Sponsored content by Harry Briggs, audit director, KPMG in the Crown Dependencies
ALL around the world, countries are looking to transition to a ‘green’ economy that is low in carbon, socially inclusive and resource-efficient. In its simplest form, ‘green’ has become short for a sustainable social, environmental and economic future.
While the world’s attention has been caught by the direct terrestrial implications of the green agenda, the ‘blue economy’ has not been prioritised to date. The ‘green’ economy should include the sustainable use of oceanic resources, but the pivotal role of the oceans in limiting temperature rises and stimulating socioeconomic development has been comparatively absent from the transition towards a green global economy.
The ‘blue economy’ is central to the green ecosystem. Oceans produce up to 80% of the oxygen we breathe, while nearly 40% of the world’s population depends on marine and coastal biodiversity for its livelihoods. For these reasons, the ‘blue’ component of the ‘green’ transition to a more sustainable global economy cannot be overlooked.
Many megacities are located in coastal zones, with over a third of the world’s population living within 100km of the sea. Most sections of the ocean economy are growing faster than the global economy in terms of value-add and employment. Pre-Covid-19, the workforce was projected to grow by 30% over a 20-year time frame, significantly outpacing global growth (at 19%). Ocean-based industries are anticipated to directly contribute to 40m jobs in 2030 (1% of the global workforce). This excludes informal employment in artisanal practices, which could include up to 350m jobs in fisheries alone.
As with climate, we are living through a continuous and unsustainable deterioration of this (limited) global common due to human interference. More effective management of the oceans is essential to achieving the speed and scale needed for a transformation to a sustainable, low-carbon world. Even more importantly, without explicit recognition of the environmental, social and economic contribution of the blue economy, we face a very real risk of reversing progress on green ambitions.
So why does the blue economy matter so much to the ‘green’ agenda? All you really need to know is that oceans perform valuable (albeit less recognised) functions in the mitigation of climate change. They capture carbon, provide protection from extreme weather events and regulate global temperatures – in many cases, more effectively than their terrestrial counterparts.
The ‘tragedy of the commons’ analogy used by ecologist Garrett Hardin can be aptly adapted to the blue economy. The oceans are a global ‘common’ resource. We are extracting more and more from the oceans. Benefits accrue to the individual, business or government alone, while the ‘costs’ of these actions are shared collectively and can be ‘invisible’. This leads to overconsumption, the shared cost of which could reach $428 billion annually by 2050.
The continued degradation of these resources risks reversing progress on the climate agenda. The ocean stores approximately 50 times more carbon than the atmosphere, sea grass only occupies 0.1% of the ocean’s surface but stores up to 18% of the carbon sequestered by the ocean – twice the amount of carbon per hectare as terrestrial soils. When ocean and coastal ecosystems are damaged, they can release CO2 trapped in the soil back into the atmosphere – a reversal of their role as carbon sinks. It is estimated that over two-thirds of mangrove coverage, over a third of tidal marshes and 29% of sea grass have been lost globally, with up to 980,000 hectares destroyed annually.
The mobilisation of blue finance is central to the transition towards a blue economy. There has been a rise in innovative ‘blue’ financing solutions. For example, in 2018, the Seychelles issued the first sovereign blue bond worth US$15m to fund the implementation of a fisheries management plan to develop semi-industrial and artisanal fisheries. With the support of private funders, the country then converted US$21.6m of national debt under the world’s first ‘debt-to-conservation’ swap aimed at ocean conservation and climate resiliency. This created the second largest Marine Protected Area in the West Indian Ocean, alongside the development of a marine management plan and a permanent endowment to sustain climate adaptation and marine conservation activities.
You cannot go green without going blue and finance is the way to do it.
