The wealth we must tap
Our economic relationship with the ocean is once again evolving in important ways. As a setting for global trade and commerce, and as a significant source of food and energy, the ocean’s contribution is already important. This century, it is likely to become an economic force. The drivers are many and varied, but have their origins in our growing familiarity with the ocean environment; new technologies that make it feasible and economically viable to tap ocean resources; longer-term growth and demographic trends fuelling; the search for food security and for alternative sources of minerals and energy; seaborne trade and rapid coastal urbanisation, among others.
Humanity’s relationship with the oceans, and how people use and exploit their resources, is evolving in important ways. While the oceans are increasingly becoming a source of food, energy, and products such as medicines and enzymes, there is also now a better understanding of the non-market goods and services that the oceans provide.
Oceans and seas cover over two-thirds of Earth’s surface, contribute to poverty eradication by creating sustainable livelihoods and decent work, provide food and minerals, generate oxygen, absorb greenhouse gases and mitigate the impacts of climate change, determine weather patterns and temperatures, and serve as highways for seaborne international trade. With an estimated 80 percent of the volume of world trade carried by sea, international shipping and ports provide crucial linkages in global supply chains and are essential for the ability of all countries to gain access to global markets.
The “blue economy” concept seeks to promote smart, sustainable and inclusive growth and create employment opportunities in maritime economic activities. It also promotes social inclusion, and preservation or improvement of livelihoods while at the same time ensuring environmental sustainability.
Origin and Evolution
Gunter Pauli’s book, “The Blue Economy: 10 years, 100 innovations, 100 million jobs” (2010) brought the Blue Economy concept into the limelight. It has emerged as a term referring to a healthy ocean, supporting higher productivity. The current focus is confined to marine products, including minerals, as if this is all it concerns. The concept, however, is much broader and encompasses even maritime activities, such as shipping services.
Although the term “blue economy” has been used in different ways, it is understood here as comprising the range of economic sectors and related policies that together determine whether the use of oceanic resources is sustainable. An important challenge of the blue economy is thus to understand and better manage the many aspects of oceanic sustainability, ranging from sustainable fisheries to ecosystem health to pollution. A second significant issue is the realization that the sustainable management of ocean resources requires collaboration across nation-states and across the public-private sectors, and on a scale that has not been previously achieved. This realization underscores the challenge facing the Small Island Developing States (SIDS) and Least Developed Countries (LDCs) as they turn to better managing their blue economies.
The “blue economy” concept seeks to promote economic growth, social inclusion, and the preservation or improvement of livelihoods while at the same time ensuring environmental sustainability of the oceans and coastal areas. At its core it refers to the decoupling of socioeconomic development through oceans-related sectors and activities from environmental and ecosystems degradation. It draws from scientific findings that ocean resources are limited and that the health of the oceans has drastically declined due to anthropogenic activities. These changes are already being profoundly felt, affecting human well-being and societies, and the impacts are likely to be amplified in the future, especially in view of projected population growth.
The blue economy has diverse components, including established traditional ocean industries such as fisheries, tourism, and maritime transport, but also new and emerging activities, such as offshore renewable energy, aquaculture, seabed extractive activities, and marine biotechnology and bioprospecting. A number of services provided by ocean ecosystems, and for which markets do not exist, also contribute significantly to economic and other human activity such as carbon sequestration, coastal protection, waste disposal and the existence of biodiversity.
Activities within the Blue Economy
The mix of oceanic activities varies in each country, depending on their unique national circumstances and the national vision adopted to reflect its own conception of a blue economy. In order to qualify as components of a blue economy, as it is understood here, activities need to:
- provide social and economic benefits for current and future generations
- restore, protect, and maintain the diversity, productivity, resilience, core functions, and intrinsic value of marine ecosystems
- be based on clean technologies, renewable energy, and circular material flows that will reduce waste and promote recycling of materials.
The blue economy aims to move beyond business as usual and to consider economic development and ocean health as compatible propositions. It is generally understood to be a long-term strategy aimed at supporting sustainable and equitable economic growth through oceans-related sectors and activities. The blue economy is relevant to all countries and can be applied on various scales, from local to global. In order to become actionable, the blue economy concept must be supported by a trusted and diversified knowledge base, and complemented with management and development resources that help inspire and support innovation.
The Climate Change perspective
A blue economy approach must fully anticipate and incorporate the impacts of climate change on marine and coastal ecosystems—impacts both already observed and anticipated. Understanding of these impacts is constantly improving and can be organized around several main “vectors”: acidification, sea-level rise, higher water temperatures, and changes in ocean currents. These different vectors, however, are unequally known and hard to model, in terms of both scope—where they will occur, where they will be felt the most—and severity. For instance, while not as well understood as the other impacts, and more difficult to measure, the impacts of acidification are likely to be the most severe and most widespread, essentially throughout any carbon-dependent ecological processes.
Likewise, the effects of sea-level change will be felt differently in different parts of the world, depending on the ecosystems around which it occurs. Most importantly, however, and unlike in terrestrial ecosystems, further uncertainty results from the complex interactions within and between these ecosystems. In spite of this uncertainty, the current state of knowledge is sufficient to understand that these impacts will be felt on critical marine and coastal ecosystems throughout the world and that they fundamentally affect any approach to the management of marine resources, including by adding a new and increasing sense of urgency.
Healthy oceans and seas can greatly contribute to inclusiveness and poverty reduction, and are essential for a more sustainable future for SIDS and coastal LDCs alike. Oceans and their related resources are the fundamental base upon which the economies and culture of many SIDS and coastal LDCs are built, and they are also central to their delivery of the 2030 Agenda for Sustainable Development, including the Sustainable Development Goals (SDGs). A blue economy provides SIDS and coastal LDCs with a basis to pursue a low-carbon and resource-efficient path to economic growth and development designed to enhance livelihoods for the poor, create employment opportunities, and reduce poverty. It is also clear that SIDS and coastal LDCs often lack the capacity, skills and financial support to better develop their blue economy. This report lays out steps for countries to follow to make the blue economy an important vehicle to sustain economic diversification and job creation in these countries. In spite of all its promises, the potential to develop a blue economy is limited by a series of challenges. First and foremost is the need to overcome current economic trends that are rapidly degrading ocean resources through unsustainable extraction of marine resources, physical alterations and destruction of marine and coastal habitats and landscapes, climate change, and marine pollution.
The second set of challenges is the need to invest in the human capital required to harness the employment and development benefits of investing in innovative blue economy sectors. The third set of challenges relates to strengthening the concept and overcoming inadequate valuation of marine resources and ecosystem services provided by the oceans; isolated sectoral management of activities in the oceans, which makes it difficult to address cumulative impacts; inadequate human, institutional, and technical capacity; underdeveloped and often inadequate planning tools; and lack of full implementation of the 1982 United Nations Convention on the Law of the Sea (UNCLOS) and relevant conventions and instruments. While stimulating growth in individual oceanic sectors is comparatively straightforward, it is not always clear what a sustainable blue economy should look like and the conditions under which it is most likely to develop.
The potential to develop the blue economy is limited by a series of challenges. Some of them are as under:
- Unsustainable extraction from marine resources, such as unsustainable fishing as a result of technological improvements coupled with poorly managed access to fish stocks and rising demand. FAO estimates that approximately 57 percent of fish stocks are fully exploited and another 30 percent are over-exploited, depleted, or recovering (FAO 2016). Fish stocks are further exploited by illegal, unreported, and unregulated fishing, which is responsible for roughly 11–26 million tons of fish catch annually, or US$10–22 billion in unlawful or undocumented revenue.
- Physical alterations and destruction of marine and coastal habitats and landscapes due largely to coastal development, deforestation, and mining. Coastal erosion also destroys infrastructure and livelihoods. Unplanned and unregulated development in the narrow coastal interface and nearshore areas has led to significant externalities between sectors, suboptimal siting of infrastructure, overlapping uses of land and marine areas, marginalization of poor communities, and loss or degradation of critical habitats.
- Marine pollution, for example in the form of excess nutrients from untreated sewerage, agricultural runoff, and marine debris such as plastics.
- Impacts of climate change, for example in the form of both slow-onset events like sea-level rise and more intense and frequent weather events. The long-term climate Challenges to the Blue Economy 11 change impacts on ocean systems are not yet fully understood, but it is clear that changes in sea temperature, acidity, and major oceanic currents, among others, already threaten marine life, habitats, and the communities that depend on them.
- Unfair trade. Exclusive Economic Zones, areas in which a state has sovereign rights over exploration and use of marine resources, are crucial to the economies of small island developing states and often dwarf their corresponding land mass and government’s administrative capacity. (In Tuvalu, for instance, the EEZ is more than 26,000 times the size of the land mass.) In the case of fishing agreements allowing access to an EEZ, there is usually a low appropriation of fisheries export revenues by national operators and insufficient transfer to national stakeholders of specific fishing knowledge by foreign fishing companies, so the potential for national exploitation of those resources is reduced in the long run.
Tackling the Challenges
Despite a range of actors and large investments, current attempts to overcome these challenges have mostly been piecemeal, with no comprehensive strategy (for example, disparate efforts centred on fisheries governance, improving ports, marine litter efforts, and so on). Even when one sectoral policy achieves some success, these results are often undermined by externalities from activities in another sector. For example, coastal zone management efforts, or support to coastal fishers, tend to be undermined by unbridled sand mining, ill-sited ports or aquaculture farms, or unregulated tourism development.
In coastal zones, declines in mangrove forest habitat resulting from habitat conversion, wood harvest, sea-level rise, destruction of dune systems from sand mining, and changes in sediment and pollutant loading from river basins combined with land reclamation for agriculture or infrastructure have serious negative impacts on fisheries by reducing or degrading spawning and feeding habitats. Loss of mangrove forests, for instance, threatens profits from seafood harvests in excess of US$4 billion per year; in Belize, mangrove-rich areas produce on average 71 percent more fish biomass than areas with few mangroves. In view of the challenges facing SIDS and coastal LDCs, partnerships can be looked at as a way to enhance capacity-building. Such partnerships already exist in more established sectors, such as fisheries, maritime transport, and tourism, but are found less in newer and emerging sectors.
There is thus an opportunity to develop additional partnerships around newer economic activities, such as marine biotechnology and renewable ocean energy.
Pakistan and Blue Economy
Pakistan is an important maritime state in the Indian Ocean blessed with approximately 1,050 km long coastline and the Exclusive Economic Zone covering about 240,000 sq. km. The maritime sector acts as the bedrock of the national economy. To optimally benefit from this natural endowment, there is a need for an integrated National Maritime Policy. Increasing the awareness and knowledge among the decision-makers as well as the general public and capacity building through public-private partnerships are required. Development of effective national compliance mechanism and stimulating renewal of potential maritime sectors through regional and international collaboration can usher the country into an era of significant growth. The efficiency of Pakistani ports should be enhanced by improving the network of rail and road infrastructure. The role of National Co-ordination bodies should be augmented. Impediments are there but efforts can surmount them.
Moreover, China has put forward plans for three ocean-based “blue economic passages” that will connect Asia with Africa, Oceania, Europe and beyond, in a bid to advance maritime cooperation under the Belt and Road Initiative.