Recently, I mentioned the famous section of Sipadan's reef that was destroyed by a barge that devastatingly scraped against it. According to Andrea and Antonella Ferrari, two divers who saw the destruction the day of the event, "The damage is incalculable." That statement got me wondering: Is it really incalculable?
Today, I decided to prove that the damage was (a) calculable, and (b) tremendous. However, upon completing my math, I determined that the economic damage was not only quantifiable...it wasn't even all that great: the economic loss resulting from the destruction of that patch of reef is only $1511 annually.
Surprised? Yup, me too.
Here are my assumptions:
- Per the UN's recent valuation, a square mile of reef may be valued between $259,000 and $1.5 million annually. When those fairly substantial figures were announced in January, environmentalists rejoiced.
- Those figures include the revenues that flow into a country from tourism; other benefits of a reef (like shore protection or natural fisheries); and intangibles such as "spiritual and aesthetic appreciation (PDF)."
- Scuba News' readers recently ranked Sipadan as the 4th best dive site on the planet, so -- although the true economic benefits of the reef are probably smaller, considering diver access is severely limited in the area -- I gave the reef the very highest valuation.
- One of the people on the scene claimed, "The area of damage was at least the size of a couple of tennis courts." For easy math, I assumed "a couple" means 10.
- The actual playing dimension of a doubles tennis court is 78 by 36 feet. For quibblers who claim a tennis court is larger than its actual playing dimensions, please bear in mind that I generously assumed the damaged area was the size of 10 tennis courts.
And here's my math:
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Area of 1 tennis court (78*36) = 2,808 square feet
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Area of 10 tennis courts (2808*10) = 28,080 square feet
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1 square mile in square feet = 27,878,400
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Percent of a square mile that is 28,080 square feet = .10072314%
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Economic value of 1 square mile of pristine reef = $1,500,000
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Economic value of damaged section of reef = $1511 annually
What!? How can that be? It's Sipadan, you fool, one of the top dive spots on the planet! Believe me, I'm as surprised as you are. In fact, when I began writing this post, I intended to prove that the economic cost of the damage was huge, so I could rail against the barge, its owners, the government that approved the permits for it to anchor in the area, and everyone else. But how can I? At $1511 annually, very few people can effectively argue that this accident is a tragedy -- at least an economic tragedy.
How can one of the most beautiful, vibrant reefs in the world have so little economic value? Is the valuation provided by the UN too low? Maybe. In their report, the UN acknowledged that it's "hard to calculate the economic value of the aesthetic and ethical benefits of ecosystems, or of the service some ecosystems provide through cycling nutrients. Estimates of the 'total' economic value of an ecosystem thus vary considerably and there is a risk that using this approach underestimates the ecosystem's social benefits and overall importance." Ah...the loophole in valuing nature. Nevertheless, it's clear that the social benefits of a given reef have been factored into the valuation. When you consider that divers pay to visit a site (and enjoy its social benefits), those benefits are captured in the tourist revenue component of the valuation. However, let's assume that the UN figured the social benefits of the reef far too conservatively -- say, at only 10% of what we, as divers, feel those benefits should be. In that case, the economic loss of the reef is only $15,110 annually -- still a negligible amount.
So what's the answer here? Should the UN re-calculate its numbers to re-figure the social value of diving on a reef? No, I don't think that'll do any good: the figure will still be low. The trick, as I see it, is that the sum of a reef's parts is greater than any single slice of reef. No natural reef exists in isolation -- it's an interlocking and interdependent system. In other words, the $1511 worth of loss that occurred in this incident will spill over onto the next reef. That reef will become overcrowded (with divers; with small fish looking for shelter; with large fish seeking food; etc.), and ITS value will decrease. And so on. In other words, we can show $1511 worth of loss today. But down the road, the cost will be far, far greater.
I don't want to be a buzz-kill this morning. I just wanted to explain why, to non-divers, reefs aren't all that important. We all know, however, how vital, spiritual, and truly, truly magnificent they are. And we're much smarter.
1. Willy,
You are a pure mathematician. A fool will believe your calculation. There are so many other things that you have not taken into account. What if the Gov't decides to close it? How much the resort operator are going to suffer? what about the workers going out of works? the agents? The airlines? etc. etc.
There are so many other things to take into account because of the damage.
I compare what you did to saying what does it cost to go thru a divorce? USD1! The cost of the paper and the ink!
Good luck to you if you look at life like that.
Posted at 12:16PM on May 21st 2006 by orson