Economic Effects of an Ocean Acidification Catastrophe

1 In 2007 IPCC Working Group 1 stated: “Ecological changes due to expected ocean acidification may be severe for corals in tropical and cold waters [ ] and for pelagic ecosystems [ ]. Acidification can influence the marine food web at higher trophic levels.” (Solomon et al. 2007) 2011). Atmospheric CO2 concentrations reach 1,000 ppm shortly after 2100 and stabilize at about 2,000 ppm shortly after 2200. Ocean pH levels decline by about 0.3 to about 7.8 in 2100. Because RCP 8.5 CO2 concentrations are consistent with those from previous highemission scenarios (e.g. SRES A1F1 and A2), we also incorporate widely-used projections beyond 2100 of pH and ocean conditions, notably Caldeira and Wickett’s (2005) “5,000 Pg C” case, under which pH falls to about 7.5 in 2200. For further details, see the appendix.


A. Ocean Conditions
We define an OA catastrophe scenario as a scientifically plausible level of OA and associated biophysical effects that enables an estimate of an approximate upper bound or potential magnitude of economic consequences over the coming two centuries.
Our scenario is based on IPCC RCP 8.5 and its extension to 2300, ECP 8.5 (Riahi et al.  Calcification rates were calculated for more than 9,000 reef locations using model values of Ωarag 3 and sea surface temperature at different levels of atmospheric CO2. The maps we produced show that by the time atmospheric partial pressure of CO2 will reach 560 ppm all coral reefs will cease to grow and start to dissolve (Silverman et al. 2009, p. 1). We now briefly explore the first three, and also explain why aquaculture is likely to be minimally affected.  Properly buffered water is a crucial input to aquaculture, just as fertilizer and water are to agriculture. It can be provided as an input.

Shellfish hatcheries in Washington and
Oregon are already doing this, mitigating OA's effects on calcifying clams and mussels through plant-level monitoring and carbonate injection (Geiling 2015, Oliver 2015. They have also adapted by moving hatchery operations to Hawaii (Welch 2012).
Based on this assessment, we suggest that the best current approximation of the long-run loss future rents from aquaculture under our OA scenario is zero.

C. Recreational Fishing
The World Bank (2012)

III. Summary and Discussion
The sum of annual ecosystem service values assessed above ranges from $141 to 227 billion.
[ Insert Table 1 Here -] The physical science literature supports the hypothesis that future OA could cause or contribute to substantial or even complete loss of marine capture fisheries and coral reefs.
Complete loss provides the upper bound appropriate for this analysis. The annual rents and net use values associated with these losses are small -between 0.09% and 0.21% of current global GDP. These losses will develop over 100-200 years, allowing ample time for the major reallocations of economic resources that will occur as rents decline and fish prices rise. Permanent biodiversity losses are potentially larger when measured by the existence values held by people alive today, but these losses will likely occur over many generations of people who will increasingly grow up without experiencing what has been lost.
One basic reason why OA does not pose an existential threat to global economic output is, perhaps, because it will primarily affect ecosystem services that are already fully-or over-exploited. A second reason is that the ecosystem services of coral reefs and freeswimming fish are combined with many other inputs to produce pleasant recreation experiences. The scope for substitution is vast; witness the many producer and consumer responses to reduced snowfall.
Ocean acidification may well inflict significant long-run welfare losses on people.
Short-run effects on capture fisheries could be quite harmful. Should OA continue unabated, the greatest economic challenge posed appears to be how to manage a slow but significant reallocation of resources away from capture fisheries and coral reef tourism.