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W e want our environment to be safer and cleaner. But how clean or safe it should be? How clean we should make the sea or air? Should we build a new dam for flood protection? Or we just tolerate the flood to get rid of the negative impact of the dam on the eco-system? Like these questions- nothing comes for free. If we want to get something, then we got to forgo something. Same with environmental resources, which are entirely public goods and are limited. So before making any decision regarding the use of such public goods, we need to compare the benefits of defending environmental resources compared with the opportunity costs or benefits forgone for alternative uses, i.e., conducting cost-benefit analysis (CBA). Accordingly, economists rely on empirical research in the form of benefit-cost analysis to aid decision makers for arriving at more informative and economically efficient choices by balancing the costs of environmental goods against their benefits (Mitchell and Carson 1989).

In simple terms, contingent valuation is a method of estimating the value that people place on a particular good. It uses survey techniques to elicit people’s willing ness to pay (WTP) to obtain a particular good or willingness to accept (WTA) to give away the good. It can be applied for goods both which are and are not traded in regular marketplaces. For goods, which are not traded in the marketplace, like restoring the Isahaya Bay wetland, a hypothetical marketplace is created in which respondents are given the opportunity to buy the good. Since the elicited WTP values are contingent upon the particular hypothetical market described to the respondents, this approach came to be called the contingent valuation method (Brookshire and Eubanks 1978). At different times and in various places, the contingent valuation method is also called thc survey method, the interview method, the direct interview method, the direct questioning method, the hypothetical demand curve estimation method, the difference mapping method, and the preference elicitation method (Mitchell and Carson 1989).

Wetlands, such as mires and tidal flats, form a unique ecosystem, providing the habitat for various animals and plant species and of immense economic importance. There are 37 tidal flat wetlands in Japan, comprising of 335 km in 1998 (reduced from 5 10 km in 1991). Currently, these wetland areas are sharply reducing as development prqjects are undergoing on 16 of these wetlands (NACSJ 1998). One of such important and endangered wetlands is the Isahaya Bay Wet-land (see Fig. 3.1 for the location). This wetland is located in Isahaya Bay, a part of the Ariake Sea - quiet pocket bay in Nagasaki Prefecture, Western Japan, approximately extending to 100 square km. The Ariake Sea is famous as the home of mudskipper. It is also the biggest center of seaweed production, providing about two-fifths of the nori production of the nation (Mainichi 2001a). Also a total of 144 species of water bird including 60 species of shorebird have been recorded.

As we have observed at the end of Chapter 3 that, in order to protect or restore the Isahaya Bay wetland (IBW) it is important to value its worth, this chapter aims to estimate the environmental value of the Isahaya Bay Wetland using contingent valuation method (CVM) and to compare the total WTP with the variation in WTP calculated on the basis of closeness to the project site, age and income of the re- spondents.

In Chapter 4 the value of the Isahaya Bay Wetland (IBW) is estimated by applying contingent valuation method (CVM). Accordingly, the objective of this chapter is to re-calculate the cost-benefit analysis of the Isahaya Bay Reclamation Project (IBRP) and to suggest ways to incorporate socio-environmental considerations in the cost-benefit analysis of a particular project.

Public parks provide different benefits to the community such as: recreational benefits, economic benefits, environmental benefits, safety benefits and so on. Among them environmental benefits provided by public parks are stressed strongly, as parks significantly improve surrounding environment by contributing to the reduction of heat island phenomenon by increasing greenery, reducing air, water, and noise pollution, and helping in wildlife preservation. Also, recently the Japanese Ministry of Land, Infrastructure and Transport underscored the need for public park maintenance and development, by including it as one of the key agenda amongst thirteen targets set for future public works projects in Japan (NNS 2003). In this context, it is interesting to investigate the state and condition of public parks in Japan. In doing so, Nagasaki City is considered as a case study.

Huis Ten Bosch, meaning “House in the Forest” in Dutch, is one of the biggest theme parks in Kyushu Island, Japan. It is a famous private recreational theme park opened on March 1992 at an approximate cost of ¥300 billion, created by transforming 152 ha of industrial wasteland through various environmentally affable mechanisms (HTB 2002). The concept of Huis Ten Bosch is “coexistence between ecology and economy” and opened in accordance with a law to promote the construction of resorts with the support of the central and prefectural governments (see Fig. 7.1 for the location of the HTB).

Huis Ten Bosch (HTB) is in serious financial distress as evident from the discussion in Chapter 7. On this background, this chapter aims to estimate the environmental value of Huis Ten Bosch (HTB) by applying contingent valuation method with different elicitation methods. By applying this method in previous chapters we have estimated the value of the eco-system of the Isahaya Bay Wetland and conducted the CBA. Based on the experience of this Isahaya Bay Wetland study, in this chapter different elicitation methods are applied and conducted the HTB valuation study. This will help us to compare the variation in willingness-to-pay due to the change in the method of asking questions.

On June 2002, Huis Ten Bosch (HTB) authority had published the . Here they calculated the total cost of the HTB project for environment friendly amenities until March 2002 (see Table 9.1 for details). Table 9.1 summarizes the main headings of this environmental cost-benefit analysis. We can see from this estimation that the total environmental costs incurred since the inception of HTB is estimated about ¥49 billion yen including the establishment and operating costs. Against these environmental costs, HTB received a total of about ¥23 billion benefits. But as HTB authority claims and we also agree with them that, these costs for environmental purpose not only brought benefits to HTB, but also to the society. Now the question is how to measure these benefits.

The relationship between geographical distance and the willingness to pay for preservation and improvement of particular environmental goods are generally thought to be negative. As shown by the negatively sloped curve in Fig. 10.1, various studies including Sutherland and Walsh (1985), Hannon (1994), Pate and Loomis (1997) also have found this relationship to be negative and argued through empirical analysis. According to them the more away the respondent resides form the area, the less likely heishe would be willing to pay for improvements or conservation of it. Although these arguments are logical, it is difficult to accept this relationship to be universal. Because environmental goods in different countries have different surrounding environment and various judgment work behind their preservation. Our first case study ‘the Isahaya Bay Wetland’ is famous in Japan for its difficult and complex nature of the problem. Hence, it is interesting to verify whether negative relationship also exists between distance of the respondent to the area and the willingness to pay for preservation of it.