Biodiversity International Journal

Economic Value Estimation of Mangrove Ecosystems in

Indonesia

Abstract Mini Review

Mangroves are highly productive ecosystem with various important social, Volume 2 Issue 3 - 2018
economic and environmental functions. In Indonesia, mangrove ecosystem is
one of the threatened resources in the coastal zone, and the mangroves have
been under intense pressure from competing resources use. In many parts
of Indonesia, the social economic values for mangrove ecosystem are varied Faculty of Fishery and Marine Science, Universitas
depending on local specific of the ecosystem. The direct use value of mangrove Padjadjaran, Indonesia
ecosystem has been tapped for wood, charcoal, tannin, construction material,
household equipment, medicines, fish, shrimp, crab, vegetable and raw material *Corresponding author: Achmad Rizal, Socio-Economic
for pulp and paper industries. The indirect use value of mangrove ecosystem is in Studies Center for Fisheries, Faculty of Fishery and Marine
the from of vital ecological functions including control coastal erosion, prevention Science, Universitas Padjadjaran, Jl Raya Bandung Sumedang
of salt interaction, stabilization of sediment, procession of adjacent coral reef Km 21, Jatinangor 45363, West Java, Indonesia, Email:
from suspend solid, protection of coastal land from storm, natural purification
of coastal water from pollution, supply of organic detritus and nutrients to
adjacent coastal water, and the prevision of feeding, nursery and breeding areas Received: January 19, 2018 | Published: February 21, 2018
for fish, crustacean and wild life. Using total economic valuation methodology, the
economic value of mangrove resource is estimated ranging from US $3,624.98 -
US $26,734.61 per ha per year.

Introduction important economic, social and environmental functions. Daniel

etal. [1] mentioned that mangrove ecosystems in Indonesia have
Indonesia has a huge potential of mangrove resources. In 2010, the highest biodiversity in the world, i.e. 89 species; 35 of them
the mangrove area was 5,209,543.16 hectares and the area was are trees, and the rest are in form of terma (5 species), perdu (9
decline rapidly to 2,496,185 hectares in 2016. This figure shows species), liana (9 species), epiphyte (29 species) and parasite (2
depletion and degradation of mangrove ecosystem and therefore, species). Dahuri et al. [2] noted some mangrove species which
the capacities to supply human needs are decline because of the usually found in coastal area of Indonesia are bakau (Rhizopora
intense pressure from many activities in the development of spp), api-api (Avicennia spp), pedada (Sonneratia spp), tanjang
coastal zone. The data above noted that development activities (Brugeira spp), nyirih (Xylocarpus spp), tengar (Ceriops spp) and
have threatened the sustainable capacity of the mangrove buta-buta (Exoecaria spp).
ecosystem in supporting future development in Indonesia.
Mangroves provide a wide range of ecosystem services, including In Indonesia, the direct use value of mangroves has been tapped
nutrient cycling, soil formation, wood production, fish spawning for wood, charcoal, tannins, construction materials, household
grounds, ecotourism and carbon (C) storage. Indonesia has a equipment, medicines and raw material for pulp and paper
huge potential of mangrove resources. The biological resources industries. The indirect use value of mangroves ecosystem is in
of the mangrove ecosystem which are believed to be highly the form of vital ecological functions including control of coastal
productive are not only able to provide various valuable forest erosion, stabilization of sediment, protection of adjacent coral
products, but also maintain estuarine water quality as a habitat reefs from suspended solids, protection of coastal land uses from
for many commercially important species of fish and prawns. storms, prevention of salt intrusion, natural purification of coastal
For tropical countries, the mangrove is one of the important water from pollution, supply of organic detritus and nutrients to
natural resources for the development sector in order to enhance adjacent coastal waters, and the provision of feeding, nursery and
human welfare through resource exploitation and environmental breeding areas for economically important fish, crustaceans and
stability. Therefore, an adequate balance must be sought between wild life [3].
the environmental benefits of the marginal mangroves and the The conversion of coastal wetlands to other uses affects
productive role of these ecosystems on a sustained management habitats of critically important valuable marine species.
basis [1]. Convincing evidence exist that mangroves serve as critically
Mangroves are forest ecosystems formed by halophytic, woody, important habitat for shrimp in the post larvae and juvenile
seed-bearing plants which range in size from tall trees to small stages of their life cycle [4]. Many scientists are arguing that a
shrubs. They have the ability to grow along sheltered, intertidal long term value of mangrove habitats is greater than its value for
coastlines on sediments that are saline, often aerobic and sometime any other use, including coastal aquaculture. Therefore, careful
acidic. Mangroves are highly productive ecosystems with various management of this resource provides numerous benefits to a

Submit Manuscript | http://medcraveonline.com Biodiversity Int J 2018, 2(3): 00051

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Economic Value Estimation of Mangrove Ecosystems in Indonesia ©2018 Rizal et al. 2/4

variety of users. Government provides maximizing producers of a natural system. If the uncertainty regarding future use is
and utility maximizing consumers in traditional markets should measurable in the form of probability for a certain outcome,
allocate scarce coastal resources and environmental uses in an the option value can be interpreted as the risk premium
economically efficient manner. Coastal zone management must paid to avoid the outcome of reversible destruction. In other
address resource allocation in an economically efficient manner words, the individual is willing to pay an amount in addition
by providing information on value of coastal resources. The to the actual price today in order to keep the use option for
information from resource valuation will help guide decision later. Therefore, total use value can be defined as the sum
makers to more objectively consider management options in of current total direct and indirect use values and this risk
allocating scarce coastal resources efficiently. premium.

Valuation Methods IV. Existence Value (EV): An existence value is interpreted as a

value humans gain from simply knowing that an ecosystem
There are basically two broad approaches to valuation, each or species exists, independent of weather an individual
comprising a number of techniques. These are the direct and uses it or not. The existence value of an ecosystem can be
indirect approaches. The direct approach looks at techniques approached by using the contingent valuation method
which attempt to elicit preferences directly through the use of through a survey of selected respondents.
survey and experimental techniques, such as contingent valuation
and contingent ranking methods. People are asked directly to state V. Bequest Value (BV): A bequest value is related to preserving
or reveal their strength of preference for a proposed resource. In the natural heritage for the coming generations. Its value is
contrast, the indirect approach is a technique which seeks to elicit derived today from knowing that the natural heritage will
preferences from actual, observed market-based information. exist and will be used by the future generation.

Most of studies have been done in Indonesia using total Based on the above, the total economic value (TEV) is a sum
economic value. The total economic value of a resource can be of direct use value (DUV), indirect use value (IUV), option value
disaggregated in two components which are use value (UV) and (OV), existence value (EV) and bequest value (BV).
non use value (NUV). Use value includes direct use value (DUV),
Quantification stage
indirect use value (IUV) and option value (OV). Nonuse value,
on the other hand, has proved to be both difficult to define and A quantification stage is the accounting of the total use and
measure. Nonuse value can be subdivided into existence value function of an ecosystem in monetary terms. There are a lot of
(XV) which measures willingness to pay for some moral, altruistic quantification methods which are often used, some of which are:
or other reason and unrelated to use or option value and bequest
a. Market price: The market price approach is used to account
value (BV) which measure an individual’s willingness to pay to
for a marketable component of a natural system, such as
ensure that his/her heirs will use the resource in the future. The
firewood and fish from a mangrove forest. The approach is
total economic value can be expressed by:
used to value a direct use.
TEV = UV + NUV = (DUV + IUV + OV) + (XV + BV)
b. Indirect price: An indirect price can be used to account for
The economic valuation of a coastal resource can be carried the non-marketable component of a natural system. This
out through two stages: method is very suitable to evaluate a physical and biological
use.
Identification stage
c. Contingent valuation method: Contingent valuation method
This is an important stage to know the benefits and functions is a very popular approach which is most used in valuating an
of a coastal resource, especially the function in relationship with environmental component, especially for a non-marketable
the other components in an ecosystem. The identified benefits one. In general, this method is carried out through a survey
include: by asking the selected respondents about the existence of a
I. Direct Use Value (DUV): This is defined as use which is certain component of a natural system.
directly obtained from using a mangrove ecosystem, such
Selecting management options
as the use of mangrove for firewood, timber and fishing,
etc. The total direct use from a mangrove ecosystem can be In order to select the best management option for achieving
formulated in a simple equation: Direct use (mangrove) = sustainable resources management, some studies has been done
Firewood use + timber use + fishing, etc. by Rizal et al. [5] and Rizal [6]. There studies used Cost-benefit
analysis in comparing each management option. Cost-benefit
II. Indirect Use Value (IUV): An indirect use is defined as use
analysis aimed at assisting the decision maker to make a decision
which is indirectly derived from a mangrove ecosystem such
which is consistent with efficiency in the allocation of resources in
as spawning ground, nursery ground, feeding ground and
certain area. Benefit and cost of proposed management option in
beach protection from waves.
the mangrove ecosystem were calculated as follows.
n
III. Option Value (OV): The concept of option value can be t
Net Present Value (NPV) = ∑( Bt − Ct ) / (1 + r )
interpreted as the potential future direct and indirect uses t =i

Citation: Rizal A, Sahidin A, Herawati H (2018) Economic Value Estimation of Mangrove Ecosystems in Indonesia. Biodiversity Int J 2(3): 00051. DOI:
10.15406/bij.2018.02.00051
 Copyright:
Economic Value Estimation of Mangrove Ecosystems in Indonesia ©2018 Rizal et al. 3/4

Where: will often rely on some judgments about technical and economic
feasibility. Using scenarios, the mangrove management options
Bt = Benefit from using mangrove ecosystem
selected are sylvofisheries-tilapia aquaculture, sylvofisheries-
Ct = Cost of using mangrove ecosystem shrimp aquaculture and sustainable forest management. Using
the benefit-cost analysis framework, the analysis showed that by
t = Time horizon (year) allocating 80% for mangroves and 20% for aquaculture: tilapia
r = Discount rate (%) aquaculture resulted in lower NPV (US $10,347.6) compared
to sustainable mangrove forest management (US $11,043.2).
The selection the best management option was based on the The management option for sylvofisheries-shrimp aquaculture
highest value of NPV. resulted in a higher NPV (US $15,195.2) compared to sustainable
mangrove forests [6].
Social economic value of mangrove ecosystems
Social value of mangrove ecosystem can be expressed by how Conclusion
many man/month utilized the resource, Rizal [6] estimated. 38 A longstanding theoretical paradigm suggests that mangrove
man-month per hectar per year involve in tapping mangrove diversity is important because it enhances the productivity
ecosystem. Economic value of mangrove ecosystem can be and stability of ecosystems [9]. The awareness of the uses and
viewed from its functions which are social, ecological, physical functions of mangrove can be viewed by knowing its functions for
and chemical aspects. This functions are classified to their uses, enhancing the productivity and stability of coastal ecosystems. At
namely direct use value (DUV), indirect use value (IUV), option first sight, the resulting monetary value estimates seem to give
value (OV) and existence value (EV). The benefit of mangrove unequivocal support to the belief that mangrove ecosystem has
ecosystem per hectare per year in Indonesia can be value as a significant, positive social value. Mangrove ecosystem plays an
follows: important role for the livelihood of small-scale fishermen whose
i. Direct use value: There are 26 productive identified uses for life dependent upon fishing and marine related activities around
the mangrove ecosystem in Indonesia varying from timber, the coastal. However, given a high potential economic value that
fire wood, fisheries and other uses. The economic value of could have been generated from other activities and the need to
this direct use value ranging from US $19.42 to US $1,687.24. protect the mangrove forest from over exploitation, there should
be a tradeoff between protecting the right of stakeholder to
ii. Indirect use value: Six indirect use values are considered, utilize the mangrove ecosystem and allowing the government to
varying from food source to storm protection with economic establish mangrove ecosystem management strategy.
value ranging from US $637.93 to US $24,000.53.
The awareness of the uses and functions of mangrove
iii. Option value: Biodiversity has been selected to refer the ecosystems can be viewed by knowing its social economic,
different types of biological diversity habitats or traits which ecological, physical and chemical functions. Therefore, it is
exist in any given system. The biodiversity value is US $15.00. important to value the resources before deciding a development
iv. Existence value: Existence value is interpreted as value program, since in addition of the market value, the resource has
humans gain from simply knowing that an ecosystem or attributed to many uses and function which is not marketed.
species exists, independent of whether an individual uses Management of mangrove ecosystems should address that the
it or not. By using the contingent valuation method, the resources is not only valued interm productive capacity but the
communities valuate the mangrove resources US $ 560.00 to total functions of the ecosystem. The incorporation of market and
US $ 2,516.40. non market value of the resource in selecting the best management
options will result to an efficient allocation of resource and the
The cost of using the mangrove are ranging from US $12.71 sustainability of the mangrove ecosystems [10,11].
to US $975.76 per hectare therefore the total economic value
of mangrove ecosystem is ranging from US $3.624.98 to US Acknowledgement
$26,734.61 per hectare per year.
We would like to thank Faculty of Fishery and Marine Science,
Management options for sustainable mangrove Universitas Padjadjaran, Indonesia for making this research
ecosystem possible. We also thank Ministry of Marine and Fisheries of
Indonesia Republic for their assistance in providing much needed
In order to select the best management option for achieving information.
sustainable Mangrove Ecosystem management, some studies has
been done by Ruitenbeek [7], Oglethorpe & Miliadou [8], and Rizal Conflict of Interest
et al. [5]. There studies used Cost-benefit analysis in comparing
None.
each management option. Cost-benefit analysis aimed at assisting
the decision maker to make a decision which is consistent with References
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Citation: Rizal A, Sahidin A, Herawati H (2018) Economic Value Estimation of Mangrove Ecosystems in Indonesia. Biodiversity Int J 2(3): 00051. DOI:
10.15406/bij.2018.02.00051
 Copyright:
Economic Value Estimation of Mangrove Ecosystems in Indonesia ©2018 Rizal et al. 4/4

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Citation: Rizal A, Sahidin A, Herawati H (2018) Economic Value Estimation of Mangrove Ecosystems in Indonesia. Biodiversity Int J 2(3): 00051. DOI:
10.15406/bij.2018.02.00051