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The Economic Impact Of Ocean Acidification On Coral Reefs

Author

Listed:
  • LUKE M. BRANDER

    (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands;
    Division of Environment, Hong Kong University of Science and Technology, Hong Kong)

  • KATRIN REHDANZ

    (Kiel Institute for the World Economy, Kiel, Germany;
    Department of Economics, Christian-Albrechts-University of Kiel, Kiel, Germany)

  • RICHARD S. J. TOL

    (Department of Economics, University of Sussex, United Kingdom;
    Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands;
    Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands)

  • PIETER J. H. VAN BEUKERING

    (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands)

Abstract

Because ocean acidification has only recently been recognized as a problem caused byCO2emissions, impact studies are still rare and estimates of the economic impact are absent. This paper estimates the economic impact of ocean acidification on coral reefs which are generally considered to be economically as well as ecologically important ecosystems. First, we conduct an impact assessment in which atmospheric concentration ofCO2is linked to ocean acidity causing coral reef area loss. Next, a meta-analytic value transfer is applied to determine the economic value of coral reefs around the world. Finally, these two analyses are combined to estimate the economic impact of ocean acidification on coral reefs for the four IPCC marker scenarios. We find that the annual economic impact rapidly escalates over time, because the scenarios have rapid economic growth in the relevant countries and coral reefs are a luxury good. Nonetheless, the annual value in 2100 in still only a fraction of total income, one order of magnitude smaller than the previously estimated impact of climate change. Although the estimated impact is uncertain, the estimated confidence interval spans one order of magnitude only. Future research should seek to extend the estimates presented here to other impacts of ocean acidification and investigate the implications of our findings for climate policy.

Suggested Citation

  • Luke M. Brander & Katrin Rehdanz & Richard S. J. Tol & Pieter J. H. Van Beukering, 2012. "The Economic Impact Of Ocean Acidification On Coral Reefs," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 3(01), pages 1-29.
  • Handle: RePEc:wsi:ccexxx:v:03:y:2012:i:01:n:s2010007812500029
    DOI: 10.1142/S2010007812500029
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    References listed on IDEAS

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    1. Seán Lyons & Karen Mayor & Richard S.J. Tol, 2008. "Environmental Accounts for the Republic of Ireland: 1990-2005," Papers WP223, Economic and Social Research Institute (ESRI).
    2. Daiju Narita & Katrin Rehdanz & Richard Tol, 2012. "Economic costs of ocean acidification: a look into the impacts on global shellfish production," Climatic Change, Springer, vol. 113(3), pages 1049-1063, August.
    3. Frances Ruane & Xiaoheng Zhang, 2007. "Location Choices of the Pharmaceutical Industry in Europe after 1992," The Institute for International Integration Studies Discussion Paper Series iiisdp220, IIIS.
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    Cited by:

    1. Daiju Narita & Hans-Otto Poertner & Katrin Rehdanz, 2020. "Accounting for risk transitions of ocean ecosystems under climate change: an economic justification for more ambitious policy responses," Climatic Change, Springer, vol. 162(1), pages 1-11, September.
    2. Narita, Daiju & Rehdanz, Katrin & Tol, Richard S. J., 2011. "Economic Costs of Ocean Acidification: A Look into the Impacts on Shellfish Production," Papers WP391, Economic and Social Research Institute (ESRI).
    3. Speers, Ann E. & Besedin, Elena Y. & Palardy, James E. & Moore, Chris, 2016. "Impacts of climate change and ocean acidification on coral reef fisheries: An integrated ecological–economic model," Ecological Economics, Elsevier, vol. 128(C), pages 33-43.
    4. Ngoc, Quach Thi Khanh, 2019. "Assessing the value of coral reefs in the face of climate change: The evidence from Nha Trang Bay, Vietnam," Ecosystem Services, Elsevier, vol. 35(C), pages 99-108.
    5. Chang K. Seung & Michael G. Dalton & André E. Punt & Dusanka Poljak & Robert Foy, 2015. "Economic Impacts Of Changes In An Alaska Crab Fishery From Ocean Acidification," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(04), pages 1-35, November.
    6. Daiju Narita & Hans-Otto Poertner & Katrin Rehdanz, 0. "Accounting for risk transitions of ocean ecosystems under climate change: an economic justification for more ambitious policy responses," Climatic Change, Springer, vol. 0, pages 1-13.

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    More about this item

    Keywords

    Ocean acidification; coral reefs; economic value; Q51; Q54; Q57;
    All these keywords.

    JEL classification:

    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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