ECONOMIC EVALUATION OF RECOVERING NATURAL PROTECTION WITH CONCURRENT RELOCATION OF THE POPULATION THREATENED BY TSUMANI HAZARDS IN CENTRAL COASTAL ECUADOR

Abstract

Tsunamis are destructive forces which threaten life, social infrastructure and production, resulting in enormous economic losses. In the last two decades destructive tsunamis as those in Indonesia (2004), Japan (2011) and Chile (2010 and 2015), caused more than 366,353 deaths and economic losses over 355 billions US$. Our present study focuses on a theoretical case of economic and human losses that tsunami impact can have in Muisne, along the central Ecuadorian coast. Using a cost benefit analysis (BCA) framework, we estimate the cost of recovery of a mangrove ecosystem in Muisne, where earthquakes with magnitudes up to 8.8 Mw can generate tsunamis with run-ups up to 43 meters. Economic benefits of environmental goods and services from Muisne mangroves are estimated to reach 16.7 US$ million/year. To maintain local wellbeing and businesses in the region, it is estimated that the mangrove recovery costs may reach up to 7.3 million US$. In terms of preventing loss human loss of life and maintaining human wellbeing, we calculate the value of community relocation to be approximately 93.2 million US$. Therefore, the total economic benefits from a recovering the Muisne ecosystem would be around 109.9 million US$ and the benefit/cost ratio is B⁄C=1.16, meaning that the recovery of the Muisne mangroves has a higher value than resettlement costs, and that makes good public policy sense.

Keywords

• Tsunami strike
• Resettlement
• Mangrove ecosystem recovery
• Benefit / cost ratio
• Ecuador