By Caroline Fouvet
The Great Barrier Reef (GBR) is one of the world’s most famous natural wonders and attracts over 40 million visitors per year in Australia. Not only is it a powerful emblem for the country, but the GBR also hosts an outstanding ecosystem comprising about 1,500 species of fish, 400 species of coral, 4,000 species of mollusc and some 240 species of birds. What’s more, reefs contribute to coastal hazard risk reduction by buffering wave energy and preventing coastal erosion.
Yet, a combination of threats, spearheaded by climate change, endangers the long-term existence of the GBR and all coral reefs across the globe. On top of water pollution and illegal fishing, the absorption of large CO2 amounts into the ocean severely affects coral reefs. Consequently, a warmer ocean contributes to coral bleaching and spreads infectious diseases while its acidification decreases corals’ growth rates.
To remedy the situation, would putting an economic value on these natural marvels succeed in drawing global attention to the issue? That’s the purpose of a recent Deloitte study that estimated the GBR to be worth $56 billion. This indicative figure captures the GBR’s economic and social value in order to elevate its significance in decision and policy-making. Concrete insights show that the reef contributed 64,000 jobs to the Australian economy in 2015-2016 and that tourism alone derived $29 billion in value.
Although it is hard to assess whether monetising coral reefs has a direct impact on their conservation, tangible figures highlight how environmental preservation is beneficial to human activities and development. So, if we are to price coral reefs, why not also bring in the insurance industry to cover them, as we do for other economic assets? This idea is actually currently being implemented in Mexico, where an insurance scheme has been set up to protect the reef off the Cancún coast. Local tourism-dependent organisations contribute between $1 million to $7.5 million to a collective pot, which will be used to cover storm-induced damages to the reef system.
This scheme, run by Swiss Re and the Nature Conservancy with backing from the Mexican government, illustrates how a public-private partnership can achieve complementary economic and environmental benefits. Trying to understand the economic value of natural resources can help decision makers from the public and business sectors better manage them and improve their resilience to climate change.
However, these approaches are new and the world has already lost half of its coral reefs over the past 30 years. As scientists expect 90% of global corals to be lost by 2050 if no drastic actions are taken, all issues that affect corals in addition to climate change impacts, such as overfishing and run-off from coastal areas, should be seen as priorities now.