(WASHINGTON – June 8, 2021) A paper published in the journal Nature Communications today on World Oceans Day finds that public and private investment lags far behind what’s needed to ensure a thriving, resilient and sustainable ocean economy — but that solutions exist.
The paper, “Financing a sustainable ocean economy,” is authored by an international group of economists and ocean policy experts. It identifies key barriers to financing and ways to mitigate them in order to support jobs, livelihoods, food security, nutrition and ocean health. Environmental Defense Fund’s Executive Vice President Amanda Leland and Senior Director for Oceans Climate Strategies Tim Fitzgerald are among the paper’s co-authors.
“In the fishing industry, women experience unequal access to capital to start or grow their own business, despite making up nearly half (60 million) of the global workforce,” said Leland. “This has real consequences for their ability to earn a stable living and provide for their families. While better financing is needed for the entire ocean economy, women especially need more and better financing options.”
A sustainable ocean economy requires more and better financing that generates, invests, aligns and accounts for financial capital to achieve sustained ocean health and governance, the paper states. Ocean finance can play a vital role in supporting sustainable development of the ocean economy by directing investment to activities and policies that minimize risk while maximizing social equity and environmental sustainability. However, the current finance gap for achieving this vision is large, the authors conclude, and access to sustainable investment capital remains limited and not equitably distributed.
The paper estimates the size of the global ocean economy — including shipping, fishing, offshore wind, tourism and marine biotechnology — to be USD $1.5 trillion, and prior to the COVID-19 pandemic, projected to grow to USD $3 trillion by 2030.
The paper notes four main barriers to increasing sustainable ocean finance: a weak policy and regulatory environment for attracting finance; a lack of high-quality, investable projects with appropriate deal size and risk-return ratios; too few projects that are attractive to investors; and a higher relative risk profile of ocean investments compared to land investments.
The paper points out that human-caused climate change and unsustainable use of the ocean and its resources has led to the depletion of fish populations and biodiversity, and increased pollution and habitat damage — and that a total of 66% of the ocean will experience impacts in key areas. These impacts will “affect the global ocean economy through impacts on livelihoods, food security, and income of marine resource dependent communities, and is expected to be worse in the tropics. Further, the ocean’s role in supporting cultural, recreational, and intrinsic values for human well-being is likely to be diminished due to the projected long-term loss and degradation of marine ecosystems,” the paper states.
“These costs and projected impacts from climate change are precisely why — on this World Oceans Day — global governments must come together with the same urgency as the Paris climate agreement to declare sustainable ocean economy financing as a central pillar in our fight for a sustainable, equitable and livable planet,” said Fitzgerald.
The paper’s authors find several opportunities for action for a more sustainable ocean economy, including:
· Establish effective and stable regulatory and policy environments to attract investment and funding.
· Strengthen knowledge, data and human capacity.
· Stop existing financing and insuring activities that undermine a sustainable ocean economy (e.g., harmful fishing subsidies).
· Increase and redirect public investment toward a sustainable ocean economy.
· Boost new approaches to insurance to de-risk sustainable ocean investments.
· Develop public-private partnerships to stimulate the flow of investible ocean deals.
“A lack of financing can scupper even the best ocean policies and practices,” says Leland. “Our paper seeks to highlight the current barriers to financing a sustainable ocean economy, offer solutions to overcome these barriers, and help transition to an ocean economy that is viable and inclusive for all, especially women, youth and indigenous communities.”
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