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The Economic Impact of Coral Reefs

 6 min read / 

There are approximately 284,000 km2 of coral reef across the globe, which are made up of billions of living coral polyps. Previous studies estimate that coral reefs generate almost US$30 billion in net benefits to the global economy each year. The chart below demonstrates the global distribution of coral reefs per sq km:

 

http://www.wri.org/sites/default/files/reefs_at_risk_2-1.jpg

 

Economic values

Most notably, coral reefs generate revenue via tourism. The total global value of reef based recreation and tourism is estimated to be US$9.6 billion per year. Countries with reefs attract millions of scuba divers annually, who contribute by paying for equipment hire, qualifications and marine park fees and so forth. This direct expenditure in relation to reef-based activities also produces indirect tourist revenue from accommodation, travel and food. Numerous small island nations, such as the Maldives, greatly rely on this eco-tourism for their economic development.

A less obvious economic value of coral reefs is their provision of physical protection for coastlines. Many of the corals form solid calcium carbonate skeletons, which act as an effective method of dissipating destructive wave energy. Not only does the coral act as a regenerating protective barrier in regions prone to strong currents and harsh weather, but it also creates vast quantities of beach material to counteract the erosion of land. The protected land and waters benefit economically via tourism and cultivation of habitats for fisheries. Studies estimate that, in total, the net benefit of coastal protection afforded by coral reefs is around US$9 billion per year.

The economic value of fisheries related to coral reefs has been estimated as US$5.7 billion annually. In Southeast Asia alone, the value of the coral reef fisheries is £2.4 billion per year. In addition to harvest for consumption, the live reef fish trade, which serves the purpose of stocking aquariums and live food fish, is said to exceed $1 billion per year. South East Asia is the largest supplier of this trade, whereas the US is the main importer of aquarium ornamental fish.

 

The impact of the deterioration

While the economic benefits that arise from coral reefs across the globe are numerous, they should not be taken for granted. The decline of coral reefs will continue to have a significant economic impact upon the estimated 500 million people who rely on them for coastal protection, food, and revenue via tourism. Although reef deterioration is not a new phenomenon, renewed emphasis is being placed on increasing awareness of reef conservation with a “Coral Reefs: Secret Cities of the Sea” exhibit opening at London’s Natural History Museum later this month.

Deterioration of coral reefs threatens revenue streamed through tourism, but much of the decline is instigated by tourism itself; both through carelessness of tourists when in close proximity to coral and through irresponsible operation of their host facilities. Sediment from unregulated construction in coastal areas decreases light levels in the water and smothering the corals; approximately 20% of the world’s reefs are at risk from land-based sources of pollution.

Public awareness and campaigns are forcing businesses to take reef conservation into account. This month, announcements were made on Adani and GVK’s expansion of the Galilee Basin and Abbott Point Port in Queensland, Australia. Initially, the dredge material generated by the coal port expansion was to be disposed of in the Great Barrier Reef Marine Park, but, in order to accommodate conservation efforts, the centre of the new agreement is for this material to be disposed of on land. Annastacia Palaszczuk, Premier of Queensland, stated:

“Today my government sends a clear message: we can protect the Great Barrier Reef, and we can foster economic development and create jobs”

Rising population and advances in fishing technology have resulted in an increase in fishing effort. Not only has this led to over-fishing and trawling, but also an increase in the use of destructive techniques such as cyanide and blast-fishing. Alarmingly, over 80% of the globe’s shallow reefs are now over-fished. Although there may be the incentive of short-term financial gain for fishermen in using destructive methods, in the long term, these unsustainable techniques are physically damaging the reef ecosystems and are curbing the productivity of the reef fishing industry.

Global climate changes are leading to an increase in sea surface temperatures, bleaching and killing the coral. An increase in adverse weather and coastal storms highlights the economic value of the coastal protection provided by coral reefs. According to the NOAA Coral Reef Conservation Program, an absence of coral reefs near Florida would cause parts of the state to be submerged. In Belize, coastal protection afforded by reefs and mangroves provide an estimated $231 to $347 million in-avoided damages per year.

 

The future: mutual support

Currently, over 19% of the world’s reefs are permanently lost, with a further 15% at risk of the same fate in the next 10-20 years and 20% in the next 20-40 years. With over 30% of the world’s population living within 100km of the coast, several global economies depend heavily on the productivity of reefs.

However, awareness of preventing deterioration is creating an encouraging movement towards conservation, with five nations in the Micronesia region committing to conserve 30% and the Caribbean nations pledging to conserve 20% of their reefs by 2020. In addition, new methods of creating artificial reefs, such as Cancun Underwater Museum, are being developed to distract tourists from and give relief to their natural counterparts.

A focus on producing and using cleaner energy sources is a collective effort that is being treated with importance worldwide, particularly in the East, where both China and India are investing heavily in green energy. In the future, we may see more steps taken to protect coral reefs against local threats. There is the need for proper enforcement of development regulations to minimise run-off waste and advances towards creating ships that operate on cleaner fuel to reduce marine-based pollution. In addition, it is important that the fishing industry is properly regulated by creating marine protected areas to allow repopulation of species, as well as the elimination against destructive fishing methods.

In order to fund conservation efforts, it is likely that a relationship of interdependence will arise between reefs and their nation’s economies. This emphasises the importance of taking steps to maintain the health of the globe’s reefs, which will, in turn, support the multiple economies and industries that so heavily rely on them.

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