Managing Some Motorised Recreational Boating Challenges in South African Estuaries: A Case Study at the Kromme River Estuary

• Author: Deborah Ellen Lee,Stephen Gerald Hosking,Mario Du Preez
• Date: 01 June 2015
• DOI: http://doi.org/10.1111/saje.12059
• Published date: 01 June 2015

MANAGING SOME MOTORISED RECREATIONAL BOATING

CHALLENGES IN SOUTH AFRICAN ESTUARIES: A CASE

STUDY AT THE KROMME RIVER ESTUARY

DEBORAH ELLEN LEE

*,

STEPHEN GERALD HOSKING AND MARIO DU PREEZ

Abstract

Estuaries in South Africa face negative crowding effects with respect to motorised boat use because

of competing demand. This paper proposes this be managed through user charges and that the

setting of these charges be informed by applying a choice experiment to estimate user preferences

for reduced motorised boat congestion on the Kromme River Estuary, Eastern Cape. The

application of this method led the paper to deduce that users are willing to pay an additional

supplementary charge of R548 per annum during peak periods (only) in order to experience a

decrease in negative crowding effects.

JEL Classification: Q26

Keywords: Estuary, choice experiment, implicit prices, conditional logit, random parameter logit

1. INTRODUCTION

Open access to estuarine recreational areas has led to exploitation, congestion externalities

and, in some cases, the general degradation of scarce natural resources (Field, 2001; Birol

and Cox, 2007). Increased human recreational demand at any given estuary will not

necessarily reduce the recreational appeal of that estuary. Because of the social element in

recreation, people are often more an attraction than detraction, especially within the

younger cohorts. However, certain types of recreational activity are prone to negative

crowding effects. In South Africa, most water-based estuarine recreational activities are

characterised by open access in the sense that no direct fee exists for entry to the estuary.

Within estuaries, there is a trade-off between motorised boat use and also between

motorised boat users and other categories of users, like shore-based fishers, residents and

owners of other craft because the space available is limited (Hay et al., 2008). This

demand competition presents the relevant authorities with a complex management

scenario, requiring the development of an estuarine management plan in which all the

identified use issues are addressed.

This rising demand for motorised boating activities at many South African estuaries is

causing problems for the visitor as well as for the environment. These issues have led to

calls for action by certain interested parties to regulate access (Grossmann et al., 2006).

Methods available to authorities for managing motorised boat access and maintaining the

recreational quality of the estuary include (i) the use of zoning regulations, (ii) the

* Corresponding author: Lecturer, Department of Economics, Nelson Mandela Metropolitan

University, PO Box 77 000, Port Elizabeth 6031, South Africa. Tel: +27 (041) 5042206.

E-mail: deborah.lee@nmmu.ac.za

bs_bs_banner South African Journal

of Economics

South African Journal of Economics Vol. 83:2 June 2015

© 2014 Economic Society of South Africa. doi: 10.1111/saje.12059

286

application of spacing standards to develop safety guidelines and (iii) access to the estuary

through the implementation of a quota system (Sowman and Fuggle, 1987; Forbes,1998;

Field, 2001; Grossmann et al., 2006). Zoning refers to dividing the estuary up into

specific recreational activity areas and regulating the activities permissible in each zone

through constant monitoring and enforcement. The implementation of spacing standards

as a means to provide recreational users with a safe boating environment would involve

the calculation of a cut-off point where no more motor boats would be allowed on the

estuary. This option requires access to reliable data on the carrying capacity of the estuary

with regards to social attitudes to crowding. This information, along with the

environmental impact of overcrowding, is often not available. If this information is

available, however, another related management intervention that can be introduced is

the quota system. The quota system would involve setting a ceiling on the number of

boats allowed on the water at any one time across different craft types. In many cases, the

quota system would likely be implemented during peak periods of the year only. It would

work on a “first-come-first-served” basis, and once the quota has been reached,

prospective motor boat users would have to wait until another motorised boat left the

water. This places the estuary users’ recreational experience in jeopardy if access is limited

or denied when the user arrives at an estuary.

The application of a quota system for regulating any estuary, however, could only work

under the following conditions: (i) reliable data are available on the average number of

boats using a certain stretch of river during different times of the year (peak vs. off-peak

periods), (ii) a maximum number of motor boats allowed on the estuary at one time have

been defined, (iii) there are effective control mechanisms in place, as well as sufficiently

capable management personnel, and (iv) funds are available to cover the additional costs

of system administration (Grossmann et al., 2006). While the quota system represents a

direct rationing mechanism, the introduction of an indirect user fee is a price-rationing

mechanism, which could also have the potential to reduce visitation to an optimal level.

Not only could it regulate crowding, but it could also yield a revenue flow to managing

from the users of estuaries by capturing their consumer surplus.

An example of a South African estuary experiencing congestion externalities, and the

locus of this study, is the Kromme River Estuary. Currently, recreational demand at

the Kromme River Estuary is mainly regulated with rules for use and minimally through

the use of registration fees, permits and levies. Should this balance be changed to a more

market driven alternative by adjusting access cost (i.e. the pricing instrument) during

peak periods to a level that regulates demand to the desired level automatically? The use

of peak load pricing has been found to be effective, as (i) it provides users with economic

incentives to use the resource during off-peak periods and (ii) it guarantees that the users

that place the highest value on using this resource for motorised boating purposes during

peak periods are the individuals that are actually willing to pay for it (Van Kooten and

Bulte, 2000).

This paper aims to inform management of the required adjustment in the current boat

license (i.e. the pricing instrument) to optimise special use (by motorised boat users) of

an Eastern Cape estuary (EC), namely the Kromme River one. The required adjustment

is estimated through the use of a stated preference technique, namely the choice

experiment (CE) method. More broadly, the latter estimates the economic value that

recreational users attach to selected estuarine characteristics (attributes) and recommends

the use of these values as inputs to amending the existing user charge structure.

287South African Journal of Economics Vol. 83:2 June 2015

© 2014 Economic Society of South Africa.