Ecosystem the “use pattern” of environmental goods. 2.2.2 Valuation

Ecosystem
services can be define as a natural services that can give benefit towards nutrient
cycling and soil formation, regulating services for example in disease
prevention, climate human such as production of food, medicine to prevent from
disease, maintenance of biodiversity and in a clean water resources, as well as
landscape opportunities for recreational benefits. There have four ecosystem
services which are provisioning services. There are consists with food, timber,
wood, fibres and fuel, supporting services prevention, flood regulation, and
water purification. Then, the cultural services such as recreational, aesthetic,
spiritual, and educational. All of this four services are given benefit towards
human well-being. Most ecosystem services have the characteristics of ‘public
goods’ so  the beneficiaries cannot be
excluded from receiving the services provided for example habitat and nursery-supporting
nursery services; and the level of usage by a beneficiary cannot be reduce the
level of service received by others for example, coastal protection and
epidemic. Due to these characteristics, the potential of private incentives to
manage mangrove ecosystem services are limited and the market for such services
does not exist. Mangrove ecosystem services are not supplied by the market
system. In other words, there is a ‘market failure’ and by its inherent nature.

2.2VALUATIONOFENVIRONMENTALGOODSANDSERVICES

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2.2.1Environmental good and market
failure

Besides
that, in a perfectly competitive market, the price of a particular good will
increase when there is scarcity, but will decrease when there is abundant
supply. This is based on the rationale that when a person consumes a good another
person is derived of utilizing that good. However, for the environmental goods,
such as a nature park, the usage of a person does not exclude others from using
it. In fact, most environmental goods are considered public goods where people
have unlimited access to it. Without property right attached, this scenario, a
characteristic of environmental goods, reflect market failure thereby
indicating that classical economic theory need to be modified to reflect the
“use pattern” of environmental goods.

2.2.2 Valuation services on natural
resources

The
approaches adopted for the economic valuation of mangrove goods and services
generally include direct service methods, which to determine the value of one person
that is willing to pay for the products or goods through a resource survey
instrument. In recent years, many valuation studies of natural resources and
environmental goods have been undertaken (e.g. Lim et al, 1993; Dixon and
Sherman, 1991; Costanza et al, 1997).  Likewise, Bockstael et al. (2000:
1385) states: ” In economics, assessment concept relating to human virtues. So
that the economy the value of the ecosystem function or service only relates to
contribution to human welfare, where human virtues are measured in terms of
each individual self-assessment of his welfare. ” The key is to determining
how changes in ecosystem goods and services affect individual well-being, and
then to determine the extent that which the person is willingness to pay for a
better changes that have a positive beneficial effect, or rather, how many persons
are willing receive as compensation to avoid negative effect.

2.3 TheConceptofTotalEconomicValue
(TEV)

            The
valuation of natural resources is related to the benefits derived by humans
from utilization of the resources. Therefore, the total valuation of a mangrove
ecosystem requires an appraisal of all the net benefits of its ecosystem. The
Total Economic Value (TEV) are expressively incorporates the linkages between
various types of exploitation as well as protection of stocks, environmental
functions and biodiversity attributes of an ecosystem. This includes links
between mangrove conversion, offshore fisheries production, traditional uses
and erosion control benefits and biodiversity maintenance functions.

2.4TYPESOFVALUE

The
term value is used in many ways in studies on the economic valuation of
mangrove goods and services, which including use values and non-use values as stated
by (Harshaw, 2000; Dlamini, 2007). It is very important to clarify the meanings
of the different types of values, as the term of values can have distinct
meanings. Definitions and discussions of non-market values offered here were
adopted according to Bishop (1999), Sarker and McKenney (1992), McKenney and
Sarker (1994), Klemperer (1996) and Dlamini (2007).

2.4.1 DirectUseValues

 Use value refers to the benefit that a user
obtains, either directly or indirectly, from participating in an activity.
According to McKenney and Sarker, 1994; Dlamini, 2007, consumptive use can be
described as participation in activities that utilize and possibly deplete the
mangrove resources. There’s classification in to two in direct service value,
which is tangible and intangible. In tangible definition it is define as
something that can be touch such as timber product for make medicine, source of
food, fishing and charcoal resources; while non-consumptive uses are those uses
or activities that do not affect the resource such as bird-watching in a
national park, wildlife observing, appreciating a view at a look-out. Direct
use values is the most important component in the ecosystem values.

2.4.2 IndirectUseValues

For
indirect use values, there are the benefit that indirectly obtained by using
the environmental resources. For example, indirect uses can be define as an
environmental resources such as reading book related to the natural resource or
watching television programmes about wildlife as stated by (Fausold et
al.1996). These are indirect use values for the people, but the direct use
values for the producers. Soil conservation, avalanche prevention, flood
prevention, balancing microclimate, landscape quality, water quality and
purification, biodiversity, conservation of the local ecosystem functions of
forest resources are considered under this category according to Merlo and
Briales 2000. Another important indirect use values is waste assimilation.
Mangroves and sea grass beds are effectively process in inadequately other
waste and treated sewage, by absorbing excess nutrients, before this enters the
sea and affects fisheries and health. Others indirect use values include, water
quality control, habitat and biological control. Due to the difficulty in
measuring the relative contribution of ecosystem to the service and function of
nature. That is, the value of ecological functions are more difficult to
quantify and not usually traded in the market place. However, it is possible to
find the value of Munasinghe and Schwab’s shadow, 1993; named in FAO, 2006.

2.4.3 OptionValues

Besides
that, within the framework of use values is the option value. The
value of an option value is regarded as an environmental value as a potential
gain compared to the actual value in use. Thus, it is a type of use value,
which give an expression of priority or willingness to pay (WTP), to preserve
the environment in exchange for the probability that individuals will use it at
a later time.  For instance, a person may
be willing to pay to protect the reserve forests area so that future
generations will have the opportunity to used and enjoy it. 

2.5NON-USEVALUES

Non-use
values also referred to as a passive use values which do not involve any actual
physical consumption of the forest goods and services. For examples of non-use
values include wellbeing, health, longevity, increases in productivity, and the
feelings of peace and tranquillity and a decrease in stress levels as stated by
(Sarker and McKenney, 1992; McKenney and Sarker, 1994;
Klemperer, 1996; Dlamini, 2007). They are further classified as existence and
bequest values according to (Sarker and Mckenney, 1992; McKenney and Sarker,
1994; Dlamini, 2011).  Besides that, non-use
values is the most difficult type of value to estimate since in most cases it
is not reflected in people’s behaviour and its thus almost wholly unobservable.
There are some expectations, such as volunteer contributions made by many
people for good reasons, though they expect little or no profit to themselves.
It is clear that an individuals can benefit more than one way from the same
ecosystem. Total economic value (TEV) is the sum of all value of use and use
irrelevant for good or service.

2.5.1 ExistenceValues

The
values of existence are the benefits derived from the knowledge that facilities
and non-timber resources will continue to exist regardless of the fact that
facilities or resources cannot be used, viewed or visited. For example, many
people donate to “save elephants” or save the rainforest charity,
without expecting to see or visit either elephants or rainforests. Unused value
refers to the excitement of people who may experience only knowing that there
is a source even if they do not expect to use the source directly. This kind of
value is usually known as existence value or, sometimes, passive use value. It
is also illustrates the fact that some people who do not want to use resources
are now willing to pay or withhold current benefits to preserve resources for
future generations or for future use. Therefore, this clearly represents the
value not used for the current generation; but depending on its potential use
by the next generation, the value of the option can be either the value of the
use or the value of not being used as stated by (Agudelo, 2001; Perman, 2003).

2.5.2 BequestValues

The
bequest value associated with the idea of worship is willing to make the
natural environment to the heirs or future generations in general. Although this
value is categorised under the non – use values for that current generation,
there are possibilities of the natural environments being used in the future.
Bequest value, as a motive under existence value as stated by Pearce and Turner
(1990). For instance, people may be willing to pay to protect the Kuala
Selangor Nature Park (KSNP) area so that future generations will have the
opportunity to enjoy it. Then,
in a recreational value on mangrove forestry context, a direct method which is
Contingent Valuation Method (CVM) is being use in this study. It is involves by
directly asking a person on how much they would be willing to pay in an
ecosystem service. In conclusion, this study has to be considered accordingly
in making decisions that affect the vital resources it because it shows an
alternative way to measure non-market benefits and natural resources.   2.6CONTINGENTVALUATIONMETHOD (CVM)Contingent
valuation method (CVM) is a direct way to capture consumer surplus generating
capacity to pay for preserving the resources or opportunities in a simulated
market. This method includes several techniques to get feedback evaluation
including game bid, payment card, open questions and closed questions. according
to (Sarker and Mckenney, 1992; McKenney and Sarker, 1994; Bishop, 1999;
Harshaw, 2000; Dlamini, 2007, 2011).2.6.1 WillingnesstoPay (WTP)         As
(McConnell, 1985) stated that the willingness to pay (WTP) is the amount of
money someone is willing to pay and to enjoy their leisure facilities. It
measures whether people are willing to pay their income to get more goods and
services, and is typically used for non-market goods. The following factors may
affect WTP for parks are age, education level, and income; fulfilment of hope;
and the existence of alternative park and recreational sites. (Lindberg, 1998) stated
that expressed its willingness to pay and the reasons provided for the
willingness to pay (WTP) questions ‘principle payments’ are used to see in
advance if respondents are basically in favour of paying at least some of the
park’s total. They were not in favour of any amount required to justify their
answers to comply with one or more of the five reasons given. The reasons
involve expenses (‘I have to pay everywhere’; ‘Zakynthos too expensive’).
According to Elsevier B, V, (2006) was asked to state the amount of money they
will pay. They were then asked to state their reasons for their answers, comply
with one or more of five predefined reasons. The reasons that refers to both
the use of such limits the number of visitors and the use of leisure real) and
the non-use (existence, choice, and value of the bequest).Due
to Mitchell & Carson, (1989), stated that the statement of the existence
value of biodiversity, although intangible is often realised in the form of
donation towards the conservation of biodiversity. Its magnitude can also be
seen in terms of willingness to pay (WTP) by the way, the survey method
preferences such as contingent valuation. The observed difference has at least
two possible meanings which the first are it can be interpreted as a sign of
weakness of survey methods such as contingent valuation. Under this
interpretation, this method does not measure priority because respondents did
not answer the question each time with neoclassical priority. The weak version
of this interpretation is the willingness to pay questions measure a priority
but is not willing to accept questions. However, as a result, with their
emphasis on the effects of income, it will help in developing alternative modes
of explanation and, as the income effect is most economic models such as
options under uncertain. The present study recognizes them, and practicing
techniques either to avoid or then minimize them. The authors pay particular
attention to the tendency of hypotheses, biased starting point, the impact of
supply and the overall bias part indicated by Navrud & Mugatana, 1994. Thus,
the 5-year commitment period of payment also encourages and resolutely
dedicated only to accept the offer of settlement. In addition, to reduce the
effect of warm light from beyond the willingness to pay (WTP), schedule an
interview and the interviewer makes clear that it does not matter if the
respondent chooses not to accept the offer. Multiple dis offers, followed by
open-ended questions used to maximize maximum WTP information. This method is
efficient in terms of the information collected. At the same time, it does not
reduce the number of higher WTP that people are willing to pay. According
Ventakatachalam, (2004), he argued that the hypothetical scenarios presented to
respondents stating the maximum amount of money they receive to compensate for
the change (WTA). Estimated WTP or WTA can show the value of environmental
goods or services, as an input to the analysis of costs – especially for public
projects.