MONTREAL — Small island developing states are the custodians of much of the world’s oceans. Through their exclusive economic zones, they control about 30% of all oceans and seas, and most of them have EEZs that far exceed their landmasses — Tuvalu’s, for example, is 27,000 times the size of its land — hosting considerable reserves of minerals, natural gas, fish, and seafood, among other resources.
But with limited capacity to fight the effects of climate change and environmental degradation, from the depletion of fish stocks to coastal erosion, ocean plastic pollution or coral reef degradation, SIDS are facing mounting difficulties in practicing good stewardship over their most precious assets.
“There are all these diversification opportunities around the blue economy that can build resilience into it, help develop sectors, make them broader, more robust to shocks in the future, and provide alternative livelihoods for people.”— Nick Hardman-Mountford, head of oceans and natural resources, Commonwealth Secretariat
In recent years, the concept of the blue economy has been embraced by international actors as a frame of reference to support SIDS in developing their economies in a way that promotes social inclusion, improves livelihoods, and ensures the sustainable management of coastal and ocean resources. It’s a concept that seeks to turn the geographical location of SIDS from a liability to an asset for ocean-based economic development. By diversifying industries and moving away from predominantly land-based development, SIDS could help create new employment opportunities.
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“Developing the ocean economies is critical for SIDS given that in most cases, it's the largest natural resource they have access to,” said Fekitamoeloa Katoa ‘Utoikamanu, high representative for the least developed countries, landlocked developing countries, and small island developing states at the United Nations.
From policy to action
Several SIDS have already adopted national blue economy strategies. Mauritius launched its oceans’ economy road map in 2013 to tap into the potential of its EEZ by consolidating existing sectors such as tourism, seaports, and fishing, and developing emerging sectors such as aquaculture, marine biotechnology, and renewable energy.
The “Seychelles Blue Economy Strategic Framework and Roadmap,” launched in 2018, sets the agenda for an integrated approach to the sustainable development of its ocean resources. It was followed by a “Marine Spatial Planning Initiative” in 2014, in partnership with The Nature Conservancy and the U.N. Development Programme, which plans for the sustainable management and health of the Seychelles’ 1,374,000-square-kilometer EEZ. In October 2018, the country launched the world’s first sovereign blue bond, raising $15 million from international investors to finance blue economy projects, including the expansion of marine protected areas, and improve the sustainable management of fisheries.
Such strategies typically cut across traditional sectors and departments, and as such pose new challenges in terms of governance.
“These large sectors tend to sit in different ministries and have different indicators of growth in the national development plan,” said Nick Hardman-Mountford, head of oceans and natural resources at the Commonwealth Secretariat, adding that a blue economy department may then be responsible for coordination. “But how do you achieve that whole-of-government approach to the blue economy in your national development strategy? These are the issues that countries are facing.”
Through the Commonwealth Blue Charter, signed in 2018, the Commonwealth Secretariat provides a space for cooperation in order to help its members reach their commitments for the sustainable development of oceans. Members have organized themselves around nine action groups to discuss priority areas, including the blue economy.
“By coming together to share and talk about the blue economy and work out what works and what are the ongoing challenges, member countries are able to address them together, and that's really the value of these action groups,” said Hardman-Mountford. Turning international commitments into action strategies that trickle down to every level of government is especially challenging for these small states, he added.
To be successful, blue economy policies and strategies must engage all stakeholders, he explained. In recent years, various models of community-based management of oceans and coastal resources have emerged, demonstrating the benefit of a bottom-up approach to sustainable marine development. One of them is locally managed marine areas, whereby local communities take charge of managing protected areas, and of which hundreds have been created across the Pacific and Indian oceans.
In 2017, the government of the Cook Islands, along with traditional leaders and local communities — and following a long consultation process across the country’s 15 inhabited islands — turned the country’s entire EEZ, equivalent to 1.9 million square kilometers, into the world’s largest multiple-use marine protected area. The marine park provides a framework for conservation and management of ocean resources, including support for coastal traditional marine protected areas or marine reserves.
“Where you have grassroots communities come together and really say, ‘we are the custodians of this area and we want to manage it,’ then they really care about it, and they really move it forward, because they have already seen that their future rests with the sustainability of this system, and managing it well,” said Hardman-Mountford.
“Making sure those communities are empowered through national policies to really take that stewardship is important.”
Funding the blue economy
Initiatives such as the Cook Island’s marine park, however, are costly to put into place, especially as SIDS lack the capacity to attract traditional sources of funding, like private sector investment.
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“The one risk which at present may be the greatest barrier to private sector investment in small island developing states relates to the impact of climate change,” said Deborah Robertson, environment specialist at the sustainable development and climate change department at the Asian Development Bank, such as rising sea levels, which could lead to larger impacts when storm surges occur, among other issues.
“Unlike other risks, this risk is at present less quantifiable and assessable and will no doubt feature prominently in private sector business decisions.”
In May 2018, ADB launched the “Action Plan for Healthy Oceans and Sustainable Blue Economies,” a $5 billion initiative to be rolled out by 2024 that will provide financial and technical assistance to ocean health and marine economy projects. As part of the action plan, the Oceans Financing Initiative, implemented by the World Wide Fund for Nature, will work to create opportunities for private sector investments to improve ocean health, notably by developing financing mechanisms such as blue bonds, blue credits for avoided costs, and first loss guarantees, Robertson explained.
For WWF, the Oceans Financing Initiative builds upon the work done by the organization at the intersection of environmental conservation, the blue economy, and finance, and indicates a growing role for development organizations in helping to set the stage for sustainable economic growth. In 2018, the organization released its sustainable blue economy finance principles, in collaboration with the Prince of Wales's International Sustainability Unit, the European Commission, and the European Investment Bank to guide investment and policy decisions.
“We're viewed primarily as a conservation organization, but in recent years there's been a growing understanding that engagement with the finance sector, both public and private, is vital to our wider objectives in terms of helping to put the planet onto a pathway that allows for people and nature to thrive together in a sustainable economy, and that includes the blue economy,” said David McCauley, senior vice president, global partnerships and multilateral engagement at WWF.
Sustainable blue finance can be directed to traditional sectors, such as seaports and tourism, making sure these projects are conducted in a sustainable way. Technology is also bringing cost-effective solutions to illegal, unreported, and unregulated fishing, which SIDS have been tackling for some time, and development organizations are serving as catalysts for new partnerships between islands and the tech sector.
In 2018, WWF in Australia, Fiji, and New Zealand, partnered with U.S.-based technology companies ConsenSys and TraSeable, and with a Fijian tuna fishing and processing company, to launch a pilot project that uses blockchain technology to improve the traceability of tuna, and prevent illegal fishing.
And in the Seychelles, GRID-Arendal, a center collaborating with the UNDP, is running the FishGuard partnership, using drones, satellites, automatic identification systems, and vessel monitoring systems to detect illegal fishing.
Funds could also be applied to circular economy principles into existing industries to reduce waste, and to invest in the protection of ecosystems, Hardman-Mountford said.
“There are all these diversification opportunities around the blue economy that can build resilience into it, help develop sectors, make them broader, more robust to shocks in the future and provide alternative livelihoods for people,” he said.
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