How Much Is the Great Barrier Reef Worth? Economists Just Figured it Out
The Great Barrier Reef should be classed as too big to fail.
(Bloomberg) -- As mankind puts the world’s largest living structure at risk, economists have come up with a new solution: put a price tag on it.
Australia’s Great Barrier Reef is bigger than Japan, visible from space and one of the most complex ecosystems on earth. But it’s also under siege from climate change, agricultural runoff, coastal development and illegal fishing.
Debate over its use is often polarized between strict protection and open development: champions of the former assign infinite value and the latter very little. That’s partly why the Great Barrier Reef Foundation asked Deloitte Access Economics to value the icon. It came up with a value of A$56 billion ($43 billion) based on an asset supporting tens of thousands of jobs and which contributes A$6.4 billion to the economy.
“Valuing nature in monetary terms can effectively inform policy settings and help industry, government, the scientific community and the wider public understand the contribution of the environment, or in this case the Great Barrier Reef, to the economy and society,’’ the Deloitte report said. “The tight and unforgiving deadline the Great Barrier Reef is up against necessitates an understanding of its true value to know what kind of policy action is required in response.’’
The economic activity and employment associated with the Reef, located off the northern state of Queensland, exceeds many industries that Australia would normally consider “too big to fail,’’ the report found. Yet the urgency to deal with its threats is only accelerating.
To gauge the risks, scientists have been exposing coral communities to future ocean temperatures and carbon dioxide levels over long periods. The results show how the precious services to the ecosystem that reefs provide will change as the oceans get warmer and acidify. And that’s a direct threat to the region’s economy.
“These experiments show taking action on climate change reduces the loss of coral reefs and has many benefits for the Great Barrier Reef and its dependent people and industries.,’’ the report found. “These types of scientific experiments, in combination with field studies, have built a strong case for action on climate change.’’
But the need to protect the icon goes beyond dollars and cents. The Great Barrier Reef’s traditional indigenous owners have a connection spanning 60,000 years, and its ecological and environmental functions are deeply embedded in their culture, the report says. Such values just aren’t suited to quantification, it said.
The report also included a survey on how people felt about the reef. Aussies wanted their children and future generations to be able to visit and enjoy it. And while that was supported by a sense of morality in guaranteeing its future health, there was also an overarching belief both locally and globally that Australia just wouldn’t be the same without it.
“From a global perspective, the reef’s importance to the planet and to biodiversity is paramount,’’ Deloitte said. “Given the reef’s status as one of the seven natural wonders of the world, this does not come as a surprise.’’
To contact the editor responsible for this story: Chris Bourke at cbourke4@bloomberg.net, James Mayger
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