To protect the oceans’ natural capital and promote sustainable economic growth, the world needs to move beyond a business as-usual relationship with its marine resources. For increasing numbers of countries, the solution is the “Blue Economy” approach. It allocates ocean space across traditional sectors such as fisheries and new ones such as offshore wind farms, with a goal of protecting resources and benefiting current and future generations. Marine Spatial Planning (MSP) is a key element of these efforts, yet it rarely includes a comprehensive analysis of the economic impact that interventions will have on the ocean and its wide range of stakeholders. This paper argues that adding robust economic analysis to the MSP process will increase buy-in, foster livelihoods, attract finance, and advance the long-term Blue Economy objective of protecting the ocean’s underlying resources and ecosystems. Although many reasons explain the limited uptake of MSP worldwide to date, implementation could be accelerated by better use of economic tools and innovative f inancial perspectives. From an economics perspective, MSP can be defined as the spatially and temporally explicit allocation of scarce marine resources and services to competing uses, and the governance framework that designs, implements, and monitors this allocation. A deeper understanding of the economic trade-offs that come with MSP, and the winners and losers who emerge, can give policymakers insights they now lack into the needs and potentials of a sustainable ocean economy. By diffusing reliable information and clearly defining property rights, MSP can also help draw f inancing for marine projects at a sufficient scale and pace. In economics, a policy can be considered desirable from the social point of view if the total benefits outweigh the costs. Importantly, the estimation of costs and benefits should not be limited to direct uses and should include ethical concerns and intrinsic values. Given scarce marine resources and multiple potential uses, the MSP process strives to allocate those resources to activities that generate the highest well-being. But to do that, planners need full data and analysis in hand, including economic analysis. MSP also requires a suitable governance framework that ensures that the process involves all relevant stakeholders, including future generations. The MSP process is not necessarily linear and sequential; it should be adaptive and dynamic, showing creativity in data-scarce and uncertain situations. As shown in Figure A, thee MSP process has four interconnected components: (1) making the case for MSP, that is, winning the support of governments, local communities, f irms, and others, (2) a detailed review of starting conditions and enabling factors, (3) design, analysis, and allocation of marine resources to alternative uses, and (4) implementation and monitoring of progress once a program is underway. This report identifies six critical gaps in economic analysis of the components of the MSP processes described above. These gaps prevent a rapid uptake of the MSP concept worldwide and are associated to: • Identification of trade-offs and winners and losers among competing users of resources • Effects of externalities such as pesticide run-off from farmlands into the sea • Scenario development and risk assessment • Monitoring and course correction after the MSP process is complete • Understanding of likely behavioral changes by people and organizations in response to MSP rules and regulations • Flexible financing instruments to help private capital enter Blue Economy projects The report briefly suggests a broad range of tools and methods for closing each of these gaps (See Figure B). They include, but are not limited to, software packages such as InVEST and ARIES, global datasets, consultative meetings to build buy-in among affected people, and innovative financial instruments such as the COAST insurance program. The common theme is that people carrying out MSP need to do all they can to fully grasp the likely future effects of their work. Economic analysis will allow them to look forward with much greater clarity. Nevertheless, the expectations need to be adjusted to the availability of data to apply the suggested tools. In many contexts, especially in developing countries, data limitations are fundamental and challenging to overcome in the short term. In these scenarios, an adaptive approach should be promoted to help accommodate different levels of technical precision about the different stages of MSP deployment.

Applying Economic Analysis to Marine Spatial Planning

Resource Key: NULUENY8

Document Type: Report

Creator:

Author:

  • World Bank

Creators Name: {mb_resource_zotero_creatorsname}

Place: Washington D.C.

Institution: World Bank

Date: 2022

Language: en

To protect the oceans’ natural capital and promote sustainable economic growth, the world needs to move beyond a business as-usual relationship with its marine resources. For increasing numbers of countries, the solution is the “Blue Economy” approach. It allocates ocean space across traditional sectors such as fisheries and new ones such as offshore wind farms, with a goal of protecting resources and benefiting current and future generations. Marine Spatial Planning (MSP) is a key element of these efforts, yet it rarely includes a comprehensive analysis of the economic impact that interventions will have on the ocean and its wide range of stakeholders. This paper argues that adding robust economic analysis to the MSP process will increase buy-in, foster livelihoods, attract finance, and advance the long-term Blue Economy objective of protecting the ocean’s underlying resources and ecosystems. Although many reasons explain the limited uptake of MSP worldwide to date, implementation could be accelerated by better use of economic tools and innovative f inancial perspectives. From an economics perspective, MSP can be defined as the spatially and temporally explicit allocation of scarce marine resources and services to competing uses, and the governance framework that designs, implements, and monitors this allocation. A deeper understanding of the economic trade-offs that come with MSP, and the winners and losers who emerge, can give policymakers insights they now lack into the needs and potentials of a sustainable ocean economy. By diffusing reliable information and clearly defining property rights, MSP can also help draw f inancing for marine projects at a sufficient scale and pace. In economics, a policy can be considered desirable from the social point of view if the total benefits outweigh the costs. Importantly, the estimation of costs and benefits should not be limited to direct uses and should include ethical concerns and intrinsic values. Given scarce marine resources and multiple potential uses, the MSP process strives to allocate those resources to activities that generate the highest well-being. But to do that, planners need full data and analysis in hand, including economic analysis. MSP also requires a suitable governance framework that ensures that the process involves all relevant stakeholders, including future generations. The MSP process is not necessarily linear and sequential; it should be adaptive and dynamic, showing creativity in data-scarce and uncertain situations. As shown in Figure A, thee MSP process has four interconnected components: (1) making the case for MSP, that is, winning the support of governments, local communities, f irms, and others, (2) a detailed review of starting conditions and enabling factors, (3) design, analysis, and allocation of marine resources to alternative uses, and (4) implementation and monitoring of progress once a program is underway. This report identifies six critical gaps in economic analysis of the components of the MSP processes described above. These gaps prevent a rapid uptake of the MSP concept worldwide and are associated to: • Identification of trade-offs and winners and losers among competing users of resources • Effects of externalities such as pesticide run-off from farmlands into the sea • Scenario development and risk assessment • Monitoring and course correction after the MSP process is complete • Understanding of likely behavioral changes by people and organizations in response to MSP rules and regulations • Flexible financing instruments to help private capital enter Blue Economy projects The report briefly suggests a broad range of tools and methods for closing each of these gaps (See Figure B). They include, but are not limited to, software packages such as InVEST and ARIES, global datasets, consultative meetings to build buy-in among affected people, and innovative financial instruments such as the COAST insurance program. The common theme is that people carrying out MSP need to do all they can to fully grasp the likely future effects of their work. Economic analysis will allow them to look forward with much greater clarity. Nevertheless, the expectations need to be adjusted to the availability of data to apply the suggested tools. In many contexts, especially in developing countries, data limitations are fundamental and challenging to overcome in the short term. In these scenarios, an adaptive approach should be promoted to help accommodate different levels of technical precision about the different stages of MSP deployment.

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