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Economic Assessment of Oceans for Sustainable Blue Economy Development
Get PDFThis paper presents the common approach on blue economy assessment adopted by selected countries in the East Asian Seas region, and results of initial assessment studies. There are many discourses on the definition and scope of blue economy as the ocean space is evolving, driven by innovations, shifting demands, and pressures from changing environment and climate. The ocean economy contributes to the GDP of the EAS countries in varying degrees: 3 % in RO Korea, 4.5 % in the Philippines, 9 % in China, and 13 % in Indonesia. In addition to the ocean economic activities, the ocean also generates ecosystem services that are not usually quantified, such as carbon sequestration, shoreline protection, waste recycling and storing, and ocean processes that influence climate and biodiversity, and affect sustainability of ocean activities. The losses resulting from unsustainable use of coastal and marine resources and environmental degradation also have to be examined since these are not usually captured in the gross domestic product (GDP). New activities have emerged over the years, such as marine biotechnologies, ocean energy, and construction of climate change resiliency infrastructure. These activities require new sub-sectors to be added into the ocean accounts. Assessment of economic performance should be based on both measures of annual growth, e.g., GDP, and measures of the natural capital, which can indicate whether the economic growth is sustainable over the long term. Estimating the value of ocean activities as well as the ecosystem services would help improve understanding of the role of the oceans in the blue economy. It also provides a mechanism to monitor the investment and net returns from ocean activities. Moreover, knowing the structure of the ocean economic sectors can be used to see how external events, such as storms, climate change and environmental changes may impact the blue economy development. However, data availability and accessibility, capacity, and getting policy and institutional support to develop and maintain ocean economy and environment accounts are challenges that need to be addressed
The Effect of Marine Protected Areas on Fishers\u27 Income in the Philippines
Get PDFThe fisheries sector is vital to the Philippine economy, providing substantial employment and income, contributing export earnings, and meeting local food security and nutrition requirements. To protect coastal and marine habitat and to sustain fisheries, over 1000 marine protected areas (MPAs) have been established, in the Philippines. This paper provides empirical evidence on the variance of net revenues linked with MPA establishment and the possible range of relocation costs for fishing effort displaced by an MPA. A total of 424 households were randomly selected from 18 barangays (villages) adjacent to MPAs in three regions in the Philippines. Results show that incomes decrease significantly for both fulltime and seasonal types of fishers after 1-3 years of MPA establishment. The loss occurring through MPA is higher than expected and at least on the short run (up to 4 years) the spill-over effect does not compensate. This information helped to determine the necessary conditional cash transfers for coastal communities who are highly dependent on coastal and marine resources
Economic Impacts of Climate Adaptation Strategies for Southern Monterey Bay
Get PDFLocal governments along Monterey Bay’s shores are undertaking a number of initiatives for which sea level rise adaptation planning is required. Governor Schwarzenegger’s 2008 Executive Order S-13-08 and the 2011 Resolution of the California Ocean Protection Council on sea level rise led to the proliferation of individual agency guidance documents (e.g., CalTrans (2011), BCDC (2011), CCC (2015)) that require emerging best available science (e.g., Pacific Institute Report (Heberger et al. 2009), NRC Report (2012)). These guidance documents stipulate that sea level rise and coastal hazards need to be considered in planning (e.g., Climate Action Compact, Climate Action Plans, Integrated Regional Water Management Plans, Local Hazard Mitigation Plans, Local Coastal Programs). Moreover, the California Coastal Commission has recently issued guidance indicating that sea level rise adaptation planning will be a critical piece of Local Coastal Programs going forward. As Ocean Protection Council (OPC)/California Coastal Commission (CCC) Local Coastal Program Update grantees, Monterey and Santa Cruz Counties serve as important pilots for the rest of California’s coastal communities as the state moves toward climate-ready planning.
For years, scientists have emphasized the need to put detailed, dynamic inundation information in the hands of decision-makers in order to support this planning. This information should characterize the physical risk of sea level rise and storms in order to inform coastal managers. Detailed economic analysis, while not completely absent, has lagged behind. Many past studies have focused on the cost of sea level rise, or in some cases estimated the economic benefits of a single adaptation strategy (armoring).
The southern Monterey Bay shore is, on average, the most erosive sandy shore in California (Hapke et al. 2006). The purpose of this study is to provide decision makers in the region with the tools they need to compare a suite of possible adaptation strategies to combat accelerating coastal erosion for their coastline. The physical process modeling projects how the coast would change in response to the implementation of each of these strategies, considering different rates of coastal erosion and flood hazards as well as sea level rise under several different sea level rise projections. This study also analyzes the economic costs and benefits of each adaptation approach, allowing decision makers to compare how the different management strategies will impact their jurisdiction economically as well as physically.
This study provides a detailed, integrated analysis of the costs and benefits of a range of coastal climate change adaptation strategies at four reaches in southern Monterey Bay (Figure 1), given a range of sea level rise projections. We consider a wide range of costs and benefits including losses to private property, to public goods such as recreational resources, and to the ecological function of coastal habitats. With extensive stakeholder input, we chose realistic alternative shoreline management strategies specific to discrete reaches of coastline in the study area. By combining projections of coastal hazard impacts (such as sea level rise, erosion, storm surge, wave impacts, etc.) with economic analyses of the impact on both at-risk human-made infrastructure (buildings, roads, etc.) and natural capital (ecological function and recreational assets), we estimated the value of various adaptation approaches for each reach. This information will give coastal managers the information they need to compare the benefits and impacts of different adaptation approaches and develop adaptation plans for their jurisdictions
From the Orderly World of Frameworks to the Messy World of Data: Canada’s Experience Measuring the Economic Contribution of Maritime Industries
Get PDFThis paper extends the frameworks developed by Park and Kildow (2014) to explore the use of supply chains to classify and organize ocean industries. Canada’s experience with measuring the economic contribution of ocean related sectors is discussed; with particular emphasis on illustrating the supply chain approach and of highlighting the multiple practical challenges that arise in defining and measuring the ocean economy. The overall conclusion is that Canada has succeeded in developing a methodological framework that allows it to report, on an annual basis high level estimates of gross domestic product, employment and labour income generated directly and indirectly by ocean sectors in Canada. The main challenge encountered is the potential for double counting, as a result of poor industry definition and use of input-output models to calculate total impacts (i.e. direct, indirect and induced)
The Role of Economics in Ecosystem Based Management: The Case of the EU Marine Strategy Framework Directive; First Lessons Learnt and Way Forward.
Get PDFThe EU Marine Strategy Framework Directive (MSFD) sets out a plan of action relating to marine environmental policy and in particular to achieving ‘good environmental status’ (GES) in European marine waters by 2020. Article 8.1 (c) of the Directive calls for ‘an economic and social analysis of the use of those waters and of the cost of degradation of the marine environment’. The MSFD is ‘informed’ by the Ecosystem Approach to management, with GES interpreted in terms of ecosystem functioning and services provision. Implementation of the Ecosystem Approach is expected to be by adaptive management policy and practice. The initial socio-economic assessment was made by maritime EU Member States between 2011 and 2012, with future updates to be made on a regular basis. For the majority of Member States, this assessment has led to an exercise combining an analysis of maritime activities both at national and coastal zone scales, and an analysis of the non-market value of marine waters. In this paper we examine the approaches taken in more detail, outline the main challenges facing the Member States in assessing the economic value of achieving GES as outlined in the Directive and make recommendations for the theoretically sound and practically useful completion of the required follow-up economic assessments specified in the MSFD
Climate Change Adaptation Case Study: Benefit-Cost Analysis of Coastal Flooding Hazard Mitigation
Get PDFThe damage Hurricane Sandy caused had far-reaching repercussions up and down the East Coast of the United States. Vast coastal flooding accompanied the storm, inundating homes, businesses, and utility and emergency facilities. Since the storm, projects to mitigate similar future floods have been scrutinized. Such projects not only need to keep out floodwaters but also be designed to withstand the effect that climate change might have on rising sea levels and increased flood risk.
In this study, we develop an economic model to assess the costs and benefits of a berm (sea wall) to mitigate the effects of flooding from a large storm. We account for the lifecycle costs of the project, which include those for the upfront construction of the berm, ongoing maintenance, land acquisition, and wetland and recreation zone construction. Benefits of the project include avoided fatalities, avoided residential and commercial damages, avoided utility and municipal damages, recreational and health benefits, avoided debris removal expenses, and avoided loss of function of key transportation and commercial infrastructure located in the area. Our estimate of the beneficial effects of the berm includes ecosystem services from wetlands and health benefits to the surrounding community from a park and nature system constructed along the berm.
To account for the effects of climate change and verify that the project will maintain its effectiveness over the long term, we allow the risk of flooding to increase over time. Over our 50-year time horizon, we double the risk of 100- and 500-year flood events to account for the effects of sea level rise on coastal flooding. Based on the economic analysis, the project is highly cost beneficial over its 50-year timeframe. This analysis demonstrates that climate change adaptation investments can be cost beneficial even though they mitigate the impacts of low-probability, high-consequence events
Editor\u27s Introduction to the Special Edition: The Economics of Climate Change in Coastal Areas
Get PDFEditor\u27s introduction to the Special Edition on the Economics of Climate Change Adaptation in Coastal Area
Maritime Accounts in the European Union: Coping with Limited Information
Get PDFThe European Commission\u27s effort to define the scope and components of the maritime economy was initially motivated by the Integrated Maritime Policy (2007). This policy package, principally based on coastal environment protection, maritime safety and security, and the European marine observation and data network, also included the development of an EU-wide economic and social database on maritime activities. The IMP database (2009) used experience from EU member states in terms of maritime database development, and conversely was an opportunity to update national contributions.
Later, two other packages contributed to broadening EC\u27s approach. 1) The Marine Strategy Framework Directive (2008) was a legislation on marine environment protection. Among other things, it required from member states an economic assessment of marine water uses. 2) The Blue Growth Strategy (2012) was launched to analyse and stimulate the potential for growth and job creation in maritime sectors, in line with EU\u27s strategy for 2020. The preparation phase included studies assessing the economic significance of blue sectors. These studies were an opportunity to consider the growth potential of maritime sectors and raise the question of how to describe this in the framework of a database.
On the basis of national experiences and of the main steps of EC\u27s policy, the present article will address in turn:
- The development of maritime databases in member states and at the EC, and their definition of the maritime economy;
- Methodological issues concerning the sectoral and geographical approach to an EU maritime database, including the problem of partially maritime sectors, data quality issues, and options for coping with limited information;
- The analysis of blue sectors with high growth potential, the methodology used for such analysis based on present and expected growth rates and job creation, and the issues limiting the applicability of this methodology
Climate Adaptation Finance Mechanisms: New Frontiers For Familiar Tools
Get PDFDemands for mechanisms to pay for adaptation to climate risks have multiplied rapidly as concern has shifted from greenhouse gas mitigation alone to also coping with the now-inevitable impacts. A number of viable approaches to how to pay for those adjustments to roads, drainage systems, lifeline utilities and other basic infrastructure are emerging, though untested at the scale required across the nation, which already has a trillion-dollar deferred maintenance and replacement problem. There are growing efforts to find new ways to harness private financial resources via new market arrangements to meet needs that clearly outstrip public resources alone, as well as to utilize and combine public resources more effectively. To date, mechanisms are often seen through a specific lens of scale, time, and method, for example national versus local and public versus market-based means. The purpose here is to integrate a number of those perspectives and also to highlight the following in particular. Current experience with seemingly more pedestrian needs like stormwater management funding is in fact a learning step towards new approaches for broader adaptation needs, using re-purposed but existing fiscal tools. The resources raised from new large-scale market approaches for using catastrophe- and resiliency-bond-derived funds will have their use embodied and operationalized in many separate local and state projects. The invention and packaging of innovative projects—the pre-development phase—will be pivotal to better using fiscal resources of many types. Those efforts can be greatly aided or hindered by larger national and especially state government policy, regulatory and capital market arrangements. Understanding the path to integration of effort across these scales deserves much more attention. Examples are given of how federal, state and local roles are each dimensions of that frontier, how existing tools can apply in new ways and how smart project creation plays a role
The New Blue Economy: the Future of Sustainability
Get PDFThe world’s ocean is the world’s life support. Many human activities have defined a negative relationship with the ocean. Simply put: we dump too much bad stuff in, and we take too much good stuff out. The traditional ocean economy—those ocean-based and ocean-related activities from which humans derive economic benefit— did not acknowledge or honor the ocean’s natural services, nor its finite capacity to take human abuse without undermining those services on which we depend. The “new blue economy” is the term of art for identifying those activities that improve the human relationship with the ocean and for aligning our systems of accounting and metrics to both define and enhance our ocean-positive economy. It also allows for us to account for “eco-system services” (provisioning, regulating, supporting and cultural) provided by the ocean to plants and animals (including humans). What will it take to define the new blue economy with metrics and definitions that are universally understood? First, the natural services of the ocean must be acknowledged and accounted for. Second, we must define what human activities comprise the “new blue economy,” and integrate those definitions into our standard accounting practices globally. Third, we must act to support and enhance those ocean-positive activities so that we achieve a more sustainable relationship with the ocean so that it can continue to provide the goods and services that sustain us. These steps are under way around the world and can serve as the foundation of a broader effort to truly achieve a positive human relationship with the ocean in ways that success (and enhanced economic, environmental, and human health) can be accounted for, measured, and sustained