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Does Coral Reef have a price?

Coral Reef

We managed to navigate the world based on a value system that classified and set hierarchies. This structure is embedded in us to a point that our society ethics that govern our behavior are called core values.

But why is this concept important and what relationship does it have with Coral Reef?

Understanding how humans assigned values is primordial to impulse Coral Reef management and avoid subjectivity. There is no inherent value in things- life- time, but creating a rank, classifying, and attaching some sort of value make the mental decision process easier. But how does this work? Can we do this objectively?

There are some mathematical models that try to work within this scope, one of the most successful has been Game Theory. This theory addressed the decision process as a zero-sum game where the participant’s gains or losses are balanced. In other words, the benefits of one player are equal to the expense of the other player. As we mention, this theory works in logic, social science, computers, and systems. But do not despair, it is not complicated.

To do this objectively, we need to have a means of quantifying it; thus, we can value Coral Reef in two separate ways, one is biological, and the other is economical. This is where game theory comes to play! But enough of that, let’s keep it simple, shall we?

From the start, we know that what is unknow has a value of zero; scientist, already understand that we need a healthy Coral Reef for many biological reasons which is adding “value” to this “resource” (note that Coral Reef terms change to resource), but not everything is known about these habitats. So, the total economic value will depend on many components, some of them are intangibles.

This term: resource, refers to “use,” and nonuse values. It could be confusing; but what we are doing is applying hierarchy and categorizing. For example: Coral mining is a direct use of this resource, but also scuba diving. The difference between them is that the former depleted the ecosystem if it is not managed. An indirect use value example is storm surge protection or fish nursery area.

A nonuse value stands for how much in a monetary way a society is willing to pay to keep the Coral Reef for the future, just so they know it is there even if there is no plan to use it now. One example of this is biodiversity.

The other type of value is the opinion value, which is difficult to quantify but added to the overall value of the Coral Reef.

Now that we have a better perspective of how we value this resource, raise the problem of what monetary price to assign to each party.

One thing to note is that economic analysis can’t value biodiversity per se, that’s in the realm of biology. But in the end, the overall economic calculations could be a powerful tool for obtaining financial funds from the government.

In terms of direct use, it is easy to identify financial returns within the market value, because what it’s measure is the transaction value within the gross domestic product. Obviously, this will change radically where there is a high revenue from tourism, or flawed areas, etc. This assessment needs to be done case by case. For example, poor countries have a tendency of extremely bad Coral Reef management, but its livelihood mostly depends on the reef. Sounds a dichotomy, but this is how humans behave. This is explained in game theory. The Coral Reef has an inherent value (biodiversity) that serves eventually at the expense of today’s financial return. That is why policy makers should consider all economic activities attached to the Coral Reef.

We see this conflict when a decision is divorced from one of the economic players, a distinctive case is destructive fishing practice that affects other economic activity of the reefs, like tourism. If the established policy is taking only the tourism site without giving the fishermen other means to carry out fishing at the level they are used to and in which many families depend on, the situation is worseness. Not only the fishermen will not comply the law, but the fishermen’s opinion-value of the coral reef will be severe effect it, diminishing its overall value. Who benefits, who loses?

Other cases, like the Napoleon Wrasse live trade stock for the Chinese market, the numbers of individuals affected in the society are few, but their private “gain” (financial return) is large. So, to elaborate better political decision we need to know the numbers of individuals involved and their economic situation, again: Who benefits and who loses?

The economic term of the postponed use of the reef is defined as deferred-use value. This concept increases the value of the reef. Public information awareness is important in helping to create this value, it is no coincidence that the Cousteau Society used dolphins as symbols. Simply put, those images help to raise money.

As we explained, economic values could be detached from reality, for example a coral reef that is constantly visited for recreation with an active population will appear to have a higher value than a reef on a remote location, but scientifically we know that remotes areas are extremely important for the health of the entire world. That is a good reason for public awareness and having science literate politicians.

Biodiversity and biological mass are key parts in this puzzle because we may obtain future products from it, in medicine and in other industries. We only grasp the surfaces of what we have and, we recently understood the role of the coral reef in the scope of the climate and food change.

We need more than ever to take care of these fragile ecosystems. In economics terms, preserve the future value of the reef.

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