Economic Analysis and Environmental Resource Valuation 


Environmental Economic valuation is the process of placing monetary value on environmental assets and is used as a common measuring rod to weigh up environmental costs and benefits. The environmental economic valuation and the cost-benefit analysis focus on the efficiency aspects of sustainable development and form part of the range of methodological approaches to incorporating sustainable development into decision-making processes.  But, valuation cannot comprise a single activity, and the seemingly simple question ‘how valuable is an ecosystem?’ can be interpreted in many different ways. Hence, PERSGA is working towards developing an economic valuation tool to examine how the costs and benefits of ecosystems are regionally distributed.

Resource valuation is a crucial step for developing the socioeconomic mapping upon which PERSGA develops sustainable income-generating socioeconomic projects (small and medium) in the Red Sea and Gulf Aden region.  PERSGA’s 2005 workshop “Towards ICZM: Balancing Standards of Life for Coastal Communities" emphasised the need to assess the economic value of the coastal and marine life in the Region’s coastal zones and the development of indicators and assessment tools accordingly.


In PERSGA’s Operational Framework (2006-2010), the following economic analysis activities have been identified to help the organization achieve its overriding sustainable development goals:

  • Identify and quantify the economic value of the region of the coastal and marine resources.

  • Conduct comprehensive stakeholder and socio-economic analysis related to marine environment and coastal areas, identify where involvement with partnerships can assist the business sector to create added value (conduct regional workshop and feasibility study); This activity will also produce a socio-economic monitoring programme to be compiled in the PERSGA IIMS

  • Work with economic ministries, local authorities and agencies in the region to identify and integrate environmental measures into regional development plans and programmes and produce “Protocol for the Integration of the Environment into Regional Development Programmes”

  • Work with the private sector in developing corporate environmental policies, an “Environmental Code for Users and Developers of the Marine Environment of the Red Sea and Gulf of Aden”

  • Review possible economic instruments for the RSGA Region to promote environmental sustainability

PERSGA is working towards establishment of partnerships with the World Bank, other Regional Seas Programmes and the Large Marine Ecosystems (LME) Initiative for the adoption of an economic valuation scheme and its related activities. For the execution of environmental analysis planning activities, PERSGA builds on the example provided by existing economic valuation tools and adapts them to address the specific circumstances of the region.    


The PERSGA Toolkit on Economic Valuation of Marine and Coastal Resources:

PERSGA is developing a Toolkit on Economic Valuation of Marine and Coastal Resources in the PERSGA region. The Organisation is training a team of regional experts to help prepare the kit. The resoruce will be used to identify the existing and potential economic value of the coastal and marine environment and implement measures to integrate the environment into the socio-economic development processes in the Region. The tool further examines the following four distinct aspects of the value of ecosystems:

  • Determining the value of the total flow of benefits from ecosystems;

  • Examining how the costs and benefits of ecosystems are distributed;

  • Determining the net benefits of interventions that alter ecosystem conditions;

  • Identifying potential financing sources for conservation