www.ifc.org/thoughtleadership NOTE 101 • APR 2021 Blue Natural Capital: Enhancing Business Outcomes and Sustainability of Coastal Tourism Markets By Elizabeth M. White and Bilal Rahill The COVID-19 pandemic hit the tourism industry particularly hard, affecting livelihoods and exacerbating some pressures on the natural capital resource base. Supporting the tourism sector recovery is an opportunity to Build Back Better,1 ensuring that business investments lead to a sustainable and resilient shared-growth pathway that is good for tourism and the natural capital on which it depends. Further sustainable management of the Blue Economy could more than double its economic contribution to global GDP.2 Therefore, the “new normal” must deepen the consideration of Blue Natural Capital and its dynamic relationship with economic sectors across coastal landscapes and markets. The experience of the State of Palawan in the Philippines is explored in this note. It serves as a useful model for weighing the opportunities and challenges typical of coastal tourism areas and exploring natural dependencies therein. Societies and businesses derive value from the oceans and coastal challenges, including climate change, pollution, unsustainable areas. The Blue Economy, which is the sustainable use of ocean coastal development, overfishing, and competing demands resources for economic growth, improved livelihoods and jobs, for resources. They are also vulnerable to shocks. In and ocean ecosystem health,3 accounts for more than 3 percent most situations, sustaining the flow of benefits to local of global GDP4 (with estimates as high as 7.5 percent). It covers communities and the economy depends heavily on the natural several traditional sectors such as fisheries and aquaculture, capital that draws visitors to these areas, protects coastlines maritime transport, tourism, and emerging sectors such as from storms, and provides food, water, fiber, and other biopharmaceuticals and marine renewable energy. Of these, essential ecosystem resources. the World Bank estimates that coastal and marine tourism will Blue Natural Capital is an important driver of GDP growth represent 26 percent of the ocean economy by 2030, representing for many countries, including small island states. It can a large part of the value of the Blue Economy.5 also be a critical contributor to the total wealth of nations Tourism and Blue Natural Capital—Building with productive coastal areas and active marine and ocean Back Better economies, including in rural areas where tourism is the predominant economic activity.6 Coastal areas are home to over 40 percent of the world’s population and are the primary livelihood source for millions Blue Natural Capital is a shared resource across economic of people. These areas also face social and environmental sectors. In addition to its economic contribution through About the Authors Elizabeth M. White, Principal Strategist, Sector Economics and Development Impact, Economics and Private Sector Development, IFC. Her email is ewhite1@ifc.org. Bilal Rahill, Senior Consultant, World Bank Group and Founder Sustainability Frameworks, LLC. His email is Bill@sustainabilityframeworks.com. The authors wrote this Note in collaboration with James Spurgeon, Director, Sustain Value; Mark Gough, CEO, Capitals Coalition; Ryley Harris, Doctoral Researcher, Virginia Tech CNRE; and Natsuko Toba, Economist, Country Economics and Engagement, Economics and Private Sector Development, IFC. This EM Compass Note builds on the concepts and discussion presented in White, Elizabeth M., Bilal Rahill, Mark Gough, and James Spurgeon, “How Natural Capital Approaches Can Support Sustainable Investments and Markets”, EM Compass Note 92, IFC, October 2020; and the report “Using Natural Capital Approaches to Manage Shared Dependencies – Delivering Sustainable Development and Enhanced Resilience” by Elizabeth M. White, Mark Gough, James Spurgeon, and Bilal Rahill, IFC et al., November 2020. 1 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. lead to the permanent depletion of the underlying natural BOX 1 Definition of Terms capital asset base and the decline of economic activities and Natural Capital: The stock of renewable and non- benefits that flow to stakeholders. In this context, businesses renewable natural resources that combine to yield a and market participants more broadly need to understand the flow of direct and indirect benefits to people. shared value of the natural resource and act in their collective Blue Natural Capital: That portion of natural interest to move to more sustainable pathways. capital that is found in coastal, marine, and ocean Blue Natural Capital faces different shocks and stresses environments and which provides ecosystem over time that can affect its value to the Blue Economy. services that yield a flow of benefits to people and Understanding how and why pressures on the natural resource sustain life on earth. base change over time is vital to investment decisions and Blue Economy: A sustainable ocean economy, where business management. Developing this understanding enables the needs of dependent stakeholders and natural stakeholders to define collective initiatives and prepare for capital-bearing ecosystems are satisfied, allowing for the sustainable continuity of both environment shocks that might undermine the best conservation and risk and economy. management practices. The COVID-19 pandemic represents such a scenario for travel and tourism. Losses associated with Natural capital as a shared dependency: Where natural capital is considered a resource that multiple the pandemic are estimated at $3.8 trillion in global travel and stakeholders jointly depend on for a range of benefits. tourism GDP, impacting about 142.6 million jobs.7 The spillover effects of these losses in local economies present risks to the preservation of Blue Natural Capital. For instance, tourism revenues, Blue Natural Capital supports other the decline in tourism revenue hurts local livelihoods and industries that draw on and impact many of the same natural may result in an increase in unsustainable fishing practices assets (such as clean water resources) through their business in search of food or additional income.8 It can also impact activities. These include local farmers and fishers, small and funding for fisheries management and marine conservation.9 medium enterprises, and many larger industries. Globally, For example, in the Philippines’ Tubbataha Reefs Natural numerous initiatives have focused on protecting the natural Park, tourism revenues make up over half of the conservation assets of coastal areas, mobilizing resources to conserve budget needed to protect areas from illegal fisheries.10 biodiversity and the natural environment, and instituting processes and requirements to mitigate the adverse effects of The post-pandemic recovery phase must include a redefinition coastal and near-shore development. of tourism strategies to enhance tourism’s sustainability and resilience across all major risk factors, including Blue Natural There have been notable advances in mapping data and the Capital. Long-term resiliency and sustainability are built on development of natural capital accounts in coastal areas and, local action. Leaders in a local market can catalyze changes more recently, recognition of the significance of plastic-related in behavior and practices of competitors, suppliers, and pollution. Spatial data and technological advances of this businesses operating in the local economic ecosystem; they nature can be usefully communicated to highlight the shared can influence government programs; and they can think about benefits of sustainable Blue Natural Capital management their shared dependencies in geospatial terms. practices across economic sectors. These advances can also This way of thinking about the sustainability and resiliency help identify priorities for investments in conservation as part of natural capital is critically important, given that climate of a sustainable and equitable pathway. change and other shocks may be formidable in the years Management of a shared resource is inherently difficult but ahead. Recent financial projections suggest that damage to the essential to a sustainable Blue Economy. Multiple stakeholders global economy from rising sea levels will amount to about who depend upon the same Blue Natural Capital can overuse seven times the cost of dealing with COVID-19.11 the resources, resulting in a decline in the quantity and quality This underscores the importance of Building Back Better in of natural capital and ecosystem services. For example, the Blue Economy by cultivating sustainable natural capital a shared dependency on water by a broad spectrum of locally. The severity of the economic shock associated with industries, farmers, households, and wildlife puts significant COVID-19 is also a useful reminder of the importance of pressure on these water resources. a diversified economic base. In this context, Building Back Fishers and tourism companies rely on coastal resources such Better should also consider building back differently and as fish, coral reefs, and associated biodiversity and ecosystem in economic sectors not fully dependent on tourism, such services. If these dependencies are not recognized and as value-added agriculture, sustainable fisheries, and fish managed responsibly and sustainably, overuse will eventually farming, among others. 2 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Environmental Stresses Tourist Arrivals Stakeholders Boat tour Ten Knots operators Shared Dependencies Fishers Dive shops The Business Case Coral cover Water quality Fish stocks • Stakeholders could lose up to USD 50 million in profits in the next 20 years compared to Enhanced Management and USD 29 million compared to Planned Management scenarios • Improved coral cover, water quality, and fish stocks New Management Pathways • Avoided risk of resort closures and reduced tourist numbers FIGURE 1 Protecting Natural Capital in El Nido Source: IFC’s Natural Capital Advisory Services Program—Ten Knots Assessment with Indufor and Sustain Value. This recovery can also identify new opportunities to unlock dependencies for the tourism market, and their continued the inherent value of nature. For instance, knowing and viability impacts long-term profitability and returns across locking in the values of biodiversity and carbon sequestration multiple tourism companies. within a seascape or landscape may help design innovative El Nido is an exceptional and popular tourism destination financial instruments that could, for instance, provide threatened by multiple stresses on its Blue Natural Capital. seed funding for circular economy business opportunities Near Bacuit Bay is a world-class coral reef ecosystem and and support more inclusive management and governance important area for local fishers. The El Nido-Taytay Managed models. For example, plastic recycling, seaweed farming, and Resource Protected Area was established in 1998 and is one renewable aquaculture could all be significant industries and of the largest marine sanctuaries in the Philippines, covering could be established, seeded, or de-risked using sustainability over 900 square kilometers. Before this, El Nido was protected finance instruments. Finding new revenue streams linked to as a turtle sanctuary. Despite these regulatory efforts for key performance indicators could help catalyze new thinking Blue Natural Capital preservation, coral reef ecosystems and and opportunities with landscapes and seascapes while fisheries’ health are increasingly threatened by unsustainable building resilience, sustainability, and circularity. tourism, illegal fishing, pollution, and climate change. Building Back Better in Palawan’s Coastal Landscape Easier access and affordable travel options led to dramatic increases in tourist arrivals in El Nido. A spike in tourism Example: El Nido Tourism and Blue Natural Capital began in 2009 after a major upgrade of the road connecting Businesses in coastal and marine landscapes have combined Puerto Princesa, Palawan’s capital, to El Nido, and the large and small measures to protect the Blue Natural Capital introduction of low-cost flights from Manila to Puerto on which they depend. In El Nido, on the northern tip of the Princesa and more recently from Manila directly to El Nido. Philippine island of Palawan, a ridge-to-reef12 natural capital With an estimated 30 percent year-on-year increase in the last approach with a leading resort operator showed that other ten years, tourism has proliferated in the area. The permanent resorts, boat tour operators, dive companies, and fishers have population of the municipality has grown from 18,832 in a direct shared dependency on the Blue Natural Capital of El 1990 to 41,606 in 2015. Total average monthly tourist arrivals Nido’s Bacuit Bay, which contributes to the economic viability reached close to 150,000 in 2017,13 including diver arrivals and vibrancy of the local area. that exceeded the recommended carrying capacity of 5,000 Tourists come to the area to experience the pristine divers per year.14 environment of clean water, flourishing coral reefs, Pressure from tourism and local population growth affects unobstructed expansive views, and unsullied places for natural capital in Bacuit Bay. The local nature-based tourism hiking, rock climbing, scuba diving, swimming, snorkeling, industry depends heavily on water quality, coral reefs, and other activities. They expect access to clean water, and terrestrial scenery. Businesses in the industry include high-quality produce, locally sourced fish and seafood, and tour operators, boat operators, dive shops, restaurants, other locally sourced inputs. These represent natural capital accommodations, market vendors, and transport. Boat tour 3 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Dependencies Impacts Consumptive Non-consumptive Inputs Outputs Geological formation Fecal Contaminants (mangroves/corals) Marine waste/litter Fish (for looking at) Other habitats and Seawater quality Coast protection Climate (rainfall, Income Security Habitat damage (above seaview) Fish (for eating) Fish (for eating) GHG emissions Sedimentation Coral Reef Use iconic species enhancement Seawater and Food Security Seawater Use Water Quality Charcoal Use Temperature) Non GHG air  Coral Reefs Other food pollutants Charcoal Beaches Habitat Energy Activity Island ° ° • • ° ° • • • ° ° ° resorts • • • ° ° • • ° ° ° ° ° Island-hopping ° ° • • ° ° • • • ° ° ° tours • • • ° ° ° • • ° ° ° Dive ° ° • • ° • • • ° ° operations • • • ° ° ° • • ° ° ° Habitat protection ° • • ° ° and restoration • • • ° ° ° • Directly Related High Materiality to the activity ° Indirectly related Medium Materiality to the activity Low Materiality to the activity Not Material TABLE 1 Materiality matrix for tourism activities in Bacuit Bay Source: IFC’s Natural Capital Advisory Services Program—Ten Knots Assessment with Indufor and Sustain Value. operators depend primarily on revenues from island-hopping It showed how healthy coral reef ecosystems enhance societal tours, whereas dive shops depend on dive expeditions and resilience, buffer against pollution, and improve the resilience, associated activities such as dive classes for revenue. Resorts stability, and long-term profits of local businesses (e.g, small rely on the same sites included on the island-hopping tours and large resorts, dive shops, and boat tour operators). and dive sites and high-end tourists seeking pristine natural When coupled with a diagnostic of the tourism market, the spaces and more exclusive access and privacy. The primary assessment helped tourism market participants identify and mass tourism in Bacuit Bay takes the form of one-day prioritize actions to build a sustainable and resilient local excursions by boat tour operators to visit various destinations tourism market (Figure 1). This highlighted the importance on island-hopping tours. of a landscape approach to understanding the dependencies, Tourism closures in other areas of the Philippines, in risks, and potential impacts associated with operating particular Boracay, mirrored what could happen in El Nido. in sensitive environments; it highlighted the connectivity The island of Boracay, another major tourist destination in between core economic activities and their reliance on shared the Philippines, was subjected to a six-month tourism closure assets; and it showed opportunities that could be funded by in 2018, triggered by the government’s response to the severe sustainability financial instruments. environmental degradation in the area. This closure led to significant lost tourism receipts and economic activity. What Material dependencies and impacts on natural capital in occurred in Boracay represented an entirely plausible outcome a “ridge-to-reef system” such as in Bacuit Bay can inform for El Nido, given that the area experienced some of the same activities to build a sustainable tourism market. The stresses, including excess tourism pressure, inadequate waste Natural Capital Protocol provides a structured approach to and sewage treatment infrastructure, and poorly regulated undertaking this kind of analysis (Table 1). For example, in fishing practices. El Nido, a scenario of increased tourism arrivals and changes Together, these stresses fueled declines in water quality, in ecosystem services’ vitality was modeled on a similar coral reefs, fish populations, and marine ecosystems’ overall experience in other locations. quality. Even in the absence of significant closures, tourist The impact on the coastal economy was estimated based on arrivals could take a hit. This occurred in Puerto Galera on three scenarios: business as usual (BAU), planned management the Island of Mindoro, where tourist arrivals dropped by 60 (PM), and enhanced management (EM). The EM scenario put percent due to poor water quality and lack of adequate waste a firm cap on boat tours, required diversified tour offerings management facilities.15 away from the most visited sites, increased tour prices, and A natural capital assessment demonstrated that enhancing added an environmental access fee and enhanced enforcement marine resources in Bacuit Bay through sustainable of management measures, such as a code of conduct for tour management would help the coastal Blue Economy thrive. boat operators at key sites. 4 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. Projected Tourist Arrivals in Three Scenarios Knock-on Impact in Palawan Boat Tour Net Revenues Net Present Value Comparison Between Stakeholders FIGURE 2 Tourist Arrivals, Knock-on Effects, Net Revenues, and NPVs under Three Scenarios Source: IFC’s Natural Capital Advisory Services Program—Ten Knots Assessment with Indufor and Sustain Value. The analysis showed that a focus on increasing the number accommodations all gain under EM of the Blue Natural Capital, of tourists in the short term, under a BAU scenario, would with the smaller companies gaining the most in relative terms. lead to an eventual decline and possible collapse of overall While boat tour operators gain the least if current unsustainable tourist revenues and local economy effects due to accelerated BAU activities continued, EM of the Blue Natural Capital and possibly irreversible environmental degradation.16 resulted in optimal long-term outcomes for tour operators. It also provided data to demonstrate how a managed Significantly higher tourist revenues also were estimated.2 increase in tourist arrivals, through tighter control of new Driving to Shared Solutions for Sustainable and accommodations and supported by municipal infrastructure Resilient Tourism and enforcement of existing and planned environmental regulations, would preserve the natural capital base, increase Well-informed risk management regulations and practices tourism revenues, and gradually accommodate 30 percent are necessary but not sufficient for a sustainable and resilient more visitors. The analysis also built in scenario models using tourism market. Even best-in-class resorts cannot eliminate the threats to their natural capital dependencies solely different climate, environmental, and sector growth scenarios. through individual sustainability practices. For example, a With this information, industry participants and public sector leading resort in El Nido is widely regarded as an exemplar authorities could see how changes in management practices of environmentally and socially responsible practices, with could lead to the preservation of the assets on which they numerous awards from prestigious industry associations. depend and an increase in values for the coastal landscape. While the resort mitigates its impact on natural capital and Enhanced management of Blue Natural Capital delivered the complies with local regulations, the impact of other actors most value. The benefits under the enhanced management on the assets in the landscape are beyond its control, as are scenario far exceeded the other scenarios (Figure 2). potential shocks. The resort can influence shared action to Fishers, boat tour operators, and small and large tourist protect the shared assets, but it cannot do it alone. 5 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. FIGURE 3 Diagnostic tool on the enabling environment for adoption of natural capital measurement and valuation in the tourism industry in Palawan. Source: White, Elizabeth, Mark Gough, James Spurgeon, and Bilal Rahill. 2020. “Using Natural Capital Approaches to Manage Shared Dependencies – Delivering Sustainable Development and Enhanced Resilience.” Local market knowledge informed solutions to underpin of environmental impacts both nationally and in Palawan, tourism’s continued success. In El Nido, businesses, local but a lack of enforcement capacity hinders effective governments, and NGOs used a diagnostic tool17 to better implementation. Various Philippine government agencies understand the factors that might catalyze shared solutions collect data on natural capital. This data is relatively coarse, around managing Blue Natural Capital and ensure its long- limited to a few sites, and challenging to deploy more broadly. term viability. The diagnostic consists of four elements: This limits the information that the private sector can access (a) policy environment; (b) stakeholders and networks; (c) and integrate into its analyses to better understand natural business and institutional capacity; and (d) industry drivers. capital dependencies. Improved access to open-sourced, Stakeholders were able to recognize the real value of the geospatial data from big data and remote sensing could be natural capital base through the assessment and realize that useful. Additional partnerships with the World Bank’s Global business as usual was not a viable way forward.18 They could Program on Sustainability, which encompasses the WAVES then identify measures to slow down the degradation or program, could also help to derive additional ecosystem even reverse it. Figure 3 illustrates the strengths (shades of services data in southern Palawan. green) and areas of challenge (orange, yellow, and red) in the Progress hinges on improved private sector initiatives and market. While the prevailing policy environment and general practices and public sector support. Tour operators in El Nido awareness of the risks to natural capital rated high, the overall noted the importance of collective action to reduce damage to readiness of the private sector proved to be a work in progress, the marine environment by less damaging boat anchoring and with early signs of industry mobilizations and collaboration improved tourist education to reduce coral reef trampling. but no clear game plan to collaborate and act to preserve the Some solutions were challenging as they involved upfront natural capital on which the local market depends. actions at the market level that had short-term financial Enforcement and implementation of policies and regulations implications (for example, a reduction in the number of tourist were mixed. Comprehensive policy governs the management arrivals). Other solutions required more robust public sector 6 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. support, including municipal wastewater treatment and solid employment, foreign exchange earnings, and tax revenues for waste management, more effective and transparent use of developing countries. Furthermore, and as confirmed through funding for low-impact mooring lines, and control of the the El Nido case, tourism generates economic activity for number of boats accessing individual sites. small- and medium-sized businesses that supply goods and services both during construction and operations. Action areas included capping the number of tour boats at sites and diversifying the offerings, increasing fees that could The Way Forward then be used for protective measures, and strengthening A more resilient tourism market depends on natural capital. enforcement of regulations and capacity of the protected The El Nido case provides useful insights into the types of area’s office. Improved access to liquidity for smaller measures and outcomes associated with enhanced management companies during the transition period from BAU to EM of the natural capital upon which the tourism market depends. was also identified as a priority to help with natural capital El Nido’s tourism future depends heavily on coral reefs and preservation. Innovative financial instruments such as Blue water quality, as does the future of hundreds of similar Bonds or Natural Capital Bonds present another opportunity tourism destinations around the world. Healthy corals provide to mobilize revenue streams at the landscape level to ensure a naturally regenerating structure that helps to absorb wave natural capital preservation energy, which is extremely important in reducing erosion and Investment and Business Opportunities in coastline flooding associated with major storms. Emerging Markets This, in turn, protects communities and ecosystems in Private sector opportunities in the blue economy abound, but places like Bacuit Bay and surrounding areas. Increased long-term sustainability is at risk. The Blue Economy covers climate variability19 (including higher temperatures, changing several traditional sectors which represent opportunities rainfall patterns, and rising sea levels) is expected to have for the private sector. The environmental and social risks significant impacts on coastal and marine environments and challenges with many of these sectors are generally well and, subsequently, on tourism. The risk of ocean warming, understood and documented: much of capture fisheries are acidification, and poor water quality is greater in Bacuit Bay unsustainable; aquaculture can destroy mangroves and can be than elsewhere in the area because the prevailing currents do a source of marine pollution; plastic pollution in urban coastal not flush the water as fully. When the resulting coral bleaching areas leads to ocean pollution, etc. and loss of ecological functions are coupled with other stresses like unplanned development, the effects on coastal tourism Opportunities for private sector participation in the traditional markets and the economy can be acute. areas of the Blue Economy may be increasingly constrained Lower fishing yields affect coastal communities’ livelihoods by the limited natural capital base that is degrading rapidly and businesses dependent on caught fish. Stakeholder data, in many parts of the world. The private sector can be part of literature, willingness to fund surveys, CCRES20 data, and coral the solution and bring policies and practices that sustain or reef vulnerability models were all considered and integrated even rebuild the natural capital base to support sustainable, into the analysis to build a strong business case for an enhanced resilient growth of the Blue Economy. Opportunities include natural capital management strategy, and in turn create a on-land plastics management, stronger circularity measures, resilient coastal tourism market in El Nido. The approach, and low-impact, nature-based tourism, among others. In many tools, and methodology employed have significant potential for of these cases, understanding the health of the natural capital replication across the tourism sector. The experience in dealing and vitality of ecosystem services will be critical to charting a with COVID-19 is also likely to provide important insights into path to a sustainable Blue Economy. how the economy of El Nido and its surrounding area can build Nature-based tourism is driving the global tourism industry. resilience outside of the tourism sector. Understanding how The global tourism industry has been growing faster than the area adapted to a new reality will provide insights into the the global economy. Nature-based tourism is the fastest- resilience aspects that should be further considered, as well as growing subsegment within the tourism sector3 and includes the policies and emergency management measures that should tourism that relies on experiences directly related to natural be implemented to prepare for future shocks. attractions. Furthermore, tourism activities not meeting the The El Nido case demonstrates that enhancing the definition of nature-based tourism also rely heavily on natural management of Blue Natural Capital can support a capital for the ecosystem services they provide, directly and broader and more sustainable Blue Economy. Enhanced indirectly (e.g., water and food). management of natural capital would protect Bacuit IFC’s long-standing support to the tourism sector has Bay from stresses such as poor water quality and coral demonstrated how tourism is a major contributor to trampling by tourists, and would increase business and 7 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group. community support for coral restoration measures. The Agribusiness, and Services, Economics and Private Sector case demonstrates that enhanced coral resilience to Development, IFC; Shaun Mann, Senior Operations Officer, environmental shocks through better management would Africa Advisory Services – Tourism, Africa Region, IFC; improve the profitability and resilience of all economic Becky Last, Operations Officer, Advisory Services, East Asia actors in El Nido’s tourism sector. and Pacific Region, IFC; and Thomas Rehermann, Senior Economist, Thought Leadership, Economics and Private Sector Additionally, enhanced coral reef quality should improve fish Development, IFC. productivity, providing greater food security for local people in the future. The assessment proposed that the tourism Please see the following additional reports and EM market could increase profits and resilience by diversifying Compass Notes about responses to COVID-19 and about tourism offerings away from just a few fragile sites. This reaching unserved and underserved populations in effort is a model that can be used in other coastal markets emerging markets: How Firms are Responding and Adapting to understand shared dependencies and act to build a more During COVID-19 and Recovery – Opportunities for Accelerated Inclusion in Emerging Markets (report, March 2021); Using Blended sustainable and resilient market. In many cases, innovative Concessional Finance to Invest in Challenging Markets—Economic financial instruments can help accelerate progress toward Considerations, Transparency, Governance , and Lessons of Experience landscape goals and, in some cases, help offset short- (report, February 2021); Private Credit in Emerging Markets (Note term social costs associated with the transition to a more 98, March 2021); How the Tourism Sector in Emerging Markets is sustainable and resilient Blue Economy. Recovering from COVID-19 (Note 95, Dec 2021); Using Natural ACKNOWLEDGEMENTS Capital Approaches to Manage Shared Dependencies – Delivering The authors would like to thank the following colleagues Sustainable Development and Enhanced Resilience (report, for their review and suggestions: Lorenzo Ciari, Manager, November 2021); How Natural Capital Approaches Can Support Sector Economics and Development Impact – Manufacturing, Sustainable Investments and Markets (Note 92, October 2021). 1 World Bank. 2020. “Building Back Better: Pursuing a Greener, More Inclusive, and Resilient Recovery.” November 27. http://documents1.worldbank.org/curated/ en/404661606955558548/pdf/Building-Back-Better-Pursuing-a-Greener-More-Inclusive-and-Resilient-Recovery.pdf. 2 OECD. 2016. “The Ocean Economy in 2030.” https://www.oecd.org/environment/the-ocean-economy-in-2030-9789264251724-en.htm. 3 World Bank. 2017. “What is the Blue Economy.” June 6, 2017. https://www.worldbank.org/en/news/infographic/2017/06/06/blue-economy 4 UNCTAD. 2020. “The Blue Economy and COVID-19 Pandemic – World Oceans Day.” (Online Conference), June 10, 2020. https://www.youtube.com/watch?v=sQV1s5IBVHY. 5 Brumbaugh, Rob and Pawan Patil. 2017. “Sustainable Tourism Can Drive the blue economy: Investing in Ocean Health is Synonymous With Generating Ocean Wealth.” Voices: Perspectives for Development (blog), May 22. https://blogs.worldbank.org/voices/Sustainable-Tourism-Can-Drive-the-Blue-Economy?fbclid=IwAR08a_zb64_gPW4VZOLIyk_ bcvgRbCK9eZHqMbKZzmLFndx_Z6RiIMKfiJQ. 6 It is useful to think of GDP as a “return on wealth.” GDP is calculated by looking back on the previous year’s economic activity and is considered a “flow” measure. Wealth and its composition tell us if the portfolio of assets or “stocks”—produced, natural, human capital, social capital—are balanced to support GDP growth in the long term. Wealth provides information about the long-term health of an economy, its capacity to sustain growth, reflecting depreciation and depletion of assets, and whether investments and accumulation of assets are keeping pace with population growth. See https://www.worldbank.org/en/news/feature/2018/01/30/the-changing-wealth-of-nations-2018. 7 See the UNWTO Tourism Data Dashboard at https://www.unwto.org/unwto-tourism-dashboard. 8 Vyawahare, Malavika. 2020. “Evidence that fish flourish in a community-managed marine area offers hope.” Mongabay, May 20. https://news.mongabay.com/2020/05/ evidence-that-fish-flourish-in-a-community-managed-marine-area-offers-hope/. https://news.mongabay.com/2020/05/evidence-that-fish-flourish-in-a-community-managed- marine-area-offers-hope/. 9 Greenfield, Patrick, and Peter Muiruri. 2020. “Conservation in Crisis: Ecotourism Collapse Threatens Communities and Wildlife.” The Guardian, May 5, 2020. https://www. theguardian.com/environment/2020/may/05/conservation-in-crisis-covid-19-coronavirus-ecotourism-collapse-threatens-communities-and-wildlife-aoe. 10 See UNESCO World Heritage Listing for Tubbataha Reefs Natural Park, Province of Palawan, The Philippines. https://whc.unesco.org/en/list/653. 11 Mufson, Steven. 2018. “Moody’s Analytics Says Climate Change Could Cost $69 Trillion by 2100.” The Washington Post, July 8, 2018. https://www.washingtonpost.com/ climate-environment/moodys-analytics-says-climate-change-could-cost-69-trillion-by-2100/2019/07/02/f9fb94ac-99cb-11e9-916d-9c61607d8190_story.html. 12 A “ridge-to-reef” system comprises the inland watershed, coastline, and offshore islands and coral reef. 13 See website of the El Nido Municipal Tourism Office. EL NIDO TOURISM: Travel guide to Palawan Island, Philippines. https://www.elnidotourism.com/. 14 Based on a carrying capacity study conducted in 2010 15 Formoso, Celeste Anna. 2018. “Getting Tourism Management Better in El Nido.” Philippine News Agency, December 3, 2018. https://www.pna.gov.ph/articles/1055539. 16 In contrast, compared to a gradual increase to a longer-term plateau for nature and adventure-based tourism (Plumpton 2017). 17 White, Elizabeth M., Bilal Rahill, Mark Gough, and James Spurgeon. 2020. “Using Natural Capital Approaches to Manage Shared Dependencies – Delivering Sustainable Development and Enhanced Resilience.” November 2020. 18 The landscape approach included both a watershed and coastal bay. By taking this joint landscape and seascape approach, the full range of relevant impacts and dependencies to each stakeholder group (accommodations and resorts, tour and dive operators, fishermen, wider economy, and government) could be accounted for when comparing the three management options. This broad assessment captured a range of impacts occurring as a result of tourist arrivals, dive and boat tour activities, sedimentation runoff, and sewage runoff (pollution). 19 Increased climate variability and climate change are already impacting the tourism industry and are likely to continue. “The projections for 2020 and 2050 are that annual mean temperature in the Philippines is expected to rise by 0.9°C to 1.1°C by 2020 and between 1.8°C and 2.2°C by 2050. Seasonal rainfall patterns will change substantially based on the 2020 and 2050 projections.” (direct quote from https://www1.pagasa.dost.gov.ph/index.php/93-cad1/472-climate-projections). 20 CCRES. No date. “Reef React: A Coral Reef Vulnerability Model. User Guide. 8 This publication may be reused for noncommercial purposes if the source is cited as IFC, a member of the World Bank Group.