Evaluating the economic damage of climate change on global coral reefs

Abstract This paper evaluates the global economic damage arising from the effects of climate change and associated carbon dioxide concentrations on the loss of coral reefs. We do this by first estimating the effects of sea surface temperature and carbon dioxide concentrations on coral cover. We develop a statistical relationship between coral coverage and sea surface temperature that indicates that the effects are dependent on the temperature range. For example, we find that increasing sea surface temperature causes coral coverage to decrease when sea surface temperature is higher than 26.85 °C, with the estimated reduction being 2.3% when sea surface temperature increases by 1%. In addition, we find that a 1% carbon dioxide increase induces a 0.6% reduction in global coral coverage. We also estimate the resultant loss in economic value based on a meta-analysis of the recreational and commercial value of reef coverage and a crude proportional approach for other value factors. The meta-analysis shows that the coral reef value decreases by 3.8% when coral cover falls by 1%. By combining these two steps we find that the lost value in terms of the global coral reef value under climate change scenarios ranges from US$3.95 to US$23.78 billion annually.

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