Spring Budget: Spending on the foundation of a sustainable blue economy

Over recent years, the UK economy has undergone several shocks. The economic effects of the COVID-19 pandemic, the Russian invasion of Ukraine, and rising rates of inflation has created a cost-of-living crisis. The UK’s economic growth has slowed, interest rates have rocketed, and disposable incomes have fallen.

Against this backdrop we need an economic strategy that delivers for both people and our ocean. Fortunately, we don’t have to trash nature and reverse ocean recovery to achieve economic growth. Growing our sustainable blue economy, by investing to protect and restore the UK’s marine natural capital, will deliver economic resilience, adaptability and opportunity in uncertain times. In doing so, it will achieve both political and environmental targets.

How could the Chancellor create sustainable blue economic growth? 

As a first step, the UK Government needs to protect and enhance the UK’s stocks of marine natural capital - resources that provide economic value and additional benefits to society. Examples include seagrass, saltmarsh and kelp forests, which sequester more carbon per area than a tropical rainforest and protect up to £33.2 billion of coastal infrastructure at risk of flooding. Healthy coastal ecosystems provide lucrative opportunities for recreation and tourism while offshore marine ecosystems absorb and store carbon on a huge scale. The Office for National Statistics has valued our marine natural capital assets at £211 billion, but this accounts for only a fraction of the natural resources found in the UK’s vast marine territory.

Marine ecosystems can provide these benefits indefinitely, and for free, if we create the right conditions for their survival. After decades of extraction and inaction, we need to restore these conditions through appropriate spending and policy support. This starts with ensuring water quality is sufficient for marine species and ecosystems to survive. Spending to support regenerative rather than degrading activities can then allow them to thrive. These are the foundations on which to build a sustainable blue economy.

Our current business-as-usual approach is already depleting ecosystems upon which many industries and aspects of the UK economy depend. Over half of the GDP of the entire planet is estimated to be moderately or highly dependent on biodiversity, most of which is found within the coastal and marine environment.

Globally, research has found that 66% of publicly listed companies have financial exposure linked to ocean health, with $8.5 trillion USD of financial value at risk over the next 15 years in a business-as-usual scenario. This should resonate with the UK’s finance sector, as we have one of the world’s largest economies and ocean territories. Protecting the value of our seas is to safeguard our economic and financial sector – a worthwhile and necessary expenditure.

Targeted spending could also unlock opportunities for further private investment into ocean recovery. Spending and policy protection will allow regenerative projects to scale-up and potentially deliver financial returns linked to the benefits they deliver, such as carbon storage.

How much to spend and on what?

The UK is the sixth largest economy in the world and the British economy made up 3.3% of global GDP in 2021. A 2020 study estimated that $174.52 billion per year would be needed up to 2030 to deliver on Sustainable Development Goal 14 – Life Below water - and safeguard the health of our ocean.

Realistically, this estimate should be considered as a minimum level of spending given that returns on investment extend far beyond environmental benefits alone.

Suggestions for where this spending could be most effectively applied include:

• Enforcement and monitoring of genuinely effective Marine Protected Areas.
• Improved water treatment infrastructure and enforcement of water quality standards.
• Financial support to scale up and de-risk habitat restoration and regenerative projects to enable further private investment.
• Developing robust Marine Spatial Planning that recognises the value of marine natural capital.
• Research to establish the appropriate baseline of marine natural capital that needs to be maintained.
• Building skills and knowledge for coastal jobs and support for a Just Transition away from extractive to regenerative industries.

We’re at a fork in the road and appropriate public spending can set us on the right path – by laying the foundations for a sustainable blue economy. This would unlock opportunities for private investment to fund ocean recovery projects, providing sustainable blue jobs, multigenerational livelihoods, and nature-based solutions to climate change and flooding.

Sustainable blue economic growth is not simply a green policy, this is a huge opportunity to invest in the UK’s infrastructure. For instance, an alternative source of funding for ocean recovery could be the creation of blue bonds, similar to the NS&I Green Savings Bonds but with proceeds exclusively available for regenerative coastal and marine projects.

We urge the Chancellor to grab the opportunities of the Spring Budget with both hands and deliver a programme of sustainable economic growth with our ocean at its core.