Bloomberg Green: Ocean Pollution and Blue Carbon Markets
This week the climate problems and solutions lurking beneath the surface of our oceans white sands dirty secret how one company's actions over the course of a century completely changed the Tuscan coast its waters and the lives of its residents. For over 100 years it has been pumping 24/7 365 days a year. Blue carbon credits. Why. The market for offsets from the ocean may be set to take off. Really. It's supposed to demonstrate how a project like this can be setup effectively. The overall blue
carbon potential for seagrass is quite large and deep. Sea gold rush mining our seabed may solve the battery shortage. But could it also do more harm than good. The IEA right now is writing regulations that could prevent mining to begin as little as two years. I'm Kailey Leinz from Bloomberg's world headquarters in New York
and this is in Berkeley. Oceans are the lifeblood of our planet. They cover more than 70 percent of the earth's surface producing over half of the world's oxygen. Yet they are under threat. Human activities are responsible for more than 80 percent of sea pollution causing
drastic changes in entire marine ecosystems. So in this edition of Bloomberg Green we outline the scale of the problem facing our oceans. The problems of plastic overfishing and how companies dump waste into our summer holiday spots while governments turn a blind eye. But it's not just a sea of problems. We are also increasingly turning to the ocean for solutions. We'll speak to a Virginia professor who was making forced underwater as part of a Neeson blue carbon credit market. And our investigative reporter Todd what he talks to us about the so-called silver bullet to the metal shortage deep sea mining. Is it really all that it seems. But before we get to all of that our Christine Lee Edwards outlines just what is at stake
if we don't fix our oceans. Global warming presents the greatest threat of all causing sea levels to rise and fish populations to decline. Scientists estimate that over the past 30 years the oldest and thickest ice in the Arctic has declined by stunning 95 percent. The environmental impact is severe but it's bad for the economy too. The melting Arctic could add nearly 70 trillion to the global cost of climate change according to new research published by Nature Communications. Our single use plastic addiction is making things worse. Researchers estimate that plastic flowing into the oceans will triple by 2040. Other human activities such as overfishing and industrial waste discharge are further destroying marine ecosystems. The recent IPCC report estimates that climate induced declines in ocean health will cost the
global economy 428 billion per year by 2050 and one point ninety eight trillion per year. Twenty one hundred. For centuries we assume that our oceans with limitless immune to human impact. It's only recently that we've realized the extent of the damage. We now know that about 85 percent of all oceans have been adversely affected by manmade activity. Whether that be through oil spills heavy shipping or the effects of climate change. And yet today only 3 percent of our oceans are considered protected. So what's the solution. Nonprofits like ocean cleanup are pulling plastic out seas while government quotas and regulations can be implemented to call a halt on overfishing and waste dumping. But in an ecosystem as interconnected as the ocean only coordinated action from nations and corporations around the
globe can succeed. Our Christine Lee Edwards there. Now let's take a look at a case study of the impact of business on the ocean. And Yano surveys a town in Tuscany with beautiful Caribbean like white sand beaches that have become a summertime attraction. But the reason for that is for more than a century it has been a dumping ground for millions of tons of waste. We look into how the alleged environmental implications of its faux Caribbean beaches and what's causing them to look that way is increasingly stirring controversy among local activists in the courts and even in markets. Our Quicktake team investigated. Solveig is multinational chemicals company based in Brussels Belgium. It's got a market value of far over 10 billion euros. It's its operations all around the world.
And this is a plant that makes soda ash an ingredient in glass and it's used for other things. And essentially they take local limestone from quarries and bring it in and pulverize it. Essentially what is being discharged are tiny tiny particles of limestone mixed in seawater and that is what is making the beach. In part that color their position is they take locally quarried natural stone and they put it through their plant and that the totally natural sandy byproduct is is pushed out to the sea where it does a terrific job contributing to the environment by helping the beach not fall victim to erosion. But the process itself of pulverizing the stone unlocks natural metals minerals that are
inside the stone. Arsenic mercury zinc lead. Some of it is dissolved in the water and some of it is still in particles and compounds that are part of the rock. And every year they pump the equivalent of almost two hundred and fifty thousand tons of these suspended solids directly onto the beach and into the Mediterranean. Well under Italian law one legal standard the company has to meet the flex the concentration of heavy metals in the discharge. What that means is it cannot exceed certain thresholds of milligrams per litre of heavy
metals. In his discharge. And it turns out that in 2013 it had exceeded those concentration limits and it never went to trial. It went to a plea bargain for polluting the beach around the plant and of looting the effluent in a way that disguise the fact that they were exceeding legal limits such as mercury that were going directly into the Mediterranean. And this is a turning point. Solve a promise to the court that it would somehow treat for those heavy metals to reduce the concentrations. The result is that Solveig has not changed how it produces soda ash nor how it discharges the pollutants. It has simply
relabeled some of the plant's processes. They're taking seawater which doesn't count for their fraction normally because it just used to cool all the hot stuff in the plants not part of the production itself. It's cooling water comes in from the sea goes out doesn't count towards their concentration. They build something and treating for ammonia rooted. About a third of the seawater through a new apparatus that they built. Let them raise the denominator of their fraction. So without changing the amount of heavy metals coming out the bottom half of that got higher and higher as they put online this new system. And now it's almost impossible to tell if they have any heavy metals going out the door. The company is very straightforward. We ask them have you reduce the amount of heavy metals. And they said no. Nothing we've done reduces the
concentrations increases the concentrations unchanged by what they have done is accounted for water differently. Well in an email exchange with us the company asserted that the Italian court never determined that the crimes were committed. A really key turning point was getting the paperwork from the court which were able to make a special request by citing public interest in our status as journalists to get the actual documentation of what happened in court that day. And it says by how much mercury and limit was exceeded by six times over 50 percent over 30 percent over that having these
raw numbers and then going back and saying it's never been in any of their filings to shareholders. They've never described it that way. Don't really ever talk about it. And seemed like it was kind of an important moment. And so we knew that we were seeing a difference between what was being presented to the public being presented to investors and the hard documentation. And that hard documentation had never come out before. The idea that this is going on three unassisted five days a year with no attempt to hide it. There's no wall behind which you
need to pair. There's no boundaries around this trench. That little shit goes into the sea. And you know in the summers I've seen it with my own eyes. There are people literally bathing right on the ditch right where the discharge enters the sea. The water is a little bit warmer. Perhaps that's what attracts some of the bathers. Download teletype data to delay. How is it not. Chess and I Yang. So let's us Ghana do today initiate a sheen quantitative form. De la Maria Tadeo da de la. But Jennings only sighed and he nodded off. Do you go forward to this song. You've got more teletype toward it. A la mer laminated on net all.
You don't get close to this plant without somebody knowing who you are what you're doing and making you feel a little uncomfortable about being here. I mean the trouble with regulation is as we found is is in part the disjointed nature. On the one hand you have the courts they enforce the law they prosecute. On the other hand you have the environment ministry which is now in charge of regulating and allowing solely to operate a plant. It wasn't clear to us just how much
communication there was between for example the courts and the environment ministry. We know that prosecutors are looking at solving again but it's not clear what the basis of their investigation might be how advanced and who it might be focusing. Another important turning point was the entry onto the scene of BlueBell an activist investor group based in London. And you know every year they pick another target and buy one share. In
this case they bought one sheriff's all day and they went after the company for its for its Italian plant. And what this did was create a ton of publicity around this and raise some really good questions. And what caught our eye was that the 2021 shareholders meeting they asked a lot of questions about the water flowing in the water flowing out and they didn't get a lot of answers. They got a lot of apples and oranges figures from the company. Companies certainly didn't tell them what they could have which was that they changed how they account for the water starting in 2019. What happens next is Solveig is facing a litany of challenges they're facing with a potential prosecution in Livorno courts. They're facing it with an uprising from this activist investor. They're facing it from activists who are energized by the fact that they some of
they had no idea that the government here in Italy was about to renew their license for another 12 years. As things stand there are no indications that Soloway intends to change this process. In this particular location. And the change will probably have to come from above. The change will probably have to come from policy that is updated to reflect the norms and practices that are used elsewhere. You can watch the rest of our Quicktake investigation on Bloomberg dot com slash Kuti. So while there are some that are causing immense damage to our oceans others are trying to clean it up. Up next we'll discuss
kelp forests blue carbon credits and the concept of underwater offsets. This is Bloomberg Daybreak. Welcome back to Bloomberg Green. I'm Jennifer Zarb sergeant in New York and here is all the climate news you need to know this week. There may never be a new refinery built in the U.S. despite surging gasoline prices. This as policymakers move away
from fossil fuels. That's according to Chevron CEO Mike Worth told Bloomberg TV that his personal view is that due to the green policy push there won't be any new refinery construction in America. Take a listen. Building a refinery is a multi-billion dollar investment. It may take a decade. We haven't had a refinery built the United States since the 1970s. My personal view is there will never be another refinery built in the United States. And in Amsterdam officials are warning the
city will miss the targets to decarbonise transportation if the central government does not help solve bottlenecks in its power grid. The rapid rise in intermittent power sources from solar and wind. More housing and electrical devices are all contributing to the growing pressure. The city said it needs help from the government to achieve its goal of reducing emissions by 55 percent in 2030 compared with 1990 levels. And finally scorching heat across Texas is expected to rapidly drive electricity demand to all time highs likely serving as the biggest test to the state's grid since last year's deadly winter storm that left millions in the dark. Power demand is expected to topple the August 20 19 record. And that is your green brief Caylee. We know that there's a lot of power grids across the US that are really going to be facing a lot of pressure this summer. Yeah and Texas has been so emblematic of that back in 2021. It was cold temperatures. That was the problem. And people
literally were freezing to death. Now heat is something else that Texas is going to have to grapple with as you try to heat a building or cool a building. It takes a lot of power to do that. And this is a persistent problem. But Texas and other states are going to try to have to soar. Thank you so much as always to Bloomberg's Jennifer. That was Sergeant. When people mention carbon offsets they think of protected rainforest and woodlands. But what about oceanic forests. Over the last two decades scientists in Virginia have spread 70 million seeds in the bays. They're restoring thousands of
hectares of seagrass. Now the Virginia Nature Conservancy is turning those underwater jungles into cash. Joining me now to discuss this and the potential scope of future projects is Chris Patrick Virginia Institute of Marine Science assistant professor and director of the S.A.T. Monitoring and Restoration Program. Chris thank you so much for being with me. First let's talk about essay these submerged aquatic vegetation. What exactly is it and why is it important. Great question. So submerged aquatic vegetation these are vascular underwater plants just like the plants that you're going to find on land. But they live underwater. So this includes everything from plants like wild celery that you'll find in the rivers the freshwater rivers all the way down to the coastal systems where you're going to find seagrass. So those are all the SCV and they're important for a
wide variety of reasons just to run through some quick ones. They provide habitat and support fisheries because they're it's called nursery habitat for juvenile fish and shellfish. They clear the water so they reduce turbidity and stabilize the sediment. They prevent shoreline erosion. They sequester carbon which is I guess what we're talking about today. They put oxygen into the water column. They do quite a bit. And they're also a really good indicator of the overall system health. And so in
the Chesapeake Bay they're one of the core indicators of how the bay restoration is doing. OK so talk to us about the work you are doing with SCV. The surveys you're conducting and how you're ultimately putting that to use in the blue carbon credit market. Right. So our program covers both the Virginia and Maryland coastal bays and also the Chesapeake Bay as a whole. And all this work is a combination of aerial surveys restoration planting projects and ground truth. So in the Virginia coastal bays each year we have aerial surveys we have planes that we fly over. So we get
imagery that we can delineate all the SCV beds. We know exactly where they are and how dense they are. And so we've been able to track how they've been expanding through time. The same time we introduced seed stock into that system about 20 years ago 22 years ago now. And I've been progressively receiving each year to help re-establish SLV in that system. You'll grass in this case and allow to expand at this point. And we put five hundred acres of grass seed down. We have ninety five hundred acres that you'll grass now. And that system that makes it the largest most successful seagrass restoration on the planet. All right. Well
let's dig in then to the numbers that you've put together. What kind of sequestration are we actually talking about it. What scale. Right. So for this project which really is a pilot it's a proof of concept project. The project area that's allowed for the carbon market is being set up is it's not the entirety of where we're working. It's only about 8000 acres in what's called Spider Crab
Bay and some of the surrounding area. And we're forecasting over the next 30 years that this could potentially sequester about 30000 really 28000 tons of carbon. So it's not a huge amount. It's not going to change climate change on its own. But it really is supposed to demonstrate how a project like this can be setup effectively and serve as a model for other projects to sort of replicate that because the overall blue carbon potential for seagrass is quite large. And finally if we could just come back to the SCV monitoring program that you're the director of it's been around for decades.
I'm just wondering what changes the program has witnessed in the Chesapeake Bay over that time. What impacts of climate change have you seen. One of the biggest things that we witnessed in the Chesapeake which is a different system than these coastal lagoons we've been talking about for the carbon market is that as the waters have been warming due to climate change one of our kind of core species in the southern Chesapeake Bay eel grass has been declining especially when we get really hot summers and another species which in grass has been expanding over the same time period. And your grass is kind of it's a northern temperate species. It likes cold water.
And so we've been witnessing some pretty major sort of changes in the composition of the sea grasses in this system as the bay warms. Thanks so much to Chris Patrick of Virginia Institute of Marine Science assistant professor of marine science and director of the Navy Monitoring and Restoration Program. Coming up solving one problem by causing another. Well dive into deep sea mining which may help produce batteries at the cost of aquatic ecosystems. This is Bloomberg Daybreak. From Bloomberg Global Headquarters in New York I'm Covid lives. And this is Bloomberg Green last edition of Bloomberg Green. We discussed reforms intended to make the mining industry more sustainable. However there is a nascent industry within mining
that may need new regulators altogether. Alarms were ringing when the head of the International Seabed Authority appeared in a promotional video for a mining startup trying to harvest minerals for electric car batteries from the bottom of the ocean. More alarming still is the unknown impact this mining could have on deep sea ecosystems and habitats. Joining me now is Todd Woody an environmental journalist covering the climate with us at Bloomberg Green. So Todd first can you tell us what it is about deep sea mining that may do damage to our underwater ecosystems. About 75 percent of the species that have been discovered in the deep sea it new to science. They think another
75 percent have yet to be discovered. So before mining began the idea is you're supposed to have a environmental baseline data about what the impact will be. So you can craft regulations to minimize that impact. The problem is you get very little data. And how would that impact potentially our global ecosystem. Scientists are still unraveling the impact they have on both the global carbon cycle and climate change. So the fear is that you'd have mass industrialization of the seabed before we know
what those connections are. You could have irreversible impacts. These mining companies the operations of deep sea mining it's on hold for now. What will companies do in the future. Will they continue to help preserve underwater ecosystems. Or is it likely that because we need cobalt and nickel and all of these other materials for batteries for these that sparks a U-turn somehow. And right now mining companies are only predicted to explore our prospects for minerals under exploration. Contracts that the IEA
say right now is writing regulations that could permit mining to begin as little as two years. This is because a small Pacific island state called Nauru triggering a rule that requires complete regulations within two years and allow money to go forward regardless of sufficient safeguards are in place. And to get those guards those regulations in place do you first have to see reform of the ISI and international legal experts believe it needs to be institutional reform in the USA. So it still feels its mandate to protect the deep sea ocean ecosystems. The ISE operates much of the operations behind closed doors that
operates in secret. So there is very little accountability even to the member states. All right. Really interesting. Thank you so much Todd Waddy. He covers the environment for us for Bloomberg Real Yield. So from deep sea mining to count forests our oceans are both a victim of and a possible solution to climate change. That's it
for this week's edition of Bloomberg Green. But you can keep the conversation going by following us on YouTube Instagram and Twitter at climate. From Bloomberg's global headquarters in New York. I'm Kelly Lines and this is Bloomberg Daybreak.