The ocean economy is the world’s fifth largest and it provides environmental services without which human life could not continue. But finding financing to operate in a way that doesn’t imperil the ocean is extremely difficult. So at a panel at the UN Ocean Conference suggested that instead of conservationists having to make the argument that the the world should finance ocean protection, those who make a living from the ocean should have to prove they’re not harming it.
“Reverse the burden of proof,” said Dona Bertarelli, Executive Chair of Dona Bertarelli Philanthropy at the panel, entitled “Mobilizing finance for ocean actions in support of Sustainable Development Goal 14.” She said this shift would unlock private finance and dramatically change the incentives. “We know what works,” she said, identifying highly and fully protected marine areas as “the most effective tool.” They offer proven benefits for both nature and people: restoring biodiversity, supporting fisheries and building climate resilience. Marine protected and conserved areas will return at least $3-4 for every $1 invested. Protecting 30% of the ocean could yield benefits of up to $926 billion by 2050.
Moderator Karen Sack, Executive Director, Ocean Risk and Resilience Action Alliance, said that the ocean is not a victim of climate change — it is a solution — “a mispriced asset class, undervalued and underfunded, yet holding the key to food security, climate stability, biodiversity recovery and sustainable growth.” Therefore, “inaction will cost us over $8 trillion in lost opportunity,” she warned, noting that bold, coordinated action today could unlock $15.5 trillion in shared prosperity by 2030.
Yet only 8.3% of the ocean has some kind of protection with only 2.8% being fully or highly protected. “Despite this evidence, the current financial flows are out of step with the scale and urgency of the challenge,” she said. Today, less than 9% of biodiversity-related development finance reaches marine and coastal ecosystems. All sources combined — public, philanthropic and private — deliver less than 1% of global climate and biodiversity finance to the ocean, with only $3 billion a year being spent against an estimated need of $175 billion annually to achieve SDG 14 and the ocean targets of the Global Biodiversity Framework.
One of the barriers to increasing investment is risk associated with it. “Without insurable oceans, we won’t have investable oceans”, said Ulrike Decoene, AXA Group Chief Communication, Brand and Sustainability. With 38% of the global population living less than 100 kilometers from the coast, rising sea levels and deteriorating ocean health present significant risks to infrastructure, communities and economic activities. The stakes are particularly high for commercial insurers, like her company. “What is at stake for my industry is, to be very blunt, is insurability of those areas”, she said.
However, she stressed the need to seize an opportunity to build collective resilience and reduce economies’ exposure to climate risk. Insurers can play an important role. AXA developed the Coastal Risk Index, which revealed that $363 billion in coastal assets are at risk without natural defenses and 14.2 million more people could face annual flooding without coral reefs, mangroves and wetlands. Insurers can provide data to decision makers. With expertise in risk assessment, insurers can also help de-risk investments and incentivize sustainable practices.
Pradeep Kurukulasuriya, Executive Secretary of the United Nations Capital Development Fund, said that “it’s impossible for us to be talking about a context where collapse of the oceans could lead to half the oxygen that we need, potentially collapsing of the insurance sector, which, if you hadn’t realized, is the first step to the collapse of banking in general.” This is a very serious time, he said, adding that the emphasis must be on the urgency.
He highlighted the use of non-Official Development Assistance (ODA) resources because ODA is declining in general. “It’s not going to work if we focus only on ODA,” he said. With the private sector being such an integral part of the issues, it is also important to deploy blended finance solutions, he noted, pointing out that private investment does not flow very easily. Of nearly $500 trillion worth of global assets, just 4% makes it to developing countries. “This is a fraction of a fraction of a fraction,” he said, adding that the One Ocean Finance Facility aims to mobilize non-ODA resources.
“Accelerating action on ocean finance is crucial, particularly for developing countries, which depend on the ocean for nutrition, livelihood, recreation and transportation,” said Kamina Johnson Smith, Minister for Foreign Affairs and Foreign Trade of Jamaica, adding that “this is especially the case” for small island developing States, as well as least developed countries. Jamaica is embarking on innovative financing schemes, including a $500 million blue green facility, which aims to attract private-sector stakeholders and investors focused on climate resilience and blue transition.
Mafalda Duarte, Executive Director, Green Climate Fund, described the ocean as “the Earth’s greatest climate regulator.” If the oceans had not absorbed more than 90% of the excess heat from human activity and a quarter of global CO2 emissions, “we would at the moment be facing much more severe impacts of climate change than we are,” she said. Ocean-based solutions could cut 4 gigatons of emissions a year by 2030. The Fund has since 2016 committed $1.3 billion to ocean and coastal resilience and have unlocked another $1.5 billion.
As “an enabler and catalyst for other investments,” the Fund has been providing grants to over 30 countries, including for the national ocean climate frameworks in Brazil and two independent economies across 14 Pacific island nations. In Ecuador, the Fund is providing $36 million in grant financing to capitalize a perpetual fund to attract private investment in mangrove protection. In Thailand, it is financing the nation’s first blue bond supporting investments in marine tourism, agriculture and coastal waste management. In Barbados, it supported a restructuring of debt that freed up $125 million for water resilient infrastructure.
Mathias Cormann, Secretary General of the Organisation for Economic Co-operation and Development (OECD), said that if the ocean economy was a country, it would already be the world’s fifth largest economy. Over the past 25 years, the ocean economy has been contributing between 3 and 4% of global gross value-added. The OECD’s Fisheries Support Estimate database shows that, of the $10.7 billion Governments spent annually on subsidies and other forms of support to fisheries between 2020 and 2022, a massive 65% risks encouraging unsustainable fishing. “We have substantial amounts of public money taking us in the wrong direction,” he said.
A new OECD standard provides practical policy guidance for Governments to materially reduce the risk that subsidies and other forms of public support benefit illegal, unreported and unregulated fishing. About 80% of official development assistance (ODA) in 2023 was focused on three traditional ocean economy sectors: maritime transport, ocean protection and fisheries. “There are untapped opportunities to diversify and strengthen growth in the ocean economy, including offshore renewable energy and marine biotechnology,” he said, noting that the recently launched OECD Guidance on Development Co-operation for a Sustainable Ocean Economy provides a blueprint for mobilizing effective finance for a sustainable ocean economy.
