Recreational impacts of an oil spill in a world heritage area: a combined travel cost and contingent behaviour method approach

Alexandra L. Egan, John Rolfe, Sue Cassells and B. Louise Chilvers

Journal of Environmental Economics and Policy, 2024, vol. 13, issue 3, 289-305

Abstract: Fiordland National Park is a UNESCO world heritage site that draws hundreds of thousands of visitors every year. An oil spill in this area could impact the visitation to not only Milford Sound, but to all of Fiordland National Park and the lower South Island. This study examined the impacts on the recreational value of Fiordland National Park under three oil spill scenarios in Milford Sound. Using a combined approach of travel cost and contingent behaviour methods revealed a consumer surplus of a visit to Fiordland National Park of NZD 534.76 and NZD 1,449.28 per person, with and without accommodation respectively. This leads to an aggregate consumer surplus estimate ranging from NZD 427.8–1,159.4 million for Fiordland National Park based on pre-COVID visitor numbers. The three oil spill scenarios represented small, medium, and large-scale oil spills, limiting various water-based activities at each step. This showed that for each increase in oil level, there was a decrease of NZD 164.10 and NZD 923.73 per person with and without accommodation respectively. This leads to an estimated minimum decrease of the welfare of visitors by 30.7–63.7 percent, or a decrease of NZD 131.3–734.0 million in the annual recreational value.Key Policy HighlightsAggregate annual recreational value estimates ranging from NZD 427.8 million – NZD 1.6 billion pre-COVID19.An oil spill occurring in Milford Sound demonstrated a minimum annual recreational value decrease of NZD 131.3 million over five years.These results demonstrate the need for appropriately funded prevention and preparedness policies to minimize possible damages.

Date: 2024
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DOI: 10.1080/21606544.2023.2248951

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