Environmental Economics and Policy Studies

, Volume 16, Issue 1, pp 45–67 | Cite as

Sustainable funding policies for environmental protection: the case of Maldivian atolls

  • Mahadev G. Bhat
  • Ramachandra Bhatta
  • Mohamed Shumais
Research Article


This paper investigates several user-based funding mechanisms for protecting the marine resources in the Republic of the Maldives, by conducting an economic valuation of its recreational uses. We developed an individual travel demand model, corrected for truncation and endogenous stratification, to estimate the benefits of atoll-based marine tourism. The study found a large disparity between the amount of economic value generated from this opportunity for nature-based tourism and the amount going into atoll environmental conservation. More than half the environmental protection expenditure currently comes from unstable international sources, which makes it imperative that more stable financing sources be found. The results of the study show that even a small percent of tax added to tourist expenditure on the islands, or a direct conservation check-off as user fee collected from the tourists, would help defray the costs of atoll conservation. The paper concludes on a discussion of the policy implications of sustainable user-based financing mechanisms.


User-based finance Atolls Marine tourism Travel cost Endogenous stratification Truncation The Maldives 

JEL Classification




This project was made possible through a grant from the South Asian Network for Development and Environment Economics (SANDEE). Special thanks to SANDEE’s Pranab Mukhopadhyay and Priya Shamsunder for their advice throughout the project. The authors would like to thank the Environmental Protection Agency (EPA) and the Ministry of Housing, Transport and Environment of the Republic of the Maldives. We wish to thank in particular the successive directors of the Environmental Protection Agency (formerly Environment Research Centre), Ahmed Saleem, Farooq Mohamed Hassan, Mohamed Zuhair and Hassan Moosa, for their support. Farath Ali deserves a special mention for the assistance she provided with coordinating the fieldwork. We are grateful to the EPA research staff for their help with data collection. The authors would also like to thank an anonymous reviewer for his/her valuable comments. Thanks to Carmen Wickramagamage for her meticulous editing of this paper.


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Copyright information

© Springer Japan 2013

Authors and Affiliations

  • Mahadev G. Bhat
    • 1
  • Ramachandra Bhatta
    • 2
  • Mohamed Shumais
    • 3
  1. 1.Earth and Environment and Economics DepartmentsFlorida International UniversityMiamiUSA
  2. 2.Integrated Social Sciences and EconomicsNational Centre for Sustainable Coastal Management, Ministry of Environment and ForestsChennaiIndia
  3. 3.Environmental Protection AgencyMaleMaldives

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