Surfonomics Quantifies the Worth of Waves

[ed.  A similar process can be applied to other natural resources including things like wilderness and refuge areas, which, on their face, might seem of little economic benefit. Yet, unspoiled natural areas support a variety of businesses and small scale economies (think guiding/fishing/hunting/eco-tourism, sporting goods, equipment rentals, lodges, air and boat taxi operations, print/publishing companies, nearby community services, and other linked economies like airline, hotel and transportation services that bring people to locations where natural areas can be accessed). Considered this way, leaving something in its natural state can have significant economic benefits if you follow all the various links. There's also a process called "contingent valuation" which attempts to assign economic values to non-market resources. This was first used on a large scale to assess damages in the Exxon Valdez oil spill.]

In 2002, a surfer named Chad Nelsen enlisted an economist at Duke University to help put a price tag on a popular surfing spot on Puerto Rico’s northwest coast. Nelsen’s idea was novel: to prove that the waves breaking on the beach constituted a multimillion-dollar asset and persuade the local town to take pains to preserve it.

Real estate developers were after another multimillion-dollar asset: the views from the beach, which would be the selling point for three high-rise condominiums they planned to build.

Surfers and environmentalists feared that the construction at Rincon, the village in Puerto Rico, would change the flow of sediment around the beach and bury a reef that created the surf break. Nelsen sought to show that without the reef, there would be no waves, no surfers and, ultimately, a big drop in tourism dollars.

“We found that people were buying second houses there just for the surfing,” said Linwood Pendleton, the Duke economist who assisted Nelsen and is a chief economist for the National Oceanic and Atmospheric Administration. “It was contributing literally millions of dollars a year to the local economy.”

Rincon and its world-class wave break, discovered by surfers in the late 1960s, embodies a cycle that’s as regular as the tides: Surfers trek to remote reaches of the globe in search of the perfect wave. They discover prized beaches. Word gets out. Tourists pile in. Developers seize land and opportunity. Construction alters the wave break. The surf loses its edge.

Surf advocates have long argued that Mother Nature is priceless, invoking geological and hydrological mechanics that distinguish the character and appeal of the waves. In a new strategy, Nelsen and a handful of other surf intellectuals are letting go of lofty environmentalist rhetoric and fighting economics with economics.

“Those of us who really love the ocean have an instinct when we see beautiful places like this to think that they’re priceless and to think that the commodification of nature, and putting price tags on everything, is the root cause of nature’s destruction. . . . I think that’s actually counterproductive,” Jason Scorse, director of the Center for the Blue Economy, said in a TEDx talk in April. Scorse is the author of the book “What Environmentalists Need to Know About Economics” (2010). “When nature is undervalued, we make bad decisions.”

Rincon was a rare victory for surfers. The international campaign to protect the wave break, led by the Surf­rider Foundation, an advocacy group, blocked the condo proposal and persuaded lawmakers to designate Tres Palmas, the name of the break, as the heart of Puerto Rico’s first marine reserve.

And it helped launch the science of “surf­onomics.”

by Gregory Thomas, Washington Post |  Read more:

Photo: Eric Luse/SFC