$38bn warning on Great Barrier Reef bleaching

Adam Morton, The Age 10 Aug 09;

BLEACHING of the Great Barrier Reef will cost Australia almost $38 billion if climate change due to greenhouse gas emissions continues unchecked, an analysis has found.

A report commissioned by the Great Barrier Reef Foundation, a business-backed body investing in science, estimates half the tourists drawn to see reef coral will stay away if projections of permanent bleaching prove correct.

Foundation chairman John Schubert, the outgoing chairman of the Commonwealth Bank, said the report was a wake-up call about the economic damage that would be triggered by the loss of one of Australia's great natural assets.

The analysis by Oxford Economics assessed not only the value of the reef in tourism and fishing, but the indirect value of having a natural barrier protecting the coastline. A measure of the value people place on the reef's survival was also included.

It found coral bleaching would result in the value of the reef tumbling by 73 per cent, from $51.4 billion to $13.7 billion. The loss in the Cairns region would be more acute: 90 per cent of an estimated value of $17.9 billion.

"We are at a crossroads," Dr Schubert said. "We owe it to the communities … to all Australians and the global community to do all we can to secure the reef's future."

Life's a bleach for Barrier Reef as climate changes
Jamie Walker, The Australian 10 Aug 09;

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."

Report reveals $37b reef bleaching cost
ABC 10 Aug 09;

An international study has found that the economic cost of coral bleaching of the Great Barrier Reef would be $37.7 billion.

The Oxford Economics report, which values the reef at $51.4 billion, also found up to 50 per cent of tourists who would normally visit the reef would stay away from Queensland if bleaching was permanent.

The study was commissioned by the Great Barrier Reef Foundation to set an economic benchmark for the natural asset.

The foundation's John Schubert says the figures paint a disturbing picture for tourism and local communities that directly benefit from their proximity to the reef.

Managing director Judy Stewart expects the economic study will set a new standard for valuing the environment.

"I expect that the methodology will be looked at in great detail by other economists looking at other environmental assets elsewhere, as well as how we value coral reefs elsewhere," she said.

Coral bleaching report 'no surprise'
Kristy Sexton-McGrath, ABC 10 Aug 09;

The Queensland Tourism Industry Council (QTIC) says it is not surprised by a report showing the economic cost of coral bleaching of the Great Barrier Reef would approach $40 billion.

The Oxford Economics report also found up to 50 per cent of tourists who would normally visit the reef would stay away from Queensland, if bleaching was permanent.

QTIC chief executive Daniel Gschwind says environmental agencies and reef operators have an important role to play in protecting the reef.

"The Barrier Reef is not only a great ecological asset, it is also a very, very important part of our economic base and we have every reason to keep continuing what we are doing and that is to look after the reef, manage it well, and make sure the reef stays one of the world's best - if not the best - managed reef," he said.

Mr Gschwind says the report's findings come as no surprise.

"This study confirms that the quality of the coral, quality of the dive, quality of the snorkelling attractions is a very, very important part of what brings people to Queensland, what brings people to Australia," he said.

"We have a very strong interest in the tourism industry to continue our efforts to make sure we operate efficiently."