8 June 2018
By Martin Koehring (The Economist Intelligence Unit)
“If you spent a couple of days in Bermuda—with its stunning pink sand beaches, beautiful sunsets and the northern-most coral reef system in the world—you would be forgiven for not noticing that Bermuda is at the epicentre of ocean risk… If the ocean was an economy it would be the seventh-largest economy by GDP in the world—and would thus sit at the G7 table.”
June 8, marks World Oceans Day, learn more about the risks and solutions in this piece by Martin Koehring, Managing Editor and Global Healthcare Lead at The Economist Intelligence Unit’s thought leadership division. Sherah Beckley, Editor Thomson Reuters Sustainability.
In May the island hosted the first ever Ocean Risk Summit—sponsored by global insurance firm XL Catlin along with other partners—which looked at the key challenges and risks posed by ocean change and identified opportunities for innovative approaches to building resilience and mitigating its effects through applied solutions.
The ocean has its own dedicated Sustainable Development Goal (SDG) as part of the 17 SDGs: with SDG14 UN member states have pledged to “conserve and sustainably use the oceans, seas and marine resources for sustainable development”. However, ocean risk has, until now, been a neglected topic. This is surprising given the importance of the ocean for people and planet. If the ocean was an economy it would be the seventh-largest economy by GDP in the world.
What is ocean risk?
The summit focused on risks from ocean change, such as extreme weather, changing ocean temperatures and warming. The year 2017 marked the worst ever year on record in terms of economic losses from weather and climate-related events, at US$320bn.
However, participants in the summit were keen to point out that traditional risks, such as commercial ones like loss of cargo, are well known, while it was crucial to address emerging ones such as ocean acidification, ocean hypoxia and marine pollution, which will have major impacts on future life on Earth.
But the traditional risks are rising higher up on the agenda too—and they are already threatening the very existence of small island nations. Bermuda’s Minister of Home Affairs highlighted the need to mitigate ocean risks around food security and extreme weather events faced by small island nations.
Meanwhile, the permanent representative of Nauru to the UN pointed out that the risk of extreme weather events such as severe cyclones and coral bleaching caused by climate change threatens the collapse of the island’s food security and infrastructure.
The British Virgin Islands’ Deputy Premier said that the economic damage caused by recent hurricanes has been more than 3.5 times the size of the island’s whole economy. All major industries (tourism, fishing, shipping) were devastated.
Ocean elder HM Queen Noor of Jordan highlighted the human toll from ocean degradation linked to issues such as microplastics entering our food chains, pathogenic bacteria from contaminated water and seafood, and the spread of infectious diseases (such as cholera). However, analysing links between climate change, oceans and human health remains tricky.
How to address ocean risks
The UN envoy for oceans suggested that the five key areas for progress needed are:
- ending harmful fishing subsidies;
- ending consumption of illegally caught fish;
- expanding marine protected areas (MPAs);
- boosting environmentally conscious coastal tourism; and
- advancing ocean exploration.
In terms of MPAs, Sir Richard Branson—who joined the summit via Skype—underlined that creating marine reserves benefited the fisheries sector in the long term. As far as ocean exploration is concerned, around 95% of our oceans remain unknown. Technology is advancing, for example through robots, autonomous vehicles, powerful computing and remote sensing. However, the summit also heard that there’s a lack of data sharing in the ocean community.
Finance, investment and insurance have a crucial role to play in addressing ocean risks. Principles for sustainable investment in the Blue Economy were adopted at The Economist’s World Ocean Summit in March. Interesting initiatives to finance ocean risk solutions in the Caribbean were discussed at the Ocean Risk Summit too, for example, the Sustainable Oceans Fund; the Inter-American Development Bank’s initiatives to mobilise green bonds and blue bonds, contingent loans and guarantees; the Caribbean Climate-Smart Accelerator; and KfW climate risk insurance.
In terms of tackling marine pollution, three key focus areas were identified at the summit. First, investing in better waste management, including the “5 Cs”: collect; capture; contain; keeping in mind context and culture. Second, changing upstream factors, especially new materials, product design and systemic change (decoupling waste generation from economic growth). And finally, taking successful case studies to scale (if suitable in the local context and culture), such as the Indonesia National Plan of Action on marine plastic debris management.
An ambitious Ocean Risk Index
In order to capture the complexity of ocean risk and create a meaningful tool for positive policy change for policymakers and other stakeholders, we have been tasked to assess the global state of ocean deterioration and its impact on human activity. Commissioned by XL Catlin, the first phase, is focused on developing a framework (i.e., the value, principles, attributes and major components) to assess ocean risk.
An international expert group, which gathered in Bermuda around the Ocean Risk Summit, informed the process. This index can be a great catalyst for positive change, and the ocean community expressed support for this undertaking at the summit. The Economist Group’s World Ocean Initiative, with support from XL Catlin, is keen to build on recent progress in tackling ocean risk.