Valuing the Ocean

The ocean provides a number of ecosystem services, which are used by mankind in multiple ways but which have not been considered systematically in economics so far. Our working group evaluates the different ecosystem services provided by the ocean by integrating them into economic models. The following topics are considered:

• Carbon Management
• Energetic and Mineral Resources
• Shipping

Carbon Management                                                                  to top

The growth of atmospheric CO2 concentration de­pends not only on global economic activity and the carbon intensity of the economy but also on the effectiveness of the natural carbon sinks, i.e. the terrestrial biosphere and the ocean. The Kyoto Protocol already contains management options for the terrestrial biosphere. However, the absolute value of the long-run atmospheric carbon stabilization level and the corresponding time path will depend crucially on the marine carbon cycle. Still, management options regarding the marine carbon cycle are still rare in the eco­nomic analysis of climate change.

Neglecting the external costs of anthropogenic carbon emissions like ocean acidification results in a too high atmospheric carbon stabilization goal. Additionally, the resulting oceanic changes determine the risk content associated with the various emission paths, regarding the impact of large scale effects like the shutdown of the thermohaline circulation or the destabilisation of methane hydrate reservoirs. However, including the ocean within the economic analysis does allow considering various management options which can decrease the costs of climate change mitigation. The option to store anthropogenic carbon in the deep ocean or even below the seabed or to enhance the net carbon uptake of the ocean from the atmosphere by iron fertilization might allow for an extended use of fossil fuels without too dramatic effects on the climate.

Main research questions are:

• Does carbon capture and injection into the deep sea (ocean sequestration) provide an serious option for the extended use of fossil fuels along with acceptable impact on climate and oceanic change?

• Does oceanic fertilisation with iron sulphates (iron fertilisation) provide an serious option to increase the biological based downward transfer of anthropogenic carbon into the oceans interior?

• Does increasing ocean acidification and the related changes in the biological environment reduce the commercial usage of oceanic resources? Which implications does this imply for ocean sequestration and iron fertilisation?

• Which additional risks by changes in the ocean have to be considered within the assessment of climate change and the resulting climate policy?

Energetic and Mineral Resources                                               to top

The ocean provides important non-renewable resources: Oil and gas are already extracted from the ocean floor today, but in the future also the extraction of mineral resources such as copper, zinc, gold or silver may be of interest. However, defining an optimal extraction policy for these resources will also require taking into account possible adverse environmental impacts. Moreover, climatic changes will facilitate access to marine resources, like oil and gas in the Arctic, which gives rise to the question how the exploitation of these resources may influence world energy markets in the future.

Main research questions are:

• What is the ocean’s potential to provide mineral resources? How can these resources be exploited optimally? How do environmental impacts influence optimal extraction policies?
• How are world energy markets going to change if climate change makes it possible to exploit untapped resources in the Arctic? What are the effects on welfare and energy security of importers?

Shipping                                                                                      to top

International shipping is an important transportation mode and central to world trade. But with increasing maritime traffic, also absolute greenhouse gas emissions of the merchant fleet increase. These emissions need to be capped and regulated efficiently, for example by integrating them into existing emission trading systems like the EU ETS. This issue is complicated by the fact that international maritime traffic includes cross-border activities, which necessitates international cooperation.

Main research questions are:

• How can greenhouse gas emissions of the world merchant fleet be regulated? What would the economic consequences be if these emissions were integrated into an international emission trading system? Is such an integration legally possible and politically feasible?

    

The Cluster of Excellence "The Future Ocean"                          to top

The inclusion of these aspects, which consider the current and future use of the ocean by man, requires an interdisciplinary research approach. The cluster of excellence “The Future Ocean” provides this opportunity in Kiel. "The Future Ocean" brings together experts from diverse specialist areas and their expertise: For example, lawyers and geoscientists are investigating questions on how and who has the right to exploit resources on the seafloor. Climatologists and economists are working on the question of what conditions make CO₂ storage on the seafloor a relevant option. Marine scientists, medics, mathematicians, chemists, engineers and social scientists are dedicating themselves to further questions.  The German Research Foundation (DFG) has approved the cluster and will be funding the investigation of this topic over the next 5 years. The Kiel Institute for the World Economy is part of this Kieler cluster of excellence. The research area “Environment and Natural Resources” and is represented within the Cluster by the research project “A7: Ökonomische Bewertung des Ozeans im Kohlenstoffkreislauf - Valuing the Ocean“ (see graphic below).

Click here, to reach the homepage of the "Future Ocean". 

Further Links:

• Chair of Environmental and Resource Economics at the University of Kiel (Prof. Dr. Katrin Rehdanz)