Economists Say the Great Barrier Reef Is 'Too Big to Fail'

If Australia doesn't do something to stop the natural wonder from deteriorating, it could cost the country an estimated $42 billion.

by Maddison Connaughton
Jun 26 2017, 3:16pm

Image via Flickr/Tchami

This article originally appeared on VICE Australia.

After an extensive six-month study, Deloitte Access Economics has come up with a price tag for the Great Barrier Reef: AU $56 billion [$42 billion USD]. The figure takes into account the "economic, social, and iconic value" of the reef, including some 64,000 direct and indirect jobs it supports.

In the scheme of Australia's economy, that's significant. The report estimates the reef generates some AU $6.4 billion [$4.8 billion USD] every year, with more than half of the revenue going directly to the State of Queensland.

"This report sends a clear message that the Great Barrier Reef—as an ecosystem, as an economic driver, as a global treasure—is too big to fail," said Steve Sargent, director of the Great Barrier Reef Foundation, which commissioned the report.

But the Great Barrier Reef is failing.

Aerial surveys by James Cook University professor Terry Hughes have shown back-to-back mass bleaching events have decimated the northern reef. "In the north, I saw hundreds of reefs—literally two-thirds of the reefs were dying and are now dead," Hughes said back in March. There's also evidence that 2017's bleaching has started to affect the middle reef as well.

These bleaching events happen when the coral gets stressed, expelling the algae that gives the reef its color. While water quality, land management, and overfishing do put stress on the reef, the biggest driver is climate change. In 2017, Hughes and scores of other scientists published a study directly linking the bleaching of the reef to global warming.

"The Great Barrier Reef is the canary in the coal mine for climate change," Basha Stasak of the Australian Conservation Foundation (ACF) told VICE.

Australia's Reef 2050 plan largely ignores the issue of climate change, and environmental groups like the ACF have serious concerns about the government pushing ahead with coal mining throughout the region—especially in Queensland's Galilee Basin, just inland from the Great Barrier Reef.

"The choice we really face now is that we cannot have a healthy reef and coal," Stasak said. "If we keep burning coal, the bleaching will continue."

Coral reefs or coal mines?

Image via Wikimedia Commons

The first major project in the Galilee Basin—Indian power giant Adani's Carmichael coal mine—will not only be Australia's largest coal mine, but also the biggest in the Southern hemisphere. Climate groups argue the Carmichael will burn through a third of the world's remaining carbon budget—the level of emissions we can still put out while managing to avoid the kind of catastrophic climate change that would completely destroy the reef.

The Carmichael is just the beginning; already, there are nine mega-mines proposed for the Galilee Basin. As Anna Krien noted in the Quarterly Essay, "at full production, the Galilee Basin is expected to double Australia's exports to more than 600 million tons a year." This would make Australia the largest coal exporter in the world.

Governments at both a state and federal level strongly support Adani's plans. Australia is considering supplying the power giant with an AU $1 billion [$760 million USD] loan for the project. Visiting India earlier this year, Malcolm Turnbull told Adani's CEO and other executives that local issues would be "fixed" to prevent legal challenges from the land's traditional owners—the indigenous Wangan and Jagalingou peoples on the site of the Carmichael, and the Juru people at Abbot Point, a port from which Adani plans to ship its coal.

Those in favor of the Carmichael coal mine argue that it would raise some AU $22 billion [$16.7 billion USD] through revenue and taxes, generating 10,000 jobs. In nearby areas like Townsville, where unemployment is pushing 10.7 percent, that's an appealing prospect. However, Adani's own legal expert, Jerome Fahrer, told Queensland's Land Court that, realistically, the figures would be much lower—probably only around 2,400 at the peak of the mine's construction. And, as Stasak points out, these estimates don't take into account the 64,000 jobs on the reef that would be threatened.

"[Deloitte's] report is really just confirming what we've always known, which is that the reef brings incredible value to Australia and the world not just in terms of the life it supports... but also in terms of the jobs it brings to the Australian economy," Stasak said.

"The mining industry is in structural decline; at some point, it'll end," she added. "The reef could provide jobs and economic boost for as long as we're willing to support it."

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