Date(s): November 13, 2012, 10:00-11:30am

Location: Room 4128, EPA West Building, 1301 Constitution Ave., NW, Washington, DC

Contact: Carl Pasurka, 202-566-2275

Presenter(s): James Palardy, Ann Speers, Elena Besedin, Paul Laskorski, Ellen Post (Abt Associates, Inc.)

Description: Coral reefs provide habitat for more than a million species, and are important for the economic well-being of more than 500 million people. Reef building corals, however, persist only within a narrow range of environmental conditions that are projected to change through time as a consequence of global warming and ocean acidification, both driven by anthropogenic carbon dioxide emissions. To date, these changes have not been incorporated into estimates of the social cost of carbon. To begin addressing this gap, we developed an integrated ecological-economic model to estimate the value of lost ecosystem services provided by coral reefs relative to baseline conditions, between 2010 and 2300.

First, we designed a spatially explicit, stochastic, Monte Carlo simulation-based biological model with user-defined inputs for several evolutionarily relevant variables to simulate the long-term effects of CO2 on coral reef area. Each of the Representative Concentration Pathway (RCP) scenarios to be used in the 5th IPCC Assessment Report was modeled. With default biological model assumptions, median simulations of coral area remaining in 2100 ranged from over 100% under RCP 2.6 to under 7.38% remaining under RCP 8.5. Under less optimistic biological assumptions, fewer than 35% of coral reefs remained in 2100 under RCP 2.6, with near global extinction of coral reefs (<0.1% area) under RCP 8.5.

To quantify the economic value of lost ecosystem services, we estimated changes in the quantity of commercially-valuable, reef-dependent seafood landings, and the quality of tourists’ reef recreation days. To value changes in the future fisheries landings we developed a model of global demand for reef-dependent fish species. The economic impacts on reef-dependent fisheries are estimated as the annualized value of changes in consumer surplus from 2010 to 2300. The lost value of recreational services was estimated using a meta-analysis of coral reef valuation studies (Londono-Diaz & Johnston, 2010). The meta-analysis modeled willingness to pay for a day of reef recreation as a function of the percent of live coral cover on a reef and other reef characteristic and methodological variables. For both the fisheries and recreational models, a variety of user-defined inputs allow for model customization, while the Monte Carlo-based ecological inputs allow for measures of uncertainty. Overall, the economic value of lost coral reef goods and services varied greatly with biological assumptions and RCP scenario. Using default economic assumptions and a 3% discount rate, annualized losses under RCP 2.6 ranged from $17 million to $4.11 billion, with median annualized losses projected to be $471 million under default biological assumptions. Under RCP 8.5, annualized losses ranged from $1.71 billion to $6.80 billion, with median losses under default biological assumptions projected to be $3.44 billion.

Seminar Category: Climate Economics