The oceans are under threat. What it means for investors.

The oceans are under threat.  What it means for investors.

The world’s oceans are under threat, risking trillions of dollars in revenue, warns a new report. But the dire situation is also an opportunity to invest in ocean climate solutions, such as offshore wind energy.

The study, by Citi Global Perspectives and Solutions (GPS), found that $4.3 trillion in revenue could be at risk today due to direct damage to the marine environment from things like fishing and habitat loss. Additionally, $27 trillion in revenue could be indirectly at risk from other ocean stressors, such as pollution and greenhouse gas (GHG) emissions. Pollution, especially plastics, is widely considered harmful to ocean biodiversity and ecosystems.

Ocean health is intrinsically linked to climate change, Ying Qin, global issues analyst at Citi Global Insights and lead author of the report, said in an interview. It’s not a niche theme or topic, it’s very connected to a lot of the emerging sustainability themes and trends, and there’s a lot of opportunities that maybe traditional investors aren’t aware of with regards to the ocean.

The analysis was based on 2021 revenue data from 48,000 public companies across all sectors, not just the maritime industries.

Ocean chemistry is changing, with acidification increasing at an unprecedented rate, Citi said. By the end of this century, the ocean is projected to be 150% more acidic than it is now based on normal emissions scenarios that pose a significant threat to marine life.

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While there are many risks from the threat of sea level rise and coastal habitat destruction to supply chain disruptions and pollution, there are also many opportunities in the ocean economy, the report said, including in emerging oceanic industries. offshore renewable energy and carbon capture and storage, or CCS for short.

Offshore wind capacity has grown steadily over the past decade, rising from 3 Gigawatts (GW) in 2010 to 34 GW in 2020. It is projected to reach 380 GW by 2030 and more than 2,000 GW by 2050. Shell (SHEL) and Equinor (EQNR) all invest in offshore wind.

As for CCS, the report notes that it is virtually impossible to achieve net zero without this technologyBarronCCS, the technology that traps carbon dioxide from industrial processes and permanently sequesters it in underground rock formations, has become a highly publicized response to the world’s need to curb greenhouse gas emissions quickly and curb global warming.

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Citi said one way CCS can be used is to store captured CO2 underground, which could be in deep salt formations, unminable coal beds, or depleted oil and gas fields. Norway is a leader in the CCS space and in 2021 launched a CCS plan dubbed Longships, after the Viking boats. The plan calls for capture, transport and storage under the seabed.

Earlier this month, Exxon Mobil (XOM) announced a deal to capture carbon from a Louisiana plant owned by steel company Nucor

his latest effort to decarbonise heavy industry.

The oceans are the world’s largest ecosystem: they cover 70% of the earth’s surface, are home to 80% of all life and produce 50% of the oxygen we breathe, according to the report. They are also one of the largest carbon sinks in the world, absorbing 30 percent of man-made carbon dioxide and capturing 90 percent of the heat generated by those emissions, Citi said.

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It’s hard to overstate the importance of a healthy ocean to our planet, society and the global economy, the authors said.

A 2015 report by the World Wildlife Fund said the ocean’s combined value is approximately $25 trillion, providing at least $2.5 trillion worth of goods and services each year.

Email Lauren Foster [email protected]

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