NOAA AND THE FUTURE OF COASTAL AND OCEAN ECONOMICS

March 1, 2005 — How valuable is the fishing industry to a local economy? How much
is a visit to the beach worth? How does conserving an estuary affect the economy? For the last few years, coastal managers and economists have been working to determine the “value” of ocean and coastal resources such as these.

A new national initiative, called the National Ocean Economics Program, or NOEP, is trying to answer these questions and others so that coastal managers have a better understanding of the value of an area’s resources and how important they are to local and national economies.

Market Values
Sponsored cooperatively by NOAA, California State University at Monterey Bay, and the U.S. Environmental Protection Agency, NOEP began primarily focusing on the market value of coastal and ocean resources — that is, the resources and activities with quantifiable dollar values and roles in the economy. Charles Colgan, chief economist for the program, has extensively researched the changing market value of coastal and ocean resources. Some of his most significant results include the following:

• Not everyone is moving to the coast. Rather, the coastal population has been growing at a slightly lower rate compared with inland areas. The difference, however, is that coastal population growth occurs in a much more limited land area, which is what causes problems for housing, cost of living, land use and other issues.
• The coastal and ocean economy has changed dramatically in the last decade. Traditional ocean industries (such as offshore oil and gas development, shipbuilding and fishing) are being replaced by the recreation and tourism business. “The coast is becoming the tourism and recreation sector — period,” states Judith Kildow, principal investigator for NOEP.
• As business has boomed on the coast — so has employment, but housing hasn’t followed. Instead, more and more people are commuting from inland areas. What coastal managers especially need to monitor, says Kildow, is the expansion of this inland population and how they can manage commuters’ transportation needs, other infrastructure issues and the impacts on the environment in these expansion areas.

Non-market Values
The second phase of NOEP focuses on the non-market value of coastal resources, or those resources that are not traded in the market, but still have value to businesses, residents and visitors. The process of evaluating non-market worth, however, is “much more complicated since there are so many ways to estimate it,” according to Linwood Pendleton, NOEP’s non-market research specialist.

Pendleton and the NOEP team are working on this section of the program in two major steps:

• Develop a portal to literature on non-market valuation. This portal is now available on the NOEP Web site.
• Expand this portal into an information system that would act as a “super database” with built-in user guidance that helps organize non-market values.

The goal of this information center is not only to help managers understand the non-market values of coastal resources, but also, as Pendleton explains, “to give these data dollar values so we can compare market and non-market values and link them to see their relationships.” The group is also collecting data on living resources, such as what species of fish are caught every year and where, and what changes are occurring with these species over time.

The State Level
While the program aims at getting a good look at the overall U.S. coastal and ocean economy,
it is also interested in the regional and local values of these resources. The California Resources Agency recently worked with NOEP to produce an in-depth report on the economic value of the state’s coastal and ocean resources.

The agency had undertaken a similar, but much more limited, study in 1994 and wanted to
see how the initial findings had changed in the last decade. “To this day, people still quote our numbers from 1992 in articles and reports,” explains Brian Baird, a program manager for the agency. “We wanted a better picture of the most recent information.”

In addition, the state is overhauling its coastal management policies in its new Ocean Action
Plan, which focuses on many of the basic principles noted in the recent report of the U.S. Commission on Ocean Policy. The findings of the commission’s coastal economics report can help the state better understand how management decisions affect state and local economics.

NOAA, Baird and the NOEP team hope that other states can use the methodology applied in the California report to get a sense of their ocean and coastal economies, as well as that of the nation as a whole. “It’s important that we all understand the human impact on the environment and how it changes over time,” explains Kildow.

NOAA's participation in the NOEP supports the NOAA Strategic Vision, which calls for an informed society that uses a comprehensive understanding of the oceans, coasts and atmosphere to make the best social and economic decisions.

Relevant Web Sites
NOAA Coastal and Ocean Resource Economics

NOAA Fisheries Economics

NOAA Fisheries Statistics & Economics

NOAA Economics and Human Dimensions Program

NOAA/National Sea Grant Internet Resource for Coastal Environmental Economics

NOAA Economic Statistics

THE ECONOMIC VALUE OF CURRENT AND IMPROVED WEATHER FORECASTS
TO U.S. HOUSEHOLDS

ECONOMIC STATISTICS FOR NOAA

AN ECONOMIC CASE FOR AN INTEGRATED OCEAN OBSERVING SYSTEM

WHAT IS THE “VALUE” OF THE BEACH?

ECONOMIC IMPACTS OF DROUGHT AND THE BENEFITS OF NOAA's
DROUGHT FORECASTING SERVICES

THE ECONOMIC IMPLICATIONS OF AN EL NIÑO

WEATHER IMPACT ON USA ECONOMY

Media Contact:
Glenda Powell, NOAA Ocean Service, (301) 713-3066 ext. 191 or Ben Sherman, NOAA Ocean Service, (301) 713-3066 ext. 178