Green finance frameworks for sustainable shipping industry and blue economy: A review
Dimitris Gavalas
Abstract
Oceans, covering over 70 % of the Earth's surface, are critical natural resources that provide indispensable goods and services essential for human well-being. However, current exploitation practices pose significant risks to marine ecosystems and economic stability, with projections estimating the ocean economy's contribution to global GDP between USD 1.5 and 3 trillion annually. This study examines the potential of ocean finance in promoting sustainable development within the maritime industry, focusing on key financial mechanisms, such as loans, grants, and innovative instruments like blue bonds and the Green Shipping Fund. It highlights the existing challenges in securing adequate funding, including significant financing gaps and the need for standardized definitions of 'green' practices in shipping. The analysis underscores the importance of increasing public and private investments, establishing clear regulatory frameworks, and fostering public-private partnerships for advancing a sustainable ocean economy. Ultimately, the findings advocate for collaborative efforts that prioritize ocean health and equity, ensuring the resilience of coastal communities and ecosystems in the face of climate change and resource degradation. Highlights The study emphasizes the development and implementation of innovative financing mechanisms such as blue bonds and the Green Shipping Fund. A key finding is the urgent need for establishing a unified regulatory framework that includes standardized definitions and benchmarks for 'green' practices within the maritime industry. The research highlights the importance of fostering public-private partnerships to enhance investment in sustainable ocean practices. The study identifies significant market inefficiencies in ocean finance, such as the misallocation of funds and inadequate risk management strategies. The need for improved data collection and comprehensive metrics to evaluate the ocean economy's impact is emphasized.