Contribution of almost $5 billion to GDP from British Columbia’s ocean likely an underestimate
British Columbia’s ocean contributed nearly $5 billion to provincial gross domestic product in 2015, an amount that is likely an underestimate, a new UBC study has found.
The “back of the envelope” estimate could be used by non-economists to work out a baseline of what oceans contribute to the economy, as part of reaching the United Nations’ goal of sustainable oceans by 2030.
Senior author Dr. Rashid Sumaila, a professor at the Institute for the Oceans and Fisheries and the School of Public Policy and Global Affairs, discusses why this value is likely an underestimate when the full contribution of the living ocean is taken into account.
Why do we need to know the value of the ocean?
Countries, including Canada, have committed to the United Nations’ goal of sustainable oceans by 2030. That means policymakers and the like need a basic understanding of the ocean’s contribution to the economy. If we know how much the ocean gives us, we can also show another reason why it is important to protect the ocean.
These kinds of assessments should be accessible to non-economists involved in ocean management, decision-making, and more. We have put together a “back of the envelope” framework that is easy to apply, using British Columbia’s “ocean sector” as a case study.
We looked at six industries, including wild fishing, marine recreation and tourism, cruise lines and marine transportation, and found that in 2015, the ocean generated approximately $4.9 billion in gross domestic product (GDP) and more than 106,000 jobs. including shipping, made the highest total contribution to GDP, followed by cruise lines, with a GDP contribution of 66% and 13%, respectively.
Why is this an underestimate?
Because we wanted to create a user-friendly framework, we only included sectors that are most closely connected to the ocean. This means that activities further from the ocean, such as research and education, and professional services are excluded.
Crucially, we failed to consider things like ecosystem services provided by the ocean, including water purification and carbon sequestration, as well as cultural value. Including these kinds of benefits would greatly increase the overall contribution, including that the ocean sectors that depend on a living ocean would be worth as much or more than those that require only water as a means of transportation.
This paper covers the ocean’s economic contribution, but once you get this initial estimate, it raises additional questions. This is a policy starting point – a quick way to make an informed decision.
Should this change how we value the ocean?
This research shows that the ocean is very valuable to BC, even with our shortened estimate. We formulated the estimate like we did, like things in terms of GDP, jobs and income because these are the indicators that decision makers always use. To get their attention, we must first speak in a common language. Once we have that common language, we can move on to highlighting the dangers of relying solely on market values.
It is misguided to use market values to measure the value of an environmental resource such as the ocean and then base policy on this value.
To mess up our ecosystems because of this would be catastrophic: human well-being is undeniably linked to the marine ecosystem. This estimate can be used to sound the alarm by using only market values to estimate the value of the ocean. That is why in many cases we are in trouble because we only look at dollar values.
Policy makers need to think carefully about the values involved and make sure they understand that market values are not the full picture or you will end up making wrong decisions.
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Lydia CL Teh et al, Assessing the Economic Contribution of Ocean Activities Using British Columbia’s Pacific Coast as a Case Study, Sustainability (2022). DOI: 10.3390/su14148662
Quote: Contribution of nearly $5 billion to British Columbia’s ocean GDP likely an underestimate (2022, August 9,), retrieved August 9, 2022 from https://phys.org/news/2022-08-contribution-billion- gdp-british-columbia. html
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