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Coral reefs in Thailand: planning for the future in a fragile paradise

July 14, 2011

Until the late 1960s, underwater ecosystems remained the exclusive domain of scientists such as Jacques Cousteau. But then technical improvements and safety regulations helped turn scuba diving into a recreational sport — and marine life has never been quite the same since. In fact, it has been said that the first generation of scuba divers may be the last to enjoy healthy coral reefs.



Coral reefs are biologically diverse ecosystems that play a key role in influencing everything from fish stocks and weather patterns to pollution levels and shoreline erosion. But because they grow on a geological time scale — it takes years for some species to add a single inch to their size — the slightest scrape from a dive tank or misplaced flipper can destroy decades of delicate construction.





This is particularly an issue for the coral reefs around Thailand’s Phi Phi Islands. Since the 2000-release of the Hollywood film The Beach — which featured these Islands along with actor Leonardo DiCaprio — tourism is on the rise and the coral reefs in the Andaman Sea are taking a beating. But Udomsak Seenprachawong fears the economic gains from Phi Phi’s popularity will be short-lived — and the environmental pain irreparable.

Putting a price on paradise





Seenprachawong is an associate professor of environmental economics at Thailand’s National Institute of Development Administration (NIDA). With support from the Economy and Environment Program for Southeast Asia (EEPSEA) , Seenprachawong has translated the long-term impact of coral degradation into dollars and cents. He’s taken into account the value of coral reefs for the tourism industry and for the environment. He’s established an annual value for the region’s coral reefs in excess of 28,100 million baht (approximately $1.1 billion). His work has paved the way for changes that could help reduce pressure on reefs and provide money for their conservation.

EEPSEA was established in May 1993 to support training and research in environmental and resource economics. EEPSEA is an initiative administered by Canada’s International Development Research Centre (IDRC) on behalf of a sponsors group, comprised of various donors from around the world.

Coral: the foundation of a fragile ecosystem

Composed of layers of calcium carbonate secreted over thousands of years by tiny, soft-bodied animals called polyps, coral reefs provide a home for a vast array of marine life. In addition, zooxanthellae, an algae that supports polyp life and gives coral its colour, absorbs carbon dioxide, processes it through photosynthesis and then emits oxygen. This process contributes to the reduction of greenhouse gases.

Coral reefs around the world have been damaged by human activity. They have been overfished (sometimes as a result of destructive fishing practices, such as blasting with cyanide) affected by pollution, harmed by careless tourism, and damaged by marine traffic. The Phi Phi Islands reef area that Seenprachawong studied includes 32,000 hectares and is showing signs of distress.

"At present, the reefs are quite degraded — only about 75 percent is living coral," says Seenprachawong. "In the past, as much as 90 percent of the coral was likely to have been healthy and growing. But scientists now estimate that if nothing is done, within the next 20 years 40 percent of the reef will be degraded."

Further degradation will affect both people and the environment says Seenprachawong. "One of the short-term impacts would be on the livelihoods of people living in the area: they would catch less fish to eat or sell. Increased degradation could also damage tourism industry."

But coral reefs also act as a natural breakwater, protecting shorelines from erosion and storm damage. Over the longer term, the combination of climate change and weakened reefs could lead to natural disasters caused by extreme weather and flooding.

Quantifying intangible benefits

It is relatively straightforward to place an economic value on natural resources that are mined, refined, and sold — these products have a price associated with them already. But determining the value of coral reefs required an innovative approach. By using two methods, Seenprachawong obtained values associated with the direct use of the reefs (i.e., their use as a tourist attraction) and their indirect use (i.e., their inherent biological value).

To calculate a value arising from the direct use of the reefs, Seenprachwong surveyed the travel costs incurred by visitors to the region. The equation included transportation, food, lodging, and entry fees to the islands for the 150,000 tourists that visit each year (according to 1998 statistics).

"The Travel Cost Method (TCM) can’t put a price on the experience itself, but we can use it to compute the consumer surplus — the difference between what consumers currently pay for a product or service and what they are willing to pay," says Seenprachawong.

Seenprachawong found that, on average, tourists are willing to pay almost twice the current entry fee to the Islands. Based on this finding, he calculated the annual value of the area for domestic visitors at 69.9 million baht ($2.6 million) and for international visitors at 8,146.5 million baht ($302 million) — a total of more than 82,000 million baht ($304 million).

To generate a second value for the indirect use and ‘non-use’ of the reef, Seenprachawong applied the contingency valuation method (CVM), which establishes a monetary value for a non-traded environmental good or service.

"The indirect use includes the biological functions of the reef including, for example, the fact that the reefs protect shorelines," says Seenprachawong. "These functions have tremendous value for later generations. Thus the CVM helps us measure the value of the reefs for the future." According to Seenprachwong’s calculations, the annual indirect and non-use value of the regions is approximately 19,900 million baht ($738 million).

From theory to practice

With values in hand, Seenprachawong then made policy recommendations to local and national governments. For example, he believes governments should allocate a larger percentage of their annual budgets to managing the reefs. Seenprachawong also recommends implementing a 40 baht ($1.50) entry fee — twice the current rate — for entry to the Phi Phi Islands. That amount, he says, is enough to make the people think about the value of the reef, but not so high as to restrict their visits. Seenprachawong was particularly concerned with ensuring the fee was within the reach of Thai people who wished to travel to the Islands.

Yet Seenprachawong also recognizes that domestic and international travelers use the area differently, and considered whether or not they should be charged accordingly (see sidebar: The Domestic vs. International Dilemma). He feels tourists should pay an additional fee of 150 baht ($5.50) to visits areas where coral is particularly sensitive to disturbances. This would generate additional revenue while not overly restricting the visits of low-income visitors. During periods when the marine ecosystem is most vulnerable, Seenprachwong advocates further increasing the fees.

"The Office of Environmental Policy and Planning is buying into the idea," says Seenprachawong. "They believe we should also control the number of people visiting Phi Phi. We need to do a carrying capacity study to determine how much tourism is too much."

Seenprachwong also feels his research results are relevant for government officials evaluating the costs and benefits of Thailand’s proposed Southern Seaboard Development Project (SSDP). The project aims to promote economic development in the country’s south by building deep sea ports and creating new industrial centers. The result will be more big ships traveling in the Andaman Sea. This traffic may affect the area’s coral reefs by shifting ocean currents, causing pollution, and increasing the risks of oil spills, says Seenprachawong.

Looking beyond the reefs

Although Seenprachawong has already transferred his Phi Phi Island results to other coral regions in the Andaman Sea, he believes the problem of undervaluing natural resources is widespread in Thailand.

For instance, coral is only one of three undervalued natural resources that stabilize ocean currents, protect shorelines, and support the marine habitat. With their roots submerged in shallow water, salt-tolerant mangrove trees protect against shoreline erosion while also acting as a nursery and breeding grounds for birds and marine life that eventually migrate to the reef. Flowering marine plants known as seagrasses provide food and habitat for turtles, manatees, fish, while also filtering sediments, releasing oxygen, and stabilizing the ocean floor. Ultimately, Seenprachawong hopes to apply his model to all three resources.

"The first project just covers coral but we can’t stop there because they are all interrelated," he says. "We need to find a way to measure all three as a bundle."

He also hopes the coral study will become a model for other natural resources such as the golden teak forests that are home to an endangered tigers. Once again, the value would be critical to cost/benefit analyses undertaken as the government considers clearcutting to build a dam in Northern Thailand.

Marilyn Smith is an Ottawa based writer who recently traveled to Thailand.

  The Domestic vs. International Dilemma

With a full 85 percent of annual visits to the Phi Phi Islands made by international tourists, there’s no question that foreigners are the biggest threat to nearby coral reefs. For Seenprachawong, impressing the reefs’ value on this transient population remains a troubling issue.

While a 40 baht fee ($1.50) is significant to local tourists, it is less than most European and North American travelers would pay for a cup of coffee at home: hardly enough to generate an attitude that supports long-term, environmental protection.

Part of the problem, says Seenprachawong, is a marked difference in how local and international tourists use the site. "Thai people might only come for a day trip, so their travel costs are quite low.

n contrast, foreigners stay for several days and might travel out to the reefs several times." It seems logical that foreigners should be charged accordingly, but Seenprachawong’s survey indicates they are not willing to pay significantly more than locals to visit marine parks. In fact, he recommends against implementing higher foreign fees to avoid tourist animosity.

"One of the characteristics of Phi Phi visitors that works against the idea of higher foreign fees is that the vast majority of foreigners are backpackers who are traveling on very tight budgets," says Seenprachwong. "If the user fees are too high, there is a risk of losing business."

To address this, he suggests a voluntary hotel fee of 40 baht ($1.50) per bed per night, which would effectively extract additional funds from the foreigners who enjoy extended stays. The voluntary nature of the fee is intended to reduce opposition from hoteliers. However, Seenprachawong feels the government should supply brochures to help foreigners understand how their ‘donations’ will be used to protect the reefs.

"In my second project, I might do two differential fees for the locals and foreigners to see if foreigners would pay more," says Seenprachawong. "Or suggest a hotel room tax that would be a percentage of the room cost, so we could generate more revenue from high-end tourists." The Southern Seaboard Development Project

Thailand’s Southern Seaboard Development Project (SSDP), is a large-scale project planned between the Lower South and Bangkok, facing the Gulf of Thailand to the east and the Andaman Sea to the west. Current plans for the SSDP call for the construction of two pipelines, two industrial ports, tank farms, an industrial estate, and at least one oil refinery.

The plan is being endorsed by the Thai government, who is hoping to duplicate the economic success of the Eastern Seaboard, which has become a centre for the petrochemical trade since the National Petrochemical Public Company Limited was established there in 1984. It is also seen as a solution to alleviating urban sprawl around Bangkok, which has become a significant problem. The government is hoping that the development of a new economic area in the Southern Seaboard region will lure people out of the congested capital.

Thailand’s coasts are abundant in natural resources, including fertile agricultural land, coal reefs, rich deposits of minerals and beautiful beaches and scenery. Environmental groups and those involved in the tourist trade are opposing the SSDP, saying that the industrial activity surrounding the project may destroy the Andaman coast's flourishing tourist trade and speed up an already rapid rate of environmental destruction evident throughout Thailand.