Cost Scenarios for Coastal Water Pollution in a Small Island Nation: A Case Study from the Cook Islands

This article presents scenarios of watershed pollution costs in Rarotonga, the largest of the Cook Islands in the South Pacific. The valuation method applied here estimates the market costs that would be avoided in the absence of watershed pollution. The study finds gross annual watershed pollution costs in Rarotonga between NZ$3.2 to NZ$17.7, with a best estimate of NZ$7.4, million. The best estimate results in household costs of NZ$2,900 per year and equates to 3.12% of gross domestic product. A wide error margin is placed around these estimates due to uncertain and incomplete datasets, a common situation for small island nations. They are presented as “cost scenarios” rather than definitive results. The article explores the practical, theoretical, and policy issues surrounding the valuation of water resources in the context of small island nations. It is argued that rough estimates of opportunity costs, limited to market goods and services, can supply governments with sufficient information to assess the relative importance of watershed pollution.