Blue eco-system restoration through blue financing
FOR the first time in the history of Pakistan, the country has hosted the ‘World Environment Day 2021’ in partnership with the United Nations Environment Programme (UNEP).
‘Eco-System Restoration’ was the theme of this year’s World Environment Day, which focuses on resetting our relation with nature.
The UN has termed this decade as ‘Ecosystem Restoration 2021–2030’ which will reinforce the existing environmental sustainability agenda of United Nations–Sustainable Development Goals (UN-SDGs) 2030.
The sustainable development of the global ‘Blue Ecosystems’ can play an important role in the environmental restoration efforts focusing on preventing, halting and reversing the degradation of global ecosystems.
Globally the coastal blue eco-system has been greatly damaged and are among the most threatened ecosystems on Earth, with an estimated 340,000 to 980,000 hectares being destroyed each year.
It is estimated that up to 67% and at least 35% and 29% of the global coverage of mangroves tidal marshes and sea grass meadows respectively have been lost.
The continuous environmental degradation of the global water habitats creates obstacles in the attainment of the UN-SDGs 2030.
Pakistan is also facing several threats to its blue economy due to ove rfishing, water pollution from industries such as the ship breaking industry, inadequate waste management systems, and insufficient water conservation measures.
During the past decades, Pakistan coastal ecosystems have been considerably exploited to yield short-term economic dividends resulting in long-term environmental degradation.
Mangrove forests in the Indus Delta, Sindh are the seventh largest arid mangrove ecosystem in the world occupying approx.1,464 sq. km in area.
However, due to unsustainable economic activities the mangrove forests in Pakistan are in a highly degraded state and offer an opportunity for restoration on a massive scale along with carbon mitigation and ecosystem benefits.
According to the World Bank ‘Blue Carbon Rapid Assessment’ report, a mangrove reforestation action can remove approx. 25 million tonnes of carbon dioxide (CO2) by 2050.
The report estimated that the Pakistan’s new plantation projects, if nurtured successfully, would be worth $500million by 2050.
The UNEP and other international organizations have connected the concept of Blue Economy from Green Economy where the principles of Blue Financing are integrated within the broader concept of Green Banking and the UN-SDGs 2030.
Blue Financing is linked with the coastal, estuarine and marine habitats that link social, economic and environmental progress.
The environmental sustainability of the blue economy is vital for the development of a country’s Green Economy.
All around the world, stakeholders have started to realize the importance of the Blue Economy and are working towards the development of sustainable marine ecosystems.
The banking and Insurance industry have a major role to play in financing the transition to a sustainable blue economy, helping to rebuild ocean prosperity and restore ocean biodiversity.
The UNEP-FI has developed the Sustainable Blue Economy Principles that can be adopted by banking industries for the creation of a sustainable Blue Economy.
The IFC is providing Blue Loans for setting up recycling facilities for approximately 50 billion PET (polyethyleneterephthalate) bottles globally.
The Blue Economy can be developed through the issuance of Blue Bonds for investment in projects aimed at restoring, protecting, or maintaining the diversity, productivity, resilience, core functions, value and overall health of marine ecosystems.
The Prime Minister Imran Khan, has also stressed the importance of blue and green financing for the attainment of sustainable development in the country.
The State Bank of Pakistan (SBP) needs to launch such schemes under the umbrella of Green Banking for providing low-interest loans for marine conservation, waste management and various marine eco-system sustainability projects.
An Environmental Risk Management (ERM) framework should also be issued by SBP for developing blue and green financing. of Issuance of blue bonds, a financing instrument that raises capital from global investors for projects that protect ocean ecology and related industries such as fisheries and eco-tourism, should be launched for the development of Pakistan’s blue economy.
Such initiatives, if aligned with sustainable blue economic practices, can play an important role in the development of this sector.
Similarly, green financing schemes should be launched for the sustainable development of eco-friendly coastal tourism to facilitate the attainment of connected UN-SDGs 2030.
Sustainable development of Pakistan’s Blue Economy can be a game changer for economic transition. Currently, the contribution of this sector to the Pakistan economy is approximately 0.4% of the GDP as it employs 500,000 fishermen directly.
Green financing can greatly enhance this sector’s growth and revenue, directly increasing the country’s GDP.
It can create opportunities for Blue Economic investment in projects like Gwadar under Green CPEC initiative or various under developed Islands.
The port city of Gawadar can be developed on green construction principles and developed as a hub for multiple green industries such as eco-hospitality, eco-tourism, green or electric transportation, green supply chain management and other environmentally-friendly industries.
Ecosystem restoration can enlarge the extent of habitats, increase species diversity and restore ecosystem complexity and function over time, as well as support the recovery of individual species populations.
It is time to create a synergistic blend of the blue and green sustainable ideologies and play our role in saving this planet.
—The writer is serving as Chief Manager-Green Banking Officer in Bank AL Habib Ltd.