Assessing the potential of impact investment in the blue economy

About

The blue economy contributes an estimated US $1.5 trillion to the global economy and is predicted to grow at double the rate of the rest of the economy by 2030. This growth is expected to create new and expanded investment opportunities in sectors such as tourism, fisheries, aquaculture, marine renewable energy, and biotechnology. Even as investors increasingly seek opportunities to align investments with sustainable development objectives, a key question remains whether investment in these sectors can occur in a manner that maximizes economic, environmental, and social benefits with limited environmental and social costs. For many sectors of the ocean economy, the answers are still unclear. Particularly in the case of emerging sectors, the timing, magnitude, spillovers, and synergies of ocean impacts are typically quite speculative and have historically relied on tenuous assumptions about how results from small pilots will scale up. 

To guide more sustainable ocean development, a better understanding of the environmental, social, and economic consequences of scaling investment in different ocean-based sectors and industries in the context of a changing climate and dynamic global economy is needed. In collaboration with Conservation International, we aim to lay the foundation for a new investment framework for ocean sectors with significant potential to enhance the overall health of the ocean and the livelihoods of the people who depend on it. 

Approach

This project has three primary objectives: (1) identify ocean sectors with the greatest potential to generate social and environmental benefits by estimating the magnitude of benefits across impact categories; (2) identify potential “game changers” in each sector by highlighting current bottlenecks to conservation and social challenges that investment and new innovations could solve; and (3) identify the potential spillover/leakage effects and the role of governance on 
increased investment per sector.

We are addressing and testing the objectives above through the following four project tracks:

• Track 1 - Identify and classify sectors: identify and classify sectors of the blue economy based on their respective potential for wealth generation, conservation, and social impact.
• Track 2 - Assessment of key sector and industry constraints: identify and assess key constraints to economic growth and maximization of potential conservation and social benefits for each sector. 
• Track 3 - Understand investment spillover/leakage: this phase is about identifying risks to conservation impact. In each sector identified above, we will assess the potential risk of spillovers and leakage that could occur. 
• Track 4 - Test the framework: once we have characterized key ocean sectors, potential investments, and the impact of those investments in each sector, we will test our framework with current investment options.