Economic Benefits from Better Ocean Observation

1
Economic Benefits from (Better) Ocean Observation

• Capitol Hill Oceans Week
• 14 June 2006
• Hauke Kite-Powell
• Marine Policy Center
• Woods Hole Oceanographic Institution

2
Source of Benefits

• The product is information
• Information has value because it is used in
  economic decisions
• Better decisions lead to improved physical and
  economic outcomes
• Short-term (operational) and long-term
  (investment, planning) decisions

3
Benefit change in value added

• Changes in social surplus
• Producer surplus
• What producers receive less what it costs to
  produce
• Consumer surplus
• What consumers would be willing to pay less what
  they actually pay
• Net change in economy (welfare)
• Often hard to measure in practice
• Proxies
• Increased goods and services
• Lower cost goods and services

4
US Coastal Ocean Observation User Sectors
5
Potential Benefits fromImproved Coastal Ocean
Obs.
6
Tampa Bay PORTSUser Groups/Applications

• Maritime
• Recreational boating/fishing
• Spill response
• Weather storm surge forecasting
• Environmental management/modeling
• Education

7
Tampa Bay PORTS Annual Benefits
high degree of confidence

• avoided groundings, commercial vessels 1.1 to
  2.8 million
• increased draft/cargo loading 1.1 million
• improved spill response 0.2 to 0.9 million

moderate degree of confidence

• reduced distress cases, recreational boats 0.2
  million
• improved weather forecasts 1.5 million
• improved storm surge forecasts 0.5 million

more speculative

• enhanced spill response, recreation 2.2 million

4.4 to 7.0 million
8
Global Ocean Winds, Waves and Currents (Satellite
Obs.)

• Benefits commercial maritime ship routing
• Potential benefits today about 80 million/year
• Additional benefits of 100 million/year possible
  with better coverage

9
Summary

• (potential) economic benefits can be documented
• order of 10 million for local (PORTS) systems
• 100s of millions for US coastal systems
• 100s of millions for global ocean systems
• user-driven requirements and business case must
  be starting point for these benefits to be
  realized