News Release Distributed 12/04/13BATON ROUGE, La. – A team of researchers from the Center for Natural Resource Economics and Policy in the LSU AgCenter Department of Agricultural Economics and Agribusiness has received a three-year award of more than $750,000 to study the value of the environmental monitoring system in the Gulf of Mexico.
The award was made through the LSU Coastal Marine Institute, a partnership between LSU and the Bureau of Ocean Energy Management of the U.S. Department of Interior, with funding shared equally between LSU and the federal agency.
A vast array of buoys and other sensors scattered throughout the Gulf provide important data to weather forecasters and others with interest in the behavior of the ecosystem of the Gulf of Mexico.
This environmental monitoring system provides science-based biological, chemical and physical data for managing marine industrial operations, coastal hazards, public safety and health, ecosystems and water quality, said Rich Kazmierczak, an AgCenter economist and leader of the research team.
Experts estimate the overall funding for the system will exceed $54 billion over the next 15 years.
“Remote sensing is expensive,” Kazmierczak said. “We’re interested in finding out how valuable the data are in terms of dollars and cents.”
The cooperative agreement with the Bureau of Ocean Energy Management focuses on the Gulf of Mexico Coastal Ocean Observing System. The study results will enhance the understanding of the social and economic value of the system, officials said.
The availability of information for a variety of management and public policy decisions can be valuable in planning for and responding to events such as hurricanes and oil spills, Kazmierczak said. “We want to determine the cost-benefit of continuing and expanding the system.”
In the beginning, the researchers will survey the system’s government, industry and individual users to find out how they use the data. The researchers will then use this information to place monetary values on the monitoring system.
In some cases, data-gathering companies accumulate the information and then provide it to commercial companies that would rather outsource the work, Kazmierczak said.
“We want to learn about the users and how they use the data for planning and decision-making,” he said. “That helps put a value on the information being collected – what it’s worth.”
The analyses will focus on the private value-added sector and firms’ willingness to share information about their industries and customers. The researchers will use these data to develop models to simulate various scenarios to compare monetary losses from previous events with estimated losses in the future.
“The study specifically examines the economic value of the information to society,” Kazmierczak said. “We’ll use surveys to find out who uses the data and estimate the social economic benefits.”
The goal is to determine a comprehensive willingness to pay for maintaining and possibly expanding the system.
In addition to Kazmierczak, other researchers participating in the study are Matt Fannin, associate professor of regional economics and community development; Rex Caffey, professor of natural resource economics; and Michelle A. Savolainen, a graduate student.
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