With around 80% of international trade passing through seaports, coastal regions play a major economic role, accounting for 60-70% of global GDP.
Environ 40% of the world’s population lives in coastal areas. Besides being home to 12 of the world’s 15 largest cities, these regions provide an essential lifeline for countless small villages and towns. With around 80% of international trade transiting through seaports, coastal regions also play a major economic role, representing 60 to 70% of global GDP.
With global temperatures rising at an alarming rate, coastal communities find themselves on the front lines of the climate and biodiversity crises. In the past twelve months alone, Hurricanes Beryl, Helene and Milton have hit the Caribbean and the US Gulf Coast, while Storm Daniel has caused thousands of victims in Libya, thus highlighting the growing vulnerability of populations living along the planet’s coasts.
The climate crisis is worsening, as are the threats posed by sea level rise, ocean acidification and warming. These dangers are compounded by habitat destruction, overfishing and pollution, which erode the health and biodiversity of marine ecosystems. The resulting disappearance of mangroves and coral reefs is expected to lead tohuge losses economic and displace many coastal communities, particularly in small island developing States where all aspects of life are linked to the sea.
Given the challenges, strengthening the resilience of coastal communities and protecting their lives, livelihoods and economies is not just a regional or national priority, but a global imperative. Addressing this will require a coordinated effort from the public and private sectors, particularly financial institutions capable of generating the investments needed to support long-term, sustainable solutions.
To this end, the United Nations conference on biodiversity studies ways to advance the global framework for biodiversity of 2022, which aims to protect 30% of all land and ocean areas by 2030. The next United Nations climate change conference (COP29), to be held in Azerbaijan, will focus on financing solutions. The United Nations Ocean Conferencewhich will be held next year, as well as the first blue economy and finance forumcould help catalyze the urgent and coordinated action necessary to safeguard the most vulnerable ecosystems on our planet.
It is encouraging that private financial institutions are also beginning to recognize the need to build climate resilience. A staggering amount of 1,000 billion dollars green, social and sustainability-linked bonds was issued in 2023, reflecting growing investor interest in projects aligned with the United Nations Sustainable Development Goals. But investments in ocean regeneration and coastal resilience remain well below hundreds of billions of dollars needed each year to protect vulnerable communities and cities.
While closing this funding gap is essential, it is equally important to engage with local communities. By considering the perspectives of indigenous people, policymakers could develop measures that protect nature, promote sustainable development and ensure that investments in infrastructure and community resilience are both equitable and effective.
Cross-sector partnerships will be essential to build a pipeline of projects suitable for investment. Ocean Risk and Resilience Action Alliance (ORRAA)of which I am executive director, seeks to mobilize funding for ocean resilience. Working with committed partners, we aim to equip bankers and insurers with the tools to account for the value of natural assets in their balance sheets, while harnessing the ingenuity and entrepreneurship of local leaders, including many are women.
Of course, there is still much to do. To build truly resilient coastal communities, climate risks must be considered in every infrastructure project, policy proposal and investment decision affecting climate-vulnerable regions. Additionally, by encouraging nature-based solutions, such as restoring mangroves and coral reefs, policymakers could strengthen natural defenses against storms and erosion while supporting biodiversity and local economies. Initiatives such as the coastal risk index – an interactive platform that leverages data to help investors, insurers and policymakers assess coastal risks – will be key to this effort.
Since public funding alone cannot generate the capital needed to protect coastal communities, greater cooperation between the public and private sectors will be essential to close the current funding gap. This will require developing innovative financial instruments to reduce risks and encourage private sector participation. It is with this in mind that ORRAA has joined forces with development guarantee groupa guarantor that supports climate adaptation and mitigation projects, to create a mechanism to reduce the risks associated with sustainable investments in “blue economy” sectors.
The United Nations Ocean Conference, which will be held next year in France, and the Blue Economy and Finance Forum, which will take place in Monaco, offer a unique opportunity to unite these different efforts. By bringing together business leaders and policy makers, these meetings could unlock large-scale funding for ocean conservation and resilience, ensuring that coastal communities benefit from a comprehensive and sustainable approach to the complex challenges posed by the climate crisis.
However, to seize this opportunity, investors, policymakers and local leaders must align their efforts. Through decisive and coordinated climate action, we can direct targeted investments into ocean resilience and ensure a sustainable future for coastal communities – and the global economy that depends on them.
Karen Sack is executive director of the Ocean Risk and Resilience Action Alliance.
Copyright: Project Syndicate, 2024.
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