State of Green Business: The business of oceans catches a wave
As new economic opportunities are found in the seas, a swell of business action to preserve and protect them has come forth.
The following is an excerpt from the GreenBiz State of Green Business Report 2016.
Seventy percent of the earth’s surface is made of oceans, yet only 5 percent of this vast expanse has been explored — and far less than that protected. Businesses are waking up to untapped economic opportunities within these watery regions, which absorb 30 percent of the planet’s carbon emissions.
But as warming, acidification, chemical pollution, waste flows, overfishing and rising sea levels imperil marine systems, species and habitats, industrializing the oceans further brings new risks. The recognition of oceans’ economic potential is crashing up against the movement to place an economic value on its natural capital.
The emerging "blue economy" movement applies sustainability to the vast marine environment, which encompasses shipping; transportation; tourism; recreation; and the harvesting of fish, seafood, oil, gas, minerals, energy and even water itself.
If oceans were a national economy, they would be the world’s seventh largest — an estimated $24 trillion in value, or $2.5 trillion a year in GDP, according to a 2015 report from WWF. In the United States alone, the blue economy was estimated at $258 billion, or 1.8 percent of GDP in 2010, according to the Economist Intelligence Unit. China credited oceans with 10 percent of its GDP and even uses a Gross Maritime Output metric — about $921 billion in 2014. Valuing the wealth of the oceans is hard to quantify because accounting methods vary and the space is expansive. (Beach sunsets: Priceless.)
Business leaders are recognizing that better data on the blue economy could enhance stewardship, reduce business costs, increase efficiency, spur innovation and open access to new markets and capital flows.
A truly blue economy should do more than prevent or diminish ecosystem harm. As visualization and protection efforts swell, so do new economic opportunities to monitor ocean health, store carbon, promote eco-tourism, prevent waste and protect marine habitats.
Contending that the surface of Mars is better explored, the Shell Ocean Discovery XPRIZE is offering $7 million to teams that innovate "deep-sea technologies for autonomous, fast and high-resolution" mapping of the ocean floor. Google Ocean — which is similarly mapping the world’s oceans with National Geographic, government agencies and thousands of volunteers — recently launched 40 underwater "street views" of marine sanctuaries, fishing sites and coral reefs, but that’s a mere drop in the bucket.
Other efforts to better understand and protect the big, blue sea: Global leaders are elevating talk of protecting the oceans while nations build blue-economy plans (although many favor development over conservation). The Group of Seven nations in 2015 for the first time put oceans on its agenda. The U.N. is completing its first World Ocean Assessment and set ocean protection as one of the 17 Sustainable Development Goals.
Even so, oceans largely came up dry in the Paris Agreement forged at COP21; the U.N. climate summit held an Oceans Day, although on the sidelines. The shipping industry, which has cumulative greenhouse gas emissions equal to those of Germany, was left untouched by the pact, even with trade by sea set to quadruple by mid-century. The Paris Agreement’s text at least noted the importance of "ensuring the integrity of all ecosystems, including oceans" — as well as conserving carbon sinks, a less direct nod to oceans.
Still, a sea change is taking place in some parts of the business world. A growing number of cargo companies are working to improve efficiency and reduce the emissions of their oceangoing fleets. The Maersk Group has a "smart sailing" container shipping effort, and is seeking to decouple growth from carbon emissions. Giant cargo shippers such as Cargill are favoring shipping companies with high efficiency ratings from the Carbon War Room. Norsepower is among those engineering shipping efficiency through a range of innovations.
Nearly 50 companies as varied as BMW, Electrolux, IKEA, Kohl’s, Marks & Spencer and Ralph Lauren are involved in the Clean Cargo Working Group, a BSR initiative to reduce greenhouse gas emissions from oceangoing shipping. In 2015, its members reported an average 29 percent drop in emissions since 2009, with measurable improvements in 21 of 25 major trade routes. Shipping hulks including Interferry and the Abu Dhabi National Tanker Company signed on to support a strong COP21 climate pact and to reduce emissions in line with International Maritime Organization goals.
To protect the oceans, the ocean economy requires NGOs, business and government working together.
One example is the Trash-Free Seas Alliance’s attack on the trillions of particles of plastic tainting the oceans. The Ocean Conservancy, partnering with Dow and Coca-Cola, seeks to stanch the flow of plastic into waterways by 45 percent in a decade, from five chokepoints in Asia. The alliance estimates that $5 billion is needed in public-private investment each year to exploit secondary markets for plastic waste, such as fuel or electricity.
A big question is whether plastic waste harvested from oceans can create enough economic value to launch viable business opportunities.
Then there is the concept of "social plastic," set forth by the Plastic Bank startup. It treats plastic trash as currency. In Haiti, for example, people can trade plastic litter in exchange for Internet access. The Plastic Bank is experimenting with 3D-printing waste plastic into fresh products, and is working with a growing number of companies to create packaging.
A few companies already upcycle water-bound waste. Method uses plastic collected from Hawaii beaches for soap bottles. Interface’s Net Works program makes new carpet tile from fishing nets, which the Patagonia-baced startup Bureo also uses to create skateboards and sunglasses. Adidas partnered with Parley for the Oceans to create a new concept shoe made from recycled 3D-printed ocean plastic waste, including from gillnets used in commercial fishing.
Plastic pollution is just one of many threats to aquatic life and the marine food supply. Although oceans provide only 2 percent of the world’s food, demand could quadruple over the next decade as the demand for protein grows in lockstep with world population. With 90 percent of fish stocks already overexploited, corporations are seeking sustainable sources for fish and seafood.
Unilever requires fish it buys to be certified by the Marine Stewardship Council. Red Lobster requires suppliers to meet Global Aquaculture Alliance standards. Whole Foods, Wegmans and Hy-Vee recently topped a Greenpeace list of supermarket leaders in sustainable seafood, which includes working to eliminate slavery from supply chains. A "blue revolution" in aquaculture could increase yields, much as the agricultural Green Revolution of the late 20th century did. By 2030, two-thirds of fish served could come from farms.
Silicon Valley investors are diving in, too. Tracking seafood supply chains is a theme of the Fish 2.0 competition, which features vessel tracking and DNA testing technologies. Similarly, the Future of Fish nonprofit incubator fosters traceability, "breakthrough aquaculture," oyster restoration and more.
One vision, promoted by the Seasteading Institute (backed by PayPal co-founder Peter Thiel), is of floating cities that farm fish at sea using kelp, a fish feed that also absorbs carbon. Such solutions might even provide a life raft to soon-to-be-underwater island-states such as the Maldives.
As sea levels rise, so does the need for infrastructure to guard cities, from New Orleans to Amsterdam and beyond, yet another opportunity. New financing models are starting to circulate; the Nature Conservancy just supported the first "blue economy debt swap" with the low-lying Seychelles, a public-private finance model built for endangered island-states to replicate.
There’s more to be harvested from the seas. Biotech firms are concocting new painkillers, antibiotics and cancer treatments from ocean critters. Drugs made from sponges, fish, invertebrates, mollusks and fungi are projected to become an $8.5 billion market by 2016, according to BCC Research.
Then there are product designs that mimic ocean life, such as the lowly Sandcastle worm, which inspired a surgical glue. It’s early days for marine biotech and its myriad applications, including safer industrial chemicals, bioremediation products and energy feedstocks. But if a gold rush rises, say, for a miracle sponge, companies will need to collaborate to prevent overharvesting such species.
The same goes for protecting minerals and metals on the seabed floor, where some ores may be 10 times more concentrated than on land. The first deep-seabed mining operation for gold, copper and other things could trawl New Guinea waters in a few years. And as China still controls 95 percent of the market for rare earths — critical ingredients in everything from iPhones to solar panels to wind turbines — yet another opportunity is waiting to surface.