Analysis: The Hauraki Gulf is far more valuable in economic and ecological terms than previous analysis has shown, according to a new report that builds extensively on conventional methodology.

The Gulf, an area of 1.4 million hectares, more than 20 times the size of Lake Taupō, has an asset value of between $40 billion and $100b, depending on the discount rate used; and it provides a flow of value to New Zealanders of more than $5b a year.

Prior conventional measures of the Gulf’s value were based on standard GDP measures of commercial activities such as shipping, commercial fishing and tourism. This study expands on those by adding calculations on the value of cultural and recreational activities and of ecosystem services the marine environment provides such as water and nutrient recycling.

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The latest valuation is at least double earlier ones. But even that is likely to be on the low side, says NZIER, the authors of the report for the Hauraki Gulf Forum. Such ecological valuations are a new field globally with only a small number of examples to date. But some of those are more comprehensive than the assessment NZIER undertook.

The Forum says the new methodology and report will help develop far better management of the Gulf.

“For many of us, the Hauraki Gulf is simply invaluable” said Nicola MacDonald, the Forum’s co-chair. “Te Moananui-ā-Toi is an ancestor and a taonga. It is part of who we are.”

“At the same time, we have seen well over a century of continuous damage done to the Gulf which is not priced, and not remediated. For example, flows of sediment and sewage off land choking our marine life, and dredging of kūtai and tipa beds leading to species collapse.

“This damage has cultural, spiritual, social, environmental, and economic consequences for all of us. Now, for the first time, we can start to put real numbers around the continued assault on this taonga.”

The table below from the report shows the split between those activities such as tourism and shipping that are already included in annual GDP calculations, plus the new categories of cultural, regulating and support services.

Central estimates of ecosystem services from the Hauraki Gulf

NZIER and the Forum stress, however, the new categories are only preliminary and partial estimates.

“This study is deliberately disruptive. It is not perfect, and there are naturally a range of assumptions used that will no doubt be hotly debated. There are also aspects where we simply lack the data to offer a full account – for example, the Gulf’s ability to sequester carbon. But it is a credit to the Forum and to NZIER to have taken this bold and important step," said Toby Adams, the Forum’s co-chair.

In its report, NZIER says this approach of incorporating ecosystem services to produce a Total Economic Value framework will help ensure that better decisions will be made about the true cost, benefits and long-term consequences of using marine resources.

While that's a big challenge in all ecosystems, it's an even greater one in marine environments because of the complexity, variability and interaction of differing ecosystems from sea-level to seabed.

The report also includes estimates of the value of the Gulf to recreational users and to property owners near it. Based on the 2021 Hauraki Gulf Survey estimated there are some 1.9 million active recreational users out of a population of 2.6m around the Gulf. The average value of recreational benefits for active users is $1,310 ($728–$2,839) per person per year.

A 2012 study showed that a property in Auckland located on the coast with wide views of the Hauraki Gulf was worth 47 percent, 92 percent and 144 percent more than if the property was 100 metres, 500 metres and 2 km from the coast, respectively. For its report, NZIER estimated those premiums equated to annual capital uplifts of $53,820 to $164,520.

But the issues the report explores are far more fundamental and life-changing than premiums for property with sea views. The ecosystem health of the Hauraki Gulf continues to decline, as successive assessments have shown down through recent decades.

We, the burgeoning population around the Gulf and users of it, must figure out quickly how to stop our destruction of the Gulf and how to help Gulf ecosystems recover. Then the Gulf will be even more beneficial for us, and we for it.

New methods of economic analysis of ecosystems, building on this report, are essential. And we must be pioneers of these disciplines because we have the largest stock of natural capital per capita of any country in the world aside from fossil fuel extractors, the World Bank calculates.

Such skills will also help us ensure that we will make a success of the extensive reforms of the Resource Management Act which parliament will likely pass before the election, as I wrote in a recent column.

And restoring the health of the Hauraki Gulf is a doddle compared with global food system. A seminal report in 2019 from the Food and Land Use Coalition, whose members include the World Business Council for Sustainable Development, came to some startling conclusions:

► The sales revenues of the global food system in 2018 was US$10 trillion. But those excluded the costs of:

► Adverse health impacts of obesity, under-nutrition and pollution, pesticides and anti-bacterial resistance totalling US$6.6t a year

► Adverse climate and natural capital impacts totalling US$3.1t a year

► Adverse rural welfare, food loss and waste and fertiliser leakage totalling $2.1t.

If food producers added in all those negative costs, the global food system was running at a loss of nearly US$2t a year in 2018.

Globally, humanity needs a revolution in economics so we can live responsibly with nature. This report on the Hauraki Gulf shows how we can start to learn and apply those principles here.

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