The power of water

Markus Müller, Global Head Chief Investment Office, on the opportunities and aims of the blue economy – an economic concept oriented towards nature.

With pictures of the Climate Visuals Photography Award, which recognizes photographers, that show the dramatic effects of climate change on people and nature.

Seventy-two percent of the surface of our planet is covered in water, which accounts for an amazing 95 percent of the biosphere and is an essential source of food for almost three billion people. Oceans are worth 24 trillion US dollars and have an annual GDP of 2.5 trillion US dollars – equivalent to the economic output of India. However, climate change, exploitation and pollution pose a major threat not only to this value, but also to the global economy as a whole. We tend to put this down to the “tragedy of the commons” (careless use of non-exclusive rival goods). But it is also the fault of the laissez faire approach, as can be seen in the progressive degradation of ecosystems, particularly oceans.

Today, 30 percent of fish stocks are said to be over-fished, whilst 60 percent are fished to their maximum threshold; half of all coral has died. If the sea level (which has risen by 20 centimetres since 1990) and the water temperature (up 0.6 degrees Celsius since 1960) continue to rise, more ecosystems will be put out of balance. Oceans provide not only fish and sandy beaches, but also jobs for hundreds of millions of people. Oceans produce around 50 percent of the atmosphere’s oxygen and have absorbed 30 percent of CO2 emissions since industrialisation began. And ocean ecosystems absorb CO2 more effectively than land-based ecosystems. However, the ocean’s capacity for storage also has a downside. The acidity of oceans has risen by 26 percent since the onset of industrialisation, which is particularly a problem for coral reefs. 

The “blue economy” concept

Gunter Pauli, a Dutch economist and entrepreneur, invented the term “blue economy” after feeling frustrated by the slow progress made by the green economy, and its misuse for commercial ends. The blue economy is intended to be a holistic concept that is based on the highest biological value creation and oriented towards nature. Another aspect of the concept is the idea of the circular economy, i.e. using resources sustainably by minimising waste and extending product lifecycles.

In 2012, the United Nations widened the concept of the blue economy in the course of developing its 17 Sustainable Development Goals (SDGs). Central to the concept is Goal 14 – “Life under Water” – which deals with ocean pollution, fishing and coastal management. The key to success is striving for a sustainable global ocean economy, in which socio-economic development is detached from purely economic development. In addition, the concept was launched because smaller island nations are often the first to feel the negative effects of climate change and overfishing. For this reason, a further key element of the concept is providing the affected island nations with financial and moral support. 

The future is blue

Since two-thirds of their overall value depends on functioning ecosystems, oceans need to be restored to a healthy – and therefore productive – state. There needs to be a particular focus on sustainable fishing, tackling pollution, establishing and managing protected areas, and renewable energy. However, it is important to take rebound effects into account in this process, such as the incentive to consume more materials because more is recycled.

The recovery of the oceans can only be achieved through global multi-lateral cooperation – through an international monitoring and protection system, innovation, research and investments, particularly from the private sector. There are already positive signals from the economy, which is increasingly discovering climate financing, developing innovation solutions and financing projects. But it is not just a question of individual actions: our economic system needs to change. Only then can sustainable solutions be found. The blue economy model offers both the international community and the private sector guidance on how to do this. 

This article originally appeared in our client magazine WERTE 21, "A changing world".

Read more about "Blue Economy" in a CIO special in autumn 2020.

You can read this article in Italian here.

Climate Visuals Photography Award photos

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