The Great Barrier Reef’s gilt-edged importance to the Australian economy has been highlighted by new research into the potential financial cost of climate change to the world heritage-listed wonder.
British consultant Oxford Economics puts the present value of the reef at $51.4 billion – approaching $2500 for every Australian alive today – but warns that nearly four-fifths of its worth would be destroyed if the coral was totally and permanently bleached.
The study goes beyond placing a dollar figure on tourism, fishing and other commercial activities involving the reef, valuing “indirect” benefits such as its role in protecting coastal communities from storms and cyclones.
The research was commissioned by the not-for-profit Great Barrier Reef Foundation. Its chairman, John Schubert, warned yesterday that the reef was at a “crossroads” because of climate change.
“We are basically at a point where we need to take action to ensure that as much of the reef as possible can be preserved,” Dr Schubert said in releasing the Oxford Economics study.
The $51.4bn figure for the reef’s net worth is calculated over a century, at a preferred discount rate of 2.65 per cent to price in the opportunity cost of tying up that capital.
Oxford Economics valued the net economic benefit and profit generated by tourism on the reef at $20.2bn, with recreational fishing worth $2.8bn. Profit from commercial fishing is $1.4bn, while the so-called indirect-use value of the reef as a coastal defence absorbing up to 90per cent of the destructive force of storm-driven waves was $10bn in present value terms.
Dr Schubert said the British firm’s estimate of the reef’s economic worth was broadly in line with that of Australian forecaster Access Economics, though each used a different form of economic modelling.
Oxford Economics also factored in a “non-use” worth of the reef of $15.2bn, representing the potential value to Australians of, say, a future visit to the reef or of its capacity to yield breakthroughs in biomedicine and other forms of research.
In costing these economic benefits, Oxford Economics said it had been able to value the potentially catastrophic effects of coral bleaching from higher ocean temperature and levels caused by climate change.
The report found that the reef had been affected by heat-related coral bleaching six times over the past 25 years, most severely in 2002, when 60per cent of reefs within the vast marine park were hit, destroying up to a tenth of the coral.
Total and permanent bleaching of the reef would cost $37.7bn, or 73 per cent of its assessed value to the economy, presently accounting for nearly 5 per cent of Australia’s gross domestic product. Tourism would be devastated, with up to half of the million or so people who visit the reef annually likely to stay away.
The Cairns region would lose 90per cent of the $17.9bn reef-related activity boosting the local economy.
“This report provides a wake-up call about the threat to one of Australia’s greatest natural assets and the potential cost to Australia,” Dr Schubert said.
“It also establishes for the first time the extent to which the Cairns region would be affected by a major bleaching event.”