Have you heard about Blue Economy?

AlaskaNor's Blue Economy

Efforts at economic development in ocean and coastal regions are more and more taking place, at least nominally, within an evolving concept called the "blue economy". National and regional governments along with international organizations are framing their efforts as taking place to promote the blue economy. While there is widespread agreement that the blue economy means connecting economic uses of the ocean with sustainable ecosystems and environmental conditions, translating this general aspiration into actual decisions by governments and businesses has proved more complex and difficult.

Designing a new economic model for Arctic regions is becoming a matter of some urgency because older economic systems are reaching their limits. This is partly the case with natural resources such as fisheries, but also the populations that have exploited the resources have reached or are nearing economic tipping points such as significant age imbalances in the populations of the regions. Making these changes within a blue economy framework requires two major steps:

1. Developing a working definition of the blue economy which can provide both clear goals and allows for means of assessing progress in achieving those goals.
2. A set of strategies that guide program and policy decisions over time.

Developing a Working Definition

There is no consensus among those who use the term "blue economy" as to what it means precisely. There is a threshold question that must be addressed and then three broad approaches to the idea can be identified, along with an issue that has been lurking in the background:

The Blue Economy as the Parts Without a Sum

This is perhaps the most commonly used approach. Each of the parts of the ocean economy is evaluated in terms of its economic output and its compliance with resource management or environmental regulatory constraints. These separate sections of the ocean economy together constitute the blue economy.

The Blue Economy Requires Balancing Multiple Factors at the Same Time

A more systematic and theoretically consistent approach to the blue economy is the application of the evolving system of national income accountings that has been codified by the United Nations (UN). The blue economy accounts would define an equilibrium condition across multiple dimensions and measure a "net ocean product" that represents annual changes towards or away from that equilibrium.

The Blue Economy as Deep Sustainability

Deep sustainability is an approach that prioritizes preservation of environment and ecosystems over economic growth. It is best illustrated with hydrocarbon extraction. The ocean economy would measure the annual output of hydrocarbons along with the output of other industries. The environmental accounts would consider depletion of hydrocarbon resources and consider sustainability a function of whether a portion of the value of the hydrocarbons sold is retained to provide a permanent source of value.

Strategies for a Blue Economy

The shaping of the blue economy will require a strategic framework to organize efforts to develop the information needed and to take appropriate actions. Such a framework could include five elements:

Investment

Expanding the blue economy requires capital investment, but the investment must be more broadly targeted.  It must include financial and physical capital, but also investment in natural capital and human capital.

Customers

Attention to environmentally sustainable production methods must be matched by attention to customers, who must be able to see the environmentally sustainable products of the blue economy as a better value overall than those from non-sustainable products. "Ecotourism" and "Sustainably Caught" fish are leading examples.

Management

Whatever definition of the ocean and blue economies is chosen, it will be necessary to have some system of measurement to set goals and assess progress.  Creating the linked economic and ecological data systems required for these purposes needs to be part of all investment and management decisions.

Innovation

The blue economy is a new approach to an old problem and as such requires significant innovations in technologies, products, and organizations. "Blue Tech" clusters and ocean-observing systems are examples of this type of innovation.

Measurement

Whatever definition of the ocean and blue economies is chosen it will be necessary to have some system of measurement that can be used to set goals and assess progress. Usually, however, the data systems needed to provide the measurements are unavailable or inadequate to the high information demands of blue economy decision making.

Charles S. Colgan, December 2018
Center for the Blue Economy, Middlebury Institute of International Studies at Monterey