Coral tragedy heralds corporate catastrophe

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Whenever a big story breaks about the dire straights in which the natural world finds itself, it always sparks something of a debate at BusinessGreen.com's Central London bunker (actually, that's a bit of a lie; there aren't many of us so it tends to be a debate carried out entirely within the confines of my head, but you get the idea).

The question is one of whether BusinessGreen.com, as a dedicated business news website, should report on news that is almost entirely focused on the perilous state of the rainforest, Arctic sea ice, or in the case of this morning's papers Australia's Great Barrier Reef.

Does the news that scientists now firmly believe global warming will lead to the inevitable destruction of the Australian coral reef within 20 years really constitute a business story?

As a rule, we decide against reporting on such stories, not because they do not have an impact on businesses, but because those impacts are several stages removed from the actual destruction of natural habitats. Unless firms are directly causing or being directly affected by the changing environment, the business angle is too opaque to justify the story's inclusion on the site.

And yet, the more these reports of environmental disaster surface, the more obvious it becomes that this editorial decision downplays the way impacts on the natural world invariably lead to impacts on the business world.

The idea that the environment provides services for the economy in the form of food, water, soil, clean air and forests is not new, nor is the realisation that it is all but impossible to put a financial value on assets that are essential in the truest sense of the word. But as climate change leads to the rapid deterioration of these environmental services the extent to which they provide the foundation of economic activity becomes painfully clear.

Taking the inevitable demise of the Great Barrier Reef as just one example it is relatively easy to trace massive commercial and economic impacts from the destruction of this unique habitat.

First up, the Australian tourism industry was worth around $85bn last year, providing nearly four per cent of the country's GDP and employing close to half a million people. This might be slightly unfair on the country that gave us Kylie Minogue, Rolf Harris and Neighbours, but not many of the international visitors who injected over $22bn into the country's economy were there for the culture.

Deep green environmentalists might regard it as crass to talk about economic costs when we are faced with the destruction of a uniquely beautiful habitat, but it is worth noting that the death of the reef can be talked about it in terms of job losses as well as species losses. The sad truth is that when the reef goes, people will lose jobs and communities will suffer as one of the main sources of income for Northern Queensland disappears.

Some economists would argue that tourist dollar would simply migrate elsewhere and the net impact on the global economy would be pretty minimal, but there are other economic impacts that are similarly easy to envisage.

As any marine biologist will tell you, coral reefs provide a key link in a complex marine food chain that would be irrevocably changed by its removal. No one knows for sure what impact the death of coral reefs would have on fish stocks, but it is unlikely to represent good news for a global fishing industry already facing up to dwindling supplies.

Moreover, coral reefs provide another critical environmental service by buffering coast lines against tropical storms. With global warming already likely to lead to an increase in the incidence of such storms the Queensland coastline could find itself increasingly vulnerable to such storms just at a time when it needs the reef's protection more than ever.

And then there are the soft benefits.

As David Attenborough put it in a speech at the Royal Society yesterday, "anybody's who's had the privilege of diving on a coral reef will have seen the natural world at its most glorious, diverse and beautiful".

A whole generation of backpackers and tourists had that privilege and in many cases it left an indelible imprint on them. It is impossible to quantify the financial value of this sense of wonder (and what's more, you would never want to try), but it is not too esoteric to suggest that access to the natural world makes people healthier, more relaxed and arguably more motivated in their day-to-day lives - or at least it always has done for me.

Regardless of what your hard-nosed, old school business exec thinks, the natural environment's contribution to a happy and healthy workforce has considerable economic value.

On balance, we will probably continue to eschew direct reports of environmental destruction in favour of those green stories with a more explicit business angle - after all there are so many hours in the day and you would probably grow bored of reading an explanation of how environmental services effect the wider economy every time you clicked on a story about habitat damage.

But the next time you do read reports of disappearing rainforests, melting glaciers or dying reefs it is worth remembering that they represent an economic as well as an environmental tragedy.