The Opportunities and Challenges of Financing the Blue Economy

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The ocean is the most precious resource available to island communities around the world, and more must be done to maximize opportunities that protect, enhance, and enrich the environment and those who rely on it. This was the message delivered by the speakers at the Waitt Institutes’ panel at the Virtual Island Summit 2022. Moderated by Dr Angus Friday, the Director of Blue Economy at the Waitt Institute, the discussions held by the panel delved into the benefits and opportunities available for financing a marine-based economic solution for development within the Pacific region. 

At the heart of the discussion were Taholo Kami, CEO of Kami Pasifiki Solutions, Noah Greenberg, Director at Starling Resources, Rhona Barr, an independent environmental economist, Coral Pasisi, a Senior Advisor at the Pacific Community, as well as William Kostka, Executive Director at Micronesia Conservation Trust. Together, they highlighted the innovation within the region and the pathways available to achieve a mark of 30% marine protected areas (MPAs) and 100% sustainable management.

Globally, over 100 nations have called for the protection of at least 30% of the marine environment by 2030. MPAs are an effective tool to preserve, maintain, and restore biodiversity and recover biomass in the marine environment, as well as to combat climate change by increasing carbon capture. However, designating new areas as MPAs and enforcing them are two different things.

Within the context of setting up a new economic venture tied to the active monitoring and management of large swathes of oceans, the cost are expected to be prohibitive, making finding funding difficult. “Rough estimates are at $5-$19 billion USD,” explains Noah Greenberg, “These costs are talked about in the abstract, which puts them at a disadvantage. When we look at MPAs in the abstract, we miss this broader context in which multiple institutions across sectors brought together to play a critical role.”

What this means is that the cost of managing an MPA can be offset using already budgeted resources – such as routine navy patrols, scientific research vessels, and other governance measures. Likewise, the costs of setting up, maintaining, and building on these MPAs can be derived from large subsidies earmarked for fisheries or tourism. Once the numbers are put into context, the proposed cost for MPA coverage does not seem unreasonable, especially considering the worldwide ocean economy in 2030 is expected to be valued at $3 trillion

For smaller island communities, the financing opportunities remain more tenuous, but as Taholo Kami points out, there are several economic measures in use at a domestic and international level that can be adapted for blue economy funding. These, in addition to re-investment into the sector, increased monitoring and restructuring fisheries operations could yield the economic stability and prosperity envisioned. “How do we make this a reality? We need to engage the private sector,” posits Kami.

In this case, the island of Niue can serve as a blueprint. The country is working towards a private-public partnership to build a sustainable blue economy that will work in perpetuity. Hailed earlier this year for designating its entire Exclusive Economic Zone (EEZ) as an MPA, the island nation is poised to pioneer blue economic development. Funding the endeavor is Niue’s Ocean Conservation Credit (OCC), “ enables buyers to become direct stakeholders and contributors to Niue’s ocean protection, climate, resilience, and sustainable development in a way that is both sustainable and transparent,” Coral Paisisi told the panel audience, “It is costed on the required costs of protection and outlook, arising across one square kilometer of ocean per year – for Niue that is $12.50 per nautical mile.”

The OCC, along with Investments from other contributors will help Niue build and maintain a marine-based economic system across its entire EEZ.. Committing to this would ensure that the blue economy thrives and increases return on investment on the OCC, further driving investment into the island’s economy. As Paisisi notes, this opportunity is a gamechanger for island communities, “This would enable Niue to move from project-based donor-dependent sporadic implementation to holistic, self-sustaining and country driven ocean conservation and resilience and sustainable developments.”

Appetite for blue economy projects is growing globally, and as the panel showcased, the opportunities for innovative governance, management, and financing are there. While financing for resilience-building and mitigation projects continues to be a fierce debate, continued discussion on the topic is unlocking new pathways. LIkewise, knowledge-sharing between global communities lies at the heart of effective governance and adaptation, as Barbados Prime Minister Mia Amor Mottley expressed during the opening session of the Virtual Island Summit. This session illustrated PM Mottley’s words well, and provides valuable insights into one of the biggest sustainability challenges facing island communities. 

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Island Innovation

Island Innovation facilitate connections between island stakeholders and sustainable development practitioners across the globe to share knowledge and promote collaboration.  By creating a support network, we smooth the way for developing innovative solutions to drive economic performance, ensure political stability and promote good governance, which improves the social and environmental conditions within island communities.

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