Environmental Engineering Reference
In-Depth Information
community-operated enterprises such as campsites, cultural tourism services,
guiding, sales of live game and consumption of game for meat, etc. Net benefits
accruing to joint-venture tourism enterprises in the conservancies were excluded
from the conservancy analysis. The conservancy budget and cost-benefit models
estimated both financial and economic values. Financial analysis looked at the
returns to stakeholders in the project, while economic analysis looked at the
degree to which the conservancy investment affected the national economy.
In financial analysis the models provided annual net profits at stability, as well
as five- and ten-year financial internal rates of return and financial net present
values for the project investment. These were done for the project as a whole, to
determine the returns to the donor, government and community investment
combined, as well as specifically for the community, to determine the returns that
the community was getting on its own investment. Wealth accumulation, in terms
of residuals for capital assets, was included. Appreciation of wildlife stocks attrib-
utable to the conservancy investment was included for the project analysis but not
for the community one (since they could not realize this value through sale). In
the community analysis, the donor and government contributions were treated as
subsidies. This meant that these contributions, treated as costs in the project
financial analysis, were treated as benefits in the community analysis.
In the economic analysis, the models measured the incremental change made
by each conservancy to the national income. Annual net benefits, internal rates of
return, and net present values were measured in terms of net national income.
National income was defined here (Gittinger, 1982) as the total net earnings of
national labour, and property owned by nationals, employed in the economy over
a period. Gross national income is closely similar to the GDP, which is the total of
the value added in all activities in the economy. Net national income is gross
national income net of asset depreciation. The financial values in the models were
converted where necessary to reflect the real costs (opportunity costs) to the
nation as a whole. The changes involved use of preliminary shadow pricing crite-
ria developed by Barnes (1994), which have been more rigorously confirmed by
Humavindu (2007). In an open economy such as that in Namibia, the only
adjustments considered necessary were to labour prices (to reflect unemploy-
ment) and to tradable item prices (to reflect excess demand for foreign
exchange). Further, some financial costs and benefits, such as taxes and subsidies,
which were simply transfers and did not change the national income, were
removed from the economic analysis.
The residual values, associated with capital items and wildlife stocks in the
conservancy, were included as benefits in the project financial analysis. The
economic analysis included the opportunity cost of the capital used, but excluded
those for land, because it was partially aimed at measuring returns to land. All
models were tested through sensitivity analysis, by varying key assumptions to
determine how robust they were, and the strength of conclusions that can be
drawn from the results. Details of the methods used are presented in Barnes et al
(2002).
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