Environmental Valuation & Cost-Benefit News

Urban greens have significant amenity and recreational use value which contribute significantly to the quality of urban life. Politicians, bureaucrats, industrial houses, and real estate developers, especially in developing countries, often attempt to
utilize these space for projects that reduce or eliminate these oases.

Non-market benefits of such areas are generally not correctly valued and incorporated in to cost-benefit analysis of development projects. Dr. Pradeep Chaudhry selected Chandigarh, one of the planned cities of India to estimate the non-market value of recreational benefits provided by the urban forestry of the city was estimated, because it is known for its parks, gardens and urban greenery.

The focus of this study, in the form of Ph.D thesis, was on city’s parks, gardens, tree-avenues, reserved forests and the Sukhana wild life sanctuary. The main objectives were to estimate the recreational use value of above areas from the point of view of residents as well as tourists coming to the city, and to assess the predictive abilities of various functional forms for developing suitable models to estimate willingness to pay (WTP).

Two economic valuation methods -- Contingent valuation method and Travel cost method were applied.

The mean willingness to pay (WTP) for the betterment of existing green landscape features and for creating new parks/gardens on the part of each "reasonably earning" family residing in the city has been found as Rs. 153/- per year for a period of five years, which indicates an annual recreational use value of the city’s urban forestry assets to Rs. 2.75 crores (Rs. 27.50 millions) at 2002-03 prices.

The Contingent valuation method (open ended) was used for this purpose and data was collected from 2358 residents of the city. The Contingent valuation method, open-ended version (CVM) and Zonal travel cost method (TCM) were used to estimate the annual recreational use value of city’s urban greenery on the part of tourists coming to the city. The reasons for variation in the results of two methods have been discussed. The inherent tendency of most of the Indian middle and upper middle class, which has the capacity to move as tourists, not to reveal actual income on record due to huge black economy of the country, has been found as one of the major reasons for poor results in CVM (OE). Estimates of recreational use value provided by the TCM has been considered more reliable in the Indian context, which was estimated as Rs. 9.24 crores (Rs. 92.40 millions). Therefore, total annual recreational (use) value of the city’s parks/gardens, boulevards, green avenues, reserve forests, wild life sanctuaries and other landscape features at 2002-03 prices, equates to approximately Rs. 12.00 crores (Rs. 2.75 crores plus Rs. 9.24 crores). This amount is the recreational use value only on the part of people using or approving of this particular environmental asset and should not be misunderstood as environmental or ecological value.

The urban forestry in Chandigarh city contributes 87.67% in making the city attractive with respect to tourism. The City’s unique architecture, openness, comparative cleanliness and other features account for the balance. or 12.33%. This exhibits the immense power of urban forestry in attracting tourists.

by Dr. Pradeep Chaudhry
PhD. Thesis
Forest Research Institute(deemed university) Dehradun-248006, India; e-mail: pradeepifs@yahoo.com
2006