RESCUE, part 20: How to Account for an Ocean Economy

Three fundamental questions as a framework for change

This week the multi-part RESCUE series continues with a breakdown of a 2020 Report by the World Resource Institute High Level Panel for Sustainable Ocean Economy that offered some revised definitions and pathways toward a more sustainable future, including three fundamental questions as a framework for change: 1. How will a decision change the wealth on an ocean balance sheet, including all produced assets? 2. How will a decision change net national income or welfare, and how will those changes be distributed between different groups of people? and 3. How will the decision change ocean-based economic production and create new means to achieve social and economic goals?

As we consider ecosystem service, we are moving toward a new method, and expanded system of valuation of the contribution of Nature as species or habitat to financial analysis and understanding of true profit and loss when we use such services, conserve them or deplete them as plus or minus on our economic balance sheet, as a measure of domestic product, and as data by which we declare policies, apply subsidy or incentive, and regulate the consumption or conservation of natural resources.

It is mostly about the data. The invention of Excel as a tool for financial planning always seemed to me as a kind of illusion, the criteria and amounts selected for a budget a magical function of selection: change the premises, thus change the conclusions, thus any budget can be made to balance, any analysis can be made to confirm predetermined conclusions. We use Gross National Product as our primary measure of economic performance, compare and contrast it, and adjust the components in order to promote continuous expansion and measure of growth. It is a formulaic arrangement of data, susceptible to what is included, and particularly to what is left out. And so, to account for the true value of an ocean economy, of associated inputs and outcomes, we need to understand that the established premises, the conventional parameters, must be adjusted to reflect a full picture of an inclusive calculation as a basis for assessment and reassessment of policy, profit, and national viability.

As the ocean connects all economies, such change, while a more accurate calculation of value, represents a radical upheaval of conventional structures and behaviors worldwide. A 2020 Report by a World Resources Institute High Level Panel for a Sustainable Ocean Economy offered some revised definitions, questions and pathways forward. It concluded first that the data required to inform the change was actually available, contained in disparate studies and government statistics, thus the primary obstacle was not inadequate information, but rather the resistance to the idea that “product” includes social inputs, that “natural capital” was an acceptable asset value to include in the calculation, and that income as social benefit was to be included in the formula.

The Report suggested three fundamental questions as a framework for change:

1. How will a decision change the wealth on an ocean balance sheet, including all produced assets (ports, for example, and non-produced assets (coral reefs);
2. How will a decision change net national income or welfare, and how will be those changes be distributed between different groups of people; and
3. How will the decision change ocean-based economic production and create new means to achieve social and economic goals?”

The Report went on to recommend an internationally agreed framework for revised national accounting, to avoid over-reliance on traditional GDP, and lead or contribute to collaborative efforts to improve national ocean accounting operations — devised systems of execution, maintenance and collection of statistics, incentivized timely transfer, reduced barriers between agencies and offices, established new standards and different practice, developed cross-cutting platforms, tools, algorithms, and programs for data sharing, and new reporting tools applied to familiarize public and private leaders and legislators — as a demonstrable commitment to change.

The Report makes for close reading, but the conclusions seem direct and simple:

a. the data exists on which to include and base the change;

b. the process is more a function of political will than illogical thinking;

c. the oversight and legislative capacity exists to execute and surveil the new system; and

d. the problem is primarily one of conventional thinking, vested interest in the old method, fear of change, and other resistance — even in the face of crisis — to a solution that would provide a context and justification for urgent strategies to conserve and sustain the natural and communal assets now threatened. Indeed, here, in the making is a key action toward RESCUE:

R for renewal
E for environment
S for society
C for collaboration
U for understanding
E for engagement

PETER NEILL is founder and director of the World Ocean Observatory, a web-based place of exchange for information and educational services about the health of the world ocean. He is also host of World Ocean Radio, upon which this blog is inspired. World Ocean Radio celebrates 15 years this year, with more than 660 episodes produced to date. Find the full RESCUE series under the SOLUTIONS theme.