Green Accounting For A Blue Economy

In March 2023, at the second meeting of the Environment and Climate Sustainability Working Group (ECSWG), delegates deliberated on the G20 High Level Principles for a Sustainable and Climate Resilient Blue Economy that was presented during the technical session. Also discussed was the technical study on Accelerating the Transition to a Sustainable and Climate Resilient Blue Economy. While further details are not yet available in the public domain, fast-tracking the transition to the Blue Economy is not surprising, with the ocean seen as the next economic frontier and the solution for sustained economic growth. Recall that eight years ago, while speaking in Mauritius, Prime Minister Narendra Modi said, “To me the blue chakra or wheel in India’s national flag represents the potential of Blue Revolution or the Ocean Economy. That is how central the Ocean Economy is to us.”

While growth along the coast has accelerated in the last few decades, it has been quite haphazard with very little planning on the one hand and belief in the inexhaustibility of environmental resources, especially the ocean (both as a resource base and as a waste sink), on the other. The growing adverse impacts of the economic activities on coastal and marine ecosystems is evidenced by fishers having to go further out at sea to catch fish, poor coastal water quality, and increasing investments into cleaning beaches, coastal protection systems and restoration of damaged ecosystems.

Blue Economy Policy

India’s Draft Policy on Blue Economy defines it as “a subset of the national economy comprising of the entire system of ocean resources and man-made economic infrastructure in marine, maritime and the onshore coastal zones within India’s legal jurisdiction, which aid in the production of goods and services and have clear linkages with economic growth, environmental sustainability and national security.” In other words, it is about economic growth based on sustainable use of natural, coastal and marine resources.

The questions, therefore, that come up, are: (a) how do we ensure that the ocean-economy focused growth is sustainable? and (b) how do we calculate the value of this growth taking into account the need to maintain a healthy ocean environment considering that it is a healthy ocean that underpins sustainable blue economy?

Marine Spatial Planning

The answer to the first question, on ensuring sustainable ocean-economy growth, lies in marine spatial planning (MSP) which has been another key point of discussion at the ECSWG meetings. Marine Spatial Planning has been defined by UNESCO-IOC as being “a public process of analysing and allocating the spatial and temporal distribution of human activities in marine areas to achieve ecological, economic and social objectives that have been specified through a political process.” MSP is the path to be followed not only for promoting activities in coastal and marine areas but also to ensure that these are not in conflict with each other.

In India, coastal planning has been mostly limited to the Coastal Regulation Zone (CRZ) defined by the CRZ Notification issued under the Environment (Protection) Act through Coastal Zone Management Plans (CZMP) which are maps of the CRZ showing the CRZ classes which also define the kinds of activities that are permitted or prohibited within them. India has made some progress in MSP for Odisha and West Bengal as part of the Integrated Coastal Zone Management Programme. This largely constituted mapping existing activities in the coastal and marine realm such as shoreline change, marine protected areas, marking out the boundaries within which fishing trawlers cannot operate, regular navigation channels and identifying zones where new activities could be added that complemented existing activities or do not conflict with existing activities.

Environmental Accounting

To look to answers for the second question, on calculating the value of the ocean-economy growth, we need to begin with the premise promoted, among others, by economist Professor Sir Partha Dasgupta that, “sustainable economics means using a different measure to GDP and accounting fully for the impact of our interactions with Nature across all levels of society” (Dasgupta, 2021).

So, what kind of figures do we have as a ball-park value for our coastal and ocean resources?

India’s long coastline of over 7,500 km, exclusive economic zone (EEZ) of 2.02 km² and continental shelf of 5,30,000 km² harbour various ecosystems from which 21,663 species have so far been recorded (Venkataraman, 2022), many of them commercially significant. It is not just the individual species that are important but also the extent of the ecosystems such as salt marshes, mangroves, tidal mudflats, seagrass beds and coral reefs apart from miles of sandy beaches and rocky cliffs. These ecosystems provide a variety of goods and services that are broadly classified into provisioning, regulating, cultural and supporting services. A first conservative estimate of ecosystem services using a combination of valuation methods indicated that the total value of these services in India was estimated at approximately Rs. 1.9 trillion (or $110 billion in purchase price parity [PPP] terms) in 2012-13, equivalent to about 2.4% of India’s net national product that year (Kavi Kumar, et al., 2022). Hence, the same rationale that “GDP growth is too narrow a measure of economic growth and not a measure of national wealth” which led to development of the green accounting framework for India is applicable for ocean ecosystems as well.

Worldwide, the System of Environmental-Economic Accounting (SEEA) framework has been used to measure the links between environment, economic and societal well-being. SEEA has two parts, the central framework and ecosystem accounting; the latter includes services provided by ecosystems, tracking changes in ecosystem assets and linking this to human activity. Most importantly, these accounting frameworks retain a structure similar to existing national accounts, and hence are capable of providing information that augments our understanding of the economy and the environment. While these frameworks have been largely applied to land ecosystems, they are now increasingly being applied to marine ecosystems through ocean accounting. In fact, the Ministry of Statistics and Programme Implementation (MoSPI) which has so far been focusing on land accounts, has called for expanding the coverage of the accounts to include ocean accounts in its strategy for the next half decade.

Ocean Accounts

The Global Ocean Accounts Partnership (GOAP), a multistakeholder partnership to measure and manage progress towards sustainable ocean development, defines ocean accounts as “integrated records of regularly compiled and comparable data concerning ocean environment assets (e.g., extent/condition of mangroves), economic activity (e.g., sale of fish) and social conditions (e.g., coastal employment).” With a structure similar to existing national accounts and compatible with the System of National Accounts (SNA) and the SEEA, ocean accounts bring the ocean into official statistics. Preparation of ocean accounts follows the same format as the SEEA Ecosystem Accounting (SEEA EA) which includes ecosystem extent account, ecosystem condition accounts, ecosystem services account and monetary ecosystem asset account. As pointed out by the High Level Panel for a Sustainable Ocean Economy, the development and integration of ocean accounts into national accounts can provide a dynamic evidence base that goes beyond a single indicator of production to reflect the full value of the ocean economy.

How are Marine Spatial Planning and Ocean Accounting connected?

Marine Spatial Planning (MSP) and Ocean Accounting (OA) can be looked at as the yin and yang of blue economy. With MSP, the use of marine spaces is planned and allocations made for various activities to ensure blue growth; part of the MSP includes identifying and delineating ecosystems that must be protected and conserved as, for example, Marine Protected Areas. With OA, ecosystems are considered assets, their extent and quality is monitored and the benefit streams that they generate are valued in monetary or non-monetary terms. In other words, OA can also serve as a monitoring tool to ensure that MSP is successful.

Though India has made some progress in MSP as mentioned earlier, effectively India can be considered to be starting out on both MSP and OA. Considering that these are closely related and require reams of data, especially for decision-making, it makes sense to work together. While MSP normally should be done by those versed in planning and OA by economists and statisticians, the ocean environment is the common thread binding them. Both MSP and OA require data; and datasets that are often similar. For example, part of MSP is mapping of ecosystems such as mangroves, seagrass meadows and coral reefs so that they can be protected and conserved. OA treats such ecosystems as ‘assets’ and needs information on their areal spread as well as their quality as together they generate values on benefit streams derived from these assets. MSP also includes activities such as ecosystem restoration; which in turn are accounted as additions to the assets under OA. MSP can map locations of similar activity and plan for clustering to reduce costs. OA looks at these economic benefits from the environmental point of view. The overlap between MSP and OA can be significantly high as we explore more and more activities and benefits related to blue economy.

With data coming from varied sources and data collection being done using different methodologies, at different spatial and temporal scales, there are definite dangers of data sets collected/generated in non-standardized formats necessitating duplication of data collection processes resulting in unnecessary expenditure of money, time and personnel. Hence it would make sense to co-develop both frameworks including data collection and collation process to facilitate progress towards successful blue economy development in India. This would also require concerted and coordinated efforts from different Ministries of the government of India including the Ministry of Earth Sciences, Ministry of Environment, Forest and Climate Change, and Ministry of Statistics and Programme Implementation.

(Published under Creative Commons from Mongabay-India. Read the original article here)