Economic consequences of algal blooms

There are numerous species of algae including macro- and micro- algae. Cyanobacteria (blue-green algae) are commonly referred to as algae but are bacteria. Not all species of algae (including cyanobacteria) are harmful. Some are harmful only at particular stages of their lifecycle and some are only harmful when they release toxins as they die. For the purpose of this information, algae includes micro and macro-algae as well as the cyanobacteria.

Algal blooms can degrade the quality estuarine ecosystem through a number of destructive mechanisms. Some of these destructive mechanisms include the release of toxins1, and/or the depletion of dissolved oxygen from the water column as a result of algal decomposition2. Ultimately, the degraded ecosystem becomes less productive. For instance, as a result of algal blooms, fisheries productivity could decrease and/or the visual amenity of an estuary might decline, reducing its value as a tourist destination. The decline in estuarine productivity has negative economic consequences. An example of the scale of the potential economic impact arising from the occurrence of harmful algal blooms (HABs) in estuaries, is the estimated cost to the US economy of US$100 million per annum. This estimated cost includes lost fishery production and the related costs of human illness, stock losses, lost tourism and recreational value3.

Photo of Microcystis bloom in Matilda Bay, Swan-Canning Estuary, WA

Photo 1. Microcystis bloom in Matilda Bay, Swan-Canning Estuary, Western Australia. Photo by Tom Rose (WA Waters and Rivers Commission).

The economic consequences of algal blooms on fisheries productivity

In Australia, the occurrence of algal blooms has resulted in substantial declines in fisheries productivity in affected waters. For example, South Australian tuna farmers suffered $45 million worth of damage in 1996 because an algal bloom damaged the gills on the tuna4. In another example, commercial fishers in 2001, reported large reductions in total fish catch during a Lyngbya (Lyngbya majuscula) bloom event in Moreton Bay, South East Queensland5.

The economic consequences of algal blooms on shellfish sales

Toxic contamination of shellfish as a result of toxins released from some algae has resulted in shellfish closures around the world in affected waters, again resulting in lost production. In Australia, shellfisheries in Port Phillip Bay were affected in 1987 by a bloom of the diatom, Rhizolenia chunii. As a consequence of this bloom, mussels, flat oysters and scallops within the bay developed a bitter flavour making them unmarketable for seven months causing an estimated loss of $1 million6. In October 1999, oyster harvesting had to be temporarily halted in the Wagonga Inlet, NSW, due to an algal bloom7. In the US, occurrences of HABs have caused the closure of commercial and recreational shellfish harvesting, in some cases leading to bankruptcy of commercial operators as well as reduced levels of investment in the local fisheries industry8.

The economic consequences of algal blooms for regional fish sales

The occurrence of toxic algal blooms can have substantial negative flow-on effects on the sale of fish. For instance, when shellfish are contaminated with algal toxins, reduced consumer confidence in the relative safety of eating shellfish can extend beyond the immediate affected area8. Also, any direct disruption to industry arising from the occurrence of algal blooms has the potential to have negative flow-on effects into other less directly affected industries3.

The effect of algal blooms on animal and human health

There are claims that some species of blue-green algae (Microcystis and Anabaena circinalis) can kill animals. Toxins are poisonous to cattle, horses, sheep, pigs, a variety of birds and small animals including snakes, fish and frogs. Intoxication with blue-green algae is characterised by convulsions, diarrhea and sudden death9. The species Anabaena circinalis was the cause of the Darling River bloom in 1990-91. Paralytic poisons were found in the dead sheep and cattle along the river at that time10.

A species of Cylindrospermosis has been a problem in reservoirs used for drinking water supplies. In the 1970s Cylindrospermosis, which had been a problem in Soloman Dam, Palm Island Queensland, was treated with copper sulphate. As the algae died, it released toxins into the water which were responsible for approximately 150 people being taken ill. Medical symptoms included gastrointestinal, liver and kidney damage10. Direct contact to cyanobacteria of exposed parts of the body including the ears, eyes, mouth and throat as well as ingestion of water containing cells by swallowing are cited as risks resulting from exposure at recreational water sites.

The Cooperative Research Centre for Water Quality and Treatment in Adelaide has a program focussing on the ill effects of algae blooms on humans. Of particular importance is the potential of some algal toxins to stimulate the growth of cancers11.

The economic consequences of human health impacts include the cost of treatment of those affected as well as loss of productivity due to increased time off work.

Economic consequences of algal blooms on recreation

Occurrences of algal blooms have been responsible for the closure of popular swimming and boating sites. A cyanobacteria (Microcystis aeruginosa) bloom in the Swan River, Perth, Western Australia, in February 2000, caused closure of popular swimming, boating and fishing areas12. Studies to estimate the cost to the economy of closures of recreational areas due to algal blooms are limited. However, at a regional level, it is thought that the economic consequences arising from lost coastal tourism and recreational value of an area due to algal blooms may be minimal. This is primarily because it is likely that substitute locations for recreation activities such as swimming and fishing, away from algal bloom affected areas, are likely to be available and would therefore minimise economic losses. Alternatively, people in the affected regions may simply find a substitute activity to swimming and contribute to the economy via some other recreational pursuit13. However, while the region as a whole may not be adversely affected due to reduced recreational value of affected waters, it is not difficult to imagine that local economies reliant on the recreational value of their waterways might suffer negative consequences.

Management of algal blooms

The potential for contamination of drinking water by blue-green algal toxins has motivated the World Health Organisation (WHO) and Australian authorities to develop water quality guidelines14. These are expected to specify ‘safe’ concentrations of algal toxins in drinking water. Management of drinking water will need to be tackled from two directions: one will require improved water treatment methods; and the other will require improvements in the management of the ecology in at risk areas15.

Run-off containing fertilisers and pesticides from agricultural land, disposal of urban sewage and storm water as well as disposal of industrial wastes have all been cited as contributing to deteriorating quality of water in rivers and streams and to the occurrence of algal blooms16. One approach is to prevent the flow of excess nutrients into waterways including improved nutrient removal from sewerage effluent before it is discharged into water bodies. Costs associated with this plan vary depending on the sewerage treatment plant17.

Alternatively, management could focus on reducing the flow of excess nutrients from agricultural land. There are a variety of ways this could be done. One way is to physically prevent the nutrients from leaving the land. This objective could in part be achieved by preventing soil loss from farms into nearby water bodies, given that soil acts as a transport device for nutrients. Cost associated with this approach would be dependent on the management devices used to manage soil loss into waterways. These devices could range from artificial stream bank stabilisation devices through to riparian vegetation planted for similar stream bank stabilisation purposes18.

Another way to prevent nutrient loss from farms is to reduce the amount of fertiliser applied to land. One approach to facilitate this is to use economic instruments such as increasing the price of fertiliser to encourage more efficient use of the substance18. However, this could be ineffective given that the demand for fertiliser by large-scale farmers in Australia is relatively inelastic due to the already low nutrient content of the soil18. Other methods of achieving reduced nutrient loss from farms may have to be sought.

Research from CSIRO has demonstrated that flow management can be a practical tool for managing blooms in impoundments and on inland rivers. There is an increasing need for environmental regulation to provide evidence that the costs of compliance are justified by community benefits. In this regard, a study in the United Kingdom (UK) assessed the value of recreational and amenity values of a water reservoir that had previously been closed to the public due to a Microcystis aeruginosa bloom19. The reservoir provides a range of recreational activities including sailing, fishing, windsurfing as well as picnicking and walking. The cost of works between 1993 and 1998 to prevent the blooms was estimated to be £295,000. The estimated willingness to pay of approximately 900,000 visitors per year to the site ranged between £364,608 and £521,225 per year. This study demonstrated that the amenity and recreational value to the community of preserving access to the site was clearly greater than the cost.

More information on nutrients (changed from natural).


Robinson, J., Cully, T., Coastal CRC


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