Our Southwest Florida
Natural Resources and Economy


Must we place a dollar figure on natural resources for them to have value?

Assigning a dollar value to goods and services provided by the environment is not easy because we usually do not buy these services directly. While we pay for food, housing, and gasoline with money that is easily counted, benefits such as clean air to breathe or the beauty of a pristine river are not goods that we pay for directly. Since these benefits are difficult to measure using traditional methods, economists have developed ways to indirectly measure how our natural resources influence our regional economy. A few of these methods were used in this study of natural resources and the economy of Southwest Florida.

 

Natural resources provide an economic value and benefit that far
surpasses simple profit calculations.

City of Punta Gorda Nature Park
Photo by Jim Stilwell

Background

Within the Charlotte Harbor National Estuary Programs study area you will find over 4,400 square miles of varied landscapes and natural resources. Land types such as wetlands, pine flatwoods, slow moving rivers, and hardwood hammocks provide natural goods and services such as flood control and support a variety of unique plants and animals. Resident Floridians enjoy resource-related benefits such as jobs in the phosphate mining industry, commercial and private fishing enterprises, and growing eco-tourism ventures. Tourists visit Southwest Florida year-round because of its pristine beaches, fine resorts and restaurants, world class fishing, and countless forms of other outdoor recreation.

To assess how our regions economy is affected by the use of natural resources, a study was conducted to measure economic value associated with the benefits we receive from these resources (see map). The natural resources considered in this study include wildlife ecosystems, water, minerals, fisheries, and agriculture. Significant benefits such as tourism, abundant clean water, and flood control are highly dependent on the quality and availability of natural resources.

Measures of Economic Value

The results of the study show the economic value associated with the natural resources of the greater watershed. Examples of activities and benefits dependent on these natural resources include:

" tourism and recreation industries (see table on back page);
" commercial fishing;
" recreational fishing;
" swimming, boating, and other water sports;
" mining;
" nature observation;
" "non-use" values of important wetland areas; and
" flood control.

Any assessment that analyzes the areas natural resource value must make some assumptions and use estimates. These assumptions make the results imprecise and may overestimate some economic values, but nevertheless provide a very useful "ballpark" understanding of the regions economic values.

Consumer Surplus and Total Income

Given the best available information, this study estimated the consumer surplus and total income associated with the natural resources in the greater Charlotte Harbor watershed.

Consumer surplus may be thought of as consumer "profit." Although this money doesnt actually change hands, it represents the value of human well-being associated with current use of the resources. For example, if you purchased a car for $10,000, but were willing to pay up to $12,000, you would get a benefit of $2,000 in consumer surplus above the price you actually paid.

Total income is the second method to consider. Any business that relies on natural resources to make money typically depends also on supplies and services from other companies. Most businesses rely on other companies to provide support such as food, transportation, utilities, office supplies, and business/professional services. These related goods and services also produce an income, and additional benefit to our community. The combined income of a business and the related sales it generates from other companies is the total income that business generates in the regions economy. For example, if a family on vacation rented kayaks at the wildlife refuge, they likely spent money at a hotel for lodging, rented a car for local travel, and purchased meals. In this case, total income would attempt to capture expenditures associated with this resource use.

Summary

The adjoining table provides estimates of consumer surplus and total income from this study. This one-year snapshot of the economic benefits from current uses of the regions resources is based upon the best information available.

 

The economic assessment calculated two values:

1) CONSUMER SURPLUS, or the maximum amount of money a consumer like you would be WILLING to pay, ABOVE the price ACTUALLY paid, and

2) TOTAL INCOME, that includes income from direct, indirect, and induced wages (induced referring to income generated from businesses that provide goods and services to the employees of direct and indirect businesses).

 

Photo by Joy Duperault

Resource Activity/Amenity Consumer Surplus Total Direct and Indirect Income
Tourism & Recreational Industries

(in Other Recreational Activities) 

$2,196,941,059

Commercial Fishing

not available

$22,635,667

Recreational Fishing

$107,228,991

(in Tourism)

Other Recreational Activities*

$809,448,482

(in Tourism)

Agriculture

not available

$671,580,307

Mining

not available

$270,250,299

Non-use value of wetland
areas in the Charlotte Harbor
NEP study area

$884,028,344

not applicable

Total

$1,800,705,816

$3,161,407,332

*(e.g. boating; swimming and other water sports; nature observation)

 

 

Economic Valuation and the Environment

Without a doubt, Floridians benefit economically from unique natural resources. The white sandy beaches, championship fishing, and multi-billion dollar agriculture industry are directly related to the quality of the environment. Natural resources support jobs and industry profit as well as other benefits such as recharging groundwater aquifers and providing essential wildlife habitat.

What happens to these economic benefits if our natural resources are damaged? Well, certainly the wildlife will decline, and so will other benefits such as recharging our drinking water supply and providing natural pollution control. While jobs may be created from new retail and manufacturing opportunities, declines in environmental quality can have costs such as less tourism-related jobs and higher pollution control costs.

When considering land use changes, we must realize all short and long-term costs and benefits, as well as cumulative effects. For example, building roads and causeways not only increases access to public lakes, trails, and beaches, but also increases the value of adjacent private lands for more intensive uses. Therefore, the cost of such new facilities should take into account the natural benefits lost not only from the right-of-ways, but also from the adjacent lands opened up for urban development. We must consider these total costs when planning future trade-offs.

The results from this study are a snapshot of our dynamic economy and ever-changing mix of goods and services. This study helps us to understand the basic linkage between our natural resources and our economy. Resources are commonly taken for granted, or simply undervalued when assessed with more common methods of economic valuation. Without this appreciation, unrecognized costs of todays natural resource alterations will simply be passed on to future generations.

Estimated User Occasions by Recreational Activities in the

Charlotte Harbor NEP by Residents

1995 Annual Number of User Occasions by Activity

Activity Charlotte DeSoto Hardee Polk Manatee Sarasota Lee Total
Saltwater Beach Activities 183,240 0 0 0 0 275,556 335,734 794,530
Bicycle Riding 590,752 69,883 59,570 678,863 157,419 888,373 1,082,383 3,527,243
Saltwater Fishing (Boat) 39,743 0 0 0 0 59,766 72,818 172,326
Freshwater Beach Activities 14,303 15,813 13,479 153,611 28,182 21,509 26,206 273,103
Picnicking 36,343 7,544 6,431 73,285 36,436 54,653 66,588 281,280
Freshwater Fishing (Boat) 32,240 17,182 16,646 166,912 7,385 48,482 59,070 345,918
Saltwater Fishing (Non-boat) 13,365 0 0 0 0 20,098 24,487 57,950
RV/Trailer Camping 2,579 13,236 11,282 128,574 652 3,879 4,726 164,927
Tent Camping 5,158 564 481 5,477 869 7,757 9,451 29,757
Freshwater Boat Ramp Use 4,572 7,920 6,751 76,936 1,901 6,876 8,377 113,333
Saltwater Boat Ramp Use 13,599 0 0 0 0 20,451 24,917 58,967
Visiting Archaeological and Historical Sites 14,889 4,886 4,165 47,466 2,715 22,390 27,280 123,791
Hiking 17,351 5,047 4,302 49,030 19,386 26,092 31,791 152,999
Nature Study 97,775 11,866 10,115 115,274 7,168 147,034 179,144 568,376
Freshwater Fishing (Non-boat) 27,081 9,665 8,239 93,888 3,149 40,725 49,619 232,367
Horseback Riding 4,103 1,289 1,098 12,518 1,683 6,170 7,518 34,381
Canoeing 5,158 2,470 2,105 23,994 4,235 7,757 9,451 55,171
Hunting 11,724 1,557 1,327 15,126 217 17,630 21,480 69,062

 

The Greater Charlotte Harbor Watershed is a unique land and water
resource that provides about $1.8 billion per year in net value to
recreators and Florida households, and is used to produce about
$3.2 billion per year in income to the area.