[Coral-List] Discussion on the compensation for coral reef damage in Egypt

Mahmoud Sarhan mahmoud.srhan at gmail.com
Tue Jul 19 02:21:35 EDT 2016

Dear Coral Listers

I would like to open a discussion again on the compensation and economic
valuation for coral reef damage. In the incidents of ship grounding on
coral reefs and other similar accidents, park rangers are always challenged
by calculating the appropriate compensation. In most cases, coral reef
ecosystem services are not accounted for during the compensation
calculations. A good economic valuation for coral reef damage is a lengthy
and expensive process. It requires expertise that might not be available in
many MPAs.

In Egypt, a formula was developed in 1992 to be used for all coral ref
damage assessment incidents. The purpose of having such formula was to
provide a unified and user-friendly compensation system that can be applied
for all cases. The formula is *A x LC x D x RP x V*
A = Impacted area (m2)
LC = % of living coral
D=% damaged
RP=number of years needed for recovery
V= Value of 1 m2 of the reef ($300 based on recreational/tourism benefits

I am currently working with the Environmental Economist Dr Rady Tawfik and
other team members to help National Parks of Egypt to develop a compensation
system for coral reef damage/injuries . During the stakeholders
consultation processes, we noticed that there is a preference to have a
straight forward damage assessment procedures. This is to facilitate the
economic valuation processes for park rangers who do not possess the
technical expertise/skills in economic valuation. We are currently
considering re-assessing and improving the current formula and developing a
standard procedures that capture the ecosystem services (direct and
indirect) where possible. We might be ending of developing the formula and
adding up more sections in the assessment to include components such as
cost of the damage assessment process and the value of other social and
ecological (direct and indirect) ecosystem services.

I look forward to get your takes on this issue. What are your thoughts on
using/developing this formula and improving the compensation system.
What concerns or suggestions you might have that could be useful for the
Egyptian case.

Your contributions are highly appreciated.

Mahmoud Sarhan *MSc, MPS*

Research Associate

Center for Sustainable Global Enterprise

Cornell University


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