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OCR for page 1
Introcluction
This report attempts to estimate some of the future economic benefits that
could result from oceanographic research, and to compare them with the
cost of doing the research. These benefits are of two kinds: annual savings
in costs of goods and services, and increases in production. The estimates
are crude and the future times when the benefits may be realized are
uncertain; we have confined ourselves to those areas where we believe
significant economic improvements can be attained within the next fifteen
years.
Such public investments as dams and aqueducts can be clearly related
to calculable monetary returns. The decision to make the investment can
be based on relatively accurate estimates of benefit-cost ratios. This is not
true for research expenditures planned over a period in the future of 10
to 20 years. Experience shows that research does produce very large
returns, but these are usually not predictable in any detail. On the other
hand, it is possible to foresee the kinds of changes that could be brought
about by research in a particular held, and the value of these changes. We
believe that such an attempt at forecasting may be useful, even though the
forecasts are based only on necessarily subjective judgments rather than on
quantitive, objective data. Decisions about research expenditures cannot
be avoided, either by the Congress or by officials at many levels in the
Executive Branch of the Government. These decisions will be more
soundly based if results from the proposed expenditures can be compared,
even approximately, with the results from other uses of the same funds.
Our purpose is three-fold: (1) to obtain some idea of how much the
expenditures planned for the national oceanographic program can con-
tribute to the economic well-being of the United States; (~) to provide a
very rough basis for comparing the anticipated economic results from
oceanographic research with those that might be attained through other
expenditures of the same funds; and (3) to suggest a conceptual and
computational framework for estimating the usefulness of investment of
public funds in this held, which could be employed by other interested
persons who may make quite different judgments about the numerical
values we have used.
Our estimates indicate that a continuing national investment in
oceanography of approximately $165 million a year (not counting the part
for national defense) will be an essential component in bringing about
savings of nearly three billion dollars a year, plus added annual production
OCR for page 2
worth almost as much. Ten to 15 years will be needed to achieve these
gains, and other expenditures in addition to those for marine research will
be required if they are to be realized.
In order to assess the desirability of an investment at the present time
to secure these future gains, both the benefits and costs must be reduced
to their "present worth," that is, the amount of money today that is
equivalent to a larger sum in the future. As shown in the Appendix,
this discounting can be accomplished in two days, depending on the time
when a decision about a program of research expenditures must be made.
The value at the present time of the estimated total benefits directly
attributable to oceanographic research during the next twenty years, is
4.4 times the estimated total research expenditures, also discounted to the
present.
The estimates are summarized in Table 1, which shows the increases
in production that might result from the use of new oceanographic knowl-
ed~e in development of orenn fisheries marine mineral Anacin once
1 ~ 7 _ _ ~ _ r V A ~ V ~ ~
marine recreational facilities, and the annual savings that might come
from improvements in shipborne transportation, long-range weather fore-
casting, and near-shore sewage disposal.
These estimates are based only on tangible and foreseeable economic
results of federally supported oceanographic research. We have not
attempted to forecast "break-throughs," or to include any revolutionary
technical innovations. We have not tried to put dollar values on the
oceanographic requirements for national defense, or on the human
satisfactions that will come from greater understanding of the oceans and
of life in the sea. Nor have we included the benefits to national prestige
and international understanding, and to international economic develop-
ment, that may be expected from international cooperation in
oceanography.
Several kinds of direct economic benefits have been omitted. For
example, marine research is essential to maintaining the production of U.S.
fisheries at its present level, but we have limited ourselves to estimates of
future increases in production. The petroleum resources of the continental
shelves have a large potential, but most of the required oceanic research is
carried out by the oil companies with their own funds. Marine disposal
of industrial wastes, including radioactive wastes, and the use of sea water
for cooling produce economic benefits that we have not attempted to esti-
mate. Considerable savings can result from better forecast and warning
systems for tsunamis and storm surges, and these too are omitted, as are
the benefits to petroleum and mineral exploration on land that can come
from greater understanding of the geologic history of the oceans and of
. . .
marine sec lmentary processes.
2
Representative terms from entire chapter:
economic results
