Assessing the Total Economic Value of the Great Barrier Reef

ASSESSING THE TOTAL ECONOMIC VALUE OF THE GREAT BARRIER REEF
The Great Barrier Reef(Image Source - The Great Barrier Reef Foundation)
Economic and the Environment (2281ENV)
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Introduction
The continent of Australia, which is positioned in between the Indian Ocean and the
Pacific Ocean, is a mega-diverse landmass with numerous biodiversity hotspots, such as
rainforests, deserts, mountainous terrain, and plains.Adding to its biodiversity, it also consists
of The Great Barrier Reef, which is the world’s largest coral reef system situated in the Coral
Sea (Wolanski, 2018).The Great Barrier Reef (GBR) comprises of nine hundred islands and
2900 coral reefs, which constitute a giant underwater ecosystem. Ironically, the ecosystem
which was formed due to global warming in the last glacial period is threatened by the same
phenomenon of today.Coral reefs are of a great benefit to its adjoining landmass, serving as a
protection to the coast. Indigenous Australians have since long taken refuge in the islands of
the Reef.
The presence of the GBR is greatly advantageous to the country, and has many
benefits such as prevention of coastal erosion, protection from natural disasters, and being an
economical powerhouse of Australia. However, the Reef’s stability is rendered vulnerable by
many factors such as climate change, seawater pollution, and overfishing. Human
exploitation of nature is one of the main factors, where we can see that the coral reef is losing
its stability over the time due to incessant human activities (De’ath, Fabricus, Sweatman, &
Puotinen, 2012). Thus, conserving the GBR would be largely beneficial to the economy of
Australia.
This essay deals with the need of conserving the GBR, the advantages and the
ecological economy of conservation of the Reef. The social costs and benefits of conserving
the GBR are discussed and tabulated. A Total Economic Value framework is made on the
GBR, and its components are analysed. The Sustainable Development Appraisal and the
trans-disciplinary approach is discussed, in relation to the ecological economics of the
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conservation of the GBR. Various environmental valuation techniques are discussed, and the
most efficient of them is analysed. The best suited framework wherin the environmental
valuation results could be presented to support decision making regarding the conservation of
the GBR is suggested. This essay provides a theoretical perspective to analyzing the
ecological economics of the GBR, which can be used to calculate the actual monetary value
of the costs and benefits of its conservation.
What are the Social Benefits and Costs of Conserving the GBR?
The Costs-Benefit analysis is a systematic approach which is used to calcualte,
compare, and analyze the costs and benefits of a given action or a situation (Ding, 2008).It is
highly beneficial in determining the suitable option which provides equitable benefits to the
costs incurred, thus is highly effective in calculating opportunity costs. While assessing the
the costs and benefits in the conservation of the GBR, there are a lot of factors that must be
considered, which are detailed in Table 1 and 2.
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Table 1 – Cost-Benefit Table : Analysis of Costs
Costs Cost Type Economic
Value Source
Fisheries Private Direct
Use/Bequest
By controlling the rampant overfishing that is
damaging the Reef, the fishing industry
would definitely incur a loss (Kennedy, et al.,
2013). This can be calculated by production
factor, where the loss of profit due to
excessive fishing (capital) and the loss of
labour (labour) must be calculated, at the
benefit of the Reef (land).
Resourse
utilization External Direct
Use/Bequest
By limiting excessve tourism by putting a cap
on the torist numbers and/or increasing the
prices, one can minimize the amount of
resourses utilized, such as energy, water, and
can minimize pollution (Goodwin, 2017). The
Travel Cost method can be used to calcualte
the projected losses of the tourism industry,
as opposed to the gains on the natural
reesources.
Agriculture External Direct
Use/Icon
As aricultural products such as pesticides and
fertilizers cause damage to the Reef by
runoffs, providing natural agricultural
products or compenstions to the farmers
would be a cost incurred (Austin, Tunny,
Prickett, Fitzgibbons, & Binney, 2013).
Industrial
Development External Direct Use
By limiting or regulating the industrial
developmnet in the area near the Reef, the
increased carbon-di-oxide levels in the air can
be reduced (Omer, 2008). The resultant loss
of profits, and the relocation costs can be
calculated by hedonic pricing.
Shipping Private
Direct
Use/Altruisti
c
Overshipping is one of the main areas that
damages the Reef, causing pollution and
resultant coral bleaching (Carse & Lewis,
2017). If limited, the costs must be calcualted
by the production factor method, where the
the loss of profit due to overshipping (capital)
and the loss of labour (labour) must be
calculated, at the benefit of the Reef (land).
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