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Economic Benefits from (Better) Ocean Observation

Economic Benefits from (Better) Ocean Observation. Capitol Hill Oceans Week 14 June 2006 Hauke Kite-Powell Marine Policy Center Woods Hole Oceanographic Institution. Source of Benefits. The product is information Information has value because it is used in economic decisions

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Economic Benefits from (Better) Ocean Observation

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  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 PORTS:User 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

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