Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region October 2020 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 1 Report No: AUS0001898 Myanmar MM Blue Economy, Plastics & Climate PASA Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region October 2020 Environment, Natural Resources and the Blue Economy Global Practice © 2020 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Attribution—Please cite the work as follows: “World Bank. 2020. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region. © World Bank.” All queries on rights and licenses, including subsidiary rights, should be addressed to World Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: pubrights@worldbank.org Layout and design by Nera Mariz Puyo. © Cover image: Adobe Stock Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region i ACKNOWLEDGEMENTS This report was prepared by a team led by Nina Doetinchem and composed of Sofia Ahlroth, Thiri Aung, Aye Ma Marlar, and Lesya Verheijen from the World Bank; Juan Jose Robalino and Aaron Russell from the Global Green Growth Institute (GGGI); and Catherine Lovelock and Sang Phan from The University of Queensland. The team received expert advice from peer reviewers Juan Pablo Castaneda, Maurice Rawlings, and Degi Young (from the World Bank) and Christopher John Dickinson and Andrew Lee (from GGGI). This report was produced under the overall guidance of Mariam J. Sherman (Country Director, Myanmar), Gevorg Sargsyan (Head of Office, Myanmar) and Mona Sur (Practice Manager, Environment, Natural Resources and the Blue Economy Global Practice). Partial data of this research was collected by The University of Queensland’s Project “Integrated planning and practices for mangrove management associated with agriculture and aquaculture in Myanmar (2017P1-MYR)” sponsored by Asia-Pacific Network for Sustainable Forest Management and Rehabilitation (APFNet). We are grateful for the valuable support from APFNet. This report was supported through the collaborative work undertaken with Myanmar Government authorities including the Forest Department, Department of Fisheries, Environmental Conservation Department, and the Ayeyarwady Regional Government and its departments’ Townships. This report would not have been possible without additional inputs from multiple international non-governmental organizations and civil society organi- zations in Myanmar. Funding for preparation of the report from the Wealth Accounting and the Valuation of Ecosystem Services Partnership (WAVES) is gratefully acknowledged. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region ii EXECUTIVE SUMMARY Mangroves provide essential ecosystem functions The 3Returns Framework provides a method for as- and services that support coastal communities. De- sessing the effectiveness of sustainable landscape spite their importance they have been degraded and interventions. The 3Returns Framework accounts for converted globally, resulting in loss of resilience of ‘green interventions’ in a landscape as: coastlines and their communities. Myanmar, in par- ticular, has high levels of mangrove loss and has the •• Investments in Natural Capital: resources allo- highest current rate of mangrove loss among man- cated to increase the stocks of natural assets; grove holding nations. With the aim to create impact •• Investments in Social & Human Capital: through a shift from degraded forests to better qual- resources allocated to increase cooperation ity forests and income improvement of local commu- within and among groups, individual and collec- nities, the Government launched in 2016 the Myanmar tive knowledge, skills, and competencies; while Reforestation and Rehabilitation Program (MRRP building/strengthening institutions for resource 2017-2026). However, conservation and restoration management, decision making, and social inte- require significant investment, and in order to stimu- gration; and late investment, there is a need for levels of certainty •• Investment in Financial Capital: resources allo- of the returns on investment. cated to acquire or increase the assets needed in In order to underpin the development of investment order to provide goods or services. strategies for mangrove conservation and restoration in Myanmar, the World Bank, the Global Green Growth Institute (GGGI), The University of Queensland (UQ), and the Ministry of Natural Resources and Environ- mental Conservation (MONREC) have collaborated on a study to assess the benefits that local communi- ties obtain from conservation and restoration of man- groves in the Ayeyarwady Region. The study focusses on provisioning ecosystem services, as well as a range of regulating ecosystem services. This study assesses the harvest of fuelwood, the har- vest (catching) of mud crabs, polyculture aquaculture practices, the harvest of nipa palm leaves and sap, and rice production, which are the primary products obtained from mangrove lands in the Ayeyarwady Region. The study also assesses the potential ben- efits of carbon sequestration and coastal and river- bank protection, which are key regulating ecosystem services of mangroves in the region. The valuation and investment analyses followed the goals of the Wealth Accounting and Valuation of Ecosystem Services (WAVES) global partnership and the Green Growth Knowledge Platform 3Returns Framework, both which aim to promote sustainable development by mainstreaming natural capital in the development of landscape planning and by support- ing decision-making for sustainable coastal manage- ment. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region iii Approach and Methodology All products and services were estimated and valued by standard methods. Mangrove status and land-use The 3Returns Framework contrasts a Business as were assessed using satellite image interpretation with Usual (BAU) scenario against green scenarios to extensive ground truthing. Carbon sequestration in understand changes in key capital indicators (natural, mangrove biomass and soils, timber production, and social & human, and financial capital) and the benefits fuelwood growth were estimated from inventories of derived from them. In this report, four green scenarios mangrove sample plots and modeling. Income, job for mangrove conservation and restoration within creation, and productivity of the harvesting of mud reserve forests (RFs) and national park (NP), which are crabs, polyculture aquaculture, fuelwood, and nipa areas under government control, are considered, along palm thatch and sap collection and utilization were with three improvement scenarios for management assessed through socio-economic surveys of coastal and investment of mangrove land outside RFs and NP villages in the region. Riverbank and coastal protection (Figure 1). Improved management scenarios within by mangroves were estimated from studies in the reserve forests include allocation of mangrove lands literature which have similar natural conditions. to community forestry. Two types of community forestry are considered: 1) Community Forestry User Groups (CFUG), where only members have access Improved land use and resource use to the mangrove resources, and 2) Village Fuelwood management within reserve forests and Plantations (VFP) where all community members, national park including landless people can access the mangrove resources. Green interventions considered enhanced The analysis revealed that improved and decentral- mangrove restoration, improved infrastructure for ized mangrove management interventions, in which aquaculture and aquaculture practices (i.e. concrete more mangrove land was allocated to community gates), improved thinning and wood collection management (Scenario 2-4), increased the total net practices and improved nipa palm production present value (NPV) of resources in the landscape techniques. The analysis for different interventions within reserve forests and national park in the re- and scenarios was done until 2026, which is the year gion. For example, in the period 2020 to 2026, NPV that the MRRP finishes. Analyses of the different increased by approximately 25%, from USD 368 mil- scenarios over longer time scales (until 2080) were lion in the BAU scenario to USD 486 million for Sce- also conducted, although uncertainties are high for nario 4 (with a discount rate of 10%) (Figure 2). such projections. Data Collection Mapping land-use and Mangrove biomass, growth, Socio-economic data (land tenure, mangrove status and carbon sequestration economic activities, jobs) Development of Scenarios and Return on Investment Analysis Green scenarios for areas within Green scenarios for areas outside Business as Usual (BAU) for Reserve Forests and National Reserve Forests and National areas inside and outside Reserve Park (resource use management Park (land-use and resource use Forests and National Park interventions) management interventions) Development of Scenarios and Return on Investment Analysis Within Reserve Forests and National Park Outside Reserve Forests and National Park outcomes outcomes (monetary, non-monetary and capital (monetary, non-monetary, and capital output output indicators) indicators) Figure 1. Major steps of the study. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region iv BAU S1 S2 S3 S4 Land Use Direct Management Responsibility • 84% Forest • 50% FD • 50% FD • 50% FD Reserve Forests As current prac- Department • 25% CFUG • 47% CFUG • 13% CFUG and National Park tice • 13% CFUG • 25% VFP • 3% VFP • 37% VFP • 3% VFP Forest Resource Use Management Forest Manage- As current prac- Enforced Improved Improved Improved ment tice As current prac- Law Enforcement Improved Enforced for CF Enforced for CF Enforced for CF tice Restoration 300 ha 1000 ha 1500 ha 1500 ha 1500 ha Other Resource Use Management Aquaculture Same condition Same condition Improved Improved Improved Rice Same condition Same condition Same condition Same condition Same condition Nipa Palm Same condition Same condition Improved Improved Improved Figure 2. Net Present Values (NPV) and Return of Investment (ROI) of enhanced mangrove management, including a Business as Usual (BAU) and four improved management scenarios for mangrove within reserve forests and national park with a regular discount rate of 10%. Scenario 1 (S1) represents enforcement of the government’s Mangrove Management Plan; Scenario 2 (S2) represents a balanced allocation to mangrove Community Forestry User Groups (CFUG) and Village Fuelwood Plantations (VFP); Scenario 3 (S3) represents higher allocation to CFUGs than VFPs; and Scenario 4 (S4) represents higher allocation to VFPs compared to CFUGs. Allocation of larger areas of mangroves under Currently, most of the jobs are from harvesting natu- CFUGs, as has been practiced in Myanmar for the ral mangrove resources such as crabs and fuelwood last two decades, would contribute to improved live- collection. Many current jobs are not sustainable lihoods of families in the region. However, increases or environmentally friendly because they lead to in the CFUGs areas come at the expense of jobs and over-exploitation of natural resources. The analysis livelihoods of many landless people who collect fu- shows that higher levels of investment in community elwood and crabs from the mangrove. Yet, the most forestry, especially through supporting VFP with as- decentralized practice – through VFP (Scenario 4) – sociated capacity building, would result in a higher provides the highest returns and non-monetary ben- proportion of green jobs associated with mangrove efits, as it creates an inclusive pathway for landless resources. The areas of healthy mangroves and plan- people to participate in the mangrove ecosystem. tations (natural capital output indicator) increased Therefore, a focus on CFUGs without consideration from about 9,000 hectares (mainly plantations) in of the landless gives rise to the risk of undermin- the BAU to over 27,500 hectares in the intervention ing the improved mangrove management intended Scenarios 2 to 4. Cumulative carbon sequestration in through community forestry. mangroves in 7 years (2020 – 2026), which accounts for half of the total biomass growth of mangroves in The analysis also found that the mangroves with- the delta, increased from over 515,000 Mg CO2 in the in RFs and NP areas are providing jobs for several BAU to over 1,709,000 Mg CO2 in Scenario 4. Addi- tens of thousands of landless people in the delta. It tionally, species biodiversity of community forestry was estimated that the livelihoods of over 200,000 mangroves, reported as the Shannon index, increas- people significantly depend on mangrove resources. es from 0.195 to 0.588, if CFUG pond owners and Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region v VFP managers keep at least 300 maternal trees of 3 Improved resource use management outside different species on their land. reserve forests and national park The study conducted analyses of the different sce- Analysis of the impacts of investment in a range of narios over longer time scales, although uncertain- mangrove management scenarios outside RFs and ties are high with such projections. The modeling NP, found that green investments can provide much results revealed that multiple capital investments higher monetary benefits compared to the BAU. have significantly higher impacts on the NPV, natu- Without capital investments, the BAU scenario is ral capital output indicators, social & human capital unsustainable and results in over-exploitation of nat- output indicators, cumulative biomass carbon se- ural resources, as observed in the decreasing BCR questration, and the number of jobs and number of over the long term (Figure 3). green jobs. In the longer term, the ROI of the green investment scenarios increases over time while the With a regular discount rate of 10%, the total NPV ROI in the BAU declines. This analysis suggests that increases from USD 486 million in the BAU to USD conventional and current BAU practices are not sus- 648 million in Scenario 3 by 2026. In the long term tainable and have negative impacts on mangrove re- (2080), NPV increases to USD 912 million in the BAU sources within RFs and NP over time. Only after 20 and USD 1,798 million for Scenario 3, respectively. years (by 2040), the ROI of all greener investment The increase in NPV for green scenarios with an im- Scenarios exceeds the ROI of the BAU (with a 4% pact discount rate of 4% was much higher that with discount rate). 10% discount rate (Figure 3). BAU S1 S2 S3 Resource Use Management Mangroves Same condition Improved (25%) Improved (50%) Improved (75%) Nipa Palm Same condition Improved (25%) Improved (50%) Improved (75%) Aquaculture Same condition Improved (25%) Improved (50%) Improved (75%) Figure 3. Benefit to Cost Ratio (BCR) and Net Present Value (NPV) of enhanced mangrove management, including a BAU and three improved management scenarios for mangrove outside reserve forests and national park with a regular discount rate of 10%. Scenario 1 (S1) represents a 25% improvement in resource management; Scenario 2 (S2) represents a 50% improvement in resource management and Scenario 3 (S3) represents a 75% improvement in resource management. For mangrove land outside the RF and NP, the in Scenario 2 and 3. In areas inside RFs and NP, highest ROI was observed for the green Scenario 1, fuelwood collection activities represent 23% of the for which only 25% of mangrove forest rehabilitation total economic benefits, whereas in areas outside RFs (by enrichment planting), nipa palm, and aquaculture and NP, fuelwood collection activities only represent pond production systems are improved. The ROI for 1% of the economic benefits. Therefore, because Scenario 1 (for both discount rates, 10% and 4%) was investment in mangrove rehabilitation by enrichment higher than that of Scenario 2 and Scenario 3. The represents the greatest capital expenditure for reason for a decreasing ROI with greater interventions scenarios in areas outside RFs and NP, an increase (Scenarios 2 and 3) is explained by the importance in the investment in mangrove rehabilitation in that fuelwood collection activities have on the ROI areas outside RFs and NP does not have the same outcomes compared to other economic activities impact as for areas inside RFs and NP. This suggests and the investment or interventions proposed that to improve profitability and efficiency in a Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region vi sustainable manner, interventions outside RFs and compared to current practices (represented in NP should consider improving the performance of the BAU scenario). fisheries and aquaculture, which represent the main •• Green investments improved financial indicators economic activities in terms of monetary benefits. as well as non-monetary and capital output Interventions such as the investment in hatcheries indicators in both the short and the long term. or the sustainable intensification of aquaculture can Over longer time scales BAU practices are support improvement not only in the profitability observed to be unsustainable in areas inside as but also in the efficiency of interventions in areas well as outside the RFs and NP. outside RFs and NP. •• For areas inside RFs and NP, decentralization Analysis of the impacts of different scenarios over and improved mangrove management are key the long term found that the NPV, BCR, and ROI innovations for achieving sustainable mangrove of the green investment scenarios increased over management. The most decentralized practice – time. Additionally, mangrove resources and capital through Village Fuelwood Plantations – provided investment in mangrove associated activities the highest returns and non-monetary benefits, outside RFs and NP can provide over 100,000 full- showing an inclusive pathway for landless people time-equivalent jobs in the delta. to participate in the benefits from the mangroves. Currently, for CFUGs there is no requirement for Improved management of mangrove resources the involvement of all community members, outside RFs and NP could mitigate millions of tons including the landless. Therefore, consideration of carbon dioxide. Cumulative carbon sequestration of appropriate safeguards for the landless in of mangroves by 2080 was around 2.5 million Mg community forestry programs is a key potential CO2 in the BAU, compared to 14.7 million Mg CO2 opportunity to empower landless people, but in Scenario 3. Also, green investments in mangrove this requires consultation within the community areas outside RFs and NP would bring multiple in order to secure their participation. other benefits. For instance, they would contribute to increasing healthy mangrove cover to around •• For areas outside RFs and NP, improving crab 29,000 ha under Scenario 3 by 2026. catching and aquaculture activities in addition to mangrove rehabilitation could be innovations for Finally, for all mangrove land, inside and outside achieving sustainable outcomes, as non-timber the RFs and NPs, resources and investments could products provide the main income from the result in over 160,000 jobs. It is estimated that over mangrove areas. While investments in mangrove 700,000 people can be provided with sustainable rehabilitation by enrichment planting improves livelihoods with a range of appropriate investments. the NPV, the investment required should be Overall, the analysis reveals that the investments carefully considered as the main production proposed through the different green scenarios systems from these lands do not directly improve the monetary and non-monetary benefits, depend on mangrove fuelwood, and therefore, as well as capital output indicators, when compared investments in the further development of to the BAU. For areas inside RFs and NP, mangrove non-timber economic activities should be restoration and decentralization of mangrove considered. management through community forestry is a key •• Land-use boundaries are not clear in mangrove innovation for achieving sustainable outcomes, landscapes in the Region, particularly those of as fuelwood collection activities currently make reserve forests. Improving the mapping in the up to 23% of the economic benefits derived from Region is fundamental to land-use planning the mangroves in the RFs and NP. Meanwhile, for which would support more effective and areas outside RFs and NP, improving fishing and successful mangrove management. aquaculture activities could be key innovations for achieving sustainable outcomes, as non-timber •• The inclusion of mangroves in mitigation as products are the main drivers of income generation well as adaptation strategies in Myanmar can outside the RFs and NP. Therefore, additional provide economic benefits for communities and interventions or investments (e.g. development important regulatory ecosystem services that of hatcheries or sustainable intensification of contribute to Myanmar’s Nationally Determined aquaculture practices) could be considered further Contributions to the Paris Agreement. in areas outside the RFs and NP. •• Finally, the interventions presented through this study aim to support and should be considered Conclusions as a response to the efforts of the Myanmar •• Allocation of mangrove land to community government to create a more resilient economy forestry and green interventions such as expressed through the Myanmar Sustainable mangrove restoration, improved aquaculture Development Plan 2018-2030 (MSDP), and infrastructure and practices, improved thinning more recently through the Myanmar Economic and wood collection practices, and nipa palm Recovery & Reform Plan (MERRP) developed as production techniques, brings greater benefits a response to COVID-19 impact. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region vii TABLE OF CONTENTS Acknowledgements...................................................................................................................................................................................................ii Executive Summary..................................................................................................................................................................................................iii List of Tables................................................................................................................................................................................................................ ix List of Figures.............................................................................................................................................................................................................. x List of Abbreviations............................................................................................................................................................................................... xi 1. INTRODUCTION.................................................................................................................................................................. 1 2. OBJECTIVES....................................................................................................................................................................... 3 3. BACKGROUND AND SCOPING..................................................................................................................................... 5 3.1 Mangrove Ecosystems in the Ayeyarwady Region............................................................................................................ 5 3.2 Study Area............................................................................................................................................................................................... 8 3.3 Identification of Stakeholders and Ecosystem Services................................................................................................. 9 3.4 Study Scope......................................................................................................................................................................................... 10 3.4.1 Mangrove Management................................................................................................................................................ 10 3.4.2 Mangrove Forest Status...............................................................................................................................................12 3.4.3 Targeted Mangrove Products and Stakeholders for the Analysis...........................................................13 4. VALUATION........................................................................................................................................................................15 4.1 Defining a Baseline.............................................................................................................................................................................15 4.1.1 Economic Value................................................................................................................................................................... 18 4.1.2 The Value of Regulatory Ecosystem Services and Social Values............................................................. 28 4.1.3 Summary of Baseline Costs and Benefit.............................................................................................................. 32 4.2 Scenario Modeling.............................................................................................................................................................................35 4.2.1 Scenarios for Areas Within Reserve Forests and National Park................................................................. 35 4.2.2 Scenarios for Areas Outside Reserve Forests and National Park.............................................................37 4.2.3 Climate Change, Including Sea Level Rise in Scenario Modeling..............................................................37 5. RETURN ON INVESTMENT ANALYSIS....................................................................................................................... 39 5.1 Return on Investment Analysis for Areas Within Reserve Forests and National Park................................40 5.2 Return on Investment Analysis for Areas Outside Reserve Forests and National Park............................. 45 5.3 Sensitivity Analysis........................................................................................................................................................................... 50 5.4 Sea Level Rise Scenarios and Impacts.................................................................................................................................. 50 6. CONCLUSIONS AND RECOMMENDATIONS............................................................................................................. 52 6.1 Conclusions...........................................................................................................................................................................................52 6.2 Recommendations............................................................................................................................................................................53 ANNEXES.................................................................................................................................................................................................................... 56 Annex 1. Methodology.......................................................................................................................................................................................... 56 Annex 2. Description of Impact Drivers, Impacts, and Impact Consequences, and Dependencies.......................... 63 Annex 3. Return on Investment Analysis for Areas Within Reserve Forests and National Park with a Discount Rate 10%....................................................................................................................................................................................................................... 68 Annex 4. Return on Investment Analysis for Areas Within Reserve Forests and National Park with a Discount Rate of 4%....................................................................................................................................................................................................................76 Annex 5. Return on Investment Analysis for Areas Outside Reserve Forests and National Park with a Discount Rate of 10%................................................................................................................................................................................................................. 83 Annex 6. Return on Investment Analysis for Areas Outside Reserve Forests and National Park for a Discount Rate of 4%....................................................................................................................................................................................................................87 REFERENCES.............................................................................................................................................................................................................91 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region viii LIST OF TABLES Table 1 Mangrove extent in hectares (ha) by region at three time periods and the percentage 7 loss between 1980-2013 Table 2 The extent of mangroves in hectares (ha) under different land tenure in the Ayeyarwady 11 Region Table 3 Key stakeholders selected (colored in yellow) for the Valuation Stage, following the 14 3Returns Framework. Table 4 The extent of mangrove land in hectares (ha) in different townships and the area in 16 different mangrove status categories in the Ayeyarwady Region Table 5 Mangrove status and land uses in the Ayeyarwady Region 17 Table 6 Mangrove extent in different mangrove status categories within Reserve Forests and 17 National Park and outside Reserve Forests and National Park Table 7 Data describing the villages and their population associated with mangroves 18 Table 8 Fuelwood collection from mangroves within reserve forests and national park in the 21 Ayeyarwady Region Table 9 The characteristics of crab catching activities from mangroves managed by the 24 Government within reserve forests and national park areas Table 10 The characteristics of mangrove aquaculture pond operations within reserve forests 25 and national park areas Table 11 The characteristics of nipa palm farm operations within reserve forests and national 26 park areas Table 12 The characteristics of rice production operations within reserve forest areas 27 Table 13 The characteristics of mangrove aquaculture pond operations in mangrove land 27 outside reserve forests and national park in the Ayeyarwady Region Table 14 The characteristics of nipa palm farm operations outside reserve forests and national 27 park in the Ayeyarwady Region Table 15 Average tree basal area growth rate of different mangrove plantation species in the 29 Ayeyarwady Delta, Myanmar Table 16 Mangrove tree growth rates analyzed from surveyed plantations 30 Table 17 Biomass sequestration services for mangroves inside and outside reserve forests and 30 national park Table 18 Coastal and riverbank protection ecosystem services derived from mangroves 31 Table 19 Government operational expenditure for control and protection of reserve forests and 31 national park areas in the Ayeyarwady Region Table 20 Baseline results for mangroves within reserve forests and national park 33 Table 21 Baseline results for areas outside reserve forests and national park 34 Table 22 Ecosystem service supply from mangrove land (inside and outside RFs and NP) in the 34 Ayeyarwady Region for 2019* Table 23 Scenarios (see text) for mangrove and associated land use within reserve forests and 35 national park Table 24 Scenarios for mangroves and associated land use outside reserve forests and national 37 park Table 25 Scenarios of mangrove cover change with sea level rise within reserve forests and 38 national park areas Table 26 Results of different scenarios over years for activities in mangroves within reserve 40 forests and national park (discount rate 10%) Table 27 Results for different scenarios over years for activities in mangroves within reserve 41 forests and national park (discount rate 4%) Table 28 Results of different scenarios by years for mangroves outside reserve forests and 45 national park (discount rate 10%) Table 29 Results of different scenarios by years for activities in mangroves outside reserve 46 forests and national park (discount rate 4%) Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region ix Table 30 Sea level rise impacts on investment analyses of activities in mangroves and mangrove 51 land-use (only for areas within RFs and NP) Table 31 Number of villages in each category of access to accessible mangrove land for mud 60 crab catching (i.e. reserve forests and national park) LIST OF FIGURES Figure 1 Major steps of the study iv Figure 2 Net Present Values (NPV) and Return of Investment (ROI) of enhanced mangrove v management, including a Business as Usual (BAU) and four improved management scenarios for mangrove within reserve forests and national park with a regular discount rate of 10% Figure 3 Benefit to Cost Ratio (BCR) and Net Present Value (NPV) of enhanced mangrove vi management, including a BAU and three improved management scenarios for mangrove outside reserve forests and national park with a regular discount rate of 10%. Figure 4 Mangrove distribution in Myanmar (Updated from the mangrove map of Clark Lab 6 2018) Figure 5 Mangrove land in the Ayeyarwady region 8 Figure 6 Land tenure of mangrove land in the Ayeyarwady Region 11 Figure 7 Mangrove status map for the Ayeyarwady Region 12 Figure 8 Mangrove fuelwood collection areas for different land tenure types 19 Figure 9 Fuelwood collection by mangrove status 20 Figure 10 Mud crab catching in different land tenure types 22 Figure 11 Mud crab catching on different mangrove status categories 23 Figure 12 Aquaculture ponds in mangrove lands for different land tenure types 24 Figure 13 Aquaculture ponds within different mangrove status categories 25 Figure 14 The distribution of Nipa palm over different land tenure types 26 Figure 15 Basal area growth of different aged mangrove plantations in the Ayeyarwady Delta 28 Figure 16 Return on Investment Analysis for enhanced mangrove management, including a 42 BAU and four improved management scenarios (see Table 26 and 27) for mangrove within reserve forests and national park Figure 17 Return on Investment Analysis for enhanced mangrove management, including a 47 BAU and three improved management scenarios (see Table 28 and 29) for mangrove land outside reserve forests and national park Figure 18 3Returns Framework Stages 56 Figure 19 Variation in the ratio of mangrove land area for crab catching to village tract area 59 over the delta Figure 20 Variation in the ratio of government managed mangrove land area to village tract 61 area over the delta Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region x LIST OF ABBREVIATIONS BAU Business as Usual BCR Benefit to Cost Ratio CAPEX Capital Expenditure CBT Community-Based Tourism CF Community Forestry CFUG Community Forestry User Group CIFOR Center for International Forestry Research CIRAD The French Agricultural Research Centre for International Development DALMS Department of Agricultural Land Management and Statistics ES Ecosystem Services FAO Food and Agriculture Organization FREDA Forest Resource Environment Development and Conservation Association, Myanmar GAD General Administration Department GGGI Global Green Growth Institute GGKP Green Growth Knowledge Platform GIS Geographic Information System GPS Global Positioning System IFC International Finance Corporation IPCC Intergovernmental Panel on Climate Change JICA Japan International Cooperation Agency MAI Mean Annual Increment MEA Millennium Ecosystem Assessment MERRP Myanmar Economic Recovery & Reform Plan MIMU Myanmar Information Management Unit MONREC Ministry of Natural Resources and Environmental Conservation MMK Myanmar Kyat MRRP Myanmar Reforestation and Rehabilitation Program MSDP Myanmar Sustainable Development Plan NDC Nationally Determined Contribution NGO Non-Governmental Organization NP National Park NPV Net Present Value NTFP Non-timber Forest Products ODA Overseas Development Aid OPEX Operational Expenditure PFM II Public Financial Managment II RF Reserve Forest ROI Return on Investment SLR Sea Level Rise UQ The University of Queensland USD United States Dollars VCS Verified Carbon Standards VFP Village Fuelwood Plantation WAVES Wealth Accounting and Valuation of Ecosystem Services WB The World Bank WIF Worldview International Foundation, Myanmar Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region xi © Adobe Stock 1. INTRODUCTION Mangroves provide essential ecosystem functions porting fisheries has been well established (Barbier, and services that support coastal communities (MEA Hacker et al. 2011, Duarte, Losada et al. 2013, Hochard, 2005, Barbier, Hacker et al. 2011). Despite their impor- Hamilton et al. 2019). Yet, the effects of deforestation tance, they have been degraded and removed glob- have resulted in lowering the capacity of mangrove ally (Valiela, Bowen et al. 2001, Hamilton and Casey forests to effectively act as a buffer against waves 2016), resulting in loss of resilience of coastlines, their and storm surges (FAO 2017). communities, and economies (Hochard, Hamilton et al. 2019). Myanmar in particular has suffered from With the development goal of enhancing economic high levels of mangrove loss (Webb, Jachowski et al. and environmental conditions, in 2016 the Govern- 2014) and has the highest current rate of mangrove ment launched the Myanmar Reforestation and Re- loss among mangrove holding nations (Hamilton and habilitation Program (MRRP 2017- 2026). The MRRP Casey 2016). The role of mangroves in protecting aims to create impact through a shift from degraded coastlines and communities from storms and flood- forests to better quality forests and income improve- ing, regulating carbon and nutrient cycles, and sup- ment of local communities. This program looks to re- Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 1 inforce efforts of conservation and restoration, with In order to underpin the development of investment the establishment of Community Forestry (CF) as a strategies for mangrove conservation and resto- mechanism to provide communities the capacity to ration in Myanmar, the Global Green Growth Insti- plan and manage their forest resources according to tute (GGGI), The University of Queensland (UQ), and an agreed management plan (World Bank 2019). the Ministry of Natural Resources and Environmen- tal Conservation (MONREC) collaborated on a study Conservation and restoration of mangroves for their to assess the benefits that local communities obtain ecosystem functions and services, including those of from conservation and restoration of mangroves. The climate change mitigation and adaptation, has there- study was done in three townships in the south-east- fore become a high priority in many nations, including ern region of the Ayeyarwady Delta, which have some Myanmar (Herr and Landis 2016). However, conserva- of the largest remaining mangrove areas in the delta. tion and restoration require significant investment in Following this analysis, the current study further ex- order to improve the management of extraction and tends the analysis by 1) including additional man- production activities of local key commodities for grove products, those of cultivation of nipa palm supporting mangrove recovery. In order to stimulate and polyculture aquaculture, and 2) extending the interventions through investment, there is a need for scale of the analysis to the whole of the Ayeyarwady high levels of certainty of the returns on investment. Region. This study comprises intensive data collec- While the benefits of ecosystem services such as tion, including mapping and on-ground assessment storm and flood protection have been valued at re- of mangrove resources, detailed household surveys gional scales (Hochard, Hamilton et al. 2019), knowl- on how community members use mangroves and edge of the benefits of mangrove conservation and what incomes they receive, accumulation of knowl- restoration to the economies of local communities edge of costs for restoration, and management ac- and individual households is less well established. For tivities by governments and non-government organi- example, the value of mangrove products and value zations. Through consultation with government and chain characteristics in terms of jobs created, income non-government organizations, this assessment de- generated, as well as the influence on social wellbe- veloped a range of plausible interventions to enhance ing, is limited to a few locations. This limited knowl- conservation and restoration of mangroves, including edge of the value of mangrove products to local evaluation of the costs of implementation and the re- communities limits the development of investment turns on investment, where direct financial benefits strategies, which could support sustainable manage- were considered, as well as social and human benefits ment of mangrove resources. derived from the mangrove ecosystem. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 2 © Adobe Stock 2. OBJECTIVES This study aims to analyze the benefits obtained of Ecosystem Services (WAVES) global partner- from the products and services of mangrove eco- ship and the Green Growth Knowledge Platform systems in the Ayeyarwady Region to support the 3Returns Framework,1 both which aim to promote World Bank Project: “Myanmar Forest Restoration, sustainable development by mainstreaming natural Development and Investment Project” (Project capital in the development of landscape planning P168254) and, more broadly, support the implemen- and by supporting decision-making for sustainable tation of community-managed regimes for man- coastal management. groves in the Ayeyarwady Region. Under this overall goal, the specific objectives are: The 3Returns Framework provides a method for as- sessing the effectiveness of sustainable landscape a) To identify monetary and non-monetary benefits interventions. The 3Returns Framework accounts for of mangrove restoration projects; ‘green interventions’ in a landscape as: b) To evaluate the cost effectiveness of restoration •• Investments in Natural Capital: resources allo- projects over a range of enhanced govern- cated to increase the stocks of natural assets; ment-led and community forestry scenarios; •• Investments in Social & Human Capital: c) To inform how management practices may help resources allocated to increase cooperation with mangrove restoration; and within and among groups, individual and collec- d) To inform policy development options to support tive knowledge, skills, and competencies; while mangrove restoration in view of their importance building/strengthening institutions for resource for the provision of ecosystem products and management, decision making, and social inte- services. gration; and The valuation and investment analyses followed •• Investment in Financial Capital: resources allo- the goals of the Wealth Accounting and Valuation cated to acquire or increase the assets needed in order to provide goods or services. 1 The 3Returns Framework methodological description is publicly available and can be found in the Green Growth Knowledge Platform under the Expert Group on Natural Capital featured resources - https://www.greengrowthknowledge.org/working-group/ natural-capital. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 3 In order to quantify the benefits, understand gen- Palm Products in the Ayeyarwady Region’3. These der roles, and identify opportunities from produc- analyses complement a previous study of ‘Bio-based tion systems that support mangrove restoration, Value Chain Analysis for Sustainable Mangrove Res- this project assessed two key mangrove-associated toration’4 focused on mud-crab fattening and fishery products’ value chains. These are presented in “in- solar-dome drying business models in the Ayeyar- sight briefs” titled: ‘Mangrove Aquaculture: Polycul- wady Region. ture Products in the Ayeyarwady Region’2 and ‘Nipa Box 1. Information on how this report can inform the World Bank portfolio in Myanmar. Under preparation: • Additional Financing to Agriculture Development Support Project - direct relation with the food and nutrition security. • Myanmar Southeast Asia Disaster Risk Management Project Additional Financing - emphasis on the floods and storms in this area. • Additional Financing - Ayeyarwady Integrated River Basin Management Project - identical focus area. • Public Financial Management II (PFM II) Project and Enhancing Institutional Capacity of State and Region Governments Project – Both are looking at strengthening institutions by looking at human resources roles, organizational structure, and technology. Also ensuring that there is capacity to complete this operation, there are synergies both in terms of looking at the process to ensure efficiency and effectiveness and ensuring the right skills are available. Also, PFM II is looking at overall revenue generation and taxes. Ongoing: • Maternal and Child Cash Transfers for Improved Nutrition Project - looks at encouraging women to improve household nutrition. Analytical activities: • Myanmar Coastal and Delta Resilience Program - is looking at improving disaster and climate resilience of coastal and delta communities in the country, specifically it is looking at tools for early detection of disasters. • Mekong Vision - the objective is to align the Mekong development and natural resources management activities more closely with long-term sustainability, in the context of the emerging challenges. Lessons from Ayeyarwady may help shape this analytical work. IFC: • Tourism Project to sustainably develop the tourism sector at the Inle Lake and Tanintharyi Region and at national- level destinations; interventions include strengthening destination planning and management to ensure sustainable and inclusive development. • The aquaculture practices observed in the study site are mostly driven by the commercialization of crabs and shrimp; as well as on how would sea level rise impact rice land and livelihoods associated with rice production. Agribusiness - this project looks to improve operational efficiency and sustainability of agribusiness companies, including developing industry standards of key agriculture commodities, strengthening value chains, and supporting farmer engagement on good agricultural practices. How do the aquaculture practices observed in this study improve operational efficiency and sustain good agricultural practices. • Environment and Social Sustainability Advisory Project aims to build responsible and sustainable private sector clients in Myanmar that can better access markets, and finance and reduce operational costs through improved environmental and social practices. IFC environment and social advisory team aims to take a holistic approach to create sustainable and transparent markets by supporting the private sector to adopt sound environmental and social practices. 2 WB (2020). Mangrove Aquaculture: Polyculture Products in the Ayeyarwady Region – Insight Brief. Washington DC: The World Bank Group 3 WB (2020). Nipa Palm Products in the Ayeyarwady Region – Insight Brief. Washington DC: The World Bank Group 4 GGGI (2020). Bio-based Value Chain Analysis for Sustainable Mangrove Restoration, Ayeyarwady Delta, Myanmar. Link: https://gggi. org/report/bio-based-value-chain-analysis-for-sustainable-mangrove-restoration-ayeyarwady-delta-myanmar/ Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 4 3. BACKGROUND © Adobe Stock AND SCOPING 3.1. MANGROVE ECOSYSTEMS IN Ayeyarwady are diverse ecosystems, comprising 21 THE AYEYARWADY REGION true mangrove species and a wide range of other co-occurring plant species considered mangrove In Myanmar, mangroves are distributed in three main associates that thrive in the brackish conditions regions: Rakine, Ayeyarwady, and the Tanintharyi of the delta. The mangroves, rivers, and creeks regions (Figure 4). Mangrove vegetation is a support important faunal species linked to fisheries dominant feature of the Ayeyarwady Delta, similar as well as species with high biodiversity value (e.g. to other large tropical deltas of the world. The Irrawaddy dolphin, crocodiles, and a range of bird mangroves influence the evolution of tropical deltas, species). The designation of the Meinmahala Kyun such as the Ayeyarwady, by trapping sediment Wildlife Sanctuary as a Ramsar site in 2017 reflects and protecting coastlines against the impacts the importance of the region for the biodiversity of of large storm events. The mangroves of the Myanmar and for the emerging tourism industry. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 5 Figure 4. Mangrove distribution in Myanmar (Updated from the mangrove map of Clark Lab 20185). 20185 The Ayeyarwady Delta comprises the main arms The mangroves in the Ayeyarwady Delta provide a of Pathein, Pyapon, Bogale, and Toe Rivers. Unlike range of functions and services that support local many of the other large deltas of South East Asia, communities. These include provisioning services6 the rivers that form the Ayeyarwady Delta are (e.g. fuelwood, nipa leaves for thatching, crabs, and comparatively unmodified and thus sediment shrimp), regulating services7 (e.g. flood mitigation, flows and other hydrological, biogeochemical, and coastal protection, nutrient cycling, and carbon se- biological processes are likely to contribute to questration), cultural services8, and supporting ser- ecosystem resilience in the face of climate change. vices9. The Ayeyarwady Delta is the key rice and fish producing area of Myanmar; responsible for about 35% of rice production of the country (Webb et al., 2014). To support development in the region, road 5 Data source: Clark Labs Sept 2020 (link: https://clarklabs.org/aquaculture/) 6 Provisioning services: products people obtain from ecosystems and which may include food, freshwater, timbers, fibers, and medicinal plants. 7 Regulating services: benefits people obtain from the regulation of ecosystem processes and which may include surface water purification, carbon storage and sequestration, climate regulation, and protection from natural hazards. 8 Cultural services: nonmaterial benefits people obtain from ecosystems and which may include natural areas that are sacred sites and areas of importance for recreational and aesthetic enjoyment. 9 Supporting services: natural processes that maintain the other services and which may include soil formation, nutrient cycling, and primary production. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 6 transport infrastructure was greatly increased during Alban, Jamaludin et al. 2020), which is increasing the 1990s and 2000s, which may have also increased vulnerability to extreme events and climate change, mangrove degradation as access to the forest was reducing the capacity for climate change mitigation, enhanced. Fishing is an important industry in the re- adaptation, and sustainable development. Despite gion (World Bank 2019), whose productivity can be the losses, the Ayeyarwady region has some of the directly and indirectly linked to mangrove cover, de- largest remaining mangrove stands in Myanmar as pending on the fish species. Fishers use fixed fishing well as significant opportunities for recovery. traps as well as small boats in the rivers and man- grove creeks and use mangrove fuelwood to pro- In addition to human exploitation of the mangrove cess their catch. Prawn fishery and the harvesting of and intense storms, climate change, and particu- sea turtle eggs are also major commercial activities, larly sea level rise, poses threats to the mangroves both which are now threatened by overexploitation (Dasgupta, Laplante et al. 2011, Horton, De Mel et al. and the loss of the mangrove forests. 2017). Sea level rise is anticipated to increase the im- pacts of storm surge (Horton, De Mel et al. 2017), Although mangrove loss in Myanmar is occurring in with negative effects on communities of the region all three regions (Table 1), losses experienced in the (Oo, Van Huylenbroeck et al. 2018). Climate change Ayeyarwady have been the largest with >80% of the may change the frequency of intense storms, al- forest cover removed and degraded since the 1980s though there are high levels of uncertainty around (Table 1). In 2019, satellite image interpretation com- projected changes in the frequency and intensity of bined with on-ground assessments found 34,650 intense storms and wind fields (Knutson, McBride et ha of degraded mangrove of a total of 178,961 ha al. 2010, Reguero, Losada et al. 2019, Young and Rib- of what was mapped as mangrove land (including al 2019). However, recent observations indicate that unvegetated land, regenerating mangrove, highly the deltas of Asia are already experiencing erosion degraded mangroves, and nipa palm), suggesting associated with mangrove clearing in conjunction further degradation since 2013 (Table 1). The man- with intense storms, sea level rise, and changes in groves in the Ayeyarwady Delta are currently at risk wind driven waves and tidal currents (IPCC 2019). due to widespread deforestation and unsustainable For example, large areas of the Sundarbans and the management practices (Webb, Jachowski et al. 2014, Mekong Delta are projected to be submerged under De Alban, Jamaludin et al. 2020). This has reduced even moderate climate change scenarios (Minder- the resilience of the delta to intense storms. In 2008, houd, Coumou et al. 2019). The Ayeyarwady Delta, the 5 meter storm surge and 2 meter high storm its mangroves, and associated human communities waves of the Category 4 Cyclone Nargis caused may have a moderate vulnerability to sea level rise widespread loss of life and devastation in the delta and changes in storm frequency and intensity com- (Fritz, Blount et al. 2009), including damage of the pared to other large deltas of Asia, because of their remaining mangrove (Aung, Mochida et al. 2013). largely unmodified river systems that support natu- ral deltaic processes (Lovelock, Cahoon et al. 2015). The impacts of Cyclone Nargis stimulated attempts However, detailed studies of the vulnerability of the to reduce losses of mangrove land and to restore the delta to climate change and the influence of climate mangrove. Mangroves are included in the adaptation change on deltaic processes (e.g. sediment deliv- strategies described in Myanmar’s Nationally Deter- ery, erosion) are not yet available which prevents mined Contribution (NDC) to the Paris Agreement detailed spatial modeling of future impacts of sea (Landis and Herr 2016). Degradation of mangroves level rise and other oceanic changes on mangroves. in the Ayeyarwady Delta has been mainly associated This represents a significant knowledge gap in the with fuelwood collection, charcoal production, ille- region, which contributes to the uncertainty asso- gal logging, and paddy cultivation (Ling and Fodor ciated with mangrove management strategies and 2019). The Ayeyarwady region is currently facing tre- their benefits. mendous challenges in limiting mangrove loss (De Table 1. Mangrove extent in hectares (ha) by region at three time periods and the percentage loss between 1980- 2013. The extent of closed-canopy mangrove in 2019 is also provided. No. of tree spp. Mangrove forest Mangrove Mangrove Mangrove Loss of mangrove (mangrove cover 2019 (ha) Division extent extent extent 2013 forest cover in % and mangrove (this study) 1980 (ha) 2002 (ha) (ha) (1980 – 2013) associates) Rakhine 32 167,730 no data 102,840 >30% Ayeyarwady 29 274,781 138,341 45,048 >80% 34,650* Tanintharyi 43 262,063 250,00 151,001 >40% Data source: (Zöckler and Aung 2019) and this study. *Total closed canopy mangrove area in the Ayeyarwady region in 2019 from this study. The total area of mangrove land 178,961 ha includes unvegetated land, regrowth mangroves, degraded mangroves, and nipa palm. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 7 3.2. STUDY AREA urgent to determine which productive management options can facilitate protection and restoration of The analysis presented in this report focused on the the mangrove forests in the Ayeyarwady Region. mangrove ecosystems of the Ayeyarwady Region (Figure 5). Two million people live in the region that Despite the Ayeyarwady Delta being the largest are highly dependent on mangrove resources for rice production area in Myanmar, over 70% of the their livelihoods. The population is spread over 2,277 population in the region are landless (Boutry, villages and 622 village tracts (a village tract can Allaverdian et al. 2017). The livelihoods of the landless have multiple villages). Among these village tracts, in the delta largely depend on casual work employed there are a limited number (59) of Community by farm owners and harvesting natural resources, Forestry User Groups (CFUGs) in 2019, indicating which is contributing to the over-exploitation of the that approximately 10% of village tracts have natural resources, including the mangroves of the community forestry projects. In this context, it is delta (Boutry, Allaverdian et al. 2017). Figure 5. Mangrove land in the Ayeyarwady region. The map shows the distribution of the mangrove land that remains after the intense clearing and conversion of the mangroves since the 1980s. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 8 3.3. IDENTIFICATION OF In addition to the value of mangroves as fish habitat, STAKEHOLDERS AND mangroves provide a range of indirect-use regulating functions and services including coastal protection, ECOSYSTEM SERVICES protection of riverbanks from erosion, flood protec- tion, carbon storage and sequestration, and nutrient Analyses of the management activities associated cycling (Barbier et al. 2011). The communities of the with mangroves in the Ayeyarwady identified a wide delta, as well as the government that bears the costs range of stakeholders that were associated with the of damage caused by extreme weather events, are mangrove or mangrove products in the study area. key stakeholders that benefit from the regulating This analysis focused on acquiring knowledge of services that mangroves provide. Because of the stakeholders involved in the direct-use of mangrove devastating impacts of Cyclone Nargis, the study products (i.e. provisioning services), filling a critical chose to include valuations of mangroves for coastal knowledge gap in Myanmar. The analysis of stake- protection and for riverbank protection, which were holders and direct-use values was restricted to five estimated using studies from Myanmar (Estoque, products: fuelwood, mud crabs, shrimp, nipa leaves, Myint et al. 2018) and from neighboring countries and rice (Box 3). These products were prioritized, where valuations were available for similar geomor- as well as the activities associated with them, be- phic settings (See Annex 1 for valuation details). cause they occur on mangrove land (e.g. rice farm- Some communities in the delta, in collaboration with ing, ponds for growing shrimp and crabs, nipa palm) non-government organizations (e.g. WorldView In- or are extracted directly from mangrove lands (fuel- ternational Foundation, Myanmar), have initiated pi- wood, crabs, crab larvae). Wild caught fish can also lot blue carbon projects. Thus, this study has also be highly dependent on the mangrove land, either valued carbon storage and sequestration, which was because species use mangrove land during their life estimated from field data as well as the pilot carbon cycle, or because they directly forage in mangroves project in the region (WIF 2018). or consume other organisms that feed in mangroves (Sheaves, Abrantes et al. 2020). However, because of Mangroves also provide habitat for a wide range of limited information on the degree of habitat depen- biodiversity, including birds and other wildlife that dencies of fisheries in the delta and the potential in- are important for ecotourism activities (Spalding direct nature of this association, the following analy- and Parrett 2019), as well as supporting ecological sis did not include wild caught fisheries. Clearly, wild processes, including pollination (Barbier et al. 2011). caught fisheries are important for livelihoods in the Due to limited information available and the limita- Ayeyarwady Delta and there is evidence of declining tion to conduct surveys of the income generated fish stocks (World Bank 2019). Further research is by communities from mangrove-related ecotourism needed to understand the links between mangrove given COVID-19 restrictions, these functions and cover, fisheries, and the dependent livelihoods in the services were not included in this analysis. Further delta. Additionally, an examination of other products research is needed in the Region for understanding (e.g. honey) could also provide insights into prod- the provision of cultural and supporting services, as ucts that may be developed in the future. well as the importance of mangrove ecosystems as a habitat for different animal species that support ecotourism activities. This could strengthen current governmental efforts such as the promotion of the Box 2. Gender role in selected Community-Based Tourism (CBT) initiative. product’s value chains Fishery value chains. The fishery sub-sector in Myanmar is dominated by men; however, women play an important role in inland fisheries, aquaculture, and small-scale fisheries. While men mainly set the nets, women are more involved in retrieving the nets and sorting the catch into categories, determining what will be sold, eaten by the household, or processed. Women are involved in equipment preparation and repairs, and in selling fishery related products, including fish paste and bait. Nipa palm value chain (thatching). The collection of nipa leaves is dominated by men. Whereas for the thatching process, family members, mostly women, are involved in the process of picking and stitching nipa leaves. As for intermediaries, mostly men are involved in the commercialization of nipa palm products. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 9 Box 3. Brief description of the five 3.4. STUDY SCOPE mangrove products considered and 3.4.1 Mangrove Management the value chains associated with the Understanding land tenure is critical to developing products. strategies to conserve and restore mangroves (Lee Fuelwood. Most of the families in the lower Delta use et al. 2019, Lovelock and Brown 2019). Government mangrove fuelwood for domestic cooking. Thus, authorities in Myanmar manage forests and forestry households are the key stakeholders for this product. land, including mangroves. The Forest Department The fishers that use bamboo rafts (kyar phaung) for has the authority to manage permanent forest es- drying fish from the onshore fishing sector are the tates and The General Administration Department second largest consumer of fuelwood in the delta. Government authorities, particularly the Forest (GAD) and Department of Agricultural Land Manage- Department, are the key law enforcement for ment and Statistics (DALMS) (former Settlement and mangrove management and protection. Until another Land Records Department) play major roles in man- alternative cooking fuel becomes readily available, aging all other lands (Shivakumar and Hlaing 2015). which is cheaper and/or local residents can afford, In the coastal areas of the Ayeyarwady Region, the such as national electricity, gas, or fuel from agriculture by-products (e.g. rice husk briquettes), Forest Department manages the mangrove reserve fuelwood collected from mangrove will remain the forests (RFs) and a mangrove national park (NP) – key domestic energy source. The collection of the Meinmahla Kyun Wildlife Sanctuary. Collection fuelwood is done by cutting trees, including branches of fuelwood is illegal within the RFs and NP; however, and main stems. This may also be referred to as it occurs and has contributed to the degradation of “logging”, although the small size of the trees precludes the production of timber products. these mangrove assets. Mud crabs. Juvenile crabs are collected from the There are several types of land uses within the bound- mangrove and then “fattened”, cultivated in small aries of the mangrove RFs and NP (in addition to ponds within the mangrove before the sale. The mangrove forest), including agriculture, cultivation of major stakeholders involved are collectors of juvenile crabs, local mangrove landholders (who grow out nipa palm, and ponds for aquaculture. Many of these crab larvae), middlemen in villages (who buy and land-uses, as well as degraded mangroves, provide transport the product), the Department of Fisheries, opportunities for improved management for conser- and consumers, including restaurants in the larger vation and restoration. Agricultural land, mostly rice cities. fields, are areas that are patches of non-mangrove Shrimp. Juvenile shrimp (fry or larvae) are collected land or land that was converted from mangroves to in the mangrove and then grown-out, cultivated in rice decades ago through alteration of hydrology ponds constructed on mangrove land. The main (drainage and protection from tides through a sys- actors involved include the collectors of wild shrimp fry (larvae), shrimp farmers, the Department of tem of walls and gates). Rice is a valuable commod- Fisheries, and local buyers who sell the product at the ity in the region and rehabilitation of mangroves in wholesale market to exporters and consumers. rice fields is a complex process with high uncertainty Nipa palm. Nipa (scientific name Nypa fruticans) is a because of the unknown extent of hydrological mod- mangrove palm distributed throughout the Indo- ifications that have occurred, the unknown extent of Pacific region. Its leaves are used to produce thatch salinized land and an unknown capacity for adapta- for roofing. The key stakeholders are nipa palm tion. Thus, for this analysis, rice fields are not consid- farmers, leaf collectors, and thatch production ered as potential areas for restoration for the green intermediaries, the Forest Department which manages nipa palm within reserve forests and investment scenarios. Surveys for this study revealed national park, and the General Administration that most of nipa palm areas and mangrove aqua- Department who manages nipa palm land outside culture ponds within RFs are on land managed by the reserve forests and national park. farmers under Form 710 or through CFUGs, which are Rice. Rice is grown on converted mangrove land. In a type of community based forestry management the agriculture sector, the major stakeholders related (Figure 6 and Table 2; See Box 4 for CFUG defini- to rice are the owners of rice fields, rice farmers, and tion); or the land continues to be used without any the Department of Agriculture, Livestock, and Irrigation. Large areas within the government formal approval. Form 7 management has been im- managed mangrove reserve forests’ boundaries were plemented in RFs due to uncertainty in the mapped converted from natural mangroves to rice fields boundaries of RFs, which have varied over time. (Webb et al. 2014). These areas are managed by the Forest Department. In the region, rice farming faces high risks of soil acidification and saline water intrusion. Additionally, irrigation of rice is not highly developed in the study area, and therefore farmers usually grow only one rice crop per year with relatively low rates of productivity. 10 Form 7: Land use certificate, farmer have rights for loan deposit, sale, inheritance of the land which has this certificate. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 10 The Ayeyarwady Delta has a high population den- and potential mangrove land that occurs outside the sity, partially because of high levels of migration to government RFs and NP are privately held lands. the Ayeyarwady Delta in the last decades. Based on Figure 6 below, indicates the distribution of land ten- field observations, it is assumed that all mangroves ure types of mangrove land in the delta. Figure 6. Land tenure of mangrove land in the Ayeyarwady Region. Table 2. The extent of mangroves in hectares (ha) under different land tenure in the Ayeyarwady Region. Land manager Area (hectares) Note Forest Department 61,701 CFUGs - Community Forest User Form 7 or Community Forest User 26,359 (18,464 as Form 7 and 7,895 by Groups is a community-based sys- Group (CFUG) CFUGs) tem in Myanmar, see Box 4. Private mangrove land 88,902 Total 178,961 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 11 center of them, which is surrounded by a ditch that 3.4.2 Mangrove Forest Status was dug to form the walls of the ponds. The man- To support the development of mangrove manage- groves within the ponds were classified in a similar ment strategies, mangrove status maps were pro- way as mangroves that were not contained within duced from satellite image interpretation combined ponds. with ground-truthing of land classifications. The The analysis of benefits of mangrove management mangrove land was classified into different catego- considered the benefits of rice cultivation where it ries (regrowth forests, degraded mangroves, nipa occurred within the mangrove RFs. Given the com- palm, unvegetated saline land, and ponds. See Ta- plexity of the economic activity, the land use man- ble 5 for the description of each category). Large agement framework and land-use change, rice farm- areas of the mangrove land of the delta have been ing, as well as coastal protection services, were not hydrologically modified through conversion to aqua- included in the analysis of mangrove areas outside culture ponds. In these areas, particularly within RFs, the RFs and NP. ponds have mangroves in the shallow areas in the Figure 7. Mangrove status map for the Ayeyarwady Region Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 12 tices.11 The typical practice is that farmers build low 3.4.3 Targeted Mangrove Products earthen walls around their mangrove area. The walls and Stakeholders for the Analysis are constructed in the processes of digging ditch- es in the mangroves, which make shallow ponds for In order to identify potential monetary and aquaculture. The farmers tend to keep mangroves in non-monetary benefits of mangrove restoration and the remaining central platform area within the pond improved management interventions, and consider- walls, although often the mangroves are degraded ing the complex interaction between the mangrove, or can die due to the altered hydrology. This occurs stakeholders, and economic activities, the scoping particularly if water levels are maintained at higher process for this study followed the recommenda- than normal levels for the mangrove trees, thereby tion of the 3Returns Framework (GGKP 2020). The imposing stress that reduces mangrove growth and framework recommends scoping the assessment of can lead to mortality (Lewis et al. 2015). The ponds benefits considering the first two stages of the value are periodically flushed with tidal water, which pro- chain (i.e. input and production) for extractive and vides wild shrimp, crabs, and fish larvae into the productive commodity-based sectors. Consider- pond. Many of the farmers also put additional shrimp ation of the first stages of the value chains provides fingerlings and juvenile crabs (which they catch or novel ways of visualizing the impact of interventions purchase) into ponds to increase productivity. The within the production and extraction systems con- farmers do not feed fish within the ponds, and crabs, nected with the related ecosystem services. shrimp, and fish depend on natural food arriving Fuelwood is the major energy source for domestic from river water and from adjacent mangroves. The cooking in mangrove areas and designated buffer aquaculture practices observed in the study site are zones around mangrove areas (where it is assumed mostly driven by the commercialization of crabs and people can access mangrove resources) in the delta. shrimp. Fuelwood is also the energy used for drying fish on A large area of mangrove land is nipa palm,12 which bamboo racks on the shore in the Pyapon township usually occupies areas of low elevation (inundated (and other settlements). Harvesting timber for char- frequently) along the riverbanks. Nipa palm occurs coal and fuelwood for cooking and drying was the in natural stands but can also be planted in some main cause of mangrove deforestation and degra- areas because of its usefulness to people. Although dation in the delta (Giri et al. 2010 and Webb et al. it is not a woody tree species, it provides similar riv- 2014), but the high level of degradation likely lim- erbank and flood protection services as mangrove its current levels of charcoal production. Fuelwood trees (Hossain and Islam 2015). In the Ayeyarwady is a significant income source for local people even region, large areas of nipa palm are distributed out- though most of the fuelwood is illegally collected (or side the RFs and NP. Nipa palm is an important in- logged) from the reserve forests and national park come source of farmers in the region. It is harvested in the delta. and sold for roof thatching, but it could be a much The catching of crabs is a major activity and source more important income source for local people if of income for people in the delta. Compared to oth- nipa palm sap is extracted and processed, as it is er fishing activities, which generally require signifi- being done in the Tanintharyi region in Myanmar and cant investment (money to pay for a fishing permit, neighboring countries such as Thailand, the Philip- nets, boats, gasoline, and labor), crab collection can pines, Indonesia, Vietnam, and Malaysia (Tamunaidu, be done with few inputs. For example, crab traps Kakihira et al. 2011, Tamunaidu, Matsui et al. 2013). can be made with little money and fishers can catch Thus, nipa palm thatch and sap are included in this crabs in nearby mangroves, or on creek or riverbanks analysis as key products from mangrove areas. without the use of boats. As crab catching occurs In addition to products obtained from the mangrove mainly in mangrove forests, people doing this activi- forests, mangrove areas have been historically con- ty do not have to pay for fishing permits. Substantial verted to rice agriculture (Giri, Zhu et al. 2008, Webb, demand from the export markets and domestic con- Jachowski et al. 2014). There are over 60,000 hect- sumption has increased the price of crabs over the ares of rice fields within the boundaries of the RFs. last 10 years. While fishers collect shrimp fry for sale Rice provides important income for farmers. Signif- to pond owners, shrimp fishing activity is not direct- icant rice areas occur in high elevation areas, which ly linked to the mangrove, as shrimp fry (fingerlings) may not have originally been mangroves. However, occur in rivers or coastal waters. Thus, for this study these areas, particularly those at a lower elevation, crab catching is the only fishing activity considered. are vulnerable to saline water intrusion and soil acid- In the delta, one of the highest incomes is derived ification. Considering the importance of rice farming from mangrove aquaculture ponds, which local farm- for generating income, this analysis considered rice ers build in mangrove areas. Aquaculture is mostly farming, but only within RFs. As mentioned before, extensive and characterized by polyculture prac- the benefits of rice farming in areas outside the RFs 11 See the insight brief entitled: ‘Mangrove Aquaculture: Polyculture Products in the Ayeyarwady Region’. 12 See the insight brief entitled: ‘Nipa Palm Products in the Ayeyarwady Region’. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 13 and NP were not considered because of the high account potential management actions to reduce level of additional complexity associated with this the impacts of SLR, including the introduction of activity. salt tolerant rice varieties and modified planting and irrigation practices. The impacts of saltwater intru- Finally, this analysis incorporated the likely impact sion with sea level rise as well as possible changes in of sea level rise on rice land and livelihoods asso- rainfall associated with the monsoon on agricultural ciated with rice production in areas within RFs by production in the delta is a knowledge gap. assuming a constant reduction in productivity over time. This assumption was based on the prognosis for rice production in Bangladesh, which took into Table 3. Key stakeholders selected (colored in yellow) for the Valuation Stage, following the 3Returns Framework. Product Stakeholder Activity Fuelwood Collectors Extraction Middlemen Commerce Fuelwood General Inhabitants Consumption – Domestic Cooking Fishers Consumption – Drying Fish Forest Department Management, Control, and Protection Crab Collectors Extraction Crab Farmers Production Middlemen Commerce Mud Crab General Inhabitants Consumption Forest Department13 Mangrove Aquaculture Management Department of Fishery Management Shrimp Collectors Extraction (not main activity) Shrimp Farmers Production Middlemen Commerce Shrimp General Inhabitants Consumption Forest Department 13 Mangrove Aquaculture Management Department of Fishery Management Nipa farmers Production Middlemen Commerce Nipa palm General Inhabitants Consumption Forest Department 13 Management in RFs Land department Land Tenure for Nipa Palm Outside RFs and NPs Rice Farmers Production Rice (Agriculture General Inhabitants Consumption – within reserve Middlemen Commerce forests) Department of Agriculture, Livestock, Management and Irrigation, Forest Department 13 The Forest Department has the authority to manage mangrove aquaculture ponds within reserve forests. Mangrove aquaculture is not yet legalized. However, for the livelihoods of local communities, the Forest Department has provided the permission to CFUGs 13 The Forest Department has the authority to manage mangrove aquaculture ponds within reserve forests. Mangrove aquaculture is to conduct small-scale aquaculture practices in line with their CF management plan as part of the agroforestry act. not yet legalized. However, for the livelihoods of local communities, the Forest Department has provided the permission to CFUGs to conduct small-scale aquaculture practices in line with their CF management plan as part of the agroforestry act. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 14 © Adobe Stock 4. VALUATION 4.1. DEFINING A BASELINE approximately 178,000 ha (Table 2). Most of these Field surveys and satellite image interpretation were mangroves are highly degraded reducing the eco- used to establish a baseline of mangrove area (cov- system services they provide. er) and status to use in the economic analyses. The Data of existing mangrove area and status with land overall approach was to use the established links tenure arrangement, as well as data on land uses between mangrove area and status and ecosys- within and outside the mangrove land (Table 5 and tem service provision (e.g. the relationship between 6) were used in the baseline assessment. In addition, mangrove area and status and value of fuelwood col- data of the characteristics of villages and village lection, or crabs caught) to underpin the economic tracts and their population were obtained from spa- analyses of the benefits derived from mangroves tial analyses and from Myanmar government sourc- over the delta. The study found that 13 townships, es (Table 7). out of 26 of the Ayeyarwady Region, have mangrove land (Table 4). The total area of mangrove land is Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 15 Table 4. The extent of mangrove land in hectares (ha) in different townships and the area in different mangrove status categories in the Ayeyarwady Region. The data is for thirteen townships of a total of 26 townships that occure in the Ayeyarwady Region. Mangrove areas by township (ha) Mangrove status Kangyid- Mawlamy- Grand Bogale Dedaye Kyaiklat Labutta Maubin Myaungmya Ngapudaw Pathein Pyapon Thabaung Wakema aunt inegyun Total Nipa palm 11,821 812 7 3 13,000 734 3,448 8,053 3,287 3,669 220 45,055 Degraded 18,726 224 3,862 39 749 3,096 4,077 3,878 34,650 mangrove Regrowth 10,408 138 27,216 6 1,139 74 2,715 157 11,782 314 53,949 mangrove Unvegetated 600 619 1 1,408 27 2,354 5,009 saline land Pond with degraded 353 19 2,323 2,695 mangrove Pond with regrowth 175 5,108 152 46 5,009 10,489 mangrove Pond with- out man- 289 15,604 30 9,189 25,112 grove Grand Total 42,018 1,793 8 3 66,552 6 1,873 3,562 11,669 6,661 38,405 3,878 534 178,961 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 16 Table 5. Mangrove status and land uses in the Ayeyarwady Region. % of mangrove Mangrove status Description Area (ha) land area Nipa palm Areas covered by Nypa fruticans, a mangrove palm 45,055 25% species. Nipa palm is mainly distributed at low ele- vations along the edges of riverbanks. Degraded Mangrove areas which have been continuously 34,650 19% mangrove logged (cut) for fuelwood and timber. Species composition comprises few tree species with small stems or coppices, lianas, shrubs. Over a significant area, particularly in high elevation areas, Phoenix palm, a mangrove associate, has become the dom- inant species which limits the natural regeneration of mangrove tree species. These mangrove areas have a standing wood volume of 5 – 50 m3 ha-1 Regrowth Almost all mangroves in the delta have been se- 53,949 30% mangrove verely degraded. The best quality mangroves in the region are mangrove plantations and some areas of natural regenerating mangroves which have been protected. These mangrove areas have standing wood volume of 50 – 200 m3 ha-1. Unvegetated saline This is potentially mangrove land but currently has 5,009 3% land no mangrove plants growing. Pond with Ponds are formed in mangrove land by digging 2,695 2% degraded ditches and creating earthen banks to limit water mangrove flows. Prawns and fish are cultivated in the deeper parts of the enclosed areas (the ditches), while mangroves can occupy the central shallower parts Pond with regrowth of the ponds. Flood gates, if present, can be used 10,489 6% mangrove to manipulate water levels within the ponds. Ponds can have mangroves of varying states (regrowth, degraded), or can be without mangroves. Pond without 25,112 14% mangrove Total mangrove land (5% of the Grand Total) 178,961 100% Other land uses in the Ayeyarwady Region (agriculture, urban, etc.) 3,189,122 Grand Total 3,366,083 Table 6. Mangrove extent in different mangrove status categories within Reserve Forests and National Park and outside Reserve Forests and National Park. Mangrove status Total area Within Reserve For- Outside Reserve Forests (ha) ests and National Park and National Park (ha) (ha) Non-pond mangroves       Nipa palm 45,055 8,876 36,179 Degraded mangrove 34,650 23,402 11,248 Regrowth mangrove 53,949 36,571 17,379 Unvegetated saline land 5,009 1,664 3,345 Sum of non-pond mangrove land 138,664 70,513 68,151 Ponds within mangrove areas Pond with degraded mangrove 2,695 1,992 704 Pond with regrowth mangrove 10,489 6,769 3,720 Pond without mangrove 25,112 8,784 16,327 Sum of pond areas within mangrove land 38,296 17,545 20,751 Total mangrove area 178,961 88,059 88,902 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 17 Table 7. Data describing the villages and their population associated with mangroves. Social Data Number Source Number of village tracts in man- 622 village tracts* Extracted from Forest Department maps, Myanmar grove lands and their 2km buffer Information Management Unit (MIMU) data, and GIS zone analysis * Village tracts within 2 km buffer zone but have less than 10 hectares of land within the buffer zone are excluded Number of villages in mangrove 2,277 villages Extracted from Forest Department maps, MIMU data, land and their 2km buffer zone and GIS analysis Population of villages within 1,826,359 people Extracted from Forest Department maps, MIMU data, mangrove land and 2 km buffer and GIS analysis zone Community Forestry User Group 7,895 ha Forest Department data (2020) (CFUG) mangrove areas Total Community Forestry User 59 CFUGs Forest Department data (2020) Groups (CFUG) in mangrove areas The number of people involved in these activities, 4.1.1 Economic Value the incomes generated, and costs incurred (from Fuelwood collection, crab catching, and “fattening” survey data) are presented below; for fuelwood col- (cultivation of juveniles) of crabs, shrimp farming, lection (Table 8), crab catching (Table 9), mangrove harvesting and making of nipa thatch, and rice farm- aquaculture (Table 10), and nipa palm farming (Table ing are the major economic activities identified and 11). considered in the scope of this assessment. Follow- ing the objectives of this report, these activities were valued in order to determine how different manage- ment interventions may impact or affect their finan- cial performance. The spatial extent of mangrove production activities is shown in a series of maps (Figures 8 to 14). Fig- ures 8 and 9 present the fuelwood collection areas in the delta over different land tenure arrangements and mangrove status. Figure 10 and 11 present ac- cessible mud crab catching areas within mangrove land. Figure 12 and 13 show aquaculture ponds with- in mangrove land. Figure 14 shows the existing nipa palm areas in the delta. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 18 Figure 8. Mangrove fuelwood collection areas for different land tenure types Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 19 Figure 9. Fuelwood collection by mangrove status. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 20 Table 8. Fuelwood collection from mangroves within reserve forests and national park in the Ayeyarwady Region. Unit Average amount St Dev Number of households per village household 252 225 Number of fuelwood logger working as full-time per village logger 17 15 Number of fuelwood logger working as part-time per village logger 26 21 Income earned per month for full-time logger MMK 221,000 28,000 Income earned per month for part-time logger MMK 145,000 42,000 Expenditure for fuelwood collecting per month (excluding MMK 32,000 12,000 labor cost) for full-time logger + rent-seeking payment (normally each time 1,000 MMK) MMK 5,000 3,000 Value (Millions MMK) (2019 – annual – estimate) Income from fuelwood collection on mangroves managed by Government 33,140 Income from fuelwood collection from village fuelwood plantations 1,459 Income from fuelwood collection in mangrove aquaculture 5,234 ponds Mangrove fuelwood collection operational costs 20,451 Fuelwood collection operational costs for village fuelwood plantations 871 Fuelwood collection operational cost for mangrove ponds 3,126 Jobs from fuelwood collection in mangroves (unregulated) (number of jobs14) 15,745 Jobs from sustainable fuelwood collection from village fuel- wood plantations (number of jobs14). 550 Jobs from fuelwood collection from mangrove aquaculture 1,974 ponds (number of jobs14) 14 Full-time and full-time equivalent jobs. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 21 Figure 10. Mud crab catching in different and tenure types. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 22 Figure 11. Mud crab catching on different mangrove status categories. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 23 Table 9. The characteristics of crab catching activities from mangroves managed by the Government within reserve forests and national park areas. Unit Average amount St Dev* Number of households per village Households 231 199 Number of full-time crab catchers per village Person 43 32 Number of part-time crab catchers per village Person 26 18 Average number of crabs caught per day by crab catchers Crabs 20 4 Average weight of crabs caught per day by crab catchers Kg 2.1 0.9 Average income of full-time crab catcher per month MMK 237,000 62,000 Average income of part-time crab catcher per month MMK 164,000 60,000 Value (2019 – annual estimate) Income from crab catching in mangroves managed by the MMK 84,392 million Government Crab catching labor costs MMK 47,128 million Number of jobs from crab catching in mangroves (number 32,695 jobs of full-time and full-time equivalent jobs) Figure 12. Aquaculture ponds in mangrove lands for different land tenure types. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 24 Figure 13. Aquaculture ponds within different mangrove status categories. Table 10. The characteristics of mangrove aquaculture pond operations within reserve forests and national park areas. Operation data Value (2019) Note Income from mangrove ponds MMK 14,787 million Annual estimation from mangrove areas (survey) Pond operational costs MMK 9,169 million Estimation from survey data Number of jobs from mangrove 15 1,951 jobs Estimation from survey data aquaculture farming 15 Full-time and full-time equivalent jobs. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 25 Figure 14. The distribution of Nipa palm over different land tenure types. Table 11. The characteristics of nipa palm farm operations within reserve forests and national park areas. Operation data Value (2019) Note Income from nipa palm farms MMK 8,929 million Annual estimation from survey data Nipa palm farm operational costs MMK 5,437 million Estimation from survey data Number of jobs from nipa palm farming 16 1,512 jobs Estimation from survey data 16 Full-time and full-time equivalent jobs. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 26 Almost all agriculture lands within RFs are rice fields. For land outside RFs and NP (assumed private land) Over 60 rice farmers who have rice fields which the study also estimated the income and costs as- were converted from mangroves in the delta were sociated with aquaculture (Table 13) and nipa palm surveyed. The income, costs, and historical land use17 activities (Table 14). were recorded. The average income, costs, and labor needs per hectare of rice field (Table 12) were used to estimate the economic activity based on agricul- ture (rice fields) within the government RFs. Table 12. The characteristics of rice production operations within reserve forest areas18. Operation data Value (2019 – annual) Note Average rice income per hectare per year MMK 0.432 million Estimated from surveys Income from agriculture (rice production) MMK 30,311 million Assumption: all are rice – one crop per year Rice cultivation operational costs MMK 16,208 Estimated from surveys Jobs from agriculture (rice cultivation) 17,541 Estimated from surveys Table 13. The characteristics of mangrove aquaculture pond operations in mangrove land outside reserve forests and national park in the Ayeyarwady Region. Operation data Value (2019) Note Income from mangrove land ponds MMK 38,867 million Annual estimation from mangrove areas (survey) Pond operational costs MMK 24,100 million Estimation from survey data Number of jobs from mangrove aquaculture 19 10,376 jobs Estimation from survey data farming Table 14. The characteristics of nipa palm farm operations outside reserve forests and national park in the Ayeyar- wady Region. Operation data Value (2019) Note Income from nipa palm farms MMK 56,512 million Annual estimation from survey data Nipa palm farm operational costs MMK 28,364 million Estimation from survey data Number of jobs19 from nipa palm farming 6,476 jobs Estimation from survey data 17 Based on information collected, most rice fields were converted from mangroves before 1995. 18 Assumption – 1 crop – rice. 19 Full-time and full-time equivalent jobs. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 27 Mangroves have high carbon stocks (called blue 4.1.2 The Value of Regulatory Ecosys- carbon) and rates of carbon sequestration in their tem Services and Social Values soils and biomass (Mcleod et al. 2011). Carbon se- questration through the restoration of mangroves Valuing ecosystem services reveals the importance can be used to generate carbon credits which can of ecosystem functions and is an essential compo- be sold to generate income for communities. In the nent for devising management activities. Ecosystem Ayeyarwady Delta there is a pilot blue carbon proj- services do not just generate products and raw ma- ect that has been registered with the Verified Car- terials, but also provide vital life support services that bon Standard (VCS) through a project supported are critical to human well-being and the functioning by WorldView International Foundation. This pilot of economies. The valuation of direct-use ecosys- project has indicated that carbon farming through tem services (refer to Economic Value Section) was mangrove restoration may be an income stream for followed by the valuation of indirect-use ecosystem communities, adding to the adaptation benefits al- services that affected the overall population of the ready articulated in Myanmar’s NDC. In this study, study area. Through literature review, expert consul- the potential of carbon gains from the restoration of tation, and baseline surveys in the study area, the aboveground biomass was quantified. Further labo- value of mangrove carbon sequestration, coastal ratory analyses will enable the incorporation of car- protection, and riverbank protection services were bon sequestered in soils. quantified and monetized. As mentioned before, the benefits of coastal protection in areas outside To estimate carbon sequestered in mangrove bio- the RFs and NP were not considered because of the mass, the study modelled mangrove growth using high level of complexity and uncertainties. simulation models. In this report, a simple approach was used by applying an average growth rate for each plantation species estimated from the sur- veyed data. Figure 15. Basal area growth of different aged mangrove plantations in the Ayeyarwady Delta. The equation is of the form G = b1 (1 - e-b A )b (G stands for basal area, A is the age of plantation, b1, b2, b3 are 2 a equation parameters). Variation about the relationship is high due to variation in environmental factors and management, including levels of tidal inundation, fertility, rates of thinning and other factors, which were not assessed or where data was not available. The dashed line illustrates the growth trend over time. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 28 The average basal area growth rate for each species delta. The detailed basal area growth rates of man- was estimated. These growth rates were used to es- grove tree species are presented in Table 15. timate growth rates of mangrove plantation in the Table 15. Average tree basal area growth rate of different mangrove plantation species in the Ayeyarwady Delta, Myanmar. Units are area of mangrove stems (m2) per hectare per year. Species Botanical name Average basal area growth rate (m2 ha-1 year-1) StDev* Aa Avicennia alba 0.42 0.25 Ac Aegiceras corniculatum 0.13 0.04 Am Avicennia marina 1.09 0.99 Ao Avicennia officinalis 1.05 1.17 Bc Bruguiera cylindrical 0.21 0.11 Bg Bruguiera gymnorrhiza 0.50 0.34 Bs Bruguiera sexangula 0.94 0.71 Cd Ceriops decandra 0.17 0.01 Ct Ceriops targal 0.11 0.0003 Ea Excoecaria agallocha 1.74 0.98 Hf Heritiera formes 1.18 0.92 Ll Lumnitzera littorea 0.81 0.46 Lr Lumnitzera racemosa 0.95 0.26 Pp Pongamia pinnata 0.29 0.14 Ra Rhizophora apiculata 0.15 0.01 Rm Rhizophora mucronata 0.75 1.45 Sg Sonneratia griffithii 0.38 0.34 Xm Xylocarpus mekongensis 1.39 0.23 *Stdev: standard deviation of the mean A universal equation relating tree biomass and basal To estimate growth rates of natural mangroves the area was developed using surveyed data and other study assumed that growth rates were similar to data available in the literature for mangroves in the mangrove plantations that had similar tree basal Ayeyarwady Delta in Myanmar. The equation is: area per hectare. Based on the 215 survey plots with- in mangrove plantations in the delta, growth rates of Biomass = 2.6453*G1.1255 (R2 = 0.9894) (1) different mangrove stands in different status cate- In which Biomass20 (Mg ha-1) is biomass of mangrove gories were estimated as below: vegetation per hectare (fully dried); G is total tree •• Degraded secondary and regenerating basal area (m2 ha-1) mangrove. These have growth rates similar From equation (1) it is straightforward to estimate to poor performing plantations (low levels of biomass of different species from their basal area tree stocking). These types of mangroves have growth rate (G). Biomass increments were then con- growth rates of 2 Mg biomass per hectare per verted to carbon sequestration using conversion year. factor from the IPCC Wetland Supplement (2014). •• Mangrove plantations and natural mangroves in good condition. Growth rates were assumed similar to plantations with a tree density of greater than 1,500 trees per hectare and have mean growth rates of 5 Mg biomass per hectare per year. •• Regenerating mangroves. These have basal area and growth rates similar to new mangrove plan- tations (1-3 years old) and have growth rates of 2 Mg biomass per hectare per year. 20 Mg = Megagram, which is equivalent to a metric tonne. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 29 Table 16. Mangrove tree growth rates analyzed from surveyed plantations. Mean tree biomass increment of Mean tree basal N (number Mangrove status similar stocking plantation Stdev* area (m2 ha-1) of plots) (Mg ha year ) -1 -1 Degraded secondary and 16.3 2.6 24 0.59 regenerating mangrove Mangrove plantations and 52.1 6.2 31 1.14 natural mangroves in good condition Regenerating mangroves 9.0 1.9 98 0.34 *Stdev: standard deviation of the mean Table 17. Biomass sequestration services for mangroves inside and outside reserve forests and national park21. Data Value (2019 – annual) Note Average annual tree biomass growth of natural 6.2 Mg/ha/year An equation relating tree biomass and mangrove and plantations basal area was developed using sur- Average tree biomass growth of degraded 2.6 Mg/ha/year vey data and secondary data available mangrove in the Ayeyarwady Delta. Average tree biomass growth of young regen- 1.9 Mg/ha/year Eq. Biomass = 2.6453*G1.1255 erating mangrove (R2 = 0.9894) From the equation, biomass was esti- mated for different species from their basal area growth rate (G). Within reserve forests and national park Healthy natural mangrove 1,100 ha Mangrove plantations 5,470 ha Degraded mangrove 43,910 ha Young regenerating mangrove 4,609 ha Carbon sequestration from mangroves annu- 58,477 Mg of CO2 Estimated from survey and modeling ally22 equivalents (total in the study area) Carbon price USD 10 per Mg Estimation from ongoing carbon se- questration projects Income from biomass carbon sequestration MMK 819 million Conversion rate USD 1 = MMK 1,400 Carbon marketing and relevant costs MMK 41 million Estimation from ongoing carbon sequestration projects (5% of carbon value) Outside reserve forests and national park Natural mangrove 0 ha Regrowth mangroves 21,099 ha Degraded mangrove 11,952 ha Young regenerating mangrove 0 ha Carbon sequestration from mangroves annu- 41,273 Mg of CO2 ally23 equivalents Carbon price USD 10 per Mg 21 For Myanmar Revised NDC, outside RF and NP carbon sequestration would support the Agroforestry targets. 22 Total biomass was converted to carbon sequestration using a conversion factor from the IPCC Wetland Supplement (2013) - Total biomass x 20% x 0.5 C x 3.67 CO2 - Only 20% biomass stored on the mangrove stands, other biomass is continuously collected for fuelwood, mainly from existing natural and plantation mangroves. 1 Mg of biomass is 0.5 Mg organic carbon (IPCC 2013) or 1.84 Mg CO2 equivalents (x 3.67). 23 Total biomass was converted to carbon sequestration using a conversion factor from the IPCC Wetland Supplement (2013) - Total biomass x 20% x 0.5 C x 3.67 CO2 - Only 20% biomass stored on the mangrove stands, other biomass is continuously collected for fuelwood, mainly from existing natural and plantation mangroves. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 30 Income from biomass carbon sequestration MMK 578 million Carbon marketing and relevant costs MMK 29 million The coastal and riverbank protection valuation of For nipa palm, which is mainly for thatching and is mangroves is based on the methods presented extensively utilized, a protection value was estimat- in the methodology section. Only well-developed ed at 150 USD ha-1 year-1. Nipa palm used for both, mangroves adjacent to open water (coastal) were thatch and sap, was considered to have higher pro- considered to have coastal protection value (includ- tection value (300 USD year-1) given that they are ing both mangroves in ponds and outside ponds). not over-exploited for thatching. Table 18. Coastal and riverbank protection ecosystem services derived from mangroves. Data Value (2019 – annual) Note Within reserve forests and national park Healthy natural mangrove 1,100 ha Assumption: stocking >2,000 trees/ha and tree volume >50m3/ha Mangrove plantation 5,470 ha Assumption: stocking >2,000 trees/ha and tree volume >50m3/ha Nipa palm 8,876 ha Assumption: Nipa palm for thatching has ½ the river back protection value (150 USD ha-1 year-1) Coastal protection value USD 1,369 ha-1 year-1 For healthy mangrove and nipa palm Value of coastal protection service MMK 13,491 million Estimated Nipa palm river protection value MMK 1,864 million Outside reserve forests and national park Nipa palm 36,179 ha Nipa palm river protection value MMK 7,598 million Assumption: Nipa palm for thatching have ½ river protection value (150 USD ha-1 year-1 ) Given the important role that the Forest Department and protection activities were quantified (Table 19). has in managing and controlling RFs and NP areas, Finally, based on data collected from the study area, data was collected regarding government opera- species biodiversity only for community forestry tional expenditure for field management and con- mangrove areas was estimated using the Shannon trol. Additional jobs related to mangrove restoration Diversity Index, which was 0.195 in 2019. Table 19. Government operational expenditure for control and protection of reserve forests and national park areas in the Ayeyarwady Region. Operation data Value (2019) Note Current government forestry staff 65 Estimated from 4 townships for RF and NP management Government costs for 1 staff – on average per month MMK 500,000 Estimated from staff salary and other costs, survey 2019 Forest Department staff operational expenses (annual) MMK 390 million Estimated from salaries and other opera- tional costs Jobs related to mangrove restoration and protection 900 jobs Estimated and equivalent to full time job (including nursery, planting, tending, monitoring) Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 31 Table 20 and 21 summarize the valuation process and quality, complementing the indicator ‘total jobs’ that baseline assessment in order to model the impacts quantifies the amount of direct jobs. The study also of potential interventions and management options estimated the number of people involved in commu- in areas within and outside RFs and NP following the nity-based land management (Community Forestry Return on Investment Analysis structure described User Group and Village Fuelwood Plantations) and in the 3Returns Framework (GGKP, 2020). The study those involved in capacity building (or under technical estimated the number of ‘green jobs24’, defined as assistance) as an indicator of social & human capital25 jobs created in an environmentally sustainable, and (See Box 4). legal activity, as a measurement and indicator of job Box 4. Community-based mangrove management and capacity building in the Ayeyarwady Delta Community Forestry User Groups (CFUG) represents a group of community members (the minimum is 5) that are allocated a certain amount of mangrove land area that the CFUG is collectively responsible for managing. Depending on community leadership or supporting extension actions by the government or NGOs, some CFUGs can claim a collective mandate. However, most of the times the responsibilities for land management and rights to access the resources are divided among the members of the group. A CFUG member has rights and responsibilities for his/her own plot. The current forest management plan for CFUG is 30 years and renewable. Village Fuelwood Plantations (VFP) are usually rehabilitated mangrove plantations which are established within existing reserve forest by the regional forestry department officials. They are established for fuelwood purposes and allocated to the most nearby villages. All the members of the villages which are granted with VFPs have equal rights and responsibilities on their village’s fuelwood plantations. Therefore, village fuelwood plantations are a community forestry scheme. The current forest management plan for village fuelwood plantation is 30 years and renewable. In the Ayeyarwady Delta, capacity building activities are mainly conducted by NGOs and international development projects. Capacity building activities are mostly focused on managing and improving production techniques related to aquaculture, agriculture, and forestry systems, and are often for both the community as well as for government staff. natural capital is comprised of 6,570 ha of healthy 4.1.3 Summary of Baseline mangrove and 8,876 ha of nipa palm. The number Costs and Benefit of people, involved in community forestry and capacity building as an output indicator for social For 2019, the total monetary benefits from areas & human capital, were 8,038. within RFs and NP add up to MMK 128,722 million, while operational expenses add up to MMK 80,438 million. Among non-monetary benefits, for 2019 total carbon sequestration equals 58,477 Mg of CO2e, green jobs comprise 22,491 jobs, and species diversity (Shannon Index) of the trees is 0.195. Output indicators of the status of different capitals (natural, financial, social & human) found that 24 A job is classified as a ‘green job’ if it meets one or more of the following criteria: (a) adequate monthly wage, (b) work stability and security, (c) occupational hazard level involved, (d) decent working hours, and (e) availability of social protection scheme (e.g. social security). Work that uses child labor and bounded labor did not qualify as ‘green job’. Additionally, employment characteristics related to sustainable forestry activities (tree plantation, forest certification, national voluntary certification), and sustainable production practices (climate smart agricultural practices) were also considered as part of the ‘green job’ criteria. 25 Social capital defined as the shared norms and values, networks and organizations that enable the coordination and mobilization of individuals’ contributions; and human capital defined or related as the individual’s capacity for work, such as knowledge, skills, and health. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 32 Table 20. Baseline results for mangroves within reserve forests and national park. 2019 Benefits (monetary)  millions MMK Value of fuelwood collection in government managed mangrove 26,337 Value of fuelwood collection from village fuelwood plantations 1,459 Value of aquaculture 14,787 Value of fuelwood collection in mangrove aquaculture ponds 5,234 Value of fishing in government managed mangroves (crab-catching) 51,828 Value of agriculture (rice production) 30,311 Value of biomass carbon sequestration 819 Value of coastal protection 13,491 Value of nipa palm thatch only 8,929 Value of nipa palm riverbank protection 1,864 Operational expenditure (OPEX)  millions MMK Forest Department staff (millions MMK) 390 Mangrove aquaculture pond operational costs 9,169 Rice cultivation costs annually 16,208 Mangrove fuelwood collection labor costs 16,253 Fuelwood collection labor costs for village fuelwood plantations 871 Fuelwood collection cost for mangrove ponds 3,126 Fishing labor costs 28,943 Other operational expenditures (related to carbon marketing) 41 Nipa palm thatch collecting and producing costs 5,437 Non-Monetary Benefits Unit Total carbon sequestration (Mg of CO2 equivalent) 58,477 Number of ‘green jobs’ maintained annually (number of jobs) 22,491 Species diversity (Shannon index for CF mangroves) 0.195 Status of Capitals (Output Indicators) Unit Natural Capital - healthy mangrove areas (natural mangroves and plantations which have stocking > 2,000 trees/ha and tree volume > 50m3/ha) (ha) 6,570 Social & Human Capital - people involved in community forestry and capacity building (num- ber of people) 8,038 Natural Capital - nipa palm (ha) 8,876 Following the study scope, for 2019 the total mone- 41,273 Mg of CO2e, and green jobs are 47,048 jobs. tary benefits from areas outside RFs and NP add up The output indicator of natural capital was 0 ha of to MMK 190,805 million, while operational expenses healthy mangrove and 36,179 ha of nipa palm. There add up to MMK 99,197 million. Among non-monetary are no people involved in community forestry and benefits, for 2019 total carbon sequestration equals capacity building in areas outside RFs and NP. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 33 Table 21. Baseline results for areas outside reserve forests and national park. 2019 Benefits (monetary)  millions MMK Value of aquaculture 38,867 Value of fuelwood collection in mangroves (inside and outside ponds) 2,642 Value of fishing in mangroves managed by the Government (crab-catching) 104,724 Value of biomass carbon sequestration 578 Value of nipa palm thatch only 36,396 Value of nipa palm riverbank protection 7,598 Operational expenditure (OPEX)  millions MMK Law enforcement and extension staff 120 Mangrove aquaculture pond operational costs 24,100 Mangrove fuelwood collection labor costs 423 Fishing labor costs in mangroves 52,362 Other operational expenditures (related to carbon marketing) 29 Operational costs for nipa palm for thatch only 22,163 Non-Monetary Benefits Unit Total carbon sequestration (Mg of CO2 equivalent) 41,273 Number of ‘green jobs’ maintained annually (number of jobs) 47,048 Status of Capitals (Output Indicators) Unit Natural Capital - healthy mangrove areas (natural mangroves and plantations which have stock- ing > 2,000 trees/ha and tree volume > 50 m3/ha) (ha) 0 Social & Human Capital - people involved in capacity building (number of people) 0 Natural Capital - nipa palm (ha) 36,179 Considering the importance to reveal how natural Region is presented in Table 22. It is worth mention- capital does not just provide products and raw ma- ing that the economic value presented for ecosys- terials, but also provide vital life support services tem services is limited by the scope of this analysis that are critical to human well-being and the func- and follows specific assumptions explained in detail tioning of economies, the economic value of ecosys- in the methodology section. tem services from mangrove land in the Ayeyarwady Table 22. Ecosystem service supply from mangrove land (inside and outside RFs and NP) in the Ayeyarwady Region for 2019*. Other mangroves Resource Rent Unit Nipa palm Aquaculture Agriculture & mangrove land Area hectares 45,055 133,906 17,545 62,785 Fuelwood & timber Millions MMK 210 15,422     Aquaculture products Millions MMK 20,385   Fishing (mud crab catching) Millions MMK 24,079 51,168     Rice production (within Reserve Millions MMK    14,103 forests and National park only) Nipa palm thatch Millions MMK  17,725     Nipa palm riverbank protection Millions MMK  9,462   Biomass carbon sequestration Millions MMK 60  1,397     Coastal protection Millions MMK 13,491     *Value indicated in the table is the resource rent (total value deducted operational costs). Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 34 4.2. SCENARIO MODELING 4.2.1 Scenarios for Areas Within The study developed a range of mangrove manage- Reserve Forests and National Park ment scenarios in order to assess and compare the The study developed a range of mangrove manage- potential outcomes of different management strat- ment scenarios in order to assess and compare the egies. The scenarios are based on varying invest- potential outcomes of different management strate- ments in activities such as mangrove restoration, gies. The scenarios include: improved infrastructure (concrete gates for aqua- culture ponds), capacity building (improved thinning A Business as Usual (BAU); a scenario where the and wood collection, aquaculture practices, and nipa current government mangrove management plan palm production techniques), and allocation of lands (MRRP) is fully enforced (MRRP+), and a range to community forestry. Additionally, in areas inside of scenarios that assess the increased allocation RFs and NP different community-based mangrove of mangroves to community forestry (CF), either management associated with its respective govern- through increasing the area allocated to CFUGs or ment enforcement has been analyzed. The analysis through an increase in the area of VFP. These two for different scenarios was done until 2026, which community forestry arrangements differ in the ac- is the year that the MRRP finishes. Analyses of the cess that they provide for landless people in the different scenarios over longer time scales (until study area for fishing (i.e. crab catching) and col- 2080) were also conducted, although uncertainties lecting wood within the mangroves. A range of oth- are high for such projections. er improvements for forest management and aqua- culture were also included. The different scenarios are described below (Table 23). Annex 2 describes in detail the impact drivers, the expected impacts, and the consequences and dependencies for each scenario. Table 23. Scenarios (see text) for mangrove and associated land use within reserve forests and national park. BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 (MRRP+) (CFUG 25%) (CFUG 47%) (VFP 38%) Land Use Direct Management Responsibility Reserve Rate as current 84% under FD 50% under FD di- 50% under FD 50% under FD Forests and practice direct responsi- rect responsibility direct responsi- direct responsi- National Park bility bility bility managed by Forest Depart- ment (FD) Mangrove Rate as current Allocate 13% of Allocate 25% of Allocate 47% to Allocate 13% Community practice total RF by 2026 total RF by 2026 2026 of total RF by Forest User (as in current 2026 (as in cur- Group (CFUG) MRRP) rent MRRP) Mangrove Vil- Rate as current 3% of total RF 25% of total RF by 3% to 2026 37% to 2026 lage Fuelwood practice by 2026 (as in 2026 (as in current of total RF by Plantations current MRRP) MRRP) 2026 (as in cur- (VFP) rent MRRP) Forest Resource Use Management Forest Man- Thinning 2 years Thinning 3-5 Thinning 5 years, Thinning 5 Thinning 5 agement Ac- and clear collec- years, no clear no clear collection, years, no clear years, no clear tivities (Com- tion collection and keeping (300) collection, and collection, and munity Forest maternal trees26 keeping (300) keeping (300) Management maternal trees maternal trees Plan) 26 Maternal trees are mature trees which can produce propagules and seeds which facilitate natural regeneration in mangroves. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 35 Law Enforce- Law enforcement Improved en- Forest manage- Forest man- Forest man- ment remains the same forcement for ment is enforced agement is agement is reducing illegal for increasing the enforced for enforced for fuelwood collec- area of CF increasing the increasing the tion and logging area of CF area of CF Restoration 300 hectares of 1000 ha of 1500 ha of suc- 1500 ha of 1500 ha of effort successful man- successful man- cessful mangrove successful successful grove plantations grove rehabil- rehabilitation under mangrove reha- mangrove reha- annually itation under implementation bilitation under bilitation under implementation target implementation implementation target (under target target MRRP plan) Other Resource Use Management Aquaculture Remain in the Remain in the Production tech- Production Production same condition same condition niques improved techniques techniques (concrete gate improved improved build, improved (concrete gate (concrete gate aquaculture tech- build, improved build, improved niques) aquaculture aquaculture techniques) techniques) Rice Remain in the Remain in the Remain in the same Remain in the Remain in the same condition same condition condition same condition same condition Nipa palm Remain in the Remain in the Production tech- Production Production same condition same condition niques improved techniques techniques (improved culture improved (im- improved (im- for multiple prod- proved culture proved culture ucts) for multiple for multiple products) products) Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 36 potential outcomes of different management strat- 4.2.2 Scenarios for Areas Outside egies in mangrove land outside the RFs and NP. The Reserve Forests and National Park different scenarios are described below. Annex 2 describes in detail the impact drivers, the expected The study developed a range of mangrove manage- impacts, and the consequences and dependencies ment scenarios in order to assess and compare the for each scenario. Table 24. Scenarios for mangroves and associated land use outside reserve forests and national park. Resource Use Management BAU Scenario 1 Scenario 2 Scenario 3 Note (25% improve- (50% im- (75% improve- ment) provement) ment) Degraded mangroves Mangroves Improved Improved Improved Mangrove under BAU felling and felling and felling and manage- conditions enrichment enrichment enrichment ment, planting (or planting (or planting (or enriched for new planting new planting new planting fuelwood for unvege- for unvege- for unvege- production tated saline tated saline tated saline (economic land) 25% of land) 50% of land) 75% of activity) the area, 75% the area, 50% the area, 25% of the area of the area of the area remains under remains under remains under BAU practices BAU practices BAU practices Nipa palm Nipa palm Improved Improved Improved Individual under BAU culture for culture for culture for use and conditions multiple prod- multiple prod- multiple prod- management ucts 25% of ucts 50% of ucts 75% of for economic the area, 75% the area, 50% the area, 25% activity im- of the area of the area of the area pact assess- remains under remains under remains under ment BAU practices BAU practices BAU practices Aquaculture in brackish Aquaculture Mangrove Mangrove Mangrove Mangrove water ponds with and with- ponds under rehabilitation rehabilitation rehabilitation friendly out mangroves BAU condi- of 25% of the of 50% of the of 75% of the aquaculture tions area, 75% area, 50% area, 25% practices of the area of the area of the area introduced remains under remains under remains under and promot- BAU practic- BAU practices. BAU prac- ed es 25% of the 50% of the tices. 75% of ponds will ponds will the ponds will be improved be improved be improved (concrete gate (concrete (concrete build, improved gate build, gate build, aquaculture improved improved techniques) aquaculture aquaculture techniques) techniques) quences especially for rice production27 (Chen, Mc- 4.2.3 Climate Change, Including Sea Carl et al. 2012). SLR is also expected to increase Level Rise in Scenario Modeling the damage caused by storm surges (Fritz, Blount et al. 2009). Mangroves provide coastal protection Following the 3Returns Framework, which strongly from storms and other waves (Hochard, Hamilton emphasizes the importance and necessity to iden- et al. 2019), yet they are also at risk from SLR if in- tify, analyze, and model changes in capitals associ- creases in tidal inundation and erosion exceed rates ated with external factors, the study incorporated of accretion of shores, which can result in mangrove increases in sea level, as they are expected with a losses (Lovelock, Cahoon et al. 2015). Estimates of high level of confidence (IPCC 2019) even though change in mangroves with SLR was based on the impacts in Myanmar have not yet been assessed ad- global model of Schuerch et al. (2019), which includ- equately. Sea level rise (SLR) is a global risk to na- ed impacts with and without coastal squeeze (Table tions with low elevation coastal land due to impacts 25). Thus, the impacts of SLR on mangroves were from increased inundation, storm surge, erosion, and either positive, where coastal squeeze was avoided saltwater intrusion (Nicholls and Cazenave 2010). In (+43% to 2100), or negative where not (-24% in cov- addition, the effects of SLR are predicted to be par- er to 2100). The amount of mangrove land lost or ticularly negative for developing nations (Dasgupta, gained each year was incorporated into the model- Laplante et al. 2011), with negative economic conse- ing assuming a linear change to 2100. 27 As rice farming was excluded for the analysis in areas outside RFs and NP, SLR impact over rice production is only considered in areas inside RFs and NP. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 37 Table 25. Scenarios of mangrove cover change with sea level rise within reserve forests and national park areas28 Coastal Squeeze Scenarios High coastal squeeze – low Low coastal squeeze – high adaptation (P5) adaptation (P300) Initial cover (km2) 5,100 5,100 Cover 2100 (km2) 3,900 7,300 Change in mangrove cover (km2) -1,200 2,200 % Change -24% 43% 28 The model of Schuerch et al. (2019) was used to estimate changes in mangrove area with sea level rise. This model considered two scenarios, one with high coastal squeeze when landward migration of mangroves is prevented at population densities of 5-20 persons/km2; and low coastal squeeze – high adaptation, where landward migration of mangroves is prevented at 300 persons/ km2). Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 38 © Adobe Stock 5. RETURN ON INVESTMENT ANALYSIS Following the 3Returns Framework, the scenari- os were modeled according to the impact drivers, Box 5. Discount Rates for the Return expected impacts, and consequences and depen- on Investment Analysis dencies described in Annex 2. Interventions such At each modeling scenario, two discount rates were as mangrove restoration, improved infrastructure applied. (concrete gates for aquaculture ponds), capacity building (improved thinning and wood collection, Regular Discount Rate or market discount rate (10%): The discount rate is estimated based on aquaculture practices, and nipa palm production interest and inflation rates of the economy. Currently, techniques), and allocation of lands to community the commercial discount rate is about 12% for forestry were analyzed as an investment of capitals Myanmar. Considering the outlook for the economic given their impact over the benefits and costs con- development of the country it is expected that the sidered. The analysis and results of this process are capital market will be stable with lower inflation and interest rates over time. Therefore, a 10% discount presented in Sub-section 5.1 for areas within RFs rate is one of the discount rates applied for this and NP and in Sub-section 5.2 for areas outside analysis. RFs and NP considering the different scenarios an- Impact Investment Discount Rate: The investment alyzed, accordingly. scenarios proposed in this study are for long-term ecosystem services and livelihood for the poor. These For the analysis, two discount rates were used, a investments can be considered as Impact Investment. regular discount rate (10%) and an impact invest- Therefore, lower discount rates are applied for these ment discount rate (4%). Both discount rates, ex- kinds of investments, for instance, 2% - 6%. In this plained in Box 5, were applied for the investment study, an impact discount rate of 4% has also being applied for all investment scenarios and for the BAU. analysis for areas within and outside RFs and NP. Following a conservative economic modeling ap- proach, the results observed from using different discount rates reflected the same impact tendency regarding the interventions proposed. and considering the relationship between benefits Overall, the analysis reveals that investment in man- and costs, conventional BAU practices are observed grove rehabilitation, capacity building, improved to be unsustainable in areas inside as well as outside infrastructure, and community development brings RFs and NP. However, differences in the scenarios, more benefits compared to current practices. Green land management, and interventions inside and out- investments improve financial indicators as well as side RFs and NP proposed in this analysis have dif- non-monetary and capital output indicators in the ferent impacts which are explained and presented short and the long term. Over longer time scales, in the sections below. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 39 5.1. RETURN ON INVESTMENT ANALYSIS FOR AREAS WITHIN RESERVE FORESTS AND NATIONAL PARK Table 26, 27 and Figure 16 are the results of the Return on Investment Analyses for activities in mangroves and other land uses within RFs and NP using two different discount rates, the regular discount rate of 10% and the impact investment discount rate of 4%. Table 26. Results of different scenarios over years for activities in mangroves within reserve forests and national park (discount rate 10%). Results in 2026 Results in 2040 Results in 2060 Results in 2080 Financial Analysis BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BCR 1.82 1.96 1.91 1.81 1.98 1.78 2.08 2.13 2.05 2.17 1.75 2.17 2.35 2.24 2.39 1.74 2.20 2.38 2.27 2.41 ROI 18.90 14.07 8.63 6.28 12.00 17.84 15.61 12.96 10.53 16.42 17.22 16.80 15.88 13.06 19.65 17.05 17.15 16.26 13.41 20.04 NPV Total Benefits (mil- lion USD) 585 620 709 767 702 969 1,124 1,361 1,515 1,380 1,090 1,341 1,714 1,896 1,740 1,109 1,388 1,770 1,957 1,798 NPV Op- erational Expenditures (million USD) 307.3 292.8 327.1 357.3 323.5 520.1 499.4 577.6 658.5 586.3 593 572 662 759 674 606.1 584.5 676.5 775.8 689.2 NPV Capital Expenditures (million USD) 14.7 23.2 44.3 65.2 31.6 25.1 40.0 60.5 81.3 48.3 29 46 66 87 54 29.5 46.9 67.3 88.1 55.3 Total NPV (million USD) 262.7 303.7 337.9 344.0 347.4 423.3 584.9 723.0 774.8 745.7 468 724 986 1,051 1,012 473.4 757.0 1,026.5 1,093.5 1,053.4 Other out- puts                                         Social & Hu- man Capital (number of people) 11,818 15,958 38,656 23,987 48,618 19,378 29,958 38,656 23,987 49,738 24,658 31,558 38,656 23,987 51,338 26,258 33,158 38,656 23,987 52,938 Natural cap- ital - Good mangrove (ha) 8,670 20,570 27,570 27,570 27,570 12,870 48,570 69,570 69,570 69,570 18,870 78,000 78,000 78,000 77,683 24,870 78,000 78,000 78,000 77,683 Cumulative biomass carbon sequestration (thousand Mg) 515 1,552 1,752 1,559 1,709 1,545 6,189 7,349 7,163 7,303 3,287 17,388 19,528 19,343 19,383 5,308 32,296 34,435 34,248 34,161 Green jobs (number of jobs) 21,061 30,372 38,124 40,187 43,117 18,515 33,447 38,124 40,187 44,245 15,270 43,447 53,124 55,187 59,245 12,802 43,447 53,124 55,187 59,245 Total number of jobs 53,092 50,016 57,768 59,830 62,761 51,570 51,691 56,368 58,430 62,489 49,484 60,988 70,665 72,728 76,786 47,447 60,988 70,665 72,728 76,786 Natural Capital Investment Platforms Analysis and ToolsEcosystems for Mangrove for Green Growth in thePlanning Ayeyarwady Region 40 Table 27. Results for different scenarios over years for activities in mangroves within reserve forests and national park (discount rate 4%). Results in 2026 Results in 2040 Results in 2060 Results in 2080 Financial Analysis BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BAU S1 S2 S3 S4 BCR 1.81 1.97 1.93 1.83 2.00 1.76 2.14 2.24 2.15 2.27 1.70 2.39 2.79 2.63 2.79 1.65 2.54 2.90 2.73 2.90 ROI 18.81 14.17 9.04 6.54 12.79 17.33 16.40 15.57 13.24 19.01 15.79 19.78 23.81 20.99 27.35 14.79 21.65 25.78 23.14 29.03 NPV Total Benefits (million USD) 738 786 910 990 902 1,602 1,942 2,402 2,699 2,453 2,271 3,206 4,386 4,843 4,477 2,591 3,995 5,339 5,869 5,448 NPV Oper- ational Ex- penditures (million USD) 388.3 369.2 416.6 459.1 412.5 869.8 838.0 982.2 1,138.8 1,005.8 1,277 1,240 1,450 1,694 1,493 1,492.6 1,457.9 1,700.2 1,985.3 1,750.5 NPV Capital Ex- penditures (million USD) 18.6 29.4 54.5 81.2 38.3 42.3 67.3 91.2 117.9 76.1 63 99 123 150 109 74.2 117.2 141.2 167.9 127.4 Total NPV (million USD) 331.0 387.3 438.5 449.7 451.2 689.9 1,036.3 1,328.9 1,442.7 1,371.6 931 1,866 2,812 2,999 2,875 1,023.8 2,419.8 3,497.3 3,716.0 3,570.3 Other outputs                                         Social & Human Capital (number of people) 11,818 15,958 38,656 23,987 48,618 19,378 29,958 38,656 23,987 49,738 24,658 31,558 38,656 23,987 51,338 26,258 33,158 38,656 23,987 52,938 Natural capital - Good mangrove (ha) 8,670 20,570 27,570 27,570 27,570 12,870 48,570 69,570 69,570 69,570 18,870 78,000 78,000 78,000 77,683 24,870 78,000 78,000 78,000 77,683 Cumulative biomass carbon se- questration (thousand Mg) 515 1,552 1,752 1,559 1,709 1,545 6,189 7,349 7,163 7,303 3,287 17,388 19,528 19,343 19,383 5,308 32,296 34,435 34,248 34,161 Green jobs (number of jobs) 21,061 30,372 38,124 40,187 43,117 18,515 33,447 38,124 40,187 44,245 15,270 43,447 53,124 55,187 59,245 12,802 43,447 53,124 55,187 59,245 Total num- ber of jobs 53,092 50,016 57,768 59,830 62,761 51,570 51,691 56,368 58,430 62,489 49,484 60,988 70,665 72,728 76,786 47,447 60,988 70,665 72,728 76,786 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in the Planning for Green Growth Ayeyarwady Region 41 Regular discount rate 10 % Impact investment discount rate 4 % a) f) b) g) c) h) Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 42 (d) (i) (e) (j) Figure 16. Return on Investment Analysis for enhanced mangrove management, including a BAU and four improved management scenarios (see Table 26 and 27) for mangrove within reserve forests and national park. Figures (a), (b), (c), (d), and (e) on the left side, are results of modeled scenarios with a regular discount rate of 10%. Figures (f), (g), (h), (i), and (j) on the right side, are modeled scenario results with a discount rate of 4%. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 43 Improved and decentralized mangrove manage- increased from about 9,000 hectares (mainly plan- ment interventions, in which more mangrove land tations) in the BAU to over 27,500 hectares in the was allocated to community forestry increased the intervention Scenarios 2, 3, and 4. Cumulative car- total net present value (NPV) of resources in the bon sequestration in mangroves in 7 years (2020 – landscape within RFs and NP in the delta (Tables 2026), which accounts for half of the total biomass 26 and 27, Figure 16). For example, NPV increased growth of mangroves in the delta, increases from by approximately 25% between 2020 to 2026, from over 515,000 Mg CO2 in the BAU to over 1,709,000 USD 368 million in the BAU scenario to USD 486 Mg CO2 in Scenario 4. Additionally, species biodi- million for Scenario 4 (with a discount rate of 10%) versity of CF mangroves, reported as the Shannon (Figure 16c). Scenario 4 allocated most of the com- index, increases from 0.195 to 0.588, if CFUG pond munity forestry mangrove areas to villages as Village owners and VFP managers keep at least 300 mater- Fuelwood Plantations and included an enhanced nal trees of 3 different species on their land. community forestry management and improved The study also conducted analyses of the different production techniques. With an impact investment scenarios over longer time scales, although uncer- discount rate of 4%, the NPV of the BAU and Sce- tainties are high with such projections (Tables 26 nario 4 by 2026 are further increased to USD 351 and 27). The modeling results reveal that multiple million and USD 451 million, respectively. capital investments have significantly higher impacts Allocation of larger areas of mangroves under on the NPV, natural capital output indicators, social CFUGs, as has been practiced in Myanmar for the & human capital output indicators, cumulative bio- last two decades, would contribute to improved live- mass carbon sequestration, and number of jobs and lihoods of families in the region. However, increas- number of green jobs. In the longer term, the return es in the CFUGs areas come at the expense of jobs on investment (ROI) of green investment scenarios and livelihoods of many landless people who collect increases over time while the BAU’s ROI declines. fuelwood and crabs from the mangrove. Therefore, This analysis suggests that conventional and current it is suggested that the Myanmar Government and BAU practices are not sustainable and have negative investors should support community forestry in VFP, impacts on mangrove resources within RFs and NP where all community members are permitted to over time (Figure 16). Only after 20 years (by 2040), catch crabs and collect fuelwood under the current the ROI of all greener investment Scenarios exceeds fishery regulations. the ROI of the BAU (with a 4% discount rate). The analysis also found that the mangroves within RFs and NP areas are providing jobs for several tens of thousands of landless people in the delta (Fig- ure 16e and 16j). It was estimated that over 200,000 people’s livelihoods depend significantly on man- grove resources. Currently, most of the jobs are from harvesting natural mangrove resources such as crab catching and fuelwood collection. Under the BAU the number of jobs associated with mangrove de- clined, while it was high and sustained for all green scenarios, although highest for Scenario 4. Many current jobs are not sustainable or environmental- ly friendly because they lead to overexploitation of natural resources. Intensive and frequent unplanned logging and fuelwood collection and crab catching under weak law enforcement have resulted in de- forestation and degradation of natural resources in mangrove areas in the delta. The analysis shows that investment in community forestry, especial- ly through supporting VFP and capacity building, would result in a higher proportion of green jobs associated with mangrove resources. Green jobs from sustainable crab catching, fuelwood collection from VFP, and mangrove restoration, increased from about 21,000 in the BAU scenario to about 43,000 jobs in Scenario 4 by 2026. Other essential indicators of green growth show improvement under green investment scenarios (Scenarios 2 – 4). The areas of healthy mangroves and plantations (natural capital output indicator), Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 44 5.2. RETURN ON INVESTMENT ANALYSIS FOR AREAS OUTSIDE RESERVE FORESTS AND NATIONAL PARK Table 28, 29 and Figure 17 are the results of the Return on Investment Analyses for activities in mangroves and other land uses outside RFs and NP using two discount rates, the regular discount rate of 10% and the impact investment discount rate of 4%. Table 28. Results of different scenarios by years for mangroves outside reserve forests and national park (discount rate 10%). Results in 2026 Results in 2040 Results in 2060 Results in 2080 Financial Analysis BAU S1 S2 S3 BAU S1 S2 S3 BAU S1 S2 S3 BAU S1 S2 S3 BCR 1.92 1.87 1.83 1.83 1.91 1.92 1.93 2.02 1.90 1.93 1.94 2.05 1.90 1.93 1.94 2.05 ROI - 29 25.91 14.97 13.74 - 37.65 23.51 20.17 - 39.83 25.13 21.28 - 40.07 25.31 21.39 NPV Total Benefits (mil- lion USD) 1,017 1,165 1,267 1,431 1,673 2,074 2,424 2,959 1,873 2,351 2,779 3,433 1,902 2,393 2,832 3,503 NPV Operational Expen- ditures (million USD) 531 600 650 731 877 1,051 1,204 1,386 984 1,190 1,375 1,586 1,001 1,211 1,401 1,617 NPV Capital Expendi- tures (million USD) 0 21.8 41.2 50.9 0 27.1 51.9 77.9 0 29.1 55.8 86.7 0 29.5 56.5 88.2 Total NPV (million USD) 486 543 575 648 796 996 1,168 1,495 888 1,132 1,348 1,759 901 1,152 1,374 1,798 Other outputs                                 Social & Human Capital (number of people) 0 750 1,500 2,250 0 750 1,500 2,250 0 750 1,500 2,250 0 750 1,500 2,250 Natural capital - Good mangrove (ha) 0 13,181 26,362 28,998 0 12,181 24,362 35,000 0 12,181 24,362 35,000 0 12,181 24,362 35,000 Cumulative biomass carbon sequestration (thousand Mg) 330 1,039 1,199 1,450 908 3,156 3,989 4,916 1,733 6,173 7,958 9,857 2,559 9,189 11,928 14,797 Green jobs (number of jobs) 47,048 61,208 77,125 91,490 47,048 61,326 75,604 90,065 47,048 61,326 75,604 90,065 47,048 61,326 75,604 90,065 Total number of jobs 58,892 73,956 90,777 105,619 58,892 73,978 89,064 104,347 58,892 73,978 89,064 104,347 58,892 73,978 89,064 104,347 29 As no investment in areas outside RFs and NP (following the interventions considered in this analysis) were identified, the ROI for the BAU is not reported. Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 45 Table 29. Results of different scenarios by years for activities in mangroves outside reserve forests and national park (discount rate 4%). Results in 2026 Results in 2040 Results in 2060 Results in 2080 Financial Analysis BAU S1 S2 S3 BAU S1 S2 S3 BAU S1 S2 S3 BAU S1 S2 S3 BCR 1.92 1.87 1.83 1.82 1.90 1.94 1.96 2.08 1.89 1.95 1.98 2.14 1.88 1.95 1.98 2.15 ROI - 30 25.28 14.27 13.00 - 42.65 26.66 22.08 - 48.18 30.75 24.45 - 49.39 31.71 24.81 NPV Total Benefits (million USD) 1,284,641 1,492,386 1,638,781 1,865,831 2,757,345 3,534,601 4,243,819 5,315,141 3,851,518 5,056,803 6,189,079 7,914,858 4,350,885 5,751,516 7,076,870 9,101,335 NPV Op- erational Expen- ditures (million USD) 670,566 768,122 839,907 952,909 1,449,237 1,780,583 2,085,824 2,422,862 2,039,199 2,543,855 3,022,157 3,525,141 2,314,851 2,898,627 3,455,935 4,034,654 NPV Capital Ex- penditures (million USD) 0 28,653 55,984 70,202 0 41,130 80,937 130,986 0 52,154 102,986 179,572 0 57,764 114,206 204,225 Total NPV (million USD) 614,075 695,611 742,891 842,720 1,308,108 1,712,888 2,077,057 2,761,293 1,812,319 2,460,794 3,063,936 4,210,146 2,036,033 2,795,125 3,506,730 4,862,456 Other outputs                                 Social & Human Capital (number of people) 0 750 1,500 2,250 0 750 1,500 2,250 0 750 1,500 2,250 0 750 1,500 2,250 Natural capital - Good mangrove (ha) 0 13,181 26,362 28,998 0 12,181 24,362 35,000 0 12,181 24,362 35,000 0 12,181 24,362 35,000 Cumulative biomass carbon se- questration (thousand Mg) 330 1,039 1,199 1,450 908 3,156 3,989 4,916 1,733 6,173 7,958 9,857 2,559 9,189 11,928 14,797 Green jobs (number of jobs) 47,048 61,208 77,125 91,490 47,048 61,326 75,604 90,065 47,048 61,326 75,604 90,065 47,048 61,326 75,604 90,065 Total number of jobs 58,892 73,956 90,777 105,619 58,892 73,978 89,064 104,347 58,892 73,978 89,064 104,347 58,892 73,978 89,064 104,347 30 As no investment in areas outside RFs and NP (following the interventions considered in this analysis) were identified, the ROI for the BAU is not reported. Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 46 Regular discount rate 10% Impact investment discount rate 4% a) f) b) g) c) h) Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 47 d) i) e) j) Figure 17. Return on Investment Analysis for enhanced mangrove management, including a BAU and three improved management scenarios (see Table 28 and 29) for mangrove land outside reserve forests and national park. Figures (a), (b), (c), (d), and (e) on the left side, are results of modeling with a regular discount rate of 10%. Figures (f), (g), (h), (i), and (j) on the right side, are modeling results with a discount rate of 4%. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 48 Analyzing the impacts of investment in a range of Improved management of mangrove resources out- mangrove management scenarios outside RFs and side RFs and NP could mitigate millions of tons of NP, green investments can provide much higher carbon dioxide. Cumulative carbon sequestration of monetary benefits compared to the BAU. Without mangroves by 2080 was only around 2.5 million Mg multiple capital investments, the BAU scenario re- CO2 in the BAU, compared to 14.7 million Mg CO2 in sults in unstainable benefits from exploiting natural Scenario 3. resources as observed in the decreasing benefit to cost ratio over the long term (Figure 17a and b). Finally, green investments in mangrove areas out- side RFs and NP would bring multiple other benefits. With a regular discount rate of 10%, the total NPV They would contribute to increasing mangrove areas increases by 2026 from USD 486 million in the BAU by 2026 to around 29,000 ha of healthy mangroves to USD 648 million in Scenario 3. Over the long term in Scenario 3. The social & human capital output in- (2080), these figures represent USD 912 million in dicator was also strengthened with green scenari- the BAU and USD 1,798 million for Scenario 3, re- os. According to the results, under the Scenario 1, spectively. The increase in NPV in green scenarios around 750 people would receive training from dif- with a discount rate of 4% (Table 29) is much higher ferent programs and projects, while over 2,250 peo- than with a 10% discount rate (Table 28). ple by 2026 will be educated under green Scenario 3. The highest ROI was observed for the green Sce- nario 1, for which only 25% of mangrove forests, nipa Overall, the analysis reveals that the investments palm, and aquaculture ponds production systems proposed through the different green scenarios im- were improved. The ROI of Scenario 1 (for both dis- prove the monetary and non-monetary benefits, as count rates 10% and 4%) is over 44 times of Scenario well as capital output indicators, when comparing 2 and over 24 times of Scenario 3. The reason for a to the BAU. However, for areas inside RFs and NP, decreasing ROI with greater interventions reflected mangrove restoration and decentralization of man- in Scenarios 2 and 3 is explained by the importance grove management through VFP is a key innovation that fuelwood collection activities have on the ROI in achieving sustainable outcomes, as fuelwood col- outcomes, compared to other economic activities lection activities currently make up to 23% of the and the investment or interventions proposed. In ar- economic benefits. Meanwhile, for areas outside RFs eas inside RFs and NP, fuelwood collection activities and NP, improving fishing and aquaculture activities represent 23% of the total benefits from the eco- could be effective activities to achieving sustain- nomic benefits under analysis, whereas in areas out- able outcomes, as non-timber products are the main side RFs and NP, fuelwood collection activities only drivers of income generation. Therefore, additional represent 1%. Considering that investment in man- interventions or investments (e.g. development of grove rehabilitation by enrichment represents the hatcheries or sustainable intensification of aquacul- greatest capital expenditure under this analysis for ture practices) should be considered and analyzed areas outside RFs and NP, an increase in the invest- for areas outside RFs and NP. ment in mangrove rehabilitation in areas outside RFs and NP does not have the same impact as in areas inside RFs and NP. This suggests that in order to im- prove the profitability and efficiency of investments in a sustainable manner, interventions outside RFs and NP should consider improving the performance of the main economic activities analyzed which are fisheries and aquaculture. Interventions such as the investment in hatcheries or the sustainable intensifi- cation of aquaculture could support improving not only the profitability but also the efficiency of inter- ventions in areas outside RFs and NP. Analysis of the impacts of different scenarios over the long term found that the NPV, BCR, and ROI of green investment scenarios increases over time. Additionally, mangrove resources and capital invest- ment on mangroves outside RFs and NP can provide over 100,000 equivalent full-time jobs in the delta. For all mangroves, outside and inside RFs and NPs, resources and investments bring over 160,000 jobs. It is estimated that over 700,000 people can be pro- vided with sustainable livelihoods with appropriate investments. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 49 5.3. SENSITIVITY ANALYSIS 5.4. SEA LEVEL RISE SCENARIOS The study analyzed different land and resource use AND IMPACTS management scenarios and its impact reflected In areas inside RFs and NP31, the impact of climate through changes in reported products’ and services’ change on rice productivity (due to saline water in- related outputs and selected indicators. For these trusion and climate events) was applied as an an- analyses, the discount rate, as well as the commod- nual decline in productivity of 0.4%. Further, SLR ities’ prices, played a vital role at the moment of scenarios that considered the impact of coastal analyzing the monetary impact. Therefore, a sensi- squeeze were analyzed which included a high coast- tivity analysis was conducted running the models al squeeze (low adaptation) scenario where a loss of through different discount rates with a minimum -0.29% mangrove area per year was used, and low discount rate of 2% and a maximum discount rate coastal squeeze (high adaptation) scenario where of 14%. Additionally, a sensitivity analysis was con- the mangrove area increased by 0.54% per year. ducted for changes in the price of the nipa palm sap, as the price for products such as mud crab, shrimp, Table 30 shows that coastal squeeze scenarios with mangrove fuelwood, and nipa palm leaves has an al- SLR have significant impacts on rice cultivation jobs ready established and less volatile market, whereas due to a reduction in the productivity and area of for nipa palm sap, there is no such market yet in the rice fields. Over 4,000 jobs are gained in the low Ayeyarwady Region. coastal squeeze scenario while over 10,000 jobs are lost in the highest coastal squeeze scenario. How- When testing different discount rates within the ever, the loss of agricultural jobs was compensated specified range in the models within and outside RFs by jobs created from increase mangrove land, asso- and NP, higher discount rates penalized the positive ciated with fishing and fuelwood collection in man- results as investment costs accrue earlier while ben- groves managed by the Government. The impacts of efits mostly arise in the long run. On the other hand, a coastal squeeze as a consequence of SLR are likely lower discount rates favored the positive impact of to be more complex and interact with other factors the proposed interventions. Yet, the sensitivity anal- (climate, storms, land-use) than modelled here. SLR ysis from using different discount rates reflected the with low coastal squeeze may increase mangrove same impact tendency regarding the activities un- extent, but the acceleration of coastal erosion could der analysis in areas within and outside RFs and NP, also occur which could result in a decrease of coast- which supported to robustness of the results’ inter- al land. Further analyses should be conducted to es- pretation based on the interventions proposed. timate SLR’s impacts on mangroves and associated Regarding the nipa palm sap, the estimation of its land uses and communities in the delta. price was based on a conservative value based on neighboring Myanmar regions and countries (i.e. Thailand and Indonesia). However, the price could be negatively affected if there is a limited market for this product in the Region. Following an assump- tion that the value of nipa palm sap could face a re- duction of 50% and 75% of its value, the sensitivity analysis showed that the conversion of production practices for nipa palm for sap and thatch still have positive investment outcomes despite lower prices. 31 Due to the high uncertainty of land use and land use change in mangrove area outside RFs and NP, the impact of sea level rises was not analyzed for this area. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 50 Table 30. Sea level rise impacts on investment analyses of activities in mangroves and mangrove land-use (only for areas within RFs and NP). Results in 2080 - no SLR Results in 2080 - SLR 1, -0.29 % Results in 2080 - SLR 2, 0.54 % Financial analysis BAU Sc1 Sc2 Sc3 Sc4 BAU Sc1 Sc2 Sc3 Sc4 BAU Sc1 Sc2 Sc3 Sc4 BCR 1.65 2.55 2.88 3.17 4.19 1.62 2.52 3.00 4.27 4.89 1.66 2.56 3.42 3.11 3.83 ROI 14.79 21.82 25.57 28.89 48.00 14.70 21.31 26.89 42.63 57.92 16.30 22.37 33.09 28.40 43.43 NPV Total Benefits (million USD) 2,591 4,015 5,310 6,834 7,865 2,666 3,941 5,481 9,126 9,115 2,845 4,107 6,400 6,782 7,311 NPV Operational Expenditures (million USD) 1,493 1,458 1,700 1,985 1,750 1,575 1,444 1,685 1,969 1,737 1,635 1,487 1,729 2,015 1,779 NPV Capital Expendi- tures (million USD) 74 117 141 168 127 74 117 141 168 127 74 117 141 168 127 Total NPV (million USD) 1,024 2,440 3,469 4,681 5,987 1,017 2,380 3,654 6,988 7,250 1,136 2,503 4,530 4,600 5,405 Other outputs           0 0 0 0 0           Social & Human Capital 26,258 33,158 38,656 23,987 52,938 26,258 33,158 38,656 23,987 52,938 26,258 33,158 38,656 23,987 52,938 Natural capital - Good mangrove 24,870 77,000 77,000 76,500 78,500 24,870 78,000 58,000 55,000 55,000 24,870 78,000 91,500 93,000 95,000 Cumulative biomass carbon sequestration (thousand Mg) 5,308 31,952 33,860 33,177 33,317 5,053 31,126 28,797 27,302 27,442 5,347 34,544 40,045 40,266 40,290 Green jobs 12,802 33,504 38,209 40,357 44,529 17,843 29,883 34,548 36,661 40,856 30,113 41,922 46,832 48,581 52,940 Total number of jobs 47,447 51,045 55,750 57,898 62,070 55,240 50,998 55,663 57,776 61,971 57,336 50,901 55,811 57,560 61,920 Agriculture job 17,541 17,541 17,541 17,541 17,541 21,591 21,591 21,591 21,591 21,591 7,461 7,461 7,461 7,461 7,461 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in the Planning Ayeyarwady Region 51 © Adobe Stock 6. CONCLUSIONS AND RECOMMENDATIONS 6.1. CONCLUSIONS BAU scenario, with the expectation that greater fu- ture benefits will offset the additional cost. While im- Mangroves in the delta provide essential ecosys- proved environmental, social, human, and economic tem services. Livelihoods derived from the natu- outcomes are realized in the short term, there is a ral resources of the mangroves reach hundreds of risk in fully realizing the monetary and non-mone- thousands of people in the Ayeyarwady Region. The tary benefits, as these typically take longer to accrue analysis of green scenarios and capital investment and require strategic long-term planning and com- reveals that interventions in mangrove rehabilitation, mitment. Therefore, the role of the Government as capacity building, improved infrastructure, and com- a planner and strategic designer for the sustainable munity development brings substantial and multiple development in the Ayeyarwady Region is crucial. monetary benefits, non-monetary benefits, and en- The investment in mangrove ecosystems requires hancement of natural, social, human, and economic a careful understanding of the complex interaction capital. Green scenarios, considering an investment between stakeholders, economic activities, ecosys- in natural, social & human, and financial capital im- tem services, and the importance of different land proved financial indicators such as the NPV, the management schemes. BCR, the ROI, as well as non-monetary and capital output indicators such as the amount of carbon se- For areas inside RFs and NP, decentralization and questration, number of green jobs, and hectares of improved mangrove management are key innova- healthy mangrove. The trade-off, which is common tions in achieving sustainable outcomes, as fuel- to green investments, is that these sustainable prac- wood collection activities currently make up to 23% tices require a higher capital investment than the of the economic benefits (2019). The most decen- Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 52 tralized practice – through VFP – provides the high- est returns and non-monetary benefits, as it creates 6.2. RECOMMENDATIONS an inclusive pathway for landless people to partici- To support successful economic activities on man- pate in the mangrove ecosystem. Currently, there is grove land, livelihood improvement, and strength- no requirement for the involvement of all community ened ecosystem services it is recommended: members, including the landless. Promotion of com- munity forestry with due respect of equal rights of •• For areas inside RFs and NP, community forestry all within local communities will help mitigate a po- in mangroves could be developed further by the tential risk of undermining the improved mangrove Myanmar Government which, according to the management intended through community forest- analysis, would enhance community incomes, ry. Consideration of appropriate safeguards for the mangrove extent, and the number of green jobs. landless in community forestry programs is a key Support may include the establishment of legal potential opportunity to empower landless people, frameworks that allow communities holding but this requires consultation within the community mangroves to borrow capital for investment in in order to secure their participation. management activities. Establishing VFPs could be increased to provide fuelwood for villag- For areas outside RFs and NP, improving fishing and ers and access for landless mud crab catchers, aquaculture activities in addition to mangrove reha- thereby increasing benefits for all community bilitation could be activities to achieve sustainable members. Developing safeguards for the landless outcomes, as non-timber products provide the main is important to be considered in any decentral- income from the mangrove ecosystems. Improv- ized community forestry intervention. ing mud crab catching and aquaculture practices could yield the most efficient outcomes. While in- •• Land-use boundaries are not clear in mangrove vestments in mangrove rehabilitation by enrichment landscapes in the Region, particularly those of improves the NPV, the investment required should reserve forests. In many mangrove areas, for be carefully considered as the main production sys- instance, nipa palm has been allocated to local tems from these land areas do not directly depend farmers under Form 7 user rights but are still on mangrove fuelwood, and therefore, investments included in the reserve forest areas. Investments in the further development of non-timber economic in land-use planning and land delineation for activities should be considered. different land use types and users would provide increased clarity in land-tenure arrangements and land management processes. Improving the mapping in the Region is fundamental to land- use planning which would support more effective Box 6. Investment risks in mangrove and successful mangrove management. Improved ecosystems in the Ayeyarwady Region mapping could be provided in easily accessible Strengthening community forestry to support long digital platforms. term and sustainable mangrove rehabilitation and management requires full participation of local •• Investment in nipa palm culture for sap and communities. Low participation is the highest risk to sustainable mangrove friendly aquaculture could the success of community-based investments. The enhance economic benefits for landholders inside Forest Department and the Government could reduce this risk by establishing clear institutional and and outside RFs and NP. Investment in extension legal frameworks to support community forestry, activities to introduce improved culture systems including those that enable community’s access to for both, nipa palm sap and mangrove friendly capital and extension services for mangrove-based aquaculture, is required to accelerate the devel- livelihood activities. opment of these activities. Establishment of nipa Infrastructure is required for the successful palm sap processing facilities through the intro- implementation and support of the economic activities discussed. Unstable electricity supply duction and development of innovative tech- threatens the success of aquaculture hatcheries and nology, as well as market research, are vital for aquaculture production. Similarly, poor road systems the success of a new nipa palm sap industry. For negatively impact market access and commerce in mangrove aquaculture, techniques for small- the Region. scale hatcheries for crabs and shrimp, as well Strong consumer demand is essential for the as improved mangrove aquaculture techniques, effective development of mangrove products. Events could have a positive and significant impact in such as COVID-19 or the lack of a stable market yields and income. for commercializing nipa palm sap jeopardize the implementation of the recommended interventions that support sustainable production practices. •• In areas outside RFs and NP, interventions such as the development of hatcheries or the sustain- Overall, climate change and sea level rise pose a high able intensification of aquaculture practices could risk to economies and social structures of low-lying landscapes like that in the Ayeyarwady Region. be considered as mechanisms to further improve the benefits of people in these areas. Outside the Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 53 RFs and NP investments will need to be tailored ment currently under review by the Ministry of for each area, weighing the costs, benefits, and Planning and Finance) developed as a response efficient use of capital. to COVID-19 impact. Central to the MERRP is the recognition of the private sector for an acceler- •• The inclusion of mangroves in mitigation as ated economic growth and inclusive develop- well as adaptation strategies in Myanmar could ment, for which several strategies aim to assist provide economic benefits for communities and the country’s firms, sole-traders, farmers, and important regulatory ecosystem services that investors. For example, policies to improve the contribute to Myanmar’s Nationally Determined business climate in Myanmar include a number Contributions to the Paris Agreement. Further of initiatives related to making easier permission investment in the development of blue carbon arrangements, appropriate and lawful access to projects could increase benefits to communi- land, information exchange, among others. Aqua- ties. Benefits would include enhanced incomes culture practices can benefit from these initia- but could also create a new industry that would tives, as the current study has identified policy comprise a range of different kinds of jobs that and regulatory frameworks as an important could promote education and capacity build- barrier for the sub-sector’s development. Addi- ing within communities. Developing innovative tionally, nipa palm recommended interventions ways to aggregate small community forestry assessed through this study can directly benefit projects into carbon sequestration projects that from the MERRP promotion of inclusive growth take advantage of economies of scale should be through agricultural development. Foundational explored. to the MSDP was the strengthening of Myanmar’s agricultural economy, which is a central goal to •• Finally, the interventions presented through this the MERRP too. Strategies aim to promote a study aim to support and should be considered greater diversification and include, among others, as a response to the efforts of the Myanmar increased investment in rural infrastructure and government to create a more resilient econ- logistics, improved formal access to land, and the omy expressed through the Myanmar Sustain- encouragement of greater value-adding in food able Development Plan 2018-2030 (MSDP), and processing and rural enterprise broadly. more recently through the Myanmar Economic Recovery & Reform Plan (MERRP, draft docu- Box 7. Importance and opportunity for gender inclusion in selected value chains. Importance. Encouraging the participation of women in the aquaculture sub-sector is considered a direct method for improving household nutrition. Rural Myanmar women are traditionally responsible for buying food that will be prepared and consumed at household meals. Additionally, their involvement also provides them with the ability to obtain greater financial independence leading to greater female involvement in household decision making. Opportunity. As mentioned in Box 2, under the current nipa palm products’ value chain, women’s role is limited to the processing of sheets of nipa thatch. The extraction and commercialization of nipa palm sap opens the opportunity for the integration of women into the production and processing stage, through the collection of nipa palm sap and primary and/or secondary processing depending on the final product. Box 8. Investment implications for economic development and livelihood improvement in coastal landscapes in the Ayeyarwady Region. Due to the limited scope of this research, several production systems which could contribute significantly to economic development and livelihood improvement in the delta have not been addressed. Nipa palm farming for nipa palm sap is a sustainable and high value in livelihoods improvement for the people in the coastal areas in the delta. To improve nipa palm farming, it is essential to convert the current ‘nipa for thatch system’ to nipa for both, sap and thatch. However, nipa palm sap would be a high value product only if there is a local market for the product. Bioethanol production from nipa sap is a feasible approach which can consume all nipa sap harvested in the delta. The Government and donors could further assess this production system for introduction to the delta. Intensive brackish water aquaculture could bring significantly higher production than the existing extensive mangrove aquaculture system. Where it is suitable (e.g. outside reserve forests and national park and with the availability of suitable infrastructure and extension services), sustainable intensive aquaculture could be an option to meet the increasing demanding of both domestic and export markets. Higher productivity from an intensive system would contribute to reducing land use change and mangrove deforestation if it is properly developed and regulated. Long term aquaculture development requires abundant and stable seed (larvae) sources. Existing brackish water aquaculture in the delta is dependent on wild caught fingerlings and juvenile fish stocks. This causes the depletion of natural resources. An improved system of hatcheries for shrimp, mud crab, and fish in the delta is needed to support long term and sustainable development of brackish water aquaculture. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 54 © Adobe Stock Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 55 ANNEXES ANNEX 1. METHODOLOGY a. Valuation and Investment Analysis The valuation and investment analysis in this report follows the goals of the Wealth Accounting and Valua- tion of Ecosystem Services (WAVES) global partnership and the 3Returns Framework, which aim to promote sustainable development by mainstreaming natural capital in development planning while supporting deci- sion-making for sustainable coastal management. The valuation of ecosystem services reveals the importance of ecosystem functions and is an essential com- ponent for devising management activities. The valuation of ecosystem services in this report follows the Millennium Ecosystem Assessment Framework methodological approach (MEA 2003), as well as the recom- mendations from the WAVES Technical Report: Guidelines for Measuring and Valuing the Coastal Protection Services of Mangroves and Coral Reefs. Based on the scope of the analysis and the specific objectives of this report, the valuation of ecosystem services focuses on valuing a subset of the direct use (fuelwood, crabs) and indirect use (carbon sequestration and coastal and riverbank protection) of ecosystem services provided by mangrove land in the Ayeyarwady Region. •• For the investment analysis, this study follows the 3Returns Framework32, which presents a method for assessing sustainable landscape interventions. The 3Returns Framework accounts for ‘green interventions’ in a landscape as: •• Investments in Natural Capital: resources allocated to increase the stocks of natural assets; •• Investments in Social & Human Capital: resources allocated to increase cooperation within and among groups, individual and collective knowledge, skills, and competencies; while building/strengthening institu- tions for resource management, decision making, and social integration; and Investment in Financial Capital33: resources allocated to acquire or increase the assets needed in order to provide goods or services. The 3Returns Framework contrasts a Business as Usual (BAU) scenario against green growth scenarios to understand changes in key capital indicators (natural, social & human, and financial capital) and the benefits derived from them. In this report, the development of a range of green growth scenarios was based on litera- ture review, expert consultation, and baseline survey in the study sites. The BAU scenario assumes continued mangrove degradation with limited mangrove restoration projects. The green growth scenarios are based on a range of investments in restoration and improved management approaches with varying intensity and altering management arrangements of government and private-managed mangroves. Figure 18. 3Returns Framework Stages 32 The 3Returns Framework methodological description is publicly available and can be found in the Green Growth Knowledge Platform under the Expert Group on Natural Capital featured resources - https://www.greengrowthknowledge.org/working-group/ natural-capital 33 Financial capital is part of the economic capital. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 56 b. Satellite Image Interpretation and Mapping The objective of the satellite image interpretation was to produce mangrove status and land use maps for mangrove lands in the Ayeyarwady Region. Planet Earth images were analyzed for producing maps (Planet team 2017). The results were validated by Google Earth and Spot 5 images. A semi-supervised image classi- fication approach was used. The nature of land uses in areas of high-density population and agriculture and aquaculture production, like the coastal region of the Ayeyarwady Region, is complex. Thus, only semi-automatic classification was used for analyzing satellite images. Manual digitalizing was used for most of the ponds given that it was not possible to auto-classify pond walls as they are also used for agricultural land and/or other purposes. c. Mangrove Data Collection Several field campaigns to collect data from the mangroves in the Ayeyarwady Region were conducted. Over- all, more than 670 plots were established on mangroves and adjacent land uses to evaluate mangrove status, biomass, and soil carbon. Plots were located inside and outside mangrove aquaculture ponds and in natural and planted mangroves. Data collection identified characteristics such as tree species, tree diameter, height, biomass, understory vegetation, and regeneration. Plot coordinates were recorded with a hand-held GPS, and 4 photos were taken from the center of the plot at cardinal directions. Soil core samples were collected from over 300 plots in mangroves and alternative land uses for analyses of soil carbon to determine the impacts of land use change on soil carbon and other soil properties. The plot level data were also used for satellite image interpretation and for producing mangrove forest status and land use maps for the study area. d. Mangrove Forest Growth and Carbon Sequestration The mangrove forest growth data from permanent sample plots in mangroves in Myanmar are not available. Due to several limitations, tree ring analyses were also not possible. Thus, the growth and dynamics of man- groves were based on measured plantations where information on the date of planting and other silviculture practices were known. Basal area, biomass, mean annual increment of basal area (MAI), were calculated from surveyed plantations. To estimate growth rates of natural mangroves, the analysis assumed that natural mangrove stands have a similar growth rate as plantations if they have a similar basal area (which is a common assumption demon- strated in terrestrial forests). e. Socio-Economic, Fuelwood, Crab Catching, Mangrove Aquaculture, Nipa Palm, and Rice Farming Surveys were used to collect data related to livelihoods, land tenure, jobs34, and rights over ecosystem-based land. Interviews with stakeholders in the study area followed the guidance from ‘The practical guidelines for socio-economic surveys’ by CIFOR – CIRAD (Liswanti, Shantiko et al. 2013). Detailed questions regarding fuelwood harvesting, crab catching, mangrove aquaculture activities, nipa palm, and rice farming were also developed. This socio-economic research was approved by the Australian Human Research Ethics Commit- tee at The University of Queensland (No. 2018000480). For modeling the economic dynamics from extractive and productive systems of the selected products (fuel- wood, mud crabs, shrimp, nipa palm, and rice), the study followed the principles and methodology of a cost benefit analysis to establish a baseline. From the baseline, improvement in production yields considering the interventions proposed were applied based on observations and project practices monitored by The University of Queensland in Myanmar. Conservative assumptions were applied for modeling operational and capital cost growth rates (e.g. 1% increase per year due to inflation) as well as for the income growth rate (i.e. no increase or decrease on income prices, increase based only on yield improvement). 34 Considering limitations of the study, only direct jobs were assessed. Indirect and induced jobs were not part of the scope of this study. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 57 f. Mangrove Accessibility to Communities – an Approach to Scaling-up The mangrove lands of reserve forests and national park are under the direct management of the Forest Department, but people can access these areas for crab catching freely and they also collect fuelwood, although this is not officially permitted. Individuals from thirty-six villages in Pyapon, Bogale, and Labutta were surveyed to investigate fuelwood collection effort from mangroves, and 20 villages were assessed to gather data on crab catching activities from mangrove land. Most of these villages were within the village tracts where government managed mangroves were highly accessible, which was designated as where the ratio of government managed mangrove land area to the village tract area was more than 30% (i.e. parts of village tract are within the 2 km buffer zone35 of mangrove land around reserve forests or national park). The livelihood surveys from these village tracts were considered as villages where people receive the maximum (100%) of benefits from mangrove lands. The study used this estimate of people’s access to government managed mangrove land as an approach to scale up data from surveyed villages to all villages in the delta. Different levels of benefits (defined below) as a function of the accessibility of government managed man- grove land were estimated. The benefits for fuelwood and crab catching from mangrove land were defined as below as a function of acces- sibility to government managed mangrove. i. Values of Fuelwood and Mud Crab Catching in Mangroves and Mangrove Land in the Delta The benefits assumed for villages with different ratios of accessible mangrove land managed by the Govern- ment were estimated as follows:  1% - 10% ratio of mangrove land to village tract area assumed to receive 25% of the maximum benefit from mangrove for fuelwood and crab catching  10% - 20% ratio of mangrove land to village tract area assumed to receive 50% benefit from mangrove for fuelwood and crab catching  20% - 30% ratio of mangrove land to village tract area assumed to receive 75% benefit from mangrove for fuelwood and crab catching  More than 30% ratio of mangrove land to village tract area assumed to receive 100% benefit from mangrove for fuelwood and crab catching 35 Based on observation and data collection, villagers, on average, traveled on foot or in small boats a distance of 2 kilometers in order to catch crabs and collect fuelwood. Therefore, a 2 km buffer zone was used to estimate people’s access to resources. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 58 Figure 19. Variation in the ratio of mangrove land area for crab catching to village tract area over the delta. The number of villages with different levels of access to government managed mangrove land was calculated over the delta and results are presented in Table 30. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 59 Table 31. Number of villages in each category of access to accessible mangrove land for mud crab catching (i.e. reserve forests and national park)36. Number of villages in each category of access to government managed mangrove Village location with land respect to government managed mangrove land 0 - 10 % 10 % - 20 % 20 % - 30 % > 30 % Sum Total number of villages within the 2km buffer 1,535 400 184 158 2,277 zone around mangrove land in the Delta Number of villages within the national park, reserve forests, and their 2 km 128 80 122 128 buffer zone. These villag- (Crabs and (Crabs and (Crabs and (Crabs and Fuel- 459 es are directly benefited Fuelwood Fuelwood Fuelwood from mangrove resources wood 100%) 25%) 50%) 75%) of reserve forests and national park Remaining villages (villages within the 2km buffer zone of mangrove 1407 320 61 30 land in the Delta but out- 1,818 side the reserve forests, (Crabs 25%) (Crabs 50%) (Crabs 75%) (Crabs 100%) national park, and their 2 km buffer zone) ii. Values of Fuelwood Collection in Government Managed Mangroves Habitat in the Delta The benefits assumed for villages with different levels of accessibility to mangrove land within government managed forests were estimated as follows:  1% - 10% ratio of mangrove land to village tract area assumed to receive 25% of the maximum benefit from mangrove for fuelwood  10% - 20% ratio of mangrove land to village tract area assumed to receive 50% benefit from mangrove for fuelwood  20% - 30% ratio of mangrove land to village tract area assumed to receive 75% benefit from mangrove for fuelwood  More than 30% ration of mangrove land to village tract area assumed to receive 100% benefit from mangrove for fuelwood 36 Access to government managed mangrove is defined by the area of government managed mangrove to the area of the village tract. Assumed benefit for crab catching and fuelwood collection for each category of village is presented in parentheses. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 60 Figure 20. Variation in the ratio of government managed mangrove land area to village tract area over the delta Table 30 has detailed number of villages which have access to fuelwood collection in government managed mangroves within RFs and NP. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 61 iii. Areas Outside Government Managed Mangroves and their 2 km Buffer Zones Mangrove land outside reserve forests and national park and the 2 km buffer zones are likely owned by indi- vidual households and other economic entities. Thus, the study assumed that people cannot freely enter into these areas for fuelwood collection, but they may still be allowed to catch crabs. Therefore, it was assumed no benefits for fuelwood collection from these areas, but benefits from crab catching:  1% - 10% ratio of mangrove land to village tract area assumed to receive 25% benefit from mangrove for crab catching  10% - 20% ratio of mangrove land to village tract area assumed to receive 50% benefit from mangrove crab catching  20% - 30% ratio of mangrove land to village tract area assumed to receive 75% benefit from mangrove crab catching  More than 30% ratio of mangrove land to village tract area assumed to receive 100% benefit from mangrove crab catching g. Coastal and Riverbank Protection The assessment of coastal protection was not spatially explicit, as sufficient data was not available to derive models with confidence. Therefore, coastal protection service at the landscape level was determined based on secondary data and literature from studies in Myanmar and nearby countries following the recommen- dations from the WAVES guidelines for measuring and valuing coastal protection services. The storm pro- tection value estimated ranged between US$ 1,120 – 1,369 ha-1year-1 based on the results of Barbier (2007) and Estoque et al. (2018), which used an avoided expenditure on physical reclamation and replenishment approach. Considering the high population density in the study area, full values for storm protection were applied throughout. There is limited information about the value of mangroves for the protection of riverbanks or the role of nipa palm in protecting riverbanks from erosion. Therefore, the riverbank protection value of nipa palm was esti- mated by remedial costs for riverbank re-vegetation. Bartley et al. (2015) reviewed the impact of riverbank re- mediation on bank erosion in the United States, Australia, Canada, United Kingdom, and Denmark and found major re-vegetation efforts have reduced the impacts of riverbank erosion (Bartley, Henderson et al. 2015). The cost for active revegetation is 2,790 AUD (2,610 USD – conversion rate in 2013) per hectare, or 3,000 USD per hectare if considering accumulative 15% inflation between 2013 - 2019. This analysis followed the as- sumption that nipa palm plantations would take 10 years to grow and achieve their full capacity for riverbank protection, which is likely due to the high density of their frond foliage. Thus, the average cost for remediation per hectare per year is 300 USD for nipa palm. Existing nipa palm in the Delta is for thatch harvesting only and not for the extraction of nipa sap and production of sugar or biofuels. The current over-exploitation of nipa fronds (S. Phan, pers. com.) reduces the canopy cover and should have a negative impact on riverbank protection values. Therefore, the study estimated that nipa palm stands used for harvesting thatch would have half of riverbank protection value (i.e. USD 150 per hectare per year). h. Climate Change and Sea Level Rise (SLR) Detailed modeling of the impacts of SLR requires accurate digital elevation models as well as knowledge of sediment supply, wave exposure, and vertical and horizontal accretion of shorelines (Minderhoud et al., 2019). Without detailed site level data and modeling, projections of the impact of SLR are likely to have large errors. Therefore, in order to estimate the effects of SLR on the mangroves of the Ayeyarwady Region, the study used recent analyses from global models. The availability of data to parameterize regional spatially explicit models of the impacts of sea level rise limits research on the impacts of climate change on the delta and its mangroves and requires further investment in research. The model of Schuerch et al. (2018), based on the DIVA model, assessed the impacts of SLR on segments of the global coastline that are 30-50 km in length. DIVA model coastal segments are assigned parameters de- scribing local rates of SLR, the geomorphology, and human population density. This study follows this model, using a SLR scenario of Representative Concentration Pathway 8.5 (0.6 – 0.8 m by 2100, IPCC 2018) and two coastal squeeze scenarios (High coastal squeeze – low adaptation, where landward migration of mangroves is prevented at population densities of 5-20 persons/km2; and Low coastal squeeze – high adaptation, where landward migration of mangroves is prevented at 300 persons/km2). Potential proportional annual losses and Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 62 gains of mangrove land over the delta were used to make first order estimates of the changes in the potential value of mangroves over time with SLR. ANNEX 2. DESCRIPTION OF IMPACT DRIVERS, IMPACTS, AND IMPACT CONSEQUENCES AND DEPENDENCIES a. In the BAU Scenario in Areas Within RFs and NP. Impact Expected impact on Impact consequences and dependencies Drivers the study area Law enforce- Weak law enforce- •• Mangrove forest structure and dynamics are degraded. Dominance of ment on ment; continuous unwanted species which limits recovery of mangroves mangrove and repeatedly •• Mangrove biomass carbon and timber loss. Mangrove biomass management illegal logging of productivity significantly reduced fuelwood and timber •• Reduce habitat for wildlife, especially birds and mammals from mangroves; and mangrove re- •• Conflict between meeting the needs of local landless people and the sources are degrad- Government’s target to maintain and improve mangrove forests ed •• Limited outcome for Government mangrove rehabilitation program because of illegal logging and unregulated management activities Community Intensive fuelwood •• Simple forest structure comprised of pioneer, fast growing species. Forestry and harvesting for cash Only young trees remain in the mangrove stands mangrove and more intensive •• Extensive aquaculture productivity directly linked to the pond surface aquaculture farming is likely area; thus, CF farmers tend to keep less trees and dig more ponds if practices preferred possible, reducing mangrove area •• Water levels are kept high most of the time in the ponds resulting in unsuitable hydrological regimes for mangroves •• Rapid cash return for mangrove aquaculture pond owners from fuel- wood and aquaculture contributions to livelihoods Nipa palm Intensive thatch col- •• Reduce riverbank protection capacity farming prac- lection for cash •• Increase nipa palm mortality tices •• Reduce flowering and sap •• Unsustainable nipa palm utilization Mangrove Limited mangrove •• Mangrove restoration achieves only about 2/3 of the target set by the restoration restoration given MRRP program limited govern- •• Unsuitable plantation establishment techniques have negative ecolog- ment budget; some ical impacts (e.g., burning vegetation before planting) unsuitable planta- •• Low investment in capacity building within local Forest Department tion establishment staff techniques •• Healthy seedlings from nursery contribute to the higher survival rate of planted trees Management Ineffective man- •• Micro institutional village frameworks are not sufficiently strengthened of village fuel- agement due to through capacity building and investment wood planta- insufficient capacity •• Illegal logging still occurs in the VFP areas tions (VFP) building and low •• People have free access to mangroves for catching crabs investment Sea level rise Soil acidification and •• Soil which was previously mangrove land has been acidified and saline water intru- become toxic resulting in low or very low rice productivity sion •• Saline water intrusion in low elevation rice fields. Farmers have no, or little, rice harvest in about 10 % of the rice area. On average, rice yields reduced by 0.4 % per year. Negative impacts Mild positive/negative impact Positive impact expected Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 63 b. For Scenario 1 in Areas Within RFs and NP. Impact Drivers Expected impact on the Impact consequences and dependencies study area Law enforcement Law enforcement im- •• Decreased illegal logging of mangroves helps to proved for RFs, NP and recover mangrove areas and their quality CFUGs; Less illegal log- •• Increased forest quality in mangroves of CFUGs ging of mangroves and •• Increased habitat for fish, crabs, and additional wildlife reduced thinning time of •• Reduced illegal logging, at the expense of livelihood CF mangroves losses for fuelwood collectors •• Increased disputes between local landless people and Forest Department authorities over mangrove protec- tion CF mangrove aquacul- Higher compliance with •• Increased quality of mangroves within the CFUG ponds ture practices approved CF manage- •• Increased value of ecosystem services and timber ment plans production of CF mangroves •• Increased resilience and sustainability of extensive mangrove aquaculture •• Increased income for CF pond owners •• Decreased crab and shrimp productivity due to increases in the forest canopy resulting in declines of open water surface area •• Decreased cash return for CF farmers in the first few years when they need income to cover capital and operational investment for the ponds (extreme cash shortage is a major problem for the poor in Myanmar) Nipa palm farming Higher contribution •• Increased riverbank protection of the nipa palm for practices of Nipa palm on local both sap & thatch (improved management area) livelihood and ecosystem •• Increased income from nipa palm on the improved services management area •• Increased contribution of nipa palm on local livelihoods (number of local labors needed for sap & thatch) •• The remaining nipa palm area for thatch only still have negative impacts as mentioned above Mangrove restoration Investment meets MRRP •• Achieve mangrove restoration targets set by the MRRP targets program •• Unsuitable plantation establishment techniques have negative ecological impacts (e.g. burning vegetation prior to planting) •• Healthy seedlings from nurseries contribute to the higher survival rate of planted trees Management of village Higher law enforcement •• Micro institutional village frameworks are not suffi- fuelwood plantations in VFP. ciently strengthened through capacity building and Increased area and investment quality of access to •• Illegal logging continues, but less occurs in the VFP Government managed areas mangroves •• All people have free access to mangroves for crab catching •• Income from crab catching and fuelwood collection in mangroves and VFPs is increased Sea level rise Soil acidification and •• Soils in areas that were previously mangroves are saltwater intrusion affected by acidification and become toxic. This results in low or very low rice productivity •• Saline water intrusion in low elevation rice field. Farm- ers have no or little rice harvest from about 10 % of rice area. On average, rice yields reduced by 0.4 % per year. Negative impacts Mild positive/negative impact Positive impact expected Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 64 c. For Scenarios 2, 3, and 4 in Areas Within RFs and NP. Impact Drivers Expected impact on Impact consequences and dependencies the study area Law enforcement Law enforcement •• Decreased illegal logging of mangroves leads to recovery of improved for RF, NP, mangrove areas and increased quality and CFUGs. Less •• Increased forest quality in CFUGs and VFPs mangroves illegal logging from •• Increased habitat for fish, crabs, and additional wildlife, partic- mangroves and reduce ularly in public RFs and NP mangroves thinning time of CF •• Reduced illegal logging at the expense of livelihoods of fuel- mangroves wood collectors, particularly in Scenario 3 •• Increased disputes between local landless people and Forest Department authorities over mangrove protection, particularly in Scenario 3. CF mangrove aqua- Forest management •• Increased quality of mangroves within the CFUGs ponds culture practices plan changed towards •• Value of ecosystem services and timber production of CF more sustainable mangroves are improved actions •• Large maternal trees are protected and provide essential habi- tat for wildlife •• Maternal trees provide seeds for natural regeneration •• Increased resilience and sustainability of extensive mangrove aquaculture •• Higher economic return from larger timber size classes to meet the future high demand for logs in the Delta •• Decreased crab and shrimp productivity due to the increase in the forest canopy and declines in open water surface area •• Lower cash return for CF farmers in the first few years when they are in need of income to cover capital and operational investment for the ponds (extreme cash shortage is a major problem for the poor in Myanmar) Nipa palm farming Higher contribution •• Increased riverbank protection of the nipa palm for both sap practices of Nipa palm on local & thatch (improved management area) livelihood and ecosys- •• Increased income from nipa palm on the improved manage- tem services ment area •• Increased contribution of nipa palm on local livelihoods (number of local labors needed for sap & thatch) •• The remaining nipa palm area for thatch only still have nega- tive impacts as indicated above Mangrove resto- Investment meets •• Mangrove restoration achieves targets set by the MRRP ration MRRP targets program •• Increased mangrove restoration rate due to increased invest- Potential additional ment `ditional investors •• Unsuitable plantation establishment techniques have negative ecological impacts (e.g. burning vegetation prior to planting) in government mangrove rehabilitation projects •• Healthy seedlings from nurseries contribute to the higher survival rate of planted trees Micro-institutional Significant new areas •• Micro institutional village frameworks strengthened through strengthen for VFPs allocated to villages capacity building and investment as fuelwood planta- •• Illegal logging reduced in the VFP areas tions, many new VFPs established •• People have free access to VFP for crab catching, particularly in Scenario 2 Increase area and •• Creation of additional income for crab catching and fuelwood quality of Govern- collection in mangroves and VFPs ment managed man- groves Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 65 Impact Drivers Expected impact on Impact consequences and dependencies the study area Rehabilitation of 50% of ponds with- •• Increased mangrove area for ecosystem services ponds without man- out mangrove will be •• Increased resilience and sustainability of extensive aquaculture grove restored ponds •• Investment from the government, donors, and pond owners is required Capacity building Decreased vulnera- •• Resilient ecosystems are more sustainable and provide less bility to climate and volatile income socioeconomic shocks •• Decreased impacts of climate and socioeconomic perturba- tions on ecosystems and communities Aquaculture practices •• Increased income for CF pond owners improved Sea level rise Soil acidification and •• Soils which were previously mangroves are affected by acid- saline water intrusion ification and become toxic, resulting in low or very low rice productivity •• Saline water intrusion in low elevation rice fields. Farmers have no or little rice harvest in about 10% of rice area. On average, rice yields reduced by 0.4% per year. Negative impacts Mild positive/negative impact Positive impact expected d. In the BAU Scenario in Mangrove land Outside RFs and NP Impact Drivers Expected impact on Impact consequences and dependencies study area Mangrove manage- Intensive fuelwood •• Mangrove forest structure and dynamics are degraded. ment harvesting for cash. Dominance of unwanted species which limits recovery of Mangrove resources mangroves are degraded •• Mangrove biomass carbon and timber loss. Mangrove biomass productivity significantly reduced •• Reduce habitat for wildlife, especially birds and mammals •• Reduce habitat/food chain for mud crab Mangrove aquacul- Intensive fuelwood •• Extensive aquaculture productivity directly linked to the pond ture practices harvesting in ponds surface area; thus, farmers tend to keep less trees and dig for cash and more more ponds if possible, reducing mangrove area intensive farming is •• Water levels are kept high most of the time in the ponds likely preferred resulting in unsuitable hydrological regimes for mangroves •• Rapid cash return for mangrove aquaculture pond owners from fuelwood and aquaculture contributions to livelihoods Nipa palm farming Intensive thatch col- •• Reduce riverbank protection capacity practices lection for cash •• Increase nipa palm mortality •• Reduce flowering and sap •• Unsustainable nipa palm utilization Negative impacts Mild positive/negative impact Positive impact expected Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 66 e. For Scenarios 1, 2, and 3 in Mangrove land Outside RFs and NP. Impact Drivers Expected impact on Impact consequences and dependencies the study area Mangrove manage- Mangrove resources •• Improved mangrove productivity & structure and increased ment improved by enrich- areas ment planting •• Increased contribution of mangroves on livelihoods of the owners and mud crab catchers •• Value of ecosystem services and timber production of mangroves are improved •• Higher economic return from larger timber size classes to meet the future high demand for logs in the Delta Mangrove aquacul- Ponds and mangroves •• Increased quality of mangroves within the ponds ture practices within ponds are im- •• Increased value of ecosystem services and timber production proved of mangroves in ponds •• Increased resilience and sustainability of extensive mangrove aquaculture •• Increased income for pond owners •• Increased mud crab productivity due to improving crab habi- tat and food chain •• Increased area of extensive aquaculture might impact on the available areas for intensive aquaculture Nipa palm farming Multiple products silvi- •• Increased nipa palm economic values practices culture practice •• Increased livelihoods contribution to local communities (create jobs) •• Increased riverbank projection value due to nipa palm struc- ture improved •• More biodiversity because nipa palm is more suitable for flow- ering and sap •• Sustainable nipa palm utilization Negative impacts Mild positive/negative impact Positive impact expected Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 67 ANNEX 3. RETURN ON INVESTMENT ANALYSIS FOR AREAS WITHIN RESERVE FORESTS AND NATIONAL PARK WITH A DISCOUNT RATE 10% a. ROI Analysis for Areas Within RFs and NP by 2026 (10% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Remain in the same Remain in the same Production tech- Production tech- Production tech- Aquaculture condition condition niques improved niques improved niques improved Remain in the same Remain in the same Remain in the same Remain in the same Remain in the same Rice condition condition condition condition condition Rate as current prac- Rate as planned by Community Forest User Group (CFUG) tice national MRRP plan 25% to 2026 47% to 2026 12.3% to 2026 Rate as current prac- Rate as planned by Village Fuelwood Plantation (VFP) tice national MRRP plan 25% to 2026 3% to 2026 37.7% to 2026 Thinning 5 years, no Thinning 5 years, no Thinning 5 years, no clear cutting, and clear cutting, and clear cutting, and Thinning 2 years and Thinning 3-5 years, no keeping (300) mater- keeping (300) mater- keeping (300) mater- Community Forest Management Plan clear cutting clear cutting nal trees nal trees nal trees Improved enforce- Forest management is Forest management is Forest management is Law enforcement ment for reducing enforced for increas- enforced for increas- enforced for increas- Law Enforcement remains the same illegal logging ing the area of CF ing the area of CF ing the area of CF 1000 ha of successful mangrove rehabilita- 1500 ha of successful 1500 ha of successful 1500 ha of successful 300 hectares of tion under implemen- mangrove rehabilita- mangrove rehabilita- mangrove rehabilita- successful mangrove tation target (under tion under implemen- tion under implemen- tion under implemen- Restoration effort plantations annually MRRP plan) tation target tation target tation target 100% Nipa palm areas 10% Nipa palm area 25% Nipa palm area 50% Nipa palm area 75% Nipa palm area Nipa palm farming are still for thatch only for both sap & thatch for both sap & thatch for both sap & thatch for both sap & thatch Investment Natural Analysis Capital for Mangrove Platforms and ToolsEcosystems in thePlanning for Green Growth Ayeyarwady Region 68 Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Benefit (monetary)           Value of fuelwood cutting in Government man- aged mangrove 124,240 57,945 57,945 57,945 57,945 Value of fuelwood cutting from village fuelwood plantations 10,970 15,241 32,243 7,846 47,774 Value of aquaculture 82,907 97,695 144,611 225,023 93,840 Value of fuelwood cut in mangrove aquaculture ponds 29,347 29,593 43,827 68,224 28,423 Value of clear cutting surplus plantation area annually 0 0 0 0 0 Value of fishing in Government managed man- groves 267,116 275,236 262,725 241,282 276,264 Value of agriculture (rice production) 159,763 159,763 159,763 159,763 159,763 Value of biomass carbon sequestration 4,764 15,077 16,791 15,138 16,360 Value of coastal protection 81,851 137,806 170,721 170,721 170,721 Value of nipa palm area for thatch only 47,637 44,054 39,904 36,154 35,300 Value of nipa palm area for sap & thatch 0 24,561 53,010 78,712 84,566 Value of nipa palm riverbank protection 9,944 10,692 11,558 12,341 12,519 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in the Planning Ayeyarwady Region 69 Operational expenditure (OPEX)           Forest Department staff 2,144 5,398 2,970 2,970 2,970 Mangrove aquaculture pond operational costs 52,208 52,208 77,482 120,800 50,129 Rice cultivation costs annually 89,114 89,114 89,114 89,114 89,114 Mangrove fuelwood collection labor costs 78,936 36,333 36,333 36,333 36,333 Fuelwood collection labor costs for village fuel- wood plantations 6,786 9,459 20,102 4,830 29,824 Fuelwood collection cost for mangrove ponds 18,080 18,232 27,143 42,415 17,498 Fishing labor costs 153,643 158,394 151,072 138,522 158,997 Other operational expenditures (carbon market- ing) 238 754 840 757 818 Operational costs for nipa palm area for thatch only 29,008 26,826 24,299 22,016 21,496 Operational costs for nipa palm area for sap & thatch 0 13,266 28,632 42,515 45,677 Capital expenditure (CAPEX)           Mangrove restoration by planting NC 18,639 30,020 30,020 30,020 30,020 Capacity building (CF & forestry staff) S&HC 907 907 1,814 1,814 1,814 Mangrove pond establishment costs FC 1,006 686 7,490 19,151 0 Concrete gates for improving aquaculture FC 0 906 22,668 40,228 12,401 Financial Analysis for regular discount rate           NPV Total Benefits 818,538 867,663 993,098 1,073,148 983,476 NPV Operational Expenditures 430,158 409,986 457,988 500,272 452,858 NPV Capital Expenditures 20,552 32,520 61,993 91,213 44,235 Total NPV 367,828 425,157 473,117 481,663 486,383 BCR 1.82 1.96 1.91 1.81 1.98 ROI 18.90 14.07 8.63 6.28 12.00 Investment Natural Analysis Capital for Mangrove Platforms and ToolsEcosystems in thePlanning for Green Growth Ayeyarwady Region 70 NPV in million USD           NPV Total Benefits 585 620 709 767 702 NPV Operational Expenditures 307 293 327 357 323 NPV Capital Expenditures 15 23 44 65 32 Total NPV 263 304 338 344 347 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Social & Human Capital (people involved in com- munity forestry and capacity building) 11,818 15,958 38,656 23,987 48,618 Natural Capital - Good mangrove areas (natural mangroves and plantations which have stocking > 2,000 trees per hectare and tree volume > 50 m3 per hectare) 8,670 20,570 27,570 27,570 27,570 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 514,730 1,551,682 1,751,711 1,559,072 1,708,755 Green jobs maintained 21,061 30,372 38,124 40,187 43,117 Total number of jobs from livelihoods and resto- ration activities within RFs and NP maintained 53,092 50,016 57,768 59,830 62,761 CF tree species diversity (Shannon index) 0.195 0.588 0.588 0.588 0.588 Natural Capital Investment Platforms Analysis and ToolsEcosystems for Mangrove for Green Growth in thePlanning Ayeyarwady Region 71 b. ROI Analysis for Areas Within Reserve Forests and National Park by 2080 (10% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Remain in the same Remain in the same Production techniques Production tech- Production tech- Aquaculture condition condition improved niques improved niques improved Remain in the same Remain in the same Remain in the same Remain in the same Remain in the same Rice condition condition condition condition condition Rate as current prac- Rate as planned by Community Forest User Group (CFUG) tice national MRRP plan 25% to 2026 47% to 2026 12.3% to 2026 Rate as current prac- Rate as planned by Village Fuelwood Plantations (VFP) tice national MRRP plan 25% to 2026 3% to 2026 37.7% to 2026 Thinning 5 years, no Thinning 5 years, no Thinning 5 years, no clear cutting, and clear cutting, and clear cutting, and Thinning 2 years and Thinning 3-5 years, no keeping (300) mater- keeping (300) mater- keeping (300) mater- Community Forest Management Plan clear cutting clear cutting nal trees nal trees nal trees Improved enforcement Forest management is Forest management is Forest management is Law enforcement for reducing illegal enforced for increas- enforced for increas- enforced for increas- Law Enforcement remains the same logging ing the area of CF ing the area of CF ing the area of CF 1000 ha of successful mangrove rehabilita- 1500 ha of successful 1500 ha of successful 1500 ha of successful 300 hectares of tion under implemen- mangrove rehabilita- mangrove rehabilita- mangrove rehabilita- successful mangrove tation target (under tion under implemen- tion under implemen- tion under implemen- Restoration effort plantations annually MRRP plan) tation target tation target tation target 100% Nipa palm areas 10% Nipa palm area 25% Nipa palm area 50% Nipa palm area 75% Nipa palm area Nipa palm farming are still for thatch only for both sap & thatch for both sap & thatch for both sap & thatch for both sap & thatch Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Benefit (monetary)           Value of fuelwood cutting in Government man- aged mangrove 220,506 69,060 69,060 69,060 69,060 Value of fuelwood cutting from village fuelwood plantations 33,029 53,034 88,490 14,679 135,479 Natural Capital Investment Platforms Analysis and ToolsEcosystems for Mangrove for Green Growth in thePlanning Ayeyarwady Region 72 Value of aquaculture 171,983 198,330 330,043 573,326 175,578 Value of fuelwood cut in mangrove aquaculture ponds 60,878 60,125 100,087 173,899 53,222 Value of clear cutting surplus plantation area annually 0 39,444 177,860 177,528 177,528 Value of fishing in Government managed man- groves 463,517 510,325 475,202 410,326 516,392 Value of agriculture (rice production) 290,398 290,398 290,398 290,398 290,398 Value of biomass carbon sequestration 9,703 40,971 47,092 45,477 46,560 Value of coastal protection 194,950 527,573 682,879 682,879 682,131 Value of nipa palm area for thatch only 89,050 81,326 70,964 56,861 45,654 Value of nipa palm area for sap & thatch 0 52,950 123,982 220,656 297,481 Value of nipa palm riverbank protection 18,589 20,201 22,364 25,308 27,648 Operational expenditure (OPEX)           Forest Department staff 4,312 11,900 6,138 6,138 6,138 Mangrove aquaculture pond operational costs 112,973 110,239 184,179 321,212 97,160 Rice cultivation costs annually 179,182 179,182 179,182 179,182 179,182 Mangrove fuelwood collection labor costs 149,747 44,075 44,075 44,075 44,075 Fuelwood collection labor costs for village fuel- wood plantations 23,009 37,001 60,355 9,720 92,590 Fuelwood collection cost for mangrove ponds 40,930 40,179 67,405 118,041 35,246 Fishing labor costs 283,621 315,614 293,240 251,630 319,668 Investment Natural Analysis Capital for Mangrove Platforms and ToolsEcosystems in thePlanning for Green Growth Ayeyarwady Region 73 Other operational expenditures (carbon market- ing) 485 2,049 2,355 2,274 2,328 Operational costs for nipa palm area for thatch only 54,227 49,523 43,213 34,625 27,801 Operational costs for nipa palm area for sap & thatch 0 28,600 66,966 119,183 160,679 Capital expenditure (CAPEX)           Mangrove restoration by planting NC 37,477 60,362 60,362 60,362 60,362 Capacity building (CF & forestry staff) S&HC 1,824 1,824 3,648 3,648 3,648 Mangrove pond establishment costs FC 2,006 1,344 7,490 19,151 0 Concrete gates for improving aquaculture FC 0 2,073 22,668 40,228 13,462 Financial Analysis for the regular discount rate           NPV Total Benefits 1,552,603 1,943,738 2,478,422 2,740,397 2,517,131 NPV Operational Expenditures 848,485 818,361 947,108 1,086,079 964,866 NPV Capital Expenditures 41,307 65,603 94,168 123,389 77,472 Total NPV 662,810 1,059,774 1,437,146 1,530,929 1,474,794 BCR 1.74 2.20 2.38 2.27 2.41 ROI 17.05 17.15 16.26 13.41 20.04 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 74 NPV in million USD           NPV Total Benefits 1,109 1,388 1,770 1,957 1,798 NPV Operational Expenditures 606 585 677 776 689 NPV Capital Expenditures 30 47 67 88 55 Total NPV 473 757 1,027 1,094 1,053 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Social & Human Capital (people involved in community forestry and capacity building) 26,258 33,158 38,656 23,987 52,938 Natural Capital - Good mangrove areas (natural mangroves and plantations which have stocking > 2,000 trees per hectare and tree volume > 50 m3 per hectare) 24,870 78,000 78,000 78,000 77,683 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 5,308,275 32,295,812 34,435,492 34,248,037 34,161,216 Green jobs maintained 12,802 43,447 53,124 55,187 59,245 Total number of jobs from livelihoods and resto- ration activities within RFs and NP maintained 47,447 60,988 70,665 72,728 76,786 CF tree species diversity (Shannon index) 0.195 0.588 0.588 0.588 0.588 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 75 ANNEX 4. RETURN ON INVESTMENT ANALYSIS FOR AREAS WITHIN RESERVE FORESTS AND NATIONAL PARK WITH A DISCOUNT RATE OF 4% a. ROI Analysis for Areas Within RFs and NP by 2026 (4% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Remain in the same Remain in the same Production tech- Production tech- Production techniques Aquaculture condition condition niques improved niques improved improved Remain in the same Remain in the same Remain in the same Remain in the same Remain in the same Rice condition condition condition condition condition Rate as current prac- Rate as planned by Community Forest User Group (CFUG) tice national MRRP plan 25% to 2026 47% to 2026 12.3% to 2026 Rate as current prac- Rate as planned by Village Fuelwood Plantations (VFP) tice national MRRP plan 25% to 2026 3% to 2026 37.7% to 2026 Thinning 5 years, Thinning 5 years, no no clear cutting, clear cutting, and Thinning 5 years, no Thinning 2 years and Thinning 3-5 years, no and keeping (300) keeping (300) mater- clear cutting, and keep- Community forest management plan clear cutting clear cutting maternal trees nal trees ing (300) maternal trees Forest manage- Improved enforce- ment is enforced for Forest management is Forest management is Law enforcement ment for reducing increasing the area enforced for increas- enforced for increasing Law enforcement remains the same illegal logging of CF ing the area of CF the area of CF 1000 ha of successful 1500 ha of suc- mangrove rehabilita- cessful mangrove 1500 ha of successful 1500 ha of successful 300 hectares of tion under implemen- rehabilitation under mangrove rehabilita- mangrove rehabilitation successful mangrove tation target (under implementation tion under implemen- under implementation Restoration effort plantations annually MRRP plan) target tation target target 25% Nipa palm 100% Nipa palm areas 10% Nipa palm area area for both sap & 50% Nipa palm area 75% Nipa palm area for Nipa Palm Farming are still for thatch only for both sap & thatch thatch for both sap & thatch both sap & thatch Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 76 Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Benefit (monetary)           Value of fuelwood cutting in Government man- aged mangrove 155,925 67,422 67,422 67,422 67,422 Value of fuelwood cutting from village fuel- wood plantations 14,232 20,138 43,665 9,905 65,157 Value of aquaculture 105,120 123,869 188,792 300,066 118,465 Value of fuelwood cut in mangrove. Aquacul- ture ponds 37,210 37,531 57,229 90,989 35,892 Value of clear cutting surplus plantation area annually 0 0 0 0 0 Value of fishing in Government managed man- groves 335,972 347,197 329,884 300,211 348,638 Value of agriculture (rice production) 201,386 201,386 201,386 201,386 201,386 Value of biomass carbon sequestration 6,043 19,355 21,730 19,442 21,187 Value of coastal protection 104,499 181,930 227,478 227,478 227,478 Value of nipa palm area for thatch only 60,118 55,378 49,680 44,207 42,889 Value of nipa palm area for sap & thatch 0 32,496 71,554 109,070 118,104 Value of nipa palm riverbank protection 12,550 13,539 14,729 15,871 16,146 Operational expenditure (OPEX)           Forest Department staff 2,714 7,028 3,794 3,794 3,794 Mangrove aquaculture pond operational costs 66,292 66,292 101,297 161,294 63,374 Natural Capital Investment Platforms Analysis and ToolsEcosystems for Mangrove for Green Growth in thePlanning Ayeyarwady Region 77 Rice cultivation costs annually 112,789 112,789 112,789 112,789 112,789 Mangrove fuelwood collection labor costs 99,359 42,378 42,378 42,378 42,378 Fuelwood collection labor costs for village fuel- wood plantations 8,829 12,532 27,286 6,115 40,764 Fuelwood collection cost for mangrove ponds 22,990 23,190 35,543 56,714 22,160 Fishing labor costs 193,805 200,385 190,234 172,837 201,232 Other operational expenditures (carbon mar- keting) 302 968 1,087 972 1,059 Operational costs for nipa palm area for thatch only 36,609 33,722 30,253 26,920 26,117 Operational costs for nipa palm area for sap & thatch 0 17,552 38,648 58,912 63,792 Capital expenditure (CAPEX)           Mangrove restoration by planting NC 23,591 37,996 37,996 37,996 37,996 Capacity building (CF & forestry staff) S&HC 1,148 1,148 2,296 2,296 2,296 Mangrove pond establishment costs FC 1,273 926 10,102 25,829 0 Concrete gates for improving aquaculture FC 0 1,090 25,951 47,600 13,293 Financial Analysis for regular discount rate           NPV Total Benefits 1,033,055 1,100,243 1,273,550 1,386,048 1,262,765 NPV Operational Expenditures 543,690 516,836 583,308 642,724 577,459 NPV Capital Expenditures 26,012 41,160 76,345 113,721 53,585 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 78 Total NPV 463,354 542,246 613,896 629,602 631,721 BCR 1.81 1.97 1.93 1.83 2.00 ROI 18.81 14.17 9.04 6.54 12.79 NPV in million USD           NPV Total Benefits 738 786 910 990 902 NPV Operational Expenditures 388 369 417 459 412 NPV Capital Expenditures 19 29 55 81 38 Total NPV 331 387 438 450 451 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Social & Human Capital (people involved in community forestry and capacity building) 11,818 15,958 38,656 23,987 48,618 Natural Capital - Good mangrove areas (natural mangroves and plantations which have stocking > 2,000 trees per hectare and tree volume > 50 m3 per hectare) 8,670 20,570 27,570 27,570 27,570 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 514,730 1,551,682 1,751,711 1,559,072 1,708,755 Green jobs maintained 21,061 30,372 38,124 40,187 43,117 Total number of jobs from livelihoods and resto- ration activities within RFs and NP maintained 53,092 50,016 57,768 59,830 62,761 CF tree species diversity (Shannon index) 0.195 0.588 0.588 0.588 0.588 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 79 b. ROI Analysis for Areas Within RFs and NP by 2080 (4% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Remain in the same Remain in the Production techniques Production techniques Production techniques Aquaculture condition same condition improved improved improved Remain in the same Remain in the Remain in the same Remain in the same Remain in the same Rice condition same condition condition condition condition Rate as current prac- Rate as planned by Community Forest User Group (CFUG) tice national MRRP plan 25% to 2026 47% to 2026 12.3% to 2026 Rate as current prac- Rate as planned by Village Fuelwood Plantations (VFP) tice national MRRP plan 25% to 2026 3% to 2026 37.7% to 2026 Thinning 5 years, no Thinning 5 years, no Thinning 5 years, no clear cutting, and clear cutting, and clear cutting, and Thinning 2 years and Thinning 3-5 years, keeping (300) mater- keeping (300) mater- keeping (300) mater- Community forest management plan clear cutting no clear cutting nal trees nal trees nal trees Improved enforce- Forest management is Forest management is Forest management is Law enforcement re- ment for reducing enforced for increasing enforced for increas- enforced for increas- Law enforcement mains the same illegal logging the area of CF ing the area of CF ing the area of CF 1000 ha of suc- cessful mangrove rehabilitation 1500 ha of successful 1500 ha of successful 1500 ha of successful 300 hectares of under implementa- mangrove rehabilita- mangrove rehabilita- mangrove rehabilita- successful mangrove tion target (under tion under implemen- tion under implemen- tion under implemen- Restoration effort plantations annually MRRP plan) tation target tation target tation target 10% Nipa palm 100% Nipa palm areas area for both sap & 25% Nipa palm area 50% Nipa palm area 75% Nipa palm area Nipa palm farming are still for thatch only thatch for both sap & thatch for both sap & thatch for both sap & thatch Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Benefit (monetary)           Value of fuelwood cutting in Government man- aged mangrove 477,102 90,934 90,934 90,934 90,934 Value of fuelwood cutting from village fuelwood plantations 105,083 165,809 238,557 33,579 369,047 Value of aquaculture 444,265 481,984 831,297 1,506,905 401,678 Value of fuelwood cut in mangrove aquaculture ponds 157,258 146,183 252,164 457,142 121,818 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 80 Value of clear cutting surplus plantation area annually 0 496,580 1,360,048 1,358,697 1,358,697 Value of fishing in Government managed man- groves 959,003 1,159,249 1,066,099 885,937 1,180,664 Value of agriculture (rice production) 638,571 638,571 638,571 638,571 638,571 Value of biomass carbon sequestration 24,532 132,274 147,375 145,153 146,143 Value of coastal protection 574,912 1,919,389 2,322,136 2,322,136 2,316,792 Value of nipa palm area for thatch only 203,612 184,522 157,300 115,954 78,763 Value of nipa palm area for sap & thatch 0 130,860 317,465 600,891 855,837 Value of nipa palm riverbank protection 42,503 46,488 52,171 60,802 68,565 Operational expenditure (OPEX)           Forest Department staff 10,883 31,534 15,732 15,732 15,732 Mangrove aquaculture pond operational costs 308,497 281,469 486,415 884,674 233,132 Rice cultivation costs annually 452,267 452,267 452,267 452,267 452,267 Mangrove fuelwood collection labor costs 355,431 58,816 58,816 58,816 58,816 Fuelwood collection labor costs for village fuel- wood plantations 81,920 128,040 179,006 24,545 277,337 Fuelwood collection cost for mangrove ponds 118,560 108,182 187,297 341,758 89,052 Fishing labor costs 636,816 791,102 726,089 599,158 806,823 Other operational expenditures (carbon market- ing) 1,227 6,614 7,369 7,258 7,307 Operational costs for nipa palm area for thatch only 123,989 112,364 95,787 70,610 47,962 Operational costs for nipa palm area for sap & thatch 0 70,682 171,473 324,560 462,264 Capital expenditure (CAPEX)           Mangrove restoration by planting NC 94,595 152,356 152,356 152,356 152,356 Capacity building (CF & forestry staff) S&HC 4,604 4,604 9,208 9,208 9,208 Mangrove pond establishment costs FC 4,725 2,354 10,102 25,829 0 Concrete gates for improving aquaculture FC 0 4,706 25,951 47,600 16,770 Investment Natural Analysis Capital for Mangrove Platforms and ToolsEcosystems in thePlanning for Green Growth Ayeyarwady Region 81 Financial Analysis for regular discount rate           NPV Total Benefits 3,626,842 5,592,845 7,474,118 8,216,702 7,627,509 NPV Operational Expenditures 2,089,588 2,041,069 2,380,250 2,779,377 2,450,693 NPV Capital Expenditures 103,925 164,021 197,618 234,994 178,335 Total NPV 1,433,329 3,387,755 4,896,249 5,202,331 4,998,481 BCR 1.65 2.54 2.90 2.73 2.90 ROI 14.79 21.65 25.78 23.14 29.03 NPV in million USD           NPV Total Benefits 2,591 3,995 5,339 5,869 5,448 NPV Operational Expenditures 1,493 1,458 1,700 1,985 1,750 NPV Capital Expenditures 74 117 141 168 127 Total NPV 1,024 2,420 3,497 3,716 3,570 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Scenario 4 Social & Human Capital (people involved in com- munity forestry and capacity building) 26,258 33,158 38,656 23,987 52,938 Natural Capital - Good mangrove areas (natural mangroves and plantations which have stocking > 2,000 trees per hectare and tree volume > 50 m3 per hectare) 24,870 78,000 78,000 78,000 77,683 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 5,308,275 32,295,812 34,435,492 34,248,037 34,161,216 Green jobs maintained 12,802 43,447 53,124 55,187 59,245 Total number of jobs from livelihoods and resto- ration activities within RFs and NP maintained 47,447 60,988 70,665 72,728 76,786 CF tree species diversity (Shannon index) 0.195 0.588 0.588 0.588 0.588 Investment Natural Analysis Capital for Mangrove Platforms and ToolsEcosystems in thePlanning for Green Growth Ayeyarwady Region 82 ANNEX 5. RETURN ON INVESTMENT ANALYSIS FOR AREAS OUTSIDE RESERVE FORESTS AND NATIONAL PARK WITH A DISCOUNT RATE OF 10% a. ROI Analysis for Areas Outside RFs and NP by 2026 (10% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Remain in the same con- Production techniques Production techniques Production techniques im- Aquaculture dition improved improved proved Law enforcement remains Improved enforcement for Improved enforcement for Improved enforcement for Law enforcement the same sustainable aquaculture sustainable aquaculture sustainable aquaculture Annually 5% of man- Annually 10% of man- Annually 10% of mangroves groves will be improved by groves will be improved by will be improved by enrich- enrichment planting and enrichment planting and ment planting and rehabilita- 0 hectare of successful rehabilitation to reach 25% rehabilitation to reach 50% tion to reach 75% of existing mangrove plantations of existing mangrove land of existing mangrove land mangrove land outside RFs Restoration effort annually outside RFs and NP outside RFs and NP and NP Annually 5% of nipa palm Annually 10% of nipa palm Annually 10% of nipa palm Remain in the same condi- will be cultured for both will be cultured for both sap will be cultured for both sap tion. Nipa palm for thatch sap & thatch to reach 25% & thatch to reach 50% of & thatch to reach 75% of Nipa palm only of existing nipa palm areas existing nipa palm areas existing nipa palm areas Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Benefit (monetary)         Value of aquaculture 207,351 216,007 220,377 224,747 Value of fuelwood cutting in mangroves (inside and outside ponds) 14,097 17,722 20,328 25,625 Value of fishing in Government managed man- groves (crab-catching) 558,697 569,853 577,871 578,338 Value of biomass carbon sequestration 3,083 9,370 10,565 12,995 Value of timber and fuelwood cutting from surplus plantations 0 0 0 0 Value of nipa palm thatch only 194,170 173,904 159,340 133,373 Value for nipa palm thatch and sap 0 134,347 230,900 403,042 Value of nipa palm riverbank protection 40,533 44,763 47,803 53,224 Operational expenditure (OPEX)         Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 83 Law enforcement staff 660 825 990 990 Mangrove aquaculture pond operational costs 130,501 130,501 130,501 130,501 Mangrove fuelwood collection labor costs 2,256 2,836 3,252 4,100 Fishing labor costs in mangroves 279,349 284,927 288,935 289,169 Other operational expenditures 154 468 528 650 Operational costs for nipa palm for thatch only 118,239 105,898 97,029 81,217 Operational costs for nipa palm for sap & thatch 0 75,036 128,963 225,109 Capital expenditure (CAPEX)   Scenario 1 Scenario 2 Scenario 3 Mangrove rehabilitation by enrichment NC 0 12,689 24,282 26,202 Capacity building S&HC 0 687 1,375 2,062 Pond improvement cost FC 0 8,451 15,550 22,649 Financial Analysis for a regular discount rate         NPV Total Benefits 1,017,931 1,165,967 1,267,184 1,431,344 NPV Operational Expenditures 531,158 600,491 650,199 731,735 NPV Capital Expenditures 0 21,828 41,207 50,913 Total NPV 486,772 543,648 575,777 648,695 BCR 1.92 1.87 1.83 1.83 ROI - 25.91 14.97 13.74 NPV in million USD         NPV Total Benefits 727 833 905 1,022 NPV Operational Expenditures 379 429 464 523 NPV Capital Expenditures 0 16 29 36 Total NPV 348 388 411 463 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Social & Human Capital (people involved in capac- ity building) 0 750 1,500 2,250 Natural Capital - Good mangrove areas 0 13,181 26,362 28,998 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 330,188 1,038,803 1,198,803 1,449,513 Green jobs maintained 47,048 61,208 77,125 91,490 Total number of jobs from livelihoods and resto- ration activities outside RFs and NP maintained 58,892 73,956 90,777 105,619 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 84 b. ROI Analysis for Areas Outside RFs and NP by 2080 (10% discount rate) Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Benefit (monetary)         Value of aquaculture 387,611 414,294 436,690 459,086 Value of fuelwood cutting in mangroves (inside and outside ponds) 26,352 36,795 46,217 58,347 Value of fishing in Government managed mangroves (crab-catching) 1,044,402 1,072,205 1,096,870 1,102,978 Value of biomass carbon sequestration 5,763 19,197 23,520 29,084 Value of timber and fuelwood cutting from surplus plantations 0 47,195 94,390 321,610 Value of nipa palm thatch only 362,973 300,506 243,741 175,573 Value for nipa palm thatch and sap 0 414,105 790,415 1,242,314 Value of nipa palm riverbank protection 75,770 88,809 100,659 114,889 Operational expenditure (OPEX)         Law enforcement staff 1,327 1,658 1,990 1,990 Mangrove aquaculture pond operational costs 252,156 252,156 252,156 252,156 Mangrove fuelwood collection labor costs 4,216 5,887 7,395 9,336 Fishing labor costs in mangroves 522,201 536,103 548,435 551,489 Other operational expenditures 288 960 1,176 1,454 Operational costs for nipa palm for thatch only 221,031 182,992 148,425 106,915 Operational costs for nipa palm for sap & thatch 0 231,288 441,466 693,863 Capital expenditure (CAPEX)         Mangrove rehabilitation by enrichment NC 0 19,669 38,242 61,420 Capacity building S&HC 0 1,382 2,764 4,146 Pond improvement cost FC 0 8,451 15,550 22,649 Financial Analysis for regular discount rate         NPV Total Benefits 1,902,871 2,393,107 2,832,502 3,503,881 NPV Operational Expenditures 1,001,219 1,211,044 1,401,043 1,617,202 NPV Capital Expenditures 0 29,502 56,556 88,215 Total NPV 901,652 1,152,560 1,374,903 1,798,464 BCR 1.90 1.93 1.94 2.05 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in the Planning Ayeyarwady Region 85 ROI - 40.07 25.31 21.39 NPV in million USD         NPV Total Benefits 1,359 1,709 2,023 2,503 NPV Operational Expenditures 715 865 1,001 1,155 NPV Capital Expenditures 0 21 40 63 Total NPV 644 823 982 1,285 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Social & Human Capital (people involved in community forestry and capacity build- ing) 0 750 1,500 2,250 Natural Capital - Good mangrove areas 0 12,181 24,362 35,000 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cut- ting) 2,558,954 9,189,236 11,927,755 14,796,996 Green jobs maintained 47,048 61,326 75,604 90,065 Total number of jobs from livelihoods and restoration activities outside RFs and NP maintained 58,892 73,978 89,064 104,347 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 86 ANNEX 6. RETURN ON INVESTMENT ANALYSIS FOR AREAS OUTSIDE RESERVE FORESTS AND NATIONAL PARK FOR A DISCOUNT RATE OF 4% a. ROI Analysis for Areas Outside RFs and NP by 2026 (4% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Remain in the same condi- Production techniques im- Production techniques im- Production techniques im- Aquaculture tion proved proved proved Law enforcement remains Improved enforcement for Improved enforcement for Improved enforcement for Law enforcement the same sustainable aquaculture sustainable aquaculture sustainable aquaculture Annually 5% of mangroves Annually 10% of mangroves Annually 10% of mangroves will be improved by enrich- will be improved by enrich- will be improved by enrich- ment planting and rehabilita- ment planting and rehabilita- ment planting and rehabilita- 0 hectares of successful tion to reach 25% of existing tion to reach 50% of existing tion to reach 75% of existing mangrove plantations an- mangrove land outside RFs mangrove land outside RFs mangrove land outside RFs Restoration effort nually and NP and NP and NP Annually 5% of nipa palm Annually 10% of nipa palm will Annually 10% of nipa palm Remain in the same condi- will be cultured for both sap be cultured for both sap & will be cultured for both sap tion. Nipa palm for thatch & thatch to reach 25% of thatch to reach 50% of exist- & thatch to reach 75% of Nipa palm only existing nipa palm areas ing nipa palm areas existing nipa palm areas Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Benefit (monetary)         Value of aquaculture 261,679 273,867 280,346 286,826 Value of fuelwood cutting in mangroves (in- side and outside ponds) 17,791 22,895 26,658 33,199 Value of fishing in Government managed mangroves (crab-catching) 705,083 720,789 732,372 733,104 Value of biomass carbon sequestration 3,890 12,067 13,794 16,794 Value of timber and fuelwood cutting from surplus plantations 0 0 0 0 Value of nipa palm thatch only 245,045 216,513 195,471 159,449 Value for nipa palm thatch and sap 0 189,146 328,637 567,438 Value of nipa palm riverbank protection 51,153 57,109 61,501 69,021 Operational expenditure (OPEX)         Law enforcement staff 835 1,044 1,253 1,253 Mangrove aquaculture pond operational costs 164,929 164,929 164,929 164,929 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 87 Mangrove fuelwood collection labor costs 2,847 3,663 4,265 5,312 Fishing labor costs in mangroves 352,541 360,395 366,186 366,552 Other operational expenditures 195 603 690 840 Operational costs for nipa palm for thatch only 149,220 131,845 119,032 97,096 Operational costs for nipa palm for sap & thatch 0 105,643 183,552 316,928 Capital expenditure (CAPEX)   Scenario 1 Scenario 2 Scenario 3 Mangrove rehabilitation by enrichment NC 0 16,680 32,799 35,806 Capacity building S&HC 0 870 1,740 2,610 Pond improvement cost FC 0 11,103 21,445 31,786 Financial Analysis for regular discount rate         NPV Total Benefits 1,284,641 1,492,386 1,638,781 1,865,831 NPV Operational Expenditures 670,566 768,122 839,907 952,909 NPV Capital Expenditures 0 28,653 55,984 70,202 Total NPV 614,075 695,611 742,891 842,720 BCR 1.92 1.87 1.83 1.82 ROI - 25.28 14.27 13.00 NPV in million USD         NPV Total Benefits 918 1,066 1,171 1,333 NPV Operational Expenditures 479 549 600 681 NPV Capital Expenditures 0 20 40 50 Total NPV 439 497 531 602 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Social & Human Capital (people involved in community forestry and capacity building) 0 750 1,500 2,250 Natural Capital - Good mangrove areas 0 13,181 26,362 28,998 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 330,188 1,038,803 1,198,803 1,449,513 Green jobs maintained 47,048 61,208 77,125 91,490 Total number of jobs from livelihoods and restoration activities outside RFs and NP maintained 58,892 73,956 90,777 105,619 Natural Capital Investment Platforms Analysis and Tools for Mangrove for Green Growth Ecosystems in thePlanning Ayeyarwady Region 88 b. ROI Analysis for Areas Outside RFs and NP by 2080 (4% discount rate) Relevant Actions BAU Scenario 1 Scenario 2 Scenario 3 Remain in the same con- Production techniques Production techniques Production techniques im- Aquaculture dition improved improved proved Law enforcement remains Improved enforcement for Improved enforcement for Improved enforcement for sus- Law enforcement the same sustainable aquaculture sustainable aquaculture tainable aquaculture Annually 5% of mangroves Annually 10% of man- Annually 10% of mangroves will be improved by groves will be improved by will be improved by enrich- enrichment planting and enrichment planting and ment planting and rehabilita- 0 hectares of successful rehabilitation to reach 25% rehabilitation to reach 50% tion to reach 75% of existing mangrove plantations of existing mangrove land of existing mangrove land mangrove land outside RFs Restoration effort annually outside RFs and NP outside RFs and NP and NP Annually 5% of nipa palm Annually 10% of nipa palm Annually 10% of nipa palm will Remain in the same condi- will be cultured for both will be cultured for both sap be cultured for both sap & tion. Nipa palm for thatch sap & thatch to reach 25% & thatch to reach 50% of thatch to reach 75% of existing Nipa palm only of existing nipa palm areas existing nipa palm areas nipa palm areas Financial Analysis BAU Scenario 1 Scenario 2 Scenario 3 Benefit (monetary)         Value of aquaculture 886,267 960,914 1,029,852 1,098,790 Value of fuelwood cutting in mangroves (inside and outside ponds) 60,255 88,846 116,098 146,383 Value of fishing in Government managed man- groves (crab-catching) 2,388,009 2,460,199 2,528,266 2,547,030 Value of biomass carbon sequestration 13,176 46,057 58,559 72,452 Value of timber and fuelwood cutting from sur- plus plantations 0 172,115 344,231 1,172,881 Value of nipa palm thatch only 829,932 655,178 487,915 305,671 Value for nipa palm thatch and sap 0 1,158,482 2,267,309 3,475,445 Value of nipa palm riverbank protection 173,246 209,726 244,641 282,684 Operational expenditure (OPEX)         Law enforcement staff 3,348 4,186 5,023 5,023 Mangrove aquaculture pond operational costs 601,815 601,815 601,815 601,815 Mangrove fuelwood collection labor costs 9,641 14,215 18,576 23,421 Fishing labor costs in mangroves 1,194,004 1,230,099 1,264,133 1,273,515 Other operational expenditures 659 2,303 2,928 3,623 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 89 Operational costs for nipa palm for thatch only 505,384 398,968 297,114 186,137 Operational costs for nipa palm for sap & thatch 0 647,040 1,266,347 1,941,121 Capital expenditure (CAPEX)         Mangrove rehabilitation by enrichment NC 0 43,173 85,785 161,974 Capacity building S&HC 0 3,488 6,976 10,464 Pond improvement cost FC 0 11,103 21,445 31,786 Financial Analysis for a regular discount rate         NPV Total Benefits 4,350,885 5,751,516 7,076,870 9,101,335 NPV Operational Expenditures 2,314,851 2,898,627 3,455,935 4,034,654 NPV Capital Expenditures 0 57,764 114,206 204,225 Total NPV 2,036,033 2,795,125 3,506,730 4,862,456 BCR 1.88 1.95 1.98 2.15 ROI - 49.39 31.71 24.81 NPV in million USD         NPV Total Benefits 3,108 4,108 5,055 6,501 NPV Operational Expenditures 1,653 2,070 2,469 2,882 NPV Capital Expenditures 0 41 82 146 Total NPV 1,454 1,997 2,505 3,473 Other outputs by 2026 BAU Scenario 1 Scenario 2 Scenario 3 Social & Human Capital (people involved in com- munity forestry and capacity building) 0 750 1,500 2,250 Natural Capital - Good mangrove areas 0 12,181 24,362 35,000 Cumulative biomass carbon sequestration in Mg (after deduction of fuelwood cutting) 2,558,954 9,189,236 11,927,755 14,796,996 Green jobs maintained 47,048 61,326 75,604 90,065 Total number of jobs from livelihoods and resto- ration activities outside RFs and NP maintained 58,892 73,978 89,064 104,347 Investment Analysis Natural Capital for Mangrove Platforms Ecosystems and Tools in thePlanning for Green Growth Ayeyarwady Region 90 REFERENCES Aung, T. T., et al. (2013). “Prediction of recovery pathways of cyclone-disturbed mangroves in the mega delta of Myanmar.” Forest ecology and management 293: 103-113. Barbier, E. B., et al. (2011). “The value of estuarine and coastal ecosystem services.” Ecological monographs 81(2): 169-193. Bartley, R., et al. (2015). Stream bank management in the Great Barrier Reef catchments: A handbook, CSIRO Land and Water, Canberra, ACT, Australia. Beck, M., et al. (2016). Managing coasts with natural solutions: Guidelines for measuring and valuing the coastal protection services of mangroves and coral reefs, The World Bank. Boutry, M., et al. (2017). “Land tenure in rural lowland Myanmar: From historical perspectives to contemporary realities in the Dry zone and the Delta.” Chen, C. C., et al. (2012). “Climate change, sea level rise and rice: Global market implications.” Climatic Change 110(3-4): 543-560. Dasgupta, S., et al. (2011). “Exposure of developing countries to sea-level rise and storm surges.” Climatic Change 106(4): 567-579. De Alban, J. D. T., et al. (2020). “Improved estimates of mangrove cover and change reveal catastrophic de- forestation in Myanmar.” Environmental Research Letters 15(3): 034034. Duarte, C. M., et al. (2013). “The role of coastal plant communities for climate change mitigation and adapta- tion.” Nature Climate Change 3(11): 961-968. Estoque, R. C., et al. (2018). “Assessing environmental impacts and change in Myanmar’s mangrove ecosys- tem service value due to deforestation (2000–2014).” Global Change Biology 24(11): 5391-5410. FAO (2017). From Users to Producers: Scaling up FFPOs Business to Implement Sustainable Development Goals in Climate Resilient Landscapes. Nay Pyi Taw, Myanmar, Regional Conference Report. Fritz, H. M., et al. (2009). “Cyclone Nargis storm surge in Myanmar.” Nature Geoscience 2(7): 448-449. GGKP (2020). Economic Appraisal of Ayeyarwady Delta Mangrove Forests. Seoul, Global Green Growth In- stitute. GGKP (2020). The 3Returns Framework: A Method for Decision Making Towards Sustainable Landscapes. Seoul: Global Green Growth Institute. Giri, C., et al. (2008). “Mangrove forest distributions and dynamics (1975–2005) of the tsunami‐affected re- gion of Asia.” Journal of Biogeography 35(3): 519-528. Hamilton, S. E. and D. Casey (2016). “Creation of a high spatio‐temporal resolution global database of con- tinuous mangrove forest cover for the 21st century (CGMFC‐21).” Global Ecology and Biogeography 25(6): 729-738. Herr, D. and E. Landis (2016). “Coastal blue carbon ecosystems. Opportunities for nationally determined con- tributions. Policy brief.” Gland, Switzerland: IUCN. Washington, DC: TNC. Hochard, J. P., et al. (2019). “Mangroves shelter coastal economic activity from cyclones.” Proceedings of the National Academy of Sciences 116(25): 12232-12237. Horton, R., et al. (2017). “Assessing Climate Risk in Myanmar: Technical Report.” New York, NY, USA: Center for Climate Systems Research at Columbia University, WWF-US and WWF-Myanmar. Hossain, M. F. and M. A. Islam (2015). “Utilization of mangrove forest plant: Nipa palm (Nypa fruticans Wurmb.).” American Journal of Agriculture and Forestry 3(4): 156-160. IPCC (2019). IPCC, 2019: IPCC Special Report on the Ocean and Cryosphere in a Changing Climate [H.-O. Pörtner, D.C. Roberts, V. Masson-Delmotte, P. Zhai, M. Tignor, E. Poloczanska, K. Mintenbeck, A. Alegría, M. Nicolai, A. Okem, J. Petzold, B. Rama, N.M. Weyer (eds.)]. In press. Knutson, T. R., et al. (2010). “Tropical cyclones and climate change.” Nature Geoscience 3(3): 157-163. Ling, S. and M. Fodor (2019). Myanmar-Country Environmental Analysis: A Road towards Sustainability, Peace, and Prosperity, The World Bank. Liswanti, N., et al. (2013). Practical guide for socio-economic livelihood, land tenure and rights surveys for use in collaborative ecosystem-based land use planning, CIFOR. Lovelock, C. E., et al. (2015). “The vulnerability of Indo-Pacific mangrove forests to sea-level rise.” Nature Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 91 526(7574): 559-563. Lovelock, C. E., et al. (2015). “The vulnerability of Indo-Pacific mangrove forests to sea-level rise.” Nature. MEA (2005). Ecosystems and human well-being-Synthesis: A report of the Millennium Ecosystem Assess- ment, Island Press. Minderhoud, P., et al. (2019). “Mekong delta much lower than previously assumed in sea-level rise impact assessments.” Nature Communications 10(1): 1-13. Nicholls, R. J. and A. Cazenave (2010). Sea-level rise and its impact on coastal zones. Oo, A. T., et al. (2018). “Assessment of climate change vulnerability of farm households in Pyapon District, a delta region in Myanmar.” International Journal of Disaster Risk Reduction 28: 10-21. Planet team (2017). Planet Application Program Interface: In Space for Life on Earth. San Francisco, CA. https://api.planet.com. Reguero, B. G., et al. (2019). “A recent increase in global wave power as a consequence of oceanic warming.” Nature Communications 10(1): 1-14. Sheaves, M., et al. (2020). “The consequences of paradigm change and poorly validated science: The exam- ple of the value of mangroves to fisheries.” Fish and Fisheries. Shivakumar, S. and U. S. Hlaing (2015). Myanmar: Land Tenure Issues and the Impact on Rural Development, Food and Agriculture Organization. Spalding, M. and C. L. Parrett (2019). “Global patterns in mangrove recreation and tourism.” Marine Policy 110: 103540. Tamunaidu, P., et al. (2011). Prospect of nipa sap for bioethanol production. Zero-Carbon Energy Kyoto 2010, Springer: 159-164. Tamunaidu, P., et al. (2013). “Nipa (Nypa fruticans) sap as a potential feedstock for ethanol production.” biomass and bioenergy 52: 96-102. Valiela, I., et al. (2001). “Mangrove Forests: One of the World’s Threatened Major Tropical Environments: At least 35% of the area of mangrove forests has been lost in the past two decades, losses that exceed those for tropical rain forests and coral reefs, two other well-known threatened environments.” Bioscience 51(10): 807-815. Webb, E. L., et al. (2014). “Deforestation in the Ayeyarwady Delta and the conservation implications of an internationally-engaged Myanmar.” Global Environmental Change 24(1): 321-333. WIF (2018). Reforestation and Restoration of degraded mangrove lands, sustainable livelihood and com- munity development in Myanmar. Verified Carbon Standard project, Worldview International Foundation, Myanmar. World Bank (2019). Myanmar Country Environmental Analysis. World Bank Young, I. R. and A. Ribal (2019). “Multiplatform evaluation of global trends in wind speed and wave height.” Science. Zöckler, C. and C. Aung (2019). The Mangroves of Myanmar. Sabkha Ecosystems, Springer: 253-268. Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 92 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 93 Investment Analysis for Mangrove Ecosystems in the Ayeyarwady Region 94