Visualizing the Human Impact on the Ocean Economy
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Visualizing the Human Impact on the Ocean Economy

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Human Impact and the Ocean Economy

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Visualizing the Human Impact on our Ocean Economy

When you think of economic output, it’s likely the ocean isn’t the first entity that comes to mind. But from facilitating international trade to regulating the climate, the “blue economy” contributes significant value in both tangible and intangible ways.

The sustainable use of the ocean and its resources for economic development and livelihoods have such far-reaching effects, that its protection is a significant goal of the United Nations, as well as for many other countries and organizations throughout the world.

However, these vital ocean assets are in danger of sinking quickly. Ahead of World Oceans Day on June 8, 2020, we look at the total value of assets that come from our ocean, and how various human activities are affecting these resources.

Global Ocean Asset Value

Economic value from all the oceans is measured both by their direct output, as well as any indirect impacts they produce.

According to the World Wildlife Fund, these combined assets are valued at over $24 trillion. Here’s how they break down:

  • Direct Output: Marine fisheries, coral reefs, seagrass, and mangroves
    Total value: $6.9T
    Examples of direct output: Fishing, agriculture
  • Trade and Transport: Shipping lanes
    Total value: $5.2T
  • Adjacent Assets: Productive coastline, carbon absorption
    Total value: $7.8T, and $4.3T respectively
    Examples of services enabled: Tourism, education/conservation (such as jobs created)

In fact, the annual gross marine product of the oceans is comparable to the Gross Domestic Product (GDP) of countries, coming in at $2.5 trillion per year—making it the world’s eighth largest economy in country terms.

Unfortunately, experts warn that various human activities are endangering these ocean assets and their reliant ecosystems.

The Cumulative Human Impact on Oceans

An 11-year long scientific study tracked the global effect of multiple human activities across diverse marine environments. The researchers identified four main categories of stressors between 2003-2013.

  1. Climate change: Sea surface temperature, ocean acidification, and sea level rise
  2. Ocean: Shipping
  3. Land-based: Nutrient pollution, organic chemical pollution, direct human pollution, light pollution
  4. Fishing: Commercial and artisanal fishing, including trawling methods

Across the board, climate stressors were the most dominant drivers of change in a majority of marine environments. Similarly, pollution levels have also increased for many ecosystems.

Plastic pollution is especially damaging, as it continues to grow at unprecedented rates, with a significant amount ending up in the oceans. The World Economic Forum estimates that by 2050, there could be more plastic in the ocean than fish by weight.

Among the various marine environments, coral reefs, seagrasses, and mangroves proved to be most at-risk, experiencing the fastest increase in cumulative human impact. However, these are also the same ecosystems that we rely on for their direct economic output.

Overall, climate-induced declines in ocean health could cost the global economy $428 billion annually by 2050.

The Ocean Economy is in Hot Water

It can be difficult to truly understand the scale at which we rely on the ocean for climate regulation. The ocean is a major “carbon sink”, absorbing nearly 30% of the carbon emitted by human activity. But acidity levels and rising sea surface temperatures are changing its chemistry, and reducing its ability to dissolve CO₂.

According to the UN, ocean acidification has grown by 26% since pre-industrial times. At our current rates, it could rise to 100-150% by the end of the century. Overfishing is another urgent threat that shows no signs of slowing down, with sustainable fish stocks declining from 90% to 66.9% in just over 40 years.

To try and counteract these issues, this year’s virtual World Oceans Day is focused on “Innovation for a Sustainable Oceans” to discuss various solutions, including how the private sector can work with communities to maintain the blue economy. In addition, there’s a petition in place to urge world leaders to help protect 30% of the natural world by 2030.

Will our human activities continue to stress the ocean economy, or will we be able to positively reverse these trends in the years to come?

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Net-Zero Emissions: The Steps Companies and Investors Can Consider

More companies are declaring net-zero emissions targets, but where can they start? Find out the steps companies and investors can take.

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The Steps to Net-Zero Emissions

To help prevent the worst effects of climate change, a growing number of companies are pledging to achieve net-zero emissions by 2050. In fact, the percentage of companies declaring a net-zero target nearly doubled from 2019 to 2020.

With urgency building, how can companies and investors approach net-zero emissions? The above infographic from MSCI highlights the steps these two groups can take, from defining a strategy to reporting progress.

Net-Zero Emissions: A Clear Process

Setting a net-zero emissions target means reducing carbon emissions to the greatest extent possible, and compensating for the remaining unavoidable emissions via removal.

Companies and investors can take four broad steps to move toward their targets.

1. Define Strategy

To begin, companies can measure current emissions and identify priority areas where emissions can be reduced. For example, ABC chemical company determines that its greenhouse gas (GHG) emissions far exceed those of its competitors. In response, ABC chemical company prioritizes reducing GHG emissions during material processing.

Similarly, wealth and asset managers can assess climate risks:

  • Risks of transitioning to a net-zero economy
  • Risks of extreme weather events

They can then map out a strategy to curb climate risk. For example, XYZ asset manager determines that 33% of its portfolio may be vulnerable to asset stranding or some level of transition risk. XYZ decides to lower its transition risk by aligning with a 1.5 degrees Celsius (2.7 degrees Fahrenheit) warming scenario.

2. Set Target

With a strategy set, companies can pledge their net-zero emissions commitment and set interim goals. They can also specify how their pledge will be achieved. For example, ABC chemical company could set a net-zero emissions target by 2050. To increase short-term accountability, they set an interim target to halve carbon emissions by 2035.

Wealth and asset managers can also set targets and interim goals, as they apply to their portfolios. For instance, XYZ asset manager could set a goal to decarbonize its portfolio 5% by 2025, and 10% by 2030. This means that the companies within the portfolio are reducing their carbon emissions at this rate.

ScenarioWarming Potential
Business as usual3.6℃ (6.5℉)
10% decarbonization1.5℃ (2.7℉)

As shown above, a 10% year-on-year decarbonization will align XYZ asset manager’s model portfolio with a 1.5 degrees Celsius warming scenario.

3. Implement

ABC chemical company takes immediate action consistent with its interim targets. For instance, the company can start by reducing the carbon footprint of its processes. This approach carries the lowest risks and costs. But to take larger strides toward its net-zero emissions goal, ABC could draw on renewable energy together with carbon-removal technologies as they are developed.

In the same vein, XYZ asset manager can move toward its decarbonization targets by adopting a benchmark index and reallocating capital. This could include:

  • Increasing investment in clean technologies
  • Re-weighting securities or selecting those that are “best in class” for ESG metrics
  • Reducing risk exposure and targeting companies for shareholder engagement
  • Selling holdings in companies with the greatest exposure

All of these actions will help XYZ become better aligned with its investment strategy.

4. Track and Publish Progress

Here, the actions for companies and investors converge. Both groups can measure and monitor progress, disclose results, and adjust as necessary.

For example, XYZ asset manager shares the following year-end results of its decarbonization strategy. The results compare the portfolio and its benchmark on their implied temperature rise and exposure to low-carbon transition categories.

 PortfolioBenchmarkDifference 
(Portfolio - Benchmark)
Implied temperature rise3.2℃ (5.8℉)3.4℃ (6.1℉)-0.2℃ (-0.4℉)
Exposure to companies classified as:
Asset stranding0.0%0.5%-0.5%
Product transition6.1%8.1%-2.0%
Operational transition5.2%7.0%-1.8%
Neutral77.6%77.8%-0.2%
Solutions11.1%6.6%+4.5%

Asset stranding is the potential for an asset to lose its value well ahead of its anticipated useful life because of the low carbon transition. Companies with product transition risk may suffer from reduced demand for carbon-intensive products and services, while companies with operational transition risk may have increased operational or capital costs due to the low carbon transition.

XYZ asset manager’s portfolio has less risk than the benchmark. XYZ has also significantly reduced its exposure to transition risk to 11.3%, down from 33% in step 1. However, with an implied temperature rise of 3.2 degrees Celsius, the portfolio is far from meeting its 1.5 degrees Celsius warming goal. In response, XYZ begins to intensify pressure on portfolio companies to cut their GHG emissions by at least 10% every year.

A Climate Revolution for Net-Zero Emissions

The time to drive the transition to net-zero emissions is now. By the end of this century, the world is on track to be up to 3.5 degrees Celsius warmer. This could lead to catastrophic flooding, harm to human health, and increased rates of mortality.

As of July 2021, just 10% of the world’s publicly listed companies have aligned with global temperature goals. Preventing the worst effects of climate change will demand the largest economic transformation since the Industrial Revolution. Companies, investors and other capital-market participants can drive this change.

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Mapped: Human Impact on the Earth’s Surface

This detailed map looks at where humans have (and haven’t) modified Earth’s terrestrial environment. See human impact in incredible detail.

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human impact on earths surface

Mapped: Human Impact on the Earth’s Surface

With human population on Earth approaching 8 billion (we’ll likely hit that milestone in 2023), our impact on the planet is becoming harder to ignore with each passing year.

Our cities, infrastructure, agriculture, and pollution are all forms of stress we place on the natural world. This map, by David M. Theobald et al., shows just how much of the planet we’ve now modified. The researchers estimate that 14.6% or 18.5 million km² of land area has been modified – an area greater than Russia.

Defining Human Impact

Human impact on the Earth’s surface can take a number of different forms, and researchers took a nuanced approach to classifying the “modifications” we’ve made. In the end, 10 main stressors were used to create this map:

  1. Built-Up Areas: All of our cities and towns
  2. Agriculture: Areas devoted to crops and pastures
  3. Energy and extractive resources: Primarily locations where oil and gas are extracted
  4. Mines and quarries: Other ground-based natural resource extraction, excluding oil and gas
  5. Power plants: Areas where energy is produced – both renewable and non-renewable
  6. Transportation and service corridors: Primarily roads and railways
  7. Logging: This measures commodity-based forest loss (excludes factors like wildfire and urbanization)
  8. Human intrusion: Typically areas adjacent to population centers and roads that humans access
  9. Natural systems modification: Primarily modifications to water flow, including reservoir creation
  10. Pollution: Phenomenon such as acid rain and fog caused by air pollution

The classification descriptions above are simplified. See the methodology for full descriptions and calculations.

A Closer Look at Human Impact on the Earth’s Surface

To help better understand the level of impact humans can have on the planet, we’ll take a closer look three regions, and see how the situation on the ground relates to these maps.

Land Use Contrasts: Egypt

Almost all of Egypt’s population lives along the Nile and its delta, making it an interesting place to examine land use and human impact.

egypt land use impact zone

The towns and high intensity agricultural land following the river stand out clearly on the human modification map, while the nearby desert shows much less impact.

Intensive Modification: Netherlands

The Netherlands has some of the heavily modified landscapes on Earth, so the way it looks on this map will come as no surprise.

netherlands land use impact zone

The area shown above, Rotterdam’s distinctive port and surround area, renders almost entirely in colors at the top of the human modification scale.

Resource Extraction: West Virginia

It isn’t just cities and towns that show up clearly on this map, it’s also the areas we extract our raw materials from as well. This mountainous region of West Virginia, in the United States, offers a very clear visual example.

west virginia land use impact zone

The mountaintop removal method of mining—which involves blasting mountains in order to retrieve seams of bituminous coal—is common in this region, and mine sites show up clearly in the map.

You can explore the interactive version of this map yourself to view any area on the globe. What surprises you about these patterns of human impact?

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