[Coral-List] $33B Hawaii Reef Economics Value

Robert Bourke rbourke at OCEANIT.COM
Fri Nov 11 21:26:29 EST 2011

Coral Listers:
	I'm going to take some heat for this, so as a pre-amble I'm a private sector environmental consultant, who has worked in Hawaii for 35 years, was one of the first proponents of widespread MPAs in Hawaii, and consider myself a staunch protector of the environment.
	The NOAA funded study "Total Economic Value for Protecting and Restoring Hawaiian Coral Reef Ecosystems" which places a total value of the reefs in the Main Hawaiian Islands at $33.5B is seriously flawed due to some basic assumptions it has made.  As scientists with expertise in coral reefs and likely a great love of these ecosystems it is very important that we critically examine all studies - even those that appear to place a high value towards an argument we'd personally like to believe.  Poor science will do little to forward this important environmental cause.
	First, I'd like to put the study into perspective.  $33.5B per year is a lot of money.  A prior study (Cesar, 2002) examined the value of the fishing, recreation, research, boating, and intrinsic value of these same reefs came up with a value roughly 1% of the NOAA study.   The Hawaii State budget for 2009 was about $22B, and the Gross State Economic Product for 2009 was $66B.  Does it make sense that the value of protecting and restoring "only" the reefs is more than the entire state budget and about half the total economic output of the entire State?  $33.5B over 300,000 acres of reef works out to about $2.50 per square foot/year.  For those interested in mitigation for reef damage this figure will lead to some interesting calculations.
	The study conducted 3277 surveys, primarily by computer, to individuals in the contiguous 48 States.  Hawaii residents and Alaska residents were excluded from the study.  40% of those surveyed had no more than a high school education.  Half had never been to a coral reef.  Think about that. The first part of the survey educates the survey taker about the degraded condition of reefs in Hawaii, including a statement that 5-acres of reef are damaged every year by boat groundings (false) and that closing 25% of the reef to fishing would result in an increase from the present day 10% to 50% of historical fish stocks within 10 years (unsubstantiated).  The survey asks a bunch of questions to help characterize the survey taker and then asks two key questions (paraphrased):
	1) Would you pay an additional $X in Federal taxes to increase the MPAs in Hawaii to 25% coverage?
	2) Would you pay an additional $Y in Federal taxes to repair the annual 5-acres of reef damage?
The study allows a choice between $0 (no fix) to values from $45 to $170 per year per household to develop MPAs (X value), and a similar choice for reef repair varying from $35 to $135 (Y-value).  The average X and Y are then added together for a total willingness to pay of $287 per household.  This value times the number of households in the US (~117M) =$33.5B per year.    There are two problems with the numbers used to estimate X and Y.  A) these represent Monopoly Money figures for respondents.  They know this isn't really going to result in an increase to their taxes & these nice people have just shown lots of pretty pictures showing that things really need to get fixed, so "Why not select some value to fix their problem?".   To anyone who believes these values mirror real choices, I suggest you look at what has been happening to taxes across the country for causes (such as education) that are much more important and closer to home.  B) the choices given, even at the lowest levels, are much higher than reasonable.  Assuming that 5-acres of coral really did get damaged each year (an unsubstantiated claim), the lowest selective choice of a $35 per year tax increase to fix the problem would result in annual tax revenues of ($35 x 117M families) $6.4B, or roughly $18,000 per square foot of reef repaired! 
	The study appears to have been designed in such a way that it is almost guaranteed to yield an unrealistically high value for the coral reef resources.    

Bob Bourke  
-----Original Message-----
From: coral-list-bounces at coral.aoml.noaa.gov [mailto:coral-list-bounces at coral.aoml.noaa.gov] On Behalf Of Linwood Pendleton
Sent: Wednesday, November 09, 2011 8:32 AM
To: <coral-list at coral.aoml.noaa.gov>
Subject: [Coral-List] Marine Ecosystem Services Partnership

Folks.  Now that the Hawaii study has your attention, you may wish to start to plumb the wealth of studies on marine ecosystem services that exists.  Please visit our beta site http://www.marineecosystemservices.org/ to view (using a mapper like that developed for OBIS SEAMAP) basic information about marine ecosystem service valuations conducted across the globe.  These studies are compiled from a variety of extant and extinct databases from around the world.

Also, consider joining the Marine Ecosystem Services Partnership community of practice at www.ecosystemcommons.org<http://www.ecosystemcommons.org> - a great place to open this important discussion to those interested in marine ecosystem services writ large.

Best wishes,

p.s.  I also was not part of the team working on the Hawaii study.  So, my ability to answer questions about this study is limited.

Linwood Pendleton
Director of Ocean and Coastal Policy, Duke's Nicholas Institute Senior Economic Advisor, NOAA
blog: www.nioceans.org<http://www.nioceans.org>
Connect with the Nicholas Institute through our social media


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