HI5003 Economics for Business Oz Assignment

  HI5003 Economics for Business Oz Assignment

HI5003 Economics for Business Oz Assignment

Introduction

The Great Barrier Reef is the coastal area on the northeast coast of Australia which is expanded in the area of 2300 km also covering some part of Italy with the total area of 350,000 square kilometres. It accommodates more than 600 types of coral and around 1625 species of fish. The reef was declared world heritage area by UNESCO which named the reef as the site of remarkable beauty and huge variety. The biodiversity vulnerability Business Economics management conducted by the government of Australia reported that the coral reef biodiversity of Australia is highly vulnerable to the climatic changes. Due to the increase in sea and air temperature the ocean is becoming aciditic resulting in bleaching of the coral reefs and degradation of the Great Barrier Reef. Apart from this, the flowing of nutrients and pesticides into the ocean from the coastal farms is also an important issue harming the economy of the country. This report relates to the analysis of the economic contribution made by the Great Barrier Reef (GBR) to the Australian economy and the impact of environmental influence on coral reefs in relation to economic loss.
 

Economic analysis

The consideration of reef as world heritage area has a high influence on the economy of Australia in terms of boosting tourism, promoting commercial fishing and aquaculture, improving recreation facilities and promoting scientific research and reef management within Australia (Coles, et.al, 2015). These sectors contribute to the economic growth and development of the country. Every year, the average contribution of reef’s tourism, commercial fishing and recreational fishing altogether to the economy is $6.9 billion. Also more than 62% of the exports of Queensland are from Great Barrier Reef ports.

Tourism

The tourism industry is the largest business activity of the Great Barrier Regenerating more than $4billion revenues for the country every year. The tourism staff and assets comprise of 820 operators and more than 1500 vessels operated in the Marne Park. The tourism activities provided in the reef include day and overnight tours, scuba diving and snorkeling, whale watching, swimming with dolphins and whales, cruises, glass-bottomed coral viewing, semi-submersibles, educational trips, aircraft and charter excursions and sailing in the ocean. All these activities attract tourists in the country resulting in boosting tourism business. As per the report of Deloitte Access Business Economics, the contribution of tourism from the great barrier to the economy of Australia calculated by applying the Tourism Satellite Accounting framework can be presented in the following table:


Table A: Contribution of tourism from GBR to the Economy
Source: Deloitte Access Economics, 2013

Commercial fishing and aquaculture

The commercial fishing and aquaculture activities performed in the Great Barrier Reef, generated revenues of $193 million in the year 2012 and employment in the country with more than 975 full-time jobs including 530 direct employment and 440 indirect employment. This contributed to $160 million in the total value added of the Australian economy. 


Table B: Economic contribution of commercial fishing and aquaculture by different regions of GBR in 2012
Source: Deloitte Access Economics, 2013

Recreation

These activities include fishing, sailing, boating and visiting an island. These activities highly contribute to the revenue of the country generating revenues of $126 million with the added value to the economy of $244 million. The recreational activities and purchase of equipment resulted in the creation of employment opportunities of 2785 individuals on the full time basis including 1767 direct and 1118 indirect jobs (Economics, 2013).


Table C: Economic contribution of recreation in GBR in 2012
Source: Deloitte Access Economics, 2013

Scientific research and reef management

These activities generate around $106 million revenues and add the value of $98 million to the total value added to the economy of Australia and generate more than 880 FTE jobs for an individual in the country. The economic contribution can be presented in the following table:


Table D: Economic contribution of scientific research and reef management in 2012
Source: Deloitte Access Economics, 2013

Recommended actions

The Great Barrier Reef is the region which is the factor contributing to the boos of Australian economy by generating revenues and employment opportunities for increasing the GDP and balance of trade through extended tourism. This region deserved the highest focus of the government and economic policy makers of the country so as to make the economy stable and stronger. There are various organisations and institutions working for the development of the reef catchment such as Great Barrier Reef Marine Park Authority (GBRMPA), Australian Institute of Marine Sciences (AIMS), James Cook University ARC Centre of Excellence in Coral Reef Studies etc. These organisations shall unite and consult with the government authorities and economists to prevent the rich heritage of the country recognised at the world level (Sheaves, et.al, 2016).

The industries in the coastal areas shall be banned from disposing the pesticides and nutrients in the ocean in order to prevent the bleaching of the coral reef and fishes in the ocean. Coral bleaching occurs when the sea temperature raises even by 1to 1.5 degree Celsius and remains the same for six weeks (Stoeckl, 2014). This can be prevented by using scientific methods and techniques for preventing the sea temperature from increasing. Also the increased sea temperature damages algae which the core food of the coral reefs. Therefore in case of damage of algae the reefs shall be provided with some food supplement to prevent damage to them\.

Conclusion

From the input output economic analysis of various economic sectors of Australia in terms of contribution to the economy by generating revenues and creating employment opportunities, it can be concluded that Great Barrier Reef has the highest value addition to the economy of the country. This can be presented in the following table:


It can be further concluded that with the efforts of government and other organisations the coral reefs can be prevented from bleaching in order to maintain the stability and growth of the Australian economy. Also, economic policies of the country and various economic issues will have a huge impact on the economic contribution of various industrial and business sectors related to the Great Barrier Reef.

References

1. Coles, R. G., Rasheed, M. A., McKenzie, L. J., Grech, A., York, P. H., Sheaves, M., & Bryant, C. (2015). The Great Barrier Reef World Heritage Area seagrasses: managing this iconic Australian ecosystem resource for the future. Estuarine, Coastal and Shelf Science153, A1-A12.
2. Deloitte Access Business Economics (2013). Economic contribution of the Great Barrier Reef. Great Barrier reef Marine Park authority, 4-37.
3. Economics, D. A. (2013). Economic contribution of the Great Barrier Reef.
4. Sheaves, M., Coles, R., Dale, P., Grech, A., Pressey, R. L., & Waltham, N. J. (2016). Enhancing the value and validity of EIA: serious science to protect Australia's Great Barrier Reef. Conservation Letters9(5), 377-383.
5. Stoeckl, N., Farr, M., Larson, S., Adams, V.M., Kubiszewski, I., Esparon, M. and Costanza, R. (2014). A new approach to the problem of overlapping values: A case study in Australia? s Great Barrier Reef. Ecosystem Services10, 61-78.