According to a new report from an international team of researchers led by the University of British Columbia, financing a sustainable global ocean economy may require a Paris Agreement-style effort. This is because ensuring a healthy ocean economy that benefits society and enterprises in developing and wealthy countries will necessitate a considerable increase in sustainable ocean finance.
Sustainable ocean economy
The sustainable ocean economy focuses on conserving the oceans and ensuring that they are healthy to support coastal economies and populations that rely on them for economic prosperity. People and animals will benefit from a healthy ocean, which will provide a healthier environment for future generations.
Financially sustainable ocean economy
A multinational group of economists and ocean policy professionals collaborated on the report titled Financing a Sustainable Ocean Economy. It analyses critical finance roadblocks and suggests solutions to help support jobs, livelihoods, food security, nutrition, and ocean health. Executive Vice President of the Environmental Defence Fund and Senior Director of Oceans Climate Strategies are among the paper’s co-authors. Despite accounting for over half of the worldwide workforce, women in the fishing sector face unequal access to capital to establish or build their businesses. This has substantial implications for their capacity to make a steady living and support their families. While greater funding is required for the overall maritime economy, women, in particular, require more.
According to the report, a sustainable ocean economy needs more and better financing that generates, invests, aligns, and accounts for financial resources to achieve long-term ocean health and governance. Ocean finance can help promote the ocean economy’s long-term development by allocating funds to activities and regulations that reduce risk while maximizing social equality and environmental sustainability. The authors conclude that the existing financial gap for realizing this ambition is substantial and that access to long-term investment capital is limited and unequally distributed. The size of the global ocean economy, which includes shipping, fishing, offshore wind, tourism, and marine biotechnology, is estimated in this report.
Four major barriers
The study identified four major barriers:
- Enable a weak environment for attracting finance sustainable ocean;
- A lack of high-quality, investible projects with appropriate deal sizes and risk-return ratios to match available capital; and
- People’s capacity to imagine and design projects that are appealing to investors is limited; and
- Ocean investments have a greater relative risk profile, and the enabling framework for insurance and risk mitigation is also lacking.
There is now a funding gap for a sustainable ocean economy. According to the experts, Governments and public institutions could be a good place to start closing this gap. There is a possibility of raising funds from the ocean’s usage, with a portion of the proceeds improving its management. More than a hundred billion funding gap in conservation financing for all ecosystems, including financial for a sustainable ocean economy, has been calculated. This amounts to less than 1% of world GDP. Can you imagine what you have if governments put aside two or three percent of their budgets?”
This would encourage financial institutions to invest and create an enabling environment with private sector players interested in supporting green businesses that promote ocean development. Then you get insurance firms involved because working in the ocean is often riskier than working on the land.
A lack of funding can undermine even the best ocean rules and practices. The study aims to identify present challenges to financing a sustainable ocean economy, propose solutions to these barriers, and assist in the transition to a viable and inclusive ocean economy for all, particularly for women, youth, and indigenous groups.