1. An economic analysis workshop was held in 2005 to build capacity for valuing the environment. It faced resistance due to the novelty of the concept. Case studies and application were needed. 2. Three applications of the economic valuation concept were studied: 1) valuing fisheries and bioresources in the Caspian Sea, 2) costing water level fluctuation management plans for a lagoon, and 3) estimating costs of an invasive species. 3. Lessons learned included using simple valuation methods, acknowledging non-monetizable elements, and addressing resistance from industries impacted by environmental costs.

1. Economic Analysis: CEP
Experiences & Lessons Learnt
Cape Town : 2007

2. Experiences
1- Capacity Building effort :
• Economic Valuation of Environment (EVE) workshop held
in Ashgabat in November 2005; collaborative effort with
the World Bank ; three from each country including
environment and economic agencies
• Lessons learnt : novelty of the concept; strong resistance to
the idea; need to focus on case studies; need to get
participants to apply their learning

3. Experiences
2. Applications
• Economics of Bioresources Utilization Study
• Water Level Fluctuations Adaptive Management Plan
for Anzali Lagoon ( WLF)
• Cost of Invasion by Mnemiopsis Leidyi

4. •Economics of Bioresources Utilization Study
• Objective was to give an indication of environmental degradation cost
versus revenues from fisheries in the Sea
0
500
1000
1500
2000
2500
1975 1980 1985 1990 1995 2000 2005
Year
Sturgeoncatch(inton)
Sturgeon Catch in Iran

5. Economics of Bioresources Utilization Study
Economics of Bioresources Utilization Study
Concept : use of simple Use Value :
• Total Revenue (TR): Official Revenue for specific species adjusted for global
average prices and for guessestimate of illegal catch
• Total Expenditure( TE) : Official expenditures adjusted for annualized
investment and for enforcement and policing
• Total Benefit : TR-TE
• Total Direct Environment Cost ( TDEC)= (Maximum Sustainable Yield- Actual
Catch) * ( Global Average prices )
•
• Total Environment Cost /Benefit = TB + TDEC
• Lessons learnt: study has been delayed /stopped due to fisheries
resistance !!

6. • WLF Plan
• Objective : to cost a number of options to deal with the Caspian
rising level versus cost of doing nothing !

7. • WLF Plan
• Concept : use of direct costs
• Cost of no-action being defined on basis of ‘perceived’ inundated land
and facilities plus references to number of people made homeless
• Cost of various options mostly defined as ‘physical costs ‘
associated with structures plus un-costed ‘political’ consequences.
• Lessons learnt : worst case scenarios do not always work; lack of data forces
huge guessestaimtes; practically impossible to go for intrinsic values; figures
always help to convince politicians

8. • Cost of Invasion
• Objective : estimate cost of no- action to deal with invading ML
• Kilka Catch rate in the Caspian
0
20
40
60
80
100
120
140
160
1995 1996 1997 1998 1999 2000 2001 2002 2003
Years
thousandtons
Azerbaijan
Kazakhstan
Turkmenistan
Russia
Iran

9. Cost of Invasion
Concept : Sum of direct and indirect costs including :
• Cost of decline in catch from maximum sustainable yield
• Lost wages of fishermen and kilka processing plants
workers
• Govt subsidies in lieu of fisheries halt
• Annualized cost of fleet deprecations and stopped plants.
Lessons learnt : “causality’ is an assumption that will
need be theoretically backed; hugely difficult to look at
consequential damages

10. • Conclusions
• Economic valuation of environment needs to be taken
seriously.
• Capacity needs to be built
• Try to be simple
• Try to monetize but lo highlight the elements that can not be
monetized.

11. www.caspianenvironment.org