If the government of Barbados allows this area to be developed it would appear to be a very poor decision from an economic perspective. The land is for sale at a price of US$12 million. A recent valuation study (I have a copy if anyone wants to see it) puts the annual value of the sanctuary and adjoining lands at over US$551 million. Preservation clearly passes the benefit/cost test.
Considering the strong call for continued incentives to support tourism during the economic downturn, policy designed to save Graeme Hall seems a no-brainer. Of course, as with all public goods, the government has to be willing to make the payment up front in order for the environmental land rents to be distributed to society. Notice the importance of the public investment discount rate here.
One could argue that there are significant opportunity costs associated with investing $12 million now, and also forgoing all future tax reciepts that could be earned if the lands were sold to private developers. But, it is hard to imagine an alternative public spending project that could yeild this rate of return.
This is a complicated issue. Proper functioning of the swamp ecosystem requires that the swamp be drained regularly by opening a sluice gate that allows water from the swamp to flow to the sea. This is also critical in preventing flooding in the area. Below are some links to recent articles:
The swamp water contains tannins which makes the water appear dirty (though testing shows that its not dirty).
Tourists get upset when the dirty-looking water clouds the otherwise clear blue Caribbean Sea at adjacent beaches.
Clearly we have a trade-off between two important environmental goods, both of which contribute to the economy via tourism.
In terms of alternative uses, in 2004 a US $22 million dollar water park was proposed for the area as a tourist attraction (think Myrtle Beach, complete with mini golf and a "lazy river"). This was favored by some and opposed by others. The plans for the water park did not go through.
As much time as I've spent in Barbados, I've never been to Graeme Hall... I certainly have a positive willingness to pay (option value) associated with its preservation.