We use the levelised cost of electricity (LCOE) to estimate the cost of additional offshore wind energy generation. The LCOE includes capital costs, fuel costs, fxed and variable

19 It can be argued that the value of nutritional benefts is already embedded in the value of fsh sold.

20Within offshore wind energy technologies, bottom-fxed water technologies dominate the current capacity of offshore wind energy.

21The authors based their estimation on several studies that have included offshore wind in scenarios projecting future energy mix. These include International Energy Agency scenarios, Bahar et al. (2019) and Teske et al. (2011). We assume a linear increase in energy generation from 2020 to 2050.

**Fig. 18.3** Historical levelised cost of electricity generation of offshore wind and strike prices in recent auctions in Europe. Note: *MWh* megawatthour. Source: IEA (2019b)

operations and maintenance costs, fnancing cost and an assumed utilisation rate for each plant type (IEA 2015).

The LCOE for offshore wind power has declined since 2010 due to factors such as increased capacity from new installations (the ratio between realised energy output and theoretical maximum output), declining operational and maintenance costs due to improved turbine design (as they are made more robust for the offshore environment), improved capacity factors (linked to an increase in turbine size and hub height) and reduced transmission costs (Hoegh-Guldberg et al. 2019).

The global weighted-average LCOE of offshore wind projects commissioned in 2018 was estimated at \$127–140 per megawatt-hour (MWh) based on the standard cost of capital representing full market risk (7% for developing countries and 7.5–8% for developed countries) (IEA 2019a; IRENA 2019). Improved fnancing terms could reduce the LCOE of offshore wind (IEA 2019a).

For example, applying a 4% weighted average of capital costs (WACC) to 2018 costs and performance parameters yields an offshore wind LCOE of about \$100/MWh, which is 30% less than the LCOE derived from the standard WACC (7–8%) (IEA 2019b).

Declining recent strike prices22 of offshore wind projects provide strong market signals of future cost reductions, indicating increased confdence from investors and setting the stage for low-cost fnancing opportunities for upcoming projects (Fig. 18.3). Analysis by the International Energy Agency (IEA) of auction strike prices shows costs could fall as low as \$50/MWh (in some cases including transmission) for delivery in the mid-2020s (for example, a UK strike price of \$51/MWh was seen in the September 2019 auction) (IEA 2019b).23 Overall, evidence shows that with an economy of scale and learning curve effects, signifcant additional reductions in generation costs of offshore wind can be anticipated in subsequent years (IEA 2019b).

For foating offshore wind energy platforms, the LCOE may be higher because this is a less mature technology compared with the predominate bottom-fxed technology; it represents only 0.03 GW of the total of 23 GW of offshore power capacity. While cost reductions in the sector are expected due to rapidly advancing technology and market conditions enabling deployment to compete globally,24 given the current low installation capacity of foating offshore wind facilities, it is diffcult

22The strike price is a guaranteed price to be paid to wholesale generators of electricity.

23There is a risk that, depending on how auctions are designed, low bids may be associated with no delivery and/or renegotiations. For example, Welisch and Poudineh (2019) state that one-shot auctions and the lack of a nondelivery penalty clause increase the probability of speculative bidding and prevent bidders from learning and from utilising information effciently.

24 In 2015 the costs of foating offshore energy were estimated to range between \$187/MWh and \$316/MWh (IEA and NEA 2015), with predictions that costs would fall by 40% by 2030 due to rapidly advancing technology and market conditions that enable offshore wind deployment to compete globally. These cost declines are also refected in recent studies. Previous National Renewable Energy Laboratory (NREL) studies estimated the LCOE for an offshore wind project in the Massachusetts wind energy area to be \$77/MWh (Moné et al. 2016). Later NREL studies revised the LCOEs downward to \$74/MWh by 2027 and \$57/MWh by 2032 for foating offshore technologies in Maine (Musial et al. 2020). The recent technological and commercial improvements in the global industry are applicable to the turbine design, turbine scaling effects on the balance of station, lower fnancing terms and lower costs for the foating platform, array and export cables. Commercial-scale plant costs (in terms of dollars per kilowatt) modelled for the Aqua Ventus technology were found to be approximately fve times lower than the pilot-scale demonstration project cost that was originally estimated at \$300/MWh.

to predict its future global costs. That said, while the relative importance of foating wind power platforms will increase, we assume that within the next 30 years the majority of offshore wind installations will be bottom fxed; thus, for an overall cost estimate, we assume the LCOE fgures will be close to that of the bottom-fxed installations.

For this analysis, we looked at two scenarios based on IEA cost projections (IEA 2019b):

#### **5.5.3 Ofshore Wind System Integration Costs**

The costs of integrating offshore power generation into the land-based electricity system include infrastructure costs (for expanding and adjusting the existing electricity infrastructure to feed in electricity production) and balancing costs (for handling deviations from planned production and extra costs for investments in reserves for handling power plant or transmission facility outages).

Offshore wind power requires an offshore grid as well as expanding the onshore transmission grid. The transmission or grid costs are closely tied to the regional regulations for connecting the project to the onshore grid (IEA 2019b). In 2015, the grid and balancing costs of integrating 50% of offshore wind power into the system were estimated at \$43/MWh in 2019 prices (or €37/MWh) for offshore projects in Germany (Agora Energywiende 2015). These estimates were higher than the integration costs for photovoltaic (PV) solar and onshore wind (\$5–20/MWh) because it costs more to connect with an offshore generation source. However, these costs are expected to decline as offshore wind projects increase and technologies improve. The average up-front cost to build an offshore wind project, including transmission costs, will drop by more than 40% over the next decade, according to the IEA. Such a drop would be due to innovation, economies of scale and supportive action to reduce costs by grid operators.25

J. Lubchenco and P. M. Haugan

**Table 18.8** Levelised cost of electricity for conventional sources of energy, 2019

*Notes: MWh megawatt-hour*

a *Levelised cost of electricity generation (LCOE) estimates for coal, natural gas and nuclear are based on NEA and IEA* (2015) *countrylevel analysis of LCOE for the various technologies. The ranges show that the LCOEs will vary by location as each technology and each country faces a different set of risk profles. Original estimates are converted from 2013 prices to 2019 prices using the Consumer Price Index infation calculator*

b *LCOE estimates for hydropower are based on analysis of plants based in the United States (see Stacey and Taylor* 2019*). They calculate LCOE for new plants using EIA data (which used WACC of about 4%). They state that new plants have higher fxed costs and LCOE (than existing resources) as they begin their operational lives with a full burden of construction cost to recover*

*Source: IEA and NEA* (2015)*, Stacey and Taylor* (2019)

For this analysis, we take a conservative approach and assume the grid and balancing cost is \$43/MWh in 2020 and declines by 20% (\$34/MWh) over 2030–2050.

#### **5.5.4 Baseline Energy Generation Costs**

In 2018, coal, gas, nuclear and hydropower accounted for 90% of the total electricity generation (IEA 2019a). We assume that, under the baseline scenario, demand for electricity will increase over 30 years (2020–2050) and additional investments in conventional sources of energy (mainly fossil fuels) will be made to meet the demand.

We analysed the LCOE of conventional sources of energy to estimate the current costs of energy generation in the baseline based on two discount factors (Table 18.8).

Based on the current energy mix and the discount factor, we estimate the global weighted average of LCOE in the baseline to be \$86–94/MWh. We assume that by 2040 the LCOE will fall by 20% based on learning effects.

#### **6 Additional Costs of Energy Generation from Ofshore Wind**

The following equation is used to calculate the additional costs of scaling up offshore wind production:

25Wind corridors for onshore wind have helped to streamline the siting of transmission for multiple projects that allow multiple developers to share the cost. These innovations could help bring down costs.

697

Costs of offshore wind energy generation o ffshore wind generation costs offshore wind integration costs- baseline energy generation costs

The total costs of scaling up offshore wind power are shown in Table 18.9, with the moderate scenario costing \$250–884 billion and the aggressive scenario costing \$97–420 billion.

#### **6.1 Assessment of Benefts**

Offshore wind energy can deliver a suite of health, environmental and ecological, and economic and social benefts.

#### **6.1.1 Health Benefts**

Due to its very low CO2 emissions and negligible emissions of mercury, nitrogen dioxide and sulphur dioxide, as well as its 0 generation of solid or liquid waste, offshore wind energy production could have a positive impact on human health depending on what energy sources it displaces. Observational and modelling studies indicate that three million premature deaths are attributable to ambient air pollution and another 4.3 million to household pollution (WHO 2016). By multiplying the annual CO2e emissions mitigation potential by the marginal cobenefts of avoided mortality (see Box 18.2), we estimate the total avoided damage costs (or discounted health benefts) from transitioning to offshore renewable energy at \$0.15–4.4 trillion over 30 years (2020–2050).26

**Table 18.9** Total costs of scaling up offshore wind production, 2020–2050

*Source: Authors' calculations*

#### **6.1.2 Environmental and Ecological Benefts**

#### **Water Consumption Impacts**

When estimating the impact of water usage for energy generation, we looked at water withdrawal and water consumption. Water withdrawal is the volume of water removed from a source, including water that is eventually returned to the same source; by defnition, withdrawals are always greater than or equal to consumption (IEA 2016).27 The type of cooling technology used mainly determines how much freshwater is withdrawn and ultimately consumed, although fuel mix, the power plant's role in the electricity system, turbine design and weather also infuence the amount of water required (IEA 2016). Thermal power plants (coal, natural gas, oil, nuclear and geothermal) demand considerable amounts of water for cooling (IEA 2016) (Table 18.10). In contrast, studies show that wind systems require near zero water for energy generation and cooling (Macknick et al. 2011).

We estimate the water consumption to be 860–1315 gallons/MWh under the baseline. Using the true cost of water in terms of avoided damage to the environment, we estimate a range from \$0.10 per cubic metre (m3 ) in water-abundant

**Table 18.10** Water consumption factors for nonrenewable technologies

*Notes: MWh megawatt-hour, PV photovoltaic*

a *Dry cooling is also an option that is not discussed here as it is expensive and has limited application*

b *Once-through cooling involves lower water consumption but higher water withdrawal than circulating cooling systems. In some jurisdictions (typically arid), once- through cooling is no longer permitted. However, we provide estimates of this technology to demonstrate a conservative water consumption scenario Source: Macknick et al.* (2011)

26This is due to reduced criteria pollutants such as ozone and particulate matter (that are indirectly displaced).

27This analysis does not account for the impact of returning the water because it often gets returned at a different temperature, leading to thermal pollution.

areas to \$15/m3 in extremely water-scarce areas (Trucost 2013). We estimate the benefts (discounted) of achieving offshore energy transformation through water savings alone to be \$1.3 billion to \$1.4 trillion over 2020–2050.

#### **Climate Impacts**

We used the social cost of carbon method (see Box 18.3) to estimate the value of reductions in GHG emissions attributable to offshore wind at \$344 billion to \$1.4 trillion over 30 years.

#### Impacts on Biodiversity

Building more offshore wind farms could have both positive and negative impacts on biodiversity. The net impacts have not been quantifed monetarily, and they would vary depending on the location of the offshore wind farm and the policies and measures to address negative impacts. Effective marine spatial planning, combined with emerging ocean energy technologies, can be effective in mitigating biodiversity loss from ocean energy technologies and reinforcing biodiversity cobenefts (Hoegh-Guldberg et al. 2019).

The risks of installing wind farms in the marine environment include biological invasions, noise and disturbing vibrations to marine species, collisions between birds and wind turbine rotors and the presence of electromagnetic felds that can disrupt marine life and benthic habitats (Langhamer 2012; Sotta 2012). However, studies have shown a gap between perceived risks and actual risks, and the former arise from uncertainty or lack of data about the real impacts (Copping et al. 2016). While it is important to acknowledge possible impacts, some of the actual risks are likely to be small and can be avoided or mitigated (Copping et al. 2016). For example, spatial planning appears to reduce risks, such as collisions with seabirds and impacts on migratory cetaceans, to manageable levels (Best and Halpin 2019). However, as wind energy expands into new areas, it could become more diffcult to mitigate impacts.

Wind farms can have positive environmental impacts by serving as artifcial reefs for many organisms (Hammar et al. 2016). In addition, the prohibition of bottom trawling near offshore wind farms for safety reasons eliminates the disturbance of fsh, benthos and benthic habitats.

Evidence from Belgium and Norway suggests that in areas with a homogeneous seabed, wind farms may enhance diversity (Buhl-Mortensen et al. 2012; Degraer et al. 2012).

#### **6.1.3 Economic and Social Benefts**

This analysis does not monetise the impacts on jobs and livelihoods to the wider community, but it acknowledges them qualitatively. Offshore wind energy can create jobs: German and UK case studies state that offshore wind development is more labour-intensive than onshore wind development because of the greater challenges inherent in building and operating offshore farms in marine environments (BMWi 2018; IRENA 2018a). In Germany, the offshore segment accounted for 17% of total German wind employment in 2016, even though it represents no more than about 10% of the country's current total wind capacity. Estimates predict that direct full-time employment in offshore wind will be around 435,000 globally by 2030 (OECD 2016).28 Similar analysis by Ocean Energy Systems shows that deployment of other forms of ocean energy (tidal range, wave power and ocean thermal energy) can also provide new jobs and additional investments (Huckerby et al. 2016).

However, the net global impact of the growth of the ocean-based energy on net jobs across the whole of the energy sector are less certain because the entire energy sector will transition to cleaner energy sources. Moving to cleaner energy will lead to job losses in the fossil fuel sector, though ocean-based renewable energy has the potential to beneft workers transitioning from declining offshore fossil fuel industries (IRENA 2018a; Poulsen and Lema 2017; Scottish Enterprise 2016), minimising the costs of transition and the risks of structural unemployment.

#### **6.2 Estimated Benefts and Costs**

We estimated the B-C ratio under two approaches.

In the frst approach, we estimated the ratio over 30 years (2020–2050), where additional energy production is calculated for each year against the BAU scenario, using present value benefts and costs. In the second approach, we calculated the B-C ratio for one unit of energy produced.

#### **6.2.1 B-C Ratio Using Present Value Approach**

Table 18.11 shows the high and low beneft-cost ratios for the frst approach—calculating additional energy production for each year against the BAU using present values benefts and costs.

On average, there is a net positive beneft from expanding offshore wind production. The net present value of benefts was estimated to be \$253 billion to \$6.8 trillion over 30 years.

**Table 18.11** Net benefts from scaling up offshore wind energy and beneft-cost ratio

*Source: Authors' calculations*

28This is an estimate of direct jobs, not including indirect or induced jobs, derived from the economic activity of an offshore wind farm.

**Table 18.12** Beneft-cost ratio for offshore wind production under varying LCOE levels

*Note: LCOE levelised cost of electricity; MWh megawatt-hour Source: Authors' calculations*

The ROI in 2050 can be high, as shown by the B-C ratio of 2-to-1 to 17-to-1 in 2050.

#### **6.2.2 B-C Ratio for a Unit of Energy Generation and Transmission**

We estimated the benefts for production of one additional unit of energy to be \$75–300/MWh. The B-C ratio varies mainly depending on the LCOE of offshore wind assumed. We examined three scenarios with different LCOE values and found B-C ratios between 0.9-to-1 and 28-to-1 (Table 18.12).

Both approaches show that the value of the ROI will increase as the costs of energy generation for offshore wind fall with improved technologies and as actions are taken to reduce integration costs. The estimates should be treated as partial because they do not include key impacts that are discussed qualitatively, such as impacts (positive and negative) on biodiversity and on jobs and livelihoods in coastal communities.

#### **Data Limitations and Caveats**

Data limitations and caveats are described in Appendix 2. They include potential risks to biodiversity, variations in GHG mitigation depending on the fuel mix in the local grid, variations in LCOE depending on local market conditions, and omitting fnancial benefts from water savings.

#### **6.3 Decarbonise the International Shipping Sector**

Shipping is a signifcant source of emissions with identifable reduction pathways (Hoegh-Guldberg et al. 2019). The sector is responsible for approximately 1 GtCO2e per year and represents around 3% of global anthropogenic CO2 emissions (Smith et al. 2015). Based on current trends, GHG emissions will double by 2050 to roughly 2 GtCO2e, compared with 2010 (Hoegh-Guldberg et al. 2019). In 2018, the United Nations International Maritime Organization (IMO) adopted a resolution29 to reduce GHG emissions from shipping by at least 50% by 2050, relative to 2008 emission levels. However, greater ambition is needed to keep global temperature rise under 2 °C to 1.5 °C (Hoegh-Guldberg et al. 2019; UNFCCC 2015).

#### **6.3.1 Baseline, Sustainable Transformation Pathway and Target Scenarios**

The sustainable transformation pathway focuses on decarbonising only the international shipping sector. Although there is potential to reduce emissions in both domestic and international shipping, we focused on international shipping, which accounts for 55% of the total emissions in the sector (Olmer et al. 2017). The following scenarios were considered from Hoegh-Guldberg et al. (2019).

Under the BAU scenario, it is estimated that total annual GHG emissions from international shipping will grow from 800 megatonnes (Mt) in 2012 to 1100 Mt. in 2030 to 1500 Mt. in 2050. The mitigation potential assumes a 20–39% emissions reduction in 2030 from a 2008 baseline, and in 2050, a 50–100% emissions reduction from the 2008 baseline emissions (Table 18.13).

The upper-bound emissions reduction for 2050 assumes that all vessels move to full use of nonfossil fuels from renewable feedstock. The lower bound is set at 50%, taken as the minimum interpretation of the IMO's objectives in the initial GHG reduction strategy (Hoegh-Guldberg et al. 2019).

#### **6.3.2 Assessment of Costs**

Because only a small subset of the feet is likely to be 'zerocarbon-fuels ready' by 2030, we assume the mitigation potential for 2030 to be mainly driven by maximising energy effciency (Hoegh-Guldberg et al. 2019). This includes technological measures that increase the energy effciency of a ship, such as altering its weight (using lighter materials) or design (such as hull coatings and air lubrication to reduce friction), and other ways to reduce or recover energy (such as via propeller upgrades and heat recovery). These measures could result in fuel savings of up to 25% (ITF 2018). In addition, energy could be saved by changes in how ships—and, more broadly, maritime transport systems—are operated, such as changes in speed, ship-port interface and onshore power. Over the last few years, both slower speeds and larger ship sizes have contributed to a decrease in shipping emissions (ITF 2018).

**Table 18.13** Greenhouse gas mitigation potential from decarbonising international shipping, 2030 and 2050

*Note: GtCO2e gigatonnes of carbon dioxide equivalent Source: Hoegh-Guldberg et al.* (2019)

29See IMO (2018).

However, effciency measures are ultimately limited by factors such as the effciency of a propeller or an internal combustion engine that are impossible to improve beyond a certain point (IMarEST 2018). As those limits are approached, improvements have increasingly diminishing returns and become less cost-effective (IMarEST 2018). Hence, the cost of decarbonising international shipping is ultimately capped by the cost of switching to zero CO2 emissions fuels and technologies (IMarEST 2018).

We refer to the IMarEST (2018) study to estimate the cost of GHG reduction in international shipping. The study assumes that signifcant absolute emissions reductions are achieved even at low marginal cost of carbon (\$50/tonne) (IMarEST 2018).30 The results from the same IMarEST (2018) model state that, depending on how prices evolve for renewable electricity in coming decades and other assumptions in the scenarios, a 70–100% absolute reduction in GHG emissions by 2050 can be achievable for a marginal abatement cost of \$100–500/tCO2e. By multiplying the cost per tCO2e abated with the mitigation potential estimated in the Hoegh-Guldberg et al. (2019) study, we estimate the total costs (capital and operational) over 30 years to be \$2.3 trillion to decarbonise shipping by 100%.31

#### **6.3.3 Assessment of Benefts**

The health, environmental and ecological, and economic and social benefts from the international shipping sector reducing its GHG emissions are summarised below.

#### **Health Benefts**

Reduced PM2.5 from marine engine combustion mitigates ship-related premature mortality and morbidity (Sofev et al. 2018). The annual avoided health damage cost to adults is calculated by multiplying the CO2e emission mitigation potential by the average marginal cobenefts of avoided mortality (see Box 18.2). In addition to the impact on adult mortality, evidence shows that reducing shipping emissions will positively impact childhood morbidity by reducing childhood asthma (Sofev et al. 2018). Based on the methodology outlined above for reducing adult mortality and for childhood asthma (see Appendix 3), we estimate the discounted cumulative health benefts from reducing emissions to be \$1.3–9.8 trillion over 30 years (2020–2050).

#### **Environmental and Ecological Benefts**

Strong acids formed from shipping emissions can produce seasonal 'hot spots' of ocean acidifcation in areas close to busy shipping lanes. Hot spots harm local marine ecology and commercially farmed seafood species (Hassellöv et al. 2013). Reducing global GHG emissions, including shipping emissions, is critical to mitigating local and global ocean acidifcation.

A recent study found that lower trophic species such as bivalves were affected disproportionately due to the compounding effects of shifts in temperature, chlorophyll and ocean acidifcation. The commercial mollusc industry is estimated to lose over \$100 billion by 2100 due to ocean acidifcation alone (Narita et al. 2012).

In addition, reducing ship speeds could positively impact marine mammals and other species. A 10% reduction in ship speed could reduce the total sound energy generated underwater by 40% and reduce the overall whale strike rate by 50% (Leaper 2019). Such measures would beneft marine species (including the whale population) globally, resulting in higher ecosystem service values (both recreational and nonuse values32) that will, in turn, improve human wellbeing. Because of uncertainty about the exact impact that measures to reduce GHG emissions would have on ocean acidifcation and noise, we have not been able to monetarily quantify these key impacts.

Reducing emissions in shipping will help avoid the most catastrophic impacts of climate change. We estimate the climate benefts (see Box 18.3) from reducing carbon emissions to be \$0.8–1.6 trillion over 30 years.

#### **Economic and Social Benefts**

Estimates suggest that improved hull shape and materials, larger ships, drag reductions, hotel-load savings and better engines and propulsors, together with routing improvements, can deliver overall effciency improvements of 30–55% (ETC 2018). The analysis indicates that reducing

30This is because of the assumption about the availability of bioenergy; in these scenarios, it is signifcant relative to international shipping's total demand for energy. In this modelling, bioenergy is assumed to enter the fuel mix as a substitute for fossil fuels and, therefore, is at the same price as the fossil fuel equivalent and is not dependent on additional carbon price to stimulate its take-up. For example, the study assumes that bioenergy enters the fuel mix as a substitute for fossil fuels at the same price as the fossil fuel equivalent (and is not dependent on additional carbon price to stimulate its take-up), the supply of bioenergy is 4.7 exajoules and there is a low price/capital cost of moving to future shipping energy sources, particularly electricity, biofuel, hydrogen and ammonia. The costs of investments increase (and, consequently, the B-C ratio decreases) if we assume a scenario where the cost of alternative fuel is higher.

31Our estimates refect both operational costs and capital investments. It is, hence, higher than the cost estimate provided in the recent analysis by the University Maritime Advisory Services (UMAS) and the Energy Transitions Commission for the Getting to Zero Coalition (2019), which states that approximately up to \$1.6 trillion 'capital investments' is needed between 2030 and 2050 to achieve the IMO target of reducing carbon emissions from shipping by 100% by 2050.

32Nonuse values (e.g., existence, bequest and option values) are the beneft values assigned to environmental goods that people have not used or do not intend to use. For example, the current generation can place a value on ensuring the availability of biodiversity and ecosystem functioning to future generations (bequest value).

a vessel's speed by 10% (e.g., from 20 knots to 18 knots) results in a 19% reduction in cargo-hauling fuel consumption after accounting for the reduced shipping speed and the associated loss in shipping time (Faber et al. 2012). These savings are already included in the cost calculations for 2030.

#### **Estimated Benefts and Costs**

Based on the methodology outlined above, we estimated that there are net benefts from making investments to decarbonise the shipping sector. The net discounted beneft (average) over 30 years (2020–2050) is estimated to be \$1.2–9.1 trillion. The B-C ratio is estimated to be 2-to-1 to 5-to-1 in 2050 (Table 18.14).

#### **6.3.4 Data Limitations and Caveats**

Data limitations and caveats include a lack of consideration of the secondary impact on commodity prices and the impact of all cost reductions (technology change) in the future. For details, see Appendix 3.

#### **6.4 Increase the Production of Sustainably Sourced Ocean-Based Proteins**

The analysis for this section builds on the estimates provided in *The Global Consultation Report of the Food and Land Use Coalition* (FOLU 2019), the analysis of Costello et al. (2016) that looks at the return from global fsheries under contrasting management regimes, the analysis of Sumaila et al. (2012) that measures the net present value of rebuilding fsh stocks over 50 years, and the analysis of Mangin et al. (2018) that compares the benefts from fsheries management against the costs for individual countries.

To determine the level of ocean-based protein production required to ensure a healthy, balanced human diet by 2050, we refer to the EAT-*Lancet* Commission report (Appendix 4; Willett et al. 2019), which states that the ocean will be required to produce 85–90 million metric tonnes (mmt) of edible-weight ocean protein annually by 2050. It is estimated that the world (freshwater and ocean) currently produces only half that amount (FOLU 2019; Willett et al. 2019).

**Table 18.14** Net beneft from decarbonising international shipping and beneft-cost ratio

*Source: Authors' calculations*

#### **6.4.1 Baseline, Sustainable Transformation Pathway and Target Scenarios**

The 2019 FOLU report looks at ocean-based production across three sectors: wild marine capture fsheries, oceanbased fed aquaculture (fnfsh) and ocean-based nonfed aquaculture (bivalves). The production scenarios under BAU and the sustainable transformation pathways are shown in Table 18.15. Production is measured in million metric tonnes live-weight equivalent. Broadly, the transformation scenarios for the sectors were modelled in terms of possibilities of expanded production.

**Table 18.15** The business-as-usual and sustainable transformation pathways

*Notes: mmt million metric tonnes*

a *Costello et al.* (2019)

b *Costello et al.* (2016, 2019); *Sumaila et al.* (2012); *this refers to the higher estimates of the Sumaila et al. optimal catch range under reform* c *FOLU* (2019)

lusc production and consumption to 4% per annum as opposed to the BAU average annual growth rate of 3.1% over the last 10 years (FOLU 2019).

#### **6.4.2 Assessment of Costs**

The analysis in this paper builds on the investment cost estimates and assumptions in *The Global Consultation Report of the Food and Land Use Coalition* (FOLU 2019), Sumaila et al. (2012) and Mangin et al. (2018).

#### **Capture Fisheries Reform**

Analysis by Mangin et al. (2018) estimates that under a fsheries reform scenario, annual global fsheries management costs would be \$13–15 billion, whereas under BAU, the costs are estimated at \$8 billion.33 Sumaila et al. (2012) estimate that the amount governments need to invest to rebuild world fsheries is between \$130 billion and \$292 billion in present value over 50 years, with a mean of \$203 billion.34

#### **Nonfed and Fed Mariculture Production**

lion to \$133 million over 2031–2050. All increases in production beyond 2030 come from new farms.

33The paper estimates a country-level B-C ratio for management improvements for 30 countries. It categorises landings in each country into three broad management categories: catch share, where managers and regulators set a scientifcally determined catch limit on the amount of fsh that can be caught using measures (e.g., community-based allocation, individual quotas, individual vessel quotas, individual transferable quotas, and territorial use rights for fsheries); strong catch controls, which include a broad range of management that can be classifed as strong biological management without catch shares; and a broad 'other' category that consists of the rest of the fsheries referred to as open access. It focuses on three types of fsheries management costs: administration (or management), research and surveillance, and enforcement (Mangin et al. 2018).

34The estimated transition costs include the costs to society of reducing the current fshing effort to levels consistent with the maximum sustainable yield and the payments governments may decide to employ to adjust capital and labour to uses outside the fsheries sector (such as vessel buyback programs and alternative employment training initiatives for fshers).

35This is based on estimates that the average capital expenditure for a large-scale, high-tech farm is \$6.50–20.00 per kg (O'Shea et al. 2019). The average production per farm is estimated to be 3000 tonnes/year (FOLU 2019).

36We estimated the increase in fshmeal and alternatives required under the sustainable transformation pathway scenario where mariculture increases to 22.4 t by 2050. The gap flled by novel alternatives and associated costs is calculated via the following steps. (1) We calculated the existing fshmeal requirements in the BAU using the feed conversion ratio (FCR) and fshmeal inclusion rate for salmon production. We use an FCR of 1.5 and a fshmeal inclusion rate of 25% (Konar et al. 2019). We assume the fshmeal inclusion rate decreases by 50% (to 13%) in the sustainable transformation pathway scenario. (2) We assumed that under the sustainable transformation pathway scenario, 50% of the fshmeal production (100 million t) will be replaced by alternative ingredients by 2050. (3) Finally, we used the current capital cost to produce feed (\$1426/t) as a proxy to calculate the additional capital investment required to expand alternative feed (Suleiman and Rosentrater 2018). Using these steps, we estimated \$145 billion in additional investments will be required in alternative feed to expand production to meet the gap caused by reducing traditional fshmeal usage. 37The fshmeal price in 2018 was approximately \$1600/t.

38This refects the gradual growth of R&D expenditure observed for the world over 2000–2010. For all countries within the Organisation for Economic Co-operation and Development, R&D expenditure grew from 2.1 to 2.4% in 2017.

three million farmers (OECD 2016). We assumed all mariculture farmers would receive training for sustainable production and improving feed effciency (\$450 per farmer [FOLU 2019]) over 2020–2050.

Based on these estimates and assumptions, the discounted costs are estimated to be \$656 billion over 30 years (2020–2050).

#### **6.4.3 Assessment of Benefts**

#### **Health Benefts**

The real gain in health benefts is the potential to increase sustainable protein supplies by encouraging more fsh consumption (produced via sustainable means) over other protein sources. This would reduce human mortality and morbidity from reduced GHG emissions (see below for the link between GHG emissions and animal-based proteins), increase healthier diets and reduce health costs from reduced pesticide and antimicrobial exposure. This is estimated to be approximately \$170 billion in 2030 and \$390 billion in 2050 (FOLU 2019).

Sustainable sourcing of ocean protein and micronutrients also helps diversify nutritious food supplies, particularly for poorer coastal communities that depend disproportionately on fsh for their protein and micronutrient consumption. The distributional health benefts to poorer communities have not been analysed or quantifed here.

#### **Environmental and Ecological Benefts**

Livestock production has high GHG emissions and requires extensive land use. The demand for animal- based protein is projected to increase even more quickly than overall food demand by 2050 due to increases in the world population and in incomes across the developing world (Searchinger et al. 2019). Since foods vary widely in their embedded land use and GHG emissions per unit of protein (Poore and Nemecek 2018), changes in the composition of future diets could greatly affect the emissions consequences of growth in protein demand (González Fischer and Garnett 2016). It is estimated that CH4 and N2O emissions in the BAU food system scenario will grow from 5.2 GtCO2e in 2010 to 9.7 GtCO2e in 2050 (Springmann et al. 2018). Of that projected growth, over 75% will come from projected growth in animal products (Hoegh-Guldberg et al. 2019).

Ocean-based proteins are substantially less carbon intensive than land-based animal proteins (especially beef and lamb), with farmed bivalves being particularly climate friendly (Hoegh-Guldberg et al. 2019).39 Therefore, actions that shift diets towards ocean-based proteins can reduce pressure on land and also reduce emissions. Moving to diets that are less dependent on terrestrial animal products, especially beef and lamb, would also slow the growth in demand for freshwater to support livestock agriculture (Hoegh-Guldberg et al. 2019). The transition, if properly managed, could yield benefts of \$330 billion in 2050 (FOLU 2019).

In addition, such diet shifts will reduce deforestation, the majority of which will be driven by clearing forests for future meat production and consumption. Searchinger et al. (2019) estimated that animal-based foods accounted for roughly two-thirds of agricultural production emissions in 2010 and more than three-quarters of agricultural land use. Under BAU, the analysis estimated that agriculture would expand by nearly 600 million ha (an area nearly twice the size of India), including the expansion of 400 million ha of pasturelands (Searchinger et al. 2019). The additional reduction in emissions from preventing deforestation has not been included in the estimated benefts.

#### **6.4.4 Economic and Social Benefts**

Reforming fsheries will result in an increase in revenues and profts to fshers in the long term. Costello et al. (2016) state that after all fsheries are optimally managed, it will take 10 years for stocks to recover and will result in \$53 billion in fsheries profts against the BAU scenario. Sumaila et al. (2012) estimate that rebuilding world fsheries could increase profts from the current negative \$13 billion to a positive \$77 billion per year. Comparing these benefts to the cost of management, Sumaila et al. (2012) and Mangin et al. (2018) show that the cumulative benefts of sustainable management of fsh stocks exceed the management costs. Sumaila et al. (2012) state that rebuilding fsheries stock will deliver a net gain (net present value) of between \$600 billion and \$1.4 trillion over 50 years, versus transition costs of \$130– 292 billion.40

#### **Estimated Benefts and Costs**

Based on key reports and papers, the benefts from increasing the share of sustainably produced ocean-based proteins in diets is estimated to be 10 times the costs (Table 18.16). Evidence indicates that while the global B-C ratio for fsheries management reform is about 9.2-to-1, the ratio is higher than 200 for some countries (Mangin et al. 2018). Sumaila

39This does not include farmed shrimp, which can be quite high in GHGs. However, salmon/marine fsh and bivalves score well in terms of lower GHG emissions.

40The lower bound corresponds to 82 t of catch and the upper bound, 99 t, which is closer to the Costello et al. (2016) estimates. To be consistent, we used both cumulative beneft and cost estimates from Sumaila et al. (2012), which offer a scenario in which the optimal fsh landings increase to 99 t when calculating the total net present value for increasing consumption of sustainably produced ocean based protein from capture fsheries, fed aquaculture and nonfed aquaculture. The net gains are present value estimates calculated using a 3% discount rate (Table 18.17).

**Table 18.16** Net benefts from increasing the production of sustainably sourced ocean-based proteins and beneft-cost ratio

*Source: Authors' calculations based on estimates from FOLU* (2019)*, Mangin et al.* (2018)*, Sumaila et al.* (2012)

et al. (2012) estimate the B-C ratio for rebuilding global fsheries to be as high as 7:1. The value of net benefts is estimated to be \$6.7 trillion over 30 years; the total benefts are \$7.4 trillion versus \$769 billion total costs.41

#### **Data Limitations and Caveats**

The estimates do not fully take into account the effects of climate change and ocean acidifcation. We recognise that there are regional differences and that there are barriers to shifting diets. See Appendix 4 for more details.

#### **7 Conclusion**

The overall rate of ROI can be high, with the average B-C ratio ranging from 3-to-1 to 12-to-1 (Table 18.17), and in some cases, such as conservation of mangroves and fsheries reform (for particular countries), it can be much higher. Our research found that investing \$2.0–3.7 trillion globally across the four areas from 2020 to 2050 could generate \$8.2–22.8 trillion in net benefts.

Actions to transform these four areas will bring multiple benefts. The total monetised and discounted benefts are estimated at \$10.3–26.5 trillion over 2020–2050.

Monetised benefts include health benefts, such as reduced mortality from improved air quality, reduced childhood asthma and improved health outcomes from dietary shifts towards sustainably produced ocean-based protein; environmental benefts, such as avoided property losses from coastal fooding, the prevention of land degradation and reduced water usage; and economic benefts, such as reduced production costs due to technological improvements and increased profts from higher fsheries productivity.

The total monetised and discounted costs are estimated to be \$2.0–3.7 trillion over 2020–2050. The costs assessed include costs to business (capital costs to set up new infrastructure, R&D costs and increases in variable costs), costs to government (regulatory costs, monitoring costs and research costs) and costs to households (loss of forgone income).

**Table 18.17** Summary of beneft-cost ratios for the four action areas in 2050

a *The ratio presented is the combined ratio for mangrove conservation and restoration. When assessing specifc interventions, the beneft-cost ratio for conservation is estimated to be 88:1 and for restoration 2:1* b *The beneft-cost ratio estimated for decarbonising international ship-*

*ping ranges from 2:1 to 5:1*

c *The beneft-cost ratio estimated for scaling up of global offshore wind energy production ranges from 2:1 to 17:1 Source: Authors' calculations*

A number of impacts (both benefts and costs) have not been monetised but are important and must be considered during the policy decision-making process. These include the following considerations:

41The B-C ratios vary across the countries and range from 1.7 up to 268, with a median of about 14 for catch share management (Mangin et al. 2018).

ated with climate change. Often, the costs of climate change– related risks are underestimated, including the potential damage of weather-related shocks and sea level rise. If 'resilience' (e.g., through the integration of natural food defences) is built into investments, then the benefts (e.g., of protective mangroves) could include a reduction in the cost of capital (due to improved risk-adjusted performance metrics) and/or reduced long-term operational expenses (e.g., through avoided losses and reduced maintenance costs).

Given that the B-C ratios in Table 18.17 are a partial estimate of all benefts and costs likely to accrue as a result of the specifed investments, they should be treated as indicative to provide the relative scale of benefts from sustainable oceanbased investments compared with the costs. Further research and analysis to address gaps in quantifying benefts will help provide a more complete picture of their value versus their costs. The analysis does not attempt to show the regional variation of the costs and benefts, nor does it show the distribution of benefts and cost across society (especially focusing on the impact on vulnerable groups). Conducting these assessments should be a key step when implementing ocean-based policies and regulations.

Although data limitations prevented a full accounting of all benefts and costs, the results of the analyses suggest that taking the following actions to transform the ocean economy will generate a host of benefts that are larger in magnitude than the costs:

• **Increasing the production of sustainably sourced ocean-based proteins**. Substantial gains in fsheries productivity can be achieved through better management of fsh stocks, which eliminates overfshing, illegal and unregulated fshing and discards of nonmarketable fsh. Sustainable marine aquaculture practices will also help meet the growing food demand. Technological innovation and adoption in breeding, production systems, disease control and environmental management will help improve mariculture's productivity and environmental performance (Waite et al. 2014). Encouraging innovation can make valuable contributions to the future scalability and lower prices of substitutes as forage fsh resources become scarce (Konar et al. 2019). Incentives are required to shift diets towards low-carbon ocean-based proteins and away from high-carbon land-based sources of protein (Hoegh-Guldberg et al. 2019).

**Acknowledgements** The authors would like to thank the following people for their review, feedback and inputs: Juan Carlos Altamirano, Maximilian Bucher, Lauretta Burke, Linda Cornish, Diletta Giuliani, Craig Hanson, Peter Haugan, Norma Hutchinson, Catherine Lovelock, Sara MacLennan, Justin Mundy, Finn Gunnar Nielsen, Eliza Northrop, Linwood Pendleton, Alex Perera, Carlos Muñoz Pina, Tristan Smith, Mark Spalding, Michael Tlusty, Laura Malaguzzi Valeri, Adrien Vincent, Richard Waite, Jacqueline Wharton and Sophie Wood. While our colleagues were very generous with their time and input, this report refects the views of the authors alone.

The authors would also like to acknowledge Maximilian Bucher for his valuable assistance, advice and contribution, especially in terms of providing essential data from *The Global Consultation Report of the Food and Land Use Coalition,* clarifying its underlying assumptions and suggesting modifcations for the purposes of this study.

Thank you also to Mary Paden, Lauri Scherer, Carni Klirs and Rosie Ettenheim for providing administrative, editing and design support.

#### **Appendix 1. Conservation and Restoration of Mangrove Habitats**

#### **Increasing Ecosystem Services from Mangrove Conservation and Restoration**

Vegetated coastal habitats are used by a remarkable number of marine and terrestrial animals (Li et al. 2018; Rog et al. 2017). Dense mangroves trap and stabilise sediments that buffer the effects of foodwaters and tidal movements. They are becoming recognised as valuable natural systems that can play an important role in wastewater treatment systems (Ouyang and Guo 2016). The values of these ecosystem services can be signifcant, as demonstrated in Box 18.5, which provides a local example of the scale of these values for mangroves in Myanmar. While global value estimates of ecosystem services exist (i.e., Costanza et al. 1997, 2014; de Groot et al. 2012), many of these estimates are resulting from metaanalysis (i.e., analysis of analyses) rather than primary valuation studies. Hence, there have been concerns around the validity of using these values for simple beneft transfer without accounting for specifc characteristics of the sites where ecosystem service value needs to be estimated (Himes-Cornell et al. 2018). We thus excluded them from the current B-C ratio analysis. However, as new primary valuation data become available, incorporating such benefts will improve marine decision-making.

#### **Data Limitations and Caveats**

#### **Box 18.5 The Economic Value of Key Mangrove Benefts in Myanmar**

The values for ecosystem services of mangroves in Myanmar, as estimated by Estoque et al. (2018), illustrate the scale of the benefts that accrue to society from various ecosystem services.

In Myanmar, a mangrove's most valuable service is as a fsh nursery (US \$9122 per hectare [ha] per year) and as coastal protection from storm surges (\$1369/ha/ year). Recreational benefts are estimated at \$476/ha/ year. Mangroves also regulate water fow (\$275/ ha/ year) and water quality (\$61/ha/year) (see Table 18.18).

#### **Table 18.18** Value of mangroves in Myanmar

#### **8 Appendix 2.** Scaling Up Offshore Wind Energy Production

#### **Data Limitations and Caveats**

Potential risks to biodiversity could arise or increase with the expansion of wind energy, especially as it moves farther from the coast. In such cases, it could be more diffcult or costly to mitigate impacts on habitats and wider biodiversity.

tainty because energy development is still immature. Further analysis in this area will help provide a more holistic picture on the ROI for the ocean energy sector overall.

• Water-saving benefts are estimated based on the opportunity costs of water. Direct fnancial benefts are also associated with water savings, but we excluded them from the beneft assessment because local water prices vary greatly across countries.

## **Appendix 3. Decarbonising International Shipping**

#### **Estimating the Avoided Costs of Childhood Asthma**

In schoolchildren, asthma leads to lost school days, which limits academic performance and has consequent psychological effects. Therefore, children with asthma have more indirect costs than older asthmatics, as the direct cost to parents is limited to missed workdays and other expenses. The total avoided costs from childhood asthma are estimated by summing the health care costs, the cost of school absenteeism and adult missed workdays. The following assumptions are made to derive the avoided costs from childhood asthma:

42Without adjusting for the higher prevalence for asthma among young and old persons.

43The 2020 Action assumes on-time implementation of the IMO's 0.5% low-sulphur fuel standard.

• The average annual health fnancial costs to government for treating pediatric asthma is estimated to range from \$3076 to \$13,612 per child in the United States (Perry et al. 2019). We take this as a proxy of the global health care cost to treat the illness.

#### **Data Limitations and Caveats**

#### **Appendix 4. Increasing the Production of Sustainably Sourced Ocean-Based Proteins**

#### **Data Limitations and Caveats**

• The report by the EAT-*Lancet* Commission has set out scientifc targets for healthy diets that will optimise human health (Willett et al. 2019). By its own admission, the report did not have the scope to fully analyse fshing and mariculture systems globally. Therefore, while some estimates were included on recommended fsh intake, more detailed analysis is needed. EAT, along with other partners,44 is supporting further work to expand scientifc understanding of the role of ocean-based protein for planetary health and human well-being. This research, referred to as the Blue Food Assessment, aims to outline pathways for a transformation to sustainable and healthy blue food for all people on the planet, now and into the future. Analysis has focused on marine food production, but a greater understanding of aquatic food production as a whole (including freshwater fsheries and aquaculture)45 is needed to evaluate the benefts and costs of aquatic food to human health and the environment. Those working on the Blue Food Assessment have recognised this and aim to incorporate it into the analysis.

44Partners include the Food and Agriculture Organization, Friends of Ocean Action, Stanford Center for Ocean Solutions, Stockholm Resilience Centre, World Economic Forum and World Resources Institute.

45Currently, the majority of aquaculture production is inland or freshwater, which constitutes 64% of the total global aquaculture production, and the proportion is likely to be higher in Asia (FAO 2018).

#### **About the Authors**

**Manaswita Konar** is the Lead Ocean Economist at the World Resources Institute's Sustainable Ocean Initiative. Contact<EMAIL_ADDRESS>
**Helen Ding** is an Environmental Economist at the World Resources Institute. Contact<EMAIL_ADDRESS>
#### **About WRI**

World Resources Institute is a global research organization that turns big ideas into action at the nexus of environment, economic opportunity, and human well-being.

#### **Our Challenge**

Natural resources are at the foundation of economic opportunity and human well-being. But today, we are depleting Earth's resources at rates that are not sustainable, endangering economies and people's lives. People depend on clean water, fertile land, healthy forests, and a stable climate. Livable cities and clean energy are essential for a sustainable planet. We must address these urgent, global challenges this decade.

#### **Our Vision**

We envision an equitable and prosperous planet driven by the wise management of natural resources. We aspire to create a world where the actions of government, business, and communities combine to eliminate poverty and sustain the natural environment for all people.

#### **Our Approach**

#### **Count It**

We start with data. We conduct independent research and draw on the latest technology to develop new insights and recommendations. Our rigorous analysis identifes risks, unveils opportunities, and informs smart strategies. We focus our efforts on infuential and emerging economies where the future of sustainability will be determined.

#### **Change It**

We use our research to infuence government policies, business strategies, and civil society action. We test projects with communities, companies, and government agencies to build a strong evidence base. Then, we work with partners to deliver change on the ground that alleviates poverty and strengthens society. We hold ourselves accountable to ensure our outcomes will be bold and enduring.

#### **Scale It**

We don't think small. Once tested, we work with partners to adopt and expand our efforts regionally and globally. We engage with decision-makers to carry out our ideas and elevate our impact. We measure success through government and business actions that improve people's lives and sustain a healthy environment.

46Reducing consumption of animal-based foods should not be a goal for people who are underconsuming. Animal-based foods provide a concentrated source of some vitamins and minerals that are particularly valuable to young children in developing countries whose diets are otherwise poor (Ranganathan et al. 2016).

#### **References**

tems. Annu Rev Mar Sci 4(January):11–37. https://doi.org/10.1146/ annurev-marine-041911-111611

J. Skea, P.R. Shukla, A. Pirani, et al.] https://www.ipcc.ch/site/ assets/uploads/sites/2/2019/06/SR15\_Full\_Report\_Low\_Res.pdf

National Renewable Energy Laboratory, Washington, DC. https:// www.nrel.gov/docs/fy11osti/50900.pdf

Lancet 393(10170):447–492. https://doi.org/10.1016/S0140- 6736(18)31788-4

technical report. World Bank Group, Washington, DC. http:// documents.worldbank.org/curated/en/995341467995379786/ Managing-coasts-with-natural-solutions-guidelines-for-measuringand-valuing-the-coastal-protection-services-of-mangroves-andcoral-reefs

Zhou F, Bisgard KM, Yusuf HR, Deuson RR, Bath SK, Murphy TV (2002) Impact of universal Haemophilus infuenzae type B vaccination starting at 2 months of age in the United States: an economic analysis. Pediatrics 110(4):653–661. https://doi.org/10.1542/ peds.110.4.653

**Open Access** This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons. org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

## **19 A Sustainable and Equitable Blue Recovery to the COVID-19 Crisis**

#### **Highlights**

Originally published in:

Northrop, E., et al. 2020. *A Sustainable and Equitable Blue Recovery to the COVID-19 Crisis*. Report. Washington, DC: World Resources Institute. Available online at http://www.oceanpanel.org/bluerecovery Reprint by Springer International Publishing (2023) with kind permission.

Published under license from the World Research Institute.

This report proposes a set of additional opportunities that are more systemic and oriented towards using this critical juncture to sustainably reset the ocean economy. This will enable the accelerated transition of ocean industries towards smarter, sustainable practices that conserve marine ecosystems, promote human well-being and build social and economic resilience to future shocks.

#### **1 Introduction**

A healthy ocean is the foundation for prosperous, healthy and vibrant economies. There is an unprecedented opportunity, through global stimulus and recovery responses to the COVID-19 crisis, to reset and rebuild economic activities in ways that will ensure a more sustainable, equitable and resilient ocean economy ft for everyone's future. This report provides a roadmap to achieve this vision.

#### **1.1 Context**

The COVID-19 pandemic has caused an unprecedented human health crisis around the world, resulting in signifcant loss of life. Emergency measures introduced to curb the extent of the virus have led to severe restrictions on human mobility, economic activities and services, affecting large swathes of the economy and resulting in widespread unemployment and impacts on people's livelihoods, well-being and wider health (Xu and Joyce 2020).

The resulting global economic downturn is expected to exceed the one experienced during the 2008–2009 global fnancial crisis (Bluedorn and Chen 2020). The global economy is projected to contract by 4.9–6% in 2020 (IMF 2020a), the largest economic dip since the global depression of the 1930s (OECD 2020c). Gross domestic product (GDP) is expected to shrink in nearly every country in 2020, although with signifcant variation refecting differing national circumstances.

As economic projections have been revised downwards, unemployment has continued to rise. Worldwide, some 300 million full-time jobs could be lost, and nearly 450 million companies are facing the risk of serious disruption (ILO 2020c), reducing local incomes, tax revenues and foreign exchange earnings. Early evidence suggests that groups that were economically most vulnerable before the pandemic will experience the greatest impacts, exacerbating existing inequalities within society (UN DESA 2020a). Globally, the COVID-19 pandemic may force as many as 100 million people into extreme poverty and could double the number of people facing acute hunger, to 265 million people by the end of 2020 (Anthem 2020).

Before the pandemic, ocean-based industries such as fshing, energy, shipping and marine and coastal tourism had been conservatively estimated to contribute 2.5% of world gross value added, a value that was predicted to double by 2030 (OECD 2016).

As of 2010, these ocean-based industries contributed some 31 million direct full-time jobs (OECD 2016). This fgure is signifcantly higher when jobs provided through informal or artisanal employment are included. For example, upper estimates in 2011 suggest that the fsheries sector alone provides the equivalent of 237 million full-time jobs when small-scale fsheries and artisanal employment are also considered (Teh and Sumaila 2013). The ocean also connects cities and countries around the world, driving economic activity and trade for the more than a third of the global population that lives within 100 km of the sea (Kummu et al. 2016). Most of the world's megacities are located in the coastal zone.

A healthy ocean not only underpins the global economy but also provides myriad non-monetary benefts alongside essential goods and services that are vital for healthy human societies, including regulating the global climate, offering a storehouse of compounds key for fghting disease (Blasiak et al. 2020) and providing natural infrastructure to protect against storm surges, fooding and coastal erosion. Fish and fsh products are among the most highly traded foods in the world, supplying a critical source of animal protein, micronutrients and omega-3 fatty acids, particularly in low-income, food-defcit countries and small island developing states (SIDS) (FAO 2020a).

The pandemic has signifcantly disrupted ocean sectors and global supply chains. These ocean industries do not operate in isolation from one another, or from the ocean environment of which they are part (OECD 2016). This has led to cascading and interrelated impacts across the ocean economy, marine ecosystems and society.

Fiscal measures announced in response to the COVID-19 crisis by G20 nations are already three times greater than those made available during the 2008–2009 fnancial crisis. More is expected as the focus shifts from emergency spending to recovery investments. The UN secretary general, António Guterres, has called for a coordinated approach to social and economic recovery from the pandemic, a response that does not lose sight of the parallel threat to the global community posed by the climate emergency. Leaders from business and civil society alike are advocating for this unprecedented situation to be used as a catalyst for a cleaner, greener and more resilient future (Harrabin 2020).

The actions that governments and fnancial institutions take now to repair and rebuild the global economy will chart the course of economic growth and sustainability for many years to come. Although the nature of the investments themselves might have a short-term focus, their impact will be felt over the medium to long term. It is therefore important to avoid locking in high-emitting, high-polluting and inequitable pathways that limit the ability to build sustainable and resilient economic systems. Investment through recovery and stimulus packages represents a crucial lever for accelerating the shift from business as usual to a more sustainable future that delivers on global targets under the 2030 Agenda for Sustainable Development, the Convention on Biological Diversity and the Paris Agreement.

While the solutions will differ from one country to another, humanity has a unique opportunity to reboot economic activities in a way that is more frmly in service of society and restores planetary health for future generations. A healthy ocean is essential in the quest for a sustainable and prosperous future, and it will be an important ally in rebuilding national and global economies from the impacts of COVID-19 and lifting communities out of poverty. Cumulative impacts to ocean health resulting from unsustainable development, overexploitation of natural resources, pollution and climate change are, however, already causing rapid changes across ocean ecosystems, undermining the ocean's ability to continue to provide vital benefts and services to the global economy and humanity. A transformational shift is needed in the relationship between humanity and the ocean, in acknowledgement of its material and nonmaterial values and importance, to ensure that the solutions pursued in response to the COVID-19 crisis do not further undermine ocean health or the future opportunities associated with the growth of a sustainable ocean economy.

The importance of green stimulus to maintain advances towards a greener economy has been recognised by some governments, yet few have recognised the role that 'blue' stimulus opportunities could also provide in supporting advances to meet environmental and climate change challenges. This report considers this gap between the impacts and responses and offers a set of high-level guiding principles for governments and fnancial institutions to consider as a frst step towards ensuing a sustainable blue recovery to COVID-19. It also supports the notion that a 'blue' recovery is a 'green' recovery and vice versa—the decision to ensure a sustainable blue recovery does not come at the expense of a green recovery—they should go hand in hand and cover the full land-to-ocean interface of activities.

Early indications suggest that society may emerge from this crisis to be less cooperative and effective (Sachs et al. 2020). However, with a longer-term vision and the right actions, the pandemic can mark the beginning of a new type of global and societal cooperation in building towards a sustainable ocean economy—which for the purposes of this report is described as the sustainable use of ocean resources (produce) in ways that preserve the health, function and resilience of ocean ecosystems and associated services (protect) and improve livelihoods and jobs (prosper). Given the importance of the ocean as a workplace and a source of income, livelihoods and nutritional food for billions of people worldwide, the importance of resetting the ocean economy on a sustainable and just path so as to reduce vulnerability to future shocks, restore resilience in natural systems and redress existing inequalities must not be overlooked.

#### **1.2 About This Report**

#### **1.2.1 Scope**

This report aims to provide a holistic assessment of the impact (economic, social and environmental) that COVID-19 has had on the ocean economy. Section 2 considers the emerging impacts on the ocean economy and early responses to the crisis by governments, fnancial institutions, industry, intergovernmental organisations (IOs) and non-governmental organisations (NGOs). In considering the impacts, it looks at six key sectors—marine and coastal tourism, fsheries, marine aquaculture (mariculture), shipping, energy and marine conservation—as well as how these impacts are interconnected across the ocean economy as a whole. Recognising that this crisis continues to evolve, these impacts represent a snapshot in time but can still offer important lessons on the scope and degree to which recovery measures must take into account ocean-based sectors, workers and affected communities, and the health of the ecosystems upon which these industries depend.

Section 3 provides a roadmap for a 'sustainable and equitable blue recovery' predicated on three mutually reinforcing elements—effective protection of ocean ecosystems, sustainable production and equitable prosperity. It outlines

#### **1.2.2 Approach**

The report relies on real-time analysis of impacts of the COVID-19 crisis presented in published reports, working papers and blog posts to help provide an aggregated picture of the resulting economic, social and environmental impacts of COVID-19 on the ocean economy (Sect. 2.1). The COVID-19 response measures (Sect. 2.2) are based on systematic review of the policy response reports from international organisations (such as the International Monetary Fund and World Bank), think tanks, consultancies, academic institutions and national government websites. Both the impacts and response measures are rapidly evolving landscapes and, as such, these sections are not intended to provide a comprehensive overview of the status quo.

The opportunities for investment of stimulus funding identifed in Sect. 3 are based on an extensive literature review and set of criteria to identify priorities that respond to the needs of governments and communities now, but which also help catalyse progress towards a sustainable ocean economy. These criteria were selected through literature review, and through expert input from bilateral and multilateral funders and government representatives involved in the design of recovery and stimulus packages. The opportunities highlighted in Sect. 3 of this report are not exhaustive of what will be required to fully transition to a sustainable ocean economy. There is already extensive literature on the solutions and opportunities for action to build a sustainable ocean economy that should be referred to in conjunction with this report—which focuses on the particular economic challenges and opportunities facing governments at this time. Annex 2 offers a summary of relevant literature.

The report draws on publicly available information (including news articles, expert opinion pieces, peer reviewed reports, academic studies and project-specifc case studies) to identify potential (short- and long-term) economic, social and environmental benefts for the priority areas of action and interventions identifed.

The fgures included are offered as proof points and illustrative examples, not as conclusive statements or guarantees. For numbers of potential job creation, many of the estimates presented in the report are based on range of studies, including ones that use input–output (I-O) models to derive job numbers, which have their limitations1 . The benefts (economic, social or environmental) that may accrue as a result of a particular policy decision or fnancial investment will be specifc to the location, economy and population they relate to.

While it is beyond the scope of this particular assessment, the value of new analysis in these areas—particularly an assessment of the direct and indirect employment opportunities associated with transitioning to a sustainable ocean economy—is well recognised and encouraged to inform decisions that relate to the ocean's contribution to socioeconomic development.

In generating this report, the authors engaged with the 14 offces of the heads of state and government represented on the High Level Panel for a Sustainable Ocean Economy (www.oceanpanel.org) to gather real-time information on country impacts, response measures and priorities, and the relevance and feasibility of interventions for these diverse geographies and economies. This report is, however, an independent input to the Ocean Panel process and does not refect the views of the Ocean Panel members.

#### **2 Emerging Impacts and Early Responses**

Jobs and sectors in the ocean economy and already vulnerable coastal communities have been hard hit by the COVID-19 crisis with signifcant revenue losses felt across coastal and marine tourism, fsheries and aquaculture, and the shipping industry. The linkages between ocean-based sectors and land-based economies mean that these impacts fow beyond these individual sectors to have economic and social repercussions across the entire economy. Only a small proportion of COVID-19 stimulus packages account for the impacts suffered by coastal communities and workers in the ocean economy and an even smaller subset focuses on transitioning to a sustainable ocean economy.

#### **2.1 Emerging Impacts on the Ocean Economy**

This assessment focuses on the impact that the crisis is having across six ocean-based sectors. We consider three categories of impacts (Table 19.1):

#### **2.1.1 Economic Impact**

The ocean economy was projected to double by 2030, but this growth potential has been curtailed by COVID-19 (Richens and Koehring 2020; OECD 2016). Signifcant revenue losses have been experienced across most ocean-based sectors, with coastal and marine tourism being the hardest hit (UNCTAD 2020b). Across these sectors—in particular coastal tourism, shipping, fsheries and aquaculture—we see a signifcant loss in revenues, risks of high job losses and reduced appetite for future investment (Table 19.1).

With a decline in international tourist arrivals, the coastal tourism sector has seen a sharp drop in revenue, putting hundreds of millions of direct tourism jobs at risk2 .

Seafood sectors (both wild fsheries and aquaculture) have been affected by a fall in aggregate demand for seafood due to the closure of restaurants and supply chain disruptions (FAO 2020b; UNCTAD 2020b). Slowed demand has negatively affected maritime shipping, the cruise sector and shipbuilding.

1*I-O analyses can portray the linkages between sectors well, based on industry-level accounts. However, they have several weaknesses, including the assumption of fxed prices (prices do not change when demand for a good, service, or input changes), fxed ratios of labour to other factors of production and fxed sectoral share of GDP over time.*

2*Ocean tourism before COVID-19 was directly valued at US \$390 billion globally and comprises a signifcant portion of many nations' GDP (OECD* 2016*).*

**Table 19.1** Summary of impacts across ocean-based sectors and ecosystems

 Global fshing activity has dropped by 10% since 11 March (Clavelle

. The impact has been even more signifcant for small-scale fshers (Campbell et al. 2020) Sales and prices have fallen for premium seafood products generally sold to restaurants, such as lobster, crabs, scallops and wild salmon (Saumweber et al. 2020) Export-oriented fsheries have seen a vast reduction in demand (particularly from Asia, the United States and Europe) as well as port closures, lost access to cold storage and cessation of shipping and air freight (Orlowski 2020) Demand has increased for non-perishable compared to fresh seafood (UNCTAD 2020b)

#### **Table 19.1** (continued)

2020)a

Wild capture fsheries

#### Sectors Economic impact Social impact Environmental impact

 Delays in trade are forcing fsh farmers to sit on stocks of live fsh for prolonged periods, increasing demand for fshmeal and fsh oil containing aquafeed (FAO 2020a). This could increase pressure on forage fsheries that are pre-dominantly used for aquafeed production

Aquaculture Production may be affected by the

closures (FAO 2020b) Flight cancellation has directly affected trade in some high-end fresh products that are transported

by air (FAO 2020b)

shortages

disruption in the supply of feed or input, transportation and labour

 Specialty aquaculture products like shellfsh (e.g. lobster, shrimp and oysters) are hardest hit by restaurant

 The sale of prepackaged, frozen or canned fsh and fsh products has increased in the short term due to panic buying. However, these industries may not be able to continue supplying the market if the raw material (such as feed) is not

 The forecast for offshore wind remains unchanged for 2021, as most projects are already fnanced and under construction (IEA 2020a). Beyond 2021, the industry might be affected due to permitting and other approval delays caused by COVID-19

Negative impacts, Positive impacts, No/neutral impacts

aThese fgures primarily represent changes in activity for the world's industrial feet—fshing vessels over 24 m—and do not fully capture the impacts on small-scale fsheries

b 15% of the U.S. total clean energy workforce could be lost over the coming months (more than half a million jobs) due to COVID-19. In March alone, more than 106,000 renewable energy and energy effciency jobs were lost in the country (Jordan 2020)

c2020 global solar and energy storage installations are expected to drop nearly 20% compared to pre-COVID-19 projections (Energy Choice Coalition 2020)

dBloomberg New Energy Finance believes that offshore wind projects are taking off despite the global economic gloom in part due to a two-thirds fall in cost since 2012 and a rush in China to fnance and build offshore wind projects before the government's subsidy regime expires at the end of 2021

eSeveral governments, such as that of the Indian state of Tamil Nadu, have suspended bans on single-use plastic bottles and bags in retail trade (Peszko 2020). The United Kingdom has suspended the plastic bag charge for online deliveries, with Scotland delaying the introduction of a packaging deposit-return scheme (Peszko 2020)

A potential decline in renewable electricity capacity for onshore wind energy and solar farm projects is forecast due to factors such as supply chain disruption, lockdown measures, emerging fnancing challenges and decreased energy demand (IEA 2020a). The share of renewables in the electricity supply has increased, as their output is largely unaffected by demand3 . Demand has fallen for all other sources of electricity, including coal, gas and nuclear power (IEA 2020b). However, increased offshore wind capacity in 2020 has more than made up for a slowdown in investments (across other renewable technologies) after the outbreak of COVID-19 (IEA 2020a). There is some uncertainty in growth projections for the offshore wind sector beyond 2021, due to permitting and other approval delays caused by COVID-19. In addition, the sectors' interconnectedness amplifes the impacts discussed across the ocean economy (Box 19.1 and Fig. 19.1).

3*However, renewable sources (mainly wind and solar) saw their share of electricity substantially increase during COVID-19. For example, in less than 10 weeks, the United States increased its renewable energy consumption by nearly 40% and India by 45%. The ongoing increase in renewable energy into the grid results from a mixture of past policies, regulations, incentives and innovations embedded in the power sectors of many forward-thinking countries (Mojarro* 2020*).*

**Fig. 19.1** Interwoven impacts across the ocean. (*Source: Authors*)

#### **Box 19.1 Interwoven Impacts Across the Ocean Economy and the Rest of the Sectors**

There are strong interconnections between ocean sectors and land-based economies. For example, fsheries and aquaculture provide employment to many communities and are vital for the food security of both coastal and inland communitiesa . The global maritime shipping industry carries around 90% of traded goods. In coastal areas, the tourism sector is the biggest contributor to local, regional and national GDP. Because of these interconnections and linkages between ocean-based sectors and land-based economies, impacts of COVID-19 fow beyond these individual sectors with amplifed consequences for the entire economy. Some examples of the transmission of impacts across sectors are discussed below.

**Disruption to maritime shipping and port services has negative consequences for the seafood, agriculture, energy, health and tourism sectors.**

associated with illegal, unreported and unregulated (IUU) fshing and human rights violations.

**The aquaculture sector and its ancillary business supply chains face setbacks due to international trade delays, restaurant and hotel closures, and reduction in fshing effort.**

fsh mortality is also increased, especially in situations where key inputs are in low supply (such as FMFO requirements) (FAO 2020b).

• Reduced tourist visits caused by lockdown measures have heavily disrupted demand for seafood from the hotel and restaurant industry, particularly for highvalue species such as lobster and prawn, reinforcing the interdependencies between the tourism, fsheries and aquaculture sectors (UN 2020c).

#### **Ocean conservation and research have decreased as a result of falling tourism revenues, lost livelihoods in coastal communities and increased ocean pollution.**

food layer protection, masks, gloves and other personal protective equipment) have increased plastic pollution in the ocean, since these items often are not properly disposed of (Tenenbaum 2020). Ocean pollution also has increased due to disruption of land-based waste collection and recycling facilities during COVID-19, especially in South and East Asiab .

#### **Reduced access to markets for small-scale fshers weakens the food security of entire local communities.**

• Reduced inland ferry services and quarantine measures have restricted the ability of many small-scale fshers to access local markets, sell their harvest and contribute to the local economy and the food security of their community.

a *Fish accounted for about 17% of animal protein consumed by the global population (FAO* 2020c*).*

b *With recycling not recognised as an essential service in many countries, less than 20% of recyclers operated during the lockdowns in Vietnam, India and the Philippines, while in Thailand and Indonesia it was less than 60%, signifcantly curtailing waste collection in cities (Circulate Capital and GA-Circular* 2020*). Critical workers in the value chain lost jobs and income to support their families. The migration of workers in these countries (from urban to rural areas) has also reduced waste collection and recycling. For example, in India, 70–80% of informal sector waste workers have left cities for their hometowns (Circulate Capital and GA-Circular* 2020*). As a result, no wastepicking has been occurring in landflls and dumping grounds for India's fve largest cities.*

#### **2.1.2 Social Impact**

Assessments of social impacts show that the COVID-19 crisis has disproportionately harmed a number of vulnerable groups, including women employed in temporary jobs, lowskilled workers, small-scale fshers and businesses, Indigenous community members and younger workers.

Women represent the majority of the workforce in the ocean economy sectors hardest hit by the crisis—about 50% of workers in the seafood sector4 , 70% in aquaculture, 80–90% in the post-harvest sector of small-scale fsheries5 and 54% in tourism (Holmyard 2020; UNWTO 2019; Monfort 2015; World Bank 2012; OECD 2015). As businesses lose revenue, many will reduce their costs by laying off workers, starting with the temporary and casual jobs disproportionally occupied by women (Holmyard 2020) (Box 19.2) 6 . The shipping industry (including the cruise sector) has been particularly badly affected due to the suspension of cruise operations and quarantining of workers (ILO 2020a; UNCTAD 2020b), with seafarers' physical and mental well-being at risk.

The reduced demand, limited accessibility of markets and collapsed prices of some fsheries have curtailed small-scale fshers' ability to pursue their livelihoods. Indigenous communities are particularly at risk as they may have reduced immunity and limited access to healthcare (UN DESA

4*When considering fsheries, aquaculture, seafood processing and all related services.*

5*Of the 120 million people who work in the capture fsheries and postharvest sectors, 47% are women. If the People's Republic of China is excluded, the share of women fshers and fsh workers approaches 60% (World Bank* 2012*).*

6*Other systemic barriers such as gender-based violence and lack of access to fnance and credit further contribute to the impacts faced by women when they are laid off work. In addition, in many countries women tend to have more work at home, raising children and taking care of the elderly and the sick. An increase in domestic violence and confict within households could increase food insecurity for vulnerable groups (Farrell et al.* 2020*).*

2020a) 7 . These groups also face risks of lost livelihoods resulting from the economic crisis, as many are employed in the informal sector or engaged in seasonal work (such as tourism), in which they do not receive social protection benefts8 . As for all sectors, young people, low-skilled workers and informal workers across the ocean-based economy have been disproportionately affected by the COVID-19 crisis (ILO 2018, 2020c; World Bank 2020a)9 .

Across the seafood supply chain, the social and fnancial resilience of small businesses (including ones that are family owned or whose workers are self-employed) is being weakened by labour shortages and low demand (Resilience 2020).

The severity of the impacts also varies across countries, with the economies of small island developing states (SIDS) facing higher economic risk (Table 19.1 and Box 19.2) given their small economic base, high degree of openness and extreme dependence on the economic performance of a few developed economies (UN 2020a; WTTC 2020).

The crisis has had some positive social consequences at a community level, such as stronger ties within communities, as demonstrated by many instances of food-sharing (Table 19.1), and by examples of community- run savings clubs to improve social and fnancial resilience in fshingdependent communities throughout the Philippines (Arquiza 2019; Polo 2020)10. However, social cohesion and trust in

9*More than 61% of the world's employed population—2 billion people—earn their livelihoods in the informal sector. These workers lack the right to social protection benefts and schemes. Some of the low-skill workers in these sectors are migrant workers. The combination of the decline in economic activity, travel restrictions and lack of social protection in many migrant hubs induces such low-skilled migrants to seek to return home. However, back home returnees continue to face challenges, including lack of employment opportunities, limited access to social safety nets, large debts accumulated to fnance migration (costs that would have been paid with higher incomes earned at the destination), loss of remittances from abroad and even discrimination by community members fearful that migrants may transmit COVID-19.Young people face multiple shocks from the COVID 19 crisis, including job loss, disruption to education and training, and increased challenges to entering the labour market. A large proportion of young workers are employed in the hard-hit sectors (including tourism), and almost 77% of the world's young workers are in informal jobs (compared to around 60% of workers aged 25 and above) (ILO* 2020c*).*

10*Women make up the majority of members in savings clubs (~70%) and help fshing households pivot from quick spending to long-term fnancial planning. This change in behaviour can powerfully affect the longterm strategy behind coastal fsheries conservation and the goal of ending overfshing. The savings clubs have already proved to be a fast, secure and communal way to ensure food security for the community during the COVID-19 lockdowns.*

authorities has also declined in some communities due to poor crisis management at all government levels.

#### **Box 19.2 Tourism Impact in Small Island Developing States**

Due to the economic crisis caused by COVID-19, small island developing states (SIDS) as a whole have seen a 25% decline in tourism receipts, resulting in a US \$7.4 billion or 7.3% fall in GDP (Coke-Hamilton 2020) a . The gross domestic product (GDP) of the Bahamas and Palau is expected to shrink by 8% or more, making the current crisis the worst in recorded history, while the drop in GDP could reach 16% in the Maldives and Seychelles (Coke-Hamilton 2020; UN DESA 2020b). High external debt, low foreign reserves and volatile capital fows have increased the severity of the pandemic's economic consequences for many SIDS (Coke-Hamilton 2020). This has had a severe impact on both direct and indirect employment (Coke-Hamilton 2020). In the Pacifc and Caribbean islands, which rely heavily on tourism, hotels and resorts have been badly affected. For example, the Fiji Hotel and Tourism Association reports that 279 hotels and resorts have closed since the outbreak, with 25,000 workers losing their jobs (ILO 2020b).

#### **Impact on women in tourism**

In 20 of 28 SIDS, women constitute more than half of those employed in the accommodation and food services sectors, the core economic activities related to tourism. Women in this sector and in these countries are also more likely than other women to own small and medium businesses. Given the female-intensive nature of employment in tourism, especially in lowskilled activities, women in SIDS are more likely than men to lose their jobs. Businesses may also choose to lower wages or shift workers to informal or part-time work, worsening the already unclear terms of employment in tourism. In addition, women face higher barriers to access business credit. In the absence of targeted policies, this means women entrepreneurs in tourism face a higher risk of bankruptcy than their male counterparts (Zarrilli and Aydiner-Avsar 2020).

a *According to the World Development Indicator database, tourism provides more than 50% of export revenue in 20 SIDS and more than 30% in 29 SIDS (Zarrilli and Aydiner-Avsar* 2020*).*

#### **2.1.3 Environmental Impact**

Overfshing, pollution and biodiversity loss were eroding the ocean's ability to sustain livelihoods before COVID-19. The pandemic is likely to intensify the severity of these threats to the ocean. Decreased presence of law enforce-

7*The impact of COVID-19 on Indigenous elders has cultural implications for their communities, as elders play a key role in keeping and transmitting Indigenous traditional knowledge, culture and practices. These include conservation of biodiversity, upholding traditions and customs, leading community gatherings and ceremonies, and serving as custodians of customary law and governance (UN DESA* 2020a*).*

8*Indigenous people account for almost 19% of the extreme poor, irrespective of the region and residence in rural or urban areas and even across international borders. They are custodians of a wealth of traditional knowledge and practices, languages and culture, which includes time- tested responses to crises (UN DESA* 2020a*).*

ment, a slowdown in key international negotiations (such as talks on fsheries subsidies at the World Trade Organization) and the roll-back of environmental regulation are likely to compromise ocean sustainability. For example, suspension of observer programs and fshing patrols may be leading to an increase in IUU fshing (Thomson 2020; CFFA CAPE 2020). Similarly, roll-back measures such as reassignment of new artisanal fshing quotas and rollover of uncaught quota have been reintroduced, which could reverse progress made in fsh stock recovery (Australian Government 2020b). However, the policy response varies greatly from one country to the next and across levels of government11. Declining tourism revenue is also weakening conservation and restoration efforts, especially in cases where ecotourism provides the revenue stream for monitoring, data-gathering, conservation, certifcation and environmental education (see Box 19.3). Table 19.1 gives details of these impacts.

In addition, COVID-19 has had a temporary impact on efforts to ensure the sustainable transition of ocean-based sectors12. However, the ambition to have a carbon-neutral feet by 2050 is still active, as demonstrated in the Norwegian Shipowners' Association climate strategy, the net-zero announcement by CMA CGM, the Mærsk Foundation donation to set up a new green technology research institute, as well as a number of large-scale projects involving energy companies (such as the partnership by Ørsted, Mærsk and others) to produce green methanol for shipping (NSA 2020b; Mærsk 2020; CMA CGM 2020)13.

While the decline of ocean-based activities, such as fshing14 and ocean-based tourism15, has offered temporary relief to marine ecosystems, over the coming months the combined effects of increased food insecurity, reduced presence of law enforcement bodies and economic recession could prevent the environmental benefts of decreased commercial maritime activities from being fully realised (Torgler et al. 2020) 16.

#### **Box 19.3 Decline in Funding for Marine Conservation Due to Loss of Tourism Revenue**

In many cases, governments use revenue from marine tourism to fund marine research and conservation efforts (Wilson and Tisdell 2003) and undertake monitoring and protection activities in marine protected areas. For example, in the Philippines' Tubbataha Reefs Natural Park, tourism revenues make up over half of the conservation budget needed to protect areas from illegal fsheries (UNESCO 2020). However, as the main tourism season (normally April and May) coincided with the strictest quarantine restrictions during the COVID-19 period, tourism revenues in Tubbataha have dropped sharply.

With the decline in tourism revenues during COVID-19, some sites have turned to crowdfunding, online donations and government grants (where available) to meet the funding gaps. In some cases, private foundations have stepped in to compensate for reduced revenue from tourism and endowments. However, these funding sources are unlikely to be sustained. Others have had to reduce surveillance and/or downscale restoration programmes, leading to an increase in fshing pressure. For example, in Seychelles, Fiji, Indonesia, the Philippines and Hawaii, there are reports of increasing fshing pressure in marine protected and conserved areas, which is encouraged by a reduced management presence (Hockings et al. 2020).

11*For example, while we see the roll-back of many national-level environmental policies, some local-level governance approaches have used consultation to institute recovery plans for fsheries and aquaculture. One example is the virtual consultation by the Philippine Council for Agriculture and Fisheries with relevant stakeholders and government offcials specifcally to discuss issues confronting the fshery and aquaculture sector amid COVID-19 (PCAF* 2020*).*

12*A survey of its members performed by the European Community Shipowners' Associations revealed that COVID-19 may negatively affect efforts to decarbonise the shipping industry (ESCA* 2020*). Responding to a general question about investments in reduction of greenhouse gas emissions, 44% of respondents to the survey said it will no longer be possible to return to the investments planned prior to the pandemic. Only 26% of respondents to the survey thought they would return to the same level of investments, whereas 30% thought the investments would still happen, but to a lesser extent (ESCA* 2020*).*

13 *Since decarbonisation of shipping is a full value chain endeavour, effort towards this transition should not be limited the shipping companies.*

14*The lockdown and labour shortages have resulted in a decrease in global fshing activity of nearly 10% (Clavelle* 2020*). In some regions this could provide temporary relief to recovering fsh populations and some possible benefts for small-scale fsheries in the longer run (Jigeesh* 2020*; John* 2020*).*

15*A potential positive outcome for marine ecosystems as a result of the decline in tourism activities (e.g. reef trampling, anchor damage, etc.) is less sewage from tourist centres (Zakai and Chadwick-Furman* 2002*).*

16*Emissions reductions caused by economic downturns tend to be temporary—and can lead to emissions growth as economies attempt to get back on track. After the global fnancial crisis of 2008, for example, global CO2 emissions from fossil fuel combustion and cement production grew 5.9% in 2010, more than offsetting the 1.4% decrease in 2009.*

#### **2.2 Emerging Responses**

This section summarises the government policy responses announced thus far to absorb and react to COVID-19 disruptions to the ocean economy and the actions taken by development banks, international organisations (IOs), non-governmental organisations (NGOs) and the private sector to transition towards a sustainable ocean economy.

#### **2.2.1 National Governments**

#### **Rapid Emergency Response**

To date, response packages from governments have amounted to approximately US \$10 trillion globally (IMF 2020a) 17. As a part of the immediate response, governments have prioritised saving lives and protecting livelihoods, with money channelled directly to households and those on the frontlines of the pandemic. For the ocean economy, this means protecting vulnerable coastal communities dependent on marine natural resources, ocean economy workers, small and large-scale businesses, and ensuring that supply chains remain open for delivery of essential goods (Box 19.4).

#### **Box 19.4 Economic Relief for Ocean Economy Workers and Businesses**

A number of measures were introduced by countries to support workers, vulnerable groups and small businesses. Some governments, such as those of the United Kingdom and Canada, along with the EU Commission, have also classifed ocean workers as 'key workers', thereby giving them right to movement (EU Commission 2020d; UK Government 2020; Government of Canada 2020).

The list below is not exhaustive but provides examples of support measures directed towards income protection and the welfare of ocean-economy workers.

businesses and enterprises (in the harvesting, processing and artisanal fshing sector), increased state aid (European Commission 2020b), online training programmes, provision of new fshing equipment, refrigeration transport service for seafood caught by artisanal fsher organisations (e.g. a pilot programme in Chile), provision of loans at subsidised interest rates, waiver of government fees associated with licenses, rollover of quota and deferral of income tax for small businesses (SUBPESCA 2020d; IKI 2020). The European Union also provides a US \$1.2 billion guarantee from the EU budget to the European Investment Bank so that it can incentivise European banks and mobilise about \$9.3 billion of working capital fnancing for small and medium enterprises in the fsheries, aquaculture and seafood services sectors (European Commission 2020b).

• **Aquaculture** Measures include income support to workers, increased funding to double community-based aquaculture production and loans or credits to seafood processors (EU Commission 2020a). In addition, the EU Commission, in response to stakeholders' requests, adopted new measures for the aquaculture sector, including support to farmers for temporary suspension of production, and support to producers for private storage of aquaculture products.

a *The 13 countries to agree this are Denmark, France, Germany, Greece, Indonesia, the Netherlands, Norway, the Philippines, Saudi Arabia, Singapore, the United Arab Emirates, the United Kingdom and the United States, all of whom now recognise seafarers as key workers.*

17*The majority of the \$10 trillion constitutes rapid emergency response for the short term and focuses on mostly fscal measures and regulatory or deregulatory measures.*

**Fig. 19.2** Announced COVID response fscal stimulus package by country. (*Note: Assumes the proposed 'Next Generation EU' recovery package is implemented in full. Source: Vivid Economics Data*)

#### **Long-Term Recovery Response Measures**

The second phase of response from national governments will be aimed at measures to promote longer-term economic recovery and resilience. Analysis from McKinsey shows that G20 nations have announced fscal measures averaging 11% of GDP, which is estimated to be three times the response to the 2008–9 fnancial crisis (McKinsey 2020). The United States has announced the largest fscal stimulus package, followed by Japan and the European Union (Fig. 19.2).

So far, 30% of economic stimulus packages are going to sectors that currently have high environmental impact (Vivid Economics 2020) 19. Within the 30%, it is estimated that the majority of the spending will have a predominantly brown impact without conditionality for performance improvements in these sectors20. Some of these 'brown' measures include unrestricted support to sectors that have proved to be environmentally harmful in the past and also include rollback on various environmental regulations implemented to deliver better environmental outcomes. For example, both the transport and industry sectors have been hit hard by the crisis and are receiving substantial support from governments. Another source estimated that more than half a trillion dollars worldwide—\$509 billion (£395 billion)—is to be poured into high-carbon industries, with no conditions to ensure that they reduce their carbon output (Harvey 2020)21. In contrast, only about \$12.3 billion is to go towards lowcarbon industries, such as renewable energy, and a further \$18.5 billion is intended for high-carbon industries provided they achieve climate targets (Harvey 2020).

Some of these interventions target the ocean economy and even fewer align with a transition towards a sustainable ocean economy (Table 19.2 and Sect. 2.3). At this stage, there is little information on how these high- level interventions and investments will be implemented and the degree to which they advance priorities for the sustainable ocean economy or undermine such progress.

#### **Development Banks and Bilateral Development Aid**

During the crisis, domestic resource mobilisation has decreased in low-income countries, and external private fnance is projected to drop by US \$700 billion in 2020, with signifcant capital fight as a compounding problem (OECD 2020d). Remittances are predicted to fall by 20% in 2020 (Ratha et al. 2020), and foreign direct investment is expected to decline 30–40% in 2020–2021 (UNCTAD 2020a). Given the uncertainty of domestic fnance opportunities in many low- and middle-income countries and the volatility of private fows, the need for bilateral and multilateral fnance is unparalleled.

18*Fiscal measures are likely to be just one aspect of the response measures—monetary measures will also be key in stimulating demand and much- needed liquidity in the market. Assessing the impact of these measures (such as quantitative easing measures) on the ocean economy is beyond the scope of the analysis.*

19*Economic stimulus packages encompass a range of fscal mechanisms, including bailouts and loans. In defning the amount of stimulus fowing through to sectors with a high environmental impact, the index has removed any measures which are purely devised to provide income support to workers (e.g. furlough or income protection programmes).*

20*Estimated by Vivid Economics (*2020*) based on the 14 of 18 countries it evaluates in its study. Brown orientation of these countries' stimulus funding based on (1) the scale of funds fowing into environmentally intensive sectors, (2) the existing green orientation of those sectors and (3) the efforts which steer stimulus toward (or away from) proenvironmental recovery.*

21 *Specifc stimulus packages include, for example, bailout measures of the aviation industry without green conditionality, subsidies for fossil fuel vehicles and an easing of permits for coal mining.*

**Table 19.2** Examples of blue stimulus packages announced by selected countries

*Notes: The list of stimulus packages with a focus of blue sustainability is not exhaustive. Exchange rates: €1 = US \$1.1842; NZ\$1 = US \$0.67; Rs1 = US \$1.013; NOK1 = US \$0.11*

aThe Green Deal consists of a €750 billion recovery fund and a €1.074 trillion EU budget for 2021–27. The amount of money set aside for climate targets, is set at 30%. The recovery fund alone would be the largest green stimulus in history. Specifc detail on the climate policies is not provided, and the European Union will report annually on its climate expenditure

A number of multilateral development banks and international fnancial institutions have mobilised resources to counteract the economic crisis in the most vulnerable countries. For example, the International Monetary Fund (IMF), World Bank, Asian Development Bank and other regional partners are working together on approaches to assist countries in the Pacifc overcome the challenges of the current crisis and position themselves for economic recovery (IMF 2020c) 22. A number of SIDS would also be eligible to apply for short-term debt relief as a part of the IMF's Catastrophe Containment and Relief Trust (Coke-Hamilton 2020). As a part of building back better after COVID-19, the Asian Development Bank is working in cooperation with the UN Economic and Social Commission for Asia and the Pacifc (ESCAP) on areas including gender inequality, climate change and ocean pollution (ANI 2020). Additionally, the African Development Bank (2020) has approved €225 million for a budget support loan for Egypt's electricity sector to bolster economic resilience and sustainability. These fnancial support measures would be in addition to several blue fnance initiatives that were set up before the pandemic to achieve sustainable ocean health and governance. This includes the Asian Development Bank's (2019) commitment of US \$5 billion (2019–2024) to expand its investments and technical assistance in ocean health and the blue economy; the World Bank's PROBLUE initiative that focuses on four pillars (fsheries and aquaculture; marine pollution; oceanic sectors and seascape management)23; and the European Investment Bank's commitment to more than double its lending to sustainable ocean projects, to €2.5 billion (\$2.7 billion), over the next 5 years (Richens and Koehring 2020) 24. However, blue measures still constitute a very small share of the response budget for development banks, and the role that blue recovery measures can play in responding to the crisis could more explicitly emphasized.

Bilateral aid and offcial lending to low- and middleincome countries from other countries can also make a big difference for the recovery. G20 nations have agreed to freeze bilateral government loan repayments for low-income countries until the end of the year as part of a plan to tackle the health and economic crises triggered by the pandemic and prevent a debt crunch in emerging markets25 (Wheatley et al. 2020). New Zealand has pledged NZ\$55 million in aid spending for Pacifc island nations (Dreaver 2020). Similarly, Germany, through the International Climate Initiative, has invested in a number of sustainability projects in 25 countries in response to COVID-19 to build future economic, social and ecological resilience (IKI 2020). Overseas development assistance (ODA) has also played a key role by building health and social protection systems in developing countries, which are critical to countries' ability to respond to the COVID-19 crisis and are central to resilience and recovery (OECD 2020d). However, with several countries' budgets in turmoil, it is possible that the overall level of ODA could decline in 2020 (OECD 2020e) 26. In addition, recent analysis by OECD shows that over the 2013-18 period a mere 0.8% of global ODA was allocated to support sustainable ocean economy and highly concentrated in three sectors—maritime transport, fsheries and marine protection (OECD 2020f). This suggests that more could be done to support a wider range of existing and new ocean-based sectors and thus foster greater economic diversifcation and resilience post pandemic (OECD 2020f).

#### **International Organisations and Non-Governmental Organisations**

The role of IOs and NGOs is vital in supporting local and national efforts to fght the pandemic. IOs are helping client countries to better address the impacts of this crisis, with a focus on empowering, protecting and prioritising the most vulnerable27. For example, the COVID-19 response offer of the UN Development Programme (UNDP) focuses on SIDS and aims to support long-term recovery efforts in these regions by helping them diversify (and sustainably expand ocean economy activities) as well as digitally transform to respond rapidly to crises28.

22*The doubling of the IMF's emergency fnancing capacity means that up to \$643 million could be made available immediately to the Pacifc island economies.*

23 *In fscal 2019, PROBLUE received signed contributions of over US \$50 million from fve donor countries (development partners are in the process of signing for over \$100 million). Actual funds received from donors totalled approximately \$28.8 million. Because of the focus on operationalising the trust fund and preparing the February 2019 annual work plan, PROBLUE approved grants of \$2 million, of which \$600,000 were disbursed, as of fscal year 2019. Grant amounts and disbursements are expected to accelerate signifcantly in fscal year 2020. As of 30 June 2019, PROBLUE's total fund balance, taking into account actual funds received from donors, disbursements, commitments, and investment income, was just over \$28 million.*

24*The bank expects to mobilise at least €5 billion in investments from private-sector companies and investors, among other partners (Richens and Koehring* 2020*).*

25*The moratorium on bilateral government debt repayments will begin on 1 May 2020. It will apply to the 76 countries that are eligible to receive assistance from the World Bank's International Development Association, which works with the poorest countries, as well as all nations defned as least developed countries by the United Nations. Eligible countries must be 'current' on any debt service payments to the IMF and the World Bank.*

26*The OECD calculates that if Development Assistance Committee members were to keep the same ODA to gross national income ratios as in 2019, total ODA could decline by \$11 billion to \$14 billion, depending on a single- or double-hit recession scenario on member countries' GDP.*

27*For more detail, see the UN COVID-19 response information at* https://www.un.org/en/coronavirus/information-un-system

28*The approach is to diversify and expand ocean economy activities and digital transformation to bolster governments' institutional capacities to respond rapidly to crises.*

Many IOs are working directly with industry associations to address the pandemic's short-term and long-term impacts on specifc sectors. For example, industry groups, such as the International Chamber of Shipping and the International Association of Ports and Harbours, and UN organisations like the World Health Organization, the International Labour Organization and the International Maritime Organization, have already led an enormous effort to establish safety protocols for preventing and mitigating COVID-19 in vessels and ports, and have also come together to explore ways to safely facilitate crew changes from disembarkation to the airport (Henriksen and Selwyn 2020). The International Chamber of Shipping has led the creation of a 12-step plan for governments on how to undertake crew changes29. The UN Global Compact is calling for a coalition of willing governments to protect global ocean supply chains by classifying these workers as 'essential'; this includes offshore energy workers and fsh farmers as well as seafarers (UNGC 2020a). The UN secretary general has called for bailouts of the shipping industry to be conditioned on alignment with the goals of the Paris Agreement (Chambers 2020b).

NGOs are working in partnership with multinational development banks and other fnancial institutions to address immediate needs whilst supporting a resilient, equitable and sustainable ocean economy. For example, the World Wildlife Fund is working to ensure continued monitoring and effective management of marine protected areas from the impacts of IUU fshing and other activities; advocating stimulus measures that promote clean energy and sustainable development; and making guidance available to cities dealing with high amounts of medical plastic waste (Plastic Cities 2020). Some NGOs are working with local fshers and women fsh workers to connect catch to private households or local markets (e.g. restaurants), thereby supporting direct marketing of catches that would otherwise go unsold. For example, Rare is working with a fshing community in the Philippines to help manage its long- term fnances (by setting up savings clubs), providing transportation for fshers (through engagement with government) and raising awareness about enforcing fsh sanctuaries important for the long-term sustainability of community livelihoods (Polo 2020).

#### **Private Investment**

Some private sector companies are exerting pressure on governments to ensure that COVID-19 recovery is green and harnesses science-based targets. For instance, in May, a climate advocacy effort, backed by the United Nations and led by chief executive offcers, saw 150 global corporations urge a net-zero recovery (UNGC 2020c). Private sector companies are also actively engaging in UN task forces to help with the global COVID-19 response30.

Blended social and green fnance has also grown due to mounting pressure on business to implement more sustainable business practices (Laidlaw 2020) 31. Also, evidence that green/SDG funds are outperforming their peers during COVID-19 could make investment in ocean- related projects more attractive (Corporate Citizenship 2020). Banks and investors are also under pressure from stakeholders to allocate more funding for environment, social and governance (ESG) initiatives, and some investment frms have launched clean energy funds.

For example, the Southeast Asia Clean Energy Facility (SEACEF) is providing early-stage venture capital–type funding to get new clean energy projects off the ground in Southeast Asia (Nguyen 2020)32. However, there is some risk that ocean-based start-ups will face dwindling funds as private institutional investors have frozen their investment decisions (Runyon 2020). Lack of fnancing will likely cause some start-ups to stop their activity.

#### **2.3 Gap Between Impacts and Response**

An assessment of responses to COVID-19 from governments, the private sector, development banks and the 'third' (or voluntary) sector show that a limited number of investments are directed towards the ocean economy, and a small

32*The fund is supported by international climate foundations including Sea Change Foundation International, the Wellspring Climate Initiative, the High Tide Foundation, the Grantham Foundation, Bloomberg Philanthropies, the Packard Foundation and the Children's Investment Fund Foundation. The supporting global philanthropies have invested an initial \$10 million in SEACEF, and are seeking to attract up to \$40 million in additional capital. It is expected that every dollar of high-risk venture capital–type funding deployed by SEACEF will leverage up to 50 times more in follow-on investment in the clean energy portfolio across Southeast Asia—reaching more than \$2.5 billion in assets while cultivating the local ecosystem of developers to grow the market. The initial focus will be on Vietnam, the Philippines and Indonesia.*

29*A 'roadmap' was developed by a 'supply chain coalition led by industry and unions in cooperation with UN agencies' (ICS* 2020c*).*

30*For instance, cross-sectoral ocean companies are actively participating in the UN Global Compact Task Force, with aquaculture players such as Cermaq and Bakkafrost, maritime insurers such as Gard AS and maritime classifcation companies including Lloyd's Register and DNV GL.*

31*There has been gravitation towards a more blended sustainable approach and with considerations of environmental, social and governance factors. Social bond issuance for 2020 totalled US \$11.58 billion as of 15 May, compared to just \$6.24 billion in the same period of 2019, according to an International Capital Market Association analysis of the Environmental Finance database. Demand for sustainability bonds, something of a hybrid between green and social bonds, has also surged. It reached \$25.62 billion in the year through 15 May, compared to \$13.64 billion in the same period a year earlier. Green bond issuance, in contrast, has dropped sharply. It totalled \$53.54 billion in 2020 as of 15 May, compared with \$84.09 billion in the same period of 2019.*

subset focuses on transitioning to a sustainable ocean economy. Within the blue measures there has been more of a focus on short-term coping strategies to address the immediate impacts of the crisis, such as high unemployment, business insolvency and health risks faced by ocean economy workers. Shifting this focus to the development and implementation of longer-term resilience-building strategies will be key to preventing future shocks and responding to ongoing stressors, such as climate change and biodiversity loss. It is imperative that ocean activities and industries transition towards smarter, sustainable practices that conserve marine ecosystems and promote human well- being both now and into the future.

Based on an assessment of the gap between impacts and responses, we summarise below the consequent missing action or unintended impact on local economies and the health of the ocean.

**To protect the livelihood of small-scale fsheries in the long term, it will be important to ensure that support policies from national governments do not encourage overfshing practices or IUU fshing that damage ocean ecosystems and deplete stocks.** A number of measures have been introduced to promote the recovery of the sector and support the fshers (especially vulnerable groups) facing loss of livelihoods due to the crisis. However, while license fee waivers, measures to reduce input costs (through provision of loans at subsidised interest rates), deferrals and rollover of unused fshing quota are being used to support fshers by reducing fshing costs, this could lead to an environmental trade-off by incentivising overfshing33. Measures such as decommissioning schemes or payments for early retirement (e.g. the European Maritime and Fisheries Fund's allowing EU member states to pay fshers and aquaculture producers for a reduction or cessation in production) could reduce oversupply of feets. However, whether such steps lead to longer-term reductions in fshing pressure and ultimately to healthier fsh stocks will depend on whether they postpone fshing effort (OECD 2020d). Measures that incentivise sectors to move towards the sustainable management of fsh stocks will be key for economic recovery and equitable prosperity in the long term. It will be important to ensure that support policies and investments do not encourage overfshing practices or IUU fshing that damage ocean ecosystems and compromise the sustainability of resources, putting future resilience at risk.

**To help reduce seafood waste and meet long-term food security targets, continuity of investments facilitating the growth of sustainable mariculture will be key**. Measures aimed at improving storage of mariculture and fsheries products will also deliver environmental benefts, reducing loss and waste of fsh products across the supply chain. Growth of sustainable mariculture practices will be very important for food security, and investments in sustainable mariculture will require a substantial mobilisation of capital. A number of innovative practices are being developed in the sector to support its sustainable transition (including aquafeed alternatives, industrialisation of seaweed and bivalve farming). While some of these have been driven by private investments, fnancing from public bodies (such as the development banks and national governments) can help mobilise private capital by building confdence and reducing risk.

**To help make up for declining tourism-based funding for ocean conservation, there is an immediate need for interventions that help protect vital and vulnerable marine ecosystems.** While decreased tourism funding has led to an increase in alternative methods of funding for marine conservation (such as crowdfunding and donations from private foundations), these funding mechanisms are unlikely to be sustained. In addition, some marine sanctuaries have been opened to fshing, which can quickly erase the progress made on marine biodiversity recovery in these sites. The current protected area network is only receiving about one-third of the funding it needs to be effectively implemented and managed, and the shortfall is even greater in developing countries (Waldron et al. 2020). Expanding protection to at least 30% of the world's land and ocean and effectively managing it would require an average investment of US \$140 billion annually and deliver a range of benefts to society that will outweigh the costs (Waldron et al. 2020)34.

**For the long-term resilience of the coastal tourism sector and protection against future climate change shocks, investment must go into restoring and protecting marine environments and uplifting local communities.** Most emergency and recovery measures have aimed to provide income continuity for tourism workers and business continuity for small enterprises that otherwise would be unable to survive the crisis. The international community has also mobilised funds through multilateral development banks to counteract the economic crisis in the most vulnerable countries. However, much more needs to be done to stimulate demand and ensure the sector's long-term resilience once containment measures are lifted. Recovery following the crisis presents an opportunity to think about innovative measures where tourism businesses play an active role in uplifting local communities and protecting coastal and marine envi-

33 *Input cost-reduction measures (such as the provision of fuel subsidies) tend to beneft larger feets at the expense of small-scale fsheries.*

34*Waldron et al. (*2020*) state that this funding should come from a range of sources, including offcial development assistance, governments' domestic budgets, climate fnancing directed to nature-based solutions, philanthropies, corporations and new sources of revenue or savings through regulatory and subsidy changes.*

ronments. Policies and investments supporting structural transformation are needed to help build a low-carbon, less polluting, more sustainable and resilient coastal tourism economy. In addition, targeting recovery at diversifcation across a range of ocean activities to reduce dependency on the tourism sector will be key to building future resilience in Caribbean and Pacifc islands.

**To ensure the long-term viability of the marine transport sector, investment and regulation needs to create the right market incentives for a sustainable transition to zero-emission vessels.** While the pandemic has curtailed the shipping sector's capacity to invest in more environmentally friendly technologies, industry is still leading a strong drive towards decarbonisation (NSA 2020b; Mærsk 2020; CMA CGM 2020). There is an important role for international organisations and governments to help keep the momentum by developing national and market incentives for decarbonising domestic and international transportation. This includes investment in green technologies, developing policy to enable the business case for the adoption by shipping of low- and zero-carbon fuels (e.g. a carbon price), develop national incentives for decarbonising domestic transportation and facilitating decarbonisation of national energy systems faster or as fast as the transition in the international feet (Hoegh-Guldberg et al. 2019). Low-carbon domestic shipping and coastal marine transport can play a strong role in building coastal resilience. Shifting freight transport from road to waterways in emerging markets (like Africa, India or Latin America), where trucks alone are responsible for about 40% of transport emissions, can substantially reduce emissions and logistics costs (World Bank 2020b). Similarly, after the crisis key global partnerships will need to continue to support SIDS and least developed countries (LDCs) that face signifcant domestic or regional shipping decarbonisation challenges. Flexible port regulations based on screening and discretion will be needed to ensure the continuity of freight distribution and ferrying of food and essential goods so that supply chains are not hit by both low demand and supply bottlenecks (Heiland and Ulltveit-Moe 2020).

**To accelerate deployment of ocean-based energy systems, a stable economic and regulatory environment will be needed to help stimulate investments in these growing sectors.** The vast majority of the COVID-19 relief from governments so far supports carbon-intensive industries without requiring improvements. For long-term sustainability it will be important to shift towards a green-blue recovery, where government, businesses and investors can play a role in boosting clean investment, both by promoting low-carbon supply chains and by grasping the opportunities of clean energy markets (Mojarro 2020). Governments will need to play a key role in providing a stable economic and regulatory environment to help stimulate investments required for an accelerated deployment of ocean-based energy systems. Investment will also be needed to advance ocean renewable technologies beyond offshore wind to make them more economically attractive.

#### **3 Roadmap for a Sustainable and Equitable Blue Recovery**

Recovery and stimulus packages represent a unique opportunity to accelerate the shift to a sustainable ocean economy that delivers on global targets under the 2030 Agenda for Sustainable Development and the Paris Agreement. Mutually benefcial, no-regrets opportunities are ready to be implemented now to support affected communities and regions, while delivering signifcant social and environmental benefts. These opportunities respond to the immediate need for job creation in the short-term and offer opportunities for long-term economic growth and resilience. Governments can also utilise innovative fnancial mechanisms to incentivise progress and avoid rollbacks in progress.

The investments that governments and fnancial institutions make over the coming months and years will have long-term effects on the nature of economies and their resilience to future shocks. Efforts should be made now to avoid locking in high-emitting, high-polluting and inequitable pathways that limit the ability to build sustainable and resilient economic systems. Investment through recovery and stimulus packages represents a crucial lever for accelerating the shift from business as usual to a more sustainable future that delivers on global targets under the 2030 Agenda for Sustainable Development and the Paris Agreement.

The ocean economy can play a vital role in this transition, and in turn this transition will be critical to securing a sustainable ocean economy for the future. Using recovery and stimulus packages to invest in, and introduce, both shortterm and longer-term policy reform for a sustainable ocean economy can provide short-term economic relief and recovery while delivering long-term societal benefts and building economic resilience to future shocks.