Assessment of the Programme of Measures for Coastal Lagoon Environmental Restoration Using Cost–Benefit Analysis

Abstract

The degradation of marine and coastal ecosystems has given rise to the creation of specific protection rules. The Marine Strategy Framework Directive and the Water Framework Directive are the standards agreed in the European Union with the aim of obtaining a good ecological status in marine and coastal waters by applying a programme of measures, if necessary. These measures must be technical, social and economically feasible, in such a way that costs do not exceed benefits. This work expounds the implementation of two economic tools to assess the programme of measures intended for the environmental restoration of one of the most important coastal ecosystems in Europe, the Mar Menor coastal lagoon (SE Spain). Thus, the cost–benefit analysis (CBA) (and its extensions) and the contingent valuation method are used to assess the aforementioned programme in terms of economic and environmental profitability. Results prove the socioeconomic and environmental profitability of the actions due to be undertaken, with rates of return of around 10%. From a methodological point of view, there is a clear need to widen the classic CBA scheme by using the extended CBA and the dual CBA to gauge this type of environmental restoration actions.

Acknowledgements

A version of this paper has been previously published as a working paper no. 588/2011 of the “Coleccion de Documentos de Trabajo de la Fundacion de las Cajas de Ahorros (FUNCAS)”. We are grateful to the financial aid received from the Spanish Ministry of Science and Innovation and ERDF through GEAMED project “Gestion y eficiencia del Uso Sostenible del agua de Riego en la Cuenca mediterranea. Sureste” (AGL2010-22221-C02-01). This work was also partially supported by the “Consejeria de Agua y Medio Ambiente” of the Region de Murcia (Contract 70/90). We also would like to thank Fundacion Seneca (Spain) for the scholarship granted to Angel Perni.

Notes

About 50% of the tourists visiting this area come from Murcia, where they own a second home; thus, the summer population of the Mar Menor has been taken into account by our sampling.

The Hildreth-Lu procedure (HL) adjusts a linear model for serial correlation in the error term. This model is a variant to the Cochrane–Orcutt procedure (CO) for small samples (Aschheim & Tavlas, 1988). Taking account of a range 1 autoregressive model: . The error term ϵt can be serially correlated over time. . The CO procedure transforms the model: . Then the sum of squared residuals () is minimized with respect to (α,β), conditional on ρ, using and interactive technique of bisection search for the HL (Neter et al., 1989). In our application, the estimation has been made using the software package Gretl 1.9.