Image Source: Katie Cerami
Ocean resources provide indispensable opportunities to economies worldwide, driving sustainable growth and fostering innovation. To account for their growing importance, Small Island Developing States have been at the forefront of the incorporation of the Blue Economy. While certainly a step in the right direction, this novel concept will bring forth a multitude of challenges that will need to be addressed if success is to be achieved.
By Ananya Mittal
Edited by Thomas Ku
The 1992 United Nations Conference on Environment and Development in Rio de Janeiro marked a turning point for the global economy, involving a shift in focus from traditional economic development to sustainable development. Gone were the days of exploiting natural resources and physical capital to achieve fast-paced economic growth, replaced by a multidimensional approach that considered a variety of factors, including environmental sustainability, social equity, and cultural appropriateness. This shift eventually led to the development of the term 'green economy,' referring to an economy that "results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities."
However, countries with coastlines and access to vast oceans and other water bodies remained concerned about this altered focus and how it applied to their unique circumstances. Small Island Developing States such as Barbados and Mauritius stood at the forefront, advocating for the incorporation of a "blue economy" to better address their situations. This movement gained traction worldwide which comes as no surprise considering that 40% of the world's population today lives near coastal areas and is involved to some extent in the global ocean economy, which includes the economic worth of all ocean-based resources and related maritime activities and is expected to double in value to $3 trillion over the next decade.
What is a 'Blue Economy,' then? While many definitions exist, one widely accepted is that provided by the UN, describing the Blue Economy as a spectrum of economic activities related to oceans, seas and coastal areas that are sustainable and socially equitable. There is a special emphasis on the latter part of the definition, and the UN highlights that the Blue Economy should promote the improvement of livelihoods through economic growth without compromising the preservation of these ocean-based resources. Such action would ensure that communities, whether in the present or the future, will not be disproportionately affected by environmental degradation and instead have equal access to ocean-based resources.
Many countries have successfully incorporated this definition of Blue Economy in their development goals. For example, the American blue economy currently supports over 2.2 million jobs annually, contributing approximately $365 billion to the country's GDP. Norway is another country adopting amendments to its policies, aiming to reduce its greenhouse emissions by 50% by 2030 for domestic shipping and fishing. This goal comes under their Green Shipping Programme, through which they have initiated over 45 green pilot projects focusing on cargo ships, offshore wind power, and services for the aquaculture industry, among other areas.
The focus on the Blue Economy has been greatly beneficial for nations, especially for SIDS. One of the key focus areas here lies in the renewable energy sector, particularly in offshore wind farms, with the power from these farms being capable of generating over 18 times the yearly global demand for electricity today. Such endeavors also require the involvement of specific professions such as wind engineers, scientists, and project managers and have the potential to create jobs in administration, construction and maintenance, reducing SIDS' dependence on fishing and tourism. However, nations can only realize these benefits after the construction of these farms, which will require significant initial investment from their governments. This stands as a large obstacle for small island nations, especially after the macroeconomic shock they experienced during the pandemic due to their narrow base of commodity exports and lack of economic diversification. In fact, they experienced a fall of around 9% in their GDP in 2020, much higher than the 3.3% decline other developing countries faced according to IMF projection data. This financial obstacle is a result of the high public debt levels in these states, rising to nearly 83% of their GDPs in 2020 and projected to continue exceeding 70% until 2025. Furthermore, these nations lack the technological and skilled human capital to transition to newer renewable energy sectors, requiring further investment. Thus, the realization of benefits is contingent upon SIDS addressing fiscal barriers, which can be achieved through cooperation with other nations through various initiatives. These initiatives could include increasing access to concessional and climate finance, encouraging private investments, and reducing remittance costs or fees incurred during international transactions. Belize implemented one such measure in 2021 and became the first Caribbean SID to issue a "blue" bond which is expected to raise capital that can help conserve 30% of the oceans.
Offshore aquaculture, an emerging approach to fish farming that involves rearing marine organisms in exposed areas beyond significant coastal influence, has widely been recognized as another sector that will exponentially grow with the development of a blue economy. Aquaculture of marine ornamental commodities, such as giant clams and corals, as well as the development of domestic industrial tuna fleets and procession operations, has provided many opportunities to generate income throughout the Pacific SIDS such as Fiji and Micronesia, creating both part-time and full-time jobs. The economic benefit has helped diversify the income earned by households, a crucial development for SIDS as the COVID-19 pandemic disrupted critical tourism sectors that account for nearly 30% of their GDP. Nevertheless, there are many challenges associated with this opportunity as well. The first, and perhaps most prominent, relates to the availability of these ocean-based resources, which have been threatened by rapid global warming. In fact, climate hazards such as coastal erosion, ocean acidification, and an increase in the number of tropical cyclones and other natural disasters have exposed small island nations' vulnerability to climate change and resulted in a loss of $153 billion since 1970. Additionally, fishers and farmers in SIDS are disproportionately affected when other maritime activities lead to the offloading of toxic waste, which generates substantial profits for those in the shipping industry.
Furthermore, while indigenous communities in these small island states actively safeguard 80% of the world's biodiversity, they often do not have access to consulting services designed to help them understand how to best utilize these resources in development scenarios. The possibility of dispossession and displacement through privatization and other means of accumulation further endangers their access to these resources. For example, local users such as small-scale fishers and indigenous populations in Canada, Iceland, and other nations have previously lost access to fishery resources because of the reallocation of fishery rights and market-based regimes. This loss in access came about due to the incorporation of a 'co-management' strategy in fishery governance, which shifted decision-making powers to the federal authorities, leaving local farmers to assume a reduced role. These challenges highlight the need for global cooperation across sectors to ensure that each nation's policies don't undermine others' and that adequate support is provided for less developed nations. The Blue Growth Initiative is a step towards this direction, providing support to develop science-based standards for fishery products, advice on market trends and capacity building to reduce fish losses and improve quality, and assistance targeting policies to secure fishing, social rights and access to welfare programs for small-scale fisheries.
Oceans, seas, and coastal areas are also vital in ensuring food security and poverty eradication, improving the welfare of the individuals reliant on these resources. As such, several measures have been adopted to ensure that small-scale fishers have adequate opportunities to sustain their livelihood. Such efforts have been supported at the micro level by private enterprises such as Abalobi, which connects chefs and restaurants to local anglers and produce in Mauritius, Tanzania, Seychelles and other parts of Africa, enabling consumers to select produce that comes from socially and environmentally sustainable fishing practices. This initiative has had immense commercial success, processing over 13,000 orders and improving quality of life for 90% of the fisherfolk surveyed.
However, the potential economic benefits of these development activities, often cited as the rationale for blue growth, are unfairly distributed. This is due to the uneven ownership of these resources by the government and associated private sector, with evidence from the Philippines indicating that small-scale fishers are still at risk of losing their livelihoods. In one instance stemming from the government's effort to develop the coastal tourism industry, a fisherman's boat was confiscated by a foreign resort owner without repercussions due to the owner's inordinate influence over tourism revenues. Ocean-based economic growth also undermines local fishers' access to fishing resources through loss of harvesting rights or increased competition over areas of the ocean. In Ghana, for instance, foreign oil miners have restricted small-scale fishers from fishing within a kilometer of their oil rigs, even resorting to physical violence to enforce these rules. Furthermore, shipping vessels hailing from developed and wealthy nations dominate over 98% of the trackable industrial fishing on the high seas and 78% of such activity within the national waters of developing countries. This results in the potential economic benefits flowing to these richer countries, leaving local fishermen worse off than they were prior to the proliferation of the blue economy.
Many other concerns—namely the sociocultural impacts of blue growth, gender inequality issues stemming from the physical requirements of aquaculture, and an overall lack of common global goals regarding the establishment of blue economies—continue to present barriers to significant progress in this direction. However, the importance of blue growth for SIDS cannot be disregarded given the direct dependence of these nations and their citizens on ocean-based resources. Hence, cooperation on a global scale is essential in order to allow for efficient, sustainable, and equitable blue economic development. To this end, more international conferences between world leaders and representatives of SIDS are necessary to facilitate conversation and establish resolutions and regulations regarding various aspects of the Blue Economy. Only then will countries be able to achieve greater and more equitable economic prosperity and collectively realize UN Sustainable Development Goal 14: Life Below Water.
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