7 Ways to Bridge the Blue Finance Gap

World Resources Institute | Rashid Sumaila, Mansi Konar, Ben Hart, and Melissa Walsh | Oct 21, 2020

ocean 300x230 - 7 Ways to Bridge the Blue Finance Gap  The ocean is a cornerstone of the global economy and a critical source of resources for the world’s growing population. It provides food, jobs and livelihoods to over three billion people, facilitates global trade and creates a home for the nearly 2.4 billion people who live in coastal areas.

Before the COVID-19 pandemic, forecasts suggested that the ocean economy could provide economic growth opportunities over the coming decade, creating $3 trillion annually in gross value added by 2030.

However, investment into the ocean economy is drastically low. Just 1% of the ocean economy’s total value was invested in sustainable project through philanthropy and official development assistance over the last ten years.

The impacts of climate change, pollution and overfishing put mounting pressure on the ocean, its natural capital and the services it provides. To change this trajectory, it is imperative that capital of all types go toward building ocean resilience and minimizing ocean risks by restoring, protecting and effectively managing how humans use ocean ecosystems.

See: ‘Bring the problem forward’: BlackRock CEO Larry Fink on climate risk

Fundamentally rethinking how humans interact with the ocean — and transforming economic models and market systems accordingly — is a critical step in slowing the decline in ocean health, stopping biodiversity loss and realizing the full economic potential of the ocean.

Research shows that investing $1 in key ocean actions can yield at least $5 in global benefits. Ocean-based investments are also one way that policymakers can ensure sustainable and equitable economic recovery from COVID-19.

There is also growing awareness that not transitioning to a sustainable ocean economy will come with high costs. For example, unabated climate change could cause coral reef tourism revenue losses of over 90%. Developing countries that rely on reef tourism and fish stocks for jobs and food security will likely experience the worst impacts of this revenue loss.

See: Cashmere and climate change threaten nomadic life

Currently, there are some barriers to financing a sustainable ocean economy. Information about the ocean and its economic, social and environmental value is often missing or inadequate, leaving investors unaware of the value their investments would have. Market distortions further compound these issues. This includes subsidies for ocean economic activities that create negative externalities. Of the around $35 billion in subsidies given to global marine fisheries each year, about $22 billion goes to harmful subsidies that prop up unprofitable, large-scale industrial fishing operations.

Properly addressing these barriers to sustainable financing and investment in a sustainable ocean economy could result in real and sustained change in the utilization and management of ocean ecosystems and the services they provide.  A new report commissioned by the Ocean Panel identifies seven key actions to plug the blue finance gap while ensuring equitable distribution of benefits from a sustainable ocean economy.

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