Australia’s Great Barrier Reef natural wonder valued at A$56 billion
The Great Barrier Reef, one of the seven natural wonders of the world, is valued at A$56 billion, while creating 64,000 jobs. New economic analysis shows that the Reef, which scientists now say may be "dead" in its current form, is critical to the Australian economy, directly boosts employment by 39,000 jobs. The decreasingly profitable coal industry is meanwhile treated as a spending priority despite contributing to damage of the Reef.
The Great Barrier Reef (GBR) spans more than 2,300 kilometres, and is of one the world’s most biodiverse regions. For Australia, it is one of the most important cultural and natural entities in the country; and a new report from Deloitte sheds light on its current value seen from an economic standpoint.
‘At what price? The economic, social and icon value of the Great Barrier Reef’ is a timely reminder of the competing interests in Australia, and globally, surrounding the future of the planet. The GBR can no longer be saved in its present form, experts have finally conceded, with future efforts focusing on preservation rather than saviour of the World Heritage Site. The GBR had become increasingly vulnerable, partly because of what scientists cited as the “extraordinary rapidity” of climate change, which has led to the bleaching of 95% of areas surveyed. The damage is so severe that some have declared the eco-structure "dead" at 25 million years old.
The Australian government meanwhile continues to invest heavily in the coal industry – despite the world increasingly turning away from the fossil fuel. New clean energy infrastructure and improved power efficiency technologies mean coal’s legacy of negative externalities, including those that now jeopardise the Reef, are no longer considered a worthwhile economical trade-off by many nations.
Value of the GBR
The survey of Australians found that climate change is viewed as the biggest threat to the future of the GBR, as cited by 44% of respondents, followed by 23% that say mining is the biggest threat. Overuse of the iconic natural wonder is cited by 13% of respondents, while impact from farming on water quality comes in at 6%.
Respondents were also asked whether they would pay to protect the GBR, and what their main reasons for that sentiment would be. 70% of respondents said that it should be protected so that future generations could be able to visit it. 60% of respondents said that it is morally and ethically right to protect it, while 59% said it is important to the planet.
The biodiversity of the GBR was sited by 58% of respondents as a reason to protect the sight, while 48% cited economic reasons. Similarly, from global respondents, economic reasons were situated near the bottom, at 24%, while importance to the plant and biodiversity came in at the top of the list.
In terms of value for Australia, the GBR is estimated to have a value of $56 billion, supporting more than 64,000 jobs directly and indirectly, while generating around $6.4 billion in returns to the Australian economy – many of which stem from tourism dollars, brought into Australia.
The coal contradiction
The recent report into the economic value of the GBR, appears to present the Australian government with a dilemma. One of the country’s largest exports, is a major contributor to the destruction of the GBR. The country, which has vast areas well suited to generating renewable energy, has so far continued to focus on coal – even while the long-term viability of investment in coal, when viewed against the targets of the Paris Agreement, means that stranded assets are likely to ensue.
One of Australia’s key arguments for increased coal exports to India, and the new mine, is India’s booming steel industry which is massive consumer of coal. However, if India chooses to introduce electricity based arc furnaces over coal fuelled blast furnaces, the risk will have been for no economic gain, while jeopardising the GBR – which contributes more sustainably to the Australian economy anyway. The coal industry therefore has a vested interest to create demand for its product in India - irrespective of the negative externalities – though with changing attitudes to renewables now increasingly shaping the global economy, that could prove easier said than done.
Internationally, the movement away from coal is growing in pace, with China scrapping 120 planned and being built plants, while India has indicated it will scrap 14 GW worth of such plants. A McKinsey report finds that peak coal is likely in 2020, although, given the pace of change, it may arrive before then. Increased investment and borrowing into the sector is likely to introduce considerable risks, both for natural wonders, such as the GBR, as well as the Australian economy and global brand. This is aside from more systematic global economic risks for fossil fuel investors and creditors, as the world works increasingly quickly to meet its Paris Agreement targets.
