What Is The Economic Value Of Healthy Oceans?

This Wednesday reprint originally appeared on March 28, 2012. I made some small changes to the original, mostly for clarity — Dave

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I suppose if you live long enough, and you know what you're looking at, you will see every conceivable folly the human species has to offer. Longevity is one consequence of living in a technologically advanced global civilization, but so is environmental catastrophe. So I was not shocked to read Science Daily's What Is The Monetary Value of a Healthy Ocean?

Professor Robert Diaz of the Virginia Institute of Marine Science is a co-editor of Valuing The Ocean, a major new study by an international team of scientists and economists that attempts to measure the ocean's monetary value and to tally the costs and savings associated with human decisions affecting ocean health.

The study estimates that if human impacts on the ocean continue unabated, declines in ocean health and services will cost the global economy $428 billion per year by 2050, and $1.979 trillion per year by 2100. Alternatively, steps to reduce these impacts could save more than a trillion dollars per year by 2100, reducing the cost of human impacts to $612 billion.

Diaz says the study report "describes the state of the science for 6 threats to the global ocean, what can happen if all these threats act together, and the economic consequences of taking or not taking action." He notes that the study is unique in stressing the interactions between and among multiple threats, which include

• acidification
• low-oxygen "dead zones"
• overfishing
• pollution
• sea-level rise
• warming

... A release from the Stockholm Environment Institute — the agency that coordinated the international study — states "The ocean is the victim of a massive market failure. The true worth of its ecosystems, services, and functions is persistently ignored by policy makers and largely excluded from wider economic and development strategies… This collaborative book presents an unequivocal argument in favor of placing the ocean at the centre of plans to build a sustainable future, while for the first time calculating the actual monetary value of the critical ocean services that we stand to lose."

Regarding overfishing, the draft executive summary has this to say—

The world’s marine capture fisheries are in a severely troubled state. The FAO estimates that 85 percent of fish stocks are fully exploited, overexploited, depleted or recovering from depletion.

Harmful subsidies continue to contribute to the overcapacity of the global fishing fleet, inconsistencies in regional fisheries management organisations (RFMOs) lead to poor regulation, and illegal and unreported fishing — estimated to drain USD 50 billion from the sector every year — remains largely unabated; all threaten the long-term sustainability of these key resources.

The loss of marine biodiversity will be further exacerbated by global environmental change (GEC) impacts...

The goal of this study—to get people to pay attention to the value of healthy oceans—is laudable. It is truly unfortunate that it is necessary to frame the "value" of healthy oceans in economic terms. Thus we never escape the mode of thinking & behavior—striving for limitless economic growth—which is leading toward the extinction of marine life and wholesale destruction of ocean ecosystems.

I was interested in the assessed "costs" by 2100, and got more insight from the Stockholm Environment Institute's press release.

A key part of the study is a groundbreaking analysis on ocean economics, designed to quantify the costs of ocean degradation, which are often invisible in the cost-benefit analyses that guide policy. The analysis calculates the cost over the next 50 and 100 years respectively in terms of five categories of lost ocean value (fisheries, tourism, sea-level rise, storms, and the ocean carbon sink) under high- and low-emissions scenarios [table below from the executive summary].

By 2100, the annual cost of the damages from ‘business as usual’ emissions, projected to lead to an average temperature rise of 4°C, is estimated to be 1.98 trillion USD, equivalent to 0.37 per cent of future global GDP.

A rapid emission reduction pathway that limited temperatures increases to 2.2°C would ‘save’ (i.e. avoid) almost 1.4 trillion USD of those damages...

Let's stop right there. The "annual cost" of the damage to the oceans in a "business as usual" scenario in which temperatures rise 4°C is estimated to be 1.98 trillion dollars in the year 2100, which is 0.37% of future global GDP. I took the liberty of calculating the estimated size of the global economy (in dollar terms) 87 years from now. In the year 2100, the estimated size of the global economy (GDP) in dollar terms will be

• $535,135,000,000,000 (or, a little over 535 trillion dollars)

Yes, you read that correctly. By way of comparison, it helps to know that the size of global GDP in 2010 was a mere $61,963,429,000,000 (61.963 trillion dollars) according to the IMF. The assumed annual growth rate is about 2.4%. These researchers assumed the global economy will be roughly 10 times the size it is now in 2100. And consider this—if human impacts on the ocean continue unabated for 87 years, the future cost of healthy oceans is only 3.2% of current global GDP.

Now, if the Earth's average surface temperature were to rise 4°C by 2100, a global economy resembling the current one can not and therefore will not exist. But the environment and the economy are routinely assumed to function independently of one another, as we with the oceans calculation.

If the cost of neglecting the health of the oceans in all the years leading up to 2100 is merely 1.98 trillion dollars per year, and your global GDP is assumed to be 535 trillion dollars by that time, why in hell would anyone give a damn about taking care of the oceans?  In so far as the cost of doing so is a pittance, a mere drop in the future wealth bucket, these researchers might as well have said that healthy oceans don't matter at all.

So we must regard this study as yet another manifestation of the usual delusional fantasy which pervades human thinking about the future. Let us quote these researchers one more time, continuing from above.

“These figures are just part of the story, but they provide [an] indication of the price of the avoidable portion of future environmental damage on the ocean – in effect the distance between our hopes and our fears,” says Frank Ackerman, director of the Climate Economics Group at SEI-US. “The cost of inaction increases greatly with time, a factor which must be fully recognised in climate change accounting.”

Let me repeat two quotes from my previous posts on the oceans.

If the ocean goes down, it's game over
   — Alex Rogers, from stateoftheocean.org

Man is not going to change, and the sea is going to be dead
   — quote from the movie The End of The Line

The economic value of healthy oceans can be summed up in one word: incalculable.

The distance between Frank Ackerman's hopes and fears is 0.37% of global GDP in the year 2100. The distance between my hopes and fears regarding the oceans is as great as the breadth of the Pacific Ocean itself. If the oceans go down, it's game over for the human species.

This Google query will give you a list of my work on the oceans.

Bonus Video — trailer for The End Of The Line

 

Comments

[Diogenes]

Anyone who wishes can watch the full documentary on Hulu.

You get to pick your 30 sec ad poison first...

http://www.hulu.com/watch/197316