If little action is taken around the world to mitigate the impacts of climate change, seafood companies and investors are likely to take a massive financial hit in the coming decades, according to a new report.
London, U.K.-based nonprofit think tank Planet Tracker has warned in a new report titled “Catch It Like It’s Hot” that in a high-emissions scenario, climate change could cost the global seafood industry as much as USD 15 billion (EUR 12.8 billion) by 2050 due to rising sea levels and ocean temperatures, as well as deoxygenation and acidification of global seas.
Funded by the Walton Family Foundation, the report outlines how extreme weather is already leading to missed fishing days, equipment damage, species migration, and the destruction of complex food webs.
Additionally, the report has projected that shifts in the distribution of species will force an increase in seafood prices as companies seek to absorb the effects of quota changes and lowered catch totals. For example, even in a low-emission scenario, over half of current straddling stocks are projected to move from exclusive economic zones (EEZs) to the high seas by 2050.
Therefore, the report has warned that governments will have to soon contend with the “significant social and economic impact” of climate change on the seafood sector.
“The impact of the climate crisis on the seafood industry is exacerbated by the misalignment of much of the seafood industry with the ecological realities it relies on,” the report said. “The seafood industry must step up and channel capital into robust climate adaptation measures. Current investment levels remain very limited.”
Gorjan Nikolik, an aquaculture, seafood, and fisheries senior analyst at Dutch financial services firm Rabobank, agreed that climate change is going to have wide-ranging effects, including on aquaculture operations, that come in many forms.
“Warming waters, such as those in Norway, have a negative impact on salmon farming by creating more stress to the fish and a higher prevalence of lice,” he said. “Also, globally, across many wild catch sectors such as Atlantic cod, a large part of the decline in total allowable catch is due to global warming. Fismeal and fish production in Peru also seems to be impacted with more frequent and severe El Niño events disrupting production. There are also more natural disasters such as floods, hurricanes, and fires. Then, there are secondary impacts on processing, restaurants, lost income, tax generation, and maybe more.”
However, Nikolik questioned how the report’s authors came to the figure of USD 15 billion in annual losses by 2050 – stating that the figure was likely too low.
“At first glance, USD 15 billion by 2050 is a very small number for an industry that has a farmgate output valued at over USD 500 billion (EUR 425 billion) annually globally,” he said.
Planet Tracker told SeafoodSource that the figure stems from the Intergovernmental Panel on Climate Change (IPCC) and is the “most conservative” estimate of climate change’s financial impact on seafood production.
Other estimates suggest losses will be higher; for instance, the University of Cambridge Institute for Sustainability Leadership (CISL), in a 2014 report co-published with the Sustainable Fisheries Partnership, projected annual losses of USD 17 billion (EUR 14.3 billion) to USD 41 billion (EUR 34.8 billion).
Nikolik said a more accurate calculation would likely take interactions between sectors into account.
“Lower Atlantic cod catches can mean higher demand for salmon or other fish species. Less wild catch in Africa means more local tilapia demand. El Niño in Peru means higher prices for other fishmeal and fish oil producers and maybe more investment in alternatives like algae oil,” he said. “Then, you still need to somehow decide what is the impact from climate change versus what is the normalized level of natural disasters, the impact of water pollution from agricultural activities and garbage, and human activities such as hydroelectric dams and overfishing. All these activities have a considerable impact, which is sometimes interlinked with climate change. A good example is Atlantic mackerel and what exactly is the cause of the fall in total allowable catch in the North Atlantic: climate change, overfishing, or a combination?”
Regardless of the accuracy of the USD 15 billion figure, the Planet Tracker report references case studies that show how climate change is already wreaking financial havoc on the industry. These case studies include plummeting cod and plaice stocks in warming U.K. waters. Elsewhere, the deoxygenation of the Baltic Sea is cited for a collapse in Baltic cod, herring, and salmon stocks. Ocean acidification, meanwhile, is blamed for a rise in the operational costs of oyster production in the U.S. Pacific Northwest.
“Adaptation is not optional. Rising ocean temperatures, acidification, and shifting fish stocks already threaten the finances of the industry," the report said. "Through a financial lens, the question is whether the net present value (NPV) of maintaining business-as-usual is greater than the NPV of investing in adaptation. Answering this question is likely to show that long-term financial resilience lies in building adaptive capacity now, not later.”
