“Science without conscience is the soul’s perdition,” Rabelais wrote, to which we might add, in these environmentally fraught times, finance without science is but greenwashing. And when it comes to finance and the environment, Nathalie Hilmi is an authority on both. She has first-hand experience of finance, having overseen hedge fund investment strategy, and as lead author of IPCC climate reports is in the front line of environmental research. She discusses prospects for the blue economy.

Nathalie Hilmi, Head of Environmental Economics at Centre Scientifique de Monaco: A lot of people have said COP27 had a disappointing outcome for the ocean, but I don’t agree. This was the first Conference of the Parties with an Ocean Pavilion, supported by scientific institutions from around the world. The ocean was given space in discussions and the cover decision clearly states that nature-based solutions will be vital in tackling climate change. This means that blue carbon - the carbon absorbed and stored by ocean ecosystems such as seagrass beds, mangroves and salt marshes - has a key role. Not to mention the solutions we can implement in high seas. Overall, I don’t view the final outcomes of COP27 as negatively as some.

Ocean financing has been tied to climate change and therefore focuses on projects aimed at reducing the impact of global warming as opposed to regenerating ecosystems. It’s not so much that the ocean is attracting less funding; more that we haven’t fully grasped what’s at stake. We should be looking at how much the blue economy can generate and factor that into government accounts. The World Bank is reviewing its evaluation system to include the environment in the widest sense, and the blue economy is part of that. We’re starting to consider the ocean as an asset that coastal countries can build on.

Blue bonds, like carbon credits, can support conservation projects aimed at preserving or regenerating marine ecosystems’ capacity to absorb greenhouse gases, when they’re not being used to pay back debt. These are important financial instruments for small, developing island nations which possess vast natural resources. Obviously there are two sides to every coin. For example, ninety percent of global trade relies on maritime transport, which is a lucrative but also highly polluting activity. We need to maintain the lucrative side and at the same time explore solutions such as green hydrogen and solar power to decarbonise vessels. The same is true for deep-sea mining. The ocean floor has been absorbing carbon for thousands of years. What will happen if we start exploiting these mineral-rich areas? Will this carbon rise to the surface and how much of it? These are questions we can’t currently answer, hence calls for a moratorium on deep-sea mining until science has done its job. We must always look beyond the lucrative aspect.

Nature provides us with incomparable services. By giving them a value, we put a figure on the services these ecosystems provide, in exactly the same way the Centre Scientifique de Monaco pays me a salary for the value of the work, the service, I provide. This is how we should be looking at the protection and restoration of natural ecosystems, so that they can fully play their role in protecting against global warming. The Intergovernmental Panel on Climate Change (IPCC) advocates that one third of solutions be nature-based. This is why we must protect coral reefs, for example, and convince governments of their importance within the blue economy. By putting a figure on ecosystemic services, we encourage governments to protect them and to see them as a financial asset that can generate a certain amount of profit. We face two major problems: climate change and biodiversity loss. Addressing these problems will mean tighter regulations, and therefore the political will to implement them, but also, as mentioned, nature-based solutions. Putting a price on nature is an additional motivation, which is why blue bonds are a step in the right direction.

We need to be thinking in terms of economic transformation. We’ve only ever considered nature as something to exploit for maximum profit. A fairer, regenerative economy for nature will imply radical changes at every level, from consumers, whose insatiable demand is destroying the planet, to industry and governments. Growth needs to be something everyone enjoys, which is why I support the creation, at COP27, of a loss and damage fund for vulnerable countries that are most exposed to climate disasters; the same countries that emitted the least CO₂ during the past century. It’s climate justice. The financial markets can help bring about this change, no longer for the sole benefit of developed countries but for the benefit of developing countries too, through mechanisms that give nature a value.

We have to reduce our CO₂ emissions. We cannot carry on as we are. If the ocean is to continue to play its role as a climate regulator, we must also tackle overfishing and pollution, and prevent mining. These are the preconditions for any form of ocean regeneration. Again, I’m fairly optimistic. The scientific world is perfectly aware of these problems. Now governments, and particularly those of small island nations, are beginning to realise the benefits to be gained from protecting their natural environment. And if they need the means to do so, blue finance can provide that. For once the markets would be doing something other than seeking instant profit, namely supporting genuinely sustainable, environmental projects. We need to look at investments from a scientist’s perspective. This is the solution, or at least part of it: investments underpinned by solid scientific research.