We’ve all heard that business is going green, but 2020 just might be the year of the “blue economy” with organizations from the major shipping banks in the Poseidon Principles Association to the UN (with their Sustainable Development Goals) and the World Bank paying attention and taking action. What is the blue economy? I’ll let the experts at the Commonwealth Organization, a voluntary association of 54 independent and equal countries answer that: “The ‘Blue Economy’ is an emerging concept which encourages better stewardship of our ocean or ‘blue’ resources” and highlights “close linkages between the ocean, climate change” and the wellbeing of people, particularly in small island states that have the most to lose from degradation of the marine environment. Industries which are part of the blue economy can include: fisheries, aquaculture, shipping, maritime transport, ports & related services, renewable energy, infrastructure, marine biotechnology & bioprospecting, maritime defence, coastal and marine tourism, coastal protection, carbon sequestration, ocean monitoring & surveillance, weather regulation, desalination, waste management and disposal. Interestingly, according to a recent study many consider “offshore oil & gas, as well as mineral resources / deep sea & seabed mining/dredging” part of the blue economy even though they are seen as environmentally damaging activities and would not fit in with either the aforementioned Commonwealth Organization’s definition or this one from the World Bank.
The Credit Suisse report “Investors and the Blue Economy” reminds us that considering the future, not just present profit and loss, is necessary, as “some two thirds of the ocean’s economic value depends on its health and therefore maintaining and restoring ocean health is an essential prerequisite for any economic activities to succeed in the long run.” The United Nations Development Programme gives us even more proof of how urgent forward thinking is: “Each year, overfishing and unsustainable practices generate economic losses valued at about US$83 billion, coastal hypoxia causes losses of US$200 billion to US$800 billion, damage from invasive aquatic species is valued at US$100 billion and damage from ocean plastics is valued at US$13 billion. In the ‘business as usual’ climate change response scenario, ocean acidification will cost US$1.2 trillion per year by 2100 as ocean acidity increases an additional 250 percent.”
The blue economy is about conservation certainly – from focusing on land and water pollution and its effect on everything from coral reefs to the food chain and climate change – but it’s also about market opportunities in meeting the needs of a growing world population. James Richens of The World Ocean Initiative points out that “ocean based industries” such as wind power, wave and tidal energy, can make an important contribution “to cutting carbon emissions, helping local communities adapt to the effects of climate change, and providing employment in a sustainable ‘blue economy’”. The OECD put out a report in 2010 estimating that by 2030 the blue economy “would reach USD 3 trillion and employ 40 million people”. But while a majority of investors believe sustainable investing will be the “new normal” in the next decade, the blue economy has a way to go; a 2018 Credit Suisse report found that “three in four investor respondents have not assessed their portfolios for their impact on the ocean.” That report was a market first valuation, and it’s key here to remember these are burgeoning ideas, however urgent they may be. It is likely that, as with general sustainability investment, the growth in interest and participation will be sharp over the next few years; indeed the report found that: “The sustainable Blue Economy is poised for an increase in importance over the coming decade, with over a third of investor respondents seeing it as amongst the most important topics in 2030.”
While investment in the blue economy seems a no brainer, there are multiple barriers aside from the lack of research, knowledge, awareness and guidelines/taxonomy pointed out in the Credit Suisse report. These barriers mainly involve the siloed nature of blue economy industries. Michelle Voyer, Research Fellow at University of Wollongong, New South Wales, Australia explained the situation to Natalie Parletta in last years’ Forbes article “Making the blue economy sustainable”: “In ocean-based management, we tend to think about things in silos. The people who look at shipping look at shipping, people who look at fisheries look at fisheries and same for all the other sectors. The blue economy is big picture, and it is thinking about, across all these different sectors, how do we think about their management in a more integrated way?” I got the chance to speak with Voyer, along with several other experts in the blue economy including Paul Holthus, Founding President and CEO, World Ocean Council; Arun Krishnakumar, Partner; Green Shores Capital; James Ellsmoor, Founder & CEO, Island Innovation; Charles Haine, Technical Director, Maritime, WSP in the UK; Natasa Pilides, Cyprus Shipping Deputy Minister; Tim Lowe CBE, Chief Executive, UK Hydrographic Office; Alisdair Pettigrew, Director, BLUE Insight; Prof. Dr. Orestis Schinas, Partner, HHX.blue; Diane Gilpin, CEO, Smart Green Shipping Alliance; Bjørn K. Haugland, CEO, Skift; Birgit Liodden, Founder & CEO, The Ocean Opportunity Lab (TOOL); and Dr. Anne-Marie Warris, Director, ecoreflect and ask them just that.
Michelle Voyer, Research Fellow at University of Wollongong, New South Wales, Australia, @Michelle_Voyer
“The Blue Economy is a concept that is frequently used but often poorly defined. Many interpretations tend to focus on promoting the aggregate benefits of individual maritime sectors, such as aquaculture, offshore energy, and shipping. Considering all these sectors together draws attention to just how much economic activity occurs in our oceans. For example, the OECD estimates that ocean-based industries contribute at least 1.5 trillion USD in 2010 with this figure set to double by 2030. The Blue Economy has also focused attention not just on the aggregate benefits of maritime industries but also their cumulative impacts. In ocean-based management, we tend to think about things in silos. The people who look at shipping look at shipping, people who look at fisheries look at fisheries and same for all the other sectors. The blue economy is big picture, and it requires thinking about and managing all these different sectors in an integrated way.”
“The most common tool used to integrate management of Blue Economy activities is Marine Spatial Planning (MSP), which is a form of ocean ‘mapping’ that allocates areas for particular uses. It is particularly useful for separating conflicting uses, although this requires significant negotiation and consultation. MSP is most common in Europe but is increasingly used in many different ocean spaces around the world. Another emerging integrated management tool is ‘ocean accounting’. This is essentially a statistical process which calculates the ‘stocks and flows’ of the different uses, natural assets, environmental costs and socio-economic benefits in the ocean. This data can then inform decision making, by providing information on how a change in management for one sector might influence other components of the natural, economic and social system. As our oceans get busier tools such as these will be increasingly important to encourage more holistic thinking about all the different dimensions of the Blue Economy.”
Paul Holthus, Founding President and CEO, World Ocean Council @OceanCouncil
“A diverse and growing mix of industries use the ocean and its resources (shipping, fishing, aquaculture, offshore oil and gas, renewable energy, cruise tourism, mining, etc.) as well as a wide range of supporting industries, such as shipbuilding, marine technology, and the supporting 'infrastructure' of finance, insurance and legal. All of these economic activities take place a single, shared, dynamic, three-dimensional global ecosystem – the ocean."
"Ocean health is degrading as it absorbs the impacts of more and more use, as well as inputs from land-based sources of pollution and the effects of climate change. A growing number of companies in the global ocean business community are working to ensure that they are part of the solution these challenges. But the interconnected nature of the ocean means that no one company – or even one entire sector – can solve global ocean challenges. Ensuring ocean health and productivity requires ocean business leadership, collaboration, and action – across the sectors, around the world and over the long term."
"The World Ocean Council was created in 2009 to provide the multi-sectoral, global, ongoing platform for bringing together the international ocean business community to work on shared challenges and opportunities of the Sustainable Blue Economy. Through the WOC, the diverse ocean business and investment community are able to tackle ocean governance, pollution, biodiversity impacts, science needs, climate change issues, and other needs for ensuring both a healthy ocean and a healthy ocean economy.”
Paul Holthus will be speaking at our CMA Shipping conference in Connecticut on July 1.
Arun Krishnakumar, Partner, Green Shores Capital, @KarunK
“The blue economy is a massive challenge and an opportunity. It is a $Trillion market for anyone looking to bring efficiencies to it. However, I do not believe one firm or a business model can cover this mammoth space. Individual players in this space need to understand the ecosystem and how they can benefit from each other. For instance, my portfolio firm FrontM provides technology platforms using AI and Data compression for remote communication. In the case of fisheries it can be very helpful to cut down the costs of communication to the shore. They are also working with several maritime clients. However, beyond that, it becomes extremely hard for one firm to provide services and products that can solve wider issues.”
“Wearing my investor hat, I like to see firms with a focused approach to a problem, but I also expect them to have a deep understanding of the ecosystem they are part of. This will help them understand the pain points they are addressing better, and solve them quicker. That would be true for any Blue economy use case. We are looking at startups that can help with the fish supply chain through data analytics. They are using on the ground operational data collected through various sources to ensure the supply chain is sustainable and to identify provenance of the fish. Last year we looked at a firm that helps with plastic collection from oceans. We also evaluated a firm that was using AI to model Ocean currents and how that affects Global climate patterns. However, these are all just small parts of the Blue economy. Therefore, I think it is hard for one player to solve all the pain points in the Blue economy. It is a big market, and requires many innovative companies, business models, governments and NGOs to come in and address this sector. I am glad that I am seeing more and more of these in the past couple of years. The awareness is definitely getting better and that is a positive sign.”
James Ellsmoor, Founder & CEO Island Innovation, @Jellsmoor
“Like most areas of sustainability, people work in silos. And the Blue Economy is no exception! These silos are not just thematic (shipping, conservation, finance, fisheries, tourism, etc.) but also sectoral (governments, private sector, NGOs, universities, etc.) and so there exists multiple challenges for engendering great collaboration. One of the most fundamental barriers is understanding of how different sectors work. Even if both the government and private sector employee both want cleaner oceans, there may be misunderstanding and even a lack of trust in each other's motives that prevents increased collaboration. I wish I had the golden solution, but really it needs to be communication between the two groups and training to understand where both sides are coming from.”
“I find there is a lot of confusion around the term ‘blue economy’ because it can be seen as too broad and make the problem too big to solve. Yes collaboration is important but on what level can the fisheries and shipping industries actually engage in meaningful collaboration anyway? Even if they are creating the same problems, the reasons behind that are varied! I am all for greater integration and collaboration, but for that we need a clearer definition of ‘Blue Economy’ - something which so far is unfortunately lacking.”
Charles Haine, Technical Director, Maritime, WSP in the UK, @Charles_Haine
“Working across sectors, we very often encounter silo-thinking. The complex trading, movement and handling of cargo is physically connected in supply chains, but so disconnected in terms of responsibility for impact, or incentivisation for improvements in sustainability. Cargo terminals and vessels in port are the most visible players in the supply chain and attract attention for the problems of air pollution, carbon emissions, noise and wastes. The retailers who place their products into containers and hulls and logistics companies delivering freight to distribution centres are less conspicuous. One way for us collectively to get a grip on the hard future reduction targets for GHG emissions is for those companies to team-up proactively and solve those economic and societal challenges.”
“We see retailers collaborating on initiatives and recently, DP World London Gateway has talked about retailers and their logistics providers pooling resources, such as access to warehouses. They’ve mentioned a style of ‘Airbnb’ use of space. The basis of the port-city dynamic, so well represented by AIVP out of Le Havre, is anchored in collaboration. On infrastructure projects for access to waterfronts and transport routes, it’s common for port authorities and the mayor or local government teams to engage with a much wider stakeholder group than has been the case in the past. That can add local information, signpost concerns and gain buy-in for a project early in the project development lifecycle. Being both an employer and focal point for marine heritage makes a port an integral part of its local environment and community. That interconnectivity and joined-up thinking is going to need to be a crucial part of cleaner, greener and modern coastal towns and waterfronts.”
“It would be encouraging to see retail, shipping, terminal, cargo and logistics representation at collaborative events on resilience, sustainability and becoming future ready. The interests and opinions of those trading in the goods we buy, the ship owners and ocean carriers, operators and forwarding companies are rarely captured at such gatherings. Supply chain players really will have to come together regularly to combine resources to continue growth plans while simultaneously improving efficiencies (and saving time/cost) in an era of transition to net zero GHG emissions.”
Natasa Pilides, Cyprus Shipping Deputy Minister, @MaritimeCyprus / @NatasaPilidou
“The Cyprus Shipping Deputy Ministry has formulated an integrated maritime policy, aiming at the protection of the marine environment and the sustainable development of all relevant maritime operations. As well as the drafting of a maritime special plan by March 2021, this includes the promotion of maritime education, and innovation in marine and maritime technologies."
"Cyprus recognises that research, technological development, and collaboration across sectors are key to finding practical solutions to the challenges that the marine industry - and society – faces, or will face in the future. One element of this is the SDM’s work with the Cyprus Marine and Maritime Institute (CMMI), an independent, international, scientific and business centre of excellence which will nurture closer cooperation and synergies between the maritime industry and the academic community. Forging relationships such as this contributes to the transfer of knowledge, the development, application and dissemination of cutting-edge technologies, and the exchange of best practices."
"Education and innovation are critical to sustainable blue growth, both on a national and international scale, which relies upon nurturing closer cooperation and synergies between the maritime industry, the academic community, and innovators from other sectors.”
Tim Lowe CBE, Chief Executive, UK Hydrographic Office, @UKHO
“Our oceans are a shared resource and require a joined-up approach to their use and protection. Marine geospatial information, encompassing all manner of data about the oceans - spanning tides and depths, temperature and salinity, marine life, offshore infrastructure and more - is the best tool we have to support this collaboration and make the right choices. This is evident under the UK Government’s Commonwealth Marine Economies (CME) programme, where the UK Hydrographic Office, the National Oceanographic Centre and Centre for Environment Fisheries and Aquaculture Science are combining their data and expertise to support the Blue Economic development of 17 nations."
"In Grenada, combined data sets are helping stakeholders across government to work together to grow tourism, as well as protect and assess the health of the coastal habitats they depend on. In Kiribati, data is helping regional and international authorities to not only support safe shipping, but also predict the impact of sea level rise and create strategies to protect communities into the future."
"This power of collaboration is being recognised by many governments and non-government organisations who are encouraging a joined-up approach to ocean use and protection. For example, the UK Government’s Maritime 2050 strategy has collaboration between government, industry and academia at its heart. And on the global stage working together to protect our ocean resources will be key to meeting the UN Sustainable Development Goals. For all these plans, whether they aim to provide coastal communities with protein, income or support to decarbonisation, accurate and interoperable marine geospatial information will be key to helping marine users work together and make better, more informed, decisions on the sustainable management of this precious, shared resource.”
Alisdair Pettigrew, Director, BLUE Insight, @BLUECOMMS / @Alai_Pettigrew
“Shipping is just one of many parties competing for use of the oceans. As the global population of almost 8 billion increasingly exploits raw materials, energy and food, from the land – in some cases leading to scarcity – it is only natural that we should turn to the oceans for these things. This explains why ocean-related business and activity is expanding rapidly – the blue economy. However, with the world’s population due to reach almost 10 billion by 2050, there is real pressure to ensure that our demands on the world’s oceans are truly sustainable, and not at the expense of marine ecosystems."
"Oceans are a more fragile environment than land and therefore must be viewed differently. For the shipping industry, the oceans are its freeways and railways – with large vessels largely transiting from one developed world location to another – often oblivious to the island states, developing nations and habitats that they pass by, both in coastal waters and deep ocean."
"Without reversing the trend for globalisation, as a shipping industry we are largely reliant upon technology to help protect the balance of the oceans and enable them to flourish in supporting jobs and livelihoods, as well as providing energy, raw materials and food in a controlled and balanced way. New technological developments such as the availability of renewable and alternative energy sources, digitalization, artificial intelligence, robotics and increasing automation will help shipping contribute to this balance; but it cannot wait.”
Prof. Dr. Orestis Schinas, Partner, HHX.blue, @SchinasOrestis
“Sustainability in the Blue Economy depends strongly on the availability of data and the degree of digitization of the industry. Any greening effort and technology require data; data are necessary for optimal use of technology as well as for efficient routing. Data can support technical and financial decisions; in the era of sharing economy, data may support operational autonomy and remote control, as well as new business models including the further evolution of existing ones, such as leasing of equipment. As the time for carbon pricing is approaching, the competitiveness of ships and ocean-facilities will be determined by their total energy efficiency. Therefore, it does not suffice to install the most energy efficient onboard, but it becomes necessary to update and advance the level of technology; in this regard technology suppliers and owners should continuously work together transforming the ship to a dynamic platform of technology. Ergo, the availability of data and the digital infrastructure will enable the continuous improvement in energy efficiency and result in more complicated yet synergetic financial schemes and relations.”
Di Gilpin, Founder & CEO, Smart Green Shipping, @DiGilpin
"Reductionist, siloed, approaches to problems doesn’t work for 21st Century challenges. Climate chaos and biodiversity loss are symptoms of a struggling system. It is hard to wrap your head around interconnectedness. The Earth’s planetary system is profoundly influenced by the health of our Oceans, but we – as, mostly, land-based people – tend to ‘not see’ what goes on at sea."
"Shipping is a highly complex system with multiple types and sizes of ships, operating under many national jurisdictions with different rules, environmental and safety standards. Complex commercial structures manage immensely technically, mechanically intricate ships designed to withstand and optimise performance in multiple operational and meteorological conditions. The key objective is to bring stuff to us land-based folk as cheaply as possible."
"This lowest-possible-cost driver makes ships vulnerable to accidents that cause oil spills, forces operators to risk pristine environments to ensure shorter routes, risking the health of our oceans. But, must we wrap our heads around the whole systems-within-systems-within-systems thing before acting?"
"This, it seems to me, ensures we spend so much time workshopping, conferencing, reporting and debating the ‘right’ way that we have neither the energy nor the confidence to act. Action is what’s needed. It is better to do what we can from wherever we are. My business, developing zero emissions, wind-hybrid ships delivers technical solutions that are much less impactful on the oceans - quieter, much lower pollutant risk, producing few, if any, harmful emissions to air and water. Sensitivity to the multiple environmental challenges is in our DNA. We get that we are part of the Blue Economy Big Picture and do what we can in our space to minimise negative impacts. People are listening. The tide is turning."
Bjørn K. Haugland, CEO, Skift, @BjornKHaugland
“Making the Blue economy sustainable, will require a holistic approach to ocean management. We must recognize that it is human activities on shore that are threatening the health of the world's oceans. More than 80 percent of marine pollution comes from land-based activities. From coral bleaching to sea level rise, entire marine ecosystems are now rapidly changing. Burning of fossil fuels results in global warming that is causing alterations in ocean chemistry and many oceanic processes, and it is threatening many species of marine animals that cannot cope with higher temperatures."
"Some main threats from land-based activities causing stress to our oceans: Global warming is causing sea levels to rise, threatening coastal population centers; Pesticides and nutrients used in agriculture end up in the coastal waters, resulting in oxygen depletion that kills marine plants and shellfish; Factories and industrial plants discharge sewage and other runoff into the oceans; and lastly Air pollution is responsible for almost one-third of the toxic contaminants and nutrients that enter coastal areas and oceans."
"Hence, my call to action to leaders working in ocean-based industries is to be more engaged in solving the root causes to our ocean challenges. Many of them are land based activities. The main topic is to engage in fighting climate change and rapidly move the world from fossil fuels to renewables. We need to act fast as warming at the poles will soon be felt globally in rising seas, extreme weather, and ice loss. Trouble in the Arctic and Antarctic could cause shocks to the ocean sooner than thought.”
Birgit Marie Liodden, Founder & CEO, The Ocean Opportunity Lab (TOOL), @BirgitLiodden
"Last September, I launched The Ocean Opportunity Lab, which is the world’s first floating lab for entrepreneurs. Now with 100+ collaborating partners across 14 countries, we bring together a diverse group of actors who might otherwise never connect. It focuses on all areas of the ocean industries, based on the SDGs as drivers for identifying new ways for the maritime & ocean communities to serve the world. It’s cross-silo oriented because we realize how the key opportunities and new solutions will be found not within but between the current ones, utilizing our competence, technology and resources in brand new ways."
"While also connecting and bridging ocean innovators with renewable energy and tech, these are key drivers and enablers for getting to the future we need to deliver on. Where ocean industries are emission and waste free, and generate more resources into the ocean than we take out from it. And where the entire project is about bridging gaps, and building bridges. Between old and young, small and big players, and junior/senior. Collaboration and re-thinking current established truths is key for succeeding in today’s global society."
Dr. Anne-Marie Warris, Director, ecoreflect, @AnneMarieWarris
“‘Systems thinking’ or ‘holistic’ thinking requires rigour, courage to look outside the conventional away from linear thinking, and capacity to deal with the uncertainty of not knowing what changes may come. It is how we will achieve UN SDG. To get out of siloed thinking requires a three-step approach: Use metaliterate learner tactics to overcome my resistance to consider solutions that are outside the box; Collaborate with organisations / people who are outside the usual sphere of the silo I work in; and lastly Build in resilience in systems and approaches using planetary boundary tools.”
“One example is how CCell Renewables is using wave power to support faster deposit of calcium carbonate (the building block of coral reefs) on artificial reefs which are then seeded with coral - tackling together the challenges of coastal erosion, coral reef loss and fishery stocks in a climate challenged world. Each of the challenges are important as a silo topic but collaborating with local coral hatcheries (INAPESCA) and NGOs (Amigos de Sian Ka’an) provides a more comprehensive solution. Through co-ordinated efforts this small-scale solution can become part of the bigger picture within the blue economy.”