Valuing the Oceans: The Costs of Climate Change

When you picture the effects of climate change, does a dying ocean come to mind?

Alongside the better-known terrestrial impacts of global warming, there are immense – and costly – damages that will occur beneath the waves. If we continue on our present course of unchecked carbon emissions, the losses due to climate change in five key ocean services could reach $2 trillion annually by the end of this century. Two-thirds of those losses could be avoided, effectively saving almost $1.4 trillion a year by 2100, if we embark on a rapid reduction in emissions to stabilize and protect the earth’s climate.

I developed these estimates as part of an international research project on the multiple threats to the oceans. The study, now available in summary form, was presented at the recent Planet under Pressure conference in London, and will be published as a book later this year. Research by my colleagues in this study describes numerous sources of harm to the oceans, stretching far beyond the few categories for which I was able to estimate monetary values.

The $2 trillion estimate includes five types of damages to the oceans and the services they provide to humanity.

• Commercial fishing will suffer major losses, as temperature changes drive many species toward the poles, and deeper beneath the surface. Gains in Arctic and Antarctic fishing will be outweighed by much greater losses elsewhere.
• Ocean-based tourism will become less attractive, as coral reefs bleach and die, formerly ideal beach locations become unpleasantly hot, and shorelines are eroded by sea-level rise. Tourists can easily go elsewhere; the communities that currently serve them will be left behind.
• Hurricanes may or may not become more frequent – debate continues on this point – but there is general agreement that they will become more intense, causing escalating losses. At the same time, growing numbers of people and amounts of property are located in hurricane-prone areas.
• Sea-level rise is driven both by runoff from melting ice sheets and glaciers, and by the gradual expansion of ocean water as it warms. High-value locations such as major cities can be protected from moderate sea-level rise – but it would be hopelessly expensive to protect all coastlines, or to build seawalls ever higher as the oceans continue to rise.
• The subtlest effect is the decline in the role of the oceans as a “sink” that absorbs carbon dioxide. A significant fraction of each year’s carbon emissions are currently absorbed by the oceans. Yet as emissions continue to rise, the oceans will absorb a shrinking fraction of future emissions, leaving more in the atmosphere and accelerating global warming.

The $2 trillion estimate has drawn widespread attention, especially in Europe where it was released. Despite its seeming immensity, it could be viewed as a relatively small number – since world GDP is estimated to be more than $500 trillion at the time, a $2 trillion loss is just 0.4% of global income. It is, however, a very partial, lower bound, not a comprehensive estimate of all climate impacts. The five types of harms that I evaluated are far from a complete picture of the damages to the oceans from climate change. Two crucial categories are necessarily omitted, because there is no meaningful way to assign prices to them.

First, some of the most profound values at risk in the oceans simply defy monetary valuation. What is it worth to preserve the existence of whales, or other endangered species? What is the value of wild nature, of unique and irreplaceable habitats? Our most important values cannot always be priced.

Second, the $2 trillion estimate is based on the most likely effects of climate change. However, climate change may also lead to tipping points, triggering abrupt, catastrophic damages. These events could dwarf the most likely outcomes. For example, there is a (surprisingly low) temperature threshold beyond which coral reefs will not survive. And at some point, rising temperatures may cause the collapse of the Greenland ice sheet, causing it to melt and slide into the ocean – ultimately resulting in a disastrous 7 meters (23 feet) of sea-level rise.

Ocean-based costs should not be viewed in isolation from other climate impacts. The same process of unchecked global warming that would cause multi-trillion-dollar ocean damages, along with other, priceless impacts, and growing risks of catastrophe, would also cause similar losses in agriculture, human health, and many other areas. The costs of taking action to reduce emissions are dwarfed by the environmental and economic costs of inaction.

And the benefits of taking action to stabilize the climate include protection of the living ocean and the numerous vital services it provides.