Shaping the Blue Economy: Leveraging the Oceans for Sustainable Wealth, Globally

by Dr. Charles Colgan Category:

One of the most important but little noticed changes over the past several decades is how our perspective on the world’s oceans has changed. Oceans were first considered mysterious, and then, following centuries of exploration, limitless. Now we think of oceans as finite and fragile ecosystems under pressure from human activities and natural changes. We have recognized that each of our uses of oceans involves real or potential tradeoffs with other uses and it has become critical to understand those tradeoffs. In turn, this means we need a much better and more detailed understanding of the economic values of oceans and coasts.

Developing that understanding is the mission of the Center for the Blue Economy (CBE) of The Middlebury Institute of International Studies at Monterey in Monterey, California. The Center maintains the largest and most diverse online data resources on ocean economic values in the U.S. through its National Ocean Economics Program (NOEP), which provides economic data at no charge to a wide variety of public and private parties involved in ocean issues. The Center also provides assistance to organizations needing to understand how economic data and analysis can inform decisions about managing ocean resources.

In 2015, the CBE was contacted by the Southern Environmental Law Center (SELC) of Chapel Hill, NC with a series of questions about the possible effects of exploration for oil and gas offshore of coastal areas in the region from Virginia to Georgia. In 2014, the Department of the Interior included the “South Atlantic” region in its proposed Five Year Plan, initiating a process of review and comment on the proposed plan and its Environmental Impact Statement.

South Atlantic governors had enthusiastically endorsed leasing for oil exploration hoping to gain jobs and economic development for their states. They were reinforced in this view by a study commissioned by the oil and related industries that forecast more than 121,000 jobs in the region. The “Quest” report, after the Texas company which prepared it, was widely distributed in the region and received a great deal of attention.

The SELC asked the CBE to review the Quest report and to provide a perspective on the broader ocean-related economic activity in the region that could be affected by oil and gas activity. CBE’s review noted that expanded economic activity in the area would occur with oil and gas exploration, but found that the Quest report had significantly overestimated the expanded activity. Drawing on data from the NOEP, the CBE report noted that other ocean-related industries in the region accounted for 249,000 jobs.

The CBE report also was widely distributed in the region and as the comment period on the Five Year Plan drew to a close, officials in local governments and businesses actively questioned the economic development benefits that had been touted by the Quest report. Opposition from within the region became so widespread that the Secretary of the Interior decided to withdraw the South Atlantic area from the final Five Year Plan.

Using its expertise in ocean industries, and especially its data on the contributions of ocean industries to coastal regions, the CBE provided the evidence that residents of the South Atlantic states needed to get a full picture of ocean use in the region and decide which tradeoffs were acceptable and which were not.

The experience in the South Atlantic states reflects a rapidly evolving recognition of the global need to make better use of the oceans to create sustainable wealth. The term “blue economy” has entered into the vocabulary of economic development in all parts of the world. But the meaning of “blue economy” is still evolving, with some emphasizing the possibilities of new ocean-based industries, such as renewable energy or bio-pharmaceuticals, and others emphasizing the need for the blue economy to be environmentally sustainable and provide opportunities across income levels. All of these changes are taking place in the context of a changing climate that is altering the physical properties of oceans that may dramatically shift the foundations of ocean and coastal economies.

Shaping this evolution of the idea of “blue economy” is an emerging challenge in large part because the tools needed to define and measure the blue economy are still being developed themselves. Part of the challenge is to integrate the oceans into the standard ways in which economies are measured. In October 2015, the CBE convened officials from ten countries in North America, Europe, and Asia to discuss how the economic value of oceans can be better reflected in national income accounts. The international dialog on ocean values is continuing in 2016 with a meeting this fall in Tianjin, China. The focus will be on developing international standards for measuring the ocean economy, including both traditional industries like fishing and new industries like offshore wind.

The standard measures must also be extended to incorporate the services provided by oceans and coastal ecosystems. As attention shifts to ecosystem-based management and the designation of marine protected areas, the economic values affected by these actions must be incorporated into decision making. The challenge for economists is that these values require more complex and unfamiliar measurement procedures. Economists will need to become more than data suppliers—they will need to work actively in community-based processes to generate and maintain innovative measurements of the sustainable blue economy as a part of the development process.

Particularly challenging will be measuring the values affected by climate change. Though changes such as sea-level rise and ocean acidification are now well known, profound uncertainty remains about the extent and timing with which these ocean changes will affect resources and regions. Economists will need to work with stakeholders to develop new tools to measure the vulnerability of economic values and wealth in the face of the deep uncertainties of climate change and its consequences and to make adaptation decisions that reflect the wide array of values of our oceans and coasts.

Dr. Charles Colgan is the Director of Research for the Center for the Blue Economy (CBE) overseeing the conduct of research activities and serving as Editor-in-Chief of the Journal of Ocean and Coastal Economics (JOCE).