Blue economics: Why the ocean matters for development
Despite its vital role in climate regulation and sustaining livelihoods, the ocean remains poorly governed. As world leaders gather for the third UN Ocean Conference, economists can also play a role in preventing ocean crises through appropriate incentives, enforceable treaties, blue carbon pricing, and community-based resource monitoring.
The ocean has swum back into the spotlight. This week leaders from more than 140 countries have assembled in Nice for the third UN Ocean Conference (9-13 June). Sir David Attenborough’s latest documentary Ocean, released to mark his 99th birthday in May 2025, adds cinematic urgency to their gathering.
Unfortunately, while scientists pore over reefs and gyres, economists have often treated the sea as a sideshow. Such neglect is costly. The ocean is not a blue backdrop to terrestrial growth; it is an economic system in its own right – and arguably the planet’s most mismanaged one.
The planet’s largest property rights failure
Two facts frame the debate. First, the high seas – waters beyond national jurisdiction – cover 64% of the ocean’s surface. Second, less than 3% of that expanse enjoys any form of protection. The result is a textbook tragedy of the commons. A single super‑trawler can scour a scar hundreds of kilometres long across the seabed. Illegal, unreported and unregulated fishing is worth billions a year. About one in every five fish is pulled from the deep illegally.
Classical economists worried about enclosure; modern ones perfected carbon pricing. The ocean falls in between. Regional fisheries agreements exist, but have the coercive power of a polite noticeboard. The first order of business is to ratify the UN High Seas Treaty and embed credible enforcement – satellite tracking, automatic licence suspensions and, where necessary, trade sanctions for serial offenders. States that breach nuclear or aviation rules face penalties; those that wreck the sea should too.
Blue carbon: a giant, invisible subsidy
Mangroves, salt‑marshes and seagrass meadows carpet barely 2% of marine area yet absorb about half of all oceanic carbon. A hectare of mangroves stores five times more carbon than an equivalent patch of tropical rainforest, while sheltering coastlines and nursing juvenile fish. Still, these ecosystems are bulldozed for shrimp ponds and hotel complexes. Extending carbon markets to “blue carbon” is the best policy, but until measurement and verification become cheap, outright bans on coastal wetland conversion may be the cheaper, second-best option.
Bottom‑trawling compounds the climate risk: disturbing seabed sediments releases roughly 370 million tonnes of CO₂ a year, almost as much as France emits. Classical economics explored how excess cattle over-graze a shared meadow. Trawling takes this allegory to the 21st century, hoovering up the meadow in one fell swoop. A harrowing scene in Ocean shows their wanton destruction. Cheap fish is great, but it must be starkly weighed against the currently unmeasured and unpriced damage that this causes, both now and in the future. Even ignoring these externalities, fishing less – and smarter – can generate an additional USD 83 billion a year.
Development depends on healthy seas
More than three billion people – most of them in low‑ and middle-income countries – rely on marine resources for protein. Of this, 600 million rely directly on fisheries and aquaculture for their livelihoods; 40% are women. A collapsing fish stock does not trim the menu in Copenhagen; it empties nets in Cotonou and drains tax coffers in Port Moresby.
The argument isn't against industrialisation; it is about fair use and supporting small-scale fishers often marginalised by industrial fleets. Far greater furore exists over displaced coal livelihoods from the green transition – perhaps one million jobs by 2050 – than the evaporation of local blue economies from industrial fishing, despite affecting several magnitudes more people. From Chile to Namibia, schemes which have secured territorial‑use rights backed by technology and community monitoring have restored stocks while raising local incomes.
A policy compass for the blue frontier
1. Ratify and implement the High Seas Treaty
Without 60 ratifications by end‑2025, plans for high seas marine protected areas will stall. Economists can design benefit-sharing rules for marine resources and translate ecological limits into actionable quotas.
2. Make enforcement bite
Satellite monitoring, blacklists and automatic market bans should shift policing from gentleman’s agreements to real deterrence. Lessons from anti-money‑laundering regimes and aviation safety are instructive.
3. Price – or prohibit – the destruction of blue carbon
Where measurement is feasible, incorporate coastal wetlands into emissions trading systems. Where it is not, impose moratoria on conversion and phase out destructive gear like bottom‑trawls in vulnerable zones.
4. Empower coastal communities
Territorial rights, microfinance for gear upgrades, and targeted infrastructure (cold storage, transport) can tilt the playing field towards responsible artisanal fleets.
Why economists must dive in
Ocean crises are, at their core, failures of incentives. Biology provides the diagnostics; economics supplies the treatment regime – property rights, taxes, subsidies, liability rules, and credible enforcement. Our discipline already estimates the social cost of carbon and auctions radio spectrum; the same tools can illuminate the deep sea, from valuing genetic resources to pricing transboundary pollution.
Attenborough ends his film with a plea: "Protect the ocean, and the ocean will protect us." If economics aims to allocate scarce resources, it cannot ignore the world's biggest one. It is time to leave the shore and start counting the waves.