Tue | Sep 25, 2018

Cockpit Country worth more alive than dead

Published:Friday | October 31, 2014 | 12:00 AM

THE EDITOR, Sir: It is interesting to read The Jamaica Bauxite Institute's (JBI) estimates of the size and value of bauxite reserves in Cockpit Country ('Bauxite price tag put on Cockpit Country', Gleaner, October 24, 2014). However, these 'values' (all based on US$30 per tonne) overestimate the real value to Jamaica by a factor of about four!

US$30 is the gross amount received, before expenses, such as capital equipment and fuel, are paid. Out of that $30, Jamaica only keeps about a quarter. For example, in 2011, only $7.62 per tonne of bauxite was retained by Jamaica. This is broken down as: royalties - $0.26; income tax - $0.08; bauxite levy - $1.63; local wages - $2.44; other local costs - $3.21 (all figures derived from government websites and quoted in US$).

So the value of bauxite in Cockpit Country to Jamaica is 300,000 tonnes x US$7.62, or US$2.3 billion.

The value of bauxite can be compared to the value that Jamaicans place on Cockpit Country. A recent study by Jamaican economist Dr Peter Edwards (Ecosystem service valuation of Cockpit Country, December 2011) estimated the non-market value of Cockpit Country to be between US$29.8 million and $47.8 million per year, while the market-based, carbon sequestration value was estimated at US$10.4 million per year.

These values accrue every year, and Cockpit Country will, hopefully, exist forever. However, we need to discount the future values to reflect our human preference for having things now.

Using a generally accepted, long-term discount rate of 1.4% for a period of 100 years:

The net present value of the non-market benefits of Cockpit Country is between US$1.6 billion and US$2.6 billion.

The net present value of carbon sequestration is US$0.56 billion.

And it is important to note that there are other market-based values such as water, forest and pollination that have not yet been valued for the Cockpit Country, as well as potential medicines and genetic resources that we cannot even quantify yet.

Keeping the Cockpit Country alive will mean it continues to supply all these services free of cost to all Jamaicans, not just now, but in the future.

Sources: http://www.mstem.gov.jm/sites/default/files/documents/mining.pdf



All calculations are available by email from the author.