Monthly Archives: September 2012

The economics of coral reefs

A recent paper in the Proceedings of the National Academy of Sciences of the United States of America (PNAS) discusses the decline of the coral cover on the Great Barrier Reef. It is estimated that in less time than the past 30 years, the coral cover has declined by more than 50 percent. Three of the major causal factors are believed to be tropical storms, bleaching and crown-of-thorns starfish (COTS).

Bleaching is probably directly related to global warming as higher temperatures triggers it. The frequency of tropical storms does likely also have some relationship to climate change. The increased presence of COTS is largely a consequence of water pollution and of agricultural fertilizers that are washed out in the sea. To save the corals on the Great Barrier Reef, the authors argue that improved water quality and control mechanisms are needed. This strategy will only be successful, however, “if climatic conditions are stabilized, as losses due to bleaching and cyclones will otherwise increase.”

Reading this paper reminds one of the project called The Economics of Ecosystems and Biodiversity (TEEB). Coral reefs have earlier been estimated to be worth $30 billion per year in tourism, protection of commercial fish species, and protection of coasts from storms. However, a meta-analysis of some 80 studies indicates that the real number probably is closer to $172 billion per year.

Estimating the economic value of our ecosystems and biodiversity is a step in the right direction. But the cost of environmental degradation should also to some extent be internalized in common economic models and data. If we cannot subtract, for instance, the cost of the destruction of the Great Barrier Reef from annual calculations of GDP, we will not have a clear image of the actual economic development.

Simon Hedlin

Uncompetitiveness in a graph