Some might argue that Australia’s beloved Great Barrier Reef is a priceless natural wonder, but economists have just placed a number on its monetary value. Accounting for factors like the reef’s contribution to tourism and fishing and even the amount that people value it simply for existing, they’ve estimated that its worth is a total of $42.4 billion in a new report, commissioned by the Great Barrier Reef Foundation and prepared by Deloitte Access Economics.
But other experts suggest that calculating a total value for a natural resource like the Great Barrier Reef may not provide the most useful information about its condition or what kinds of measures we should be taking to protect it.
“I think you’d be hard-pressed to find anyone in the world who’d say the world would be better off without the Great Barrier Reef,” said Eli Fenichel, an expert in the valuation of natural resources at Yale University, who was not involved with the report. “The important policy question is how much do we invest in it, and the answer to that is, well, how much do we improve the Great Barrier Reef with those investments, or what is the trajectory for value with the Great Barrier Reef and do we do something to change that?”
The report released Sunday aims to calculate the reef’s value as an asset to the nation of Australia, a project the authors say is more important now than ever. After suffering two straight years of unusually warm water temperatures and intense coral bleaching — which has caused widespread coral death on certain parts of the reef and bleaching along at least 900 miles of the 1,400-mile reef — scientists are increasingly concerned about the reef’s future.
“There has never been a more critical time to understand precisely what the reef contributes and, therefore, what we stand to lose without it,” the report states.
The authors incorporated data pulled from a number of previous Australian studies on tourism, recreation, fisheries and reef management activities, as well as new surveys that question the public’s feelings about the reef’s importance and their willingness to protect it. Altogether, the report concludes that the Great Barrier Reef added a total of $4.8 billion, or 6.4 billion Australian dollars, to the Australian economy between 2015 and 2016, mainly through the tourism industry.
And the report suggests that the reef’s total asset value comes to A$56 billion ($42.4 billion). Of that value, $22 billion comes from tourism and $2.4 billion comes from recreation. The other $18 billion sums up the reef’s worth to people who don’t actively visit it, but still value its existence in the world — this number can be thought of as the amount Australians would be willing to pay to prevent its destruction.
While 2.3 million Australians visit the Great Barrier Reef each year as tourists, “clearly the other 22 million place a value on the Reef too,” said lead report author John O’Mahony, an economist and partner with Deloitte Access Economics, in an email to The Washington Post.
The $42.4 billion estimate covers the reef’s asset value through the next 33 years — a time period that spans from now through the end of the Australian government’s Reef 2050 Long-Term Sustainability Plan, a framework for managing and protecting the reef through the year 2050.
The $42.4 billion value is worth more than 12 Sydney Opera Houses. However, Fenichel expressed concern about some of the factors included in this number, and whether they directly reflect the value of the reef. Certain jobs that benefit from the tourism industry, such as those related to hospitality or food service, could still potentially move and exist in other locations, even if the reef completely disappeared, he suggested.
“You could ask what part of Australia’s GDP touches the reef, and I kind of think that’s what they did in their numbers,” he said. “What part of GDP is directly attributable to the reef — I think that’s a little murkier.”
And Fenichel added that looking at natural resources in terms of their total asset values may be less useful than determining how their value is changing over time — a measurement that could help policymakers better understand whether their investments in conservation will actually make a substantial difference.
“The total value doesn’t really tell us much about if you change the management [of a resource], what’s the return on that,” Fenichel told The Washington Post. If the value of the Great Barrier Reef has been decreasing in recent years, for instance, this might suggest that an improvement in management is needed, and investing in more stringent conservation strategies could have a high return on investment.
The new report, rather, seems to simply suggest that the reef has a high total value at the moment, and therefore there’s a lot at stake if it were to be seriously damaged or destroyed.
“Obviously the intention of the study is not to commodify the environment or imply it’s for sale, but to raise awareness about its value,” O’Mahony said.
The authors also point out in the report that it’s “clear how inadequate financial measures are for something as important to the planet as the GBR.” They note that the value of the reef’s biodiversity — as well as its sheer natural wonder — are not factored into this report, and add that “if quantified, they would show it is worth much more than what is reported here.”
In other words, even total asset value estimates are relative depending on the data that are included and they way they’re analyzed. And according to Fenichel, some of the report’s finer details may actually be more noteworthy than the final values it comes up with.
The surveys on the reef’s importance to people around the world and their willingness to pay to protect it, for instance, contained some interesting insights, he suggested. More than half of all Australians — and nearly three-quarters of respondents in other countries — said they’d be willing to pay some amount weekly (ranging from 44 Australian cents to more than A$15 (33 cents to $11 in U.S. currency) to ensure that the Great Barrier Reef is protected.
While the Great Barrier Reef has suffered some devastating losses in the past two years, it’s by no means necessarily doomed. That said, its future is of definite concern to scientists, as there are many factors that may continue to threaten the reef in its weakened state — pollution, too much human contact and the growing influence of climate change are just a few.
With many challenges still looming over the reef, the new report underscores the fact that it does make many significant contributions to both the economy and culture of Australia — even if its exact monetary value, and how it’s changing over time, comes with some uncertainty.
“I think some of the valuation in these reports should be less front and center an overall story of why the reef is important to Australia or the world,” Fenichel suggested. “There’s a lot of that in this report, and I would hate for anyone to miss some of that because they were skeptical or didn’t find the headline valuation that interesting or useful.”