of 2,429 people of whom 1,121 are women and 1,308 are men. Pongwe has been occupied by 513 people of whom 260 are women and 253 are men. Kiwengwa and Pongwe comprise the total of 415 and 106 households respectively.
1.3.4 Socio-economic activities
The majority of Kiwengwa and Pongwe inhabitants depend on fishing, agriculture and commercial activities, both small and medium scale projects for their livelihoods. The most important commercial activity is tourist business, which includes possessing local restaurants, tour guide and supply of products to tourist hotels. A total of 14 tourist hotels are found along KPTA in which villagers get employement (Annex 3). Other economic activities include seaweeds farming (mostly for women) and government employment. Despite being the major cause of forest decline, cutting of forest products for trade and domestic purposes serve as another main occupation in the area.
1.3.5 Ecology and climate
Kiwengwa-Pongwe forest reserve is a coral rag type of forest which is found at 0 – 20m above sea level. The forest reserve covers an area of approximately 3324 hectares. As it is for most part of Zanzibar Island, KPFR receive average annual rainfall of about 1750 mm. The area experiences sea breeze with high humidity ranges between 76 to 87 percent. The reserve also is a locale of different kinds of wildlife, which includes rare and endemic species such as adder’s duiker, red colobus monkey and a large number of bird species.
1.4 SIGNIFICANCE OF THE STUDY
The Zanzibar National Forest Policy (CNR 1995) emphasises the need for community-based natural resources management, whereby benefit sharing among stakeholders is considered as the main motivation towards sustainable natural resources management and poverty alleviation. However, incentives that can be used as returns for the local community management team, who offer their services to manage and protect the forested catchments, are absent. To comprehend sustainable management of this dwindling resource in KPFR, there is purposive need of employing an economic component that can reward local community and serve the factual benefit of protecting surrounding natural resources.
This study gives a picture on the acceptability of PWES as a mechanism of compensating environmental services providers to solve both environmental and socio-economic problems in the area, which is vital in implementing and improving workability of the existing frail JFM. This study is the first of its kind in Zanzibar, and it is expected that the results can be useful in exploring the basis for establishment of PWES towards achieving the dual goal of environmental conservation and economic gain. This study is relevant, not only for sustainability of natural resources and community development, but also for the tourism sector and the national economy at large.
1.5 LIMITATIONS OF THE STUDY
Failures of some hoteliers to provide reliable information about their activities and WTP based on the study objectives were one of the limiting factors limiting proper execution of the study. The study managed to get responses from twelve out of fourteen hotels found along KPTA. Some hotels refused to respond by the face-to-face interview and claimed to send questionnaires by mail to the researcher’s office. This action caused some questionnaires being returned with some unanswered questions. Furthermore, to be given only two respondents as representative from Zanzibar Water Authority (ZAWA) also become a constraint to get more consistent data for the sector. Limited time and financial resources made the researcher confine the scope of the study to only five out of fifteen villages surrounding KPFR.
Being known by respondents as a forester in the KPFR somehow might affect the study results. For example, seeing me as a representative of government could make respondents underestimate the worth of forest related businesses they undertake (tax evasion). Sometimes respondents gave answers that might please the interviewer to see that they are not guilty of destructive behaviour. At the same time, it
is likely to be easier to fool a complete stranger than someone with firsthand knowledge of the area. Hence, it is also an advantage to be a forester experienced with the study area, because it was difficult for respondents to cheat during the interview and whenever misgivings arose I was appropriately probing the respondents to clear doubts. This was realized when some respondents said that they are not using the forest for business activities at all, but then I found a customer pick and choose bundles from heaps of freshly cut fuel woods (green woods) in the backyard of his house. Being known has both its pros and its cons and I simply assume that these cancel each other out and cause no serious bias to the present study.
1.6 ORGANIZATION OF THE THESIS
The paper is organized into five chapters. Chapter one provides a general overview about management of natural ecosystem based on different approaches. It also describes the research problem and justification, profile of the research site, the significance and limitation of the study. Chapter two describes the research objectives and methodology used to collect and analyze data whilst chapter three covers literature review based, on the study objectives. Chapter four gives results and discussion on socio-economic characteristics of KP communities as well as potentials and challenges facing KPFR in connection with PWES establishment. Furthermore, it explains in depth the results of WTP from hoteliers and WTA from KP communities. Chapter five presents conclusion based on the study findings and provides recommendations for better performance of the proposed system in question.
CHAPTER TWO: RESEARCH OBJECTIVES AND METHODOLOGY
2.1 OBJECTIVE OF THE STUDY
Payment for Watershed Environmental Services is a very important approach towards sustainable management of watersheds, especially at local level. However, its establishment depend much upon getting reliable information from the local site in question based on the objectives of the study. General and specific objectives are summarised below:
2.1.1 General Objective
The broad objective of this research is to assess the acceptability of payment for watershed environmental service approach (PWES) as environmental management mechanism in promoting the sustainable management of KPFR watershed resources as well as improving livelihoods of the KP communities.
2.1.2 Specific Objectives
The specific objectives are as follows:
• To identify the existing potentials and challenges for PWES to be executed at KPFR.
• To examine the willingness of concerned stakeholders around KPFR, to accept a PWES system. • To determine and propose a reliable institutional framework and payment modality for PWES
system to work at KPFR.
2.2 METHODOLOGY USED IN THE RESEARCH
This section describes the approach that was used in gathering empirical data for the research. Furthermore, data collection procedures, analysis techniques and interpretation of data will be explicated.
2.2.1 Research Design
This study make used of cross-sectional survey design in collecting empirical data from five shehias of Kiwengwa-Pongwe. A household’s sample was used to give representative information on presented potentials and challenges, communities’ willingness to accept compensation (WTA), their socio-economic characteristics as well as institutional framework and payment modality that can work at
KPFR. Furthermore, the entire population of fourteen hotels at KPTA (Annex 3), based on the same design was used to provide information about WTP.
Both quantitative and qualitative data were collected from primary and secondary sources. The reason for combining these two methods is based on the nature of the study and study objectives. Quantitative statistics for both WTP and WTA on PWES were collected from hoteliers and other commercial water users, households and local authorities, based on Contingent Valuation Method (CVM) principles and objective of the study.
It is not possible to explore all important information needed to answer a full package of study objectives by using quantitative data alone. Issues like stakeholders’ perceptions on PWES, their opinions and views, reasons for responses and suggestions were qualitatively analysed. As Darlington and Scott (2002) reported, it is easy to test quantitatively the user characteristics and nature of the services provision in a particular organization, but the reasons why this might be so, may not easily be investigated using quantitative methods. The qualitative methods may have a place in exploring how many people define their needs and why. When investigating human beings and their judgment on a particular issue surrounding them, there is danger that conclusion, although arithmetically precise, may fail to fit the reality on the existing situation (Berg, 2004; Mills, 1959). Therefore, one also needs the qualitative method to assess all unquantifiable facts necessary for a particular statement of the problem in question.
2.2.2 Research data sources 2.2.2.1 Secondary data collection
Secondary data were collected from various documents and records from several relevant institutions and organizations including local, national and international organisations, both published and un-published working documents at all levels. Journals and articles from internet were also a major source of secondary data. Most of the secondary data were based on what has been done or known in relation to stakeholders and community perceptions and acceptance on PES and PWES systems in other similar places in the region. Information from secondary sources helped to create a state of knowledge on the subject and enable me to determine the missing information about the subject. Furthermore, secondary data were facilitating the designing of data collection instruments in the field as well data analysis.
2.2.2.2 Primary data collection
Based on the conceptual framework of the study, two basic variables (WTA and WTP) were enumerated as the research is central measures. Primary data were collected directly from the field using face-to-face survey technique. However, this was only done perfectly on households’ questionnaires concerning WTA. Some of KPTA asked the surveyor to leave the questionnaire so that they could fill it later.
2.2.2.2.1 CVM method in collecting WTA and WTP information
CVM is a survey-based stated preference methodology that provides respondents the opportunity to make an economic decision concerning the relevant non-market good. Values for the good are then inferred from the induced economic decision. It circumvents the absence of markets for public goods by presenting consumers with hypothetical markets in which they have the opportunity to buy the service in question. In CV individual respondents are asked hypothetical questions about how much would they be willing to pay to access a services or goods or what level of compensation they would be willing to accept for trade-off services of non-market goods (Carson et al., 2001; Shah, 2002).
In this study, a hypothetical market was set as; environmental service is improved water services purchased by hoteliers (buyers) from the KPFR managed jointly by Zanzibar Water Authority (ZAWA), Kiwengwa-Pongwe communities and DCCFF as environmental services providers and seller of the service. The payment vehicle is additional water fees for improved water services. In order to make the hypothetical market a realistic and plausible, the environmental services has to be properly described, the methods of payment as well as the institutional structure under which the environmental services will be provided are to be clearly specified (Mitchell et al., 1989; Giorgio, 1998), which is explicated in the Results and Discussion chapter.
As suggested by Mitchell and Carson (1989), WTP and WTA measures designed into particularly simple form: for a desired increase (improve) in an environmental service, the maximum amount the hoteliers would be willing to pay to obtain the improvement water service, and for a decrease, the minimum amount that KP communities would be voluntarily willing to accept in compensation in exchange for accepting the decrease (reduced access to KPFR resources as means of halting forest destruction and improve conservation of watersheds).
The determinant of which CVM method to apply depends much on study objectives, whether it is primary or pilot kind of study as well as by time and financial resources (FAO, 2000). According to Cameron et al (1987; cited by Shah 2002), there are three different approaches asking the CVM questions.
• Open ended (discrete choice method), where the respondents are simply asked to name the amount they are willing to pay.
• Sequential bids (referendum or dichotomous choice), where respondents are asked whether or not they would pay or accept some specified sum (the question is then repeated using a higher or lower amount, depending on the initial response).
• Close ended, where the respondents are asked whether or not they would pay a single predetermined amount. In this approach the sum is varied across respondents.
It has been suggested that the discrete choice method can mostly be used as a pilot tool to establish appropriate bidding figures to be used in other approaches (Shah, 2002; Cameron & Quiggin, 1994; Sal-Salazar & Garcia-Menendez, 2001). Similarly, Whittington et al., (1990) and FAO (2000) have argued in favor of the dichotomous choice method. Despite these arguments, this study incorporated discrete choice method1, where the respondents are simply asked to name the amount they are willing to pay and accept, because of time and financial resources limitations. It was not possible to run a pilot survey large enough to provide the appropriate bidding figure and then conduct another survey for the actual data collection.
2.2.2.2.2. Sample Size and Sampling Techniques
To collect information on willingness to accept (WTA) compensation for switching from present non-environmental activities into provision of non-environmental services that will ameliorate the watershed status of KPFR, the household communities from Kiwengwa and Pongwe shehias (village local authorities), form a basic sampling unit for measurements. In this part, the shehias’ registers were used as sampling frames, in which 30% of households in each shehia were randomly selected for the household questionnaire survey, which is enough to represent a population in social research study as
1
In annex 5, question 19, looks like as if uses the dichotomous choice method, but the fact it use discrete choice method, where respondents were asked about WTA and they openly decide to state the amount wish to offer. Those category bids were provided in the questionnaires to improve efficiency during data analysis.
suggested by Tunis (1998). This made the total of 160 households that were interviewed, of which 125 and 35 households were from Kiwengwa and Pongwe respectively.
To collect information about willingness to pay (WTP) for the environmental services (in this case water resources from KPFR) hoteliers (water users) were surveyed by asking WTP questions. WTP survey applied a total population sampling to enumerate all 14 hotels along the KPTA. To get consistent informants, the snowball sampling of non-probability techniques were used in each hotel/institution during interview as per Berg (2004).
To obtain representation on standpoint of PWES from NGO’s, governmental institutions and local authorities, 12 sampling units were involved. Little number of available interviewees per sector was the basic ground to have 12 sampling units from three above sectors. This gave the total sample size of 186 sampling units for the whole research study.
2.2.2.2.3 Data collection tools
Structured questionnaires were developed, pre-tested (with selected community outside research area), reviewed and administered. The questionnaires were divided into several parts, which reflect the type of information needed in addressing specific objectives of the study. There were both open and closed ended questions with the purpose of unveiling the system of knowledge and structuring of ideas essential to respondent’s own view of the research problem. Many researchers use a combination of closed and open questions; often researchers use close-ended questions in the beginning of their survey, and then allow for more expansive answers once the respondent has some background on the issue and is "warmed-up" (Palmquist, 1993).
To make conversant with questionnaires, preliminary training were done before the main survey to local experts who assisted the researcher in the running of the questionnaire at community level. Focus Group Discussion (FGDs) was conducted to the local communities to supplement the information collected during questionnaire survey. Interview guides (Annexes 7 and 8) were used to obtain qualitative information from DCCFF officials, key informants, village leaders, Village Conservation Committees (VCCs) members and Zanzibar Water Authority (ZAWA) officials.
2.2.3 Data Treatment, Analysis and Interpretation
Data from this study were both descriptively and quantitatively analyzed. SPSS and Excel statistical packages were used for analysis and interpretations and in test of associations among variables based on the research objectives. Quantitatively the values of water services in KPFR were estimated by using Contingent Valuation (CV) method to measure willingness to pay (WTP) and willingness to accept (WTA). Targeted water consumers (KPTA hoteliers) were asked to give their maximum WTP values for the improved water services and communities around KPFR were asked to provide their minimum WTA values as compensation for switching from their present activities into provision of environmental management services to improve both water quality and quantity at KPFR.
The respondents mean WTP and WTA are variables of interest that were calculated from CV method. To calculate these means, the sample average is the best (Shah, 2002; FAO, 2000). In this study, sample means of WTP and WTA were calculated from all respondents who have expressed their willingness and revealed their value for the water services, which is multiplied by the size of the population (N) affected by the proposed PWES system. In this study, mean WTP and WTA were applied to give the maximum WTP that hoteliers claimed to be willing to give to KP communities as compensation and minimum WTA that have been accepted by KP communities as compensation (contributions) from hoteliers for better services they get respectively.
From the analysis, the descriptive statistics were used to provide information on measure of central tendencies for the data. Frequency distribution tables and computation of proportions in percentage were used in analyzing the socioeconomic (categories) variables for the households. Cross tabulation were done to show the degree of influence of dominant responses among other responses. Qualitative information were analyzed using the content and structural functional analysis techniques in which components of verbal discussions from different respondents were broken down into smallest meaningful units of information, values and attitudes of respondents.
CHAPTER THREE: LITERATURE REVIEW
3.1 GLOBAL PERSPECTIVE ON MANAGEMENT OF WATERSHED AREAS.
Currently, holistic approaches emerge to be the main focal point towards the sustainable management of watershed areas in the world. Johnson et al (2001) highlighted that this motive came into action after the collapse of many watershed development projects around the world that failed to take into account the needs, constraints, and practices of local people around their natural ecosystem. Conventional sectoral approaches did not give opportunities for local communities to participate in the management of natural ecosystem of which they depend for their livelihoods. Salam et al (2006) noted that despite local communities for many years living with the natural ecosystem in a compatible manner, the conventional top-down management approach let these communities feel that they are not part of the ecosystem, thus resulting in intensive degradation of the environment.
FAO (2006) noted that natural ecosystems supply a wide range of environmental services, from which people benefit, and upon which all life depends. However, when it comes to the management of natural ecosystems, a one-sided approach is applied generalising rural people and ecosystems as antagonists. Under this circumstance, it is worthwhile to find and suggest efficient alternative approaches such as Payment for watershed environmental service (PWES) that will guarantee both socio-economic development of local community and natural ecosystem resilience. Larsson (1999) highlighted that the objective of compensation approaches must be effective in attaining environmental intentions: efficient in being effective in the lowest possible cost and equitable in the sense that sharing of burden and benefits be among the members of the target group (stakeholders) around the natural ecosystem.
So the world’s vision towards the sustainable management of watershed focus, not only to raise local communities’ awareness, but also to improve economic gain of the people livelihoods based on approaches that jeopardize neither future benefits of environmental services nor future natural ecosystem resilience. The implementation of the established ecosystem-based approaches adopted by the Convention on Biological Diversity, the Convention on Wetlands, the Food and Agriculture Organization, and others could substantially improve the future condition of water-provisioning services by balancing economic development, ecosystem conservation, and human well-being objectives (Millennium Ecosystem Assessment, 2005).
According to Busch et al (2003), an ecosystem-based approach is multi and interdisciplinary which include stakeholders, perspectives, and human goals, and consider the health and vitality of ecosystems into the indefinite future, and include the larger landscape and connections among other landscapes. He added that ecosystem-based decisions acknowledge that the environment changes, even in the absence of anthropogenic influence. Under these circumstances a payment for environmental services (PES) approach has taken the lead to ensure that both goals of economic gain and environmental nourishment are attained. Currently, we are witnessing application of many PES and other market-based approaches in managing natural ecosystem (Pagiola et al 2005).
3.2 PAYMENT FOR ENVIRONMENTAL SERVICES APPROACH IN THE SUSTAINABLE MANAGEMENT OF NATURAL ECOSYSTEM
Payment for Environment Services (PES) is becoming a more prevalent tool for natural resources management. The main idea of PES is to complement and replace weak environmental conservation measures in protecting the world’s dwindling biodiversity. At the same time it considers the welfare of the community’s conservators and services providers, who are in most cases rural poor farmers, with these natural resources as their main source for livelihood. It is a direct approach in solving both environmental conservation and economic gain for environmental conservators and provides more benefits to biodiversity than community-based interventions such as Integrated Conservation and Development Projects (Ferraro and Kiss, 2002).
According to Wunder (2005), PES are part of a new and more direct conservation concept, which clearly identifies the need to bridge the interests of landowners and communities in rational use of natural resources. Successful application of PES approach in different parts of the world in solving environmental problems and at the same time used to alleviate conflicts among stakeholders between land resource uses and conservation of ecosystems, have made it to be favoured among environmental practitioners, donors and local communities (Pagiola, 2003).
While forest ecosystems offer both direct and indirect benefits, of which some are perceived as environmental services, they are threatened by prevailing high rate of deforestation (Zahabu et al., 2005). According to Pagiola (2003), illegal cutting of forest resources, in tropical forests, is threatening sustainability of the ecosystems and eventually leads to loss of their ability to provide the required services. He mentioned that the main factor behind forest degradation is application of inappropriate
conservation measures, which usually concentrate on conservation efforts but leaving out important stakeholders’ needs and shareable benefits (as compensation) for conservation services they provide.
Payment for environmental services (PES) evolved on the idea that sustainable resources management generate environmental services and that consumers may be willing to pay. The services include carbon sequestration and storage, biodiversity conservation, watershed protection, landscape beauty and tourism. PES refers to a voluntary transaction in which a well-defined environmental service (ES), or a land-use likely to secure that service, is being purchased by at least one ES buyer from at least one ES provider if, and only if, the ES provider secures ES provision, i.e. conditionality (Wunder, 2006). As depicted in figure 2.1, PES is distinguished from other conservation approaches based on the degree to which they rely on economic incentives and the extent to which conservation is targeted directly rather than integrated into broader development approaches.
Figure3.1: Comparing PES to other Conservation Approaches
Source: Based on Wunder (2005)
3.3 PAYMENT FOR WATERSHED ENVIRONMENTAL SERVICE (PWES)
In protecting watersheds, water-based PES system is termed as Payment for watershed environmental services (PWES), which explains management activities of a specific land and water use in the upstream part of the watershed that provide beneficial outcomes to downstream water users in terms of improvement or stabilization of water flow (quantity) and maintaining low concentration of sediment and chemical elements in the water flow (quality). These beneficial uses are thus defined as
environmental services to downstream users (Kiersch et al; 2005). Pagiola et al (2005) propose that the best ways to create conservation funds in the market-based instrument, that will be used by environmental service provider to further maintain the natural ecosystem, is by Visitor fees, Payment for watershed services and Conservation grants for increased recreation, increased downstream water services and increased biodiversity conservation respectively (figure 2.2).
Figure 3.2: Identifying potential financing sources for a conservation intervention
R e d u c e d e x t r a c t i o n o f f o r e s t p r o d u c t s I n c r e a s e d r e c r e a t i o n I n c r e a s e d d o w n s t r e a m w a t e r s e r v i c e s I n c r e a s e d b i o d i v e r s i t y c o n s e r v a t i o n C o s t o f c o n s e r v a t i o n B e n e fi ts fr om the ec osy s te m ( U S $ or U S $/h a ) V i s i t o r f e e s P a y m e n t s f o r w a t e r s e r v i c e s C o n s e r v a t i o n g r a n t s C o n s e r v a t i o n f u n d
Source: Based on Pagiola (2005)
Watershed protection is an environmental service that has pioneered the use of payment schemes. PES for watershed management typically involves payments to upstream land users for improving or stabilising land use in the catchments, for example by paying land owners not to harvest trees, build roads, or convert forest land to other uses that could adversely affect water quantity or quality needed for irrigation, drinking water, or hydro-electric utilities. In some cases, financial transfers have been made from utility companies to land users or land owners (FAO 2006).
Both conservation and development organizations have growing interest in the development of PWES, from which the primary motives have been to create a steady flow of funding needed to achieve conservation objectives; to contribute to poverty alleviation by creating economic incentives for conservation; and to reduce disparities in the costs and benefits of management actions needed to produce ecosystem services (Tognetti et al; 2003). Willingness to pay (WTP) for watershed ecosystem
services had been driven by an increased perception of threats to their continued provision and recognition of the limits of regulatory approaches and the absence of economic incentives (ibid).
Compensation payment system in PWES can be in cash and/or in kind depending on the structure of the service provider (Groups, community, individuals, NGOs etc), land-use, land ownerships and rights, kind of environmental services to be bought by ES buyers and the like. Kirsch et al (2005) reported that there are no studies or data that enable one to quantify the water-related services of different type of land uses, and hence compensation mechanisms cannot be based on a full economic valuation of those services. Wunder (2006) suggests that cash will be most appropriate when ES suppliers forego cash income to comply with a PWES contract, for instance reducing planned expansion in cash crops to conserve forest area vital for watershed protection. Indeed, in this situation ES suppliers could hardly be expected to accept non-cash payment system benefits exclusively, since cash is exactly what they lose from conservation (ibid).
3.4 PWES APPROACH IN THE MANAGEMENT OF WATERSHEDS IN TANZANIA
Integration of all mentioned stakeholders is very important for the sustainability of the PWES system in performing its duty effectively. FAO (1996) suggested that the institutional and policy framework for payments for watershed protection will depend on the size of the watershed, the number of providers and users of the service, and their social, economic and cultural situation. FAO argues that effective strategies are needed to ensure that all environmental service providers are thoroughly involved in the management to ensure the sustainable use of the resources. However, the level of involvement of local communities in the case of management of watershed areas is still low in most developing countries, including Tanzania (Dungumaro and Madulu 2002).
Much destruction of watershed areas in Tanzania are the results of using poor conventional management approaches which do not consider the contribution of local people living around the catchments (WWF, 2006). This has been noticed by World Wide Fund for Nature (WWF) which decided to develop a new, holistic payment approach for environmental services (PES) in Uluguru Mountains Catchments forest (Tanzania), with the aim to explicitly balance poverty reduction with conservation by delivering both sustainable natural resources management and improved livelihood security for the rural poor.
The objective of the Uluguru Mountain watershed project is to supply hydrological services to downstream communities that benefit Dar es Salaam city, Coast and Morogoro regions. According to Ferraro (2007), the watershed project is managed in the way that local people should stabilize and improve their farms as well as preventing further forest loss. He added that upstream local communities are the environmental services providers and downstream stakeholders include water authority, private sector cooperation as buyers of the hydrological services.
Payment for Watershed Environmental Services system in Zanzibar is a new approach for sustainable management of watersheds, which has not been implemented before. However, the payment system as compensation device to local community for particular environmental services provision is not a strange idea in Zanzibar. Jozani National Park in Zanzibar has experienced compensation system by paying the local communities on regular basis, in return of their crops that usually are eaten by red colobus monkeys (Piliocolobus Kirkii) which is the big tourist attraction at the park (Makame, 2001). This can be a good example to take and apply at KPFR for the sustainable management of biodiversity and watershed areas in the reserve.
3.5 APPLICATION OF CONTINGENT VALUATION METHOD
In recognition of vital services they provide, since 1960’s several non-market valuation techniques have been developed, to estimate the value of non-market goods including environmental services (Carson et al., 2001). Some of these methods that currently are used in economic environmental valuation are Hedonic Pricing Method (HPM), Cost Travel Method (CTM) and Contingent Valuation method (CVM). The Hedonic pricing method is used to estimate economic values for ecosystem or environmental services that directly affect market prices. For example, the price of a car reflects the characteristics of that car-transportation, comfort, fashion, luxury, fuel economy, etc. Therefore, we can value the individual characteristics of a car or other good by looking at how the price people are willing to pay for it changes when the characteristics change. The hedonic pricing method is most often used to value environmental amenities that affect the price of residential properties.
The travel cost method is used to estimate economic use values associated with ecosystems or sites that are used for recreation. The basic principle of the travel cost method is that the time and travel cost expenses that people incur to visit a site represent the “price” of access to the site. Thus, peoples’ willingness to pay to visit the site can be estimated based on the number of trips that they make at
the willingness to pay (WTP) of consumers for a particular non-marketed benefit or their willingness to accept (WTA) monetary compensation for the loss of the same (Mathur et al., 2003).
CVM is the method for estimating the value by using the offer that a person places on a good. The CVM approach asks people to directly report their willingness to pay (WTP) to obtain a specified good, or willingness to accept (WTA) to give up a good, rather than inferring them from observed behaviours in regular market places (FAO, 2000). Currently, the CVM has taken the lead to be applied in assessing environmental goods. The link between welfare economics and CVM is quite direct because it offers the potential to trace out the willingness to pay and willingness to accept distributions for a population of economic agents for a proposed change in a good (Carson et al., 2001).
Furthermore, CVM has become one of the most promising approaches for determining the public’s willingness to pay (WTP) and willingness to accept (WTA) for public goods and services due to its flexibility and ability to estimate total value, including non-use value (Carson et al., 2001).
3.5.1 Uncertainties in Contingent Valuation Method
Contingent valuation method has some uncertainty that may arise in different ways, including the following: Uncertainty can originate with the public good or contingency that is to be valued. Respondents may be uncertain about what it is that they are valuing, having no experience with it and perhaps never having seen it (Shaikh et al., 2006). Wang (1997) noted that, the value an individual allocated to the specified non-market amenity is influenced by prices of both substitutes and complements, if they even exist, and markets for these goods may behave in ways that are unpredictable to the individual. Shaikh et al (2006) suggested that uncertainty can also derived from questionnaire used to elicit information, although this problem can be overcome to some extent by improved survey design.
On the other hands, when using CVM, it might happen that individuals may simply be unable to make a trade-off between the amenity in question and the monetary good. Moreover, respondents may not understand the contingency in question and the manner in which it would be achieved, perhaps being hesitant about the policy instrument proposed for addressing the environmental spill out (Shaikh et al., 2006). While some uncertainty can be resolved by giving respondents with more complete information, or working with them in controlled interactive environments, some uncertainty can never be resolved (ibid). Preferences are ambiguous, the response to a valuation question has more than one meaning and,
consequently, a person might answer a valuation question but, when probed about their response, will add caveats and/or express uncertainty about the value provided. Researchers have proposed a variety of empirical treatments for addressing this type of uncertainty, but there has been no overarching agreement on a unified approach, mainly because of the nature of the uncertainty and different views about how it is to be interpreted (Shaikh et al., 2006).
3.5.2 Pros and cons of Contingent valuation method
3.5.2.1 Advantages of CVM
• According to FAO (2000), the Contingent Valuation Method has proven particularly useful when implemented alone or jointly with other valuation techniques for non-market goods, such as the travel cost method or hedonic approaches.
• CVM has an aptitude to use responses from respondents to fix value on ecosystem goods that are not normally marketed. It remains the only technique capable of placing a value on commodities that have a large non-use component of value, and when the environmental improvements to be valued are outside of the range of the data (FAO, 2000).
• Brouwer and Spaninks (1999) claim that among the economic methods used to valuate environment, CVM is the only one to date that is able, in principle, to account for possible non-use motivations underlying people’s value statements. Some economists argue that environmental resources associated with multiple outputs are best valued using CVM within the context of total valuation framework that consider all component values, including non-use values, either sequentially or simultaneously (Scodari, 1997).
• CVM has been found to be an easy and versatile implement estimating diversity of environmental goods depending on how you design it to meet the objectives of the concerned study. As Carson et al, (2001) highlighted, CVM is flexible in facilitating valuation of a wide variety of non-market goods, including those not currently available. Fuguitt (1999) also supported that CVM has greater versatility; it can estimate values for a particular site as well as designated resources or activities within a wider geographical area.
3.5.2.2 Disadvantages of CVM
Despite having many merits on its application over other economic valuation methods, CVM has got some limitations on its applicability that one needs to pay attention to before applying it. Some of these disadvantages are:
• The CVM responses are based on hypothetical behavior such that the respondent’s attitudes and knowledge might influence and pit the value of environmental goods on his/her favour and not from economic point of view. Krishnamurthy (2003) argue that the resultant value of environmental goods is “contingent” because CVM depends on individual’s perception of a number of background factors that influence the market under survey.
• In the CVM there is a tendency of having difference between stated preferences as expressed on the questionnaires and respondents’ actual preference revealed in the real market situation. One survey to assess WTP for organic foods in Sweden, the surveyor found 90 % are willing to pay for organic foods with increase of price. However, it was found later that less than 10 % of respondents show up to buy the products in the market (SVD, September 12, 2007). When a consumer responds to a CVM questions and states his/her preference or willingness to pay, it usually is not certain that he/she will actually pay the stated amount for the goods or services in question (Shah 2002; Carson et al., 2001; Hartwick & Olewiler, 1998).
• The CVM surveys are considered complex, time consuming and expensive to put into practice (Carson et al., 2001). The CV surveyors need to ensure that prospective consumers understand what they are being asked to value, how it will be provided, and how it will be paid for (Mitchell and Carson, 1989; Whittington et al., 1990). This point should be explicitly provided to all respondents regardless of their difference in life experience and educational background (Shah 2000; Mitchell and Carson, 1989).
• CVM surveys are vulnerable to the warm glow effect (Shah, 2002). The warm glow effect is a form of interviewer bias. It happens if a respondent in a CVM survey tries to please an interviewer by agreeing to pay some amount when he or she would not do so otherwise (Carson et al., 2001).
