ERENEA is a research group integrated in ECOBAS. Its main lines of research are in the field of the Economy of Natural Resources and the Environmental Economy, with special attention to the marine field. On “World Oceans Day” this group brings us a series of reflections on the Blue Economy.  

The importance of the sea in economic activity

European Commission documents on the Blue Economy (SEC/2006/689, COM (2012) 494 end) estimated that 25% of the European population lived in maritime regions. 40% of European GDP originated in these regions. It was also estimated that maritime-dependent economic activities accounted for 5.4 million jobs and 75% of Europe’s external trade (37% of EU internal trade).

Among the activities directly related with the sea we immediately perceive those related to the production from marine resources, whether they be living (fisheries, aquaculture) or non-living (minerals or fossil resources). These include marine energy resources, which are not limited to oil or natural gas deposits, but include wind, wave, tidal or geothermal sources. In addition, processing and distribution activities, largely located in coastal areas, must be added to resource extraction itself.  

It must be added to this production of typically marine goods the activities of services: transport (of goods and people), tourism and leisure (the classic of sun and beach or other formats with more cultural or sports accent), and other activities related to defence or maritime security. Another significant part of the activities refers to the equipment and infrastructure which are related to the above: ports and shipbuilding are the main references located in the coastal areas.

We can complete this overview taking into account human and intellectual capital and environmental functions related to the sea. The above- mentioned activities require specific training and knowledge, as a basis for generating value. Undoubtedly, a leap forward has been made in recent decades, largely overcoming the traditional difficulties of a less common means of human activity. Having this capital is an essential starting point.  

Finally, we must pay attention to the sea as a reservoir of biodiversity and balances of the environmental variables that affect the planet. The ecosystem balance and the effects of anthropogenic climate change (melting, sea currents, water temperature, sea level rise, CO2 fixation, etc.) are of particular relevance to the marine environment. Awareness of these effects is still limited (especially in economic terms), and concern about them has been particularly evident in recent decades, both globally and in terms of more local impacts (pollution, discharges, etc.), or not so local (case of non-bio-degradable waste, such as plastics).

European Agenda on the sea

Marine and maritime issues are among the strategic issues on the European agenda for the past 15 years, in reference to economic growth and sustainability. This fact can be seen from key documents such as the Green Paper on Maritime Policy (COM, 2006, 275 end), the Marine Strategy Directive (Directive, 2008, 56/ EC) or the Commission Communication to Parliament on Blue Growth (COM, 2012, 494 end).

The latter document presents a definition of Blue Growth identifying and associating marine and maritime activities with (allegedly) high economic potential. At the same time, however, there are gaps in knowledge, management, financing, human capital and communication. The same document identifies 5 priority areas: blue energy, aquaculture, coastal and cruise shipping tourism, marine mineral resources and blue biotechnology. In addition, relationships with other activities or marine spaces (especially in the field of infrastructure) are recognised as well as mutual impacts.

Turning to some concrete points, it was estimated in this document that electricity produced from offshore wind sources (133.3 Twh) will account for 26.9% of all wind-generated electricity in the EU by 2020 and it will alone supply 4% of total EU electricity demand. Other technologies (mentioned above) are still less developed, but they open up important possibilities.

Aquaculture, which has not reached the levels of other non-European and non-Community countries, has grown by 6.6% per year in recent years. It has contributed more and more to the food supply of products of marine origin, thereby adding to the contribution of fisheries , which, although more stagnant, maintains high levels of production and, as in aquaculture, employment.

Tourism on Europe’s coasts accounts for 63% of tourist movements within the EU. To the classic destinations and formats must be added the growing path (and recovered after the years of crisis) in recreational navigation and cruise tourism. If classical tourism employs 2.3 million people in the EU, the latter already had more than 150,000 jobs. These new aspects also have a considerable knock-on effect.

By 2020, 5 per cent of the minerals used in the world (including cobalt, copper and zinc) are expected to come from the ocean floor and the trend is increasing. At the same time, new technologies allow the extraction of highly demanded dissolved minerals, such as boron or lithium. Europe has specialised vessels and extractive experience which may allow it to gain initial comparative advantages in these experiences. This production is in addition to the best known oil and natural gas production.

It should also be mentioned that new technologies applied to living organisms (also those other than fish or crustaceans) have allowed new uses. Applications in antiviral, anti-cancer and other pharmaceutical products, cosmetics, proteins, biomaterials or biofuels have been highlighted. The origin can be diverse: from fish to algae, sponges, or deep-water organisms (which grow without light and withstand extreme levels of temperature and pressure). The expectations in this section are very high, but the uncertainty is high and the initial investment requirements are also high. There is no doubt that scientific knowledge opens up great opportunities in this area.

Three conditioning factors for future developments  

We must at least consider these three factors: (a) scientific knowledge, including economic valuation; (b) regulation of activities and governance systems in the environment; (c) the context of globalization and international competition.

• Scientific knowledge in marine environment

The success, or at least the degree of prominence, that a company or country can achieve in this maritime race, depends to a large extent on scientific and technological progress, the excellence or quality of the researchers involved, and the selection of research programmes and the integration of teams in them. As this sector is less well known, progress will undoubtedly have multiplier effects. At the same time, the aim is to gain a better understanding of the social and economic aspects of the activity. These are further aspects: the rigorous definition of economic magnitudes (in order to avoid the problems of heterogeneity, duplicity or difficulties of environmental goods assessments). The identification and proper assessment of spillover effects on income and employment and of environmental impacts, the analysis of cause-and-effect relationships (beyond mere descriptive indicators), the identification of perceptions and strategies of the actors involved (both on the supply and demand side). Choice and competitiveness depend on it.

• Regulation of activities and governance   

 We are talking about complex systems, with many agents and variables. Future developments will depend closely on the economic and business environment in these activities and on governance and institutional cooperation in the maritime field.

Due to the historical processes of each country, the rights (public or private) and the rules of use in relation to space and marine resources have had a differentiated evolution (by activity and by country), especially significant in the last four decades, in what is still an incomplete process. In fisheries and aquaculture, traditional open access situations have given way to international regulations (200-mile exclusive zones) and at local or regional level (licensing systems, quotas, etc.), which delimit access rights, use, extraction, management and transferability of rights.

Due to the historical processes of each country, the rights (public or private) and the rules of use in relation to space and marine resources have had a differentiated evolution (by activity and by country), especially significant in the last four decades, in what is still an incomplete process. In fisheries and aquaculture, traditional open access situations have given way to international regulations (200-mile exclusive zones) and at local or regional level (licensing systems, quotas, etc.), which delimit access rights, use, extraction, management and transferability of rights. Significant changes can also be seen in maritime transport, such as the handling of risk and maritime safety (as in the case of liability for toxic discharges), although there are differences between countries. The choice of standards also has an impact on the economic strategies of fishermen, fish farmers and hauliers, in particular on investment decisions, sustainable use of resources or business organisation.

An additional problem is that we often find ourselves with scattered regulatory powers and gaps in definition. On the other hand, the combination of the public and private spheres also requires specific treatments. This is particularly evident in transport (where security is to be protected) or in ports (where the management of public domains subject to many environmental or social impacts, must be compatible with the action of the private agents operating in the marine traffics).

The definition of maritime policies should carefully consider institutional aspects. The decentralization of tasks and the correct definition of the areas of responsibility of the administrations will facilitate governance, further delimiting responsibility for externalities and related impacts.

• External actors: globalization and competition

Maritime activity is no stranger to major international economic movements (capital and people). The review of activities allows us to see how Asia has gained presence, not only because economic and demographic growth rates are higher in Asian countries, but also in the light of specific data on production and international trade. This is evident in fisheries and aquaculture (through monitoring FAO data, for example). But also in aspects such as shipbuilding and maritime freight transport. Since trade in marine products has traditionally been more liberalized, this influence must also be counted on.

However, in Europe and in general, freight traffic by sea has grown more than average. Tourism has had an important boost. Marine energy has developed extensively in Northern Europe. And although fisheries and aquaculture are more generally stagnant, some aspects (such as aquaculture of species such as salmon) have seen significant growth, which could be extended to new products. But in addition, other non-food uses (related to cosmetics, health and age, sport, etc.) are gaining momentum.

In this context, the business dimension and competitiveness are key factors for this open and growing competition. And, of course, the geo-strategic factors and the regulatory capacity of international organizations will be elements to be taken into account. We are not, of course, oblivious to the trends observed worldwide in this regard.

In conclusion: what we want to look at here and now?

• Public and private initiatives

Exploiting the opportunities of the sea requires both public and private initiative. Completing and specifying the necessary regulations that promote efficiency and sustainability are objectives of public action. The influence on scientific initiatives is also placed especially on this side.

Private initiative also has unfinished business in this institutional context, and its success options will be strongly related not only to the opportunities that maritime resources can offer (in the markets) or the advantage of geographical location, but also with the virtuous use of scientific knowledge and efficient economic management under conditions of competition and globalization. But in both respects there are many uncertainties and the recent past sheds light and shadow.

• Assess past and present results and develop new opportunities

Spain (for example) accumulates results, knowledge of the environment and cultural and historical heritage related to the sea. The results also have a support in business fabric, human capital and effects carried on the whole of society. All this is undoubtedly the most cause for optimism. But there is also concern about the overall competitive context and the weaknesses related to the business dimension and other shortcomings.

On the other hand, the search for opportunities in future aspects (recalling the selection of the Blue Growth initiative) requires investment and initiative, or a combined public-private action with significant amounts of scientific input. • Production, distribution and networks In the current context, one of the keys to success or economic strength is the control of distribution and intermediation, extending the scope of production to other aspects. Whether by private initiative in this direction or by a combination of public and private actions, moving in this direction would open up new perspectives. Otherwise, the risks of dependence on large distribution chains or international investment groups that have already looked at these possibilities would increase. Moreover, the supporting infrastructures (ports, intermodality, unique facilities) will be part of the future and of the opportunities in this direction.