The ocean business

The rise and rhetoric of the blue economy

Mon Nov 02 2015


Deep-sea mining is both totem and taboo for the new ocean economy. It reflects the promise of what is loosely termed the “blue economy” as well as its dangers and pitfalls. The first commercial mining operation will not begin until 2018, when Nautilus Minerals, a Canadian company, gouges copper off the sea-bed in 1,600 metres of water at its Solwara-1 concession off Papua New Guinea. Yet deep-sea mining has come to symbolise the tension between growth and conservation in the seas—between the need to find new providers of jobs and natural resources, as terrestrial opportunities flag, and that of arresting the decline in health of ocean ecosystems.

Talk of the ocean as a new economic frontier, of a new phase of industrialisation of the seas, will become widespread in 2016. The ocean already has its share of industry: shipping, under-sea cables, offshore oil and gas, fishing, tourism and more. With the exception of fisheries, where recovery of depleted stocks will require a range of reforms, most are expected to grow rapidly in the coming decades, in parallel with rising global income, consumption and population. Shipping, according to some estimates, could grow by two to three times by 2030, for example; offshore oil could expand from 40% to almost 50% of total oil production.

The new blue

To this, add a set of emerging industries. The European Commission has identified five growth areas: aquaculture, coastal tourism, marine biotechnology, ocean energy and sea-bed mining. These, it says, could provide 1.6m new jobs by 2020. China, America, India, Indonesia and small island states all join an expanding roster of countries turning to the ocean as a source of growth and business opportunity. The colour of this growth is nominally blue, taking its cue from terrestrial parallels of green growth and the green economy. China’s blue-economy plans stress “sustainable development and conservation”; others similarly link economic growth with sustaining the health of their ocean space.

However, the promise of blue growth is rendered less tangible by a peculiarity of ocean economics: the absence of sound measurement. Not all countries calculate their “ocean GDP”. Comparing the findings of those that do is complicated by different measurement systems and by the often blurred lines between coastal and ocean activity. So estimating the size of the flow of goods and services in the global ocean economy is surprisingly difficult. WWF, an environmental group, had a stab in a report released in 2015: it put the world’s annual “gross marine product” at $2.5 trillion.

Still less is known about the non-market goods and services provided by the ocean: the value of a reef’s protection against storm surges, or the ocean’s capacity to sequester carbon dioxide. WWF estimates an underlying “asset” base of $24 trillion. How much this natural capital is eroded by human activity, and how much benefit is derived from it, public and private, remains a big knowledge gap, and an impediment to decision-making, notes the UN’s first “global marine assessment”, also released in 2015.

Another warning comes from the European Marine Board. In a recent report it highlights the dangers of the emerging “deep blue economy”, in seas deeper than 200 metres. New technologies are opening up waters hitherto unexplored and out of reach, while science, policy and governance scramble to keep pace. The fear is that fragile deep-sea ecosystems will be damaged before they are properly understood. Just 0.0001% of the deep sea has been sampled biologically.

A European Parliament study of the EU’s blue-growth strategy raised questions about how policy could be implemented given knowledge gaps on marine life, on seabed resources, and on the risks and opportunities of further economic activity in Europe’s seas. As competition for ocean space intensifies, these same shortcomings—compounded by legal and institutional constraints—will mean that for most countries striking a balance between encouraging economic growth in the ocean and nurturing the health of ocean ecosystems will be a complex, long-term undertaking.

The year ahead will no doubt produce another crop of sobering reports on the decline in ocean health and the dangers of over-zealous development. Threats to the seas from climate change, land-based pollution and over-fishing will still predominate. The blue economy will remain nascent, an aspiration, critics might even say a distraction—more “economy” than “blue”, and involving “blue-washing” similar to “green-washing” on land.

It may be too early to be that harsh. But governments will need to move with greater purpose on properly planning and managing their ocean spaces if they are to stay ahead of the coming wave of activity, and make informed choices about protecting, even restoring, ocean health. And businesses have work to do in 2016 if they want to persuade suspicious greens (or blues) that their plans will do more good than harm.

You are reading a small selection of content from The World in 2016. To read all the articles in this year’s edition download The World in 2016 app.
Download 'The World In 2016 iOS app'
Download 'The World In 2016 Android app'