Toward a Blue Economy: A Pathway for Sustainable Growth in Bangladesh Public Disclosure Authorized Termez Feyzabad Sheberghan Konduz Mazar-E Sharif Aybak Taloqan Meymaneh Baghlan Qal eh-ye Mahmud-E AsadabadEraqi Bamian Mehtar Lam Chaghcharan CharikarKabul Herat Jalabad Srinagar Mayda Shahr Baraki Barak Islamabad Ghazni Peshawar Gardez Zareh Sharan Tarin Kowt Farah Qalat Lahore Lashkar GahKandahar Simla Zaranj Chandigarh Quetta DandeldhuraJumla Dhangarhi Delhi SallyanBaglungPokhara New Delhi ThimphuWangdue Prodrang Itanagar Nepalganj Kathmandu Paro GangtokPunakha Bhairawa Ramechhap Bhimphedi Ilam Rajbiraj Dispur Lucknow Kohima Jaipur Biratnagar Shillong Patna Imphal RajshahiDhaka Pasni Ormara Aizawl Gwadar DhakaNarayanganj KarachiKarachi Agartala Port Muhammad Bin Qasim BANGLADESHKhulna Chalna ChittagongChittagong CalcuttaKolkataMongla Barisal Bhopal Jakhau Gandhinagar Haldia Kandla Budge-Budge MundraMandvi Navalakhi Bedi Okha Sika Cambay Sikka Vadinar Bhavnagar Dwarkar Porbandar Surat Paradip Mangrol Bhubaneshwar Veraval Diu Puri DamanDaman Silvassa Bay of Jawaharlal Nehru Port MumbaiBombay (Mumbai) Bheemunipatnam Vishakhapatnam Public Disclosure Authorized Bengal Hyderabad Kakinada Vengurla Port Redi PanajiMormugao Belekeri Karwar Honavar Coondapur Malpe ChennaiMadras New Mangalore Mangalore Pondicherry Pondicherry Cuddalore Tellicherry Calicut Beypore Karikal Nagapattinam Kozhikode (Calicut) Kavaratti Cochin Jaffna Kayts Alleppey Kankesanturai Mannar Needakara Quilon TrincomaleeTrincomalee Tuticorin (New Tuticorin)Trivandrum Anuradhapura Cape Comorin Puttalan Kandy ColomboColombo Badulla Hambantota RatnapuraGalleGalle Male MAIN CITIES Gan Island IBRD 43693 | MAY 2018 NATIONAL CAPITAL This map was produced by the Cartography Unit of the World Bank Group. 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Toward a Blue Economy: A Pathway for Sustainable Growth in Bangladesh. Washington, DC: The World Bank Group. Cover Credit: Helena Eitel (Ocean Art Hub) and Pawan Patil. REPORT NUMBER 126654 Toward a Blue Economy: A Pathway for Sustainable Growth in Bangladesh Pawan G. Patil John Virdin Charles S. Colgan M.G. Hussain Pierre Failler Tibor Vegh A COLLABORATIVE PARTNERSHIP Acronyms and abbreviations BBS Bangladesh Bureau of Statistics BOBLME Bay of Bengal Large Marine Ecosystem CICES Common International Classification of Ecosystem Services CMSP Coastal and Marine Spatial Planning CO2Eq Carbon Dioxide Equivalent DOWA Deep Ocean Water Applications EEZ Exclusive Economic Zone EIA U.S. Energy Information Administration ENOW Economics: National Ocean Watch ESESA Experimental System of Ecosystem Service Accounts FOSP Future Ocean Spatial Planning FY Fiscal Year FYP Five-Year Plan GDP Gross Domestic Product GEF Global Environment Facility GNI Gross National Income GVA Gross Value Added IEA International Energy Agency ICT Information and Communication Technology IPCC Intergovernmental Panel on Climate Change INDC Intended Nationally Determined Contributions ISIC International Standard Industrial Classification IUU Illegal, Unregulated, and Unreported IRENA International Renewable Energy Agency LME Large Marine Ecosystem MEA Millennium Ecosystem Assessment MOEF Bangladesh Ministry of Environment and Forests MPA Marine Protected Area MSP Marine Spatial Planning NOAA National Oceanic and Atmospheric Administration NPV Net Present Value OECD Organisation for Economic Co-operation and Development REDD+ Reducing Emissions from Deforestation, Forest Degradation and the Role of Conservation, Sustain- able Management of Forests, and Enhancement of Forest Carbon Stocks in Developing Countries SDG Sustainable Development Goal SEEA System of Environmental and Economic Accounts SIDS Small Island Developing States TEEB Economics of Ecosystems and Biodiversity TEU Twenty Foot Equivalent Units UN United Nations UNDP United Nations Development Programme UNEP United Nations Environment Programme UNFCCC UN Framework Convention on Climate Change WTTC World Travel and Tourism Council WWF World Wide Fund for Nature TOWARD A BLUE ECONOMY: A PATHWAY FOR 4 SUSTAINABLE GROWTH IN BANGLADESH Glossary of terms The sum of the economic activities of ocean-based industries, and the assets, goods, and services of marine ecosystems (OECD 2016). Note that this definition does not imply any measure of the sustainability of these Ocean economy activities. a. Ocean economy Sector a. A specific area or group of industries in the ocean economy. Also includes groups of ecosystem services for which markets do not exist and that are not reflected in measures of other industries or ecosystem services. A concept applied to the ocean economy to reflect its level of sustainability, and defined here as simply “sustainable development of the ocean economy.” This definition is based on characterizations of the concept as: • “A sustainable ocean economy, where economic activity is in balance with the long-term capacity of ocean ecosystems to support this activity and remain resilient and healthy” (Economist Intelligence Unit 2015); and Blue economy • “comprising the range of economic sectors and related policies that together determine whether the use of oceanic resources is sustainable” (World Bank and UN DESA 2017). The concept uses a metaphor with colors, describing an ocean economy as “brown” (not sustainable), or “blue” (the equivalent of “green” and sustainable), or somewhere in between the two. The blue economy is defined here as a sustainable ocean economy, in which economic wealth is balanced with the health of ocean ecosystems and their natural assets, and is socially sustainable. Natural capital has been defined as the stocks of Earth’s natural assets and resources, such as soil, water, air, and biodiversity (Brown et al. 2016). The ocean’s natural capital is defined here as those natural assets and resources that are linked to the ocean environment. These assets and resources can be further defined Ocean’s natural capital as (i) stocks of natural resources, such as offshore deposits of fossil fuels, minerals, and aggregates, and (ii) spatially-defined stocks of “ecosystem assets” cycled and renewed as part of wider ecosystem functions and which yield a flow of valuable ecosystem services (Brown et al. 2016). Ecosystem services The benefits that people get from ecosystems (MEA 2005 and TEEB 2010). The capacity or capability of an ecosystem to produce or provide an outcome (“service”) of potential use to Ecosystem functions people (Brown et al. 2016). 5 vwv Table of contents Acronyms and abbreviations 4 Glossary of terms 5 Acknowledgements 10 CHAPTER 1. EXECUTIVE SUMMARY 12 CHAPTER 2. INTRODUCTION: A GROWING OCEAN ECONOMY 18 CHAPTER 3. GLOBAL CONCEPTS AND MEASURES FOR THE BLUE ECONOMY 22 1.1 The Concept and Measurement of an ‘Ocean Economy’ 23 2.2 The Concept of A Blue Economy 31 2.3 Summary of Key Concepts 36 CHAPTER 4. CURRENT STATUS OF BANGLADESH’S OCEAN ECONOMY AND ECOSYSTEMS (A BASELINE FOR TARGETS) 38 3.1. Current Policy Framework in Bangladesh for the Ocean Economy 39 3.2. Bangladesh’s Ocean Economy 42 3.3. Status of Bangladesh’s Ocean Ecosystems: The Natural Capital 55 3.4. External Drivers of Future Growth in Bangladesh’s Ocean Economy 60 CHAPTER 5. THE WAY FORWARD TO A BLUE ECONOMY IN BANGLADESH 66 4.1 Rationale for Recommendations to Inform a Coordinated Planning Process for Blue Economy Policy Design and Delivery 67 4.2. First Recommendation: Improve Measures of the Ocean Economy 69 4.3 Second Recommendation: Model Policy Reform Scenarios for a Blue Economy, in Order to Set Targets and Develop Public Investment Strategies. 70 4.4 Coordinating the Planning Process and Future Directions 72 TOWARD A BLUE