08 Jun 2016
The Blue Economy and Ocean Health: Part 1 - Building a Blue Economy
WHAT IS BLUE ECONOMY AND WHY ARE WE TALKING ABOUT IT?
This article is the first in a four-part series on the Blue Economy and Ocean Health, discussing ocean management and focusing on its relationship with decision-support frameworks and ocean governance.
Oceans cover 70% of Earth’s surface yet most of the political, economic, and environmental attention has traditionally focused on terrestrial systems probably because the changes in these systems are much easier for humans to relate to. Case in point: 16 % of the terrestrial area is protected vs. only 3 % of the oceans area.
Oceans, however, are absolutely fundamental in maintaining all life on Earth and they are a key source of food, livelihoods and cultural well-being for a substantial portion of global population. Sadly, over the past few decades, we land-dwelling creatures have not been kind to our oceans; human actions have destroyed many ocean ecosystems, putting our food, economies and culture in jeopardy. These impacts are further exacerbated by the increasing needs of an ever-expanding global population and by pressures resulting from a changing climate.
But the tides are finally, albeit slowly, turning and, under the leadership of many small island nations, ocean issues have recently been brought firmly to the forefront, first at the Rio +20 Conference in 2012 and then just last year at the Climate Conference in Paris. In Rio, these countries questioned the relevance of terrestrial “green economy” to them and highlighted further the importance of healthy oceans to their economies and well-being. The ensuing “blue economy” approach embraces the same core principles as Green Economy: “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities”, it recognizes the major role oceans play in the future of humanity, and promotes a pathway of preserving vital ocean natural capital for the sustainable development of ocean dependent nations. Moreover, a Blue Economy framework aims at moving from conventional compartmentalized and sectoral methodologies to integrated, multi-level and participatory approaches.
Oceans are now recognized as a critical component of countries’ economies, and several nations (including Canada, US, China and EU countries) have integrated oceans into their national policies. Oceans have also been recognized globally: the UN recently published its first World Ocean Assessment and one of the 17 Sustainable Development Goals is solely for oceans. Businesses are also stepping in and realizing the value in the sustainable development of the world’s oceans. According to the Reviving the Ocean Economy report by WWF the value of oceans, based on marketed goods and services, is estimated to be whooping $2.5 trillion per year —just in comparison, in 2015 the Gross Domestic Product (GDP) of the UK was $2.9 trillion— making our oceans equivalent to the world’s 7th largest economy. In addition, The Economist predicted that the role of oceans in the global economy is going to increase and in this century oceans are likely to become one of the main economic forces.
GDP, a commonly used yardstick to measure the economic progress of nations, is not designed to capture the state of the underlying natural assets of our economy. As such, the vital benefits humans receive from healthy oceans are largely, if not entirely, unvalued. With declining ocean health, it is time to look at the big picture: how sustainably are we using our oceans and what is the cost to us in not doing so?
This is what natural capital accounting attempts to do by looking beyond GDP and integrating the intangible values of nature into all aspects of economic activities. By internalizing natural capital into national accounts, we are better able to gain a more comprehensive picture of the state and the sustainability of our economy. For instance, estimates in a 2012 report by the World Bank of global fisheries’ accounts revealed that most of our fisheries are underperforming and that under better management regimes, the economic benefits of fisheries can potentially increase from US$120 billion to US$900 billion.
While evaluating the economic value of fisheries may be relatively straightforward, putting a price tag on intangible ocean services such as nutrient regulation, coastal protection or spiritual and cultural values is inherently difficult. There is no comprehensive approach that could fully account for the value of all ocean services —for instance, how to put a price tag on a lazy Sunday stroll on the beach— which is why these estimates likely fall significantly short of the total value. In recognition to that, this approach does attempt to capture at least part of the ocean benefits that we are not able to see. For example, the 2012 World Bank report featured a study that revealed that if the “indirect” services of mangroves —such as their role in coastal protection, fish habitat and carbon sequestration— are considered, the economic value of mangroves exceeds the benefits of converting mangrove forests to shrimp farms.
Natural capital accounting can help us understand whether this capital is being used sustainably and allow us to communicate this information to both government and business leaders so they can better understand both the impacts of their actions on the largest human heritage, our oceans, and how that affects their nations’ overall economic and social well-being.
Indeed, restoring our oceans to a healthy and productive state while improving human well-being and social equity requires innovative global approaches where governments, private sector, NGOs and civil society all work together. In understanding the economic contributions of oceans to societies, decision-makers are able to better assess the economic trade-offs of various courses of action, which can lead to decisions that preserve natural capital as well as long term economic gains.
The next article will discuss several existing frameworks to integrate blue economy and facilitate discussions for collaborative management of our ocean and coastal resources at various different scales.
Thank you to Lindsay Mosher, Steven Katona, Erich Pacheco and Johanna Polsenberg for their helpful editorial comments.