Early-stage investors must focus on the ocean economy to make waves in the climate race, according to Ed Phillips, Investment Director at Future Planet Capital.
As we move into the summer months, we can expect headlines to be filled with record-breaking temperatures and unprecedented wildfires driven by climate change. While what happens on land will make our changing climate visceral to many, the damage happening to our oceans may continue to go unheeded and unnoticed.
This year’s World Oceans Day was therefore a helpful moment to reflect on the need for action and to put our oceans higher up the climate finance agenda, not only to mitigate the damage happening to this vast and important resource, but to also capitalise on the solutions it offers.
The ocean, which covers more than 70% of our planet, is the natural engine room when it comes to climate management. It produces 50% of the world’s oxygen, absorbs 30% of global carbon dioxide emissions, and captures 90% of the excess heat produced by these emissions.
Beyond these capabilities that must be protected, we should also be turning more to the ocean’s additional climate potential. Ocean-based climate solutions, such as ocean-based renewable energy and utilising low-carbon food from the ocean, hold the potential to reduce the emissions gap by up to 35% on a 1.5ºC pathway.
The economic argument is also strong. The global ocean economy is estimated to sit at around US$1.5 trillion per year, making it the seventh-largest economy in the world. With the right expertise, motivated investors could access ocean assets that total out at an estimated US$24 trillion!
Despite all this, what has been labelled the world’s greatest ally against climate change, still finds itself snubbed when it comes to investment. The ocean receives less than 1% of all climate finance, and the UN’s fourteenth Sustainable Development Goal – Life Below Water – remains the most underfunded of all.
Clear blue future
As headlines will remind us, there is a clear imperative to unlock the potential of our ocean if we are to take timely strides against climate change. But vast amounts of capital are still required to achieve this. So, how do we get more capital floating into the ocean economy?
Part of the solution might seem quite simple – putting the ocean at the forefront of the global climate change regime. Given its known importance – and potential – you’d be forgiven for thinking this was already the case. Not