Australia, along with the entire world, faces the tremendous challenge of climate change over the coming decades. Along with its impacts on a wide variety of global ecosystems, climate change has the potential to have long-term impacts on Australia’s Great Barrier Reef (GBR). Among the most serious of these are the phenomenon of coral bleaching (or, more properly, bleaching mortality) and its attendant effects on the reef’s biodiversity.
The long term effects of coral bleaching (in both the Cairns region and the entire GBR) are the focus of this study. Coral bleaching, and related effects of warming, present a serious threat to the future existence of the reef. The Garnaut Climate Change Review (2008) (“the Garnaut Report”) and other recent media commentary has paid particular attention to the issue of the long term survivability of the GBR due to bleaching and there have been growing public concerns about its future.
As noted in a supplementary paper to the Garnaut Report, if atmospheric concentrations of carbon dioxide (CO2) exceed 500 parts per million (ppm) the GBR is likely to experience a massive loss of biodiversity and ecological function. Any semblance of reefs to the coral reefs of the Great Barrier Reef Marine Park today would vanish, with the GBR having a vastly different appearance to that which attracts tourists at present (Hoegh-Guldberg and Hoegh-Guldberg 2008).
This, in turn, raises the issue of how much the nation (and by extension, the world) values a World Heritage listed natural resource such as the GBR.
This report takes into account:
• direct use values of the commercial, recreational fishing and tourism industries (i.e. profitability);
• direct use values by tourists and recreational fishers (i.e. how much the groups using the GBR truly value the reef, rather than simply how much they spend in the region);
• indirect use values of coastal protection;
• the non-use values of Australians who may not visit the reef but are willing to pay for its continued
• non-use values for international residents.
The analysis has been conducted using a Total Economic Value (TEV) approach, consistent with the concepts set out in the Queensland Government’s Environmental Economic Valuation: An introductory guide for policy-makes and practitioners (2003). The approach also draws on concepts developed in the recent Garnaut Report and environmental economics literature, including use of a 100 year timeframe and a social
discount rate of 2.65%.
As a first step, the total value of the GBR and of the GBR in the Cairns area were derived. From this, estimates of the total cost of bleaching of the GBR and of the GBR in the Cairns area were then calculated. Where there are uncertainties over data, a conservative approach has generally been adopted. At a preferred discount rate of 2.65%, streamed over 100 years, holding present day values constant, it is estimated that the present value (PV) of the GBR as a whole 9excluding indigenous values) is $51.4 billion, with a value of $17.9 billion estimated for the Cairns area.
From this, an estimate of the cost of bleaching for the Cairns area and the GBR can be derived. If a
total and permanent bleaching of the GBR were to occur today, then (holding present day values
constant over 100 years, at a discount rate of 2.65%0 the costs (in PV terms) are estimated at $37.7
billion with an estimate of $16.3 billion for the Cairns area.
Put another way, the bleaching cost for the whole of the GBR is roughly equivalent to a constant $1.08 billion
per annum over the course of a century.
These values reflect those which can be reasonably attributed to the GBR. For example, tourism motivated
by the GBR’s coral sites is included but not regional tourism which is focussed on other activities (e.g.
swimming, beach visits, visits to friends and relatives).
The Great Barrier Reef Foundation commissioned this report which was written by Oxford Economics.
Related links: The Garnaut Report