An Economic Analysis of Using Retired Vessels to Create Artificial Reefs in Costa Rica

Author

Josué González, Stephen F. Austin State UniversityFollow

Date of Award

12-2020

Degree Type

Thesis

Degree Name

Master of Science - Forestry

Department

Forestry

First Advisor

Dr. Gary Kronrad

Second Advisor

Dr. Pat Stephens Williams

Third Advisor

Dr. Daniel Scognamillo

Abstract

ABSTRACT

The Republic of Costa Rica is a Central American country with only 0.03% of the world’s landmass, but 5% of the world’s biodiversity, making it a leading ecotourism destination. Ecotourism is one of the main sources of revenue for the country, but the degradation of coastal reefs has resulted in a significant loss of financial income for developing areas. As a result, many of these areas are searching for methods to revert the degradation of coral reefs.

Artificial reefs play an important ecological role in marine ecosystems due to their complexity and size. They help in the development of communities of fish, corals, and other aquatic fauna, as well as positively influencing the economy of the surrounding communities by bringing in revenue. Not only will the creation of artificial reefs assist Costa Rica’s conservation efforts by creating habitat for corals and game fish, but also it will improve its economic development by creating more jobs and potentially increasing the number of tourists visiting the country each year. The goal of this study was to calculate the number of anglers and/or scuba divers that need to visit Costa Rica in order to break-even on the costs of creating an artificial reef by sinking retired naval vessels, approximately $8.6 million. The analysis assumed that all funding to convert the costs of developing the artificial reef would come from the 13% sales tax revenue paid by

the additional anglers and scuba divers. The high and low seasons, high and low amenity costs, payback period, interest rates and the installment payment or capital recovery formula are several of the variables that were used to obtain the calculations in this study.

Results show that, depending on the length of stay, the sales tax revenue collected from an additional 287 to 452 anglers or 303 to 476 scuba divers each year for 20 years during the high season would pay, with interest, for the creation of the reef. To pay for it in one year, Costa Rica would need 4,488 to 7,067 additional anglers or 4,742 to 7,443 scuba divers in a single year. To pay for the cost with interest for the creation of the reef with taxes collected during the low season, and depending on the length of stay, the country would need 1,475 to 2,458 additional anglers or 1,503 to 2,505 additional scuba divers each year for 20 years. If Costa Rica wanted to pay for it in one year during the low season, they would need to attract between 23,076 to 38,460 additional anglers or 23,515 to 39,192 additional scuba divers in a single year. These results show that the creation of an artificial reef using a retired vessel has great potential in Costa Rica when comparing the results to the 283,790 anglers that visited Costa Rica in 2008.

Repository Citation

González, Josué, "An Economic Analysis of Using Retired Vessels to Create Artificial Reefs in Costa Rica" (2020). Electronic Theses and Dissertations. 349.
https://scholarworks.sfasu.edu/etds/349

Creative Commons License

This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.