A Case study on economic valuation of environmental services provided by the Bolgoda Lake Sri Lanka Phase I

Abstract

In the recent past, several countries in Asia have demonstrated robust economic growth, largely led by industrialization. A consequence has been rapid urbanization. About 30 percent (800 million people) of the total population in Asia, live in urban areas (cities and towns). This demographic shift towards a larger urban population is accelerating. It is expected that by year 2025, about 60 percent of the Asian population (2.5 billion people) will be living in urban areas. The number of large urban cities is growing rapidly in the region. Currently, there are nine megacities (those with the population of the more than 8 million) in Asia, and their number is expected to increase to 13 by the year 2000.

The concentration of industrial activities and large populations in Asian cities have caused environmental problems with serious consequences that undermine the gains from growth to human welfare. Awareness to consider environmental conservation as an essential goal of development is increasing. Governments, the private sector, community groups are responding with a variety of initiatives such as investment on environmental management, controls on investments having potential to pollute the environment, encouraging the use of environment friendly technology, and creating awareness among population on need for urban environmental conservation.

The physical magnitude of urban environmental degradation has been reasonably analyzed and understood. The economic impact of environmental degradation, however, has not been adequately analyzed, degradation has not been considered for rational policy-making. This leads to anomalies in prioritization of investments and selection of environmental management strategies and policies to economically efficiently mitigate environmental degradation