Ecological and Economic Analysis of Watershed Protection in Eastern Madagascar

Kramer, R.A. et al., 1997. Journal of Environmental Management

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Watershed protection is one of the many goods and services provided by the world’s fast disappearing tropical forests. Among the variety of watershed protection benefits, flood damage alleviation is crucial, particularly in upland watersheds. This study is a rare attempt to estimate flooding alleviation benefits, resulting from the protection of upland forests in Eastern Madagascar. A three stage model is used to examine the relationship between the economic concept of value and the bio-physical dimensions of the protected area. This approach combines techniques from remote sensing, soil and hydrologic sciences and economics. In stage one, the relationship between changes in land use practices and the extent of flooding in immediate downstream is established by using remotely sensed and hydrologic-runoff data. Stage two relates the impact of increased flooding to crop production by comparing the hydrologic data with the agronomic flood damage reports for the same time period. In stage three, a productivity analysis approach is adopted to evaluate flood damage in terms of lost producer surplus. The presence of the Mantadia National Park, in eastern Madagascar, is designed to prevent land conversions and changes in hydrologic patterns, thereby alleviating flood damage. This averted flood damage is a measure of the watershed protection benefits to society. Given that natural systems are subject to considerable stochastic shocks, sensitivity analysis is used to examine the uncertainty associated with the key random variables. The results of this analysis should help policy makers assess trade-offs between the costs and benefits of protecting tropical rainforest.

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