Water Resources Management and Wetland Conservation: The Case of Akrotiri Wetland in Cyprus

Abstract

This chapter presents the results of a contingent valuation study, which was carried out to estimate the socio-economic value of one of the most important wetlands in Cyprus, namely the Akrotiri wetland. Resulting policy implications for effective, efficient and sustainable management of this wetland, according to the requirements of the WFD and other EU Directives, are spelled out.

An erratum to this chapter is available at 10.1007/978-90-481-9825-2_12

Introduction

Wetlands are crucial to life-support functions, human health and the natural ­environment, and are vital to the functioning of any economy in the world. They are amongst the Earth’s most productive ecosystems, providing a diverse array of important ecological functions and services, including flood and flow control; groundwater recharge and discharge; water quality maintenance; habitat and ­nursery for plant and animal species, and biodiversity and carbon sequestration. These ecological functions and services translate directly into economic functions and services such as flood protection; water supply; improved water quality; commercial and recreational fishing and hunting, and mitigation of global climate change (Barbier et al. 1997; Woodward and Wui 2001; Brouwer et al. 2003; Brander et al. 2006). Therefore, wetlands are also necessary inputs to production in economic sectors such as agriculture (arable and non-arable land, aquaculture, commercial fishing, and forestry), industry (e.g. power generation), tourism, and household consumption. (UNEP 2005).

From an economic perspective, wetlands are being over-exploited and hence are not being managed efficiently. This is due in part to the existence of market and government failures at the local, national, and international level. Wetlands are often treated as public goods as opposed to private goods, and are subject to externalities. Thus, private costs and benefits diverge from social costs and benefits, leading to their excessive use and mismanagement. Moreover, Schuyt and Brander (2004) state that the main cause of much of wetland degradation is information failure. Policy-makers often have insufficient information on, or underestimation of the economic values of wetlands, hence conservation of wetlands does not appear to be a serious alternative to other development decisions. Consequently, recognition and capture of the economic value of wetlands is crucial for their sustainable management. In recognition of the deterioration in the quantity and quality of ­wetlands, several initiatives have been undertaken to ensure the sustainable ­management and conservation of this valuable resource.

As explained in Chapter 4, The EU’s Water Framework Directive (WFD 2000/60/EC) aims to protect and achieve a “good status” for all water resources by 2015. The Article 1(a) of the Directive asserts that there should be no further ­wetland loss or degradation in Europe, by specifically stating that further deterioration of wetlands should be prevented and wetlands should be protected and their status enhanced. Further to the WFD, there are other EU level regulations, such as the EU Birds Directive (79/409/EEC) and the EU Habitats Directive (92/43/EEC), which aim to conserve several ecological functions, services and attributes that are provided by wetlands. Alarmed by the accelerated rate of global wetland loss and degradation, there have also been international efforts to conserve them. The Ramsar Convention on Wetlands of International Importance, which was created by 100 countries in 1971, provides the framework for national action and international cooperation for the conservation and wise use of wetlands (Ramsar 2003).

As with the other EU member states, Cyprus has to undertake the measures for wetland, habitat and bird conservation stated in the EU Directives. Cypriot ­wetlands are diverse in nature and characteristics ranging from coastal, natural seasonal salt lakes and marshes, such as the Akrotiri wetland and the Larnaca salt lakes, to ­artificial standing freshwater wetlands like the Achna and Asprokremnos dams. Larnaca salt lake and Akrotiri are also included in the Ramsar Convention, since 2001 and 2003 respectively.

The wetlands in Cyprus are especially important habitats for biodiversity riches. The location of the island at the crossroads between Asia, Africa and Europe, makes its wetlands important stops on the migratory routes of birds traveling between these continents during autumn and spring passages. The wetlands of Cyprus are, therefore, crucial habitats for migratory birds, functioning as resting, wintering and often breeding areas. The role of wetlands in supporting biodiversity is evident from the fact that out of the 16 important Bird Areas in Cyprus, listed by Birdlife International, five are predominately wetlands with further four covering some wetland habitats (Charalambides 2000). Furthermore, minor wetlands created by the small streams and their springs on the mountainous Troodos area are pockets of high biodiversity, unaffected from agricultural activities and pesticide pollution. These are especially important for the survival of rare insect species and ­amphibians (Demetropoulos 2005).

In addition to their important functions as biodiversity habitats, Cypriot wetlands are widely used for recreation by locals and tourists alike. Akrotiri wetland and Larnaca salt lakes are popular sites for birdwatchers because of the large numbers of exotic birds including flamingos. Because of their waterfowl abundance, these wetlands are visited by large number of hunters during the designated hunting ­periods. There are, however, unfortunate cases of illegal and indiscriminate hunting despite the fact that the wetlands are either temporary or permanent game reserves. Larnaca and Akrotiri wetlands, also hold cultural value because of historical monuments (e.g., the Hala Sultan Tekke mosque, which is an important Moslem shrine, and the archeological site from the late bronze age) fond in the former (Ramsar 2001), and traditional arts and crafts made by the materials, such as reeds, collected from the latter (Ramsar 2003).

Similarly to the rest of the global wetlands, Cypriot wetlands were not ­efficiently and effectively managed in the last century as a result of underestimation of or lack of information on the many economic benefits they generate. Consequently, the failure of the markets to capture these values led to their widespread degradation and depletion. Cypriot wetlands were drained to be used for various economic ­sectors, such as agriculture, industry and housing. For example, the Akrotiri ­wetland was extensively drained during the 1940s anti-malaria campaign, while a eucalyptus plantation was created to lower groundwater levels and limit water inflow to the wetland (Demetropoulos 2005). Today, this plantation is no longer desirable from a conservation point of view (Kuijken 2004). The drained land from the Akrotiri wetland has been used for agriculture and livestock grazing. Similarly, part of the area previously occupied by the Larnaca wetland has been replaced by the Larnaca international airport.

As explained in greater detail in Chapter 2, Cyprus faces chronic water shortages. As a result, an important aim of the government has been to secure water supplies and attain equilibrium between water supply and demand, for agricultural and ­tourism sectors, as well as for household use. To reach this aim, a large number of dams and reservoirs were constructed on the major rivers and streams of the island. Consequently, water inflows to existing wetlands have been greatly diminished, decreasing their areas and hence the populations and variety of the biodiversity they could support. An example is the construction of the Kouris river dam, completed in 1994, which limited inflows to the Akrotiri wetland. On the other side, dam ­construction campaign also had some favorable impacts, in the form of creation of new artificial wetlands at the dam sites. The Achna dam, constructed in 1987, for example, now supports large numbers of waterfowl and is considered a wetland of great importance in terms biodiversity (Charalambides 2000; Demetropoulos 2005).

The ecological significance of wetlands has been recognized by the Cypriot Government, which has already undertaken the responsibility of conserving them. Management plans are developed for of Akrotiri and Larnaca wetlands, in which they are characterized as permanent game reserves, while smaller wetlands are characterized as temporary reserves.

This chapter presents the results of a contingent valuation study, which was carried out to estimate the economic value of one of the most important wetlands in the country, namely the Akrotiri wetland. Resulting policy implications for effective, efficient and sustainable management of this wetland, according to the requirements of the WFD and other EU Directives, are spelled out.

Capturing the Value of Wetlands for Policy Purposes

The main reason for wetland degradation and depletion is that wetlands are public goods, without market prices. A good is public to the extent that consumption of it is non-rival, i.e., one person’s consumption of the good does not reduce the amount available to others, and non-excludable, i.e., it is not possible to supply the good only to those who choose to pay for it, and to exclude everyone else. Pure public goods cannot be provided by the price mechanism because producers cannot ­withhold the good for non-payment, and since there is no way of measuring how much a person consumes, there is no basis for establishing a market price. Public goods are therefore not traded in markets as private goods are. As a result, this leads to externalities (i.e., costs or benefits borne by individuals who are not directly involved in a market transaction, where these individuals have not been compensated) and thus, these goods are often under-produced or exploited by the market, a phenomenon called a ‘market failure’ in economic terms. Where market failures exist, government must intervene to allocate the resources efficiently. More often than not however, governments do not intervene to correct these failures because environmental conservation is not a high priority. In addition, certain government policies such as subsidies, distort the prices of environmental resources thereby not accounting for their economic scarcity. These result in the phenomenon of ‘government failure’ (Cornes and Sandler 1996; Pearce and Moran 2001).

To correct for these failures, the value of all the benefits provided by environmental goods need to be captured. Environmental economists have been at the forefront arguing that individuals may derive values from non-market goods, especially environmental goods, through many more sources than just direct consumption. More specifically they refer to the capturing of the total economic value (TEV) of environmental goods, which includes the value that individuals derive from using the environmental good, i.e. use values, and values that individuals derive from the environmental good even if they themselves do not use it, i.e. non-use values. Use values can be further classified into three broad categories: Direct use values, indirect use values, and option values. Direct use values come from the consumptive use of the environmental goods itself. Direct use values of wetlands include recreational activities, e.g. hunting and fishing; waste disposal, and energy resources.

For most private (normal) goods value is almost entirely derived from their direct use. Many environmental goods however perform an array of functions that benefit individuals indirectly: Indirect use values of wetlands include benefits such as flood and storm protection; water supply; improved water quality, and climate stabilization (Brander et al. 2006). Finally, option value recognizes that individuals who do not presently use a good may still value the option of using it in the future.

The option value for wetlands therefore represents their potential to provide economic benefits to human society in the future.

A further major expansion of value of an environmental good is the inclusion of non-use values (Krutilla 1967). These are values that individuals may derive from environmental goods without ever personally using or intending to use them. These can be further classified into three categories: existence value, bequest value, and altruistic value.

Existence value refers to the value individuals may place upon the conservation of an environmental good, which will never be directly used by themselves or by future generations.

Individuals may value the fact that future generations will have the opportunity to enjoy an environmental good, in which case they might express a bequest value.

And finally, altruistic value states that even if the individuals themselves may not use or intend to use the environmental good themselves, they may still be concerned that it should still be available to others in the current generation.

Stated preference methods (SPM), also called direct valuation methods, have been developed to estimate the economic values of environmental goods that are not traded in the markets. In addition to their ability to estimate use values of any environmental good, the most important feature of these survey-based methods is that they can estimate the non-use values, enabling estimation of each component of TEV, explained above. Since many of the outputs, functions and services that wetlands generate are not traded in the markets, SPM can be used to determine the value of their economic benefits (Bateman and others 2003).

The SPM employed in this chapter is the contingent valuation method (CVM). The CVM can elicit in monetary terms individuals’ valuation of changes in the quantity or quality of a non-market environmental good. With CVM, valuation is dependent or ‘contingent’ upon a hypothetical situation or scenario whereby a sample of the population is interviewed and individuals are asked to state their maximum WTP (or minimum willingness to accept (WTA) compensation) for an increase (decrease) in the level of environmental quantity or quality. To conduct a CVM, special attention needs to be paid to the design and implementation of the survey. Focus groups, consultations with relevant experts, and pre-testing of the survey are important pre-requisites. Decisions need to be taken regarding how to conduct the interviews (in-person, via mail or via telephone surveys); what the most appropriate payment bid vehicle is (e.g., an increase in annual taxes, a single-one-off payment, a contribution to a conservation fund, among others¹); as well as the WTP elicitation format (e.g., open-ended, bidding game, payment card, single-bounded and double-bounded dichotomous approaches) (Hanemann 1994; Bateman et al. 2003). Ultimately, the mean WTP bids that have been obtained from the sample can then be extrapolated across the population to obtain the aggregate WTP or value of the environmental resource (Mitchell and Carson 1989).

Case Study on Akrotiri Wetland

This chapter presents the results of a CV study carried out to estimate the use and non-use values of the Akrotiri wetland in Cyprus. This wetland is located in the southernmost part of the island, in the Akrotiri peninsula, 5 km southwest of Limassol. The Akrotiri wetland is the largest inland aquatic system in Cyprus, composed of a seasonal brackish lake and the surrounding saltwater and freshwater marshes (Phassouri marshes), covering area of 25 km². Part of the wetland is located within the British sovereign bases. The wetland recognized as a wetland of national and international importance by the Ramsar Treaty (site no: 1375), and as an important bird area by Birdlife International, as well as a special protected area by the Barcelona Convention (Kailis 2005).

The Akrotiri wetland provides habitat for important biodiversity riches. Specifically, 66% of all bird species recorded in the island is found in Akrotiri. The average depth of the salt lake, which does not exceed 30 cm, makes it ideal for waterfowl. Furthermore the wetland is located on a major migratory route for birds traveling between northern Europe, Africa and Asia, functioning as a resting, ­wintering and breeding area. On average 6,000–10,000 greater flamingos (Phoenicopterus rubber) have been recorded wintering there, representing more than 1% of the eastern Mediterranean population, while the wetland is a resting place for approximately 50% of the African population of Anthropoides virgo ­during the autumn migration. In total 45 species included in the EC Birds Directive Annex I have been recorded in Akrotiri (Demetropoulos 2005).

Water flows into the salt lake come from two main sources: runoff from the Akrotiri Aquifer, to the north of the wetland, (approximately 30%) and rainfall (70%), which regulates the salinity regime of the lake. Salinity level is crucial for the balance of the wetland’s food chain, since the hatching Brachinella spinosa on which waterfowl feed, depends on it. The seasonality of the lake is a primary ­feature of the ecosystem. However if the lake remains dry all year long, which may occur in years of extreme drought, the birds that migrate there will have to find alternative habitats (Arghyrou 1992).

Phassouri marsh is a drainage outlet of the Akrotiri Aquifer system. The flooding extent of the marsh impacts directly on the population of the birds recorded there. For instance, during 1992 when the marsh remained largely dry due to extreme drought, the number of birds recorded decreased. The marsh is used by the local communities primarily for traditional methods of livestock grazing, which is beneficial for maintaining the semi-natural characteristics of these habitats and also for controlling for overgrowing of reeds, which are potentially harmful for biodiversity (Kuijken 2004).

In addition to its biodiversity value, the Akrotiri wetland is also important for recreation and education. The wetland is popular with birdwatchers especially during the autumn and spring migrations when the site hosts a large number of flamingos. Furthermore, it is a destination for educational trips by schools in the surrounding villages and the city of Limassol.

The proximity of the wetland to an important urban center, to military installations and its relation to outflows from the Akrotiri aquifer system make it especially susceptible to various environmental problems. Although to our knowledge there has been no official study, anecdotal evidence reported (Jalon 1992) suggests that the construction of the Kouris river dam, completed in 1994 decreased the water level in the aquifer, and hence limited the outflow of water to the wetland. It is now recognized that the survival of the wetland depends on the management of the water balance of the area (Demetropoulos 2005). Water inflow is expected to decrease further due to the limitation of surface water flows from the ongoing construction of radar installation in the British sovereign bases. Further, it has been reported that this installation is a threat to waterfowl and other birds, since many deaths occur as a result of collisions. Construction in the British sovereign bases has been the most controversial environmental issue in Cyprus also because of the associated political aspects. Other threats to the wetland include pollution due to agriculture, pesticides and waste dumping which occurs especially in the north side of the wetland. Moreover, uncontrolled entry and illegal hunting threaten several of the species found in the wetland (Ramsar 2003; Demetropoulos 2005; Kailis 2005).

The Contingent Valuation Survey

The CV survey on Akrotiri wetland consisted of three parts. In the first section the respondents were asked whether or not they were aware of the existence of the wetland and whether or not they have ever visited it. This question was asked to identify users and non-users of the wetland. All respondents were then read a statement describing the wetland, its functions and the major threats it is facing. The proposed payment vehicle was the creation of a “Fund for the Conservation of the Akrotiri Wetland”, financed by a one-off income tax on all taxpayers, under the management of the EU, which the Cypriot public regards as a trustworthy international entity. Taxation was used in order to avoid free-riding which may occur in the case of ­voluntary contributions.

The valuation scenarios were based on discussions with focus groups and informal interviews carried out with the Cypriot public. The wetland characteristics that the public considered as important included (i) biodiversity, defined as the number of species in the wetland and their population levels, (ii) the area of the wetland and (iii) the educational and recreational activities ­taking place in the wetland. Based on these characteristics, and discussions with ecologists and hydrologists at the Ministry of Agriculture and Natural Resources, two valuation scenarios were ­constructed to be valued relative to a status quo scenario:

• Scenario A (Status quo): Biodiversity will decrease by 10%, wetland area will decrease by 200 ha and educational and recreational activities will decrease.

• Scenario B (Conservation): All attributes will remain at their present levels as described in Section Results above.

• Scenario C (Improvement): Biodiversity will increase by 10%, wetland area will increase by 200 ha and educational and recreational activities will increase.

The policy change that would facilitate movement from the status quo, i.e. Scenario A, to Scenarios B and C, would be using water diverted from either Kouris or Yermasoyia dams in order to flood parts of the wetland for a 90 day period each year (as proposed by Jalon 1992). Movements from the status quo to Scenarios B and C, would reveal the WTP of the public, for conservation and improvement of the ­wetland respectively. For more details on the survey design and ­implementation, please see Annex II.

The sample statistics are reported in Table 10.1, and compared to the population average. Approximately 50% of the sample is female. Statistical tests suggest that this is in line with the latest population survey. Sampled respondents were significantly more educated compared to the population, as 35.8% has completed or is completing a tertiary education course, relative to 25% in the population. Sixty-eight percent are occupied in full time employment relative to 48.1% of the population, which represents a significant difference. The divergence between the sample and population statistics can be explained by the fact that most of the respondents reside in urban areas, where education and full time employment levels are considerably higher.

Table 10.1 Descriptive statistics of the survey sample

In addition to the social and economic variables, information on the attitudes of the respondents for environmental issues were elicited through a series of questions including their purchase of organic produce; environmental publications; fair-trade and environmentally friendly products, and recycling, as well as donations they make to environmental organizations. These were measured on a Likert-scale ranging from zero (never) to four (always). An environmental consciousness index (ECI), ranging from 0 to 20, was calculated using the Likert scores.

Results

The analysis of the survey results reveals that the Akrotiri wetland was relatively well known to the respondents as 71.2% indicated that they were aware of its existence, while 29.2% have visited the wetland at some stage. These high percentages can be attributed to the size of the island and the consequent short distances, as well as to the location of the wetland, which is adjacent to popular holiday resorts and to the city of Limassol. In addition, the extended media coverage of the construction of radar installation within the British sovereign bases contributed to the recognition of the wetland.

Regarding participation, 85.6% of the respondents declare that they are in principle WTP to move from scenario A to Scenario B (that is to move from the status quo to the conservation of the present conditions), while the percentage increases to 87.7% for moving from scenario A to scenario C (moving from the status quo to improvement upon the present conditions). Among those that declared that they are WTP to move from the status quo to both Scenario B and C, 37% increased their bids when moving from A to C relative to the previous question, while 60% stated the same WTP, and 3% decreased their bid. On average the respondents are WTP CYP10.9 for conservation of the wetland in its present condition and CYP13.01 for improvement of the conditions in the wetland.

A respondent was considered to have a true zero valuation of the scenarios if they agreed only to either of the two questions that aimed to determine those with true zero values: (1) I do not care about wetlands and (2) I do not have the resources to contribute to such fund. Among those not WTP, only one individual with true zero value was identified. Protestors were determined if a respondent agreed with any one of the protest questions: (3) The Cypriot government should conserve the wetland without extra taxation, (4) I do not believe that my contribution will be used effectively (5) The British government should contribute. In total 26 respondents protested moving from scenario A to B, and 22 moving from scenario A to C. Over half of the non-participants did care about the wetlands, while almost 80% of those agreed that the British government, which has a sovereign base on the wetland, should contribute to its conservation. Statistical tests are carried out in order to investigate any possible differences between the social and economic and attitudinal characteristics of those respondents who are willing to participate in conservation or improvement of the wetland and protestors. The tests reveal that there are no significant differences between protesters and participants for moving from ­scenario A to scenario B. The same applies for differences between protesters and participants for moving from scenario A to scenario C.

The respondents who were in principle WTP were further asked the reasons as to why they were WTP for conservation and/or improvement of the conditions in the wetland. 81.3% stated that they cared for the existence of the wetland, thereby revealing existence value. 80.7% revealed their option value by stating that they might want the visit the wetland in the future. 80% of the respondents considered wetland to be a part of their cultural heritage and hence recognized the cultural value of the wetland. Approximately 95.8% of the respondents would like the ­wetland to be available for future generations, revealing bequest motives.

When participation and WTP of users and non-users of the wetland are ­compared, it can be seen that 83.6% of users are WTP to move from Scenario A to Scenario B, whereas this figure is 86.5% for non-users. Moreover 85.5% of the users and 88.7% of non-users are WTP to move from Scenario A to C. Statistical tests reveal that these differences are not statistically significant. The average WTP of users to move from Scenario A to B is CYP12.8, whereas this figure is lower for non-users who are WTP CYP10.2. The average WTP of users to move from Scenario A to C is CYP14.6 for non-users it is CYP12.4. These differences are, however not statistically significant. Therefore it can be concluded that both the use and the non-use values of the wetland are important determinants of its value.

Finally, econometric analysis was carried out in order to investigate the relationship between respondents’ WTP and their social and economic and attitudinal characteristics. As expected, in both scenarios, i.e. both for WTP for conservation and for improvement of the conditions of the wetland, the respondents’ WTP increases with their ECI. In other words, the higher the level of the respondents’ environmental consciousness, the more they are WTP both for conservation and improvement of the conditions in the wetland. Respondents with university degrees and above are also WTP more both for conservation and for improvement of the conditions in the wetland. Those respondents’ who are employment full time are also WTP higher amounts for conservation of the conditions in the wetland. Furthermore, respondents with children are WTP higher levels for conservation and improvement of the conditions in the wetland, revealing the ‘bequest values that respondents have over conservation of the environment for their future heirs to enjoy (Krutilla 1967; Kosz 1996). Respondents who are located further away from the wetland are WTP less for wetland management scenarios, exhibiting a ‘decay factor’ found by Bateman et al. (1995). Finally, the respondents’ WTP for conservation and improvement of the conditions in the wetland increases in the number of times they have visited the wetland. Given that almost 70% of the respondents who have visited the wetland at least once have been there for recreation and similar purposes, this result reveals use values of the wetland are substantial.

Policy Implications and Conclusions

A major component of water resources, wetlands provide a diverse array of economic functions and services such as water supply and water quality improvement, as well as recreational services and habitats for biodiversity (Brander et al. 2006). These economic functions and services are crucial inputs to several sectors in the economy including agriculture, industry, tourism and household consumption (UNEP 2005). Sustainable management of wetlands as a part of water resources is especially important in Cyprus, an arid country with scarce water resources. Wetlands in Cyprus have not been managed sustainably in the last century mainly as a result of the lack of information on or underestimation of the economic benefits they generate.

This chapter aimed to shed light onto the present status of important wetlands in Cyprus, especially to their role in conservation of the island’s biodiversity riches, and to the several other economic benefits they generate as well as various threats they face. It is explained that the value of the economic benefits generated by environmental resources such wetlands are not straightforward to assess due to their public good nature. Capturing the total economic value (TEV) of non-marketed water resources, such as wetlands, however is an integral part in the design of economic incentives and institutional arrangements that can ensure their sustainable, efficient and equitable allocation.

A stated preference environmental valuation method, namely a contingent valuation study is undertaken to estimate the economic value of the benefits generated by conservation of and improvement in the conditions of the Akrotiri wetland, the most important wetland in Cyprus. The results of this contingent valuation case study indicate that the public is generally familiar with the Akrotiri wetland, is concerned about the deteriorating conditions in the wetland, and derives positive and significant use and non-use values from the various economic functions and services generated by the wetland. The results reveal that impacts of the social and economic and attitudinal characteristics of respondents on their valuation of the sustainable management of the wetland conform with economic theory. The economic value a respondent derives from the sustainable management of the wetland increases in the number of children, education, income and environmental consciousness level, and the visitation number of the respondent, and decreases in their distance to the wetland. The results further disclose that the public derives considerable non-use values, especially in terms of bequest values, and use values from recreational uses of the wetland. Even though the willingness to pay of the public for conservation and improvement of the conditions in the wetland are as high as CYP10.9–CYP13.01 per person, depending on the intensity of sustainable management, several ­respondents stated that the British government, which had a sovereign base on the wetland, should also contribute financially to the sustainable management of the wetland.

The resultant values can provide the policy makers with the necessary economic information for the construction of sustainable and efficient management strategies for Akrotiri wetland. As explained, the results provide estimates of the use and non-use values provided by the Akrotiri wetland. These estimates can be aggregated across the population and thus result to an estimate of the total benefits provided by the wetland. The derived value could then be used in cost benefit analysis in order to evaluate alternative policy proposals for the restoration, conservation or alternative exploitation of the wetland. Furthermore, as referred to earlier sections there are wetlands in Cyprus that are similar to the Akrotiri wetland. From the results of the case study presented in this chapter, it can be inferred that the Cypriot population enjoys significant benefits from the existence and conservation of those other wetlands. Hence in an integrated water management framework, water resources management policy should also be directed towards managing and conserving the country’s wetland resources.

Appendices

Annex I: Technical Notes on the CVM

The CVM was first proposed by Ciriacy-Wantrup (1947) and came into prominence in the early 1990s due to the Exxon Valdez oil spill in Alaska in 1989 and the subsequent lawsuits. With regard to wetland applications, CVM is useful for examining direct use values such as recreational fishing and hunting, and indirect use values such as improved water quality. CVM can also measure the option use values of wetlands associated with biodiversity, as well as the non-use values. Despite the strengths of CVM regarding its ability to estimate non-use values and evaluate irreversible changes, this method has been criticized for its lack of validity and reliability (Kahneman and Knetsch 1992; Diamond and Hausman 1994). This is on account of potential problems including information bias, design bias (starting point bias and vehicle bias), hypothetical bias, yea-saying bias, strategic bias (free-riding), substitute sites and embedding effects. Starting point bias usually arises in bidding games and suggests that the WTP bid is anchored on the first suggested bid price.

• 1. Interviewing bias indicates that the attitude of the surveyor can influence the values given by respondents.

• 2. Non-response bias may arise if those that refuse to answer the survey are not a random part of the population but those with a particular attitude (e.g. strongly against the proposed project).

• 3. Strategic bias occurs when respondents deliberately under- or overstate their WTP. Respondents may understate their WTP if they believe that the actual fees they will pay for provision of the environmental resources will be influenced by their response to the CV question. Conversely, realizing that payments expressed in a CV exercise are purely hypothetical, respondents may overstate their true WTP in the hope that this may increase the likelihood of a policy being accepted.

• 4. Yea-saying bias indicates that respondents may express a positive WTP because they feel good about the act of giving for a social good although they believe that the good itself is unimportant.

• 5. Insensitivity to scope or embedding bias implies that WTP is not affected by the scale of the good being offered. If people are first asked for their WTP for one part of an environmental resource and then asked to value the whole resource the amounts stated may be similar.

• 6. Payment vehicle bias indicates that respondents may state different WTP amounts, depending on the specific payment vehicle chosen. Payment vehicles such as a contribution or donation, may lead people to answer in terms of how much they think their fair share contribution is, rather than expressing their actual value for the good.

Information bias contends that the WTP that an individual expresses in response to a CV question is not a reflection of preferences they held previously but are ­constructed in the interview procedure. Hypothetical bias contends that respondents may be prepared to reveal their true values without strategic bias but are not capable of knowing these values without participating in a market in the first place (Bateman et al. 2003).

To address these, the Blue Ribbon Panel under the auspices of NOAA (Arrow et al. 1993) have made recommendations regarding best practice guidelines for the design and implementation of contingent valuation studies.

The earliest CV application on wetlands is a 1969 estimation of consumer ­surplus for wildlife hunting in the wetlands of the US Pacific western flyway (Hammack and Brown 1974). Since then several CV studies were carried out to estimate the use and non-use values of wetlands around the world. Pate and Loomis (1997), for example, find that WTP for a wetland improvement program in California, US, is about US$215(€178.5) per household and that this value decreases as the distance from the site increases. Oglethorpe and Miladou (2000) find that mean per capita WTP per year for use and non-use values of Lake Kerkini in Greece is £15.24(€22.1). Brouwer et al. (2003) carry out a meta-analysis² of 30 CV studies on wetlands and find that use values (such as flood control, water ­generation and water quality attributes) have a stronger influence on WTP than non-use elements such as the biodiversity function of wetlands. They estimate the mean value of wetlands to be 62SDR (special drawing rights) (€74) with a median of 34SDR (€40) per household per annum.

Annex II: Technical Notes on the CV Survey on the Akrotiri Wetland

The valuation questions consisted of two parts: first the respondents were asked whether or not in principle they would be WTP some amount of money for moving from scenario A to scenario B (or C). In the case where the respondents stated that they were willing to participate, they were asked for their maximum WTP. The WTP was elicited by using a payment card with amounts ranging from CYP0.5(€0.88) to over CYP100(€175). Before stating their WTP, the respondents were reminded of their income, expenses and other payments they make for environmental goods and services.

Debriefing questions were asked, in order to identify between protest responses and true zero values for non-participants. These questions also enabled investigation of which components of value and motivations for conservation were important for the individuals that were WTP. A negative response to participation was treated as protest if the individual agreed with one of the following: “I do not believe that my contribution will be used properly”, “the government should protect the wetland without imposing extra taxation” and “the British government should protect the wetland”. The final section collected various socioeconomic data on the respondents, including age, educational level and employment.

Data collection took place during the summer of 2005 in Nicosia and Limassol, through personal interviews with randomly selected individuals in various central areas of the cities. The sample was designed to include 52% of Greek-Cypriot population resident in the urban areas. Nevertheless, the sample includes individuals residing in other urban and rural regions that found themselves in the sampling areas at the time of the survey. In total 188 individuals responded to the questionnaire with residents of Nicosia, Limassol and other cities accounting for the 66%, 23% and 11% of the sample respectively.