Catalysing Ocean Finance - Sustainable Development ecosystems and associated livelihoods and economies

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  • Catalysing Ocean Finance Volume I Transforming Markets to Restore and Protect the Global Ocean

    United Nations Development Programme

    Empowered lives. Resilient nations.

  • September 2012 Catalysing Ocean Finance Volume I Transforming Markets to Restore and Protect the Global Ocean Copyright © 2012 United Nations Development Programme

    United Nations Development Programme Global Environment Facility Bureau of Development Policy GEF Secretariat 304 East 45th Street 1818 H Street, NW 9th Floor MSN P4-400 New York, NY 10017, USA Washington CD 20433, USA www.undp.org www.thegef.org

    All right reserved. This publication or parts of it may not be reproduced, stored by means of any system or transmitted, in any form or by any medium, whether electronic, mechanical, photocopied, recorded or of any other type, without the prior permission of the United Nations Development Programme.

    Catalysing Ocean Finance Volume I Transforming Markets to Restore and Protect the Global Ocean was written and edited by the following individuals: Andrew Hudson and Yannick Glemarec, UNDP-GEF

    The authors would like to thank the following individuals for their generous support in providing informal peer review of Catalysing Ocean Finance

    Dandu Pughiuc, Head, Marine Biosafety Section, International Maritime Organization; Carol Turley, Senior Scientist, Plymouth Marine Laboratory; Paul Holthus, Executive Director, World Ocean Council; Ned Cyr, Director, Office of Science and Technology, US National Oceanic and Atmospheric Administration (NOAA); Peter Whalley, Independent Consultant; Robert Diaz, Professor of Marine Science, Virginia Institute of Marine Science; Chua Thia-Eng, Chair, PEMSEA Partnership Council

    Designer: Kimberly Koserowski, First Kiss Creative LLC

    Cover Photo: Richard Unsworth/Marine Photobank.

    Caption: Indonesia: Hardy head silversides (Atherinomorus lacunosus) are abundant shoals of fish living in shallow water reef flat seagrass meadows throughout the Indo-Pacific. These fish species that feed primarily on zooplankton and small benthic invertebrates are an important part of the seagrass food web. They make an excellent food source for larger fish species.

    Production: Graphics Service Bureau, Inc., New York, USA

    This publication was printed on recycled paper.

    Empowered lives. Resilient nations.

    UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in 177 countries and territories, we offer global perspective and local insight to help empower lives and build resilient nations. www.undp.org

    The GEF unites 182 countries in partnership with international institutions, non-governmental organizations (NGOs), and the private sector to address global environmental issues while supporting national sustainable development initiatives. Today the GEF is the largest public funder of projects to improve the global environment. An independently operating financial organization, the GEF provides grants for projects related to biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants. Since 1991, GEF has achieved a strong track record with developing countries and countries with economies in transition, providing $9.2 billion in grants and leveraging $40 billion in co-financing for over 2,700 projects in over 168 countries. www.thegef.org

  • Empowered lives. Resilient nations.

    Catalysing Ocean Finance Volume I Transforming Markets to Restore and Protect the Global Ocean

    United Nations Development Programme

  • ii Catalysing Ocean Finance Volume I

    TABLE OF CONTENTS Figures, Tables and Boxes 1

    Foreword — Helen Clark, UNDP and Naoko Ishii, GEF 3

    Acronyms 4

    Executive Summary 6

    Introduction 11

    1. A new Paradigm to Address the Main Drivers of Ocean Degradation 13

    2. UNDP-GEF Strategic Planning Instruments for Catalysing Ocean Finance 19

    3. Lessons Learned 27

    4. A Roadmap to Restore and Protect the Global Ocean 34

    5. Conclusion 49

    References 52

  • 1Catalysing Ocean Finance Volume I

    FIGURES, TABLES AND BOXES Figures

    Figure 1 Leveraging Ratio of Six Coastal and Ocean Market Transformation Initiatives 7

    Figure 2 Scaling up Actions to Restore Ocean Ecosystems 10

    Figure 3 Earth’s Planetary boundaries 14

    Figure 4 Four-Step Approach to Catalysing Ocean Finance 17

    Figure 5 Summary of TDA/SAP Approach 20

    Figure 6 The ICM Development and Implementation Cycle 23

    Figure 7 Generic approach to building on global or regional legal framework to remove barriers and put in place enabling environment for catalytic ocean finance 24

    Figure 8 Catalytic Ocean Finance Ratio (Catalysed Public & Private Finance: UNDP-GEF Finance) for the six case studies 27

    Figure 9 Global increase in frequency of hypoxia 32

    Figure 10 Forward Exponentially, Looking Backward 33

    Figure 11 Global map of Hypoxic Areas 35

    Figure 12 Changes in Ocean pH over the last 25 million years and projections in ‘business as usual’ fossil fuel use scenario 38

    Figure 13 Impact on shipping CO2 emissions of implementation of IMO Ship Energy Efficiency Management Plans (SEEMP) and Energy Efficiency Design Index (EEDI) measures, 2010-2050 40

    Figure 14 Invasive Marine Species Pathways and Origins 43

    Figure 15 Global fisheries subsidies – breakdown by impact, source and developed/developing nations 44

    Figure 16 Scaling up Actions to Restore Ocean Ecosystems 51

    Tables

    Table 1 Public Costs, Catalysed Finance and Ratios for Scaled Up Actions to Sustain the Global Ocean 9

    Table 2 Generic suite of barriers to ocean and coastal sustainability 29

    Table 3 Generic Public Policy Mix to Remove Key Barriers to Ocean Protection and Restoration 30

    Table 4 Estimated costs to achieve global 10% of global ocean under Marine Protected Areas (MPA) 47

    Table 5 Public Costs, Catalysed Finance and Ratios for Scaled Up Actions to Sustain the Global Ocean 50

    Boxes

    Box 1 Catalysing Finance 16

  • 2 Catalysing Ocean Finance Volume I

  • 3Catalysing Ocean Finance Volume I

    The world’s oceans and coastal areas are an integral part of life on earth. They are the source of a variety of essential goods and services – including food, transport, oil, gas, and minerals, to name but a few, and also deliver vital ecosystem services such as climate regulation and oxygen production.

    It is therefore of tremendous concern that our oceans are under significant threat, whether that be from pollution, overexploita- tion, habitat loss, invasive species, or climate change.

    While a number of important commitments have been made to the protection and restoration of oceans, their health is still in decline. This underscores the need to take decisive action without delay.

    This publication - Catalysing Ocean Finance - demonstrates that, far from being an intractable problem, sustainable ocean manage- ment could become a successful legacy of today’s generation of decision-makers. It shows how the challenges facing the ocean stem from widely understood market and policy failures - failures which can be addressed through the application of appropriate mixes of market and policy instruments.

    As early as the mid-1990s, the Global Environment Facility (GEF) and its partners recognised and began to address threats to marine ecosystems and associated livelihoods and economies. In so doing, the GEF acknowledged that the sheer size and multi-country nature of most of these marine systems, and their linked river basins, as well as the global nature of some of the threats they are faced with, called for coordinated, multi-country approaches. With its focus on transboundary waters, this positioned the GEF as a potential catalyst to demonstrate and scale up effective strategies to address ocean challenges.

    Over the past twenty years, the United Nations Development Programme (UNDP) and the GEF have successfully developed a range of strategic planning tools aimed at assisting governments to put in place enabling policy environments to catalyse investment for restoring and protecting the marine environment. In several cases, catalysed public and private financial flows have exceeded the initial GEF investment several hundred-fold. In some cases, these instruments have helped to shift sizeable ocean industries, such as shipping and tuna fisheries, to a more environmentally sustainable path.

    Catalysing Ocean Finance takes stock of how effective these instruments have been in helping countries to address challenges facing the oceans and explores how they could be successfully scaled up. It estimates that an initial public investment – on the order of $5 billion over the next ten to twenty years – could be sufficient to catalyse several hundred billion dollars of public and private invest- ment, and thereby foster global transformation of ocean markets towards sustainability.

    The Global Environment Facility and the United Nations Development Programme, working in partnership with partner countries and initiatives, such as the recently launched World Bank Global Partnership for Oceans and the UN Secretary General’s Oceans Compact, look forward to building on the successful approaches demonstrated in Catalysing Ocean Finance to sustainab