Environmental economics of coral reef destruction in Sri

Coral reefs are a resource of immense importance for a large number of peop le, especially the coastal populations of the developing world. Available i nformation on coral reefs in Sri Lanka and Southeast Asia has been used to evaluate the ecological services provided by coral reefs and to assess the long-term economic benefits derived from some of the ecosystem functions. T he minimum economic value of coral reefs in Sri Lanka is estimated at USD 1 40 000-7 500 000 km(-2) reef over a 20-yr period. The economic consequences of coral mining were investigated and economic costs (USD 110 000-7 360 00 0) were found to exceed net benefits (USD 750 000-1 670 000) by as much as USD 6 610 000 km(-2) reef when analyzed over 20 years in tourism areas. The highest costs were associated with decreased tourism (USD 2-3 million) and increased erosion (USD 1-4 million). However, in rural areas there is stil l a strong incentive for coral mining, because coral mining in the short-te rm perspective provides a more profitable business compared to fishing and agriculture. The results have implications for management and show that Sri Lankan legislation banning coral mining in the coastal zone is beneficial to the country's economic development.