Valuing the Ocean

One way or another, most of the people reading this column earn their living from or because of the ocean.

As that indicates, the ocean is a valuable resource. But it is easy to take that resource for granted and not appreciate the value we get from it.

The ocean represents about 70 per cent of the earth’s surface. Scientists tell us that humans evolved from creatures that migrated out of the ocean onto land a long, long time ago, so we owe our very existence to it. And it has played a huge role in our lives ever since.

The ocean is valuable for at least four reasons — because it is there, because of its esthetics, because of its role in our planet’s ecosystem and because of what it can provide.

Simply, because it is there, the ocean has been a means for transportation between landmasses, much the way roads provide means for transportation between land-based communities. In the coastal zone, properties that are on the oceanfront or even just have an ocean view usually cost more to buy than their land-locked counterparts. And people pay substantial sums of money to spend time on a beach and swim surf the waves, or dive into the depths.

As part of the overall ecosystem, the ocean provides a cooling effect in summer and a warming effect in the winter, helping to moderate temperatures. Because of these effects, it plays a significant role in weather patterns, for better or worse. It produces half of the oxygen we breathe.

Although the ocean is an important part of the global ecosystem, it is also host to a very distinctive part of that ecosystem that provides food and other products through either capture or culture.

The ocean’s ecosystem contains an amazing array of creatures that have developed with characteristics adapted to very specific and distinctive environments. Humans and other land-based animals have harvested a broad range of that ocean-based wildlife, to be turned into food, pharmaceuticals, nutraceuticals, oils for various uses, fertilizers and other things.

In recent decades, the ocean has become a significant source of energy generated from either wind or water movements. In addition, the ocean bottom has been a source of minerals and petroleum.

To take advantage of all the opportunities the ocean presents, we have developed a huge range of technologies of one kind or another. Those technologies have enabled us to extract value from the ocean but just developing the technologies has created additional value.

For all these reasons — and probably more — large numbers of people have historically settled near the ocean or a large river that gave them access to the ocean. Overall, the ocean has been a big and valuable part of human existence, even for people who have not lived near the ocean or earned a living from it.

Nevertheless, the world’s oceans are currently under threat from a wide variety of sources, practically all caused directly or indirectly by humans. In many ways, they have been used as a waste dump.

Agricultural chemicals, industrial effluents and plastic wastes have all found their ways into the ocean. It absorbs about 30 per cent of the carbon dioxide and 93 per cent of the heat produced by human activity, changing the chemistry of the water.

The heat has increased water temperatures around the world, with substantial impacts on its biodiversity and the abundance and distribution of a large range of different sea creatures. And fish have been harvested beyond levels the ocean has been able to replenish.

As world population increased from about 2.5 billion in 1950 to over 7.5 billion now — more than tripling in one human lifetime — demands on the ocean and dumping into the ocean have increased dramatically, contributing to the problems we see today. If these trends continue, it seems fair to say they will lead to a very significant deterioration in the quality of life for future generations.

Lonnie Snow photo

The ocean is what economists call a public good — a commodity or service available to all members of a society, without charge. Air is another example of a public good and humans have abused it, as well, with emissions of greenhouse gases that are the cause of global warming.

As a public good, people cannot be excluded from using either air or the ocean. And use by one person does not obviously reduce its availability to others, although the actions of some users do cause a deterioration in the quality of what is available for others.

A large part of the problem is that when you don’t pay for something, it seems to have no value and is treated as such.

Another part of the problem is that individual users are not held accountable for their use, so they are able to avoid penalties for abuse. In short, consumers of public goods are able to take advantage of them without contributing to their preservation or maintenance — sometimes referred to as the free rider problem.

Because of their widespread availability, free usage and lack of accountability for use, many public goods are subject to excessive use that ultimately affects all users. That leads to what has been referred to as the tragedy of the commons, where individual users, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action.

The tragedy of the commons is often used as an explanation for overfishing of the world’s fish resources and more specifically, was used to explain what happened to the fisheries in Atlantic Canada from the 1950s through the early 1990s.

There are ways to solve this problem, but they mostly involve limiting access, putting a value on the shared resource and/or holding people accountable for their use of it.

The carbon tax recently promoted by Canada’s federal government is one example of how a value can be put on a public good, to change the behaviours of people who use it.

But, as in the case of the carbon tax, putting a value on a public good to preserve its usefulness and benefits for everyone is a very controversial topic.

Typically, the abusers of the resource want to avoid paying for its use and any accountability for their abuse of it, so they raise objections of various kinds to scuttle any effort to bring in such a change. They would rather pay lobbyists to influence public sector decisions in their favour than pay a tax on their use of the public good. It is a well-established pattern, not only in Canada, but around the world.

Because it is clear the ocean is being abused, we need to be more concerned about that and start taking action before it is too late. Maybe we would be more motivated to do something, if we had a better understanding of the ocean’s value.

Currently, we only value what we take from the ocean, not the ocean itself. For example, the only fish considered to have value are the dead ones we catch. But the live fish that remain in the ocean are needed to ensure there will be more fish in the future. Because they are the source of all future fish, they are much more valuable than the ones we catch and we need to take that into account in managing fish stocks.

So how can we measure the value of the ocean?

In general, there are three ways:

  • as an asset,
  • as a stream of future income,
  • and the cost of replacing it, if it were no longer available.

An asset is anything tangible or intangible that can be used to produce value in the future — a stock of wild fish, for example. Its value is generally measured in terms of what someone would be willing to pay to either build it or buy it. But there is no easy way to measure the cost of creating an ocean or the price someone would be willing to pay to own one.

Because it is an asset, the ocean can be used to produce value and incomes in the future — by catching fish, for example. Therefore, another approach to measuring its value is to estimate what the present value of those future incomes might be. But there are so many different potential sources of income in so many places, doing the actual measurement would be a very complicated exercise.

If the oceans were no longer capable of providing the benefits humans have historically enjoyed from it, what would have to be done to restore those benefits through other means? If you could find an answer to that question, it might be possible to estimate the ocean’s value. But, again, that is a very challenging problem to both define and solve.

Even though the ocean clearly has a lot of value, it is not easy to estimate what it might be. Some people have tried but there are many variables that must be taken into account and the data needed to do the measurement are not easy to collect, so there is no widespread understanding of what the value would be.

Putting a value on the ocean may be trying to reach too far. But it is possible to estimate at least some of the economic activity — the stream of income — based on the ocean and there have been a number of efforts to do so.

For example, the Organization for Economic Cooperation and Development (OECD), sponsored by a group of relatively affluent countries, including Canada, estimated the contribution of ocean-based industries, the natural assets and the ecosystem services the ocean provides for 2010 — now a decade ago.

It estimated the ocean economy’s output at US$1.5 trillion, approximately 2.5 per cent of the world total. Offshore oil and gas accounted for one-third of that value, followed by maritime and coastal tourism, maritime equipment and ports. Direct full-time employment was estimated at 31 million jobs, with capture fisheries accounting for over one-third and coastal tourism for almost a quarter.

The OECD also said the economic activity in the ocean is expanding rapidly, faster than the global economy as a whole, both in terms of value added and employment. It expected that the ocean economy would more than double by 2030 and we are now halfway there. Particularly strong growth was expected in marine aquaculture, offshore wind energy, fish processing and port activities.

In 2015, the World Wildlife Fund (WWF), in association with the Boston Consulting Group, estimated the “gross marine value” of the ocean was at least US$24 trillion, although they said they believed that was a “vast underestimate,” because some ocean-based activities were not included. However, it said there was strong evidence that the value of major ocean assets has been in decline for decades, even though the need for food and resources from the ocean is increasing rapidly.

The report went on to say, “The ocean is changing faster than at any other point in tens of millions of years. There is a real chance that we may push many ocean systems beyond the point of no return, seriously constraining options for our children and for generations to come. The growth in human population means restoring the ocean economy and its core assets is a matter of global urgency, but the list of ocean systems under heavy pressure is already long and growing.”

Here in Canada, the Ocean Supercluster says that Canada’s ocean economy contributes over $36 billion to our gross domestic product (GDP) and employs 350,000 Canadians. But, at about one per cent of the national economy, the size of our ocean economy is smaller than it should be, considering that Canada borders on three oceans and ocean activities represent 2.5 per cent of the global economy.

In contrast, Norway, with a population of just over five million, has an ocean economy worth nearly seven times that of Canada.

Even though we can’t measure the value of the ocean directly, the calculations of the different organizations referred to above indicate it is very large indeed and there is potential for much more. It seems everyone wants to take advantage of that potential and get their share of it — and they want it now.

But unless we do much more to protect and preserve the ocean, it seems everyone will get much less from it in the future.

It is easy to avoid responsibility, thinking it is someone else’s problem to solve, but that is not the case. We all have contributed to the problem. Now we need to be part of the solution, because only widespread participation can solve a problem that is so big in scope.

We take it for granted that the ocean will always be there and will continue to provide the benefits we are accustomed to. But that is not the case, as the ongoing moratoriums on fishing groundfish in Atlantic Canada demonstrate.

To paraphrase former U.S. President John F. Kennedy, “Ask not what the ocean can do for you; ask what you can do for the ocean.”


Managing Director of the Canadian Centre for Fisheries Innovation — Newfoundland

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