The Europaen Commission The Commission on the Protection of the Black Sea Against Pollution
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Report Contents

Preface Chapter 1A Chapter 1B Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12
List of Tables List of Figures

State of Environment Report 2001 - 2006/7

Chief Editor, Prof. Dr. Temel Oguz, Institute of Marine Sciences, Middle East Technical University, Erdemli, Turkey

Chapter 11 - Socio-Economic Pressuers and Impacts

State of the Environment of the Black Sea - 2009

CHAPTER 11 SOCIO-ECONOMIC PRESSURES AND IMPACTS

D. Knowler

School of Resource and Environmental Management
Simon Fraser University, Burnaby, British Columbia, Canada

11.1. Introduction

For several decades, the Black Sea has exhibited signs of being one of the most polluted and mismanaged inland or semi-enclosed seas in the world. Outbreaks of cholera, reduced recreational opportunities and degraded life support systems for both wildlife and humans have hindered the development of the region (Mee, 1992). Yet the Black Sea is an important European resource, with its watershed accounting for over half the area of the continent and its productivity rated at several times that of the adjoining Mediterranean Sea. However, these very characteristics make it more vulnerable to the environmental degradation that has occurred.

Environmental degradation in the Black Sea Region has had social and economic costs in a number of sectors. One of the hardest hit is the fisheries sector, where catches of the most lucrative fish species fell dramatically in the 1980s and 1990s. The costs of environmental degradation have manifested themselves in many other sectors as well. Along with fisheries costs, the World Bank (2000) and more recent Tranboundary Diagnostic Analysis (Black Sea Commission, 2007a) document extensive tourism, agricultural and health costs that have resulted from degradation of the Black Sea.

The extensive pollution loads discharged by the Danube, by other major rivers and by the Black Sea states themselves, together with over-fishing, dumping of toxic wastes, intensive shipping activity, mineral exploitation, the introduction of non-native species and the damming of tributaries, have been recognized as the proximate causes of severe environmental degradation in the Black Sea (Duda and LaRoche, 1997). Nutrient pollution is among the most important environmental problems affecting the Black Sea. As a result of 30 years of heavy nutrient pollution, the Black Sea (which was once oligotrophic) is now critically eutrophic (ICPDR, 1999). The northwestern portion has been transformed from a diverse ecosystem to a eutrophic plankton culture (Middleton, 1999).? Other important contaminants in the Black Sea include oil, synthetic organic compounds and radio nuclides deposited by the Chernobyl accident (Stanners and Bourdeau, 1995). This has had a major impact on the biodiversity and ecological integrity of the Black Sea (CEC, 2001).

However, underlying these more proximate causes of degradation has been a number of social and economic pressures. Poor initial conditions or rapid changes in social and economic pressures, serve as drivers of environmental change. In this chapter, these social and economic pressures are reviewed, together with the impact that the environmental degradation of the Black Sea has had on its dependent human population. The approach taken is to compare conditions during the 1995 to 2000 period with those of the more recent period (2001 to 2005). These periods correspond to the periods reviewed during two Transboundary Diagnostic Analyses. The emphasis here is on the social and economic pressures driving environmental change as well as the impacts of change on human populations. In addition to the standard methods employed for such analyses, consideration is also given to ecological economics perspectives by including a discussion of changes in non-market values due to environmental degradation, as well as a brief review of progress towards sustainability in the six Black Sea nations.

11.2. Valuing the Environmental Goods and Services Provided by the Black Sea

??????????? The Black Sea ecosystem generates a large number of environmental goods and services, some of which pass through markets, while others do not. Assessing the value of these environmental goods and services is a useful first step in understanding the human impacts of changes in the Black Sea marine system. However, to carry out such an assessment requires a framework for distinguishing and grouping these values. The concept of total economic value (TEV) provides such a framework. TEV makes a distinction between use values and non-use values, the former being further divided into direct and indirect use values. Direct uses refer to those uses which are most familiar, such as harvesting of fish and shellfish, collection of commercially valued marine products and use of the marine zone for recreation. Marine systems also perform ecological functions that support economic activity. These ecosystem services are referred to as indirect use values since it is not the functions themselves but their contribution to production that is valued. For example, marine systems can assimilate nutrients and other pollution to some extent, while coastal wetlands provide habitat for nursing and rearing of marine species.

Non-use value is often thought of as coinciding with the concept of existence value; individuals may be concerned about the continued existence of some environmental resource, such as a marine ecosystem or species, even though they have no plans to visit it. Non-use values are typically not commercially expressed since they are unrelated to use. As an example, marine biodiversity may be valued by persons living in distant countries. Due to their nature, non-use values are very difficult to measure.

For cases where values can be measured, we start with the economist?s concept of willingness-to-pay, whether or not we actually make any payment. From this amount we then subtract what it costs to supply the good or service, recognizing that in situations where environmental goods and services are free gifts of nature this cost is zero. Measuring economic values for the environment relies on a number of valuation techniques. These techniques can be divided into those that use market prices to directly measure the economic value of environmental goods and services, and those that do not. The latter group constitutes methods for non-market valuation, and these can be subdivided into a several further groupings.[3]

What are the main values associated with the environmental goods and services provided by the Black Sea? Relatively little non-market valuation of ecosystem goods and services has been carried out involving the Black Sea marine ecosystem. Clearly, the Black Sea marine system supports a range of use and non-use values. For example, there are numerous values associated with the Black Sea?s coastal zone and wetlands. Gren (1996) carried out a valuation study of the Black Sea wetlands, using data for 35 wetlands. She considers the fish, reed harvesting, grazing and nutrient retention values. She found that these values totaled from US$314 million to 514 million per year. These values correspond to US$ 190 and 312 per ha, respectively. Studies of other coastal systems can be instructive for putting Gren's estimates in context. For example, Brander et al. (2003) reviewed several dozen coastal valuation studies and found that the median values for coastal goods and services such as recreation, water quality, commercial fisheries and biodiversity ranged from $200 to $500 per ha per year (Table 11.1). Thus, Gren's estimates would seem quite reasonable.

In addition to the values associated with the coastal areas, the living marine resources of the Black Sea provide direct, indirect and non-use values (Table 11.2). While no estimate is available of the aggregate magnitude of these values, they certainly amount to tens or perhaps even hundreds of millions of dollars per year (see below, for an estimate covering the anchovy fishery). Aside from these values, there are a number of other specific biochemical and hydrological functions that are performed by marine systems and these should be included as well.

Degradation of the Black Sea marine system has resulted in the loss of all or some of the values referred to above. In the next section, the social and economic forces driving this unfortunate situation is explored, and then an assessment of the impacts on social and economic systems is made, keeping in mind the general trends over the last decade or so.

Table 11.1. Estimated Value of Black Sea Coastal Wetlands (US$/ha/yr)

Wetlands

Area

(ha)

Fish

Value

Harvest of Reeds & Grazing

Nutrient Retention

Total

Danube R. Delta

592,000

25

76

62

163

Dniestr R. Delta

200,000

8

26

22

56

Lower Dniepr R.

150,000

-

19

16

35

Don R. Delta

55,000

2

7

6

15

Others

653,000

19

26

-

45

Total

1,650,000

54

154

106

314

Source:? Gren (1996)

Note; figures are rounded and adjusted for rounding error. Lower values for nutrient retention from Gren (1996) are used in these calculations. Based on studies for 35 wetlands in the Black Sea region.

Table 11.2. Living Marine Resources of the Black Sea and their Values

Living Marine Resource

??????? Direct, Indirect and Non Use Values

Fish stocks

(e.g. anchovy, sprat, shad,

whiting, horse mackerel)

fresh, frozen, salted, canned and reduced products for

local consumption or export (direct use)

commercial and non-commercial species serve as

food for higher level predators (indirect use)

Molluscs, crustaceans, etc.

(e.g. clams, mussels, crabs,

sea snails, etc.)

commercially important as seafood (direct use)

serve as biofilters for reducing pollution (indirect use)

Bottom plants (e.g. red algae,

seaweed beds, etc.)

source of agar and sodium alginate (direct use)

critical habitat/food for many fish species (indirect use)

Marine mammals

(e.g. monk seals, dolphins)

previously harvested commercially (direct use)

important ecological function as top predators

(indirect use);? may have high intrinsic value as rare or endemic,? species (non use)

11.3. Socio-economic and Institutional Pressures

To understand the social and economic driving forces behind environmental change it is useful to employ a conceptual framework. Typically, the D-P-S-I-R model is used for this purpose (Fig. 11. 1). In this model, socio-economic drivers (D), environmental pressures (P), environmental state changes (S), social and economic impacts (I) and, finally, policy responses (R) work in sequence and through feedback mechanisms to describe the process of environmental change (Mee, 2005).

The main environmental pressures of human origin affecting the Black Sea marine systems living resources and habitats have been described in the 2007 transboundary diagnostic analysis as:

inflows of nutrients, resulting in eutrophication;

the loss of higher trophic level predator species, which has altered food chain structure;

the introduction of exotic species, especially the jellyfish Mnemiopsis leidyi;

modifications in river flow regimes, which have affected the salinity of the Black Sea and had other effects;

declines in populations of various living marine resources as a result of over harvesting; and,

inflows of chemical and toxic pollutants and erosion of coastlines.

Socio-economic DRIVERS

 

Policy RESPONSE options

 

Institutional BARRIERS for

change

 

Social and economic IMPACTS

 

Fig. 11.1. Modified D-P-S-I-R model showing the Relationship between Drivers (D), Pressures (P), State Changes (S), Impacts (I) and Responses (R), with the Addition of Institutional Barriers. Source: Mee (2005).

Further details concerning the extent and severity of these environmental pressures can be found in other reports. Here, we examine the underlying causes or drivers behind these problems and these are largely social, economic and policy or institutionally related. However, the situation is not obvious. Unlike many rapidly growing regions of the world, the population of the Black Sea countries (except Turkey) has been contracting over the last decade (Table 11.3). Population growth rates have been consistently between zero and -1% per year (Fig. 11.2). This situation presents complex challenges for environmental management: while a declining population might be expected to put less pressure on the resource base, it may also lead to difficulties with mustering the necessary resources to address existing environmental problems. Our data does not indicate whether the coastal zone itself is experiencing a decline in population, but this may be the case where fisheries have historically been important (versus tourism) or where population density in this zone is much lower than the country as a whole (Table 11.3).

The trend is much more positive with respect to economic performance over the last decade (Table 11.4). This suggests that declining population may be a lagging indicator of national performance, since economic growth was significantly higher during 2001 ? 2005, in comparison to 1995 ? 2000. The exception is Turkey, where there was no significant change in the economic growth rate.? However, Turkey and all other Black Sea countries experienced much lower consumer price inflation during the latter period, an indication of more stable macroeconomic conditions (Table 11.4). The main trend has been the reduction of importance of agriculture and the increasing significance of the service sector (Black Sea Commission, 2007a), a development that is typical of emerging economies.

Table 11.3. Demographic Data for the Black Sea Countries and their Coastal Zones, Selected Years

Population

(million)

Coastal Zone, 2005

Countries

Country Data, 2005

1995

2005

Population

10-14 years

(%)

Population

density

(per km2)

Population 1/

(million)

Population

density 2/

(per km2)

Bulgaria

8.30

7.72

14.1

70

2.1

60

Georgia

4.79

4.32

19.5

64

1.7

76

Romania

22.68

21.71

15.9

94

0.97

62

Russia

148.40

142.70

15.7

9

0.89

100

Turkey

60.64

71.61

29.5

94

7.6

74

Ukraine

51.50

46.93

15.4

81

6.7

60

Source: World Bank. 2007. Key Development Data & Statistics. Data and Statistics. World Bank staff estimates from various sources including census reports, the United Nations Population Division's World Population Prospects, national statistical offices, household surveys conducted by national agencies, and Macro International. Accessed November 28, 2007.

http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20535285~menuPK:1192694~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html.

1/ Georgia excludes Abkhazia; Russian population is only for Krasnodar Krai; Turkey excludes Istanbul.

2/ Turkey excludes Istanbul.

?

?????? Fig. 11.2. Annual Population Growth in the Black Sea Countries, 1995 to 2005. data source: World Bank Development Indicators website (accessed November 27, 2007) at http://web.worldbank.org

What is the significance of improving economic conditions in the Black Sea countries for the marine environment? One theory holds that as countries stabilize and their per capita income increases, there is a general improvement in environmental conditions, but only after a threshold is surpassed.[4] Given that some Black Sea countries may be at or near this threshold it is possible that we could expect conditions to improve in response to higher per capita incomes. However, this is not certain and there may be a period of further deterioration before income levels are sufficient to stimulate more expenditure on environmental improvement. Further study of this phenomenon, as it affects the Black Sea region, is clearly required.

Table 11.4. Selected Economic Data for the Black Sea Countries, 1995 to 2000 and 2001 to 2005.

GDP, Per Capita

(US$ current prices)

Countries

GDP, Growth

(% change/year)

Consumer Prices

(% change/year)

Average

1995-2000

Average

2001-2005

Average

1995-2000

Average

2001-2005

Average

1995-2000

Average

2001-2005

Bulgaria

1471.72

2565.74

-0.6

4.9

213.0

5.3

Georgia

655.88

1018.96

5.3

7.3

39.3

5.8

Romania

1644.38

2927.60

0.2

5.7

62.8

18.6

Russia

2074.24

3387.92

0.8

6.1

65.7

14.9

Turkey

2947.62

3523.07

4.6

4.5

75.9

28.1

Ukraine

781.48

1171.70

-3.6

7.7

89.0

8.1

Sources: International Monetary Fund, World Economic Outlook Database, October 2007. Data and Statistics. http://www.imf.org/external/pubs/ft/weo/2007/02/weodata/ weoselgr.aspx. Accessed November 28, 2007.

??????????? Another factor driving economic growth and potential environmental change in the region is petroleum development. Asmus and Jackson (2004, p23) describe the situation concerning this sector of the regional economy as follows: ?The wider Black Sea region straddles and indeed dominates the entire Euro-Asian energy corridor from trans-Ukrainian oil and gas pipelines running to the markets in Europe?s north to the Baku-Tbilis-Ceyhan pipeline running to the Mediterranean. A new Euro-Atlantic strategy geared towards anchoring and stabilizing the region can potentially bring the vast energy reserves of the Caspian Basin and Central Asia to European markets on multiple, secure, and environmentally safe routes. Not only will these energy supplies secure the prosperity of a politically independent Europe for decades to come, but the construction and maintenance of these routes will provide an important economic stimulus to the economies that were left behind in the revolution of 1989.?

??????????? It seems obvious that the possibilities for harmful impacts on the environment are substantial. Progress in ensuring this development does not harm the Black Sea will need to be monitored.

Finally, policy and institutional factors also play a role and can inhibit progress in addressing the problems of degradation (Fig. 11.1). For example, most living marine resources are not owned but shared, and therefore can be referred to as common property or ?common pool? resources. There has been relatively little control of commercial harvesting of fish and other species -- thus, there is at best "regulated open access" to the resource and this results in over harvesting.[5] Use of the Black Sea and its tributaries for the disposal of wastes is free (un-priced) and so this ecosystem service is overused, imposing external costs on the commercial fisheries. Meanwhile, the diversion of water flows from tributaries for power generation or irrigation is done without taking account of their value in maintaining suitable fish habitat and salinity levels in the Black Sea; this is another example of an external cost. On the policy side, general public policy failures include an inadequate regulatory framework, poorly coordinated planning mechanisms and a lack of enforcement of existing laws and regulations. Finally, insufficient international coordination, given the transboundary nature of most living marine resource stocks, contributes further to the problem.

11.4. Consequences of Environmental Change in the Black Sea

The pressures cited above have led to changes in the environmental state of the Black sea marine system, but these are intermediate effects, as they have further impacts in social and economic terms. Impacts on the key sectors of fisheries and tourism are reviewed below, along with a brief overview of the impact of environmental conditions on human health. Sufficient information for other sectors to consider the environmental impacts of Black Sea degradation was not available.

11.4.1? Fisheries

One of the key industries of the Black Sea is its fisheries. Only five of the 26 commercial fish species once abundant in the Black Sea in 1970 remained commercially viable in the mid 1990s (Stanners and Bourdeau, 1995), a result of pollution and the introduction of non-native species, most notably the comb jelly Mnemiopsis leidyi. The Black Sea?s fisheries, which supported approximately two million fishers and dependents, suffered almost total collapse (Mee, 1992; Travis, 1993). Some rough estimates were made of the losses incurred by the Black Sea commercial fisheries during this period (Caddy 1992, Campbell 1993):

Catch values from the mid 1980s to early 1990s declined by about US$240 million, using total Black Sea landings values of 900,000 t and 100,000 t, respectively, and a unit catch value of $300/t.

Separate estimates for Turkey alone suggest even higher losses, totalling $300 million annually.

Processing plant losses were roughly estimated at about $10 million for the 50 plants in the Black Sea region, on the basis of the costs of switching over to an alternative production line.

Using the more extreme replacement cost approach, the estimate for Turkish processing plants alone suggests losses of $20 to 30 million.

Up to 150,000 people were estimated to depend directly on the Black Sea fisheries. Income losses have been more difficult to estimate. Wages lost in processing plants alone totalled approximately $10 million annually.

The most comprehensive economic valuation of the decline in Black Sea fisheries is provided by Knowler (2005), who modeled nutrient-induced eutrophication and its impact on the commercial anchovy fishery in the Black Sea. While increasing nutrient loads reduced the quality of fish habitat for many benthic species (e.g. turbot), it had the reverse effect on anchovy, since these species are not much affected by algal blooms and other eutrophication-related events, and benefit from increased marine system productivity (Caddy et al. 1995). As a result, the role of nutrients as an environmental influence was modeled as a positive effect on anchovy recruitment. Complicating the picture was the shift in environmental conditions in the Black Sea in the mid 1980s due to the introduction of Mnemiopsis leidyi. Since Mnemiopsis preys on anchovy juveniles, this reduces the anchovy?s potential stock size, offsetting the perceived benefits from increasing nutrient loads.

For this reason, two historical periods were modeled, a pre-Mnemiopsis period (1971-86) and a subsequent period with Mnemiopsis present (1987-93).[6]? Just considering the prevailing nutrient conditions (with no abatement), Knowler (2005) estimated that the comb jelly reduced the profits available in the Black Sea anchovy fishery from over $17 million per year to under $300,000 per year, a decline of 98% (Table 11.5). Similarly, the sustainable harvest of anchovy declines from almost 400,000 t per year to only 40,000 t per year and the optimal number of industrial purse seine fishing vessels goes from 72 to 13. In contrast, the fishery had been characterized by hundreds of vessels historically, many of these vessels representing overcapitalization and leading to overexploitation.

Table 11.5. Potential Long Run Profits in the Black Sea Anchovy Fishery for the Pre-Mnemiopsis and Mnemiopsis Periods (US$ thousands, 1989/90 prices)

Historical

Period

No Pollution

Control

50% Reduction

in Phosphates

Welfare Change

due to

Pollution Abatement

Pre-Mnemiopsis

(1971-86)

17,080

14,336

‑2744

With Mnemiopsis

(1987-93)

290

138

‑152

Welfare Change

due to Mnemiopsis

‑16,790

‑14,198

-

Source:?? Knowler, 2005

The long run economic welfare change induced by nutrient abatement was calculated as the difference in available profits earned with and without the change in environmental quality but allowing for separate effects from nutrient abatement and the introduction of Mnemiopsis. The resulting values calculated for both scenarios show that: (i) nutrient abatement would have actually reduced profits in the anchovy fishery, and that (ii) the impact would have been much greater during the period before Mnemiopsis entered the Black Sea (Table 11.5). With the establishment of the invader, the productivity of the anchovy stock declines so significantly (as do fishery profits) that the effect of nutrient abatement is relatively small.

The recent recovery in some Black Sea countries? fisheries through the early part of this decade indicate there may be hope for restoring the fisheries to some desired level (Table 11.6). Compared to maximum production figures for the 1972 ? 1992 period (Stamatopoulos, 1995), only Georgia and Ukraine exceeded this performance in the 2001 ? 2005 period.? Other countries (especially Romania and Bulgaria) show much lower production more recently, while even resurgence in the Turkish Black Sea fishery still leaves the harvest at 100,000 t per year below the maximum attained in 1988.

Recovery in the fisheries will depend on management improvements that reduce the risk of further collapses in the future. Thus, the increases in harvest need to be sustainable and not just an expansion in national fishing fleets that generate illusory gains, only to be lost as environmental conditions change or stock dynamics respond negatively. Data on fishing fleets suggest a mixed experience across countries (Table 11.6). While Georgia and the Ukraine have managed to increase harvest with a significant reduction in their fleets, Bulgaria?s performance is the reverse and is suggestive of worsening conditions.

Table 11.6. Fishery Statistics for the Black Sea during 1995-2000 and 2001-2005

Total Catch (t)

Number of Vessels (> 12m)

Country

1995-2000

2001-2005

% Change

1995-2000

2001-2005

% Change

Bulgaria

7743

6024

(22)

34

47

39

Georgia

4326

9468

119

35

31

(12)

Romania

3223

1964

(39)

12

9

(28)

Russia

6233

14148

127

26

26

0

Turkey

348636

374708

7

1048

1236

18

Ukraine

34955

48914

40

160

112

(30)

Total

405116

455225

12

1315

1461

11

Source:? Black Sea Commission, 2007a

11.4.2? Tourism

Tourism in the Black Sea region is an important industry. It benefits from general trends in world tourism, that have seen global tourism receipts grow an average of 8% per year from 1980 to 2000, while world economic growth averaged 3% (Lanza et al. 2005). Nonetheless, even at the national level, tourism in the Black Sea countries involves a relatively small number of visitors and expenditures. For example, Bulgaria, Russia, Turkey and Ukraine (no data for Georgia and Romania) accounted for only 13.7% of international tourist arrivals in Europe in 2006. For receipts, the share is even smaller: the same four countries received only 8% of total European tourism receipts and only Turkey indicates a share of receipts greater than its share of international arrivals (4.1% and 4.5%, respectively).[7]

Tourism can be both a source of environmental impact as well as being highly sensitive to the effects of degradation. According to Rudneva (2003), over 4 million persons visit the Black Sea coastline in summer but by the 1990s this had declined, compared to the 1980s, particularly in Romania where amenity values deteriorated significantly due to pollution and eutrophication. Beaches and coastal tourism resources are apparently of higher quality in Russia, Ukraine and the Caucuses but the region struggles to attract international destination tourists: Brown (1996) indicates that only 8% of tourists using the Black Sea region are from abroad.

Despite the localized nature of Black Sea tourism, international tourism trends offer insights into the general situation. Recent international travel trends suggest some improvements in visitation, comparing international arrivals for the Black Sea countries in 2001-2005 with 1995-2000 (Table 11.7). However, it is difficult to know how well these national trends reflect the experience in the Black Sea region and to what extent changes in environmental quality may be an influence. The improving trend is most noticeable in Bulgaria and Ukraine, where large increases in arrivals and receipts are noted for the more recent period (2001-2005). The increasing fortunes of tourism in these countries is demonstrated by the large rise in the share of exports attributable to tourism in 2001-2005, compared to 1995-2000, with as much as a doubling in the case of Ukraine (Table 11.7).

Table 11.7.??????????? General Tourism Statistics for Black Sea Countries

Country

Number of Arrivals

(thousands)

Receipts

(millions current US$)

Receipts

(% of total exports)

Average

1995-2000

Average

2001-2005

Average

1995-2000

Average

2001-2005

Average

1995-2000

Average

2001-2005

Bulgaria

2860.8

4026.8

903.0

2105.6

14.3

19.0

Georgia

267.2

368.2

135.5

189.8

21.9

14.2

Romania

3031.8

n.a.

502.2

651.8

5.1

2.9

Russia

16689.7

22338.0

n.a.

6078.8

n.a.

3.7

Turkey

8254.7

14802.6

n.a.

n.a.

n.a.

n.a.

Ukraine

5333.2

11958.5

506.0

1887.4

2.7

5.4

Source: World Bank. World Development Indicators 2007. Accessed at:

http://ddp-ext.worldbank.org/ext/DDPQQ/showReport.do?method=showReport

Assessing the impacts of environmental degradation on tourism requires studying tourists? attitudes towards possible improvements in environmental quality. Brown (1996) used this approach to determine how tourist visitation would change given fixed improvements in environmental quality in the Black Sea. He used the travel cost technique and pilot studies in Romania to generate values for the entire Black Sea region (Table 11.8). Tourists were asked whether they would still visit the region given prescribed changes in environmental quality (5%, 10% and 20%) and this information was then used to project changes in visitation and the value of gains/losses in consumer welfare associated with these changes, measured as changes in consumers? surplus.[8]

Tourists responding to the survey interpreted environmental quality with respect to ?debris in the water, poor water clarity, oil in the water and on beaches and other dimensions? (Brown, 1996, p15). Using 1995 visitation and expenditure as a baseline, the annual aggregate willingness to pay for a 5% improvement in environmental quality was $314 million per year (1995 prices). This contrasts with a willingness to pay of $551 million per year for a 20% improvement in environmental quality (Table 11.8).

Table 11.8. Estimated Annual Loss of Tourism Value from Environmental Deterioration of the Black Sea in the Mid-1990s

Country

Baseline Values

Estimated Value of Quality Change

Visitors

(number)

Estimated value

(1995 $millions)

5%

improvement

10%

improvement

20%

improvement

Bulgaria

800

48

12

14

21

Georgia

250

15

4

4

7

Romania

870

52

13

15

23

Russia

12500

750

188

218

330

Turkey

2200

132

33

38

58

Ukraine

4250

255

64

74

112

Total

20870

1852

314

363

551

Source:? Brown, 1996

While conditions have changed somewhat since this study was done, it is likely that the basic conclusions and order of magnitude estimates remain the same. One continuing cause for concern is the presence of large amounts of marine litter. In a recent study of marine litter from the Black Sea Commission high levels of marine litter (ML) on recreational beaches were noted (Black Sea Commission 2007b, p10): ?Great numerical predominance of plastic ML (80?98%) has been determined in comparison with glass ML (2?20%) on the wild (unmanageable) beaches of Crimea, Ukraine, during different seasons. The density of beachfront pollution by polymeric garbage varied from 333 to 6,250 kg/km2, while the density of glass ML fluctuated between 222 and 1,455 kg/km2. The concentration of ML collected in different places of the Turkish Black Sea coast varied from 58 to 1,395 kg per linear kilometer of the coastline... According to interview data, most visitors of Bulgarian beaches (up to 90%) appreciated local climatic conditions but did not like rubbish on the coast. The opinion of holiday-makers was that ML strongly (or very strongly) affects quality of a beach.??

Clearly, more needs to be done to improve environmental conditions for Black Sea tourism. If these improvements are made, then the opportunities to provide substantial gains to consumer welfare surely exist. Domestic tourism participation is closely tied to economic conditions so that rising incomes will be important as well. A generally increasing global trend in tourist activity will help.

11.4.3? Health

According to Rudneva (2003), the most important health-related effects of marine degradation are the presence of microorganisms from infected sea water, contact with polluted sea water or beach sand, and consumption of contaminated seafood. In an earlier World Bank cost-benefit study (World Bank n.d.), the main health threats in the Black Sea region were assessed for three locations according to whether they were of a continuous or incidental nature (Table 11.9). Extremely high to large risks were common. In recent decades, the Black Sea countries have experienced several incidents of cholera, E. coli outbreaks, hepatitis A and enterovirus infections. Most such problems stem from direct effluent discharges to the Black Sea near urban areas and beaches or from bioaccumulation of toxics within fish and mollusks harvested for human use.

Progress in addressing the problem of human health impacts has been made since the identification of waste water treatment hot spots in the original 1996 transboundary diagnostic analysis. As part of the investment program initiated since 1996 a number of waste water treatment plants have been funded and contamination problems are considered resolved at these sites. However, the number is not large. Of the 34 municipal hot spots identified in the 1996 Transboundary Diagnostic Analysis,? upgrades on only 8 have been completed (Tsarevo, Constanta Nord/Sud, Eforie Sud, Mangalia, Gelendzhik, Dzoubga and Pivdenni), while work continues at several additional sites (Black Sea Commission, 2007a). Thus, there is still some progress to be made in addressing this critical environmental problem.

11.5. Sustainability: Progress and Prospects

In this section, we examine general progress towards sustainability in the six Black Sea countries using new indicators of sustainable economic welfare. Conventional indicators of socio-economic progress neglect the progress of countries towards attaining sustainability. Various indicators of sustainability are available to correct this shortcoming but most concern ecological status or are not appropriate at the national level (Bell and Morse 1999). The most appropriate for comparing the performance of whole national economics is the Adjusted Net Savings concept (or Genuine Saving), developed by the World Bank.[9] This sustainability indicator is related to green national accounts by using national accounts data to measure the true savings in an economy. It takes account of investments in human capital, depletion of natural resources and damage caused by pollution via several adjustments to gross savings in the country:

Table 11.9. Degree of Health Risk Associated with Various Aspects of Black Sea Pollution

Nature of Pollutant

Health Threat

Continuous Risk

Incidental Risk

Istanbul

Odessa

Bourgas

Istanbul

Odessa

Bourgas

Discharges from harbours and ships

Allergic reactions

extremely high

extremely high

extremely high

extremely high

extremely high

extremely high

Industrial chemical discharges

Skin and outer mucosa diseases

? large to very large

extremely high

substantial

Very large

extremely large

substantial

Industrial Organic Discharges

Allergic reactions

extremely high

extremely high

large

extremely high

extremely high

large

Toxic Industrial Chemical Discharges

Life

threatening

insignif.

very small

insignif.

Small

large

small

Contaminated Seafood

extremely high

large

average

Large

substantial

very small

Municipal Sewage

Typhoid fever,

?dysentery, cholera

extremely high

extremely high

large

large

large

small

Contaminated Seafood

extremely high

large

average

large

substantial

very small

Agricultural chemicals

Allergic skin

?diseases

average

very high

average

Source : World Bank, 2000. The threat levels are ordered in the following manner:

extremely high > very large > large > substantial> average > small >very small > insignificant.

Depreciation of manufactured capital is deducted to yield net national savings.

Current education expenditures are added to net domestic savings to capture investment in human capital.

Depletion of natural resources is deducted to capture the reduction in asset values resulting from extraction or harvest. The measure of depletion is taken as foregone natural resource rents.[10]

Residual pollution damages are deducted as measured by estimated health damages due to urban air pollution.

If adjusted net savings are negative, then the country?s total wealth is falling (see http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/EXTEEI/0, contentMDK:20487828~menuPK:1187788~pagePK:148956~piPK:216618~theSitePK:408050,00.html). Policies resulting in consistently positive adjusted net savings suggest the country is on a path towards sustainability.

?

Fig. 11.3. Sustainability Indicators: Adjusted Net Saving in the Six Black Sea Countries, 1996 ? 2004. Data source: World Bank website (accessed November 27, 2007) at http://web.worldbank.org

For the Black Sea countries the picture is one of widely divergent performance on sustainability during the years 1996 ? 2000 (Fig. 11.3). Most countries showed a more-or-less constant trend but at quite different levels, while two performed more erratically. Russia indicates a dramatic downturn in sustainability after 1997, mostly due to an increase in energy resource depletion. Conversely, Georgia shows a dramatic increase in sustainability at the same time, resulting from an increase in gross savings and reductions in fixed capital depreciation and particulate matter pollution. Throughout the period, all countries show substantially lower adjusted net savings than the World average, except for Turkey (Fig. 11.3).

In the subsequent period from 2001 ? 2004 there is a general converging trend in the sustainability performance of the Black Sea countries (Fig. 11.3). The strongest performers are Russia and the Ukraine, while Turkey?s adjusted net savings decline gradually. For the former two countries, the improvement stems from higher gross savings and lower depreciation of fixed assets. It is of interest that the Black Sea countries seem to be converging around the World average performance.

11.6. Conclusions

The D-P-S-I-R model clearly suggested some progress on socio-economic dimensions of environmental improvement in the 2001-2005 period that may, in part, be tied to enhanced economic fortunes. More stable and prosperous economies are liable to (eventually) lead to improving environmental conditions. There is certainly some evidence that the Black Sea countries are converging on a path towards sustainability (as measured by net adjusted savings). On the other hand, there is more progress to be made: achievements in addressing hot spot investments to eradicate water quality problems have been modest and more is required if threats to human health are to be reduced.

An important element in making further progress is the development of a set of indicators that can measure achievements on social and economic issues. While developing a full set of appropriate indicators would be a substantive undertaking, and one that is not possible here, Table 11.10 provides a preliminary list of possible indicators as a starting point. These suggested indicators include some for which the data may exist now (e.g. national gross domestic product, international tourist arrivals, net adjusted savings), it also contains some for which data may be sparse or non-existent at present (e.g. marine fish stocks, coastal zone population density). Many of the latter are the more detailed indicators that reflect localized conditions within the coastal zone of the Black Sea countries. Thus, a concerted effort with the requisite funding will be required to make progress in this area.

Table 11.11. Preliminary Socio-economic Indicators for the Black Sea

Type of

indicator

Indicators Units

Population and Demographics

- Administrative units in coastal zone (cities,

? localities, villages, etc)

- Population, country and coastal zone

[Note: its useful to have country and coastal zone

to place latter in national/comparative perspective]

- Population density, country and coastal zone

- Population growth, country and coastal zone

- Net migration rate, country at least

no.

thousands pers.

inhabitant/km2

%

%

Economic

- Land use change in coastal zone [by land use type]

- Average monthly earnings, national

- Fishing catch [by species]

- Marine fish? stocks [rare to find this]

- Gross domestic product, national and regional

- Sectoral distribution of GDP

- Changes in value of ecosystem services

- Changes in value of natural capital

%

Euro/month

t/year

t

Thou Euro

%

Thou Euro

Thou Euro

Social and

?Health

- Population with access to clean water

- Population connected to WWTP

- Unemployment rate, national

%

%

%

Transport

- Density of the public road network, coastal zone

- Number of airports, coastal zone

- Length of railways, coastal zone

- No. of harbours

- Total harbour area

- Harbour traffic capacity

km/km2

no.

km

no.

ha

mil/tons/year

Tourism

- Touristic accommodation units in coastal zone

- Number of tourist arrivals

- Number of tourist overnight stays

- Value of tourist expenditures

bed units

no/year

bed-nights

Thou Euro

Public Awareness and Sustainability

- Number of? environmental NGO?s

- Net Adjusted (Genuine) Savings indicator

?? (World Bank)

- Ecological Footprint & related (Global Footprint

? Network, Moran et al. 2008)

No.

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