Methods of Valuation of The Central Catchment Nature Reserve

Kaia Margit Davis Tan, September 2014

The Central Catchment Nature Reserve is a tranquil oasis right in the heart of
otherwise busy Singapore. It is the green lung of the city with 2889 hectares of
secondary forest including portions of primary rainforest surrounding four
reservoirs. Recreational activities are popular with the main attractions being
the Singapore Zoo, hiking, cycling, bird watching, kayaking and fishing.
Although the reserve is protected under the Parks and Trees Act 2005, the
area remains vulnerable to urban impacts. It is critical to conserve the
reservoirs and surrounding rich biodiversity, with close to 1,000 plants and
500 species of animals, including several critically endangered species such
as the Lesser Mouse Deer and the Banded Leaf Monkey (RDB, 2006). The
Central Catchment Nature Reserve (CCNR) is also a ground for research and
education, and provides vital services ranging from supplying clean drinking
water to maintenance of ecological life processes.
There are a few methods which could establish an approximate economic
value on the Central Catchment Nature Reserve in Singapore. The Threshold
Values Method (Krutilla and Cicchetti, 1972), where preservation and
development are mutually exclusive has the advantage that several elements
in the method capture key aspects of the CCNR: Its potential alternative use,
which is important since Singapore is a land scarce city; the irreversible
environmental services and goods provided by the forest and reservoirs
should it be developed and notably, it also includes the value of environmental
preservation for future generations. Another suitable method is the Cost
Savings Method, which evaluates cost savings when the environment is
protected and left in its pristine state (described in Thampapillai, 2002). In the
case of the CCNR we would have to determine the cost saved by conserving
the area for water catchment and clean drinking water reservoirs, as opposed
to the cost of depending on water from Malaysia with the ensuing security
implications. The forests also function as CO2 sinks, improving the air quality
of the city. However, estimating cost savings of biodiversity, some unique and
critically endangered species, is difficult. There are also costs associated with
recreational benefits, health and medical expenses (Thampapillai, 2002).
Furthermore, there are benefits to the marketing effort of portraying Singapore
as a garden city, which attracts foreign investors and businesses.
The rate of environmental degradation occurring around us is alarming.
Humans benefit from ecosystems goods and services and removing these
would lead to economic collapse (Costanza, 1997). Governments who
incorporate ecological functions into the financial equations are better
equipped to decide the fate of nature reserves such as the Central Catchment
Nature Reserve in Singapore. The cost of dealing with the environmental

degradation, some of which are irreversible, is many fold that of using sound
environmental management of natural resources. If we do not correct the
value of environments such as CCNR, but continue with business as usual
and urban sprawl, the pollution and biodiversity depletion will continue to
degrade these resources until they are damaged beyond repair.
References:
Costanza, R. et al. (1997) The value of the worlds ecosystem services and natural
capital, Nature 387: 253-260.
Krutilla, J.V. and Cicchetti, C.J. (1972), "Evaluating Benefits of Environmental
Resources with Special Application to the Hells Canyon", Natural Resources Journal,
12: 1-29
RDB (Red Data Book) of Singapore, www.Nparks.gov.sg
Singapore Statutes Online, http://statutes.agc.gov.sg/
Thampapillai, J. (2002) Environmental Economics: Concepts, methods, and
policies, Oxford University Press, Chapter 07.