Oceans: Preserving and Powering our Blue Economy

Transcript

Oceans: Preserving and Powering our Blue Economy

Soundbites:

TOM:00:06 Our oceans are the life blood of our planet, and they’re under threat

Céline Cousteau (10:17.287)when we talk about ocean acidification, there is no quick solution 

Céline Cousteau 3:03 

It's estimated that there's about eight million tons of plastic waste that ends up in our oceans. 

TOM: But it supports a huge part of our global economy

Karine 2:25 The link of the ocean economy could cost the global economy more than $400 billion per year by 2050.

Or

prior to the COVID-19 pandemic the ocean economy was projected to increase to three trillion dollars in 2030.

TOM: and has the potential to power our net zero agenda

Miguel Stilwell d'Andrade 

So the global installed offshore wind capacity should reach around 600 gigawatts by 2050.

TOM 00:20

I'm Tom Parker, and welcome to the next five podcast brought to you by the FT partner studio. In this series, we ask industry experts about how their world will change in the next five years, and the impact it will have on our day to day. This episode is all about the future of our oceans, where we will discuss the importance of oceans as a climate regulator, a blue economy and a power generator all while underlining the need for ocean preservation.

MUSIC FADE

Oceans cover 71% of the planet’s surface and are a life support system making up 97% of the world’s water and 95% of all space made available for life. They’re important to all life on earth is unquestionable, one area they are particularly important is as a climate regulator, controlling the weather and mediating temperature. They are the largest store of carbon, absorbing 83% of the global carbon carbon cycle. They sequester a third of all carbon emitted by human activity a year, roughly two billion metric tonnes, and in the last 200 years have absorbed 90% of heat trapped due to increased GHG emissions. But with this increased absorption of heat and CO2 comes consequences. Our oceans are now too acidic, killing coral reefs, the essential building blocks of marine life, and a vital source of food and livelihood for half a million people. At the current rate of temperature increase and acidification, coral reefs could vanish altogether by 2050. 

Céline Cousteau 06:20 

People may think, well, why does that matter? 

TOM: 2:06 This is Céline Cousteau, a documentary filmmaker, public speaker, author and socio-environmental advocate who is a frequent panellist at the United Nations in New York.

Well, the corals are the basis of an entire ecosystem. Once again, if the coral is dying, all of the life around the coral is going to disappear as well.

Céline Cousteau (06:31.414)

That's not good for the balance of the ocean ecosystem and biodiversity. It's not good for, we'll say, the economy of travel and tourism who wants to swim over a dead coral system. It's not good for our food industry either. So when we look at what's negative for our oceans, we can always bring it back to the impact that it has on humans.

Céline Cousteau (10:17.287) when we talk about ocean acidification, there is no quick solution and no quick answer to that. I'm gonna quote somebody that I do often, and Lonnie Thompson, a glaciologist,

once answered the question of climate change. I said, are we going to be able to shift on time? And he looked at me very, very sweet. And he said, you know, the problem is that humans don't react until their backs are up against the wall. And with climate change, that's just too late. So that for me doesn't mean I lose hope. What it means is, let's get going. Let's stop talking about all these things. 

There are solutions out there that we can implement on a national level, on a local level, on an individual level, and all of that needs to happen. If we wanna see a future that's healthy for our kids, then we will do everything necessary, but we need to think generations ahead. And right now, as Lonnie Thompson said, our backs are a bit up against the wall. We need to accelerate.

Everything we do matters.

TOM:02:21  Alas, climate change is not the only human based harm affecting our oceans. There is a huge and growing threat from plastics. Per annum,  17.6 billion tonnes of plastic leak into oceans. If that’s hard to fathom, imagine a rubbish truck full of plastic pouring into the ocean every minute, for an entire year. Reducing our dependence on plastic is paramount, from industry to consumer.

Céline Cousteau 3:03 

It's estimated that there's about eight million tons of plastic waste that ends up in our oceans. When that statistic comes out, people think, oh, well, it's just a floating plastic bottle or it's just whatever, no. There's microplastics. Those microplastics get ingested in fish.

And right now the ocean conservancy estimates that pretty much there's plastic in all of the fish, at least the ones they tested. That doesn't just stay in the intestines of the fish, that goes into the fish, the entire fish, including the parts that we eat. And so that comes back to us. If the oceans are polluted, again, not just with plastics, but also with the unseen pollutants, such as agricultural runoff, pesticides, et cetera, that comes back to us, that comes back to our own bodies. 

What's important for us to understand is that no matter what happens in the oceans, it's full circle. It comes all the way back to us. So the beautiful thing is that the challenges of our oceans are also our capabilities of change. Our capabilities of having a positive impact. And I think that's where we really need to concentrate our attention and our energy.

TOM: 04:06 There are projects out there where action is being taken, attention given and positive outcomes seen. 

Céline Cousteau (13:59.502)

There are plenty of examples of successful ocean preservation projects. I think we just need to open our eyes. Not just the ones that are getting a lot of media attention, but even the small scale ones. So if we're looking in different places around the world, which I've had the tremendous privilege of being able to do, I've seen some. There's one that I just personally love. There's a place in Mexico called Cabo Pulmo, which literally means the lung.

Cabo Punmo is a small fishing community in Mexico, and they realized that they were depleting their fish faster than it was regenerating. And that was their livelihood, their ability to literally feed their families. So they sought the help of an organization and the government to protect this area near their village and receive a government subsidy while they were letting the marine ecosystem recuperate.

I went there 10 years after they started, and it is one of the most dense, biodiverse areas that I have seen in the oceans, because that was its natural baseline. By leaving it alone, it actually recuperated. The benefit to that is not only are they able to fish outside the marine reserve to be able to have a healthy economy, they can also fish within the marine reserve what they need to feed their families that day.

And there's a new economy that came in because it is such an amazing, beautiful dive place that they now have an additional economy. So that is an example of a small community that decided to do something thinking far ahead that was successful. 

Céline Cousteau (17:31.822)

When you look at the oceans in terms of just the economic value of oceans, when it's done right, we can actually create not just a sustainable but a regenerative economy. And I think that that's important when we speak of the blue economy is to shift not just from sustainability.

status quo, leaving it as is, but actually regenerating. So with that example of Cabo Pulmo and being able to say, let's protect this area, let's let it replenish, it will come back to its natural baseline, its natural biodiversity. We need to also respect the idea of 30 by 30, protecting 30% of our oceans by 2030. This allows the oceans to regenerate. That's going to be beneficial to all of us. 

Again, if the oceans are polluted, our blue economy isn't gonna thrive.

TOM: 04:23 The blue economy includes all economic sectors which have a direct or indirect effect on the ocean. Ocean-based industries play a key role in the world economy. In 2010 the OECD estimated that the ocean’s economic contribution to the world economy was 1.5 trillion dollars, which would make it the 7th largest economy. The OECD also estimates that the ocean economy’s value added to the global economy could reach $3 trillion by 2030 and employ 40 million people. Alas, rising sea levels and temperatures due to climate change, overfishing, man made pollution and other mismanagement is affecting the blue economy and those that rely on it. 

Karine 00:22: So far we’ve not taken care of our ocean, and the consequences are quite serious. 

TOM: This is Karine Measson, head of the water management division in the European Investment Bank and responsible for the ocean activities at the EIB.

Karine 01:36

The UN climate change panel estimated that without action, the global economy will cost more than $400 billion per year by 2050.

Karine 02:14

So it’s clear the current use of oceans and it’s resources is unsustainable and it has really led to too many negative impacts for our societies. Let’s take sea level rise as an example, sea level will rise from 30 centimeters to more than one meter in some emissions scenarios.

And if you then think that half of the world’s cities are in coastal zones and that more than 600 million people live in these zones it gives you an idea of the challenge we are facing. 

So this really requires massive effort in coastal protection investments and adaptation to climate change, to protect people and the economy. So this is really a sector, for example, where

all investors should see a benefit. It's not only for public sector investment, this is also to protect the economy, all the assets that you have if you have your plant in a low-lying coastal zone, it's at risk. On a more general note, the OECD estimates that ocean-related activities have the potential to outperform the growth of a global economy both in terms of value added, in terms of employment.

and prior to the COVID-19 pandemic the ocean economy was projected to increase to three trillion dollars in 2030. So there's really scope for investors, for all types of investors, all types of financial products.

And the OECD has estimated that a strong growth should happen in four sectors that they name, offshore wind, marine aquaculture, fish processing, shipyards. So for the investors, I think there's a role to play, both to invest in sectors which will bring them returns, but also to make sure that the whole economy is protected from the risk it's currently exposed to.

TOM: 05:59 The UN SDG 14 is all about the blue economy, but it is the most underfunded.  Bridging the funding gap is a challenge.

Karine (02:58.934)

I think one of the main issues is that in fact this is largely unknown and we know very little about the ocean today. I mean, I read recently that a summary of all what we've done, you know, the scientists have photographed a black hole, they have landed on Mars, they have spent spacecraft to the dark side of the Moon, but 80% of the ocean is still unmapped, unobserved and explored. So...

This is really one of the last unknown frontiers on our planet, in fact. So we need to bring investors to an area which remains largely unknown, in fact. And in terms of the funding gap for SDG 14 or for the blue economy in general, I think there's no shortage of investment capital available globally. But I think there's a shortage of bankable projects.

I mean projects of high quality, sustainable projects, economically viable projects with both the appropriate financial side and the risk profile that are needed to match the available capital. And you see a full range of deals possible from the deals requiring capital grants to V1 financially available, which requires equity. So I think there's space for everybody and there's a need for everybody, for all types of investors from philanthropies to venture capital equity providers. And I also believe that for public institutions like the EIB or others, we also have a key role to play to...

to de-risk investments, to provide advisory facilities, to help prepare these good projects, these bankable projects that I mentioned, but also to crowd in other finances, because we need both the public and the private sector in this type of challenge.

Karine 06:28  In terms of policy support,

We need a stable policy environment to attract investment and funding. And we should have the right public policies to create incentives for this environment. We talked a lot about subsidies to fisheries, for example, last year following the WTO agreement.

Today, too many unsustainable activities receive subsidies. There was an estimate from the IMF, 6.3% of global GDP was provided as fossil fuel subsidies to both ocean and land-based businesses in 2015. So we need the right policy support

to incentivise the right activities. And of course, we also need collaboration and partnerships between the various stakeholders and an improved governance. Currently, the blue economy issues are often spread across multiple institutions, responsibilities in most countries. So in addition to the lack of bankable projects, I really believe these are the three main elements that we need to work on. information and knowledge, policy support and collaboration and partnerships.

TOM: 06:16 Oceans are the world’s largest untapped source of renewable energy, offering a natural and low carbon alternative to fossil fuels. Ocean energy, by means of OTEC(Ocean thermal energy conservation), tidal barrage and wave power, has a 350GW global market opportunity by 2050. But, according to the IEA, ocean power generation needs to grow an average of 33% a year between 2020 and 2030 to meet net zero climate goals. 

Luckily, the ocean also affords vast potential above the waves. In 2022, wind electricity generation (onshore and offshore) reached more than 2100 TWh, up 14% from 2021. But, to hit net zero 2050 targets that will require 7400 TWh by 2030, an average annual capacity growth of 17% a year, according to the IEA. The offshore wind sector globally is an area of major focus to reach these goals, with cost reduction and policy support being key components for success.

Miguel Stilwell d'Andrade (00:30.274)

We're clearly living in an energy transition, which is probably one of the most existential and defining moments that we have currently.

TOM:07:43 This is Miguel Stilwell d’Andrade, CEO, EDP and EDP Renewables

It's a major global challenge, and it's something that's affecting us all across the planet. The other day I was talking at a conference and I was mentioning that the Stone Age didn't end because of a lack of stone, and I don't think that the fossil fuel age will end because of a lack of fossil fuels.

Miguel Stilwell d'Andrade (07:37.442)

So just to start off, renewable energy currently represents only about 14% of the global energy supply and that obviously needs to increase significantly to around 60% by 2030 and then 90% by 2050 if you were to meet the net zero scenario.

Part of that, a big part of that is going to come through offshore wind or offshore technologies, because obviously the ocean represents a huge part of the planet and it covers 70% of the world's surface. And so being able to take advantage of that, being able to use those resources to produce clean, reliable and affordable energy is absolutely critical if we want to do this energy transition. 

But I have no doubt about the direction this is going in. And so I'm certainly in the camp that this is going to happen. We can question the speed at which it will happen. But even if you didn't believe in climate change.

It makes sense to do this energy transition because you are using cleaner energy, but which is more affordable and it provides you with energy security. And so why would you want to be dependent on gas from Russia or Nigeria or Qatar or anywhere else if we have our own resources to produce that, whether it's in Europe and the US or Southeast Asia or wherever you are. If I have the sun and I have the wind, why should I be importing energy from outside? And it's getting cheaper. 15 years ago when we started looking at solar projects, or 16 or 17 years ago, it used to cost 400 euros per megawatt hour to produce using solar panels. Nowadays, in many cases, it'll cost you 20 euros per megawatt hour. That's a 95% reduction in the cost of solar. The same thing has happened to wind, both onshore and its happening offshore. We bid in the UK at one point at 117 pounds per megawatt hour.

Two years later, we were bidding at 57 pounds per megawatt hour, not because we were being more aggressive, but simply because the costs had come down over time. So I believe in technology and in progress. I believe that we will be getting more and more efficient solar panels and wind turbines. And this will ultimately be what will drive the energy transition. 

TOM: 07:54

According to the European Commission January 2023 report, goals for offshore wind by 2030 have nearly doubled since November 2020 to circa 110GW. In the UK alone, up to 30GW of offshore wind capacity could be installed by 2030, delivering a third of the UK’s current electricity demand. Developments in floating offshore wind also takes advantage of windier seas further from shore and will help countries with steep coastlines, that are unable to support bottom fixed installations, gain access to renewable energy. And if you can float wind turbines then you can float Photovoltaic cells to harness the power of the sun too. 

Miguel Stilwell d'Andrade (15:26.946)

So there are various different technologies which have been tested out over the years. I mean, offshore wind is clearly the one that has differentiated itself in terms of competitiveness. I say there are others like floating PV, so photovoltaic. This is particularly useful in countries or in geographies where there are not a lot of waves, it's not very stormy. So particularly areas around Asia Pacific in between the islands, you can have solar PV on the ocean. So that's one particular technology where we see some promise.

Miguel Stilwell d'Andrade 08:02 

Floating offshore is still a relatively small component. So most of the offshore that is being installed and will be installed over the next decade will be bottom fixed offshore. So it's monopiles or jackets which are essentially fixed to the ocean floor. And so that's typically associated with, for example, the North Sea off the East Coast of the U.S. in some parts of the Asia Pacific.

to represent a major part of the growth going forward. Floating offshore is a more early stage technology. There are still only some pre-commercial projects, for example one in Portugal in Viennese Castel, a 25 megawatt project, there's one in Scotland and there are a couple of others around the world but very limited. This is expected to accelerate but I'd say more towards the decade of 2030. 

So I think it's critical that over the next decade we manage to really accelerate the build out of renewals in general and offshore is certainly a major component of that. If we don't manage to do that we will not achieve the targets set out in the Paris Agreement.

And so this next decade is absolutely decisive in terms of reaching those targets.

TOM: 08:46 But to get these technologies to scale requires investment and policy support.

Miguel Stilwell d'Andrade (10:38.99)

So the next couple of years are critical in terms of taking the investment decisions to scale up renewables so that we can hit the targets, the one and a half degrees by 2050. So we don't go above that. I mean, it's clear that we need to electrify the economy, we need to decarbonize it, and the way to do that is using renewables, as I mentioned.

and offshore is a major part of that. But we need to scale it up very quickly now. So I think the investment decisions that we are taking today are the ones that are going to have an impact over the coming years. 

Miguel Stilwell d'Andrade (11:55.234)

So what we need to do to be able to scale up is to have the right policy in place. We need to have the governments aligned in terms of auctioning or attributing seabed leases so that companies can come in and they can develop these projects. We need to create, let's say, the regulatory framework so we can then sell that energy either directly to customers or to the system in general. We need to make sure that there is financing in place to finance these projects. We're talking about trillions of euros and dollars

that need to be invested over the coming years. So it's a mixture of policy, having the governments aligned to actually be able to build out these projects, making sure we have the right regulation, to provide the right incentives. As I said, having the financing, we need to have the supply chain because this is obviously a fast growing industry.We should be investing at five times the speed that we currently are. So we need to also scale up the supply chain. And that means, you know,

It means everyone who's fabricated monopiles or jackets of the different pieces that make up these massive projects. And then we need to hire people. I mean, we are hiring thousands ourselves, sort of as EDP, but just in general the sector is hiring thousands and thousands of people.

So these are the sort of green jobs that many politicians and people talk about precisely to drive this growth over the coming years. So we need to get all of these pieces together so that we can effectively accelerate the build out of renewals. And only by doing that will we be able to meet the targets that are set out in the Paris Agreement.

TOM: 08:56 Across the blue economy, ocean preservation and the energy sector action is being taken and over the last few years there has been an acceleration of commitments. In June 2023, the High Seas Treaty was signed at the United Nations meeting in New York, following almost a decade of multilateral negotiations. The importance of this cannot be underestimated. The High Seas accounts for two thirds of the ocean, the area outside of national boundaries and jurisdiction, and as such has been under severe pressure from climate change, overexploitation, pollution and decreasing biodiversity. The treaty effectively paves the way for global protection of the high seas, and the marine resources and biodiversity within them.This is a victory for now but requires action and the next five years will be critical.

Céline Cousteau (21:36.37)

I do believe that in the next five years, we're going to see more marine protected areas because of an understanding of the benefits of protecting marine ecosystems. And because again, there's the goal of protecting 30% of the oceans by 2030, I do think we're going to make progress towards that goal. I also feel that the high seas treaty is going to be put into place at least started. It's not something that's quite simple.

perhaps on the coastline, even though that's quite complicated. But in the next five years, I hope the high seas treaty will start being implemented. What I hope for is continued education and consciousness within schools, with students, and then within the public of our connection to the oceans. I really feel that it's important. 

Céline Cousteau (24:12.998)

Because I was able to perhaps experience the oceans personally and go diving and have the experience of being completely surrounded by this just amazing ecosystem and witness creatures and witness myself within that ocean ecosystem. I just have an innate connection to her and

that for me is like protecting a human. I don't see the difference between our existence and the existence of oceans.

Céline Cousteau 23:05 I want to see the ban of single use plastics. I just think it's a useless thing that we have within our societies, make people responsible for purchasing them if they want to use them. And more support for organizations, NGOs, and communities that are doing the work because there is no lack of...

heroes out there who are defending the oceans, who are preserving the oceans, who are restoring the oceans. We just need to choose what our interest and passion is and support the people who are already out there doing the work.

TOM: 10:14 The next five years are also crucial for the renewable energy sector. And for the whole blue economy 

Miguel Stilwell d'Andrade (29:04.638)

So the global installed offshore wind capacity should reach around 600 gigawatts by 2050. That's the objective if we want to hit net zero by that date. And so this requires a massive investment. There are headwinds. I think we need to be clear about that. In the times that we're living in, whether it's inflation, whether it's regulation in some countries.

Whether it's just an increase in the cost of capital and the interest rates, all of this is going to create pressure and challenges for building out offshore. These are long-term projects which take many, many years, sometimes six to 10 years to develop and to bring online, and then they operate for 30 to 40 years. 

Miguel Stilwell d'Andrade (19:07.842)

So I think the next five years for ocean energy will continue to be one of huge growth and expansion. You will have new countries opening up and also beginning to move forward with offshore projects. You'll have existing countries that are already investing in offshore wind continue to scale up. And I think you'll see sort of the existing players, but also new players coming in and really trying to develop these projects. So as I say, there will be an explosion.

in terms of offshore wind energy in the various geographies or in the various countries around the world. I think the fundamentals are there. The demand is there. I think the technology is there. The capital is there. And so it's really a question of sorting out or working through some of these short-term challenges to make sure that we have, you know, viable, long-term, sustainable offshore wind projects. I do believe human behavior is responsible for climate change and I think we have a responsibility to make a difference and to actually help transition from fossil fuel age to clean energy age.

I'm a sailor and a surfer. I spend a lot of my weekends at least in the ocean. And so I have a particular personal connection there. And so that's not obviously necessarily why I do it. But I certainly understand not just the power of the ocean, but I think of all the potential that it has. And I think it's one of those resources that we have that we should treasure.

Karine (28:41.898)

I'm very optimistic for the next five years when I see all what has happened in the recent past on the international scene but also at project level.

I think there is international recognition that something needs to be done and that the ocean needs to be part of a solution to the challenges that we face.

What we need to see of course and what I think will happen is further progress on the international scene, on the financing side, I think we have more and more tools to guide investors in the investment. UNEPFEE is doing a great job to follow up on the sustainable blue economy financing principles.

They issued several reports including the turning the tide report to define what sustainable investments are. So I think it will really help to attract investors in this field. In my view there's also more and more recognition that inaction has a cost. And a study estimated that the cost of coastal protection

relocation of people and loss of land to sea level rise could range between 200 billion a year to one trillion dollars a year by 2100 depending on the increasing sea level of course. So there's a huge cost to inaction so I really believe that investments will start to flow in the sector.

We need to see more private entities investing sustainably in the ocean. I think sustainably is very, very important to reduce ocean pollution and preserve marine ecosystems, but also to provide the economic and social benefits to the communities. And I believe we need to see more partnership between the private sector and the public sector. 

Karine 28:53 I really believe that the international community and the investors have realised that this is time to invest in the ocean.

Karine (30:56.282)

I think I realized how we've treated the ocean in the past. And this is what happened in the last five years. I think that most of us didn't know. And I realized that we can act. I mean, the ocean is very big, but it's not too big to act. And

Probably this is what motivates me. It's because I can see that, I mean, with my work or with my colleagues in the EIB, we can play our part. Of course, we won't achieve anything alone, as will be the case for all stakeholders, but I really believe that this is where I and my team can have an impact by financing projects on one side and raising awareness on the other side.

that we all have to play our role here and if we don't, we face major issues because as I said, the ocean has to be part of the solution, otherwise we'll be in big trouble.

TOM OUTRO: 10:32

The OECD estimates that more than 3 billion people rely on the oceans for their livelihood. But really our whole world, our future on this planet relies on the preservation of our oceans. They are a powerful ally and thus preserving our oceans and the life within them is a key part of the climate agenda. Japanese Philosopher, Daisaku Ikeda, said

“Just as waves arise when the wind blows, action changes reality.”

We certainly need action. We’re being given the warning signs. That is our reality. According to Jens Sinke, Professor of Paleobiology, University of Leicester.

 “Coral reefs are the ‘canaries in the coal mine’ when it comes to sensing ecosystems under stress from ocean warming due to climate change.” Looking after our oceans makes social and economic sense. A transition to inclusive and sustainable Blue Economies offers opportunities for economic and social growth and ensures the long-term productivity and preservation of our ocean. The money is there but finding more bankable projects is imperative.

The ocean as a renewable power generator not only symbiotically allies with a sustainable blue economy, but helps to mitigate climate change, build grid resilience and energy security. Protecting the ocean, protects and powers us, and the planet. If we want a greener future we need to concentrate more on the big blue.