1. Oceans and Economic Value: An Introduction Consortium for Ocean Leadership 25 October 2012 Hauke Kite-Powell, Marine Policy Center, WHOI

2. Topics What does “economic value” mean? Economics & the ocean: different types of “economic value” questions Examples

3. The Nature of Economic Value Not absolute – depends on societal context and (changeable) human preferences – As opposed to, for example, temperature! Defined at the margin – limits of extrapolation – Economic value is meaningful only for something that you can (realistically) “trade away” Value vs. impacts – Jobs, research budgets, … Value over time – discount rates – Example: climate change

4. Economic Value & the Ocean Flows (value added) generated by ocean-related activities – GDP; the “cash flow” part of balance sheet Asset values of ocean resource stocks – “assets & liabilities” part of the balance sheet Value of research (information) Value at stake in ocean management (policy) decisions

5. Examples of Value Added Flows Commercial fishing – Fishing to the dock – Processing – Wholesale/distribution – Seafood markets – Restaurants National Ocean Economics Project (NOEP) data: GDP contributions from ocean industries

6. Examples of Asset Values Offshore minerals – Oil and gas in offshore reservoirs – Hard minerals (sand, gravel, gold, …) – Market price net of extraction costs Fish stocks – Discounted stream of landings (dockside value net of capture costs) – Depends on management!

7. Examples of Value of Information Ocean observing systems (PORTS, IOOS) – Difference in outcomes of decisions with/without Ocean carbon cycle – Uncertainty about future C uptake, atmospheric C concentration, climate costs Ocean research infrastructure – Likely return on investments in infrastructure and research activities

8. Examples of Policy Questions Beach closures – Human health costs from exposure to bacterial contamination – Lost recreational benefits from unnecessary closures Investment in clean water – Fish, marine mammal populations – Recreational amenities – Human health implications