OPERATIONAL BRIEF New Frontiers of Innovation BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM © 2022 The World Bank Group 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000 | Internet: www.worldbank.org Acknowledgments This work is a product of the staff of The World Bank Group with external contributions. “The World Bank Group” refers to the legally separate organizations of the International Bank for Reconstruction and Development (IBRD), This brief was written by Ede Ijjasz-Vasquez (Lead In addition, the team received incisive and helpful advice, the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Consultant). The series of briefs was prepared by a team led by comments and input from World Bank colleagues, including Investment Guarantee Agency (MIGA). 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Specialist), Ede Ijjasz-Vasquez (Lead Consultant), Christian Peter (Practice Manager), Lia Carol Sieghart (Practice Manager), and Sanjay Srivastava (Practice Manager). BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 1 About the Blue Economy for Resilient Africa Program Key Messages The Blue Economy generated nearly US$300 billion for the African continent in 2018, creating 49 million jobs in the process. These and other crucial benefits—most notably food security, livelihoods, biodiversity, and resilience to the effects of climate change—are entirely dependent on the Changing the growth trajectory of blue economies in health and productivity of coastal and marine areas. Africa toward a sustainable and resilient path will require innovation on several areas. By safeguarding productive coastal landscapes, countries will be in a better position to take full advantage of future Blue Economy opportunities, which range from sustainable blue energy to aquaculture to blue carbon. Technological innovations—from satellite monitoring The World Bank’s Blue Economy for Resilient Africa Program, announced at COP27, will and early warning systems to artificial intelligence and provide multisectoral analytical, financial, and policy support to Africa’s coastal countries quantum computing—need to be at the core of Africa’s and island states to help them leverage the opportunities—and manage the risks—inherent future Blue Economy. in scaling up their Blue Economies. Innovative scientific and research partnerships are needed to understand the current and future state and trends of About this series of briefs the coastal and marine environment, and the projected impacts of climate change. Scientific understanding needs to be translated into solutions at a faster pace. The Blue Solutions for Africa series of operational briefs captures how a thriving Blue Economy can help African New methods to engage meaningfully with communities, countries better manage the development challenges businesses, and governments to co-create they face while supporting economic growth, sustainable sustainable local solutions will need to be explored. livelihoods, and the health of these precious ecosystems. A larger flow of financial resources from development THE BRIEFS COVER THE FOLLOWING THEMATIC AREAS partners and transfers from central governments will be required to achieve sustainable development in coastal • Climate change • Data management and and marine areas. However, this will not be enough. knowledge creation Financial instruments that mobilize additional resources • Coastal and marine biodiversity and habitats • Innovative financing from the private sector, blended finance instruments instruments that leverage limited government resources and donor • Sustainable fisheries funds, and a supportive regulatory framework to reach • Developing and incentivizing global climate and carbon funds will all be needed to • Marine pollution institutions achieve success. • Jobs and livelihoods © Shutterstock • New frontiers of innovation • Participatory marine spatial planning © IFreepik 4 NEW FRONTIERS OF INNOVATION BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 3 Introduction Africa’s Blue Economy shows great potential for tackling the enormity of climate change while improving livelihoods for coastal communities. However, achieving this potential requires improvement in the scientific understanding of marine and coastal conditions in the context of The Challenge climate change, paired with innovations in technology, business, finance, and—importantly—the institutional structures that will develop and implement mitigation and adaptation initiatives. Achieving the full potential of Africa’s This brief sets out how the World Bank—in addition to developing novel financial instruments Blue Economy while tackling the to unlock the investments needed to grow the Blue Economy—contributes to innovation by enormity of the growing challenges supporting research into local marine and coastal conditions; supporting the localization of global technologies where appropriate; and encouraging partnerships across stakeholder imposed by climate change on groupings around a common purpose of developing the continent’s Blue Economy through innovative solutions. the region’s coastal and marine environment will not be possible with traditional solutions. Innovative, out-of-the-box, solutions will be needed in multiple areas. According to the African Union, Africa’s Blue Economies Communities and ecosystems in coastal Africa are already generated nearly US$300 billion and created close to 50 million feeling the impacts of a changing climate. Even with decisive jobs in 2018, with economic activities ranging from fisheries climate action to achieve the Paris goals, these impacts will to tourism, coastal urban development, trade, and logistics. continue to grow for decades to come. The continent’s most The African Union’s Agenda 2063 has identified the Blue vulnerable coastal communities and the fragile marine and Economy as a key goal towards achieving a prosperous Africa. coastal ecosystems will need climate adaptation action at scale to prepare for the climate impacts of today and tomorrow. The potential of Africa’s Blue Economy is at risk from a variety of environmental and development pressures, including pollution, fisheries overexploitation, unplanned coastal development, deforestation, and coastal erosion. Climate change amplifies and accelerates these risks. 4 I NEW FRONTIERS OF INNOVATION © Arne Hoel / World Bank BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 5 Institutions Business models Traditional solutions designed and implemented The sustainable, resilient growth of Africa’s What is Needed by individual sector government agencies blue economies cannot be achieved by the at the central level will not be able to grow private sector alone. The significant and growing African blue economies as quickly and risks that African countries face require new as sustainably as they could. The challenges imposed business models supported by science and technology, by climate change require the engagement of new effective and adaptive government regulations and support, stakeholders, new institutional arrangements, and transparent and productive relations with communities. and new engagement and action platforms. Traditional solutions focused on narrow interventions Economic sectors in the coastal and marine environment— are no longer adequate. This brief reviews five areas of The complexity of today’s environmental and climate challenges—and the including fisheries, tourism, trade, infrastructure, and urban markets—need prosperous businesses that understand the innovation and positive disruption that can provide opportunities for new economic growth environmental constraints and risks facing the blue economies of based on a Blue Economy—requires Africa. This understanding requires up-to-date information, solid the basis for a new, resilient, and sustainable Blue new approaches that involve all key projections on climate change impacts, and coordinated action. stakeholders, from communities Economy in Africa. These areas are technology, to businesses to all levels of Climate adaptation and resilience action can also not be science, institutions, business models, and finance. government. Locally led solutions that seek to strengthen the resilience the sole responsibility of government stakeholders. The private sector needs to play a fundamental role in adaptation of communities and accelerate action at scale. This engagement will need innovative their journey to prosperity need public-private partnerships that transform climate risk- Technology Science the support of national agencies. management solutions into viable enterprise options such The availability of frontier technologies provides The Intergovernmental as outcomes-based arrangements to monitor and protect a unique opportunity for Africa’s Blue Economy to Panel on Climate Many environmental challenges— natural resources or implement nature-based solutions, leapfrog and find new solutions for sustainable, Change’s Sixth Assessment from those affecting fisheries to and flood-protection mechanisms that enhance the value resilient coastal and marine development. New Report (Chapter 9) estimates coastal erosion—require regional, of urban land linked to benefit-sharing mechanisms. technologies are disrupting data value chains (from new ways that only 3.8 percent of climate-related © Freepik multi-country action. Traditional regional of acquiring, storing, analyzing, and sharing data) to disrupting research funding is directed towards African cooperation mechanisms need an upgrade Finally, climate adaptation actions should not be seen only as stakeholder value chains (from the sharing economy to topics, and less than 15 percent of that funding goes to ensure agile responses. Mayors have a special a cost. They can be generators of new and better green jobs crowdsourcing solutions, fintech, and virtual learning). to African institutions. Research platforms and initiatives role in the rapidly urbanizing coastal areas of Africa. for adaptation. Innovative business models and public-private Mobile phones and e-money are two examples of digital that work to expand the available knowledge resources partnerships for sustainable and resilient blue economies will technologies for sustainable development that have been are needed to facilitate better understanding of the current Citizens, governments, and businesses need to interact create new jobs. Rolling out the adaptation program at scale— successfully introduced and scaled on the continent. state of Africa’s ecosystems and economies, and on new engagement platforms if they are to seize the from enhancing coastal erosion management to deploying the projected impacts of a changing climate. opportunities offered by disruptive technologies. The nature-based solutions such as mangrove plantations—can The resilience of Africa’s Blue Economy must crowdsourcing and co-creation of solutions that break generate a large number of jobs for the youth of Africa’s coastal rely on advanced technologies such as early Perhaps of greater importance is transforming rigid institutional silos can be part of the innovation toolkit. areas. The self-reinforcing mechanism of more and better warning systems and advanced tools to existing research into practical solutions jobs for adaptation leading to a more prosperous and resilient monitor environmental changes, including toward a resilient Blue Economy in the economy needs to be part of a new growth trajectory for Africa. climate change impacts. Big data, artificial Africa region. This transformation should intelligence, the sensor-driven internet not be limited to critical environmental of things, and cloud computing—among issues such as biodiversity and fisheries, Finance other technologies—will be indispensable but should also be applied to economics The traditional financial model—regardless of Innovative financial instruments that provide greater for enhancing disaster resilience and (for example, to advance the understanding whether it takes the form of standard international flexibility to tackle complex and uncertain development climate adaptation in coastal areas. and application of nature-based accounting, © Freepik development assistance (such as individual challenges are critical for shifting the growth trajectory or to produce new tools to develop spatial grants and loans) or central government of Africa’s blue economies. Instruments designed to The application of disruptive technologies needs planning) and social sciences (in areas such transfers—will not be sufficient to tackle the enormous finance outputs, or even outcomes, rather than inputs, will to be accompanied by two major societal changes. First, as locally led development and behavioral change). challenges facing Africa’s coastal and marine environment. give entrepreneurs and local governments new tools to the capacity of government agencies and other stakeholders New business models and coordinated stakeholder localize and co-create disruptive and adaptive solutions. to leverage these technologies for the benefit of African The Africa Union’s Science, Technology and Innovation engagement platforms require commensurate innovations coastal economies and societies needs to be enhanced. Strategy for Africa 2024 places science, technology, and in finance. Many new solutions are being developed. For One of the most important outcomes of the 2021 United Second, the relationship between stakeholders—government, innovation at the core of the region’s development and growth. example, labelled bonds are being expanded to include blue Nations Climate Change Conference (COP26) was the re- the private sector, and citizens—needs to shift in such a way Its fourth priority area, “protection of our space”, focuses on bonds specifically focused on investments linked to the Blue establishment of a process to have formal carbon markets that citizens and enterprises are more informed, governments satellite-enabled Earth observation as the basis for enhancing Economy. The use of this debt instrument can help connect established. As of 2021, more than 21 percent of global are more responsive, and decision-making processes are research into environmental protection, including climate the African coastal and marine economies with rapidly greenhouse gas emissions were covered by carbon pricing more transparent. For example, a sustainable resilient change studies, biodiversity, maritime and sub-maritime growing ESG markets—responsible businesses that are instruments in operation. However, African blue economies ocean fisheries sector needs the continuous application exploration, and water. seeking to invest in projects that offset their environmental do not yet have the monitoring, reporting, and verification of innovative technologies, from satellite monitoring to and social impacts. It is important to note, however, that mechanisms in place to access these climate finance artificial intelligence analysis of stock and fishing boat the issuance of blue bonds needs solid preparatory work, mechanisms. The opportunities are enormous, including in the data. However, the best technology without connections to monitoring systems, and a strong pipeline of certifiable voluntary market where companies purchase carbon credits fishermen—both commercial and artisanal—and government projects that match the specific criteria of these labelled bonds. to achieve their net-zero and other climate commitments. This agencies will not achieve the urgent transformations needed. voluntary market remains varied and is evolving rapidly. 6 I NEW FRONTIERS OF INNOVATION BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 7 How the World Bank Group Innovation is at the core of the World Bank Group’s contributions to Africa’s Blue Economy. Contributes to Solutions From developing new financing models to supporting the rapid development and deployment of novel scientific from transferring frontier technical solutions to the knowledge and innovative technologies, to catalytic West African context to support for new institutional platforms and business gamifying engagements models, the World Bank Group is working hand in hand to support the inclusive with African partners to establish and scale up programs for co-creation of solutions that a sustainable and resilient Blue Economy in the continent. strengthen climate adaptation and build coastal resilience. © Freepik Projects supported by the World Bank Group are using the latest technologies to transform key sectors in the Blue The World Bank Group continues to develop Economy. The use of satellite monitoring to understand and support new financial instruments specifically changing environmental conditions and how coastal erosion designed to support action at scale in the Blue Economy of trends are amplified by climate change is now a routine part of Africa. From labelled bonds to financial instruments linked projects in West Africa. The latest technologies are being used to outcomes, the World Bank Group is responding to the in state-of-the-art electronic fishery monitoring, surveillance, needs of African countries with innovative approaches. For and control systems in the Africa Regional Fishery Program, example, in October 2018 Seychelles issued the world’s first scaling up the successful lessons learned in a World Bank- sovereign blue bond with support from the World Bank. In financed project in Mauritania, a country that is now a pioneer addition to providing technical advice to design this innovative among African countries in the use of these technologies. instrument, the World Bank provided a US$5 million guarantee and mobilized an additional US$5 million concessional loan In addition to supporting novel research, the World Bank from the Global Environmental Facility to partially subsidize Group builds strong linkages between scientific understanding the payment of bond coupons. Using the lessons learned from and the technologies, investments, and policies that drive Blue this pioneer blue bond and the global experience of similar Economy activities. In Morocco, for example, the World Bank instruments, in 2022 the International Finance Corporation supports the strengthening of marine and coastal environment published Guidelines for Blue Finance to scale support. monitoring programs, while in the Red Sea and Gulf of African countries will be able to design blue project eligibility Aden region, the World Bank supports the understanding of criteria and issue blue bonds in line with the International anthropogenic and climate-induced changes affecting marine Capital Market Association’s Green Bond Principles. and fishery resources. And in West Africa, the World Bank and several other partners support the Center for Ecological At the Government of Morocco’s request, the World Bank Monitoring’s Coastal Observatory, which seeks to gather data is also supporting an innovative US$350 million project and conduct analyses of coastal risks in the region. Resulting designed to use budget programming as the basis for effective improvements in the development and dissemination of planning of the Blue Economy. This design is not focused scientific knowledge are influencing investment decisions on the financing of specific inputs. Rather, it rewards the taken by various countries to enhance their blue economies. achievement of well-defined outcomes and allows Morocco’s Ministry of Economy and Finance to influence developments The World Bank Group supports the development of new in the country’s Blue Economy through a collaborative regional partnerships that bring together a broad range of approach between agencies working in blue sectors. The stakeholders in engagement platforms and co-creation program is designed to support the implementation of the spaces. A leading program is the West Africa Coastal Areas country’s 2021 nationally determined contributions, with Management Program (WACA). This convening platform goes a special focus on adaptation measures to build coastal beyond grouping development partners with West African resilience. The implementation of this innovative financial countries to bring together communities, mayors, the private instrument is providing important lessons for replication in sector, and the scientific community for collective action. In other African countries. addition to a broad range of scientific, data, and investment support, the WACA program has galvanized a global call for innovations to tackle coastal erosion and flooding risks (see “Crowdsourcing Innovation” on page 8). These solutions range 8 I NEW FRONTIERS OF INNOVATION © Jonathan Ernst / World Bank BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 9 © Freepik What Success INNOVATION CROWDSOURCING INNOVATION Innovation—scientific, technological, social, and entrepreneurial—is critical to solving the challenges faced by Africa’s Blue Economy. In 2020, the West Africa Coastal Areas Management Program ran a global competition calling for the best ideas to develop resilient and sustainable solutions to coastal erosion, flooding, pollution, and climate change along West Africa’s coast. will Look Like Some of the most interesting solutions proposed include: Changing the growth trajectory of blue economies • Developing an open-access, interactive, online application that offers insight into the impact of ports and other in Africa toward a sustainable and resilient path will coastal infrastructures on erosion. The app should be designed to be used by anyone, with or without a scientific require innovation at multiple levels. Success will require background, to facilitate collaboration between technical experts and stakeholders. innovative solutions that go beyond the use of current • Creating a public-private fund-pooling resource that brings together West African countries and seaports to develop a transnational sand bypass. Sand bypassing is the process whereby sand is manually moved from one and future disruptive technologies. These technologies— place (typically one that is gathering sand due to manmade structures) to another (typically one where sand is being eroded) to restore sand balance, reduce erosion, and minimize port sedimentation. This solution combines finance, from satellite monitoring and early warning systems to technology, and institutional arrangements and could achieve savings of as much as a third of the costs associated with traditional single-port or single-country solutions. artificial intelligence and quantum computing—need to • Taking a systems approach to port development. This approach brings together a wide range of stakeholders to be at the core of Africa’s future Blue Economy. However, contribute to port development from the outset, so ensuring that the port is inclusively designed and incorporates all perspectives—economic, environmental, and social. innovation will also be required in other areas. • Developing a tool that extracts wave energy to reduce erosion at the coast, while simultaneously providing much- needed desalinated water and electricity to nearby coastal communities to increase climate resilience. Increased resources and stronger global science and • Implementing a nature-based solution designed to speed up the spontaneous regeneration of mangrove trees research partnerships are needed to understand the and restore their capacity to control coastal erosion by mitigating hydrodynamic and sedimentary conditions. current and future state and trends of the coastal and marine environment and the projected impacts of • Engaging in a gamified process to increase stakeholders’ participation in integrated coastal management and planning. Participation is not limited to information sharing but focused on full inclusion of the local population, including climate change. However, this will not be enough. Faster Changing the climate adaptation employment opportunities or co-creation and co-decision-making processes. translation of scientific findings into the design and implementation of programs and policies is equally important. growth trajectory of Source: WACA Call for Innovation eBook The sustainable and resilient development of blue economies in Africa will require focused, decisive effort by blue economies in Africa toward a national governments and development partners. But the engagement of other stakeholders is also fundamental for a new economic paradigm for coastal areas. Success will require engagement with communities on the design and implementation of local solutions; with private enterprises sustainable and resilient path to co-create sustainable business propositions and green jobs for climate adaptation; and with local governments to encourage co-creation of solutions with local constituents. A larger flow of financial resources from development partners will require innovation at and transfers from central governments will be required to achieve sustainable development in coastal and marine areas. However, this will not be enough. Financial instruments multiple levels. that mobilize additional resources from the private sector, blended finance instruments that leverage limited government resources and donor funds, and a supportive regulatory framework to reach global climate and carbon funds will all be needed to achieve success. 10 I NEW FRONTIERS OF INNOVATION © Dominic Chavez / World Bank BLUE ECONOMY FOR RESILIENT AFRICA PROGRAM I 11