The Ocean Economy in 2030
Shardul AgrawalaHead, Environment and Economy Integration DivisionOECD Environment Directorate
Ny-Ålesund SymposiumSeptember 19-21 2016
Outline
2
• Global challenges and implications for the ocean economy
• The Ocean Economy today
• Growth prospects for ocean-based industries
• The Ocean Economy in 2030
• Some Policy implications
GLOBAL CHALLENGES
AND IMPLICATIONS FOR
THE OCEAN ECONOMY
3
Global Economy is stuck in a “low growth” trap
4Source: OECD Economic Outlook 2016
5
52
53
54
55
56
57
58
59
60
61
62
Q42007
Q42008
Q42009
Q42010
Q42011
Q42012
Q42013
Q42014
Q42015
Q42016
Q42017
OECD Euro area
Source: OECD Employment Outlook 2016.
OECD Employment will return to pre-crisis only in 2017
Slowing long-term economic growth
6
Source: OECD Long-Term Economic Outlook, 2014
7
Source: UN (2014), allianz.com
Growing population, urbanisation, megacities
Environmental issues
8
Increasing primary energy demand…
… and accelerating climate change
Source: IEA, 2015; IPCC, 2015
• Ocean based assets and economic activities offer prospects for new sources of growth, jobs, and innovation.
• The also offer solutions to key environmental challenges
• While also being at increased risk from enhanced economic activity, demographic and environmental pressures
Where do Oceans fit in ?
9
THE OCEAN ECONOMY
TODAY
10
The concept of the ocean economy
11
Ocean Economy
Ocean-based
industries
Marine ecosystems
Market flows and services
Natural capital assets
Non-market
flows and services
Physical capital stock ocean-based
industries
Intermediate inputs
Impacts
Source: OECD (2016)
Creation of OECD Ocean Economy Database at global
scale:
- 10 major ocean-based industries so far;
- industry-specific contribution to the global economy
(gross value-added and employment);
- drawn from official primary and secondary international
(e.g. OECD, UN organisations, World Bank) and national
sources, supplemented by industry and business data;
- breakdown by major geographic regions;
- partial sectoral coverage for 169 coastal states /
economies.
How was the ocean economy measured?
12
• Not volumes (e.g. freight tonnes, gross tonnage/CGT….)
• Not turnover – involves double counting of inputs purchased from other industries
• Gross Value Added – output of entire sector minus intermediate products purchased from other industries
the direct net economic contribution of an industry to the overall economy.
What are we measuring?
13
How big is the ocean economy?
14
0
100
200
300
400
500
600
US
D B
illi
on
s
Value-added of ocean-based industries in 2010 by industry
Source: OECD (2016)
Regional breakdown of value-added
of selected ocean industries in USD billions, 2010
15
0
5
10
15
20
25
30
Africa andMiddle East
Asia andOceania
Central andSouth
America
Europe NAFTA Rest of theWorld
Value-added of shipbuilding by region
0
5
10
15
20
25
30
35
40
45
Africa andMiddle East
Asia andOceania
Central andSouth
America
Europe NAFTA Rest of theWorld
Value-added of fish processing by region
0
1
2
3
4
5
6
7
8
9
Africa andMiddle East
Asia andOceania
Central andSouth America
Europe NAFTA Rest of theWorld
Value-added of fisheries by region
0
20
40
60
80
100
120
140
160
Africa andMiddle East
Asia andOceania
Central andSouth
America
Europe NAFTA Rest of theWorld
Value-added of maritime and coastal tourism by region
Ocean-based industries contributed
more than 31 million FTE jobs in 2010
16Note: FTE = full-time equivalentSource: OECD (2016)
0
2
4
6
8
10
12
Mil
lio
ns
FT
E
Full-time equivalent employment in ocean-based industries in 2010
THE OCEAN ECONOMY IN 2030
17
• Capture fisheries• Offshore oil and gas extraction in deep water
Prospects for modest growth
• Shipping• Shipbuilding• Offshore wind• Marine aquaculture• Tourism• Surveillance and safety
Prospects for high long-term growth
• Ocean renewable energy• Marine biotechnology• Deep-sea mining• Carbon capture and storage
Long-term potential but not yet at
commercial scale
Growth prospects for ocean industries
18
Offshore wind
19
Installed wind power capacity by type and region in the IEA New Policies Scenario, 2040
Source: OECD/IEA, 2014
Ocean energy
20
Source: European Ocean Energy Association (2010)
Projected ocean energy installed capacity…
… in context
• Objective: obtain a coherent projection of the growth of the ocean economy as a whole
• Our approach
– Ocean economy database, integrating country- and industry- specific data
– Business-as-usual scenario: continuation of past trends, no major policy or technological developments.
The Ocean Economy in 2030
21
Ocean industry value-added to double
(from 1.5 to 3 trillion USD) by 2030
22
Source: OECD (2016)
In 2030, ocean industries likely to provide more than 40 million FTE jobs
23
Source: OECD (2016)
0
2
4
6
8
10
12
Mil
lio
ns
Full-time equivalent employment in ocean-based industries in 2010 and 2030
2010
• Some important maritime sectors missing due to data gaps or early stage of development.
• Only measuring direct economic contribution and direct FTE employment (no spill overs effects, etc.)
• Only industrial-scale activity, no artisanal sector.
• Qualitative discussion of challenges in marine ecosystem valuation.
Conservative estimates!
24
SOME POLICY IMPLICATIONS
25
A growing ocean economy relies on a
healthy marine ecosystem…
26Source: WWF (2015)
… which is already under pressure on various fronts
“Business-as-usual growth of economic activities
in the ocean is not an option for the future”
Source: IPCC, 2015; FAO, 2015, Maribus, 2010.
Pollution Overfishing
Global warming Acidification
• It is time to recognise the closely interconnected clusters of ocean economic activities as an economic system, rather than a fragmented collection of individual sectors (Parallels with the “information economy”).
• Need to strengthen integrated and more strategic approach to management of maritime activities, not least in economic exclusion zones, but also at regional and global levels.
– Strengthen Information Base: data on marine resources very fragmented and hard to locate, limited information on interactive effects of different uses and users of the ocean
– Use of Economic Analysis and Incentives : Better economic valuation of marine ecosystems and services, integrating such information in decision-making, greater use of economic instruments to internalise environmental externalities
– Better harness technology and innovation for the sustainable development of the ocean economy
Some final thoughts
28
29
Further Information
http://www.oecd.org/futures/oceaneconomy.htm
APPENDIX
30
Ocean-based industries
31
Established
ocean-based industries
Emerging
ocean-based industries
Industrial capture fisheries Industrial marine aquaculture
Industrial seafood processing Deep- and ultra-deep water oil and gas
Shipping Offshore wind energy
Port activities Ocean renewable energy
Shipbuilding Marine and seabed mining
Offshore oil and gas (shallow water) Maritime safety and surveillance
Marine manufacturing and construction Marine biotechnology
Maritime and coastal tourism High-tech marine products and services
Marine business services Others
Marine R&D and education
Dredging
Source: OECD (2016)