![Total official flows (sum of ODA and other official flows) to Caribbean states from 2016 to 2022 (represented in millions of USD, from [10]).](https://www.researchgate.net/profile/Michael-Bennett-62/publication/382830101/figure/tbl1/AS:11431281264776362@1722678206082/Total-official-flows-sum-of-ODA-and-other-official-flows-to-Caribbean-states-from-2016_Q320.jpg)
Access to this full-text is provided by MDPI.
Content available from Fishes
This content is subject to copyright.
Citation: Bennett, M.; March, A.;
Failler, P. Blue Economy Financing
Solutions for the Fisheries and
Aquaculture Sectors of Caribbean
Island States. Fishes 2024,9, 305.
https://doi.org/10.3390/
fishes9080305
Academic Editor: Dimitrios
Moutopoulos
Received: 22 May 2024
Revised: 18 July 2024
Accepted: 23 July 2024
Published: 3 August 2024
Copyright: © 2024 by the authors.
Licensee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and
conditions of the Creative Commons
Attribution (CC BY) license (https://
creativecommons.org/licenses/by/
4.0/).
fishes
Article
Blue Economy Financing Solutions for the Fisheries and
Aquaculture Sectors of Caribbean Island States
Michael Bennett * , Antaya March and Pierre Failler
Centre for Blue Governance, University of Portsmouth, Portsmouth PO1 2UP, UK;
antaya.march@port.ac.uk (A.M.); pierre.failler@port.ac.uk (P.F.)
*Correspondence: mbenntt97@gmail.com
Abstract: This study reviews various financing solutions available for fisheries and aquaculture
development in Caribbean small island developing states (SIDS) and Barbados, Grenada, and St. Vin-
cent and the Grenadines. Previously identified financing needs within the fisheries and aquaculture
sectors have been matched with the most suitable financing mechanisms. However, the use of blue
levies is recommended and applicable in almost every scenario, as they allow these sectors to drive
their own development in financing research and conservation projects to their own benefit. The use
of “blue tokens” with sufficiently low repayment coupons allows development projects to gather
public support for fisheries, thereby increasing the likelihood of the project being successful through
community buy-in. The possibility of natural capital being traded as public equities as “Natural Asset
Companies” provides the opportunity for development projects to fund themselves. The review
concludes that natural capital can be leveraged as the base through which public-private partner-
ships (PPPs) can facilitate optimal delivery of ecosystem services, benefit multiple stakeholders, and
provide numerous development opportunities. An enabling environment for debt and lending with
low-interest loan repayments is also applicable to almost every scenario, as it facilitates access to
capital finance for infrastructure development and the acquisition of increasingly sustainable fishing
equipment. Steps towards generating an enabling environment for financing fisheries and aquacul-
ture in the Caribbean region are also discussed. The establishment of dedicated financing institutions,
PPPs, and sufficient data reporting infrastructure for the fisheries and aquaculture industry are
essential for driving development in these sectors. Likely, the largest limiting factor in financing
Caribbean fisheries and aquaculture industries is a lack of awareness of the range of finance and
financing mechanisms available to stakeholders, as well as an enabling environment for financing
blue Economy sectors. This review is thus intended to aid financing institutions, Blue Economy devel-
opers, and specifically Caribbean fisheries and aquaculture stakeholders and Caribbean governments
by raising awareness of the financing mechanisms available, encourage the incorporation of their use
in the fisheries and aquaculture industries in the Caribbean, and encourage policymakers to create an
enabling environment for financing development in these crucial sectors.
Keywords: Caribbean Blue Economy; fisheries and aquaculture; natural assets; SIDS financing;
sustainable finance
Key Contribution: Review and matching of the most suitable finance and financing solutions to
previously identified development needs for the fisheries and aquaculture sectors of Caribbean Island
States. Their associated implementation and necessary structures for incentivizing their use through
an enabling environment are also discussed.
1. Introduction
In recovering from the restrictions placed on countries due to the COVID-19 pandemic,
the development of the Blue Economy, and by extension, fisheries and aquaculture, has
been heralded as an option for the greatest sustainable development [
1
]. The rise of the
Fishes 2024,9, 305. https://doi.org/10.3390/fishes9080305 https://www.mdpi.com/journal/fishes
Fishes 2024,9, 305 2 of 39
Blue Economy is seen as an avenue through which countries can coordinate and develop
their aquatic resources for sustainable economic, environmental, and social development,
especially small island developing states (SIDS) such as those in the Caribbean [
1
] and in
particular Barbados, St. Vincent and the Grenadines, and Grenada.
Currently, fisheries in Barbados, Grenada, and St. Vincent and the Grenadines land
approximately 6000 tonnes of fish per annum and are not able to satisfy local consumption
needs [
2
]. Fish imports have increased over the last decade due to high demand, with
fish consumption at a high international level in Barbados (around 40 kg/capita/year)
and mid-level in Grenada and St. Vincent and the Grenadines (27 and 20 kg/capita/year
respectively; Ref. [
2
]). Population forecasts show a slight increase in the population of these
3 countries by 2030 and then a decrease to reach their 2015 levels [
2
]. This indicates that
the pressure on fish resources as a result of demand is not likely to increase. Moreover,
the economic and social importance of aquaculture and inland fisheries is currently low in
these countries [
3
]. Marine capture fisheries are of greater importance as they employ a
significant fraction of each country’s labour force (23,500 people in total), which generates
significant national revenue [
4
]. However, the failure to integrate fishery data into economic
value (especially from artisanal, subsistence and small-boat fishing) [
3
] risks a potential
underestimation of the contribution these fisheries sub-sectors have in contributing to the
national Blue Economy.
Coastal and marine habitats provide multiple important ecosystem services which
contribute to the Blue Economy sectors in the three countries [
5
]. In terms of fisheries and
aquaculture in the Caribbean region, marine and coastal habitats (namely mangroves, sea-
grass beds and coral reefs) provide noteworthy functions to capture fisheries, specifically as
breeding grounds, nurseries and feeding grounds that contribute to productivity. Activities
or phenomena that degrade or reduce these habitats (i.e., a reduction in either area or health)
will likely diminish the provisioning of these services, as a healthy environment underpins
the economic activities dependent on it [
5
]. Moreover, a single ecosystem concurrently
contributes to several ecosystem services [
5
], emphasising the potential significance of these
systems to a country’s well-being and national Blue Economy development. The economic
price of replacing these ecosystem functions and services when a degraded ecosystem can
no longer deliver them will be extremely high [
4
]. A rough estimate of the total contribution
of mangroves, coral reefs and seagrass beds is USD 800 million annually for all three of
the countries [
6
]. Moreover, the natural capital (living natural resources such as plants, ani-
mals, and ecosystems) in Grenada, Barbados, and St. Vincent and the Grenadines is being
depleted, owing to anthropogenic drivers, specifically coastal development, overfishing,
introduction of invasive species, pollution, and the impacts of climate change [3,7–9].
Currently, there is insufficient infrastructure in place for the economic-value devel-
opment of the fishery sector, nor for the expansion of the aquaculture sector, particularly
where sector-specific policies are not aligned to the Blue Economy concept nor integrated
into national or regional development planning [
4
]. The Blue Economy in the three case-
study countries is still in the early stages of development [
4
]. Despite the significant natural
resources of Barbados, Grenada, and St. Vincent and the Grenadines, as well as the op-
portunity to implement integrated Blue Economy approaches, the rate of adoption has
been relatively slow. Currently, insufficient infrastructure is in place for the development
of the fisheries and aquaculture sectors of Grenada, Barbados, and St. Vincent and the
Grenadines [
4
]. However, the potential of these sectors is significant, but only if the ap-
propriate development investments are made [
4
]. In addition, the current regulatory and
policy environment is also inadequate for attracting investment and funding for the Blue
Economy (and thus fisheries and aquaculture) [4].
Significant development funding, including official development funding (ODA) and
other official flows (OOF), has been directed to the Caribbean region (Table 1; Ref. [
10
]).
The Caribbean region receives an estimated 8.8% share of the total global ODA funding
(Table 5 p. 20 in [
11
]). However, Grenada, St. Vincent and the Grenadines have received
relatively small amounts of development assistance compared to other countries in the
Fishes 2024,9, 305 3 of 39
Caribbean (Table 1). There is no recorded data available for development finance allo-
cated to Barbados after 2010 [
10
]. Since receiving development funding support, neither
Barbados, Grenada, nor SVG have developed stable, productive national economies nor
sustainable local societies. This may be due to the comparatively limited funding received
by these countries, which highlights an opportunity for significant national development
through increased funding support in these countries. There is no pattern in this data
(Table 1) to suggest that the amount of ODA funding is likely to increase significantly
going forward, further highlighting the need for innovative financing mechanisms to be
developed in these countries. In implementing such mechanisms, these countries could
generate development finance themselves and reduce their reliance on ODA funding sup-
port for national development goals. The development of the Blue Economy of Grenada,
Barbados, and St. Vincent and the Grenadines could generate the synergies needed to
facilitate long-term finance [4].
Table 1. Total official flows (sum of ODA and other official flows) to Caribbean states from 2016 to
2022 (represented in millions of USD, from [10]).
Country 2016 2017 2018 2019 2020 2021 2022
Grenada 6.41 1.09 0.65 1.65 3.42 3.30 2.26
St. Vincent and the
Grenadines (SVG) 2.99 4.30 0.63 10.92 3.75 5.91 9.12
Montserrat 44.13 41.76 39.04 36.36 47.19 37.37 42.74
Haiti 744.43 712.668 635.033 463.29 483.40 434.89 450.21
Caribbean (total) 367.91 1254.48 1221.13 748.764 984.413 1292.16 1104.86
The aquaculture and fisheries sectors of Barbados, St. Vincent and the Grenadines
(SVG), and Grenada are currently underdeveloped yet have the potential to contribute
to each country’s Blue Economy once commercially viable [
3
,
4
]. The financing needs for
Caribbean fisheries and aquaculture sectors have recently been identified by March et al. [
4
],
contextualising the challenges and opportunities in the sector. This paper continues to
build on the work of March et al. [
4
] by discussing solutions and options for public and
private financing for aquaculture and fisheries development in Barbados, Grenada, and St.
Vincent and the Grenadines (as part of the ‘SDG Joint Fund Programme: Harnessing Blue
Economy Finance for SIDS Recovery and Sustainable Development’ consultancy) as this
has not yet been conducted in the available literature, such that the “right investments can
be made”. The paper also discusses steps towards generating an enabling environment for
blue financing in the Caribbean. While the paper focuses on Barbados, St. Vincent and the
Grenadines (SVG), and Grenada, its content is not limited to these countries and may be
applicable to SIDS in the greater Caribbean region as a whole. This review is intended to
aid financing institutions, Blue Economy developers, and specifically Caribbean fisheries
and aquaculture stakeholders, governments, and decision-makers.
2. Approach
This review supplements and directly builds upon this previous research [
4
], which
contextualised the fisheries and aquaculture sectors of Grenada, Barbados, and St. Vincent
and the Grenadines. Together, the current work and March et al. [
4
] constitute the findings
of the ‘SDG Joint Fund Programme: Harnessing Blue Economy Finance for SIDS Recovery
and Sustainable Development’ consultancy. This manuscript’s content is based on a litera-
ture review of relevant documents relating to the financing of fisheries and aquaculture
sectors, as well as stakeholder engagement and consultation through workshop events. The
consultation process involved correspondence and meetings with parties with vested inter-
ests at a national level, comprising state and various sector representatives at the industrial,
semi-industrial, and small-scale levels, who are able to implement blue financing strategy
and identify gaps and needs in the current system (under the ‘SDG Joint Fund Programme:
Harnessing Blue Economy Finance for SIDS Recovery and Sustainable Development’). The
Fishes 2024,9, 305 4 of 39
consultation was necessary for the identification of projects that would be suitable for blue
financing solutions and was conducted from October 2022 to December 2022. A series of
regional workshops were also hosted during this period and included the countries of
Barbados, St. Vincent and the Grenadines, and Grenada, as well as regional development
organisations, specifically the United Nations Environment Programme (UNEP), United
Nations Development Program (UNDP), and the Fisheries and Aquaculture Organisation
(FAO). Participants varied over the course of the workshop series. However, workshops
consisted of a minimum of 20 different stakeholders per workshop. In-person workshops
were run over the course of a workday and involved presentations and Q&A sessions
concerning prepared questionnaires that were developed for different stakeholder groups
(as above).
March et al. [
4
] identified financing needs for the fisheries and aquaculture sectors
of these countries, highlighting the development needs of the national aquaculture and
fisheries sectors, the lack of adequate policy and regulatory frameworks for the sectors
as well as the structuring of the respective national blue economies, and highlights the
specific opportunities for the development of the fisheries and aquaculture sectors of these
countries. The authors state that dedicated blue financing funds and mechanisms are
needed for the development of the currently immature aquaculture sector [
4
], which can
be applied to the fisheries sector as well. The authors identify the need for an enabling
environment for such development and the necessity of contextual analysis to develop
tailored financing options and solutions for the fisheries and aquaculture development
within each respective country’s context [
4
]. The content of this manuscript is in direct
response to the needs and opportunities identified by March et al. [
4
] by proposing the
“how” of mobilising finance for facilitating the development of the fisheries and aquaculture
industries in Grenada, Barbados, and St. Vincent and the Grenadines.
Section 3reviews proposed financing solutions (specifically) available for the common
development needs and priorities for fisheries and aquaculture development (as identified
in [
4
]). The proposed range of financing solutions (non-exhaustive) was synthesised from
the author’s own experience in developing national Blue Economy strategies and from the
advisory documents for other island nations (such as Madagascar in [
12
] and Seychelles
Blue Economy Action Plan, in [
13
], Africa Blue Economy Strategy, in [
14
], among others).
Non-return-seeking finance solutions (like public finance) have been omitted from this
review as they are unlikely to incentivise investment by not providing any benefits for
potential investors who engage with them. Mutual benefits (i.e., benefits for both/multiple
parties involved) form the basis of the mechanisms discussed herein. Furthermore, given
that investor returns are fiscally based, fisheries and aquaculture development are generally
assumed to be reflected by changes in industry/sector productivity (which is easily quantifi-
able as catch/production data) as a result of improved ecosystem health. However, industry
development may also include other indicators, such as increases in job creation or in the
nutritional quality of fish products. The financing solutions are summarised in Table A1:
Summary of various financing mechanisms for use in fisheries and aquaculture sectors of
Caribbean states. (Appendix A), with their optimal use case being contextualised with the
previously identified common financing needs among the case study countries in Table A2:
Linking financing instruments with financing needs in the fisheries and aquaculture sectors
in Barbados, Grenada, and St. Vincent and the Grenadines (Appendix A).
Section 4discusses the development of an enabling financing environment for fisheries
and aquaculture, the features of which are recommended to be developed in each of
the case study countries. Section 5concludes the paper, emphasising key take-aways in
financing fisheries and aquaculture development in Grenada, Barbados, and St. Vincent and
the Grenadines.
Fishes 2024,9, 305 5 of 39
3. Finance vs. Financing Solutions
A framework that supports sustainable long-term financial support for fisheries and
aquaculture development requires the distinction between finance and financing and the
integration of the two in a clear, targeted manner.
Finance is the mobilisation of fiscal resources, but (“throwing money/currency at
the problem”) should not be viewed as a once-off solution to solve the challenges that
face the fisheries and aquaculture industry. For finance to be invested in sustainable
fishing practices, the goal/purpose of new and sustainable fishing techniques needs to be
communicated to current and prospective fisheries stakeholders, as well as the legitimacy
of sustainable management practices [
15
] to increase investor confidence and buy-in. The
legitimacy of sustainable management practices and fishing methods can be communicated
by providing evidence of widespread consensus (regional/global or among the scientific
community) as to the practices used, a historical track record of mutual benefit (between
investors and the industry), and the presentation of reliable data that represent the impact of
the sustainable methods in question by reliable indicators in the relevant industry. Examples
can include the amount of national public finance that is allocated to the development of the
national fisheries and aquaculture sectors, ODA funding, and development project funding
for fisheries and aquaculture projects [
15
]. Public authorities are encouraged to support the
transition of current fishing mechanisms to more sustainable practices, as well as promote
an environment which upholds and maintains the regulations and development of fisheries
and aquaculture. Much of the funding that is available to support sustainable (fisheries and
aquaculture) development is from grants for time-limited projects, which can inhibit the
momentum of innovation [
15
]. A further potential disadvantage of short-term funding is
that the experience and expertise built up in short-term project teams are not retained, and
thus, the stakeholder relationships that build trust between government bodies and public
sector officials at the termination of the project [
15
,
16
]. For these reasons, it is unlikely
that finance alone will be able to incentivise consistent development in aquaculture and
fisheries and identify the need for long-term financing structures and frameworks [15,16].
Financing includes the fiscal mechanisms or arrangements that facilitate returns on
investment (whereas finance itself does not inherently seek any returns [
15
,
16
]. These
include debt and equity instruments, insurance products, securities, derivatives, and others.
These mechanisms encourage the maintenance and development of whatever initiatives
they are invested in, which will consistently produce a return on investment, making them
more suited for long-term sustainable development projects.
The consistent supply of seafood and the concurrent conservation of marine ecosystems
will require financing from both public and private fisheries and aquaculture stakeholders.
The conservation of natural ecosystems and exploitation of marine capital can be both rev-
enue sources and costs, and they are in need of financing [
15
,
16
]. Capture fisheries and
aquaculture (as well as other terrestrial-based industries) exert pressure/strain on marine
ecosystems. The aim is thus to create financing mechanisms and frameworks that facilitate
industry initiatives/operations to limit negative ecosystem impacts and promote environmen-
tal sustainability. The protection of ecosystems provides critical services (such as supplying
safe nursery environments for juvenile fish) for the production of seafood for a country’s
people, even if conservation and maintenance costs are likely to be greater than the revenue
produced. This is particularly important for Caribbean countries as the region’s economy is
largely centred around tourism and ecotourism, which is reliant on inherent natural capital.
Prioritising the funding and financing of natural assets of Barbados, Grenada, and St. Vincent
and the Grenadines not only benefits the fisheries and aquaculture sectors but also synergises
with the tourism sector and the development thereof.
3.1. Fiscal Policy for Fisheries and Aquaculture Development
Fiscal policy covers state spending and the state’s generation of revenues. State
governments also have multiple sources of revenue: taxation, fees (from government
authorisation documents like licences), state asset ownership, state-owned enterprises
Fishes 2024,9, 305 6 of 39
(SOEs), and relations of debt and credit [
17
]. Budgetary governance is also classified as
fiscal policy and deals with the administrative and institutional systems that control the
fiscal flows of the state [18].
Table 2summarises different financing structures that may be applicable to the de-
velopment of Caribbean fisheries and aquaculture. These can be applied to the relevant
environments and ecosystems that are aligned with the interests of aquaculture and fish-
eries development. State-owned enterprises with environmental objectives, state-mandated
tourist fees and revenues generated, and leases and licences are all (directly or indirectly)
part of environmental fiscal policies. However, different parts of public fiscal policy can
be revenue generators and liabilities at different times and at different levels of the or-
ganisation. For example, state-owned enterprises with positive profits generate revenue
for governments, but they can also be a liability due to their indebtedness. The specific
application of fiscal policy thus requires an in-depth understanding of the relevant industry
(fisheries and aquaculture) for optimal use as a development mechanism, including gov-
ernment support of lending activities that promote sustainable development or minimise
environmental harm.
Table 2. Government financing structures that are applicable to the development of Caribbean
fisheries and aquaculture.
Type of Arrangement Description
Environmental taxes
An environmental tax is meant to target activities that cause environmental
degradation or pollution, but this does not imply that the tax has a proven
effect in terms of minimising environmentally degrading or polluting
activities. Rather, the minimum definition of an environmental tax is that it
increases the costs of pollution activities [19]. Nonetheless, the actual
application of an environmental tax is likely to have the effect of incentivising
some activities whilst disincentivizing others.
Leases, licences and fees
Whereas a tax is compulsory, a lease, licence or fee can be seen as a form of
exchange between a public authority and a (legal) person, which grants the
latter a certain right or privilege. Another difference between this category of
public fiscal revenues and taxes is that these leases, licences and fees remain
stable regardless of the incomes that the payer may generate as a result.
State-owned enterprises (SOEs)
SOEs are rarely thought of as part of fiscal policies. Nonetheless, they are and
many of the types of companies that have historically been state-owned
around the world have some clear environmental impacts. Public utilities
companies such as water companies and energy companies quite explicitly
have an environmental aspect since they usually have environmental quality
or resource efficiency as key objectives. Other types of SOEs, like
transportation companies, may increasingly incorporate environmental
objectives. SOEs can be run with a focus on generating profits, but they can
also seek to strategically increase public goods and services through their
operations.
SOEs can be a source of revenue when they generate profits while their
inventory and equipment can be seen as capital goods. Meanwhile, SOEs can
also hold liabilities in the form of debt.
Fishes 2024,9, 305 7 of 39
Table 2. Cont.
Type of Arrangement Description
Debt and lending
Debt can be an income for public entities as well as a cost and liability.
Lending from development banks under national control, lending from
sovereign wealth funds and debt in the form of deferred taxes (with potential
interest added) are examples of the state as creditor and debt as a source of
public incomes. By contrast, sovereign debt is a continuous source of public
expenditures. Lending practices, both when the state is the creditor and
debtor, can be explicitly targeted towards the objectives of sustainable
aquaculture and fisheries development. (see Section 3.3)
Public finance support (government subsidies)
Public finance such as grant funding or philanthropic contributions (while not
directly a financing mechanism as previously defined) can be used as a
financing mechanism to garner private investment. This can be performed in
the form of government subsidies, where public finance is directed towards
development mechanisms or initiatives that also require further private
funding to be implemented. The total cost of the fiscal contribution from the
private sector is lowered, thus incentivising private investment in an industry
(fisheries and aquaculture).
This mechanism can thus facilitate affordability of industry (aquaculture and
fisheries) development for the private sector.
Blue Levies and Stakeholder Taxation
Several countries impose levies that are targeted at environmental protection, usually
in the form of environment or tourism enhancement levies. Similarly, this kind of mech-
anism can be used to enhance the fisheries and aquaculture industries in various ways,
such as environmental protection, MPA management, and infrastructure development.
These levies are usually applied in different ways, at different rates and at different levels
of organisation, like on importation, consumption, accommodation, service, or travel. For
example, the British Virgin Islands (a known SIDS country) imposed an Environmental
and Tourism Levy of US$10 to be paid on arrival at all ports of entry [
15
]. The tourism,
hospitality, cruise and charter, extraction, and ports and ship-building industries could
be potential targets from which the proceeds of blue levies could be directed to support
fisheries and aquaculture in Barbados, Grenada, St. Vincent and the Grenadines.
Environmental taxes (or levies) could be applied to organisations that rely on natural
resources on which fisheries and aquaculture industries are reliant as well and are known to
negatively affect those environments. However, the degree to which this occurred may not
necessarily have been quantified [
20
]. The fisheries industry is known to pollute the marine
environment, such as due to the use of old and outdated equipment that breaks and is lost
at sea [
21
–
23
] and thus should not be exempt from this kind of tax (they could also be taxed
for unacceptable bycatch of non-targeted species). The proceeds from these taxes could
then be used to reverse the degradation and further improve the environment or intensify
the ecosystem service these areas provide to fisheries [
20
]. Similarly, an organisation can be
incentivised to proactively develop these environments of importance and, in exchange,
receive specific tax exemptions, thereby fostering an enabling environment of coastal
systems protection, which would ultimately benefit the fisheries and aquaculture sector.
Potential industries that can be targeted are tourism, terrestrial agriculture, fisheries and
aquaculture, and maritime transport. A regional environmental tax could be established
to support fishing grounds shared by multiple states or multiple sectors, ensuring that no
one country or industry is more negatively affected by another (similar to the idea of the
“tragedy of the commons” with many actors depleting unregulated finite resources [
24
]).
This would require transparency and control over the number of vessels from each country
allowed to access such a particular fishing ground. Various mechanisms for managing and
regulating shared resources have been discussed elsewhere [25].
Environmental taxes and fees were, on average, 1.19% of the Latin American and
Caribbean (LAC region) GDP in 2019 [
19
]. This level was slightly lower for Barbados, which
Fishes 2024,9, 305 8 of 39
only generated taxes equivalent to 0.81% of its GDP ([
19
]; numbers are not included for
Grenada and St. Vincent and the Grenadines). Caribbean environmental taxes, as a share
of GDP, were roughly equal to the entire LAC average and were greater than that of South
America and below Central American and Mexican tax levels [
19
]. There is an opportunity
for increased environmental taxes and fees in countries like Barbados for development
revenue generation, where existing taxes and fees fall below regional averages or when the
current taxes as a proportion of national GDP are generally limited (for example, less than
3% of national GDP).
3.2. Compensation Mechanisms for Natural Capital
Compensation can be classified as a type of fee payable for the renting of a resource
or for degrading a natural asset or ecosystem (but this needs to be quantified). The
design of compensation mechanisms can vary immensely. These mechanisms can be
designed to directly benefit the environments that underpin extractive industries, such
as capture fisheries and unsustainable aquaculture, particularly payment for ecosystem
services (PES schemes) and biodiversity offsetting. By contrast, where compensation is
linked to environmental outcomes, levies, fees, or licences are not necessarily linked to
environmental outcomes, but their proceeds may still be directed to benefit fisheries and
aquaculture (non-environmental benefits).
Payment for ecosystem services (PES) schemes are known by five characteristics [
26
]:
“(1) a voluntary transaction where (2) a well-defined ecosystem service (ES, or a land-use
likely to secure that service) (3) is being ‘bought’ by a (minimum one) ES buyer (4) from
a (minimum one) ES provider (5) if and only if the ES provider secures ES provision
(conditionality).” PES schemes thus entail the voluntary buying and selling of ecosystem
services based on the seller protecting an ecosystem.
Although PES implementation mechanisms for marine sustainability have been limited
in the Caribbean region, they can be designed to benefit the ecosystems that provide the
underlying support for fisheries in the Caribbean region. Most historic PES schemes
are drawn from the forestry industry and indicate that PES can work as a subsidy [
27
],
encouraging resource users to implement environmentally sound practices [
28
]. This can
take the form of fisheries stakeholders using fishing equipment that is less damaging to
the environment (such as moving to trawling as opposed to dredging). Despite most PES
programmes being thought of as a market-based approach, most programmes are based on
compliance with government regulations [
29
]. However, these subsidy-PES programmes
are only as good as the (government) authorities that implement them since PES requires
enforcement of regulations. Subsidy-based PES schemes are potentially more difficult for
cash-strapped governments to maintain.
Carbon sequestration, biodiversity protection, watershed protection and ecosystem
beauty are central types of ecosystem services [
26
], and these benefit several industries
beyond just aquaculture and fisheries (replenishing fish stocks and providing safe nursery
grounds). Biodiversity offsetting, carbon and other nutrient trading credits, as well as
listing natural environments or protected areas on the stock exchange, are other forms of
PES that are able to finance the natural environments that support and underpin fisheries
and aquaculture. Table 3summarises a few examples of PES for marine environments
that support fisheries and aquaculture (but more detailed information is presented in
Trends [30]).
As an example, the CARIPES project (started in 2011) aims to facilitate the active
participation of coastal fishermen in the conservation and sustainable use of available
marine resources in Caribbean marine protected areas (MPAs). The project further aims
to leverage the use of local fishermen’s knowledge of the coastal and marine biodiversity
within pre-established MPAs, facilitate resilience development among marine ecosystems
towards global climate impacts, and develop appropriate PES schemes in the Caribbean
through the use of such local knowledge. The project has been active in the islands of
Grenada, St Eustatius, and Martinique and further endeavours to generate avenues for
Fishes 2024,9, 305 9 of 39
the development of compensation mechanisms (payments for ecosystem services) while
supporting fishers reaping the associated economic benefits of such protected areas. Such a
project could be replicated on other islands of concern, such as Barbados and St. Vincent
and the Grenadines.
Table 3. Examples of payment for ecosystem services for marine environments (based on
Trends [30]).
PES Type Elaboration Examples
Regulated markets
Cap and trade markets require
resource users to hold a purchasable
right to the resource they use. It sets a
limit to resource use and allocates a
tradable share of the resource to an
asset owner.
A licence is not necessarily tradable
and the issuer of a licence does not
necessarily set a limit to damages to
an ecosystem, but it still constitutes a
transaction based on compliance.
Fishing can in different ways be governed through
mechanisms that can reasonably be seen as PES. On
the most simple level, recreational fishers are in
some jurisdictions required to pay for fees or hold
annually paid licences.
Another example are individual transferable quotas
(ITQs) that are used to allocate annual fishing rights
within an exclusive economic zone (like quota’s per
fishing ground). ITQs can then be traded and leased
amongst fishers. By using the regulated ITQ
marketplace, a sustainable fishery and ecosystem
services market can be achieved [31], through the
trading of rights to exploit the fish provisioning
service of an ecosystem within identified sustainable
harvesting limits. The rights to a proportion of the
total fish population (fishing quota) has to be
identified beforehand and the total harvestable
quota must be within the sustainable harvesting
limits of the ecosystem, for this mechanism to be
effective.
Government mandated fees related to ecosystem
services can likewise be seen as a form of PES based
on compliance. This can for example be tourist fees
associated with entering (marine) protected areas,
that in this case are of importance to fisheries and
aquaculture.
Voluntary transactions
Voluntary PES transactions can
involve private and public sector
actors alike. Governments, private
individuals, NGOs and development
organisations can all pay private
actors to change practices or avoid
harm to ecosystems.
The Marine Legacy Fund of Tanzania is an example
of voluntary PES. It is a revolving fund whose
original sources of revenue as well as its spending
can be seen as forms of PES. It gains revenue from
tourist fees, fossil fuel taxation and fishing licences.
However, the fund uses this revenue to finance the
protection of coastal habitats and important marine
sectors. Whereas its sources of revenue are based on
compliance, its spending can be seen as voluntary
PES. This kind of structure can be applied to
countries individually, or regionally, due to shared
fish stocks (or other shared resource use).
Stakeholders (public or private) that make use of the same natural environments
on which fisheries and aquaculture rely (eco-tourism, for example) can be mandated to
contribute to its optimal natural functioning, maximising the ecosystem services they
provide to the aquaculture and fisheries industries, which would also benefit other sectors
such as the tourism industry.
3.2.1. Biodiversity Offsetting
Biodiversity offsetting is a form of compensation that is based on counterbalancing
any lost biodiversity from a development project by investing in equivalent biodiversity
somewhere else, thus aiming to maintain biodiversity despite economic development (or
Fishes 2024,9, 305 10 of 39
environmentally harmful extraction processes). It is relevant to consider biodiversity offset-
ting here as it has previously been used to preserve marine biodiversity and wetlands [
32
].
The ideal application of biodiversity offsetting is the application of the “mitigation hi-
erarchy” when considering the predicted negative biodiversity impacts of development
initiatives [
33
,
34
]. If developers follow the mitigation hierarchy (avoidance—minimisation—
restoration—offsets), they should try to avoid negative impacts in the first place, secondly
consider the minimising of impacts, thereafter restoring any negative impacts stemming
from the development, and finally using biodiversity offsets to compensate for the un-
avoidable biodiversity loss stemming from development projects [
33
]. Thus, biodiversity
offsetting is only meant to counter biodiversity loss, which cannot be prevented [34].
In the case of other extractive industries, a portion of revenue earmarked for biodiver-
sity offsetting could be invested into supporting the fishing grounds that a state or region
relies on through examples such as investing in sustainable fishing programmes, the acqui-
sition of sustainable fishing equipment, financing the prevention of illegal, unreported, and
unregulated (IUU) fishing. The associated biodiversity loss that is found with dredging,
trawling, or new aquaculture infrastructure developments can be offset by investing a
portion of the proceeds into less damaging subsectors, such as domestic handline fisheries,
sustenance fisheries or developing restocking programs that use the available nursery habi-
tats already present on Barbados Grenada, or St. Vincent and the Grenadines (such as the
development of mangroves and seagrasses). Furthermore, different levels of compensation
can be mandated due to the perceived value of the affected (extracted or displaced) species
or environment in question.
However, determining an equivalent unit of biodiversity is extremely difficult, relies
on simplifying conventions, and includes several moments of uncertainty. One issue, for
example, is whether to consider biological diversity at a species level or at a system level.
In other words, is an equivalent sum of biodiversity required or is an equivalent ecosystem
required? To even approximate the latter is certainly difficult, but even if offsetting is
limited to a species level, another question that emerges is whether compensation should
be of the exact same species or if another species of equal importance can be considered
for compensation (for an in-depth analysis of difficulties pertaining to biodiversity finance,
see [
35
]). For example, for every shark that is caught and succumbs to bycatch, should
50 individuals of its primary prey species be required as compensation for (restocked) or the
protection of another shark? It is likely that biodiversity offsetting is further complicated
by the extraction of mid-trophic level species, as the effects on trophic levels above and
below it could destabilise a functioning ecosystem (in a multi-directional “trophic cascade”,
despite being defined as top-down interactions [
36
]), and potentially risk the collapse of an
entire fisheries sub-sector. For this reason, it is advisable that ecosystems as functioning
units be considered [
37
,
38
]: where two ecosystems are available as fishing grounds, one
should be protected and demarcated as an MPA, whereas the other may be afforded less
regulation. This would be considered a form of biodiversity offsetting if the productivity
of each system were initially similar (this further emphasises the need for accurate and
detailed ecosystem evaluation).
Accurate offsetting requires establishing baseline levels of biodiversity at the sites
that provide offsets. A significant risk is that baselines may be set too low and thus give
developers an unwarranted amount of credits. If an area is invested in due to offsetting
(an MPA, for example), the response of the investment needs to be equitable to the initial
biodiversity loss. This requires sufficient long-term data on that area to assess historical
performance or attributes, and where this is not available, data would first have to be
collected. This limits the potential number of sites for immediate biodiversity offsetting, as
only sites with historical data would be able to provide accurate indications of develop-
mental productivity (historical fisheries catch data may be particularly useful). However,
cost-efficiency for environmental changes in biodiversity also changes [
39
]. Thus, these
become economic issues and require funding and financing themselves. Given that the
extent of habitats that provide key ecosystem services (such as mangroves) is low and
Fishes 2024,9, 305 11 of 39
decreasing in Barbados, Grenada, and SVG [
6
,
40
–
42
], extensive monitoring is necessary
to establish what the historical coverage of such a valuable habitat was. This enables an
appropriate response elsewhere, like conserving and fostering the development of the coral
reefs in areas where they are relatively underdeveloped (as in Barbados and Grenada).
The difficulties of appropriately managing a biodiversity offsetting programme imply
that taxation and fees are better as a form of environmental compensation and compensation
for a developer’s renting of the ocean as a public resource. The fee could be applied as
part of licensing programmes and could secure an appropriate minimum public revenue.
One of the potential benefits of biodiversity offsetting is that funding from development
projects becomes earmarked specifically for biodiversity purposes. The challenge for
regular fees and taxation is to ensure the political will and administrative capacity to
ensure an appropriate share of the public revenue is directed towards the improvement
and protection of ecosystems that support fisheries and aquaculture.
3.2.2. Carbon and Other Nutrient Trading Credits
Coastal environments are likely to offer nutrient capture and sequestration services
(such as blue carbon) in addition to the benefits they provide to fisheries and aquaculture [
5
].
These services can be capitalised upon and leveraged as pollutant offsets (on international
and domestic markets) from which revenue can be generated to further support the pro-
tection, optimisation of services, and maintenance of the environments themselves or be
directed towards development in other areas of fisheries and aquaculture.
Blue Carbon entails the use of coastal and marine ecosystems as vehicles for carbon
capture and sequestration. Mangrove forests, salt marshes, algae, wetlands and even
whales contribute to carbon storage in coastal and marine environments [
43
,
44
]. Blue car-
bon, thus, refers to processes where biological organisms permanently store carbon as long
as the organism (tissues) remains intact and alive. Beyond this broad conceptualisation,
blue carbon is usually used to refer to the active promotion of blue carbon processes in
order to generate carbon credits through carbon sequestration for use in international cli-
mate commitments or carbon markets. Since the majority of carbon sequestration happens
in coastal and marine areas, their applicability to SIDS states and their support for the
sustainable development of SIDS states are considerable. Many of the ecosystems that pro-
mote blue carbon (such as mangroves) also provide other co-benefits like nursery/feeding
grounds for fish and wave attenuation, which contribute to the reliance and longevity
of infrastructure along SIDS’ coastlines. While historically, there have not been many
examples of development projects tapping into the nutrient credit markets in the Caribbean
region, the conservation and development of the mangrove habitats on the islands of Bar-
bados, Grenada, and St. Vincent and the Grenadines present an ideal opportunity to access
nutrient trading markets (such as the carbon credit market) which can further finance the
development of these key ecosystems, thereby stimulating the performance of the fisheries
and aquaculture sectors.
Applicable to other nutrient offset projects, a central concern with any type of carbon
mitigation programme is that it is inherently reliant on carbon accounting methodologies
and frameworks [
45
], irrespective of whether these are used for national development
contributions (NDCs), voluntary markets or compliance markets. Many blue carbon
projects face data limitations (due to determining the appropriate and market-accepted
measurement techniques of these ecosystems) and may limit the amount of attention and
funding these projects are able to garner to either fund their own development or the
industries the ecosystems underpin (fisheries and aquaculture). The implication is that
priority is not inherently given to the carbon sequestration projects that lead to the optimal
carbon outcomes, but rather that prospective investments may be preferentially directed to
the projects where the extent of carbon capture and sequestration impact can most easily
be traced and tracked, at the lowest costs.
The market uptake for carbon credits and carbon offsets has been somewhat limited,
one reason being the high demand in compliance markets. Market conditions for carbon
Fishes 2024,9, 305 12 of 39
credit prices have continuously been changing. The price of carbon in the EU emissions
trading system (ETS) has been increasing since the end of November 2020, at around
22 Euros per tonne of carbon dioxide (CO
2
). Prices peaked at around 96 Euros in February
2022 but fell later in the same year [
46
]. Whereas the carbon market fluctuates somewhat
regularly, other nutrient credit markets may be more stable. Other elements, such as
nitrogen, may be charged and capitalised on in a similar manner as carbon, thus potentially
increasing the value of any one ecosystem. By harnessing the multiple ecosystem services
it provides on trading markets, especially considering the effective bioremediation services
that ecosystems like mangroves and seaweeds provide in reducing the negative effects
associated with complex pollutants or fertiliser runoff (i.e., addressing multiple pollutants
concurrently). However, given that nutrient offsetting (such as carbon offsetting) is still a
nascent industry, a stable market price for specific nutrient offset credits would allow for
the necessary confidence and risk assessment in employing this type of funding scheme for
revenue generation, as well as increasing investor confidence.
Any type of blue carbon project is likely to involve either NDCs or the voluntary
carbon market. Towards the end of 2021, carbon prices were rising on voluntary carbon
offsetting markets, which several stakeholders expected to continue in 2022 [
47
]. Major
companies are making net zero pledges and increasing their voluntary commitments to
mitigating climate change privately. This opens up the possibility for the ecosystems of
Caribbean countries to capitalise on the voluntary blue carbon market. An increase in the
demand for blue carbon projects is thus expected. However, a concern has been the lack
of quality, verified projects and carbon offsetting. The classification of an environment
that provides such carbon removal and sequestration services (such as declaring a marine
environment as an MPA) may increase the perceived reliability with which the offsetting
can be expected to be available year on year (if that environment were involved in a carbon
sequestration and offsetting programme). Such protected status further facilitates buyer
confidence that the service will be improved upon in future and that nutrient credits may
become cheaper in the future (similar to developing more sophisticated computer product
offerings year on year). Declaring where proceeds are re-invested in a transparent manner
may further encourage buy-in from offset buyers through contributions to development
in other areas, such as NDCs or fisheries and aquaculture development. In addition,
this may incentivise continued participation of stakeholders from such industries in blue
carbon projects, as it would benefit their own sector as well (i.e., added benefits to carbon
offset investing or investing in blue carbon development projects if the habitat in question
also provides benefits such as fisheries stimulation). However, voluntary offsetting is an
additional expense relative to the operations of the companies buying the offsetting, which
limits their incentive to invest—if faced with an economic slump (or the risk of one), there is
a chance that companies will discontinue their voluntary offsetting arrangement or switch
to cheaper, lower quality credits.
When considering nutrient offsets (like blue carbon), it is essential that existing local
practices and livelihoods (social development) are taken into account. Research on carbon
projects shows that local community involvement facilitates project success, as compared
to if it were not present [
48
]. This includes free, prior and informed consent (FPIC), but
successful project implementation cannot be limited to a formal exercise of securing FPIC.
It needs broad support from a community that can see themselves in the project, as well
as the potential for livelihood development. For example, blue carbon projects that seek to
preserve seagrasses may collaborate with fishers that usually pass through marine areas with
seagrasses. Collaboration with local fishermen and women could be more cost-effective and
provide additional income streams if integrated into a seagrass monitoring scheme.
3.2.3. Natural Capital as Publicly Traded Equities
The Intrinsic Exchange Group (IEG) has collaborated with the New York Stock Ex-
change (NYSE) to create a new asset class: Natural Asset Companies (NACs). The purpose
of such NACs is to maximise the performance or delivery of the natural asset they are
Fishes 2024,9, 305 13 of 39
associated with, either through ecosystem services provisioning, the use of the asset for
restorative or regenerative agriculture (including aquaculture), or hybrid cases. NACs have
the explicit mandate to actively manage, maintain, restore and grow the value of the natural
capital they are associated with. A NAC may also use payment-for-ecosystem services
mechanisms such as producing carbon credits, other nutrient credits, and biodiversity
credits (i.e., verified ecosystem services delivery) in which the NAC, as a company, trades.
The NAC itself is listed on the stock markets and, based on its performance, may attract
investment support.
Prospective NACs are evaluated by the IEG and then listed for trading on world plat-
forms, enabling the conversion of natural assets (such as publicly owned land) into revenue.
This process has the potential to facilitate environmental, social, and industrial benefits at
scale, contributing towards a shift to a more sustainable and circular economy [
49
]. One
such example is in Costa Rica, where IEG is collaborating with the local government to
explore the creation of a NAC to value and finance conservation and social priorities and
meet national and global commitments (e.g., High Ambition Coalition 30
×
30 goal). The
coral reefs that support the livelihoods of many locals in Barbados, Grenada, and partic-
ularly St. Vincent and the Grenadines (having the largest expanse of coral reefs among
the three) can be registered under public-private NACs (between governments and the
national population) to generate revenue for the development and conservation of these
valuable ecosystems from the stock markets.
However, the evaluation criteria and indicators of performance used to assess the
natural assets in question need to be standardised and recognised (i.e., agreed upon). This
constitutes a major hurdle as discrete natural assets (for example, in different countries)
face different stressors (whether ecological, climate, social, or political), which determine
their functioning and performance. Thus, establishing an optimal functioning baseline
of performance becomes inherently difficult and is subjective to what historical data is
available for each region, as well as to whoever is performing the evaluation.
Nonetheless, the sustainable management of the environmental areas that underpin
fisheries and aquaculture industries (such as fishing grounds and MPAs or other natural
assets) such that the maximum amount/number of benefits are realised is thus incen-
tivised by potentially global markets through the use of NACs. This mechanism presents
a catalysing mechanism for fisheries and aquaculture development while concurrently
incentivising sustainable and social development as well.
3.3. Debt for Nature Swaps and Debt Buy-Backs
A debt-for-nature swap (also known as a “debt buy-back”) can be defined as a scenario
where a creditor forgives debt owed to them in exchange for a commitment by the debtor
to use the outstanding service payments for a particular investment [
50
]. This can be
explained differently as a creditor agreeing to sell a portion of the debtor’s debt for an
agreed purpose under agreed conditions. The redemption of debt can thus be conducted at
a discount. The service repayments can be invested into whatever project or initiative is
agreeable to both parties in the transaction, such as for fisheries and aquaculture industries
or environmental and social-based projects. Furthermore, third parties can facilitate such
transactions by providing a loan or guarantee to the debtor. These can be used to finance
marine-related development, including fisheries and aquaculture, as well as reduce debt
repayments. Debt swaps can present an enticing opportunity for the governments of
(SIDS) countries hoping to simultaneously facilitate development and reduce the country’s
historical debt.
Historically, debt swaps have not been considered for the protection of marine envi-
ronments (MPAs). However, this changed with the Seychelles Debt Swap of 2015, which
was the most successful debt-for-nature swap for a SIDS [
51
]. This deal, facilitated by The
Nature Conservancy (TNC), converted US $21.6 million of sovereign Seychelles debt to the
Paris Club of Creditors. The issuance was made possible due to World Bank expertise and
guarantee, a Global Environment Fund (GEF) non-instrument grant to reduce the coupon
Fishes 2024,9, 305 14 of 39
rate, and technical expertise from the then Prince of Wales International Sustainability Unit.
The bond was purchased by three impact investors, and the blue bond proceeds led to
the establishment of an environmental trust fund—Seychelles Conservation and Climate
Adaptation Trust (SeyCCAT) and committed the Republic of Seychelles to protect 30% of
its EEZ as marine-protected areas (MPAs). The many ecosystem services and industry
opportunities that MPAs can provide to a country’s people and economy indicate that
deals such as these have the potential to galvanise a country’s future development in a
sustainable way. Given the similar context that many SIDS countries share with one another,
such debt swap structures can be applied to Barbados, Grenada and SVG, addressing both
the historical national debt and nature conservation challenges they face simultaneously.
Many Caribbean countries (Haiti, Jamaica, and others) have been involved with debt
swaps since the 1990s, but these have rarely contributed to a significant reduction of debt in
the region [
52
]. For example, in 2012, Antigua and Barbuda negotiated a ‘debt for climate
adaptation with coastal zone management swap’ with Brazil for USD 18 million, but it did
not come to fruition due to delays with the Brazilian Parliament [52].
Challenges that arise with the mobilisation of debt swaps include the composition of
creditors (where the heterogeneous composition of sovereign credit transactions can make it
difficult to make enough actors agree on the terms and conditions of debt swaps). As is often
symptomatic of debt-swap deals [
53
], another challenge is the size of the deal. As a country
develops and creditors become more confident of a country’s ability to repay their loans,
the creditors become less willing to sell the loans at a discount, debt being swapped at lower
valuations and thus resulting in smaller deals. However, there are exceptions: a recent
Belize debt-for-nature swap raised US $364 million to buy back US $553 million of debt by
the Belize government (at a discounted rate). The debt conversion was made possible by a
loan and guarantees from TNC, Credit Suisse, and the Inter-American Development Bank
(IDB). The scale of the transaction benefited from high discounts on Belizean debt and new
structuring practices [54].
Political controversies may also bring the legitimacy of debt swap deals into question
and thus cast doubts on the legitimacy of any resulting development. Political controversies
ascribed to debt swaps can be seen as a question of whether the high indebtedness of SIDS
is legitimate in the first place or if a debt swap is a solution to immediate economic and
environmental problems. If, on the one hand, existing debt levels are taken for granted, a debt
swap may be seen as a pragmatic tool to achieve different policy objectives. By contrast, if
the original debt is essentially considered politically illegitimate, actors may see a debt swap
as equally illegitimate. The de facto loss of sovereignty that is associated with government
debt swap may be another point of contention. When the debt swap is used to create an
environmental trust fund, a way to ensure that the government is at arm’s length of the trust is
to not have a government majority on the board [
55
]. However, this makes it more likely that
a deal is going to be perceived as illegitimate [
55
]. A debt swap can best be seen as a means of
establishing and incentivising policy consistency on the part of the government. Whether or
not this should be thought of as a de facto loss of sovereignty is a political question. On the
one hand, it is a commitment that the government voluntarily enters into. On the other hand,
it makes it difficult for a government to change course, which can be beneficial as different
government offices come and go during elections/regime changes.
The efficacy of debt swaps as a solution for reducing national historical debt is controver-
sial and debated, as debt conversions do not necessarily lead to long-term debt sustainability
(see [
56
]). Perry et al. [
57
] provide further context for the source of historical debt among
Caribbean island states, as well as comment on the socio-cultural and political implications of
debt swaps (and other financing mechanisms herein discussed). However, the author does not
provide pragmatic alternatives to overcoming historical debt beyond demanding recompense
for the injustice of a colonised past. Long-term sustainable debt reduction through debt swaps
would more likely arise from investing in long-term projects which have the potential to
facilitate a country’s future economic development in a sustainable way, as well as enhancing
the country’s future resilience to the phenomena that create the debt in the first place (such as
Fishes 2024,9, 305 15 of 39
resilience to destructive weather). One such example is the stimulation of the fisheries and
aquaculture industries through the development of nature-based solutions, such as MPAs,
which protect ecosystems with multiple benefits (such as wave damping, blue carbon, and
providing fish nursery and feeding grounds). Such solutions that involve local communities
are also more likely to last as local buy-in in the initiative/project would more likely maintain
any development (or identify alternative funding and financing) even if debt repayments
were late or discontinued. However, this would require informed communities to have access
to possible financing mechanisms, potentially through a local financing unit. Despite the
challenges associated with debt swaps, they have the potential to resolve some of the historical
debt of some Caribbean SIDS as well as other national development needs but are likely
not the only solution to this challenge. The use of debt swaps, together with other financial
mechanisms and arrangements, likely offers the greatest possibility of success in resolving
national historical debt.
3.4. Blue Bonds and Other Sovereign Bonds
Blue bonds have been promoted as a means of financing Blue Economy developments
amidst the fiscal constraints that SIDS are facing. Similarly, blue bonds can be used to finance
the development of fisheries and aquaculture. Blue bonds, like other bonds, are tradable fixed
securities issued by an authority to raise funds on global markets and increase the issuer’s
debt. The World Bank defines blue bonds as “a debt instrument issued by governments,
development banks or others to raise capital from impact investors to finance marine and
ocean-based projects that have positive environmental, economic and climate benefits” [
58
].
Issuances of blue bonds are conducted based on a per-case basis and case-specific environ-
mental and economic returns, but generally the criteria for bonds to be considered “blue”
require that the investment be used for oceanic or marine resource development.
Barbados is among some of the first countries to partner with The Nature Conser-
vancy (TNC) on a Blue Bonds project after Seychelles. A novel co-guarantee structure
with a $50 million guarantee from TNC, alongside a $100 million guarantee from the
Inter-American Development Bank (IDB), was used to facilitate a $150 million debt conver-
sion that will facilitate the expansion of Barbados’ marine protected areas from virtually
zero to approximately 30% and improve management for all marine waters within its
jurisdiction [
59
]. This project is expected to free up approximately $50 million to support
environmental and sustainable development actions in Barbados over the next 15 years,
making both the country and its people more resilient in the context of climate change.
Barbados worked with Credit Suisse, who acted as Global Lead Arranger, to raise approxi-
mately $150 million through a dual currency term loan facility (with CIBC FirstCaribbean
as Domestic Lead Arranger). This Blue Loan funded the buyback of a portion of Barbados’
existing debt and was partially funded through the implementation of Blue Bonds in capital
markets. The new financing featured a lower interest rate than the old debt, with both TNC
and IDB each providing repayment guarantees on the country’s behalf, and 100% of the
resulting cost savings will be directly allocated for marine conservation [59].
Using blue bonds as a financing mechanism supports an environment that stimulates
the development of a country’s entire Blue Economy by presenting financial capital to
private actors wishing to make a sustainable change at low risk to investors [
60
]. When
considering a bond issuance, it is critical that the bond structure is fit for purpose (in this
case, the development of fisheries and aquaculture industries), ensures the highest degree
of environmental and social impact, and that the issuer receives the lowest possible interest
rates on repayments. March et al. [
61
] discuss the challenges involved when designing blue
bond financing for Caribbean SIDS, using the Bahamas as a case study example. Three
different bond structures may be applicable for the development of Caribbean fisheries and
aquaculture sectors: catastrophe bonds, environmental impact bonds, and use-of-proceeds
bonds (see also [62,63]).
The mechanism of catastrophe bonds is that a trigger level (like the wind speed of a
hurricane) for a specific area is determined before the phenomenon occurs. If the trigger
Fishes 2024,9, 305 16 of 39
level is surpassed, the insurer pays out to the insured party. However, this bond differs
from insurance in that it pays out before the phenomenon has struck, whereas insurance
pays out afterwards [
61
]. One challenge of catastrophe bonds is that they only imply that
very specific events are being insured and that these events have to fulfil specific conditions.
Furthermore, no payout is required if the trigger level is not surpassed, but damage is still
widespread because of the phenomenon. Environmental bonds raise capital, but the return
on investment is based on the success of an environmental programme or project, as defined
by pre-determined key performance indicators (KPIs). Before using such a financing
mechanism, it is advised that the developmental sector has clearly defined key performance
indicators (KPIs) to provide added confidence and clarity for potential investors [
61
]. In
the case of fisheries and aquaculture development, this could be achieved by achieving a
maximum sustainable yield of a fish stock within two years, for example, or the protection
of 20 hectares of mangroves as fish nursery grounds. A use-of-proceeds bond entails the
upfront promise that proceeds will be used towards blue development (not necessarily
environmental development). These bonds are at risk of “environmental non-performance”,
where returns as benefits of the environment do not materialise, but the economic returns
do [
61
]. This type of bond may be particularly suitable for the development of fisheries and
aquaculture infrastructure (equipment, value-addition practices, workspaces, etc.), given
that no explicit environmental benefit is mandated.
3.5. Blue Tokens and FinTech
“Fintech” or financial technology refers to the use of new technology to improve
management and access to financial operations and processes. It involves the use of
specialised software, algorithms (machine learning), and artificial intelligence to achieve
improved management of finances [
15
]. This has expanded into the insurance and investing
industries. Fintech has enabled improved compliance and faster transactions and has
further allowed financing to be raised on open markets with far less friction or difficulties.
Blue tokens are a proposition where fintech and blockchain technology are used to
raise money for blue (fisheries and aquaculture) development projects [
15
]. An issuer could
set an amount they would like to raise, for example, US$10 million, with an initial fixed
repayment coupon. The initial price of each token could be set at US $10 (predetermined),
with one million tokens being issued on a secure blue token market or platform. Any
investor who has been approved through rigorous identity checks, like Know Your Client
(KYC) and anti-money laundering (AML) checks, can then buy tokens and either hold
them to maturity or trade them among other investors on the blue token platform. A Blue
Economy credit rating agency (alluded to before) could also rate the issuance (initially and
later annually) for development outcomes and financial viability, thereby giving investors
maximum information to assist with their investment decisions [15].
The use of blue tokens could democratise investments, making the opportunity to
invest in the development of the Blue Economy, or in this case, fisheries and aquaculture
industries, accessible and giving all stakeholders a real stake in the Blue Economy. With
the establishment and development of blue bonds, blue tokens can thus give the citizens of
Barbados, Grenada, and St. Vincent and the Grenadines the ability to invest in the future of
their nations as big ocean developed states (BODS) rather than SIDS [
15
]. They are also able
to invest in blue tokens from other countries’ blue bonds, fostering development support
where such structures are in place, even if not in place in their own nation yet. This may be
applicable for blue bonds issued towards the development of coral reefs in SVG: the largest
coral reefs among the three counties are likely to facilitate the greatest economic returns
(among the reefs of the three countries), garnering more attention than others in terms of
interest for development.
3.6. Insurance
Instead of being a source of new finance, insurance can be viewed as a tool with which
to support the financing of fisheries and aquaculture projects. Insurance can create confi-
Fishes 2024,9, 305 17 of 39
dence for a potential project developer or investor in that it limits the risks that the project
may face, potentially reducing the costs of capital investment. The role of risk management,
risk pooling and risk transfer has become important for any potential development in
the Caribbean as the intensity of natural disasters like hurricanes increases [
15
]. Marine
insurance can be explored and tailored to specific industries within the Blue Economy, like
fisheries and aquaculture.
Parametric insurance is one type of ex-ante disaster financing and makes payments
based on the intensity of a disaster event and the amount of loss calculated using a model
previously agreed to by both parties [
15
]. This type of insurance is different from indemnity
settlements in that there is no on-site assessment of individual losses but rather depends on
a triggering mechanism (based on variables out of the control of both the policyholder and
insurance issuer). This may be of interest to stakeholders in the fisheries and aquaculture
sector, where infrastructure is swept away or is unrecoverable for assessment of damages,
or instances where a natural environment that underpins the industry gets damaged, and
objective ecosystem valuation becomes skewed by lack of historical data (however in such a
scenario, ownership or shared ownership may have to be allocated and proven, like through
an NAC). Another example is the Caribbean Oceans and Aquaculture Sustainability Facility
(COAST), a parametric insurance facility developed jointly by the Caribbean Catastrophe
Risk Insurance Facility—Segregated Portfolio Company (CCRIF-SPC), the United States
Department of State, the World Bank, TNC and the Food and Agriculture Organisation.
COAST targets the fisheries sector specifically and is geared towards addressing the impacts
of natural hazards on the food security and livelihoods of those working in the fisheries
sector of the Caribbean. This policy was first issued and piloted in July 2019 for Grenada
and Saint Lucia. The Caribbean would benefit from drawing lessons learnt from these
examples and scaling up insurance for other Blue Economy areas [15].
Public social protection programs, as well as private and community savings arrange-
ments, can function as insurance, too. Such savings clubs can be used to finance different
needs, including insurance, but savings can itself function as an economic buffer for times
of crisis or a short-term economic downturn [
54
]. Savings and insurance are, of course, not
new sources of financing, but they can create support during periods of hardship. These
savings programmes can be managed and used to recover local fishing and aquaculture
projects that provide direct benefits to the local communities before contributing to the
industry at large (such as local job creation and food provisioning). Types of development
projects that may be of high priority after a catastrophe include fisheries (small and large-
scale), shipbuilding and repair, and natural ecosystem recovery (particularly those that
underpin essential fisheries). Such projects lead to revenue generation that could expedite
the recovery from natural disasters sooner.
Many different insurance products exist (catastrophe and resilience bonds), each with
its own advantages and potential pitfalls. The demand for high premiums on insurance
products is likely to present a barrier to entry to their use in Caribbean SIDS, where finance
and financing are already in short supply. Insurance companies that assign their risks on a
biannual or annual basis also assume greater risk as the insurance products would have
to cover longer expanses of time, increasing the likelihood of a higher number of severe
weather events and thus payouts [64].
4. Generating an Enabling Environment for Financing Fisheries and Aquaculture in
the Caribbean
Generating an enabling environment to encourage investment and financing, thereby
reducing barriers to spontaneous entrepreneurial development in the private sector, will
have knock-on benefits across the entire Blue Economy in the Caribbean as a whole [
65
],
including the fisheries and aquaculture sectors. As the Caribbean is a developing region,
there is limited private sector finance support available from governments in the region,
as funds are directed to more critical or prioritised development needs elsewhere. It is
thus necessary to put into place the structures that can facilitate the long-term financing
Fishes 2024,9, 305 18 of 39
of sustainable (environmentally, socially, and economically) fisheries and aquaculture
development projects that arise from the industry itself, such that new development is
incentivised through potentially greater fiscal returns for the investment made. In addition,
the development of an enabling environment is proposed as the solution for overcoming
the capacity constraints and regulatory barriers to new development in the fishery and
aquaculture sectors of Barbados, Grenada, St. Vincent and the Grenadines [
4
]. Together,
these (following) structures contribute to an enabling environment that facilitates industry
development for the fisheries and aquaculture industries and the Blue Economy and have
been curated from the national development strategies of other successful island nations
and advisory documents (for example, such as from Africa Blue Economy Strategy [
14
];
The Seychelles Blue Economy Action Plan [
13
]; Madagascar Blue Economy Strategy for
Fisheries and Aquaculture [
12
]). However, their effectiveness may vary and is specific
to different national development contexts, including different fisheries and aquaculture
sectoral contexts.
4.1. Sustainable Blue Economy Finance Principles
Banking mechanisms for blue development, such as for fisheries and aquaculture, are
lacking in Grenada, Barbados, and SVG, as are the associated governmental policies. A
transparent policy framework that follows blue financing principles has the potential to
increase investor confidence, thus increasing the availability of working capital to industries.
Underdeveloped financial markets and large historic national debt only further emphasise
the need for an enabling and sustainable investment policy framework [66,67].
Emphasising sustainable Blue Economy finance principles would encourage the use of
sustainable finance mechanisms for the fisheries and aquaculture sectors. These principles
were launched in 2018 and present the world’s first guiding framework for banks, insurers
and investors to finance sustainable development [
68
]. The framework promotes Sustain-
able Development Goal (SDG) 14 (Life Below Water) and establishes specific standards
related to sustainable development in financial ocean sectors. The European Commission,
WWF, the World Resources Institute (WRI) and the European Investment Bank (EIB) col-
laborated to develop these principles, which are also hosted by UNEP FI as part of the
Sustainable Blue Economy Finance Initiative [
68
]. These principles can be integrated into
the policy and regulatory frameworks of Barbados, Grenada, and St. Vincent and the
Grenadines. However, regional or national efforts can be directed towards the development
of financing principles that align with NDCs.
4.2. Integrating Aquaculture and Fisheries into the Greater Blue Economy
At present, current policies operate disjunctively, with insufficient overarching frame-
works to support financial investment or mitigate the risks of climate change and habitat
health reduction to the fisheries and aquaculture industries. The maximum potential of
fisheries and aquaculture and their capacity to add to the development of the broader
Blue Economy is not reflected in the current unintegrated (and not sufficiently holistic)
policy structure. Existing frameworks can be characterised as a disjunct assemblage of
fisheries agreements and programmes, and they are often dated and thus inappropriately
formulated national laws at various levels for current development challenges. New leg-
islation has been drafted (e.g., in Barbados), but these have not yet been approved by
the cabinet, with fisheries management being excluded from coastal and marine resource
management, other environmental agendas, and tourism management [
4
]. Furthermore,
the significance of the ecosystem services that natural environments provide to the fisheries
and aquaculture sectors (such as habitat provisioning, nursery grounds provisioning, and
fisheries stimulation) remains ignored, resulting in gaps in implementation and duplication
of development efforts across institutions and agencies, at national and regional scales. The
lack of sustainable blue financing and an overarching integrated governance framework to
coordinate various pressures on coastal and marine resources continues to hamper devel-
opment efforts in valorising the fishery and aquaculture sectors [
69
–
71
]. Further barriers to
Fishes 2024,9, 305 19 of 39
policy integration are due to a lack of consistent and integrated data collection with which
to inform policy-making decisions (at both national and the subsequent regional scale),
lack of coordination among governance structures leading to duplication of efforts, and
differing prioritisation of development goals due to different national development needs.
The fisheries and aquaculture industries should remain a priority when considering
Blue Economy development because fisheries will continue to provide the majority of
animal protein to the people of Barbados, Grenada and St. Vincent and the Grenadines, as
well as supplying a majority of jobs (ever more so with the increasing spread of aquaponics
and aquaculture). These sectors have the potential for considerable wealth creation op-
portunities should value addition be facilitated within each country prior to export [
72
].
Such wealth creation is possible within the Blue Economy concept, as it promotes the
development of biodiversity within coastal habitats by facilitating the development of solu-
tions that are beneficial for both biodiversity conservation and climate change mitigation
and adaptation. Furthermore, fisheries have the opportunity to play a central role in the
conservation and rehabilitation of key ocean habitats as the main observers of changes in
the open sea. These are key indicators for the status of ecological and ecosystem health, as
they observe associated changes in fisheries’ productivity (a less productive fishery relative
to the past, indicating that the ecosystem may be degraded).
The development of the Blue Economy in Barbados, Grenada, and SVG is nascent [
4
].
Despite the significant natural resources of Barbados, Grenada, and St. Vincent and the
Grenadines, as well as the opportunity to implement holistic Blue Economy approaches,
the rate of adoption has been slow. Grenada is the first Organisation of Eastern Caribbean
States (OECS) member country to have developed a vision for its blue growth economy.
The county’s blue growth vision is to become a world leader and international example of
blue sustainability by optimising its coastal, marine, and ocean resources. Comprehensive,
holistic preparation, design, and capacity development are needed to consolidate and
coordinate sectors and industries to create synergies and development considerations
between sectors. There is significant potential for generated synergies to facilitate finance for
the development of the Blue Economy in each country, further emphasising the importance
of mediating collaboration.
The Ocean Governance Committee (OCG) is in place in most OECS Member States.
They have, in most instances, identified and mandated the creation of National Coordi-
nation Agencies that work closely with the OECS Ocean Governance and Fisheries Unit
(which leads and coordinates activities at the regional level). OECS Member States are at
various stages of establishing national OGCs to serve as standing committees of public
sector departments, statutory bodies and non-governmental organisations. Their goal is to
facilitate inter-sectoral coordination on ocean governance issues. They may thus have an
important role to play regarding the management of shared fisheries stocks and the con-
servation of the natural environments that underpin those important fisheries. Although
the OCGs offer regional consistency and the ability to provide some support to nations
seeking to implement Blue Economy approaches, the mechanism still requires enhance-
ment. Barbados, despite being in the eastern Caribbean, is not a part of the OECS [
73
], thus
limiting regional consistency by hindering the establishment of a Barbadian OCG and the
associated benefits therefrom. The Regional Ocean Governance Team (OGT) (funded by
the World Bank) provides technical support to the national technical committees through
the OECS committee on matters related to ocean governance and the Blue Economy.
4.3. Finance and Financing Coordinating Facility
A regional Caribbean Blue Economy financing facility (or unit) may help address
some of the challenges which are anticipated if financing for the fisheries and aquaculture
industries is to be scaled up, as well as investments into the Caribbean Blue Economy as
a whole [
15
]. One such example is managed by the International Union for Conservation
of Nature (IUCN) and has a global reach: the Blue Natural Capital Financing Facility. A
national or regional financing facility would be responsible for the coordination and devel-
Fishes 2024,9, 305 20 of 39
opment of financing solutions/instruments for development projects that align with the
objectives of the Blue Economy and leverage existing resources more efficiently [
15
]. This
would include activities such as market research and valuation studies to inform investment
into the Blue Economy and, by extension, the fisheries and aquaculture industries as well.
The facility would have the potential to serve as a connection hub for development partners
and private funders and act on behalf of national or regional governments to issue financing
mechanisms aligned with the development of Blue Economy projects. The agency would
ideally also seek to contribute towards capacity building to aid in project implementation,
as well as monitor the results and effectiveness of those projects for which it has put financ-
ing structures in place [
15
]. The facility could further be responsible for testing innovative
finance and financing instruments, facilitated through structures like innovation networks,
accelerators, and incubators, which could source local and global financing knowledge and
information, leveraging it for the benefit of the Caribbean communities. For instance, the
Caribbean Science Foundation uses various platforms to engage and educate aspiring engi-
neers and scientists across the region. Similarly, “Ten Habitat”, a start-up ecosystem, has
mushroomed across the region, where potential entrepreneurs are supported and funded
using a range of practical tools, including networking and mentorship [
15
]. Such a unit
may be most useful when part of pre-existing government structures (i.e., not independent),
thereby serving as an example of a successful public-private partnership (PPP) benefiting
both parties involved.
A regional coordinating facility might best be situated in locations that are easily acces-
sible to the rest of the Caribbean region. However, given the complexity of the Caribbean’s
governance structures, a regional coordinating facility for finance and financing may best be
located where previous governance structures have been situated or within such structures
themselves. Examples include the seat of the Caribbean Community and Common Market
(CARICOM) secretariat in Georgetown (Guyana) or possibly the seat of the CRFM secre-
tariat in Belize City (Belize). The benefit of such a placement, beyond mere ease of access, is
that it allows for increased awareness of regional development programmes, initiatives and
opportunities among multiple governance structures. This facilitates synergies and integra-
tion across multiple departments with an increased likelihood of actual impact throughout
the Caribbean region. Such a regional facility will be able to better undertake the explicit
actions and research specifically directed towards finance and financing Blue Economy
development, which may fall out of the purview of CARICOM (which is concerned with
more than just financing the Blue Economy) and the CRFM (which although concerned
with financing development in the fisheries and aquaculture sectors, also concerns itself
with other aspects of these industries such as coordinating catch data for example).
4.4. Development Tools and Reporting Infrastructure
4.4.1. Screening Tool
The Sustainable Seas Draft Blue Economy Investment (BEI) project screening tool/criteria
(by Jonathan McCue, Service Agreement Number: BBRSO145916) has been created for assess-
ing and prioritising different potential development projects to finance, specifically for the
development needs of Barbados, Grenada, and St. Vincent and the Grenadines. The criteria
used to assess each project are based on the cornerstones of Blue Economy development:
environmental sustainability, social responsibility, and economic impact. The tool includes
criteria for development projects across all Blue Economy sectors as well as fisheries and
aquaculture industries. The use of this tool has the potential to facilitate the most significant
available returns of investment for investors in determining appropriate development projects
to finance while also increasing the likelihood of multi-sector development. The use of this
tool should ensure the financing of projects with minimal environmental, social and economic
impact, thus avoiding further accruement of debt.
Fishes 2024,9, 305 21 of 39
4.4.2. Data Reporting and Infrastructure
The importance of data reporting for fisheries management (and thus ecosystem
management) should be emphasised, as the effectiveness of any management decision is
reliant on the data that represent the real-time scenarios affecting the industry. The integrity
and honesty of the data being reported should thus be maintained and encouraged as much
as possible.
The development of the fisheries and aquaculture industries necessitates national
centralised data reporting structures. The Caribbean Regional Fisheries Mechanism (CRFM)
is a regional-scale example. However, national-level platforms can more easily facilitate the
reporting of fisheries catch data, which would allow for better management of local fisheries
sub-sectors, address national-level issues and concerns, and more engaging management of
national marine environments that underpin local fisheries. Providing a tool or platform for
the hassle-free reporting of catch and aquaculture production data, as well as the methods
and locations associated with those data, can facilitate the creation of tailored financing
solutions for those practices or projects, allowing for more efficient industry development,
management, and effectiveness (profitability).
Currently, monitoring approaches such as accounting for activities associated with
the Blue Economy have not been conducted in a coherent manner. Blue accounting data
need to be recorded and catalogued from isolated sources to produce a comprehensive
view of the Blue Economy industries and their impact on the livelihoods of nationals of
Barbados, Grenada, and St. Vincent and the Grenadines. There are also gaps where no
data are recorded for certain sectors (like vessel maintenance). Such gaps lead to a skewed
interpretation of the industry and facilitate unoptimised management decisions. Critically,
ecological components of the Blue Economy need to be accounted for, particularly of envi-
ronments of key development sectors such as fisheries and aquaculture, as the ecosystem
services provided by these habitats directly facilitate the developmental prospects and
functioning of these industries. The implementation of nationally determined contribu-
tions towards sustainable development (and climate change) will necessitate the need for
blue and green accounting frameworks for assessing developmental change that relates to
environmental sustainability (of those that underpin key industries).
Partnering with the Global Ocean Accounts partnership (GOAP) may offer benefits to
national governments in the Caribbean in facilitating the establishment of ocean accounts
and monitoring protocols for national Blue economy accounting. GOAP aims to build a
global community of practice for ocean accounts (also known as “blue accounting”) with
an international network including national governments, the World Bank, the United
Nations Economic and Social Commission for Asia and the Pacific (ESCAP) and specific
fisheries departments like Fisheries and Oceans Canada. GOAP encourages countries and
stakeholders to include the use of other indicators beyond only gross domestic product
(GDP) in their measurement and recording of progress towards sustainable development,
as the reliance on only GDP as a yardstick for development has led to previous misinformed
policy decision-making (see [74] for a detailed analysis on this topic).
4.4.3. Spatio-Temporal Planning Tools and Prospective Approaches
The use of integrated and prospective approaches to the management of marine
ecosystems is lacking in the three study countries. This is likely due to growing blue
economies in their nascent stages in Barbados, Grenada, and St. Vincent and the Grenadines.
Furthermore, the large marine ecosystem approach (specifically the Caribbean LME) has not
been integrated or institutionalised into national environmental management frameworks.
The adoption of such a paradigm would facilitate a better understanding of the dynamics
of coastal and marine ecosystems. The use of approaches such as blue accounting and
data reporting of key ecological indicators (biological productivity/fish biomass, pollution,
ecosystem health) would facilitate improved resource management.
For countries like Barbados, Grenada, and St. Vincent and the Grenadines, where
resources are limited, sustainable and optimal use of them is critical to economic prosperity.
Fishes 2024,9, 305 22 of 39
As such, marine spatial planning (MSP) is particularly important and has been lacking
in these three countries. “Marine Spatial Planning (MSP) is a public process of analysing
and allocating the spatial and temporal distribution of human activities in marine areas to
achieve ecological, economic and social objectives that have been specified through a politi-
cal process” [
75
]. The use of MSP usually forms part of a country’s national Blue Economy
development strategy and implementation plan, particularly where shared resources are
shared by multiple stakeholders (such as fisheries stocks). Despite potential challenges, the
use of MSP has the potential to facilitate an enabling environment for national development
and has been shown to be effective in other SIDS countries like the Seychelles.
4.5. Development of Sustainable Micro, Small, and Medium-Sized Enterprises (MSMEs)
Considering that many fisheries and aquaculture operations are more likely to operate
at smaller scales than large commercial-scale fishing fleets, it is thus necessary to focus
on the sustainable development of micro, small and medium-sized (MSME) enterprises
in the fisheries and aquaculture sectors [
76
]. MSMEs that already operate on a successful
(environmentally) sustainable business model are likely to perpetuate that model when
operating at larger scales, as it has already proven to be profitable while benefiting the
environment. Moreover, an enabling environment for the development of MSMEs en-
courages participation in the fisheries and aquaculture industries as support services are
available for future business growth and expansion. The growth of small (subsistence)
scale fishers is thus facilitated by an enabling environment for MSME, presenting a route
for transitioning from a subsistence-based livelihood to entrepreneurship, which in turn
may afford improvements in the livelihoods of Caribbean locals.
MSMEs can be considered as the “missing middle” and lack access to capital [
76
].
These include organisations that are raising USD 500 K–10 M (with revenues exceeding
USD $250 K) annually. MSMEs are challenging for financiers because banks are not inter-
ested (as the company is likely unable to offer sufficient collateral for loans and presents
a security risk for the investment), and MSMEs are too small for bonds or private place-
ments. Microfinancing is too expensive, and MSME fragmentation presents an elevated
risk, disincentivising investment [
76
]. Yet MSMEs represent the majority of employment
in developing countries (such as in the Caribbean region) and represent the majority of
industry stakeholders [
76
]. Moreover, investors require MSMEs as the mechanism with
which to actualise returns and impacts of investments, such as through blue bonds, devel-
opment banks, industry ventures, and impact funds (and many others [
76
]). An evaluation
of the finance gap, such as that of Asian Blue SMEs (at the value of USD 2 trillion [
76
]), is a
recommended starting point for MSME development in the Caribbean.
National or regional programmes that facilitate scaling offer readiness training and
access to finance and financing, which present avenues with which to develop MSMEs to
benefit the fisheries and aquaculture industry. A similar programme to SME BlueImpact
Asia could be developed for the Caribbean region. The BlueImpact programme is an
initiative to raise capital for sustainable SMEs in the Asia and Pacific Blue Economy by
acting as a platform that connects qualified investors with Blue Economy SMEs. The
programme thus supports catalytic funding and mobilises appropriate matching private
sector enterprises [
77
]. The programme also aims to replicate successful business models
across the Asian and Pacific region through this programme, thus facilitating Blue Economy
development [77].
The integration of MSMEs (and small-scale fishers) into the broader Blue Economy
can be accomplished by establishing a programme similar to ‘Abalobi’ (in South Africa).
The non-profit organisation strives to connect individual small-scale fishers and fishing
communities to buyers through its technology platforms. Their community-supported
fishery model promotes fair market access, transparent supply chains, national food security,
and “fish with a story” (presenting the people and communities behind the produce). The
organisation has global international partners, such as the Seychelles Hook and Line
Fishes 2024,9, 305 23 of 39
Fishers Organisation and the World Wildlife Forum, already replicating the model in other
countries [78].
4.6. Public-Private Partnerships (PPP)
While no single definition satisfies all demands, (at a generic level) public-private
partnerships (PPP) is an encompassing term that covers many forms of collaboration
among public, private, and civil sectors [
79
]. The “Canadian Council for Public-Private
Partnerships” defines a PPP as “a cooperative venture between the public and private
sectors, built on the expertise of each partner that best meets clearly defined public needs
for services or infrastructure through the transfer between partners of resources, risks and
rewards”. Two important elements of this definition are that the arrangement is to provide
public services and that partners share any associated risk. The aim of PPPs is to structure
the relationship between the public and private sectors, allocate the risks to the parties that
are best able to manage them and add value to public services by using private sector skills
and competencies [
79
]. However, it is important to make the distinction that PPPs are not
incentives or subsidies given by the public sector to attract private investments.
PPPs are important as mechanisms for developing technologies where normal private
sector market incentives fail. Furthermore, PPPs improve the quality of the delivered
service by facilitating optimal participation of both sectors: the government acts as the
regulator and is tasked with monitoring performance and the planning of services, whereas
the private sector’s attention is on managing and optimising the daily delivery of the
service [
79
]. PPPs thus improve the cost-effectiveness of services (and risk management),
the savings of which can finance other services or development in industries of importance.
Despite PPPs having the potential to bring about significant economic benefits, they
are challenged by internal and external risks to both parties in the partnership. Of the many
risks that exist, reputation damage is likely the most limiting in engendering future investor
confidence and being offered future development project opportunities [
79
]. External
risks can arise from events beyond the scope of the project as well as from changes in
government, legislation or the political climate. Such risks may be addressed in PPP
contracts but are fundamentally outside the project itself and may be beyond the control
of the private sector [
79
]. Internal risks are particular to the project or the way it is
constructed and operated and are generally under the control of the contracting parties.
The contracting arrangement should explicitly allocate risk among the signatories to ensure
no disagreements arise with the onset of internal risks. One of the critical internal risks
is that demand will be insufficient to allow the project company to repay its financial
obligations from project revenues. Given that demand risk is difficult to estimate, even
more so in developing or recovering economies (common among SIDS states), the public
sector commonly assumes that the private sector should shoulder demand risk. However,
when it does so, the private sector is likely to ask for more support from the government in
the form of subsidies, grants or guarantees to mitigate this risk [79].
There is a wealth of resources to provide assistance in the establishment of business-
related PPPs. Development aid is available for the development of PPPs from organisations
like the United Nations [
79
]. Such arrangements may be particularly suited to the devel-
opment needs of fisheries and aquaculture in Barbados, Grenada, and St. Vincent and the
Grenadines, as they have been shown to assist the governments of countries that have
difficulty in fostering public sector investments to improve local infrastructure and product
chains that meet international rules [79].
Most countries also have PPP knowledge centres or units from which assistance can
be gained [
79
]. Such a unit is beneficial for leading the implementation of PPP programmes
and training government authorities responsible for local implementation. It should give
advice regarding the rules and regulations for PPPs in the country. Recommended as
places to start searching for further information on general principles and approaches
are the World Bank’s Private-Public Partnership in Infrastructure program, Institute for
Public-Private Partnerships, Inc., and Public-Private Infrastructure Advisory Facility [
79
].
Fishes 2024,9, 305 24 of 39
Allam and Jones [
80
] propose a development framework specifically for SIDS to develop
climate change and economic resilience, largely based on urban and cultural heritage PPP.
However, given that many cities in Barbados, Grenada, and St. Vincent and the Grenadines
are small, the framework may only be applicable for Bridgetown (Barbados), as it is the
largest city of the three countries (with an estimated population of 98,500). Nonetheless, it
may facilitate the development of fisheries through PPP as the city is likely a hub of trade
(of fish, an important resource likely tied to the cultures of island inhabitants).
4.7. Enabling Policy Environment for Financing
The regulatory environment can have a significant impact in facilitating sustainable
development of the fisheries and aquaculture sectors and the Blue Economy. An analysis of
the existing regulations and policy environments for Grenada, Barbados, and St. Vincent
and the Grenadines has been conducted [
4
]. In addition, aspects of the regulation and
policy framework have been discussed, namely fiscal policy mechanisms for fisheries and
aquaculture development (Section 3.1) and the implication of sustainable Blue Economy
finance principles (Section 4.1). However, the development of a regulation and policy
environment that enables and facilitates finance for the fisheries and aquaculture sector (and
the Blue Economy at large) was not discussed but identified as a development priority [
4
].
An enabling financing environment alongside integrated national (and regional) Blue
Economy frameworks can offer increased security for investments, incentivise investment
and thus facilitate development for the fisheries and aquaculture industry [
12
–
14
]. We
suggest that an ideal enabling regulatory environment may optimally facilitate the financing
of sustainable industry development, such as fisheries and aquaculture, when constructed
with consideration of the following:
•
Facilitates and encourages the use of fiscal policy for sustainable development
(Section 3.1)
•Supports the implementation of sustainable Blue Economy principles (Section 4.1)
•Facilitates local and international entrepreneurship
•
Supports a mixed economy (with private—and state influence) and encourages free-
market environmentalism.
The principles of the Blue Economy overlap with those of free-market environmen-
talism along the axes of environmental sustainability and economic sustainability, and
free-market environmentalism does not specifically exclude social sustainability. Free-
market environmentalism integrates the goals of preserving the environment with the
concepts of a free-market economy. It recognises the potent incentives for conservation and
environmental care that markets can offer, emphasising the use of private property rights
and contracts as effective tools for environmental protection [
81
,
82
]. Consequently, we also
suggest that policy and regulation surrounding property ownership rights be elucidated
for the optimal leveraging of financing mechanisms (for example, payment-for-ecosystem
services). We suggest that existing financing regulatory frameworks be reviewed to inte-
grate the above considerations, thus developing a more enabling financing environment
for the fisheries and aquaculture industries and the Blue Economy.
5. Conclusions
This review discusses various finance and financing mechanisms for supporting devel-
opment projects in Caribbean fisheries and aquaculture industries. Developing financing
mechanisms to support and drive the maximal sustainable exploitation of the environments
that underpin fisheries and aquaculture will facilitate an increased contribution to national
and regional blue economies, as well as avoiding exhaustion of the resources on which
Caribbean livelihoods are dependent for years to come. Many of the fisheries and aquacul-
ture industries of Caribbean countries face complex problems, but the improved use and
management of natural environments and the development of PPPs as management tools
for sectoral development have been suggested elsewhere [
4
]. The leveraging of natural
capital forms the base around which the benefits of PPPs can be utilised for optimal delivery
Fishes 2024,9, 305 25 of 39
of ecosystem services and provide numerous opportunities for multi-sector development
synergies that can ultimately benefit multiple sector stakeholders. However, policy regard-
ing the ownership rights to natural environments would need further development and
elucidation to determine who can leverage the multitudes of financing mechanisms suited
to a specific ecosystem. The boundaries of ecosystems need to be well-defined and clear to
all its users to limit confusion regarding ownership and property rights. Doing so is further
necessary for leveraging natural capital for funds to finance Blue Economy development
projects, as ownership of the natural capital (or services therefrom) may need to be used
as collateral security. Further policy development may be directed towards determining
whether the number of financing mechanisms employed per ecosystem should be capped
or not. Regardless, the development of accurate ecosystem accounting programmes and
mechanisms (to determine the value of ecosystem services) is essential in realising the
benefits of sustainable management and ensuring returns for potential investors.
The various common financing needs of the fisheries and aquaculture sectors of
Barbados, Grenada, and St. Vincent and the Grenadines [
4
] have been matched with the
most suitable financing mechanisms (Table A2, Appendix A). Blue levies are generally
recommended and applicable in almost every scenario, as they allow the fisheries and
aquaculture industry to drive its own development in financing research and conservation
projects (to its own benefit). The use of blue tokens with sufficiently low repayment coupons
allows development projects to gather public support for fisheries, thereby increasing the
likelihood of the project being successful through community buy-in. The possibility of
natural capital being traded as public equities as “Natural Asset Companies” provides
the opportunity for development projects to fund themselves. An enabling environment
for debt and lending with low-interest loan repayments is also applicable to almost every
scenario, as it facilitates access to capital finance for infrastructure development and the
acquisition of increasingly sustainable fishing equipment. The development of an enabling
environment through the development of dedicated financing institutions and PPPs and the
establishment of sufficient data reporting infrastructure for the fisheries and aquaculture
industry is essential for driving development in these sectors.
There are complex challenges for the development of the fisheries and aquaculture
sectors to be addressed, such as overfishing, pollution, and the introduction of invasive
species (and others). An injection of finance does not necessarily translate into meaningful
development or solutions to these problems. However, finance is a tool to help mobilise
action to facilitate the transition to a sustainable Blue Economy. Without finance or the
mechanisms which generate finance, limited action takes place, particularly in terms of
policy development, government coordination, and implementation and enforcement of
development policies. The use of financing mechanisms has the potential to facilitate
finance sustainability within sectors of the Blue Economy, enabling each industry to fuel
its own development. In addition, the conditions that enable an increased degree of
finance to support development through the Blue Economy need to be developed and
maintained. These conditions include low corruption, efficient processing of finance
transfers (through dedicated secure financing institutions), good governance, strong societal
and environmental standards to guide industry development, and transparency of any
non-private development. Developing methodologies, regulations, and policies to facilitate
these conditions ensures that any finance that is injected into a sector and the Blue Economy
results in tangible impact and sustainable development.
Financing mechanisms can facilitate the optimally sustainable exploitation of the
fisheries and aquaculture resources in the Caribbean, thereby ensuring the ability of these
industries to support developing Caribbean Blue Economies for future generations. One
of the largest limiting factors in financing the fisheries and aquaculture industries in the
Caribbean is likely to be awareness of the range of finance and financing mechanisms
available to industry stakeholders, as well as an enabling environment for financing the
Blue Economy sectors. This review is thus intended to aid financing institutions, Blue
Economy developers, and specifically Caribbean fisheries and aquaculture stakeholders
Fishes 2024,9, 305 26 of 39
and Caribbean governments by raising awareness of the financing mechanisms available,
encourage the incorporation of their use in the fisheries and aquaculture industries in the
Caribbean, and encourage policymakers to create an enabling environment for financing
development in these crucial sectors. The authors advocate for the establishment of fi-
nancing mechanisms that generate finance for an industry as opposed to once-off finance
contributions and support, as the former is more likely to have a consistent impact over the
long term.
The methods used here, as well as March et al. [
4
], can be applied to the holistic Blue
Economy development of other nations, including other SIDS, as follows:
1.
The identification of capacity constraints and development opportunities (in align-
ment with national development priorities).
2. Identification of potential finance and financing mechanisms.
3. Analysis of the enabling environment at the national level.
4.
Matching of suitable finance and financing mechanisms with previously identified
financing needs in light of the current enabling environment.
5.
Review of identified development solutions in light of other sectors’ development prospects.
Discussion of the various elements of an ideal enabling financing environment usually
occurs at a more general overarching level. However, the implementation of these various
elements differs in their suitability and effectiveness in supporting development at a
national or regional level. Given the need for the development of national Blue Economy
strategies and frameworks to address the unique development needs of any one country
(as these needs may differ between neighbouring countries), the appropriate resolution for
implementing elements of an ideal financing environment may be best suited to the national
level. In this manner, the enabling environment can be developed by supporting national
Blue Economy strategies through synergies facilitating sustainable development. While the
work in this paper completes only a part of what is required for meaningful development,
future work can involve analysis of the local enabling environment at the national level of
each of the countries discussed, such that the most suitable financing mechanism can be
implemented effectively in addressing the identified financing needs for national fisheries
and aquaculture sectors. Thereafter, the identified solutions should be reviewed in relation
to the development needs of other Blue Economy sectors so that non-limiting solutions
(to the development of other sectors) are implemented. In addition, future work should
include a detailed analysis of the feasibility and potential risks (financial, environmental,
and social) associated with the implementation of the mechanisms (at the national level)
herein discussed.
This work focussed on the development of fisheries and aquaculture sectors as part
of the Blue Economy due to these sectors having a disproportionately larger influence
on the national economy and local livelihoods. However, the Blue Economy advocates
for a holistic approach rather than a siloed or sectoral approach. We suggest that the
development of priority sectors (such as fisheries and aquaculture for SIDS) be prioritised
with the explicit consideration of the future development needs of other sectors in mind.
While non-priority sectors may be underdeveloped, the development of priority sectors
should not occur in such a way that it limits the development prospects of other sectors
of the Blue Economy [
65
]. The most optimal method of concurrent holistic development
of Blue Economy sectors with limited resources still remains a challenge, but the use
of innovative sustainable financing mechanisms (as they develop) has the potential to
contribute to sustainable development in Blue Economy sectors.
Author Contributions: M.B.: Investigation, Writing—Original Draft Preparation, Writing—Review
and Editing. A.M.: Conceptualization, Methodology, Formal Analysis, Writing—Original Draft Prepa-
ration, Writing—Review and Editing, Project Administration. P.F.: Conceptualization, Methodology,
Investigation, Writing—Original Draft Preparation, Supervision. All authors have read and agreed to
the published version of the manuscript.
Funding: This research received no external funding.
Fishes 2024,9, 305 27 of 39
Informed Consent Statement: Not applicable.
Data Availability Statement: All data generated from the study are available in the manuscript.
Conflicts of Interest: The authors declare no conflicts of interest.
Fishes 2024,9, 305 28 of 39
Appendix A
Table A1. Summary of various financing mechanisms for use in fisheries and aquaculture sectors of Caribbean states.
Financing Instrument Description Requirements
Fiscal Policy
Fiscal policy covers state spending and the state’s generation of revenues. Budgetary governance is also classified as fiscal policy, and deals with the administrative and institutional systems that control the
fiscal flows of the state. Different parts of public fiscal policy can be revenue generators and liabilities at different times, at different levels of organisation. The specific application of fiscal policy thus requires
an in-depth understanding of the relevant industry (fisheries and aquaculture) for optimal use as a development mechanism.
Environmental Taxes
The minimum definition of an environmental tax is that it increases the costs of pollution activities [
19
].
An environmental tax is meant to target activities that cause environmental degradation or pollution, but
this does not imply that the tax has a proven effect in terms of minimising environmentally degrading or
polluting activities. The actual application of an environmental tax is likely to have the effect of
incentivising some activities whilst disincentivizing others.
Public awareness
Monitoring of pollution among stakeholders (Pollution accounts that track equipment lost at sea
for example)
Identification of the locus of implementation (individual, organisational, national, regional)
Incorporation into legal structure (policy-making)
Leases, Licences, and fees
Whereas a tax is compulsory, a lease, licence or fee can be seen as a form of exchange between a public
authority and a (legal) person, which grants the latter a certain right or privilege. These leases, licences
and fees remain stable regardless of the incomes that the payer may generate as a result.
Public awareness.
Easy-to-use infrastructure for applications, and issues.
Controlled public register of licences and rights issued.
Public enforcement mechanism (such as harbour officials checking permits for access to fishing
grounds)
State-owned enterprises (SOEs) and
public-private partnerships (PPP)
SOEs are a form of fiscal policy, where SOEs have some clear environmental impacts beyond only service
delivery. Public utilities (water and energy companies) explicitly have an environmental aspect since
they usually have environmental quality or resource efficiency as key objectives. Other types of SOEs,
like transportation companies, may increasingly incorporate environmental objectives. SOEs can be run
with a focus on generating profits, but they can also seek to strategically increase public goods and
services through their operations. SOEs can be a source of revenue when they generate profits while
their inventory and equipment can be seen as capital goods. Meanwhile, SOEs can also hold liabilities in
the form of debt.
PPPs are a cooperative venture between the public and private sectors, built on the expertise of each
partner that best meets clearly defined public needs for services or infrastructure through the transfer
between partners of resources, risks and rewards. The aim of PPPs is to structure the relationship
between the public and private sectors to allocate the risks to the parties best able to manage them, and
to add value to public services by using private sector skills and competencies. However, it is important
to make the distinction that PPPs are not incentives or subsidies given by the public sector to attract
private investments.
Examples applicable to fisheries and aquaculture include organisations that facilitate data recording of
fish catches, vessel regulatory bodies specifying monitoring equipment used, fisheries management
organisations.
Identification of public needs (at national scale) and natural resources.
Transparency in decision-making, operations, and impact to build public trust.
Environmental monitoring and accounting.
Identification of public needs and subsequent private sector expertise.
Public buy-in.
Transparency among public and private partners.
Fishes 2024,9, 305 29 of 39
Table A1. Cont.
Financing Instrument Description Requirements
Debt and lending
An enabling environment for debt and lending presents an avenue for fisheries and aquaculture
development. As fisheries and aquaculture equipment are often expensive (and become increasingly
technical with the incorporation of sustainability objectives), many stakeholders globally make use of
loans to develop and expand. An enabling environment such as low interest rates on loans and alternate
avenues for debt repayments, may incentivise development in other sectors as well as aquaculture and
fisheries. The state of national and global economies (such as recessions) needs to be considered and how
this influences the borrowing of money (where in a recession, the borrowing of money is far less likely
than in an economic boom/upturn). There is room for public influence (as well as regional organisations
like development banks) in this regard to reduce loan and debt repayments through industry financing
(subsidies).
Awareness among the industry as to the borrowing options available (through the establishment of
coordinated information and development centres)
Monitoring the development of the industry.
Blue levies and stakeholder taxation
Blue levies and stakeholder taxation are similar to environmental taxation, but are not limited to
disincentivising pollution. These mechanisms are rather aimed at reinvesting revenue for industry
development. These levies are usually applied in different ways, at different rates and at different levels
of organisation, like on importation, consumption, accommodation, service, or travel. Sectors that rely
on the environments that sustain fisheries and aquaculture or on the sector itself (such as tourism,
hospitality, cruise and charter, extraction, and ports and ship-building industries) could be potential
targets from which the proceeds of blue levies could be directed to support fisheries and aquaculture.
Transparency
Monitoring of stakeholder relationships with the environment and/or fisheries and aquaculture
industry.
Mechanism or institution to implement, coordinate, and reinvest proceeds according to
development needs.
Payment for Ecosystem Services (PES)
Schemes
PES schemes are known by five characteristics [
26
]: “(1) a voluntary transaction where (2) a well-defined ecosystem service (ES, or a land-use likely to secure that service) (3) is being ‘bought’ by a (minimum
one) ES buyer (4) from a (minimum one) ES provider (5) if and only if the ES provider secures ES provision (conditionality)”. PES schemes thus entail the voluntary buying and selling of ecosystem services,
based on the seller protecting an ecosystem. Where PES schemes are directly linked to environmental outcomes, levies, fees or licences are not necessarily linked to environmental outcomes, but their proceeds
may still be directed to benefiting fisheries and aquaculture (non-environmental benefits).
Despite most PES programmes being thought of as a market-based approach, most programmes are based on compliance with government regulations [
29
]. However, these subsidy-PES programmes are only
as good as the (government) authorities that implement them since PES requires enforcement of regulations. Subsidy based PES schemes are potentially more difficult to maintain for cash-strapped
governments. A requirement for all PES schemes is accurate environmental monitoring and accounting.
Regulated markets
Cap and trade markets require resource users to hold a purchasable right to the resource they use. It sets
a limit to resource use and allocates a tradable share of the resource to an asset owner. The rights to the
ecosystem or ecosystem service can then be traded (if legal). Ecosystem service can then be exploited on
regulated markets (for example, in the form of biodiversity or resilience credits as the measure of
ecosystem service delivery).
A licence is not necessarily tradable and the issuer of a licence does not necessarily set a limit to damages
to an ecosystem, but it still constitutes a transaction based on compliance.
Controlled public register of licences and rights issued. National natural resources can be divided
into concession areas which can then be exploited by the private sector on a rotational basis
according to who owns the legal right to do so (such as the kelp-harvesting concession areas
established in South Africa).
Mechanism of access to acquire rights and licences and having this available to anyone. An
example is an auctioning mechanism for available national rights to resource exploitation.
Enforcement and monitoring of compliance and limitations of approved permits relating to shares
of the natural resource (including parties involved with subletting). Requires easy-to-use
mechanism.
Sophisticated and sufficient legal policy framework regarding (temporary) ownership or rights to
national natural resources.
Voluntary transactions
Voluntary PES transactions can involve private and public sector actors alike. Governments, private
individuals, NGOs and development organisations can all pay private actors to change practices or
avoid harm to ecosystems.
Platform to identify, mediate and increase awareness of voluntary opportunities available to
stakeholders.
Requires monitoring of fisheries and aquaculture sectors
Fishes 2024,9, 305 30 of 39
Table A1. Cont.
Financing Instrument Description Requirements
Biodiversity offsetting
Biodiversity offsetting is based on counterbalancing any lost biodiversity from a development project by
investing in equivalent biodiversity somewhere else, thus aiming to maintain biodiversity despite
economic development (or environmentally harmful extraction processes). If developers follow the
mitigation hierarchy (avoidance—minimisation—restoration—offsetts), they should try to avoid
negative impacts in the first place, developers should secondly consider the minimising of impacts,
thereafter restoring any negative impacts stemming from the development, and finally they can use
biodiversity offsets to compensate for the unavoidable biodiversity loss stemming from development
projects [33]. Thus, biodiversity offsetting is only meant to counter biodiversity loss that cannot be
prevented [34]. Different levels of compensation can be mandated due to the perceived value of the
affected (extracted or displaced) species or environment in question.
The associated biodiversity loss that is found with unsustainable fishing practices (dredging, trawling),
or new aquaculture infrastructure developments, can be offset by investing a portion of the proceeds into
less damaging subsectors (domestic handline fisheries, sustenance fisheries or developing restocking
programs).
Baseline levels of biodiversity at the sites that provide offsets (sufficient long term data on that
area, to assess historical performance or attributes, and where this is not available data would first
have to be collected).
Mechanism or institution to implement, monitor and coordinate biodiversity offsetting with
development needs, with the private sector.
Carbon and nutrient trading credits
Coastal environments are likely to offer nutrient capture and sequestration services (such as blue carbon)
in addition to the benefits they provide to fisheries and aquaculture [5]. Many of the ecosystems that
facilitate the generation of carbon and other nutrient trading credits, also provide other co-benefits like
nursery/feeding grounds for fish and wave attenuation which contribute to the reliance and longevity of
infrastructure along coastlines. These services can be capitalised upon, and leveraged as pollutant offsets
(on international and domestic markets) from which revenue can be generated to further support the
protection, optimisation, and maintenance of the environments themselves, or be directed towards other
areas of fisheries and aquaculture. The conservation and development of the coastal (mangrove) habitats
may present an ideal opportunity to access nutrient trading markets (such as the carbon credit market)
which can further finance the development of these key ecosystems.
Dependent on environmental monitoring and blue accounting methodologies.
Nutrient credit market access (voluntary offset market vs international compliance markets)
Finding buyers for credits (can be facilitated by third party organisations).
Certification of methods that generate credits by reputable and internationally recognised
organisations (increases buyer confidence).
Local community involvement and buy-in (as pertains to conservation, and development impact).
Legal policy for clear ownership rights of ecosystem service and/or associated credits
Natural capital as publicly traded
equities
The Intrinsic Exchange group (IEG) in collaboration with the New York Stock Exchange (NYSE) are
pioneering the creation of a new asset class: Natural Asset Companies (NACs). The purpose of such
companies is to maximise the performance of the natural asset they are associated with, whether this be
through ecosystem services provisioning, restorative/regenerative agricultural use, or hybrid cases
integrating both. These companies are evaluated by the IEG, and then listed for trading on world
platforms, enabling the conversion of natural assets into financial capital.
The sustainable management of the environmental areas that underpin fisheries and aquaculture
industries (such as fishing grounds and MPAs) such that the maximum amount/number of benefits are
realised is thus incentivised by potentially global markets.
Standardisation of assessment of natural assets.
Establishing a baseline of optimal ecosystem performance (need historical data).
Awareness raising.
Legal policy for clear ownership rights of ecosystem or ecosystem service.
Debt swaps
A debt swap can be defined as a scenario where a creditor forgives debt owed to them in exchange for a
commitment by the debtor to use the outstanding service payments for a particular investment [
50
]. The
redemption of debt can thus be conducted at a discount. The service repayments can be invested into
whatever project or initiative is agreeable to both parties in the transaction, such as for fisheries and
aquaculture industries or environmental and social based projects. Debt swaps can present an enticing
opportunity for the governments of (SIDS) countries hoping to simultaneously facilitate development
and reduce the country’s historical debt. However, debt swaps are not explicitly limited to fiscal policy
as any private stakeholders can engage with this mechanism assuming mutual agreement to the (legal)
terms of the arrangement.
Efficient mechanism or platform for arranging debt swaps. As they are time sensitive (unresolved
debt accumulating with time), such a mechanism needs to be quick and easy (this has been a
problem with historical national debt swaps and needing to be ratified in parliament first, leading
to reduced effectiveness).
Composition of sovereign creditors need to all agree on the terms and conditions of the deal.
Transparency among parties and in terms of the progress of impact (development) achieved.
Involvement and buy-in of local communities for environmental development, are likely to
maintain impacts achieved regardless of late repayments or other complications.
Consistency in the deal from the government side, regardless of changes in political
composition/structure.
Fishes 2024,9, 305 31 of 39
Table A1. Cont.
Financing Instrument Description Requirements
Blue (and other sovereign) Bonds
Blue bonds are “a debt instrument issued by governments, development banks or others to raise capital from impact investors to finance marine and ocean-based projects that have positive environmental,
economic and climate benefits” [58]. Using blue bonds as a financing mechanism supports an enabling environment for stimulating the development of a country’s entire Blue Economy, by presenting
financial capital to private actors wishing to make sustainable change, at low-risk to investors [60]. When considering a bond issuance, it is critical that the bond structure is fit for purpose (in this case the
development of fisheries and aquaculture industries) ensures the highest degree of environmental and social impact, and that the issuer receives the lowest possible interest rates on repayments. Issuances of
blue bonds are conducted based on a per-case basis and case specific environmental and economic returns, but generally the criteria for bonds to be considered “blue” require that the investment be used for
oceanic or marine resource development.
Catastrophe bonds
A trigger level (like the wind speed of a hurricane) for a specific area is determined before the
phenomenon occurs. If the trigger level is surpassed, the insurer pays out to the insured party. This bond
differs from insurance in that it pays out before the phenomenon has struck, whereas insurance pays out
afterwards [
4
]. Furthermore, no payout is required if the trigger level is not surpassed, but damage may
still be widespread because of the phenomenon.
Transparent environmental monitoring.
Widely informed and well-established environmental trigger levels.
Environmental bonds
Environmental bonds raise capital but the return on investment (ROI) is based on the success of an
environmental programme or project, as defined by pre-determined key performance indicators (KPIs).
In the case of fisheries and aquaculture development, this could be achieving a maximum sustainable
yield of a fish stock within a two years for example, or the protection of 20 hectares of mangroves as fish
nursery grounds.
Well recorded and documented development progress (as per KPIs).
Evidence of longevity/persistence of development (such that any progress does not easily get
reversed upon ROI).
Timelines of assessments need to be sufficiently long to allow the environment to reflect the
development changes (e.g., there may be a lag period involved in a fish stock producing at
sustainable max yield, if fishing of the stock has recently been suspended).
Examples of specific development options within fisheries and aquaculture may be beneficial for
investors to choose from.
Use-of-proceeds bonds
A use-of-proceeds bond entails the upfront promise that proceeds will be used towards blue
development (not necessarily environmental development). These bonds are at risk of “environmental
non-performance” where returns as benefits of the environment do not materialise, but the economic
returns do [61]. This type of bond may be particularly suitable for the development of fisheries and
aquaculture infrastructure (equipment, value addition practices, workspaces, etc.), given that there is no
explicit environmental benefit mandated.
Given that no specific environmental benefit is mandated, it may be beneficial to stipulate any
development or acquisitions from a use-of proceeds bond that involves some measure of
environmental afterthought; e.g., when developing fisheries and aquaculture infrastructure, it
could be designed in a (environmentally) sustainable fashion.
Transparency in use of proceeds.
Blue tokens and Fintech
“Fintech” or financial technology, refers to the use of new technology to improve management and
access of financial operations and processes. It involves the use of specialised software, algorithms
(machine learning), and artificial intelligence to achieve the improved management of finances [15].
Blue tokens is a proposition where fintech and block chain technology are used to raise money for blue
(fisheries and aquaculture) development projects [
15
]. An issuer could set an amount they would like to
raise, for example US $10 million with an initial fixed repayment coupon. The initial price of each token
could be set at US $10 (predetermined), with one million tokens being issued on a secure blue token
market or platform. Any investor who has been approved through rigorous identity checks, like know
your client (KYC) and anti money laundering (AML) checks, can then buy tokens and either hold them
to maturity or trade them among other investors on the blue token platform. A Blue Economy credit
rating agency (alluded to before) could also rate the issuance (initially and later annually) for
development outcomes and financial viability, thereby giving investors maximum information to assist
with their investment decision [15].
Technological infrastructure (sufficient computing equipment, stable electric supply, stable internet
connection, etc).
Stakeholder awareness as to what is available.
Digital security.
Secure block chain technology and infrastructure.
Blue token platform or market.
Thorough identity verification (approval).
Endorsement/certification would be beneficial (such as through a Blue Economy credit rating
agency).
Insurance
Insurance can create confidence for a potential project developer or investor in that it limits the risks that
the project may face, potentially reducing the costs of capital investment. The role of risk management,
risk pooling and risk transfer has become important for any potential development in the Caribbean, as
the intensity of natural disasters like hurricanes increase [15]. Many different insurance products exist
each with their own advantages and potential pitfalls. The demand of high premiums on insurance
products are likely to present a barrier of entry to their use in Caribbean SIDS where finance and
financing is already in short supply.
Low premiums on insurance incentivise its use in lowering risk for investors. This may be
achieved with various forms of fiscal policy (i.e., government support) or regional support (such as
from development banks).
Awareness among project developers and industry stakeholders.
Risk management to be factored into development projects.
Fishes 2024,9, 305 32 of 39
Table A2. Linking financing instruments with financing needs in the fisheries and aquaculture sectors in Barbados, Grenada, and St. Vincent and the Grenadines
(formulated from March et al., 2023 [4]). Financing instruments are ranked by their potential effectiveness.
Financing Need Description Potential Solutions Financing Instrument
Intra-regional trade and domestic
market development
A minimal portion of exports from the three countries is traded within the
region, while the bulk of exports surpass national imports. It is crucial for
these countries to maintain trade with the global market but to reduce
vulnerability to external disruptions by boosting intra-Caribbean trade and
limiting exports. This approach will help ensure that each country’s
nutritional requirements and domestic market demands are fulfilled.
There is a need to simplify the transportation of fish products across borders
to promote intra-regional trade. This could be accomplished by consolidating
import/export declarations and phytosanitary inspections under a single
government or regional agency. Setting a zero percent preferential tariff for
intra-regional trade would ensure that fish imports/exports face no
restrictions.
Implementing a uniform system of conformity assessment procedures for
testing, inspecting, and certifying fish products for import/export across all
countries would minimize confusion about trade standards and ensure that
all products on the market meet legislative and food safety requirements.
1. Blue levies
2. Fintech (blockchain)
3. PPP’s and SOE’s
4. Debt swaps
5. Blue bonds
6. Use-of-proceeds bonds
Value addition of fish products
The essential factor for maximising profit or gains from fish products is value
addition, which also generates employment and foreign currency earnings.
Countries need the technology and resources to meet processing, packaging,
and marketing demands for target markets. However, this technology is
often costly and needs to be imported, increasing the startup costs for
developing value addition in Caribbean countries.
Government planning should prioritise value addition in seafood value
chains by (i) encouraging private investment in seafood value addition
through zero-rating imported machinery (ii) recognising the importance of
training initiatives for seafood producers to equip them with necessary skills
and knowledge for various stages of the value chain (iii) studying,
reassessing, and potentially redefining the seafood chain to address
bottlenecks and operational challenges (iv) continuing market development
and diversification, and (v) establishing information centers to provide
operators at various chain nodes with the necessary information for planning
and investment decision-making.
The three countries can consider producing ready-to-cook and ready-cooked
meals, which are increasingly popular in developed countries. This approach
would yield higher prices for their fish products compared to exporting
unprocessed fish to American markets or other countries.
An example is what Barbados is doing with its tuna sector: making its fishing
fleet more efficient and sustainable by providing it with target-selective
fishing equipment (also opens itself up to an increasing amount of fast
growing markets); and processing tuna before export (e.g., boxed tuna loins).
Enhancing value in the tuna sector would better support local hotels and
restaurants, retaining more value on the island and reducing reliance on food
imports.
1. Debt and lending
2. Blue tokens and fintech
3. Use-of-proceeds bonds
4. PPPs
5. Blue levies
6. Debt swaps
7. Voluntary PES transactions
8. Insurance
Improving ecosystem services
delivery
Without healthy ecosystems, fishery resources provisioning declines. The
coastal and marine ecosystems around Barbados, Grenada, and St. Vincent
and the Grenadines are significantly degraded, severely impacting fisheries
and fish catches. Mismanaged and unsustainable fishing practices, such as
non-targeted bycatch, inefficient fishing gear, and overfishing, further harm
ecosystem healthrazmakThere is an immense gap in the knowledge
pertaining to the state of ecosystems. An effective understanding of
ecosystems is needed to measure baselines and progress in this area.
Evaluating ecosystem services and anthropogenic degradation of the
environment, will assist in creating market-based mechanisms to pay for such
services or compensate for any damages caused.
To sustain the capacity of ecosystems related to fisheries and aquaculture in
providing services, it is essential to improve the valuation of these services
and enhance restoration efforts. This includes well-managed fisheries, closed
seasons for the recovery of natural stocks and the environment, sustainable
resource extraction with appropriate fishing gear, and an ecosystem-based
approach to sustainable resource management.
Continuous evaluation of ecosystem services would provide a highly
integrated, multi-sector management tool, combining knowledge from
ecology, biology, economics, and social sciences. This valuation would be
expressed in monetary terms, making it universally understandable. An
example of such a tool is the Natural Capital Project’s InVEST (Integrated
Valuation of Ecosystem Services and Trade-offs), which offers a suite of
open-access software tools for valuing natural capital. However, substantial
data is required for its effective application, and a concerted effort in data
collection is recommended alongside its use.
1. PPP’s and SOE’s.
2. Environmental taxes.
3. Blue levies.
4. Natural Asset Companies (NACs)
5. Voluntary PES transactions
6. Blue bonds
7. Environmental bonds
8. Catastrophe bonds
9. Use-of-proceeds bonds
10.
Carbon and nutrient trading credits (re-
quires environmental accounting to al-
ready be in place)
Fishes 2024,9, 305 33 of 39
Table A2. Cont.
Financing Need Description Potential Solutions Financing Instrument
Increasing the role of MPAs as
fisheries management tool
Marine protected areas (MPAs) and harvest control are incentive-based
fisheries management tools that have proven effective over time. Their
benefits extend beyond MPA boundaries, including increased biomass and
abundance, habitat preservation, reduced mortality, and enhanced growth
and reproduction. The effectiveness of MPAs is context-dependent, and it is
crucial to implement rules that control and limit fishing around their
periphery to realise their full potential.
MPAs also present significant opportunities for the eco-tourism sector to
benefit from the services they provide. The development of MPAs allows for
collaboration between fisheries, tourism, government, the private sector, and
donor agencies to acquire resources, expertise, and technical knowledge
related to the Blue Economy, helping to address sector challenges. Adequate
support structures and education about eco-tourism opportunities may be
necessary to implement more MPAs. The culture and traditional fishing
methods of fisherfolk can be leveraged to facilitate this transition to
eco-tourism by sharing and monetising these experiences for tourists.
A thorough understanding of species distribution and their habitat
relationships is crucial for the success of marine protected areas (MPAs), yet
this is often insufficient in existing protected areas worldwide, undermining
their effectiveness. Each MPA must have its own tailored management plan
developed and implemented. Key factors for effective MPAs as management
tools include sustainable fisheries management, economic prosperity, the
MPA’s location, size, and habitats, its connectivity to other MPAs, and the
quality of local stakeholders’ participation in its management.
MPAs should serve not only conservation goals but also the improved
management of existing MPAs and the creation of a network of MPAs as part
of a targeted fisheries management strategy. MPAs should be designed and
managed in areas that significantly contribute to fishery resources.
Stakeholders in the industry can be financially incentivised to adhere to and
enforce MPA regulations, but a transparent platform or mechanism should be
established before this can be effectively implemented.
1. PPP’s and SOE’s
2. PES schemes
3. Natural Asset Companies
4. Blue levies
5. Leases, Licences, and fees
6. Debt swaps
7. Blue tokens
8. Environmental bonds
9. Catastrophe bonds
Scaling and development of
aquaculture and mariculture
The aquaculture and mariculture sectors of the three countries are
underdeveloped, but present a means with significant potential to create
revenue. With the collective fish stocks predominantly at or above their
sustainable harvesting limits, fisheries offer decreasing capacity. Using
investment directed at the development of the Blue Economy, upscaling
aquaculture and mariculture offers the potential to optimise the benefits
received from the development of the marine environment, create
sustainable, quality employment, and offer high-value commodities for both
export and the domestic market. This area also offers the potential to develop
further economic opportunities up- and downstream of the mariculture and
aquaculture ventures themselves, creating further livelihoods. The benefits
from aquaculture development, including job creation, entrepreneurship,
skills development, increased food security, and potentially circular resource
use, can be realised more expediently than the transition to sustainable
fisheries.
Investment should be directed towards the creation of an enabling
environment in which aquaculture operations can flourish, with the required
support structures in place (such as veterinary services and distribution
chains) to encourage further development. Among some relevant initiatives,
Earth Ocean Farms in Mexico use open sea aquaculture technology to
cultivate totoaba (endangered species) and red snapper (Lutjanus purpureus) in
their natural environment through cages that are introduced into deep waters
with ideal conditions for their growth.
Essential for further development of mariculture is the harnessing of external
capabilities. Connecting with practitioners experienced in aquaculture
activities would provide a valuable resource for the development of
mariculture in Caribbean regions. These expert practitioners could deliver
key pilot projects that would provide training and capacity building, while
developing strategies that prioritise national development in aquaculture and
mariculture. Cultivating these connections could provide a significant
investment opportunity through international development agencies, while
providing a passageway to engaging in purposeful development of
mariculture in the Caribbean.
Aquaculture financing could happen both at the level of individual projects
and at a national level. On a project level, countries that have some
aquaculture can mobilise financing for securing production and
environmental quality of aquaculture. This can also be promoted through
financing of research-based institutions that support aquaculture developers.
On a national level, financing is needed for not only creating but, just as
importantly, for ensuring that public authorities have the capacity to execute
national policies. In Martinique, for example, local support for aquaculture
development exists and is aided by local and international (EU) funding
mechanisms. Aquaculture research institutions such as ‘Delegation Ifremer
des Antilles Francaise’ (IFREMER) can facilitate collaboration projects to
further the development of aquaculture on the island and in the region on a
bigger scale.
1. Debt and lending
2. Blue bonds
3. Blue tokens and fintech
4. PPP’s
5. Debt swaps
6. Voluntary PES transactions
7. Insurance
Fishes 2024,9, 305 34 of 39
Table A2. Cont.
Financing Need Description Potential Solutions Financing Instrument
Development of aquaponics and
integration into BE development
plans
As with aquaculture and mariculture, integrating aquaponics into Blue
Economy development strategies alongside fisheries and aquaculture
provides a pathway to realise the sustainable intensification of fisheries,
aquaculture, food and agriculture. Aquaponics reintroduces biological
complexity into agricultural systems, closely guided by knowledge
co-creation and sharing processes that aim to maximise synergies. Tackling
the region’s high food import bill and improving food security is increasingly
being explored through aquaponics. An aquaponics industry can facilitate
the rearing of fish for high-value protein concurrently with a range of
vegetables and other produce, which as an import substitution measure can
help reduce dependence on these foreign imports.
Depending on market trends, crop production can be rapidly accelerated
according to the local, tourism, and export demands. However, it is
important to have access to markets that are willing to pay higher prices for
superior quality produce. Costs for both construction and operating of
aquaponics is fairly high, and production expenses may thus not be
recovered without access to high-value markets. The aquaponics initiative
may not be profitable without access to, and leverage, in the markets. A great
deal of aquaponic businesses have failed—typically due to poor business
planning and marketing strategies, rather than production-related issues.
Community driven (potentially PPP) projects could drive development in
aquaponics throughout the Caribbean. This may contribute to ensuring the
nutritional needs of locals are met despite limited available resources, as well
as the potential of generating revenue for community well-being (by selling
to premium markets, with sufficient scale).
While financing the acquisition of aquaponics infrastructure is
straightforward, facilitating access to markets is arguably one of the greatest
limiting factors in the development of aquaponics. Market access and
transport throughout the Caribbean region are areas towards which
investment can be directed as they impact the success (via scalability and
long-term sustainability) of any aquaponics venture. In this regard, synergies
with the tourism and hospitality (restaurants, hotels, etc.) industry can be
developed ensuring a reliable supply of premium produce for local and
international tourists.
Investment into aquaponics research and training institutions is also advised,
as these will yield important contributions such as the profitability of (the
appropriate combination of) cultured species. Such centres could also
facilitate training in business planning and marketing strategies, in addition
to aquaponics production.
An enabling environment for aquaponics development is more likely to
attract foreign investment and external expertise. A unified system of
conformity assessment procedures for testing, inspecting, and certifying
aquaponics products for import and export would minimise confusion over
trade standards and ensure that all products meet legislative and food safety
requirements.
1. PPP’s
2. Debt and lending
3. Blue bonds
4. Blue tokens and fintech
5. Debt swaps
6. Voluntary PES transactions
7. Insurance
Develop and integrate aquaculture
with alternative and emerging
industries
To achieve scalable growth in aquaculture, it is essential to invest in
strengthening existing relationships with other sectors and fostering new
ones. This approach opens up numerous opportunities through alternative
and emerging industries related to aquaculture.
There is potential to create synergies between aquaculture and the biomedical
industry, where products or byproducts from aquaculture could offer
additional resources for alternative biomedical applications. This can be
thought of as increasing the value addition potential/capacity of the industry
as a whole, whereby development in fisheries and aquaculture thus holds
implications for other sectors of the Blue Economy.
For example, tilapia skin from aquaculture farms is used to treat first and
second-degree burns in northern Brazil. Once considered a waste product,
this skin is rich in collagen, helps protect against infection, speeds up healing,
and reduces the need for pain medication. This use of tilapia skin offers a
cost-effective way to integrate the aquaculture industry with the medical
field, requiring no additional development beyond existing aquaculture
practices to enhance food security, livelihoods, and economic growth.
Species of Rhodophyta, such as Irish Sea Moss found in the Caribbean,
contain unique compounds with various health benefits, making them
valuable for biotechnological applications. Seaweeds also play a significant
role in agriculture by increasing crop yields as fertilisers and reducing the
chemical load on soils and crops. Expanding mariculture to include seaweed
extracts in food processing, nutraceuticals, pharmaceuticals, and industrial
applications presents significant investment opportunities within the Blue
Economy, enhancing sector connectivity and income generation. This
approach also addresses the issue of Sargassum seaweed influxes in the
region. It is essential to establish appropriate regulations for using these algae
in consumption and as fertilisers throughout the Caribbean, especially
regarding processing requirements and removing potentially harmful
substances from the biomass.The integration of products from aquaculture
and aquaponics with emerging industries is research and time intensive.
Partnerships with other sector stakeholders may thus be beneficial for
developing future mutual benefit.
1. PPPs’ and SOE’s
2. Blue levies
3. PES schemes
4. Blue bonds
5. Use-of-proceeds bonds
6. Blue tokens and Fintech
Fishes 2024,9, 305 35 of 39
Table A2. Cont.
Financing Need Description Potential Solutions Financing Instrument
Integrating fisheries and
aquaculture into the wider BE
In the context of Blue Economy development at the national level, fisheries
and aquaculture should be prioritised. They will remain the primary sources
of animal protein and employment for the population, especially with
growing efforts to advance aquaculture and aquaponics. Fisheries, as key
observers of marine changes, must play a central role in preserving important
habitats and rehabilitating degraded ones. This aligns with the Blue Economy
approach, which integrates marine biodiversity with coastal habitats to
develop solutions beneficial for both biodiversity and climate change
mitigation and adaptation.
Currently, there are limited coordination mechanisms and no overarching
entity to drive Blue Economy development, resulting in a dominance of
sectoral approaches. This hinders the ability of countries to effectively design
and implement Blue Growth policies and to protect the environment and
enhance ecosystem health through the Blue Economy concept. Additionally,
there is increasing confusion about the role of the state in each country due to
a lack of clear commitment signals. Therefore, structuring the Blue Economy
should be the top priority, preceding all other interventions.
There is also a lack of an integrated and forward-looking approach to marine
ecosystems and spatiotemporal management tools. Neither country has fully
adopted the large marine ecosystem approach (Caribbean LME), which
would help monitor the evolution of coastal and marine ecosystems using
ecological indicators such as biological productivity (particularly fish
biomass), pollution (including plastics and chemicals), and ecosystem health.
The absence of this approach results in less effective resource and ecosystem
management.
The establishment of supra ministerial Blue Economy coordination units in
each of the countries respectively will facilitate the integration of the fisheries
and aquaculture sectors into the wider BE, by being able to manage its impact
relative to other sectors. Such a unit will also be better suited to develop
coordination mechanisms between BE sectors with fisheries and aquaculture
industries resulting in cross-sectoral synergies and increased development
capacity.
Improved understanding and comprehension of fisheries and aquaculture
value chains and challenges facilitates integration into the wider BE, by being
able to identify synergies and opportunities for cooperation with other
sectors, and the fisheries and aquaculture sectors and markets of other
countries.
The development of integrated and spatiotemporal management tools can be
coordinated and integrated into fisheries and aquaculture, by a BE unit. A
Blue Economy unit with a holistic approach will also facilitate and inform
policy decision-making more accurately than individual sector
representatives.
Adoption and awareness raising of the large marine ecosystem approach
among fisheries and aquaculture stakeholders can facilitate a more
sustainable and efficient use of available natural resources. Awareness-raising
can be facilitated by regional organisations, BE units, NGOs, or the state.
1. Blue levies and stakeholder taxation
2. SOE’s
3. Debt swaps
Data limitation among fisheries and
aquaculture and lack of policy
development
Blue Economy activities and components are currently not accounted for in a
unified manner. At present, data must be gathered from various sources to
obtain a comprehensive view of the Blue Economy’s contributions to added
value and job creation. For some sectors, such as ship maintenance, data is
not even recorded. Implementing a national accounting system would
facilitate the tracking of annual changes in economic sectors. Similarly,
ecological aspects of the Blue Economy are not accounted for, despite the
valuable ecosystem services provided by coastal areas and their role in
mitigating hurricane impacts. However, with the implementation of
nationally determined contributions, green and blue accounting should
emerge as foundational tools for evaluating specific actions related to climate
change. The lack of data results in uninformed decision making and
inadequate fisheries and aquaculture policy making, negatively affecting the
industry.
A national organisation for Blue Economy accounting (and environmental
accounting) could regulate the accounting of BE activities. This thus ensures
that the data from a wide variety of sources is verified and coordinated,
meaning that it can be used to inform decision-making relating to
climate-change, and industry development. Policy-making needs to be
informed by available data, and where it is missing, similar examples (of
other countries’ fisheries and aquaculture sectors) can be used as proxies (if
appropriately similar).
Where such an organisation is missing, an easy to use platform for recording
data in fisheries and aquaculture is necessary. The design of the platform
should be such that it encourages unambiguous data input and should use
data already generated/collected by industry stakeholders. Incentivising
stakeholders to encourage honest data reporting of fishing activities (such as
through tax exemptions or non-government subsidies) may contribute to
filling the data limitation.
1. PPP’s and SOE’s
2.
Blue levies and stakeholder taxation (and
exemption)
3. Fintech
4. Use-of-proceeds bonds
An enabling environment for
fisheries and aquaculture
investment
Banking mechanisms are inadequate, and financial markets remain
underdeveloped. In this context, a transparent policy framework adhering to
emerging blue finance principles (such as those from UNEP-FI) could help
build investor confidence. Creating a supportive environment for sustainable
financing of fisheries within the broader Blue Economy will require focused
attention, particularly in relation to addressing national debt.
The recent Caribbean Blue Economic Financing Project (Caribbean BlueFin)
offers a chance to strengthen the capacity of selected countries and establish
an environment conducive to private sector involvement and investment in
the Blue Economy.
1. Debt and lending
2. Insurance
3. Fiscal Policy
4. Debt swaps
Fishes 2024,9, 305 36 of 39
References
1.
Bethel, B.J.; Buravleva, Y.; Tang, D. Blue Economy and Blue Activities: Opportunities, Challenges, and Recommendations for The
Bahamas. Water 2021,13, 1399. [CrossRef]
2.
FAO. FishStatJ—Global Production by Production Source 1950–2019; FAO: Rome, Italy, 2022. Available online: https://www.fao.org/
fishery/en/statistics/software/fishstatj (accessed on 4 April 2023).
3.
FAO. Fishery Country Profile; Grenada; FAO: Rome, Italy, 2019; Updated December 2019. Available online: https://www.fao.org/
fishery/en/facp/grd (accessed on 23 April 2023).
4.
March, A.; Failler, P.; Bennett, M. Caribbean Fishery and Aquaculture Financing Needs in the Blue Economy: Identifying
Opportunities and Constraints in Barbados, Grenada, and St. Vincent and the Grenadines. J. Sustain. Res. 2023,5, e230004.
[CrossRef]
5.
UN. United Nations—Blue Economy: Oceans as the Next Great Economic Frontier. 2023. Available online: https://unric.org/en/
blue-economy-oceans-as-the-next-great-economic-frontier/ (accessed on 3 March 2023).
6.
Failler, P.; Pètre, É.; Binet, T.; Maréchal, J.-P. Valuation of marine and coastal ecosystem services as a tool for conservation: The
case of Martinique in the Caribbean. Ecosyst. Serv. 2015,11, 67–75. [CrossRef]
7.
Jackson, J.; Donovan, M.; Cramer, K.; Lam, V. Status and Trends of Caribbean Coral Reefs: 1970–2012. IUCN. 2014. Available
online: https://portals.iucn.org/library/efiles/documents/2014-019.pdf (accessed on 20 March 2023).
8.
Patil, P.G.; Virdin, J.; Diez, S.M.; Roberts, J.; Singh, A. Toward A Blue Economy: A Promise for Sustainable Growth in the
Caribbean; An Overview. World Bank Group. 2016. Available online: https://www.cbd.int/financial/doc/wb-blueeconomy.pdf
(accessed on 20 March 2023).
9.
Wilson, R. Impacts of Climate Change on Mangrove Ecosystems in the Coastal and Marine Environments of Caribbean Small
Island Developing States (SIDS). 2017. Available online: https://www.seatoneconsulting.com/wp-content/uploads/2017/04/
Impacts-of-Climate-Change-on-Mangrove-Ecosystems-in-the-Coastal-and-Marine-Environments-of- Caribbean-Small-Island-
Developing-States.pdf (accessed on 21 March 2023).
10.
OECD Data Explorer. Official Flows by Country and Region. From OECD.Stat. 2024. Available online: https://data-explorer.
oecd.org/vis?df[ds]=DisseminateFinalDMZ&df[id]=DSD_DAC2@DF_DAC2A&df[ag]=OECD.DCD.FSD&df[vs]=1.1&dq=
.DPGC.206.USD.Q&lom=LASTNPERIODS&lo=5&to[TIME_PERIOD]=false (accessed on 6 February 2024).
11.
Lewis, F.; Saliman, A.; Peterson, E. Funding Trends 2023: Tracking the State of Global Ocean Funding. Our Shared Seas. 2023.
Available online: https://oursharedseas.com/funding/ (accessed on 15 May 2023).
12.
Failler, P.; Andriamahefazafy, M. Madagascar Blue Economy Strategy for Fisheries and Aquaculture; Government of Madagascar:
Antananarivo, Madagascar, 2022.
13.
Failler, P. Seychelles Blue Economy Action Plan; Department of the Blue Economy, Republic of Seychelles and United Nations
Economic Commission for Africa: Addis Ababa, Ethiopia, 2020; 20p.
14. AU-IBAR. Africa Blue Economy Strategy—Blue Governance Framework; African Union: Addis Ababa, Ethiopia, 2020.
15.
Ram, J.; Kaidou-Jeffrey, D. Financing the Blue Economy in the Wider Caribbean. In The Caribbean Blue Economy; Routledge:
Abingdon, UK, 2020; pp. 210–225.
16. Clegg, P.; Mahon, R.; McConney, P.; Oxenford, H.A. (Eds.) The Caribbean Blue Economy; Routledge: Abingdon, UK, 2020.
17.
Whiteside, H. Beyond death and taxes: Fiscal studies and the fiscal state. Environ. Plan. A Econ. Space 2021,55, 1744–1761.
[CrossRef]
18.
Vidal-Hernández, L.; de Yta-Castillo, D.; Castellanos-Basto, B.; Suárez-Castro, M.; Rivera-Arriaga, E. Fiscal Economic Instruments
for the Sustainable Management of Natural Resources in Coastal Marine Areas of the Yucatan Peninsula. Sustainability 2021,
13, 11103. [CrossRef]
19.
Cepal, N. Revenue Statistics in Latin America and the Caribbean 1990-2019/Estadísticas Tributarias en América Latina y el
Caribe 1990–2019. 2021. Available online: https://www.cepal.org/es/publicaciones/46811-revenue-statistics-latin-america- and-
caribbean-1990-2019-estadisticas (accessed on 16 February 2024).
20. Attzs, M.; Maharaj, M.; Boodhan, G. Survey and Assessment of Environmental Taxes in the Caribbean; Inter-American Development
Bank: Washington, DC, USA, 2014.
21.
Ballesteros, L.V.; Matthews, J.L.; Hoeksema, B.W. Pollution and coral damage caused by derelict fishing gear on coral reefs around
Koh Tao, Gulf of Thailand. Mar. Pollut. Bull. 2018,135, 1107–1116. [CrossRef] [PubMed]
22.
Unsbo, H.; Boltenstern, M.; Granberg, M.; Olshammar, M.; Karlsson, M. Quantification and Environmental Pollution Aspects of Lost
Fishing Gear in the Nordic Countries; Nordic Council of Ministers: Copenhagen, Denmark, 2022.
23.
Nelms, S.E.; Duncan, E.M.; Patel, S.; Badola, R.; Bhola, S.; Chakma, S.; Chowdhury, G.W.; Godley, B.J.; Haque, A.B.;
Johnson, J.A.; et al. Riverine plastic pollution from fisheries: Insights from the Ganges River system. Sci. Total. Environ. 2020,
756, 143305. [CrossRef] [PubMed]
24.
Thompson, N. Thompson, William (1775–1833), Socialist and Economist; Oxford Dictionary of National Biography (Online ed.);
Oxford University Press: Oxford, UK, 2004.
25.
Ostrom, E. Governing the Commons—The Evolution of Institutions for Collective Action; Cambridge University Press: Cambridge, UK,
2015; ISBN 9781107569782. Available online: https://www.cambridge.org/us/universitypress/subjects/politics-international-
relations/political-theory/governing-commons-evolution-institutions- collective-action- 1?format=PB&isbn=9781107569782 (ac-
cessed on 15 May 2023).
Fishes 2024,9, 305 37 of 39
26.
Wunder, S. Payments for Environmental Services: Some Nuts and Bolts; CIFOR Occasional Paper No. 42; CIFOR: Bogor, Indonesia,
2005. Available online: https://montagneinrete.it/wp-content/uploads/2024/03/op-42-wunder-on-payments_1495540914-1
.pdf (accessed on 23 April 2023).
27.
Engel, S.; Pagiola, S.; Wunder, S. Designing payments for environmental services in theory and practice: An overview of the
issues. Ecol. Econ. 2008,65, 663–674. [CrossRef]
28.
Van Hecken, G.; Bastiaensen, J.; Huybrechs, F. What’s in a name? Epistemic perspectives and Payments for Ecosystem Services
policies in Nicaragua. Geoforum 2015,63, 55–66. [CrossRef]
29.
Salzman, J.; Bennett, G.; Carroll, N.; Goldstein, A.; Jenkins, M. The global status and trends of Payments for Ecosystem Services.
Nat. Sustain. 2018,1, 136–144. [CrossRef]
30.
Trends, F. Payments for Ecosystem Services: Getting Started in Marine and Coastal Ecosystems. A Primer. 2010, pp. 4–5,
Electronic Source. Available online: https://www.forest-trends.org/wp-content/uploads/imported/marine-coastal-pes-getting-
started_2010-pdf.pdf (accessed on 15 May 2023).
31.
Newell, R.; Sanchirico, J.; Kerr, S. An Empirical Analysis of New Zealand’s ITQ Markets. In Proceedings of the IIFET 2002
Conference, Wellington, New Zealand, 19–22 August 2003.
32.
Robertson, M.M. The neoliberalization of ecosystem services: Wetland mitigation banking and problems in environmental
governance. Geoforum 2004,35, 361–373. [CrossRef]
33.
BBOP. The Mitigation Hierarchy—Business and Biodiversity Offsets Programme. 2023. Available online: https://www.forest-
trends.org/bbop/bbop-key-concepts/mitigation- hierarchy/ (accessed on 11 April 2023).
34.
Ten Kate, K.; Bishop, J.; Bayon, R. Biodiversity Offsets: Views, Experience, and the Business Case; IUCN & Insight Investment: Gland,
Switzelrand, 2004; Online Report. Available online: https://www.iucn.org/sites/default/files/import/downloads/bdoffsets.pdf
(accessed on 20 May 2023).
35.
Dempsey, J. Enterprising Nature: Economics, Markets, and Finance in Global Biodiversity Politics; John Wiley & Sons: Hoboken, NJ,
USA, 2016.
36.
Ripple, W.J.; Estes, J.A.; Schmitz, O.J.; Constant, V.; Kaylor, M.J.; Lenz, A.; Motley, J.L.; Self, K.E.; Taylor, D.S.; Wolf, C. What is a
trophic cascade? Trends Ecol. Evol. 2016,31, 842–849. [CrossRef] [PubMed]
37. Blair, J.M.; Collins, S.L.; Knapp, A.K. Ecosystems as functional units in nature. Nat. Resour. Env’t. 1999,14, 150.
38. Jax, K. Ecological Units: Definitions and Application. Q. Rev. Biol. 2006,81, 237–258. [CrossRef] [PubMed]
39.
Niner, H.J.; Randalls, S. Good enough for governance? Audit and marine biodiversity offsetting in Australia. Geoforum 2021,
120, 38–45. [CrossRef]
40.
Resilient Islands. Valuing the Benefits of Mangroves and Coral Reefs in the Caribbean. Coastal Resilience. 2024. Available
online: https://media.coastalresilience.org/Resilient_Islands/BenefitsOfMangrovesAndCorals_TechReport.pdf (accessed on 16
April 2024).
41.
UNEP-WCMC. WorldFish Centre, WRI, TNC. Global Distribution of Warm-Water Coral Reefs. 2024. Available online: https:
//doi.org/10.34892/t2wk-5t34 (accessed on 12 February 2024).
42.
UNEP-WCMC. Short FT. Global Distribution of Seagrasses (Version 7.1). 2024. Available online: https://doi.org/10.34892/x6r3
-d211 (accessed on 12 February 2024).
43.
Chami, R.; Cosimano, T.F.; Fullenkamp, C.; Oztosun, S. Nature’s Solution to Climate Change: A strategy to protect whales can
limit greenhouse gases and global warming. Financ. Dev. 2019,56. Available online: https://www.actu-environnement.com/
media/pdf/news-34050-article-finances-developpement.pdf (accessed on 17 April 2023).
44.
Howard, J.; Hoyt, S.; Isensee, K.; Telszewski, M.; Pidgeon, E. Coastal Blue Carbon: Methods for Assessing Carbon Stocks and Emissions
Factors in Mangroves, Tidal Salt Marshes, and Seagrasses; IUCN: Gland, Switzerland, 2014.
45.
Bumpus, A.G. The Matter of Carbon: Understanding the Materiality of tCO2e in Carbon Offsets. Antipode 2011,43, 612–638.
[CrossRef]
46.
Trading Economics. EU Carbon Permits—Trading Economics. 2023. Available online: https://tradingeconomics.com/
commodity/carbon (accessed on 12 April 2023).
47.
Vandana, S. Voluntary Carbon Market—S&P Global; Agnihotri, A., Ed.; S&P Global: New York, NY, USA, 2022. Available
online: https://www.spglobal.com/commodity-insights/en/market-insights/latest-news/energy-transition/010622-voluntary-
carbon-market-rally-set-to-stretch-into- 2022-on-demand-optimism (accessed on 13 February 2023).
48.
Fleischman, F.; Basant, S.; Fischer, H.; Gupta, D.; Lopez, G.G.; Kashwan, P.; Powers, J.S.; Ramprasad, V.; Rana, P.; Rastogi, A.; et al.
How politics shapes the outcomes of forest carbon finance. Curr. Opin. Environ. Sustain. 2021,51, 7–14. [CrossRef]
49.
IEG. Intrinsic Exchange Group. 2023. Available online: https://www.intrinsicexchange.com/home-1 (accessed on 12
February 2023).
50.
OECD. Lessons Learnt from Experience with Debt-for-Environment Swaps in Economies in Transition; OECD: Paris, France, 2007; p. 39.
51.
The Commonwealth. Case Study: Innovative Financing—Debt for Conservation Swap, Seychelles’ Conservation and Climate
Adaptation Trust and the Blue Bonds Plan, Seychelles (On-Going). 2020. Available online: https://thecommonwealth.org/case-
study/case-study-innovative-financing-debt-conservation-swap-seychelles-conservation- and (accessed on 14 September 2022).
52.
Fuller, F.; Zamarioli, L.; Kretschmer, B.; Thomas, A.; De Marez, L. Debt for climate swaps: Caribbean outlook. In Impact: Science
Based Implementation of 1.5 C Compatible Action for LDCs and SIDS; Climate Analytics: Berlin, Germany, 2018; pp. 1–18. Available
online: https://ca1-clm.edcdn.com/assets/debt_for_climate_swap_impact_briefing.pdf (accessed on 27 September 2022).
Fishes 2024,9, 305 38 of 39
53.
Bigger, P.; Christiansen, J.; Dempsey, J.; DiSilvestro, D.; Irvine-Broque, A.; Nelson, S.; Rojas-Marchini, F.; Schuldt, A.; Shapiro-
Garza, E. Beyond the Gap: Placing Biodiversity Finance in the Global Economy; Third World Network: Penang, Malaysia, 2021.
[CrossRef]
54.
Victurine, R.; Meyers, D.; Bohorquez, J.; Box, S.; Blythe, J.; Callow, M.; Jupiter, S.; Schweigart, K.; Walsh, M.; Bieri, T. Conservation
Finance for Coral Reefs. Vibrant Oceans Initiative Whitepaper; Wildlife Conservation Society: New York, NY, USA, 2022; p. 10.
Available online: https://doi.org/10.19121/2022.Report.43864 (accessed on 18 September 2022).
55.
McGowan, J.; Weary, R.; Carriere, L.; Game, E.T.; Smith, J.L.; Garvey, M.; Possingham, H.P. Prioritizing debt conversion
opportunities for marine conservation. Conserv. Biol. 2020,34, 1065–1075. [CrossRef]
56.
Munevar, D. Making Sense of Belize’s Blue Bond Proposal. EURODAD: European Network of Debt and Development. 2021.
Available online: https://www.eurodad.org/making_sense_of_belizes_blue_bond_proposal (accessed on 20 February 2022).
57.
Perry, K.K. From the plantation to the deep blue sea: Naturalising debt, ordinary disasters, and postplantation ecologies in the
Caribbean. Geogr. J. 2022,189, 562–574. [CrossRef]
58.
World Bank. Sovereign Blue Bond Issuance: Frequently Asked Questions. 2018. Available online: https://www.worldbank.org/
en/news/feature/2018/10/29/sovereign-blue-bond- issuance-frequently-asked-questions (accessed on 27 August 2022).
59.
Winters, R. The Nature Conservancy Announces Its Third Global Debt Conversion in Barbados. The Nature Conservancy.
2022. Available online: https://www.nature.org/en- us/newsroom/tnc-announces-barbados-blue-bonds- debt-conversion/
#:~:text=The%20Blue%20Bonds%20strategy%20combines,of%20their%20communities%20and%20economies (accessed on 26
September 2022).
60.
Sumaila, U.R.; Walsh, M.; Hoareau, K.; Cox, A.; Teh, L.; Abdallah, P.; Akpalu, W.; Anna, Z.; Benzaken, D.; Crona, B.; et al.
Financing a sustainable ocean economy. Nat. Commun. 2021,12, 3259. [CrossRef] [PubMed]
61.
March, A.; Failler, P.; Bennett, M. Challenges when designing blue bond financing for Small Island Developing States. ICES J. Mar.
Sci. 2023,80, 2244–2251. [CrossRef]
62.
Adams, D.M.; Benzaken, D.; McCarron, B.; Taylor, L.; Thiele, T.; Tok, X. Analysis & Development of a Pacific Ocean Bond; Asia
Research & Engagement: Singapore, 2020.
63.
Mehta, A.; Tirumala, R.D.; Andrich, M.L. Financing the Ocean Back to Health in Southeast Asia: Approaches for Mainstreaming Blue
Finance; Asian Development Bank: Metro Manila, Philippines, 2021.
64.
Christiansen, J. Securing the sea: Ecosystem-based adaptation and the biopolitics of insuring nature’s rents. J. Political Ecol. 2021,
28, 337–357. [CrossRef]
65.
Cisneros-Montemayor, A.M.; Moreno-Báez, M.; Reygondeau, G.; Cheung, W.W.L.; Crosman, K.M.; González-Espinosa, P.C.;
Lam, V.W.Y.; Oyinlola, M.A.; Singh, G.G.; Swartz, W.; et al. Enabling conditions for an equitable and sustainable blue economy.
Nature 2021,591, 396–401. [CrossRef] [PubMed]
66.
Quak, E. How Losing Concessional Finance Affects Small Island Developing States (SIDS); K4D Helpdesk Report No 626; Institute of
Development Studies: Brighton, UK, 2019.
67.
Bishop, M.; Argudin Violante, C.; Bouhia, R.; Carter, G.; Corbett, J.; Lindsay, C.; Scobie, M.; Wilkinson, E. Just Transitions in Small
Island Developing States (SIDS); Electronic Source; British Academy: London, UK, 2021.
68.
UNEPFI. The Principles—Sustainable Blue Finance. United Nations Environment Programme Finance Initiative. 2018. Available
online: https://www.unepfi.org/blue-finance/the-principles/ (accessed on 23 September 2023).
69. Thiele, T.; Gerber, L.R. Innovative financing for the high seas. Aquat. Conserv. Mar. Freshw. Ecosyst. 2017,27, 89–99. [CrossRef]
70.
Gbigbi, T.M.; Achoja, F.O. Cooperative Financing and the Growth of Catfish Aquaculture Value Chain in Nigeria. Croat. J. Fish.
2019,77, 263–270. [CrossRef]
71.
Syddall, V.M.; Fisher, K.; Thrush, S. Collaboration a solution for small island developing states to address food security and
economic development in the face of climate change. Ocean Coast. Manag. 2022,221, 106132. [CrossRef]
72.
UNCTAD. Barbados Bets on Tuna to Boost the Value of Fish Exports. 2020. Available online: https://unctad.org/news/barbados-
bets-tuna-boost-value-fish-exports (accessed on 16 February 2024).
73.
OECS Member States. Organization of Eastern Caribbean States. 2024. Available online: https://www.oecs.org/en/who-we-are/
member-states (accessed on 6 February 2024).
74.
OECD. Beyond GDP—Measuring What Counts for Economic and Social Performance; Organization for Economic Co-Operation and
Development (OECD): Paris, France, 2018. Available online: https://www.oecd.org/social/beyond-gdp-9789264307292-en.htm
(accessed on 16 May 2023).
75.
International Oceanographic Commission. Marine Spatial Planning. 2022. Available online: https://www.ioc.unesco.org/en/
marine-spatial-planning (accessed on 18 May 2023).
76.
ADB. Financing the Blue Economy: Investments in Sustainable Blue Small-Medium Enterprises and Projects in Asia and the Pacific; Asian
Development Bank (ADB): Metro Manila, Philippines, 2022; ISBN 978-92-9269-603-0. Available online: https://doi.org/10.22617
/TCS220281-2 (accessed on 17 September 2022).
77.
ADB. SME BlueImpact Asia: Financing Small and Medium-Sized Enterprises that Dominate the Blue Economy. Online Webinar.
Asian Development Bank (ADB) Knowledge Events. 2022. Available online: https://events.development.asia/learning-events/
sme-blueimpact-asia-financing-small-and-medium-sized-enterprises- dominate-blue (accessed on 16 February 2024).
78. Abalobi. Home Page. 2023. Available online: https://abalobi.org (accessed on 16 February 2024).
Fishes 2024,9, 305 39 of 39
79.
Weirowski, F.; Hall, S.J. Public-Private Partnerships for Fisheries and Aquaculture: Getting Started; WorldFish Center Manual
Number 1875; The WorldFish Center: Penang, Malaysia, 2008.
80.
Allam, Z.; Jones, D. Climate Change and Economic Resilience through Urban and Cultural Heritage: The Case of Emerging Small
Island Developing States Economies. Economies 2019,7, 62. [CrossRef]
81.
Anderson, T.L.; Leal, D.R. Free Market Environmentalism; Palgrave Macmillan: New York, NY, USA, 2001; ISBN 978-0-312-23503-1.
[CrossRef]
82.
Coates, R. What is Free-Market Environmentalism? Lean Liberty. 2023. Available online: https://www.learnliberty.org/blog/
what-is-free-market-environmentalism/ (accessed on 2 February 2024).
Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual
author(s) and contributor(s) and not of MDPI and/or the editor(s). MDPI and/or the editor(s) disclaim responsibility for any injury to
people or property resulting from any ideas, methods, instructions or products referred to in the content.
Content uploaded by Michael Bennett
Author content
All content in this area was uploaded by Michael Bennett on Aug 03, 2024
Content may be subject to copyright.
