Supply-side approaches to the economic valuation of coastal and marine habitat in the Red Sea Academic Article uri icon


  • The degradation of natural fish habitat in the ocean implies lost economic benefits. These value losses often are not measured or anticipated fully, and therefore they are mainly ignored in decisions to develop the coast for industrial or residential purposes. In such circumstances, the ocean habitat and its associated ecosystem are treated as if they are worthless. Measures of actual or potential economic values generated by fisheries in commercial markets can be used to assess a conservative (lower-bound) value of ocean habitat. With this information, one can begin to compare the values of coastal developments to the values of foregone ocean habitat in order to help understand whether development would be justified economically. In this paper, we focus on the economic value associated with the harvesting of commercial fish stocks as a relevant case for the Saudi Arabian portion of the Red Sea. We describe first the conceptual basis behind supply-side approaches to economic valuation. Next we review the literature on the use of these methods for valuing ocean habitat. We provide an example based on recent research assessing the bioeconomic status of the traditional fisheries of the Red Sea in the Kingdom of Saudi Arabia (KSA). We estimate the economic value of ecosystem services provided by the KSA Red Sea coral reefs, finding that annual per-unit values supporting the traditional fisheries only are on the order of $7000/km2. Finally, we develop some recommendations for refining future applications of these methods to the Red Sea environment and for further research.

publication date

  • July 2013