Economic Impact of Oceans

¶ … Oceans on Human Life:

Recent economic, political, and environmental developments

One of the oldest forms of transport is sailing: long before airplanes or cars were invented, people turned to the sea as method of moving goods and people from one place to another. But oceans still play a critical role in the modern economy. In fact, an estimated one of every 6 jobs in the U.S. is in some way tied to the oceans and "over 1/3rd of the annual U.S. Gross National Product originates in coastal areas -- approximately $700 billion… U.S. maritime transport carries 95% of the nation's foreign trade" ("Oceans impact the economy" 2015). The importance of ocean-related shipping has increased rather than decreased in recent years, due to the rise in global trade. Although cheaper and more convenient airplane-related travel has retracted the importance of human-driven transport by sea, ocean-related trade has increased.

The creation of open ship registries, "allowed the shipping companies to combine the relatively low capital costs in the industrial countries with the low labour costs for seafarers from developing countries" and to "compensate for sharply rising labour costs, especially in the industrial nations" as well as avoid equally costly regulations (Bucker et al. 2014: 8.1). The dominance of a handful of the top registries has been one noteworthy development. "The ten top open and international registries accounted for about 55 per cent of the global merchant fleet in 2008. In 1950 this figure was only 5 per cent" (Bucker et al. 2014: 8.1). The dominant nations include Japan (16.0), Greece (15.3), Germany (9.5), China (8.4) and Norway (4.5) (Bucker et al. 2014: 8.1).

Ships have become larger, faster, and more specialized than ever before, which has also driven the rise of sea-driven commerce (Bucker et al. 2014: 8.2). One of the most important products transported by sea is crude oil. The price and availability of crude oil affects the global economy in a critical fashion. Crude oil accounts for nearly a quarter of all goods transported by sea, but its transport obviously has a major effect not simply upon the market itself but also upon the daily lives of consumers dependent upon transportation via car and also goods that are shipped via trucks and other land vehicles powered by oil (Bucker et al. 2014: 8.2).

In ancient times, ports were a vital driver of civilization. Most of the world's dominant early civilizations were dependent upon nearby bodies of water, including ancient Greece. Even today, cities and hubs of commerce congregate near coastal areas. An estimated "4% of U.S. counties that are adjacent to the coast produce 45% of the nation's gross domestic product (GDP)" and "tourism and recreation account for 70% of the ocean economy's total employment and 34% of its GDP. Offshore Mineral Extraction accounts for another 37% of the ocean economy's GDP" ("How important," 2015). The U.S. proximity to oceans is a critical component of its continued economic development as well as a necessary facet of attracting tourism to the U.S. "Certain industries, like commercial fishing, obviously depend on the sea" (Narula 2014). But hotels located near ports are also at least partially dependent upon the ocean. The rise in ocean cruises has also become a critical component of tourism in many areas.

In the past, maritime regulation was a highly ambiguous part of international law. The question of who owns the sea was both a philosophical as well as a political and economic question. Today, the seas are regulated by United Nations Convention on the Law of the Sea (UNCLOS), given the extent to which ownership of various bodies of water can have upon a nation's economy (Bucker et al. 2014: 10.1). "Countries have property rights at sea just as they do on land…every nation with a coast also has an EEZ [Exclusive Economic Zone] -- which extends far beyond a country's territorial waters -- reflects the importance of the ocean as a source of wealth" (Narula 2014). It should be noted that UNCLOS was adapted relatively late, in 1982 and laws of custom as well as formal regulation also influence how nations negotiate their rights to the ocean. "Since the mid-17th century, countries had generally accepted that national rights applied to a specified belt of water, known as the territorial sea, extending from a nation's coastlines, usually for three nautical miles -- roughly equivalent to the distance travelled by a cannon shot" (Bucker et al. 2014: 10.1). But the extent to which rights to the sea and economic ownership could affect a nature's future demanded greater and more specific international oversight. Thanks to international law, today, only the nation with an EEZ may fish within the zone or create structures such as oil platforms for mining (or wind turbines, which may become more critical in the new, greener future) (Bucker et al. 2014: 10. 2). "Around 90 per cent of all commercially relevant fish species occur in the coastal states' EEZs" even though "these economic zones make up just 35 per cent of the seas' total area" (Bucker et al. 2014: 10.2).