20 July 20

A Sustainable Ocean Economy for 2050: Approximating Its Benefits and Costs

Tag Cloud

By Manaswita Konar and Helen Ding
Secretariat of the High-Level Panel for a Sustainable Ocean Economy, World Resources Institute

 

The ocean and its resources provide key ecosystem services and benefits that are crucial for human wellbeing and the prosperity of the global economy, but these services are at risk. The ocean’s wide range of ecosystem services (including food, energy, recreational/cultural services and trading/transport routes) is vital for the well-being of society. However, climate change, overfishing, pollution and a loss of biodiversity and coastal ecosystems are eroding the ability of the ocean to sustain livelihoods and prosperity.

Taking action to protect these ocean-based ecosystems and ensuring the environmental sustainability of ocean-based activities will produce health, environmental and ecological, and economic and social benefits to people and the planet. A key question for policymakers and funding agencies is how these benefits compare with the costs. This analysis aims to answer the question by building on several existing analyses and reports, including The Ocean as a Solution to Climate Change: Five Opportunities for Action (Hoegh-Guldberg et al. 2019) and The Global Consultation Report of the Food and Land Use Coalition (FOLU 2019). Using both quantitative and qualitative methods, it demonstrates that ocean-based investments yield benefits to society in the long term, and these benefits substantially outweigh the costs.
This analysis is the first attempt to estimate the global net benefit and the B-C ratio over a 30-year time horizon (2020–50) from implementing sustainable ocean-based interventions. It indicates the scale of benefits compared to the costs by focusing on four ocean-based policy interventions: conserving and restoring mangrove habitats, scaling up offshore wind production, decarbonising the international shipping sector and increasing the production of sustainably sourced ocean-based proteins (to ensure a healthy, balanced human diet by 2050). These interventions would contribute to global efforts to reduce greenhouse gas (GHG) emissions and move countries towards their Sustainable Development Goals and targets (HoeghGuldberg et al. 2019).

For each intervention area, the impact to reach a sustainable transformation pathway by 2050 is measured relative to a business-as-usual scenario. A B-C ratio is developed by dividing the present value of benefits in 2050 by the present value of costs. The categories of benefits assessed include health (such as a reduction in mortality and morbidity), environmental and ecological (such as benefits from higher biodiversity, reduced water usage and land-based conflicts, and coastal protection) and economic and social (such as increased business revenues, household income, jobs and food security). The categories of costs include costs to business (such as capital investments and increases in operational costs), costs to government (such as costs of regulations, research and development [R&D] expenditures, enforcement and monitoring costs) and costs to households (such as opportunity costs of forgone activities). The benefit and cost estimates are partial estimates; impacts are monetarily quantified where possible and are qualitatively described when quantifiable data are absent.

Taking action to protect these ocean-based ecosystems and ensuring the environmental sustainability of ocean-based activities will produce health,environmental and ecological, and economic and social benefits to people and the planet.

 

Key Findings
The overall rate of return on investment (ROI) can be very high, with sustainable ocean-based investments yielding benefits at least five times greater than the costs. When assessing individual interventions, the average economic B-C ratio range between 3-to-1 and 12-to-1, and in some cases even higher. The B-C ratios were similar to key health interventions in developed and developing countries. Specifically, investing $2.0–$3.7 trillion globally across the four areas from 2020 to 2050 would generate $8.2–$22.8 trillion in net benefits (average $15.5 trillion), implying a rate of ROI of 400–615 percent. The B-C ratios vary across sectors and interventions (Table ES-1; Figure ES-1) as follows:

Every $1 invested in mangrove conservation and restoration generates a benefit of $3. When assessing specific interventions, the B-C ratio for conservation is 88-to-1 and for restoration is 2-to-1. Three factors drive the difference in the B-C ratios:
the higher cost of mangrove restoration (due to seeding and replanting), low survival rates following restoration and the lag in accrual of benefits from restoration. The total value of net benefits for mangrove restoration over 30 years ($97–$150 billion) is higher than for conservation ($48–$96 billion) because we assume the area of mangroves restored is 10 times that of the area conserved.

Every $1 invested in scaling up global offshore wind production generates a benefit estimated at $2–$17, depending on the cost of offshore energy production and transmission and the types of generation that would be displaced. The value of the ROI will increase as the costs for offshore wind energy generation fall because of improvement in
technologies and actions to reduce integration costs.

Every $1 invested in decarbonising international shipping and reducing emissions to net zero is estimated to generate a return of $2–$5. The analysis assumed the significant capital expenditure to switch to zero-carbon emissions will happen after 2030, and limiting the analysis to 2050 captures only a portion of returns from these investments, which will continue beyond 2050.

To read the full article please click HERE

Categories