Breaking down the Blue Economy: A multi-part series on the ocean and marine environments through an economic lens
- Introducing the Blue Economy
“The Blue Economy is sustainable use of ocean resources for economic growth, improved livelihoods and jobs, and ocean ecosystem health.” – The World Bank
The “Blue Economy” is one of the latest in a series of terms related to sustainability and sustainable development that encompasses many of the activities and initiatives being taken for a more earth friendly and equitable future. Once a niche term, the “Blue Economy” has now matured into one of the most popular buzzwords in ocean and environmental issues today. Despite some negative connotations with which buzzwords are often associated, being a buzzword is not such a bad thing in this case. The Blue Economy has been an effective term for communicating a lot of highly relevant issues facing the ocean, frequently making its way into reports and even major global meetings titled after and dedicated to its name, including the 2018 Sustainable Blue Economy Conference that 18,000+ attended. No doubt the Blue Economy is and will continue to rise as one of the principal themes for environmental progress for at least the next decade.
2. “Blue” means “Green”
But like many buzzwords, Blue Economy is frequently overused and misapplied towards concepts or activities that do not align with its true meaning. Such misuse may be partly a result of the Blue Economy not having a single universally accepted definition, and thus has been interpreted in a variety of different ways that allows it to be loosely applied like other ‘fashionable’ or on trend phrases. Case in point, the Wikipedia page for the Blue Economy has an entire section dedicated to its definition that includes input from seven different agencies. A report from the World Wildlife Foundation (WWF) best captures the disparity in its opening statement.
“For some, Blue Economy means the use of the sea and its resources for sustainable economic development. For others, it simply refers to any economic activity in the maritime sector, whether sustainable or not.”
While some may argue whether sustainability and an environmental focus is embedded within the definition of the Blue Economy, the very use of word “Blue” is actually a direct descendant from another color more frequently associated with the environment. Indeed, “Blue” really means “Green” as the idea of the Blue Economy arose out of the “Green Economy” which adopts the same sustainability focused approach.
This idea of using “Blue” to stand in for “Green” when highlighting sustainable development specific to the ocean rather than the environment in general is actually a common practice. Other examples include “Blue Bonds” as an offshoot of the term “Green Bonds” to mean bonds used to finance environmental projects in the ocean. “Blue Carbon” has been used to define carbon sequestration in marine environments (something traditionally attributed to forests on land). Even the Green New Deal has its own spinoff for the ocean in the “Blue New Deal”. And finally, attaching the Blue Economy to ideas and activities that are inconsistent with its environmental focus in order to improve their image could be considered a form of Greenwashing (though this is not to say that all examples of misapplication of Blue Economy are intentional efforts to deceive).
So in the end, these environmentally focused principles are inherently rooted within the Blue Economy due to inclusion of the word “Blue”. And when we choose to interpret the idea of the Blue Economy and explore its various components, we should make sure we take our information from agencies that make the marine environment and its ecosystems a central and inseparable aspect of its very meaning, and ignore those that do not (see definition of marine ecosystems).
3. The Blue Economy encompasses a diversity of industries, practices, and activities
Now there remain several agencies that have produced work on the Blue Economy that maintain this environmental focus, but for consistency it is perhaps best to break down what’s inside the Blue Economy from a single source of information.
The World Bank is an especially reputable and well-established agency in the area of environmental economics and sustainable development. It is the type of wide-reaching yet specified organization that can (and has) moved the concept of the Blue Economy forward on an international scale in an impactful manner. And while the Blue Economy is too broad and complex to discuss in full detail in one article, the World Bank has distilled the Blue Economy into an easily digestible package of sectors and activities that is representative of the diversity and range of its working parts. The 5 categories of activities (13 sub-categories) include the following:
Harvesting and trade of marine living resources
- Seafood harvesting
- Use of marine living resources for pharmaceutical production and chemical applications
Extraction and use of marine non-living resources (non-renewable)
- Extraction of minerals
- Extraction of energy sources
- Freshwater generation
Use of renewable non-exhaustible natural forces (wave, wind, and tidal energy)
- Generation of (off-shore) renewable energy
Commerce and trade in and around the oceans
- Transport and trade
- Coastal development
- Tourism and recreation
Indirect contribution to economic activities and environments
- Carbon sequestration
- Coastal protection
- Waste disposal for land-based industry
- Existence of biodiversity
Together, these activities are relevant across 10 sectors/industries:
- Coastal and Maritime Tourism
- Marine Biotechnology and Bioprospecting
- Extractive Industries: Non-Living Resources
- Renewable Marine Energy
- Maritime Transport, Ports and Related Services, Shipping and Ship Building
- Waste Disposal Management
- Supporting Activities (e.g. ocean monitoring and surveillance, ecosystem-based management, and others)
Pursuing a “Blue Economy” means performing or addressing these activities and sectors in ways that 1) preserve the availability of marine resources for future generations, and 2) minimize any negative effects on the environment. And while they all involve a degree of use or exploitation of marine resources, some of them may actually be considered activities that promote conservation or are otherwise beneficial towards the well-being of marine environments. Examples include renewable marine energy to mitigate climate change or supporting activities like ocean monitoring and ecosystem-based management that can help us minimize harmful practices like illegal and destructive fishing.
4. The Blue Economy and marine ecosystems – What is it all worth?
But one common feature of these components of the Blue Economy is that they all represent different pathways in which society benefits from the ocean. And in most cases (though not quite all), these benefits are sourced from marine ecosystems, and thus are forms of ecosystem services which are quickly defined as, “the benefits people obtain from ecosystems” (Millennium Ecosystem Assessment). These can range from direct market values of marine products like wild-caught fish, to the value of mitigation services in natural environments like carbon sequestration, or even more holistic values like the cultural value of certain animals and places.
We will look at ecosystem services more closely in a future piece, but for now it is simply important to understand that society benefits greatly from the marine environment in a diversity of ways, many of which are represented within the Blue Economy, and not all of which are valued and can be traded in the free market (e.g. the existence value of biodiversity and other “indirect contributions” within the World Bank’s list of activities, ).
But the complexity of the ocean that covers 70% of Earth’s surface and the nearly countless ways it impacts coastal communities makes it very difficult to place a specific value on the ocean and the Blue Economy. These challenges are then boosted by the fact that there is much debate around valuation methods, especially when dealing with values that are difficult to monetize (like those indirect contributions). As such there is little consistency between organizations on how much the ocean, or at least a “healthy” ocean, is really worth, but estimates tend to range in the trillions of dollars. The UN estimates that the “ocean economy” provides $3-6 trillion every year (or about 4-7% of global GDP), which if the ocean were a country would comfortably place it in the top 5 of national economies. WWF estimates that “marine environments” are worth a total of at least $24 trillion, with an annual output of $2.5 trillion or more per year (slightly lower than the minimum UN projections).
So while there may not be a consensus over an exact number and methodology for valuing the ocean, all signs indicate that it is very, very big. In turn, we must also remember that we stand to lose much of that value if the health of marine ecosystems declines such that they can no longer provide the ecosystem services that we benefit from. The estimated values of the Blue Economy and its associated ecosystem services are therefore reflective of the scale we should be ready to invest in order to avoid severe environmental degradation.
Over the course of upcoming posts, we will explore the economic significance of specific marine resources and ecosystems, the threats they face, and innovative economic based solutions to addressing those threats.
Working towards a Ph.D. at Stony Brook’s School of Marine and Atmospheric Sciences, with a focus on economics of marine ecosystems and conservation finance. Read more at @johnjoaquinbohorquez.