How to Troubleshoot Apps for the Modern Connected Worker
Catalysing Ocean Finance: Transforming Markets to Restore and Protect the Global Ocean
1. Catalysing Ocean Finance:
Transforming Markets to Restore
and Protect the Global Ocean
Andrew Hudson, Head,
UNDP Water & Ocean
Governance Programme
7th GEF IW Conference
Barbados
30 October 2013
2. Value of ‘blue’ ocean to the ‘green’ economy
• Food security
• Tourism
• Transport
• Energy (fossil
fuels, renewables…)
• Ecosystem Services
(carbon and nutrient
cycling , climate
moderation, habitat, etc.)
• Poverty Reduction – GDP
contribution ocean sectors
as high as 20% in some
developing countries
3. Market value of ocean goods & services
Sector
Fisheries &
Aquaculture
Value
$100 billion/year, 45 million jobs
Transport/Shipping $435 billion/year, 13.5 million jobs, moves
90% international trade
Oil & Gas
30% global oil is offshore, $90
billion/year, increasing
Tourism
5% global GDP, 6% global jobs, coastal is
major segment, ~$271 billion/year
(US as proxy)
Global contribution ~$1 trillion/year, 500 million jobs
of the ‘ocean
economy’
4. But our oceans – and trillions $ in goods
and services - are at serious risk ….
Overfishing
Coastal hypoxia
Invasive Species
Habitat Loss
Ocean Acidification
Most are accelerating
5. Global costs of poor ocean management
on socioeconomic development
Ocean Issue
Overfishing
Costs to Society
$50 billion/year
Coastal Hypoxia/Eutrophication $200 - $790 billion/year
Invasive Aquatic Species
$100 billion/year
Coastal Habitat Loss
Unknown but large
Ocean acidification
$1.2 trillion/year (2100)
in “BAU” scenario
Total Costs today at least
$350 - $940 billion/year
6. Market & Policy failures drive ocean degradation
Ocean Issue
Market/Policy Failure(s)
Coastal hypoxia/eutrophication (fertilizer
& manure run-off, poorly treated
wastewater)
Lack of internalizing cost of nutrient
damage into price of fertilizer and human
& livestock wastewater management
Marine Invasive Species – shipping as
main vector
Lack of internalizing economic damage
invasives into shipping operations,
internalize cost to clean up ship ballast
water
Loss Coastal Habitats
Lack proper valuation of ecosystem
services coastal habitats provide
Overfishing
Lack internalizing socioeconomic and
environmental costs of overfishing into
(sustainable) fisheries management; ‘bad’
subsidies to fisheries
Ocean acidification (dissolution of
anthropogenic CO2 into ocean)
Lack of proper price on carbon which
incorporates environmental and economic
damage of acidification
8. Three Ocean Planning Instruments
(Volume II – Methodologies
& Case Studies)
• Transboundary Diagnostic Analysis/Strategic
Action Programme (TDA/SAP)
• Integrated Coastal Management/Framework
for Sustainable Development of Coastal Areas
(ICM/SDCA)
• Building on Regional and Global Ocean Legal
Frameworks
10. GEF-UNDP-IMO GloBallast Programme
• 2004 adoption international convention ship’s ballast
water & sediments; likely to come into force soon
• 70+ countries & several regions reforming policies &
legislation for convention compliance
• $100 million+ ballast water treatment R&D
• New ballast water treatment industry ~$35 billion
11. UNDP-GEF support to Reversing Eutrophication
& Hypoxia in Danube River/Black Sea
•
$3 billion catalysed nutrient reduction investments (>200) delivered 25,000 mt/year
N, 4,000 mt/year P pollution reduction, comparable to observed reductions in Danube
nutrient loads to Black Sea
• Reversal of large scale Black Sea hypoxic area, ecosystem in recovery
• For N, P, Chl-a, 68, 88, 100% Danube
waters rated Class I or II water quality
12. Tangible Impacts on other Marine Systems
Yellow
Sea
Large
Marine
Ecosystem – commitments to
reduce fishing pressure 2530%, reduce nutrient discharges
10% every 5 years through
2015, scale up MPAs and
sustainable mariculture
Rio de la Plata/Maritime Front $2.62 billion in commitments to
pollution reduction and wetland
protection
East Asian Seas/PEMSEA – 11% of
region’s coastline with ICM
programmes against near zero
baseline early 90’s; 20% ICM target
by 2015; over $10 billion in
cumulative
environmental
investments leveraged through
ICM programmes
W/C Pacific Ocean Fisheries –
fisheries representing 40% world’s
tuna stocks
moving towards
sustainability – VMS, observers,
ecosystem-based catch quotas,
etc. Tripling of tuna landings/value
by Pacific Island countries.
13. Case Studies – Catalytic Finance Ratios
GEF
Grant(s)
($
million)
Catalysed
Public &
Private
Finance
($ million)
Catalytic
Finance
Ratio
51.89
2,983
57
Yellow Sea
15.1
10,863
737
Rio de la
Plata/MF
9.31
2,620
281
PEMSEA
36.1
10,000
277
W/C Pacific
Fisheries
15.1
3,214
213
14
35,000
2,500
141.144
64,680
458
UNDP/GEF
Program
Danube/Black
Sea basin
GloBallast
TOTAL
14. Using these UNDP/GEF results and public costs and other
research/info as proxies, what would be the approximate:
- Public costs
- Catalysed finance
- Benefits
of scaling up proven ocean planning methodologies and policy
instruments to address ocean challenges globally?
16. Restoring Depleted Fisheries
Strategic Planning Methodologies
Policy Instruments
Build on Global & Regional Legal & Institutional
Frameworks
• Complete WTO negotiations to phase out
negative fisheries subsidies
• Strengthen RFMOs & LME institutions
Shift negative fisheries subsidies $16 billion/yr to
sustainable aquaculture, MPA, improved management
TDA/SAP: Scale up in ~50 LMEs/fisheries areas
facing depletion/overexploitation
CBD Aichi Biodiversity Target #11:
10% oceans under MPAs
ICM as cross sectoral tool to promote
sustainable fishing & aquaculture
Ensure sound science, ecosystem-based approaches, data
sharing, precautionary principle in RFMOs & LME
Scale up Individual Transferable Quotas (ITQ), potential
revenue up to $40 billion/year, $ to MPA, sustainable
aquaculture, improved management
UN Fish Stocks Agreement, FAO Code of Conduct, Port
State Measures, etc.
250,000
Reversing Overfishing (US$ millions)
200,000
150,000
100,000
50,000
One time
public costs
One time
catalysed
Finance
Recurring
public costs
(per year)
Recurring Avoided Costs
catalysed (Benefits) per
finance (per
year
year)
17. Coastal hypoxic & eutrophic areas increasing
geometrically due to tripling of nitrogen loads to ocean
18. Reversing Ocean Hypoxia
Strategic Planning Methodologies
Policy Instruments
Scale up TDA/SAP in 20 remaining LMEs
(& linked river basins) facing hypoxia
Nutrient management regulations
Scale up ICM in LMEs as tool to leverage
local level nutrient pollution reduction
investments and protect nutrient sinks
Nutrient emissions cap and trade in river basins
(national, regional)
Fertilizer subsidy reform
Subsidies to agricultural nutrient reduction practices and
technology
Subsidies to wastewater and industrial nutrient recovery & re-use
Global nutrient reduction fund capitalised by innovative financial
mechanism(s)
$600,000
Reversing Coastal Hypoxia
(US $ millions)
$500,000
$400,000
$300,000
$200,000
$100,000
$0
One time public costs
One time Catalysed
Finance
Avoided Costs (Benefits)
per year
19. Risks from invasive species will worsen as
shipping trade continues to grow rapidly
20. Preventing aquatic invasives – ship hull fouling
Strategic Planning Methodologies
Policy Instruments
Build on guidelines and/or anticipated
international instrument on Ship Hull Fouling
Tools, methodologies, standards & guidelines
on hull fouling management
Incorporate hull fouling issue into LME
TDA/SAPs where invasives are priority issue
Support to negotiations and enhanced
capacity for implementation of possible new
international agreement
Facilitate private sector technology R&D
Marine Invasive Species - Hull Fouling
(US $ millions)
60,000
50,000
40,000
30,000
20,000
10,000
One time public costs
One time Catalysed
Finance
Avoided Costs (Benefits)
per year
21. As atmospheric CO2 continues to rise, ocean pH dropping (=
increasing ocean acidity) at fastest rate in 25 million
years, threatening very basis of marine ecosystems
22. As international trade continues to
grow rapidly, shipping CO2 emissions
projected to triple or more in BAU
23. Blue Carbon – potential contribution
to climate change mitigation
• “Blue Carbon” coastal habitats –
mangroves, seagrasses especially – significant carbon
sinks, much higher than tropical forests on a C/ha/year
basis
• Comprehensive program to protect and restore key
blue carbon sites could represent 0.4 – 3.0% (0.15 –
1.02 Gt CO2/year) of present day CO2 emissions
• Beyond CC benefits, substantial additional economic
benefits would be realized - adaptation benefits
(protecting coasts from storm surges, etc.) and
maintaining other ecosystem services of coastal
habitats (fish spawning areas and
nurseries, recreation, etc.).
24. Ocean sectors contribution to
slowing ocean acidification
Strategic Planning Methodologies
Policy Instruments
Build on UNFCCC (or new MEA)
• Ocean pH target (minimum)
• Adoption & implementation of Blue Carbon
Amend UNFCCC to incorporate safe ocean acidity
limit & catalyse action (or create new multi-lateral
environmental agreement – MEA)
Build on new IMO ship energy efficiency guidelines
Tools, methodologies, standards & guidelines to
promote uptake of IMO energy efficiency guidelines
• Ship EE management plans (SEEMP)
• Ship EE design standards (EEDI)
• Facilitate private sector R&D
ICM, TDA/SAP to help promote scaling up local and
national Blue Carbon initiatives
Robust blue carbon inventory methodologies help to
mainstream blue carbon into carbon finance
Ocean sectors contribution to reversing
ocean acidification (US $ millions)
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
One time public
costs
One time
Catalysed
Finance
Recurring
Catalysed
Finance
Avoided Costs
(Benefits) per
year
25. Conclusions
• Reversing ocean degradation is not an intractable problem
• Ocean sustainability can be a legacy of today’s generation of
decision makers
• A modest additional public investment of around $5 billion over
10-20 years could be sufficient to catalyse hundreds of
billions, transform ocean markets and sustain the trillions of
dollars in ocean goods and services into perpetuity
• But these ocean planning processes and catalysis of action and
investment, take TIME, ocean degradation is geometric, need to
take action immediately to prevent continued decline and
possible ‘tipping points’
26. Catalysing Ocean Finance credits & thanks
Authors:
• Volume II - Alfred Duda, Global Environment Facility (Chap 1.1); Yihang
Jiang, UNDP-GEF Yellow Sea LME Project (Chap 1.2; Chap 1.3: Case Study #2);
Andrew Hudson, UNDP-GEF (Chap 1.3: Case Study #1; Chap 3.1, 3.2); Percy
Nugent, UNDP-GEF FrePlata Project, (Chap 1.3: Case Study #3); Adrian Ross, UNDPGEF PEMSEA Programme (Chap 2.1, 2.2, 2.3: Case Study #4); Barbara
Hanchard, UNDP-GEF-FFA Pacific Oceanic Fisheries Project (Chap 3.3: Case Study
#5); Jose Matheickal, UNDP-GEF-IMO GloBallast Programme (Chap 3.3: Case Study
#6); Volume I - Andrew Hudson/Yannick Glemarec
Peer Reviewers:
• Dandu Pughiuc, Head, Marine Biosafety Section, International Maritime
Organization; Carol Turley, Senior Scientist, Plymouth Marine Laboratory; Paul
Holthus, Executive Director, World Ocean Council; Ned Cyr, Director, Office of
Science and Technology, US National Oceanic and Atmospheric Administration
(NOAA); Peter Whalley, Independent Consultant; Robert Diaz, Professor of Marine
Science, Virginia Institute of Marine Science; Chua Thia-Eng, Chair, PEMSEA
Partnership Council
• Designer: Kimberly Koserowski, First Kiss Creative LLC
• Project Management: Jane Fulton, UNDP
Notas do Editor
In this presentation I will review the key results from “Catalysing Ocean Finance”, a recently launched UNDP/GEF report which documents twenty years of UNDP/GEF experience in promoting the protection and restoration of some of the world’s most important marine ecosystems. This report documents the successful application of three key ocean strategic planning methodologies that have proven highly effective in creating the necessary enabling policy environment for leveraging significant financial flows towards more sustainable ocean use.
Summarizes major ocean using and dependent sectors and critical role of oceans in provision of ecosystem services and to poverty reduction
Reviews and adds up estimates of the economic value of different ocean sectors to the world (market) economy.
Despite a number of commitments made by governments and other stakeholders over the last twenty or more years at global, regional, national and local levels, on the whole ocean health remains in decline globally and, perhaps most alarming, nearly all aggregate indicators for ocean health show degradation continuing geometrically/exponentially vs. linearly.
Summarizes and adds up estimated socioeconomic costs of poor ocean management and unsustainable use of marine resources. Contemporary costs to human societies may approach US $1 trillion per year; climate change impacts (warming, acidification, habitat degradation, etc.) will only increase these figures further.
All of the key challenges facing ocean ecosystems derive from various policy and market failures which result in environmental externalities which impact the oceans. Solutions to each of these challenges require ‘internalizing’ these externalities into the costs of ocean using and ocean impacting industries and markets.
When one reviews recent popular media, one could get the impression that our oceans have already passed point of no return in terms of degradation and ‘tipping points’. However, UNDP/GEF experience demonstrates that there remains substantial hope and opportunities to reverse these negative trends and place the global oceans back on the path to sustainability.
These are the 3 core strategic planning methodologies and approaches UNDP/GEF has successfully applied over the last 20 years that have helped to create an enabling policy environment (at global, regional, national and/or local scales) that in turn has served to catalyse significant public and private financial flows for ocean restoration and protection and in several cases, delivered measurable improvements in ocean ecosystem status and associated livelihoods.
GEF-UNDP-IMOGloBallast program played (and continues to play) a pivotal catalytic role in the processes that led to the negotiation, adoption and ratification of the international convention on ship’s ballast water and sediments. In addition to assisting over 70 countries with the governance reforms necessary for compliance and implementation of the convention, through a series of activities such as Global R&D fora, technology directories, the Global Industry Alliance on Ship Ballast water, and others, the program has helped to catalyse the creation of a whole new ballast water treatment industry, expected to be valued in the tens of billions of dollars when ships are required to achieve compliance with the convention once it enters into force.
From the late 1980’s, the NW shelf of the Black Sea was experiencing severe eutrophication and hypoxia leading to species and habitat loss and socioeconomic impacts which reached $500 million per year. Over a nearly 20 year period, UNDP/GEF helped the 17 countries of the Danube/Black Sea basin to better understand the immediate and root (policy failure) causes of the hypoxia and to put in place the necessary policies, legislation and investments needed to reduce nutrient pollution in the basin. Through the identification and facilitation of pollution reduction investments, the series of GEF projects helped to catalyse over $3 billion in public and private sector investments and sizeable reductions in Danube and Black Sea pollution loads. This ultimately led to the reversal of the Black Sea hypoxia area (one of world’s first documented reversal of a major hypoxic zone) and measurable improvements in the status of both the Danube and Black Sea ecosystems.
This slide summarizes the key results of the other 4 case studies in Catalysing Ocean Finance, each example documenting leverage of billions of dollars in public and private financial flows catalysed by the enhanced enabling policy environment created through the GEF projects.
This slide summarizes the 6 case studies: total GEF grant (via multiple, 2-4, GEF projects over 13-20 year time frames), the total catalysed public and private finance, and the ‘catalytic finance ratio’ of the latter two figures. The ratios range from 57-2,5000 with a cumulative catalytic ratio of 458 leveraging nearly $65 billion.
Catalysing Ocean Finance then examined the question, drawing from the 6 case studies as ‘proxies’ for estimating the costs required to transform markets and restore ocean ecosystems, what would be the approximate public costs, socioeconomic benefits and total catalysed finance associated with a global scaling up of these methodologies to address the key ocean challenges comprehensively.
Roughly 40% of global stocks now overexploited or collapsed; wild fisheries catch has been flat at about 80 million mt/year since the mid-1980’s, deficit largely made up from aquaculture which now makes up about 46% of globally consumed seafood products by volume. WB/FAO estimate approximate $50 billion annual economic loss due to overfishing.
One time catalysed finance $238 bn. reflects scaling up of UNDP/GEF experience with moving Yellow Sea and W/C Pacific fisheries towards sustainability (which alone represent 5% global fish catch). One time public costs dominated by costs to establish MPAs to achieve 10% Aichi target of 10% of world oceans under MPA, recurring public costs similarly dominated by annual management costs of MPAs. Recurring catalysed finance represents redirection of ‘bad’ subsidies ($16 billion/yr) and use of Individual Transferable Quota (ITQ) revenue (~$40 billion/yr) towards more sustainable fishing and aquaculture practices. Avoided costs represents elimination of the estimated annual $50 billion economic loss due to overfishing
Now nearly 500 hypoxic areas globally, doubling roughly every 10 years since beginning 20th century. Dominated in Europe, US, Australia but increasingly appearing in rapidly growing regions including East Asia, South Asia and Latin America. Under business as usual scenario, global nitrogen loads to ocean will double or triple again by 2050, seriously exacerbating ocean hypoxia, and most of this growth is projected to occur in the developing world.
One time public costs about $2.5 billion to scale up TDA/SAP (too small to be visible in this graph) and local/national ICM programs in LMEs impacted by hypoxia. One time catalysed finance about $80 billion calculated via global scaling up of UNDP/GEF experience in Danube/Black Sea to LMEs impacted by hypoxia. Avoided costs represent average of estimated range ($200-$790 billion/year) global socioeconomic impacts of eutrophication and hypoxia.
Main two vectors for global transfer of aquatic invasive species are ship ballast water (5 billion tons being transferred around the world at any given moment) and ship hull fouling. 100’s of invasions have already occurred, causing estimated $100 billion/year in economic damages, and will only increase unless these two vectors are controlled much more effectively. Unlike pollution, overfishing, etc. aquatic invasions are nearly impossible to reverse so the ecosystem and socioeconomic damages are inherently permanent and therefore worse. Through GEF-UNDP-IMO GloBallast program, int’l community has made tremendous steps to reduce the risks from ballast carried invasives but similar steps are needed to address the risks from hull fouling.
One time public costs of around $20 million (too small to be visible in graph) would be for a GEF or other global initiative, modeled after GloBallast, to catalyse public and private action on ship hull fouling through governance reform and cataysed investment. Policy etc. commitments articulated under a global framework would in parallel be mainstreamed into LME management programs to facilitate uptake at regional and national levels (as was done by GloBallast).
Marine organisms threatened by ocean acidification include those that fix calcium carbonate in their shells, not only shellfish but a sizeable fraction of the world’s phytoplankton, the basis of the ocean food chain that produce half of the oxygen delivered to us by the biosphere. Lower pH can also negatively impact other aspects of organismal functioning – respiration, growth, reproduction, communication, etc. Ocean pH dropping at fastest rate in at least last 60 million years and previous major changes in ocean pH have been associated with mass extinction events.Pteropods (keystone zooplankton species) in Antarctic already showing impacts of acidification as it is happening fastest there due to cold water absorbing CO2 more readily. In ‘business as usual’ CO2 emissions scenario, ocean pH, already decreased by 0.1 pH unit, by 2100 could drop a further 0.3-0.4 units with potentially catastrophic effects on marine ecosystems. Only solution to ocean acidification is to reduce CO2 emissions, geoengineering solutions that regulate solar input to earth would not address acidification (could speed it up in fact with less incentive to reduce CO2)SEM photo on top right of incompletely formed marine coccolithophorid grown under lower pH environment.
Global shipping volume has been growing at 3-4% per year and projected to continue to do so for the foreseeable future especially as middle income/BRICs continue rapid growth and associated increase in purchasing power. Worst case scenario, shipping could grow to 12-18% of global CO2 emissions. Through IMO, international community recently passed aggressive ship design (EEDI Energy Efficiency Design Index) and energy efficiency (SEEMP Ship Energy Efficiency Management Plans), regulations went into effect 1 Jan 2013. A concerted international (UN, industry, governments) effort to implement the new standards could avoid nearly 1 Gigaton CO2 emissions from shipping compared to the ‘business as usual’ scenario, this represents about 3% of present day global CO2 emissions so would be a sizeable contribution and prevent shipping from becoming a major piece of the climate change problem.
Robust blue carbon methodologies are needed and presently being developed to permit blue carbon schemes access to carbon markets and promote a global scaling up of Blue Carbon in same context as REDD.
One time public costs for 1. shipping EE initiative modeled after GloBallast ($20 m.), 2. scaling up Blue Carbon initiatives in the 40 countries that host the majority of seagrass and mangrove habitat biomass ($400-800 m.). One time catalysed finance is estimated private sector flows for new investments in controlling hull fouling ($20 billion), recurring catalysed finance is $0.3-5.1 billion/year in global sales of blue carbon credits. Avoided costs represents contribution of avoided shipping and blue carbon CO2 emissions to reduced global impacts of CC drawing from Stern report. Use ICM and TDA/SAP as tools to help mainstream blue carbon into regional, national and local ocean planning processes.