The importance of the world’s oceans, and the challenges they face cannot be understated. Oceans are home to the earth’s most diverse ecosystems, and are crucial to fighting climate change as they absorb 30% of the CO2 in the atmosphere. The total economic value of the world’s oceans is estimated at USD 2.5 trillion per year, with the livelihoods of 660 – 820 million people globally supported by the fisheries sector alone. Yet, despite this environmental and economic importance, ocean mismanagement is rife. The major fish stocks people consume are on the edge of collapse, as fish stocks are severely over-exploited. The world’s reefs are stressed, and mangroves – the lungs of the ocean – continue to be removed at destructive rates.
The impact of ocean degradation, and collapses in marine ecosystems will be most keenly felt in the global south. In Africa, fish accounts for 40% of protein intake across the continent, and the fishing industry generates livelihoods for an estimated 100 million people, many of whom already live below the poverty line. The fishing industries currently contribute USD 24 billion to African GDP – already quite a substantial sum, which could even be much higher if supply chains are improved. Poor management, rampant illegal fishing, and poor policing of coastal areas have drastic consequences on seafood production, with countries such as Ghana (one of the few where adequate data exists) experiencing up to 90% reduction in the amount of locally produced seafood.
Concerted efforts are needed to protect our oceans. And the private sector must play a leading role if Sustainable Development Goal 14 — “conserving and sustainably using the ocean, seas and marine resources” — is to be achieved. Ocean management has historically been left to governments, with well-publicised activist organizations and NGO’s also involved. With multiple competing interests and individual users acting based on self-interest rather than common good -achieving consensus amongst the current major players is seemingly impossible. Shared resources will continually get depleted. It is high time private sector funds started investing in ocean and fisheries management – in the same way they are now investing in other issues such as affordable housing, and infrastructure. Such funds could profitably scale existing innovations, underwrite innovative financing, and play a role in the development of public private partnerships (PPPs) in the space.
Ocean clean up technologies, catch methods, seafood production, and innovative methods of monitoring activities on the ocean should be supported by private funding to grow and scale. Often funding should support the large up-front investments needed by many innovations aiming to improve ocean management, such as: Precision Seafood Harvesting which uses technology to greatly reduce the incidental capture of unwanted fish and other marine creatures; closed-contained aquaculture systems that can produce fish sustainably and with minimal environmental damage; tracking technology that reduces illegal fishing by tracing where fish have come from; and trading systems which bring transparency to fish markets which have historically been opaque, despite fish being the most traded food commodity in the world.
Significant opportunity exists to apply social / development impact bonds (SIBs/DIBs) to marine management. SIBs and DIBs allow private investors to invest in a set of interventions to improve a social outcome, and if the social outcome improves, the relevant government repays the investors with interest. These bonds could be applied to areas such as mangrove restoration or marine park establishment with returns based on the higher catch rates these systems provide. Indeed, given marine environments provide resources associated with revenue streams, bonds in ocean and fisheries management could be applied with greater ease than in many social areas in which these instruments are currently offered or under development.
Governments, including many operating in Africa are taking an increasing interest in managing, controlling and monitoring fish stocks. Private funding could contribute to these initiatives, supporting the development of value chain infrastructure to improve efficiency and reduce waste. Whilst public-private partnerships (PPP) initiatives are being explored in areas such as agriculture and energy, to date, little emphasis has been given to developing these relationships for the use of resources from the ocean. A fund could play a leading role in changing this situation.
Progress is being seen in the development of funds doing just these things, including The Sea Change Investment Fund, EKO Asset Management Partners, and the Bloomberg Foundation. While financial results for these operations have been mixed, they are a crucial start on what is required. Future funds must build on the learnings of these leaders to maximize financial and social returns. Strong efforts must also be made to get major industry participants such as those operating in the seafood value chain to have greater level of participation in these funds.
The inclusion of life below the ocean in the SDGs is a good start to saving the oceans; real financial impetus, led by private sector actors, now needs to occur if we are to have any hope of it succeeding.
Michael Davis is a Senior Consultant in the Nairobi office of Dalberg Global Development Advisors. Dalberg is a strategic advisory firm dedicated to global development.