The economic value of coral reefs: Climate change impacts and spatial targeting of restoration measures

We develop a travel-cost random utility model to estimate the value of recreational ecosystem services provided by more than 170 outdoor sites located on the island of Maui (Hawaii, USA). Particular emphasis is placed on the role of coastal ecosystems by combining recent fine-scale data on coral cover and fish biomass with information on almost 3000 recreation trips taken by Maui's residents. Our approach is grounded in economic theory and provides estimates that are directly applicable to inform a wide array of coastal management questions. Our results show that the 2014–2015 coral bleaching event caused losses in the order of $25 M per year to Maui's residents. We also identify the areas where coral reef restoration would maximize welfare gains. Impacts can vary up to a factor of 1000 across locations, demonstrating the need to carefully consider such heterogeneity in spatial prioritization. Our simulations also show how access fees or green taxes can raise funds for financing conservation measures aimed at bolstering coral reefs resilience to climate change.