Cost benefit analysis of a mangrove restoration program as a climate change impact mitigation strategy in de gi lagoon, binh dinh province

MINISTRY OF EDUCATION AND TRAINING

NHA TRANG UNIVERSITY
__________________________

CHARLES NYANGA

COST-BENEFIT ANALYSIS OF A MANGROVE RESTORATION
PROGRAM AS A CLIMATE CHANGE IMPACT MITIGATION
STRATEGY IN DE GI LAGOON IN BINH DINH PROVINCE

MASTER THESIS

KHANH HOA – 2018


MINISTRY OF EDUCATION AND TRAINING

NHA TRANG UNIVERSITY
__________________________

CHARLES NYANGA

COST-BENEFIT ANALYSIS OF A MANGROVE RESTORATION
PROGRAM AS A CLIMATE CHANGE IMPACT MITIGATION
STRATEGY IN DE GI LAGOON IN BINH DINH PROVINCE

MASTER THESIS

Major

Marine Based-Ecosystems
Management and Climate
Change

Code
Topic Allocation Decision
Decision on establishing the
Committee
Defense Date
Supervisors:
1. Professor: Curtis Jolly
2. Professor: Kim Anh Nguyen Thi
Chairman of the Committee
Professor: Le Kim Long
Faculty of Graduate Studies

KHANH HOA – 2018


UNDERTAKING
I undertake that the thesis entitled: “Cost Benefit Analysis of the Mangrove
Restoration Programme as a Climate Change Mitigation Strategy in De Gi Lagoon
in Binh Dinh Province”, is my own work. The work has not been presented elsewhere
for assessment until the time this thesis is submitted.
Khanh Hoa, 19th Jun, 2018

Charles Nyanga
Author

iii

ACKNOWLEDGEMENTS
I, Charles Nyanga, wish to acknowledge the financial support from the
Norwegian Agency for Development Cooperation (NORAD) through the Norwegian
Programme for Capacity Development in Higher Education and Research for
Development (NORHED) for the International Master of Science in Marine Based
Ecosystems Management and Climate Change (MEMACC).
I also wish to acknowledge funding from NORAD for the full scholarship which
was granted to me to enable me to pursue the International MSc (MEMACC).
I also express my gratitude to the Ministry of Education and Training of the Socialist
Republic of Viet Nam for the material and financial support through the Faculty of
Graduate Studies of Nha Trang University and the Department of External
Cooperation (DEC).
I, wish to acknowledge the Department for Agriculture and Rural Development of
Binh Dinh Province for the assistance they rendered during the data collection
exercise.
Special thanks go to Professor Kim Anh Nguyen of Nha Trang University, Viet Nam
and Professor Curtis Jolly of Auburn University, United States of America for their
advice, patience, guidance, motivation and expert knowledge which enabled me to
complete my research and write my thesis successfully. Further, all my lecturers from
Nha Trang University (Viet Nam), University of Tromso (Norway), University of
Bergen (Norway), University of Ruhuna (Sri Lanka) and Bogo University (Indonesia)
deserve to be acknowledged for the contributions in preparing me for the thesis work.
I wish also to thank you my family, my parents, my brothers and sisters, my wife
and my children for the spiritual support they have rendered to me throughout my
study period. Lastly my thanks go to my classmates for the encouragement and
enthusiasm they have endowed into me. My special thanks go to Loi To Thi Bich for
allowing me to use her data for my report.
Khanh Hoa, 19th Jun, 2018

Charles Nyanga
Author

iv


TABLE OF CONTENTS
UNDERTAKING ......................................................................................................... iii
ACKNOWLEDGEMENTS .........................................................................................iv
TABLE OF CONTENTS .............................................................................................. v
LIST OF SYMBOLS .................................................................................................. vii
LIST OF ABBREVIATIONS ................................................................................... viii
LIST OF FIGURES .......................................................................................................x
LIST OF TABLES ........................................................................................................xi
LIST OF APPENDICES ............................................................................................ xii
ABSTRACT ................................................................................................................xiv
CHAPTER 1 INTRODUCTION..................................................................................1
1.1 Background information ............................................................................1
1.2 The Problem Statement .............................................................................4
1.3 Objectives of the research study ............................................................... 5
CHAPTER 2 LITERATURE REVIEW .....................................................................6
2.1 Ecosystems Goods and Services (EGS) - free goods and services from
nature ..........................................................................................................6
2.2 The benefits of Natural Capital – the ecosystems goods and services ...7
2.3 Drivers of changes in ecosystems .............................................................. 7
2.4 Historical trends in mangrove deforestation and restoration in Viet
Nam – 1940s to 2015 ...............................................................................10
2.5 Methods of Mangrove Ecosystems Valuation – a conceptual
framework ................................................................................................ 13

2.6 Methods of carrying of out CBA. ............................................................ 13
2.7 Procedure of carrying out CBA – an analytical framework ................15
2.8 Examining Community Participation in Mangrove Restoration - an
application of the Tobit Regression Model ............................................15
2.9 National Mangrove Restoration Programs in Viet Nam ...................... 16
2.7 Mangrove Restoration, Development and Climate Change .................19
CHAPTER 3 RESEARCH METHODS ....................................................................20
3.1 Research approaches ................................................................................20
3.2 Method of estimating willingness to pay (WTP) ....................................20
3.3 Mathematical Models for Performing Cost Benefit Analysis (CBA) ..21
3.4 Mathematical Models for performing discounted cash flow (DCF) ....24
3.5 Tobit Regression Model – a theoretical background ............................ 24
3.6 The determination of sample size ............................................................ 26

v


3.7 The research process ................................................................................27
3.8 The methods to attain the objectives ...................................................... 29
3.9 Research Tools Utilised to Attain the Objectives ..................................30
3.10 Study Site .................................................................................................31
3.11 Data synthesis/analysis ...........................................................................33
CHAPTER 4 RESULTS AND DISCUSSIONS ........................................................ 34
4.1 Results from Focus Group Discussions ..................................................34
4.2 Results from Expert Opinion Interviews ...............................................35
4.3 Results from research data - Biographical information ....................... 35
4.4 Results from research data - Calculation of cost benefit analysis of
aquaculture ............................................................................................... 39
4.5 Results from research data - Cost-benefit analysis of mangrove
restoration programmes ........................................................................42

4.6 Results from meta-analysis, synthesis of past research results and
citations .....................................................................................................50
4.7 Results from citations – providing evidence in support of mangrove
restoration..................................................................................................53
4.8 Results from research data - Climate change awareness and
understanding of implication of good mitigation practices in
communities around De Gi Lagoon. ...................................................... 54
CHAPTER 5 :CONCLUSIONS AND RECOMMENDATIONS ........................... 56
5.1 Conclusions............................................................................................... 56
5.2 Recommendations ..................................................................................... 57
5.3 Future of research work in De Gi lagoon mangrove restoration as a
climate change mitigation strategy ......................................................... 58
REFERENCES ............................................................................................................59
APPENDICES ..............................................................................................................67

vi


LIST OF SYMBOLS
AM

Arithmetic mean

𝝱

a vector of factors

𝝱o

the intercept

𝝱j

parametric estimate of the jth variable

C0

initial cash outlay

CFi

Cash flow occurring at the end of the period i

CO2

carbon dioxide

e

margin of error

€

Euro

ha

hetare

I

Initial investment

km

kilometer

n

sample size

N

Total number of households

pH

potential of Hydrogen (acidity or basicity)

q

number of variables or regressors

r

cost of capital used as a discount rate

NaCl Sodium Chloride
t

life of the project

US$ United States dollar
Xi

a vector of independent variables, the regressors

Yi

the dependent variable, the regressand

Yi *

the latent variable
the sum from i=1 to the tth value

vii


LIST OF ABBREVIATIONS
ACCCRN

Asian Cities Climate Change Resilience Network

ASEAN

Association of South East Asian Nations

BAU

Business as Usual

BCR

Benefit Cost Ratio

BFT

Benefit transfer

BMZ

The Germany Federal Ministry for Economic Cooperation and
Development

CBA

Cost-Benefit Analysis

CICES

Common International Classification of Ecosystems Services

CIEM

Central Institute for Economic Management

CIT

Citation

CP

Change in production

CVM

Contingent Valuation Method

DERG

Development Economics Research Group

DESA-SD

Department of Economic and Social Affairs – Statistics Department

EGS

Ecosystems Goods and Services

EU

European Union

EVC

Economic Value Coefficients

FAO

Food and Agriculture Organization

FCR

Feed Conversion Ratio

GHG

Green House Gases

GoV

Government of Viet Nam

GRETL

GNU Regression, Enometrics, Time-series Library

GSO

General Statistical Office of Viet Nam

IUCN

International Union for the Conservation of Nature

IRR

Internal Rate of Return

MA

Meta-Analysis

MARD

Ministry of Agriculture and Rural Development

MEA

Millennium Ecosystem Assessment

MEMACC Marine Based Ecosystems Management and Climate Change

viii


MFF

Mangrove for the Future

MONRE

Ministry of Natural Resources and Environment

MV

Market value

NGO

Non-Governmental Organization

NMV – SP Non-Market Valuation method
NORAD

Norwegian Agency for Development Cooperation

NORHED

Norwegian Programme for Capacity Development in Higher Education
and Research for Development

NPV

Net Present value

NTU

Nha Trang University

PES

Payment for Ecosystems Services

ProEcoServ Project for Ecosystems Services
PVB

Present value of benefits

SDGs

Sustainable Development Goals

SEA

Southeast Asia

SES

Synthesis of existing studies

TEV

Total Economic Value

UN

United Nations

USD

United States Dollar

VND

Viet Nam Dong

WRI

World Resources Institute

WTP

Willingness to pay

WWF

World Wide Fund for Nature

ix


LIST OF FIGURES
Figure 2.1: Pressures on mangroves forests ...................................................................8
Figure 2.2: An example of mangrove deforestation trends in the Philippines (19702000) ............................................................................................................9
Figure2.3: Mangrove cover trends in Viet Nam between 1943 and 2008 ................... 11
Figure 3.1: Map of study site – De Gi Lagoon ............................................................. 31
Figure 4.1: Respondents by commune and respondents’ income (n =150)
........................................................................................................................ 36
Figure 4.2: Number of people and dependents in Household (n =150) ....................... 36
Figure 4.3: Employment status of respondents (n = 150) ............................................37
Figure 4.4: Educational level of respondents and age of the respondents (n = 150) ...38
Figure 4.5: Marital status of respondents and gender of the respondents (n = 150) ....38
Figure 4.6: Mangrove contribution to fisheries ............................................................ 52
Figure 4.7 : Effects which responses have been informed by government (n =150) ...54
Figure 4.8: Effects which have been observed by the community members (n =150) 55

x

LIST OF TABLES
Table 1.1: Mangrove species replanted in Viet Nam ....................................................2
Table 1.2: Mangrove forest losses in Southeast Asian Countries during periods
measured (1960 – 1997) ...................................................................................3
Table 2.1: Ecosystems Goods and Services ...................................................................6
Table 2.2: Percentage of the total deforested mangroves (2000-2012) converted to
different land uses ............................................................................................ 9
Table 2.3: Showing summary of some of the various mangrove restoration
intervention programmes in Viet Nam ........................................................... 18
Table 3.1: Tobit model variable description and possible signs of factors ..................26
Table 4.1 : Total cost-analysis of 1 ha of aquaculture per ha per year in Thi Nai
Lagoon (2012 prices) ..................................................................................... 40
Table 4.2: Total cost-analysis of 1 ha of aquaculture per ha per year in De Gi Lagoon
(adjusted for inflation to 2017 prices) ............................................................ 40
Table 4.3: Variation in total cost for sensitivity analysis .............................................41
Table 4.4: Summary of CBA and sensitivity analysis for aquaculture ........................ 42
Table 4.5: Total benefit of mangrove restoration estimated with non- parametric
method at 2012 prices .................................................................................... 44
Table 4.6: Total benefit of mangrove restoration estimated with non- parametric
method at 2017 prices .................................................................................... 45
Table 4.7: Sensitivity analysis for mangrove restoration .............................................46
Table 4.8 ARR Calculation results ...............................................................................46
Table 4.9: PBP calculation............................................................................................ 46
Table 4.10 Determination of IBCR...............................................................................47
Table 4.11: Comparison of between mangrove restoration and aquaculture
development (mangrove conversion and destruction) ...................................48
Table 4.12: Results of the Tobit regression model run using Gretl software ...............49
Table 4.13 Summary of meta-analysis with no regression of restoration programs ....51

Table 4.14: Mangrove contribution to fisheries at different locations in the world .....52

xi


LIST OF APPENDICES
Appendix

Contents/Title

Reference Page

1

Revised Implementation Plan

All pages implied

2

Calculations and Statistical Results

39

2.1

Table of computation of WTP

39

2.2

Results of expression of WTP

39

2.3

Responses on Community Support for Mangrove

39

Restoration
2.4

Responses on Community Support for

40, 39

Government
2.5

Computation of Number of Households in De Gi 39
Lagoon and Population Adjusted to 2017 figures
at 1% growth rate

3

Cost-benefit analysis of aquaculture development

53

at 11% discount rate
4

Sensitivity analysis for aquaculture development

38, 53

5

Sensitivity analysis for mangrove restoration

53

6

Total costs and benefits of mangrove restoration

41, 53

7

Results from meta-analysis

45

8

Results from meta-analyisis continued

45

9

Impacts of Climate on Aquaculture (2010 – 2020)

31

– Mekong River Delta, Viet Nam
9.1

Possible Impacts of Climate Change on Pangasius
Production Costs

xii

45


Appendix Contents/Title
9.2

Reference Page

Possible Impacts of Climate Change on Shrimp

48, 49

Production Costs

10

Climate Change and Production Parameters in

31

Study Area
10.1

Monthly Rainfall in Quy Nhon City

31

10.2

Average of Sea Level Rise in Quy Nhon City

31

10.3

Mean Air Temperature in Quy Nhon

31

10.4

Production of Aquaculture in Binh Province

31

10.5

Export of Aquatic Products

31

11

Questionnaire

31, 32, 33, 34, 35

12

FGD Topic Guide

31, 32, 33, 34, 35

13

Expert Opinion Interview Guide

30, 31

14

FGD & Expert Interview Consent Form

30, 31

xiii


ABSTRACT
Mangrove forests occupy approximately not more than 1% of the world forested
land, according to experts. These important ecosystems are currently being lost at an
alarming rate. Aquaculture, urban development,

agriculture,

and industrial

development have been observed to be the major causes of these mangrove losses. The
mangroves are an important source of ecosystems goods and services (EGS) amongst
which are carbon sequestration, providing breeding and nursery grounds for several
species of flora and fauna, materials, medicines, and climate change impact protection.
This study investigated the cost benefit analysis of a mangrove restoration programme,
particularly in De Gi lagoon of Binh Dinh province of Viet Nam. The methodology
involved data collection from both secondary and primary sources such as Focus
Group Discussions (FGDs), Expert Opinion interviews, survey questionnaire
administration and synthesis of previous research results. Thereafter an analysis was
carried out to calculate the benefit-cost ratio (BCR), net present value (NPV), internal
rate of return (IRR, for mangrove restoration only), average rate of return (ARR),
payback period (PBP), and incremental benefit cost ratio (IBCR). The results showed
that mangrove restoration and conservation appear to be a better option as opposed to
mangrove conversion and destruction for aquaculture development without mangrove
forests. This was supported by results from other studies around the world which
showed that mangroves were very valuable as a source of EGS such as aquaculture
production and fisheries support, climate change impact mitigation as well as

adaptation to name, but a few.
In this study, it has been strongly recommended that the government of Viet Nam
(GoV) should come up with programmes aimed at both informing the fishing and
aquaculture communities of the importance of mangrove restoration, encouraging
community-based ecosystems management and conservation for the benefit of the
present and future generations.
Key words: Mangrove forests, ecosystems, aquaculture, climate change, mitigation,
conservation

xiv


CHAPTER 1 INTRODUCTION
1.1 Background information
The term mangrove (Rhizophoraceae) refers to various plant species (trees and
shrubs) which are tolerant to salty waters and normally grow in the intertidal zones of
coastlines belonging to tropical and subtropical sheltered coastlines (UN Environment,
2014).The term is applied to both individual plants and entire ecosystems occupied by
mangroves. The area covered by mangroves is referred to as the mangal. Mangroves
cover less than 1% of tropical forests worldwide (UN Environment, 2014). The
mangroves are a well-adapted plant species that grow in fresh, brackish and salty water
wetlands. They occur dominantly in brackish and salty water wetlands since this tends to
eliminate competition from plants and shrubs which are adapted to fresh water wetlands.
The mangroves’ adaptation mechanisms include salt coping mechanisms which enable
them to filter out more than 90% of the salt in sea water; water hoarding mechanism
which enables them to hoard water in thick succulent leaves; and breathing in a variety
of ways using snorkel like parts(American Museum of Natural History, 1999).
The mangrove forests are confined to regions 300 North and 300 South of the
equator. The total area occupied by mangrove forests in the world is 18.1 million ha.
South and Southeast Asia has a total of 7.5173 million ha of mangrove forest area.

This is equal to 41.5% of the world total mangrove forest area (Spalding, Blasco, &
Field, 1997).
Vietnam with a population of 95.541 million and population density of 308.1
persons per km2 (DESA-SD, 2017), is mostly a coastal country with a coastline of
3,260 km long and occupies a land mass of 33.1 million ha. The country is located at
140 3’ 29.96” N and 1080 16’ 37.91” E (GPS-coordinates, 2018). This country had
about 408,500 ha of natural and dense mangrove forests before the wars, in 1943 , and
by 2001 the mangrove forests had been reduced to 156, 608 ha of which 32,402 ha
(21%) were natural mangrove forests and 122, 892 (79%) were planted mangrove
forests according to 2001 statistics (Hong & Dao, 2005; Vietnam Environmental
Protection Agency, 2005). Spalding et al. (1997). The World Mangroves Atlas reports
that in Viet Nam some of the losses of mangrove forests came about due to the use of
herbicides and napalm during the war, from 1955 to 1975. They also state that in

1


1997 Viet Nam had 272, 300 ha of mangrove forests and two protected areas with
mangroves, and also informs that the Vietnamese government had re-planted more
than 53, 000 ha of mangrove forests since 1990 (Spalding et al., 1997). These values
are much higher than those reported by other researchers like Hong and Dao (2005).
Napalm which was used to destroy the mangrove forests is a thickener of gasoline
used for flame warfare purposes. Napalm is mainly an aluminium disoap of mixed
oleic coconut, and naphthenic acids also containing minor proportions of uncombined
fatty acids, unsaponifiables, inorganic impurities and moisture (Mysels, 1949). This
chemical is dangerous and apparently burnt most of mangrove forests in Viet Nam.
(a) Mangrove species replanted in Viet Nam
The world has more than 73 species of mangroves growing in more than 123
countries. Viet Nam has more than 31 species and some effort was made at replanting
the mangrove to replace some of the previous losses of species which were lost during

the wars and after the wars due to various development activities. Some of the species
which were re-planted as reported by Spalding et al (1997) are shown in the table 1.1
(Spalding et al., 1997).
Table 1.1: Mangrove species replanted in Viet Nam
Species
Family
Higher

Common name

Classification
(Genus)
1

R. mucronate

Rhizophoraceae

Rhizophora

Red mangrove

2

R. apiculota

Rhizophoraceae

Rhizophora

Tall stilted mangrove

3

R. stylosa

Rhizophoraceae

Rhizophora

Spotted mangrove

4

K. candela

Rhizophoraceae

Kandelia

Oriental mangrove

5

Avicennia alba

Acanthaceae

Avicennia

Api api

6

C. decandra

Rhizophoraceae

Ceriops

Flat leaved spurred
mangrove

7

S. caseolaris

Lythraceae

8

Nypa fruticans

Arecaceae

Sonneratia

Mangrove apple
Palm mangrove

Source: Compiled by the student for this report, 2017 based on data from (Field, 1990)

2


However, despite the replacement of several species, the losses experienced are quite
heavy. Spalding et al (1997), informs that SEA had experienced some of the greatest
losses in mangroves. The loss of mangrove forests in South and Southeast Asia
experienced by four countries which are very active in mangrove restoration are shown
in table 1.2 below. These losses amount to 4% of the total area of world mangroves
and it can be seen that Viet Nam had suffered the largest amount of losses among the
four countries during this period (Spalding et al., 1997).
(b) Mangrove loss in four of the most active countries in mangrove restoration in Asia
Table 1.2: Mangrove forest losses in Southeast Asian Countries during periods
measured (1960 – 1997)
Country

Original Area of

Area of loss

Percentage loss

Mangroves (ha)

(ha)

(%)

85,000

12%

1980-1990

Philippines 400,000

160,000

40%

1960 -1997 *

Thailand

550,000

247,000

44.9%

1961- 1986

Viet Nam

400,000

252,500

63.13%

1962 - 1972

Total

2,058,333

744,500

36.17%

1960 - 1997

Malaysia

708,333

Period

Source: Adapted from (Spalding et al., 1997) and modified for this report
Note:
* This period is estimated based on the activities in the region

These mangroves play a very important role in supporting coastal community
livelihoods in Vietnam. The mangroves provide resources like fire wood, charcoal,
food, medicines, tannin, and construction materials. Mangrove ecosystems provide
support for biodiversity as habitats for diverse species of amphibians (Amphibia),
reptiles (Reptilia), mammals (Mammalia) and birds (Aves). They provide aquatic
resources by supporting marine life and provide an important link in the marine food
web by making available detritus to create biotope for marine creatures. The

mangroves also provide habitats and breeding grounds for shrimps (Caridea), fish
(Ichthyoid), snails (Achatinoidea), crabs (Brachyura), frogs (Rana Temporaria) and
their juveniles; mangroves act as giant kidneys filtering solid waste; mangroves act as
green walls sheltering the coastal areas from salt intrusion and providing storm
protection hence forming natural dykes (Hong & Dao, 2005).

3


1.2 The Problem Statement
The problem lies in over-exploitation and double-destruction from conversion of
mangrove forests for other uses like shrimp aquaculture, urban and industrial
development on one hand and the herbicides and napalm used during the wars (1955 to
1975) on the other hand (Spalding et al., 1997). These activities have led to loss of the
natural giant kidneys for the filtration of solid waste materials, loss of natural dykes, as
well as loss of habitats and breeding grounds for marine and other creatures. The
government of Viet Nam (GoV) with support from Non-Governmental Organisations
(NGOs), the World Bank, other international organizations and regional economic
bodies like Association of South East Asian Nations (ASEAN) and the Asian Cities
Climate Change Resilience Network (ACCCRN) has been making efforts to replant
the mangroves, as noted earlier. According to World Resources Institute (WRI), from
1978 to date over 18,000 ha have been replanted bringing the total to 172,000 ha from
approximately 150,000 ha (Org, Buckingham, & Hanson, 2015).
What exacerbates the problem then? Healthy mangrove forests have three core
functions. According to Food and Agriculture Organisation (FAO ,2007), these three core
functions are: (1) Direct productivity functions, namely providing high quality
construction timber and poles, fuel wood, pulpwood, folders for domestic animals, nontimber-forest products (i.e. tannin, medicines, adhesives etc.). The problem here is that
mangroves provide an estimated value of products of between USD 1.0 billion and about
USD 6.0 billion per year in ecosystems services. Thus, conserving the mangroves will
tend to contribute to the attainment of several Sustainable Development Goals (SDGs),

namely: SDG 1 (end poverty and hunger), SDG 2 (foster decent work) and SDG 3 (foster
economic development). (2) Ecological functions, namely spawning and nursery grounds
for fish (Ichthyoid) and crustaceans (Crustacea), maintaining delta building processes
(land forming), soil conservation (along rivers and creek banks), habitat for wildlife (birds
(Aves), otter (Lutrinae), crocodiles (Crocodylinae) etc.). The problem here is that 10% of
all known fish species make use of mangroves. Therefore, conservation of mangroves
adds notably to SDG 15 (halt biodiversity loss). (3) Protective and sequestration functions
namely: storm protection (hydraulic resistance against storm surge), shelter and shoreline
protection as well as CO2 sequestration. The problem here is that mangroves are able to
sequester 3 to 5 times more CO2 than the terrestrial forest trees. Therefore, conserving

4


mangroves will tend to contribute to the attainment of SDG 13 (climate change adaptation
and mitigation) (FAO, 2007; WWF, IUCN, & BMZ, 2017). All these benefits which are
obtained from these functions will disappear if mangroves are not restored and attainment
of many SDGs may not be achieved. Further, the problem is worsened since Vietnamese
coastal areas are under extreme high pressure from natural stressors like climate change
temperature rise and storms. Over-exploitation for agriculture, fisheries and aquaculture
have also added stress on mangrove forests (Field, 1990).
A study by Tinh et al (2013) in Thi Nai Lagoon showed that the benefits of
mangrove restoration and conservation were apparently higher than the benefits of
mangrove forest conversion for aquaculture purposes (Tinh, Toan, & Tuan, 2013). The
study area for this current research project was De Gi Lagoon in Phu My and Phu Cat
Districts in Binh Dinh Province. There have not been any studies on the costs and benefits
of mangrove restoration in this lagoon. The study will probe two possible scenarios,
namely: (1) Convert mangrove forests for aquaculture; (2) Restore the mangrove forests
and introduce ecosystem and environmental management procedures.
After completion and conclusion, this study will contribute to the availability of

literature on the Cost-Benefit Analysis of mangrove restoration and aquaculture
development options in the face of climate change in De Gi Lagoon for consideration
by policy makers, for use by professional lecturers, researchers and students alike.
1.3 Objectives of the research study
The main objective of this research project is to carry out a cost-benefit analysis
(CBA) of a mangrove restoration programme as a climate change mitigation strategy
in De Gi Lagoon in Binh Dinh Province.
To achieve the above main objective, the research will attempt to:
(1) Determine the costs and benefits of aquaculture development versus mangrove
restoration of the De Gi Lagoon communities
(2) Examine the individual willingness to participate in a mangrove restoration
program as a climate change mitigation strategy using a Tobit regression model

5


CHAPTER 2 LITERATURE REVIEW
2.1 Ecosystems Goods and Services (EGS) - free goods and services from nature
Ecosystems goods and services (EGS), which we take for granted as free goods
and services from nature, have been categorized in a number of different ways namely:
(i) functional groupings, like regulation, carrier, habitat, production and information
services; (ii) organizational groupings, like services that are associated with particular
species, that regulate certain exogenous input or which have a particular relationship to
the organization of biotic services; (iii) descriptive groupings, like renewable resource
groups, physical structure services, biotic services, information services, social and
cultural services (MEA, 2003). All these are provided for free.
The Millennium Ecosystems Assessment (MEA, 2015) gives a categorization of EGS
as shown in table 2.1 below, based on functions:
Table 2.1: Ecosystems Goods and Services
Ecosystems Goods and Services

Support

Direction

Services
Provisioning
 Food
 Fresh water
 Wood and Fiber
 Fuel

Supporting

Regulating

 Nutrient cycling

 Climate regulation

 Soil formation

 Flood regulation

 Primary production

 Disease regulation
 Water provision
Cultural
 Aesthetic
 Spiritual

 Education

6


 Recreational
Source: The Millennium Ecosystems Assessment (MEA, 2003)

2.2 The benefits of Natural Capital – the ecosystems goods and services
The International Union for Conservation of Nature (IUCN, 2015) states that the
degradation of the natural environment by our actions as humans has considerable
costs associated with it. For instance, in the EU region alone, it is estimated that
pollination is worth more than €14 billion per year and wetlands also provide
approximately €6 billion in ecosystems goods and services (EGS) per year. All these,
that is pollination and the EGS like soil, water, air, biodiversity, landscape, pollination
from natural capital, are free (IUCN, 2015).
The IUCN (2015) goes further to state that one quarter of species in the EU, for
example, are currently under threat of going into extinction due to habitat loss, urban
expansion, agriculture, industrial development and climate change. There is a clear
acceleration of this state of affairs. The IUCN further reveals that, in Berlin alone, for
example, a city of 3.5 million inhabitants was serviced by 23,000 ha of green protected
areas which were able to supply enough clean water to all the inhabitants. This service,
if carried-out using water supply infrastructure would cost more than €16.7 million per
year. The green areas are protected by Natura 2000. Managing Natura 2000 networks
requires €5.8 billion per year but generates € 200 billion to € 300 billion per year of
economic benefits (IUCN, 2015). Clearly there appears to be more benefits than costs.
2.3 Drivers of changes in ecosystems
The MEA (2003) identifies two main categories of drivers of ecosystems change.
They are: (i) exogenous drivers and (ii) endogenous drivers. Indirect exogenous
drivers of change are institutions, prices and markets, and technology development.

Whilst direct exogenous drivers are the effects of environmental change such as
increased mean temperature from carbon dioxide (CO2) concentrations or lower mean
temperatures from volcanic pollution. Indirect endogenous drivers are technology
adaptation like fish (Ichthyoid) location technology. Whilst direct endogenous drivers
which directly affect ecosystems are, land use change, land cover change, species
input and removal (MEA, 2003). The mangroves plays a very big role as carbon
sequesters of exogenous effects from carbon dioxide among many others.

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(a) Pressure on mangrove ecosystems
Mangroves have pressures exerted from several sources as indicated above by the
drivers of change. Figure 2.1, under here, show a concept of the pressures on
mangroves and the results. On the left are the drivers and on the right are the results
from the pressures.

Figure 2.1: Pressures on mangroves forests
Source: Compiled by the student for this report (2017)

(b) Drivers of changes in mangrove ecosystems in Southeast Asia (SEA) 1950 - 2015
Richards and Friess (2016) in their report state that the major drivers of mangrove
deforestation in Southeast Asia has been aquaculture. And over the past 30 years,
aquaculture has grown while mangrove forests have been shrinking in this region of
the world (Richards & Friess, 2016b). Between 2000-2012 aquaculture accounted for
almost 30% of all conversions of mangrove forests (see table 2.2).

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Table 2.2: Percentage of the total deforested mangroves (2000-2012) converted to
different land uses
Country

Aquaculture

Rice

Oil
palm
15.7
1.1
38.2
40
11.1
8.9
0.5
27.7
0

Mangrove
forest
22.6
0.5
17.6
5.1
7.3
9.8
0.6
12.5

0

Urban

Other
category
11.2
7.6
16.7
24.1
41.3
47.6
4.9
14.8
73.9*

48.6
0.1
1.9
100.1
Indonesia
1.6
87.6
1.6
100
Myanmar
14.7
0.1
12.8
100.1

Malaysia
10.8
5.6
14.4
100
Thailand
36.7
0.9
2.7
100
Philippines
27.7
1.5
4.6
100.1
Cambodia
21
10.4
62.5
99.9
Vietnam
29.2
0
15.9
100.1
Brunei
0
26.1
0
100

TimorLeste
0
0
0
0
0
0
0
Singapore
29.9
21.7
16.3
15.4
4.2
12.3
99.8
Total
Countries are ordered by total mangrove lost. Percentages may not add up to 100 owing to rounding.

The small amount of mangrove deforestation in Timor- Leste is due mainly to shoreline erosion.
Source: Adapted from (Richards & Friess, 2016b) page 346

Another study by Giesen et al (2006), reported that over 1.2 million ha of
mangrove forests have been converted to aquaculture in SEA. They further reported
that aquaculture is the largest single most cause of mangrove deforestation around the
world and in SEA region countries in particular. They have shown a typical example
of the Philippines’ situation in Figure 2.2 shown below. The graph shows clearly
aquaculture overtaking the mangrove forests in area (Giensen, Wulffraat, Zieren, &
Scholten, 2006).

Figure 2.2: An example of mangrove deforestation trends in the Philippines
(1970-2000)
Source: Adapted from (Giensen et al., 2006) page 48

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(c) Drivers of changes in the mangrove ecosystems in Viet Nam
According to ProEcoServ (2015), Viet Nam’s Mekong River Delta ecosystem is
second only to the Amazon in fish biodiversity with more than 1,100 species of fresh
water fish. However, the natural mangrove forest wetlands as well as other wetlands
have been reduced by more than 180,000 ha during the 20-year period to 2003, while
aquaculture areas had increased to 1.1 million ha during the same period of time.
These changes in ecosystems and land use pattern were mostly driven by conversion
of mangrove wetlands to aquaculture, tourism facilities and planted forests
(ProEcoServ, 2015).
Richards and Friess (2016), carried out a study and determined that on the overall
the rate of mangrove deforestation across Southeast Asia between 2000 and 2012
stood at 0.18% and they singled out aquaculture as the largest contributor to this
deforestation of mangroves accounting for about 30% of this deforestation. They
further pointed out that about 16% of the world’s mangrove forest species are about to
go into extinction (Richards & Friess, 2016a). In addition to these studies, Cowles
(2015) reports that mangrove forests are the most frequently converted type of forests
with a conversion rate standing at 3-5 times more than the average rates of ordinary
forest loss and this has led to over 40% of mangroves being lost since 1950. Cowles
(2015) goes on to point out that most of these conversions go to aquaculture pond
development, agriculture, infrastructure and other urban projects (Cowles, 2015).
2.4 Historical trends in mangrove deforestation and restoration in Viet Nam –
1940s to 2015
As mentioned and cited earlier, Viet Nam had been facing a decline in mangrove

forest area since the 1940s. Buckingham and Hanson (2015) in a report of a case study
for the World Resources Institute(WRI) have informed that since 1978 more than
18,000 ha of mangrove forests have been restored bringing the total area of mangroves
to more than 170,000 ha by 2008 (Buckingham & Hanson, 2015). Further, from figure
2.3 below, it can be noted that the decline in mangrove forests was very rapid between
1943 and 1999. There was a stagnation in 1999 but a reversal in 2001. During 2001 and
2007 there was a marked increase but during 2007 to 2008 there was a slight decline.

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Figure2.3: Mangrove cover trends in Viet Nam between 1943 and 2008
Source: Adapted from (Buckingham & Hanson, 2015), page 3 (modified)

(a) In-action and its costs
The EU (2009) warns that failure to act, in stopping this continued trend of
mangrove forest conversion, on the part of governments, policy makers and
communities will lead to governments paying a heavy price. The EU (2009), goes on
to warn that the world will be losing an equivalent of €50 billion annually in
ecosystems services. Further, if governments take the business as usual (BAU)
pathway, the loss would be equivalent to 7% of world GDP by 2050 (EU, 2009).
(b) Importance of climate mitigation
The importance of climate mitigation through the use of natural means, such as
the establishment of mangrove forests, has been studied by several authors (Powell &
Osbeck, n.d.; Tinh et al., 2013; WWF et al., 2017). However, the determination of the
value of the natural resources like mangrove forests as a means for climate mitigation
and improvement of livelihoods has never been studied in De Gi Lagoon. Tuan and
Tinh (2013) carried out a classical study on CBA in Thi Nai Lagoon in Binh Dinh
Province. They determined the cost-benefit of aquaculture development option by
using revealed preference methods that are based on market-pricing approaches. They

determined the cost-benefit of restoration of mangroves using the data from Asian
Cities Climate Change Resilience Network (ACCCRN)-supported projects and
benefits were calculated using non-use values of the mangrove forests. The approaches

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