Comments due by Oct 28, 2017
(A$: Australian dollar)
Deloitte Access Economics has valued the Great Barrier Reef
at A$56 billion, with an economic contribution of A$6.4 billion per year. Yet
this figure grossly underestimates the value of the reef, as it mainly focuses
on tourism and the reef’s role as an Australian icon. When you include aspects
of the reef that the report excludes, such as the ecosystem services provided
by coral reefs, you find that the reef is priceless. Putting a price on the
Great Barrier Reef buys into the notion that a cost-benefit analysis is the
right way to make decisions on policies and projects that may affect the reef.
For example, the environmental cost of the extension to the Abbot Point coal
terminal can be compared to any economic benefits. But as the reef is both
priceless and irreplaceable, this is the wrong approach. Instead, the
precautionary principle should be used to make decisions regarding the reef.
Policies and projects that may damage the reef cannot go ahead. How do you value
the Great Barrier Reef? The Deloitte
report uses what’s known as a “contingent valuation” approach. This is a
survey-based methodology, and is commonly used to measure the value of
non-market environmental assets such as endangered species and national parks –
as well as to calculate the impact of events such as oil spills. In valuing the
reef, surveys were used to elicit people’s willingness to pay for it, such as
through a tax or levy. This was found to be A$67.60 per person per year. The
report also uses the travel-cost method, which estimates willingness to pay for
the Great Barrier Reef, based on the time and money that people spend to visit
it. Again, this is commonly used in environmental economics to value national
parks and the recreational value of local lakes. Of course, all methods of
valuing environmental assets have limitations. For example, it is difficult to
make sure that respondents are stating realistic amounts in their willingness
to pay. Respondents may act strategically if they think they really will be
slugged with a Great Barrier Reef levy. They may conflate this environmental
issue with all environmental issues. But more importantly, the methodology in
the report leaves out the most important non-market value that the reef
provides, which are called ecosystem services. For example, coral reefs provide
storm protection and erosion protection, and they are the nurseries for 25% of
all marine animals which themselves have commercial and existence value. The
Deloitte report even cites (but does not reference) a 2014 study that values
the ecosystem services provided by coral reefs at US$352,249 per hectare per
year. The Great Barrier Reef Marine Park covers 35 million hectares with 2,900
individual reefs of varying sizes. This means the ecosystem services it
provides are worth trillions of dollars per year. That is, it is essentially
priceless. The problem with putting a value on the Reef Valuing the environment
at all is contentious in economics. Valuation is performed so that all impacts
from, say, a new development, can be expressed in a common metric – in this
case dollars. This allows a cost-benefit analysis to be performed. But putting
a price on the Great Barrier Reef hides the fact that it is irreplaceable, and
as such its value is not commensurate with the values of other assets. For
instance, using Deloitte’s figure, The Australian newspaper compared the reef
to the value of 12 Sydney Opera Houses. But while they are both icons, the
Opera House can be rebuilt. The Great Barrier Reef cannot. Any loss is
irreversible. When environmental assets are irreplaceable and their loss
irreversible, a more appropriate decisionmaking framework is the Precautionary
Principle. The Precautionary Principle suggests that when there is uncertainty
regarding the impacts of a new development on an environmental asset, decision
makers should be cautious and minimise the maximum loss. For example, if it is
even remotely possible that the extension to the Abbot Point coal terminal could
lead to massive destruction of the reef, then precaution suggests that it
shouldn’t go ahead. Assigning a value to the reef might still be appropriate
under the Precautionary Principle, to estimate the maximum loss. But it would
require the pricing of all values and especially ecosystem services. While the
Precautionary Principle has been much maligned due to its perceived bias
against development, it is a key element of the definition of Ecologically
Sustainable Development in Australia’s Environment Protection and Biodiversity
Conservation Act 1999. For a priceless asset like the Great Barrier Reef, it is
perhaps better to leave it as “priceless” and to act accordingly. After all, if
the Precautionary Principle is ever going to be used when assessing Ecologically
Sustainable Development, in contrast with cost-benefit analysis and valuations,
it is surely for our main environmental icon. Ultimately, the protection and
prioritisation of the Great Barrier Reef is a political issue that requires
political will, and not one that can be solved by pricing and economics.
18 comments:
DeShawn McLeod
The most confusing aspects of environmental economics are the valuation theories used to quantify or evaluate environmental assets in terms of capitalism. If, for example, the Great Barrier Reef is “priceless” then that must translate into any environmental asset being “priceless” because of its contributions to human society. It seems these valuation theories are for those who do not understand how valuable and necessary the environment is and to convince the ignorant that environment is essential.
What we’ve been learning in this course so far touches on the mainstream ignorance to the well being of those who inhabit this planet. It’s the technical way of saying, life is precious for those who don’t ultimately see it that way. Instead of traditional economics, which does analysis on maximizing consumer and producer surplus, environmental economics considers the larger scope of humanity in longer periods of time. That's a more difficult task which, I think, requires more time and effort to effectively convey the overall idea this type of economics explores.
In regards to the Reef, I think environmental economics would sink in more if the public was educated on how their lives are affected by things they cannot see or have access to. The response of the public to evaluate their thoughts on the environmental would have a more educated, greater impact because people are aware. With all the environmental economics in the world, if the collective thought has not shifted to change, the work of people looking into the future will be disregarded.
I think putting a price on the reef can debunk the idea that the reef is priceless and irreplaceable. Yes, the price that is listed in the article is high but, the reef is something that can never be replaced. It's apart of the environment and I think that alone is irreplaceable. I think that the argument in the article comparing the Opera House to the reef is crucial because it gives a great idea that one is simply way more important and replaceable than the other. The Great Barrier Reef is not only something pretty to look at but, it regulates so many different living beings that belongs to it so, putting a price on it leaves it vulnerable for decisions that we should be more mindful of. There isn't anything else like the reef and it is impossible to build a new one due to the fact that we have little to no control over nature. For example, the reef has drastically changed from how it used to be to what it looks like today. A large percentage of the reef has been declared dead and scientist are scrambling for ways to try and save it. Putting a price on something that is irreplaceable can eventually cause it's fate and with the way the reef has been declining in its physical state, it doesn't seem too far way from now.
I value the great barrier reef greatly because I feel as if it is one of the greatest gifts that earth has received environmental wise. I remember learning about it when I was a child and being amazed at it's vibrant colors and the different species that lived on the reef. It was something that I remembered the world valuing more than it does now. It's sad to see that the reef has hit such a decline and improvement has been minimal or come to a standstill.
When reading about valuation, I find a couple of things questionable. For example, how direct are the numbers used to measure the price of the reef? In the article, it stated that the numbers can't really be exact so, how can a price come about? In addition to that, why put a price on it if it's not definite? This can be seen as a huge problem in environmental economics because valuation is something that is constantly brought up when it comes to the environment. Not everything in the environment needs to have a price in order for it to be deemed valuable. I hope in the future, this is improved due to the fact that this won't be the last time that something like this happens.
Olivia Gonzalez
Our money-centric society tries to add ad dollar number to the worth of things in order to give them value. This article talks about placing a value on one of world's greatest natural occurrences, the Great Barrier Reef. Deloitte Access Economics has estimated that the value of the Reef is $56 billion. The article compares the Reef's value to 12 times that of the Sydney opera house, but then argues that the two cannot be compared. If the opera house is destroyed, it can be rebuilt. If the reef continues to deteriorate at the rate that it is now, it will disappear and never be able to be replaced.
This goes for many of Earth's most valuable resources. Things like rainforests, clean air and water, and the Ozone layer will never be able to be saved after they disappear. We must be conscious of the value of the earth and how no amount of money will be able to revitalize them after they are killed.
DeShawn/Alexis/Olivia
You make a great observation when you say/imply that if an asset is priceless then how can we attach a price to it? That is precisely why deep ecologists refuse to participate in the game of mainstream environmental economics.
Yang Peidong
This post tells about the difficulty of valuing environmental issues. In most economic cases, experts tend to use cost –benefit analysis to evaluate a product or a program. This method is quite effective and useful in daily life. However, the valuation of environmental issues is much more complex. First of all, many potential benefits that a certain animal specie or a plant are hard to measure, not to mention to put a price. The example of Great Barrier Reef is illustrative in this point. Great Barrier Reef brings huge profits through travelling industry and also serves as home for countless fish in the sea, providing storm protection and erosion protection. These profits brought to the nature can’t be directly turn into visible interests to human beings, such as commodities or money, but no one can deny that they are all vital to the ecosystem and to the human’s living environment. We can’t make a survey to those fish about how much do they think they will pay for such protection. Secondly, environmental issues are mostly irreplaceable. Some people suggests that Great Barrier Reef is worth 12 Sidney Opera House. But Opera House can be rebuilt and Great Barrier Reef can’t. Plus, although it is a great pity for people lose Opera House or any other historical sites, the fundamental existence of people won’t be directly influenced. Otherwise, if the Great Barrier Reef is destroyed, the ecosystem will absolutely be disturbed, threatening the existence of all human beings. Therefore, in the environmental issues, it is better for people to hold the belief that all environmental objects are priceless, thus, people will always put environmental protection in priority to any commercial interests, preventing unpredicted bad natural disasters happen in the future.
Paola Idrovo
It seems incredibly futile to attempt to assign monetary values to aspects of our environment that are so clearly unique. It is frustrating to see our society forcing ecology to fit into our economic system instead of reworking the economic system so that it works in cooperation with ecology, prioritizing its integrity. All of the metrics mentioned in this article for valuing the Great Barrier Reef fall short in some way. The precautionary principle is mentioned, but never actually applied when significant economic interest is at stake. Or it seems, in the context of this conversation the incredible value of the ecosystem services the Great Barrier Reef provides is ignored. It seems we will only appreciate the actual and total value something like the Great Barrier Reef provides once it is entirely destroyed or gone. Until then, developers will continue to be enticed by the immediate profit they experience.
Jordi Isidor
Although it's kind of hard for me, an economic student, to accept the fact that economies on issues as the preservation of the Great Barrier Reef is not the best or most efficient science to base a decision on. Although using cost-benefits analysis we can determinate an approximate valuation of the reef, even this value been over trillions of dollars, there is no way that politicians should based their decision on that analysis. As we have learned in this course there are different ways of measure the value of a environment space. However, the one thing that we should realize that although in some cases the value is low, we are not paying attention that those spaces are not replaceable and if we get rid of them, there is no way we can take them back. Looking at the environment should always be long term rather than short-term where the potential profit can be just a tiny percent of the potential profit in the long run.
The article states how that, and I quote “when you include aspects of the reef that the report excludes, such as the ecosystem services provided by coral reefs, you find that the reef is priceless”. In my view, by the Deloitte Access Economics valuing the Great Barrier Reef at $56 billion, with an economic contribution of $6.4 billion per year - while they have attached a numerical value to all the good this reef may do for them, they are blatantly overshadowing the big picture and long term benefits.
The issue with viewing the Great Barrier Reef as an asset is because it comes with the implication that it can always be liquidated for profit. In reality, in my opinion and also the one I can gauge from this article post, is that it is absolutely irreplaceable and it should not be touched regardless of the price that has been imposed on it. There is imperceivable values that come attached to natural recourses that simply do not mesh with any economic surveys done upon it.
Alison Zhabotinskiy
It is very sad and unfortunate to read about the deterioration of any natural environmental assets, especially one as important as the Great Barrier Reef. This post essentially brings up the same issue that we have been facing for a long time, except the issue is getting worse. Our environment is deteriorating, yet there is a lack of willingness to recognize the issue and to recognize the importance of these environmental assets such as the Great Barrier Reef. Essentially, putting a price on a priceless asset, just devalues the asset and creates a larger ignorance to the problem. In the comparison of the opera houses and the reef, though they mention both are “icons,” the opera houses can be described as iconic, but the reef is much greater than a spectacle and source of entertainment. The reef is an essential ecological and environmental asset, which provides numerous benefits, but will die as ignorance prospers. Attaching a price tag onto the reef is not a solution in saving and maintaining it.
Zixuan Song
When I looked at this article I was shocked by the Great Reef, it's so amazing as the part of the eco-system. The nature is so amazing to build the such great thing in the world. Natural environment assets can bring the huge profits and benefits to the humans. In the article, the Deloitte uses the willingness to pay by each passenger to compute the value of the Great Reef, however, this is the most inaccurate way to calculate the value of natural environmental assets. The natural environmental assets such as the Great Reef can not be rebuilt and obviously, such great natural environment assets can not be created by human production.
This is no doubt that we can not compute the value of these natural environmental assets by measuring the willingness to pay by passengers. These natural environmental assets is priceless and we need to enhance our ability to protect them.
Andresious Cyprianos
The greatest drawbacks to valuing environmental assets such as the barrier will always be the fact that it is firstly impossible to assign a monetary value to easy over 1 billion living species and secondly the bias that comes with evaluating what would be regarded as as a much more "precious" species e.g a coral vs a clam. In my opinion large ecosystems such as The Great Barrier Reef, The Amazon Rain forest and The Sundarbans should have the Precautionary Principle implemented at all times. Since the Precautionary principle aims at minimizing maximum loss, any developments on these ecosystems would almost automatically be halted. Because we can not fully understand the value or the natural ecological services provided by and ecosystem, we will never be able to successfully evaluate and contain any imminent losses that would be because of human activity.
I think its really unfortunate that all this decisions will always fall down to political leaders; they are influenced by the will to gain support and if citizens are not aware or do not comprehend the impacts of human activity on future generations then we will only have ourselves to blame.
Rebecca McMann
When it comes to nature there is no way to put a price tag on any of it period. Every piece of the earth has a purpose and a reason for being there. The Great Barrier Reef specifically holds a great amount in its own natural value on what it does for the area around it. The reef like it said in the article is a buffer for storms and also is a home to a multitude of species. To put any kind of number on a piece of the earth seems impossible. Monetary value on something that holds an irreplaceable value to present life and future life. Each and every ecosystem has its own responsibilities that cannot be remedied by humans. We can put dollar value on things such as trees or oil fro our purposes of making a business and marketing their uses fro us, and apply this as well to how the great barrier reef is a tourist spot for Australia, but no matter what the dollar value can never ever reach the amount that those items actually cost. The value of the barrier reef, the trees all over the world and every other part of the world can not be given dollar value because no matter what they are all irreplaceable. Just like with the food chain if one piece of the food web is taken out of the equation the backlash from it can be catastrophic, because everything is connected and when one piece is taken out the others will suffer and the next and the next until the whole thing is forced to come crashing down. Australia needs the reef because of storms and to keep the ecosystem of the water sound them living in a healthy environment. A precautionary principle aiming at lessening the maximum loses is a good thing. There is no way to fully understand how much vale these reefs hold to their ecosystems and the over all ecosystem of the world. Saving these areas connects to how we are a right now, need to physically see it kind of world. Elections and such no one wants to do now fro later, especially for a world that they most likely would never see. People want results now and on top of that want to apply the smallest amount of effort to getting what they want. If we do not learn to value our world as priceless we will just keep on letting it be destroyed and never be able to recover any piece of it and sign over our own self worth's to nothing.
Daniella Antolino
Reading this article gave me a clear and unfortunate outlook on how the environment is wearing down and these beautiful scenic areas aren't as scenic anymore. Especially the Great Barrier Reef. All of these articles have the same message of the environment being in danger and society is failing to see what is going on and how serious this issue really is. Putting a pice tag on something nature created is devastating there should never be a price tag on a piece of the earth that is so natural. It is there for a reason, theres a purpose for being in the environment and its surroundings. in more of these cases experts would most likely use cost benefit analysis to evaluate a product or a program. This method is useful in every day life and most definitely effective but in this case it wouldn't be. although this may be profitable and the traveling industry loves to see the Great Barrier Reef it is also there for the purpose of the fish and the animals surrounding it, so to take that for granted and putting a price on something to gain profit is doing much more harm to the situation. If the reef continues to deteriorate it can not be rebuilt like some other things. You can't replace the damage we are doing for no amount of money, society has to look at the impact it has rather than a money value. For example, Clean water, clean air, the ozone layer, rainforests if all of these things are gone we can not get them back, We have to look at the picture as a whole and how serious of a condition our environment is in and start making changes. We can start now but if society never does it can be too late and more priceless nature will be destroyed.
Jaquille Ward
It is extremely difficult to place a value on assets in the environment. I agree that the Great Barrier Reef is priceless because it is something natural to the environment and it is impossible to give it a price tag. Who are we to determine how much something natural to the earth is worth? It is bad enough that the Great Barrier Reef is endangered when it provides plenty benefits to those around it. You can't put a price tag on oxygen because it's a necessity provided by nature. The reef is irreplaceable and whatever damage done to them will be irreversible. It plays an important role in the ecosystem and should be left alone. The value of the reef is beyond a price tag because it's worth so much. People need to respect the environment enough to understand that nature and the things provided in the ecosystem cannot be bought.
Mehmet Karademir
I believe, we cannot put value for Great Barrier Reef. It is an amazing natural environment which is very important for the world. First of all, we cant put value for things that are created by naturally because they are part of ecological system and they are very helpful for the environment as well. Once we change that balance it would be impossible to bring it back. In the article, it is clear that we are not giving enough attention to our natural environments. Instead we are investing our money on different kind of things like example that was given in the article we are destroying the ecological system for our economic benefits. We can always gain economic benefits however, we would not be able to get back the natural environment that we destroy back. As a result, these types of environments are priceless and i believe we cannot put price tag to it. We should be much more careful when we are making decisions that will affect these natural environmental areas because it is impossible to bring it back once it is destroyed.
Yunjia Guo
This week's post discusses how the value of natural reserves are underestimate and the limitations of the valuing method by addressing the issue of the Great Barrier Reef.The value of the Great Barrier Reef is actually priceless not like other assets, and the function of it in the ecosystem is irreplacable. Also I feel even thought we know that this kind of assests are "priceless", I agree the "price" of them should be valued. Another important reason is that people should understand what we will lose if we are not treating the environment in the right way. Also, thinking about the loss, I wonder if we could value the natural assests by analyse how much will we cost to maintain the present situation when it is damaged and the cost of rebuilt them, while I do understand those are not able to be rebuilt. From these I understand that how important it is to protect our natural environmnet and to maintain the ecosystem. Moreover, since I just watched a video about the how our consumption of some fish hurts reefs and the ecosystem. I wonder how can environmental economists value the loss of natural assests by our daily behavior(with a price)?
Firstly, I agree with the conclusion of the article in that our natural resources, habitats, and beauty cannot be sufficiently assessed using any existing valuation system. Although critics will say that the Precautionary Principle is anti-development, I believe it is only perceived that way due to the true pricelessness of the environment's most prized possessions (i.e. the Great Barrier Reef; Niagara Falls; the Amazon Rainforest). The Great Barrier Reef is responsible for providing an ecosystem for tens of thousands of species. With it gone, these species would likely die off and, eventually, become extinct.
Bearing this is mind, there is no possible way of using valuation for assets such as this. The existing valuation methods in Economics are geared toward estimating the cost/benefits of material items and replaceable property. Given that Natural Beauty is often times, if not always, irreplaceable, there is no way to apply said methods to these types of assets. And so, it does end up that many will not place the same amount of pricelessness on these environmental treasures, and this is why they continue to be destroyed. Without a proper technique of quantifying the importance of species' lives, politicians/policy makers/economists will remain unaware of the true value of the Reef, and other environmental wonders like it.
Celena Danahy
This article poses a very interesting question: how do we place a value upon something that is ultimately priceless? In economics we are constantly trying to determine the value of good in order to run a cost-benefit analysis. With an environmental crisis at our hands, we are responsible for placing a value on natural resources that are limited and irreplaceable. The article made me question the relationship between the word value and the word money in economics. In economics we use monetary valuations because currencies are a set value that can be easily translatable around the world. In an ideal world, we would have a separate measurement for situations like the one mentioned in the article about the coral reefs.
Furthermore, I understand that most people cringe at the idea of placing a monetary value on the coral reef, but the reality is that there is no other way to then protect it within society. First of all, not everyone believes in the severity of the environmental crisis, while others simply do not care about the repercussions because they will not live to see them. People may not understand scientific research, but everyone talks money. By placing a high monetary value on the coral reef, companies are able to be held responsible for their negative impact on it.
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