Keywords

1 What is Blue Carbon?

The term “blue carbon” was first coined by the United Nations Environment Programme (UNEP) in a report (hereafter referred to as the UNEP report) published in 2009 (Nellemann et al. 2009). In the climate change debate, forests have been well known as sinks for carbon dioxide (CO2), but the important function of the ocean as a sink has been overlooked. The CO2 fixed by marine organisms is referred to as blue carbon. The UNEP report pointed out that the ocean is responsible for 55% of all biological sinks worldwide, and that coastal vegetation, such as mangrove forests, seagrass beds, and salt marshes, which cover less than 0.5% of the ocean, is responsible for 50–71% of all ocean carbon sinks. The three main ecosystems that sequester blue carbon are referred to as traditional blue carbon ecosystems.

Most of the blue carbons are stored and sequestered in the sediment but not in the plant biomass. This is evident from the fact that the plant biomass of blue carbon ecosystems is only approximately 0.05% of the plant biomass on land, yet they sequester the equivalent amount of CO2 per year. The CO2 sequestered on the seabed is stored without being decomposed for several thousand years and is thus extremely highly preserved.

In contrast, blue carbon ecosystems are the most rapidly disappearing ecosystems on the planet. As of 2009, when the UNEP report came out, it was estimated that an average of 2–7% of blue carbon ecosystems were lost annually. This means that we are losing an important CO2 sink and are risking CO2 emission into the atmosphere, which has accumulated there for thousands of years. These facts have made an international appeal for the urgent need to conserve the existing blue carbon ecosystems and to restore or rehabilitate lost or degraded ecosystems.

Since the UNEP report of 2009, blue carbon has been integrated into the international climate change agenda. The Intergovernmental Panel on Climate Change (IPCC) developed the national greenhouse gas inventory guidelines in 2006, but in 2010, the United Nations Framework Convention on Climate Change (UNFCCC) requested for clarification of the calculation method for wetlands, with a primary focus on the re-wetting and restoration of peatlands. In 2011, the IPCC established a task force to develop guidelines for wetlands. In 2013, the IPCC General Assembly adopted and published the “2013 Supplement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventory: Wetlands” (Hiraishi et al. 2014), which presents a methodology for calculating the amount of blue carbon accumulated in the soils of coastal ecosystems as CO2 emissions from coastal ecosystems. This is thought to have increased the momentum for reflecting the blue carbon in the policy.

2 Kelp as Overlooked Blue Carbon

As of 2009, underwater macroalgal beds were not considered blue carbon ecosystems, with the UNEP report stating. “Most macroalgal (or seaweed) beds (including kelp forests) do not bury carbon, as they grow on rocky substrates where burial is impossible.” This situation is attributable to the lack of scientific knowledge on the distribution area of macroalgal beds and the carbon sequestration process and its amount. However, with increasing scientific evidence, the treatment or perception of macroalgae has changed significantly in recent years.

Recently, the focus on macroalgae as a blue carbon source has rapidly increased. According to a recent estimate, the area of macroalgal beds is 10–40 times larger than that of other blue carbon ecosystems (Table 7.1). The primary production rates and CO2 absorption coefficients of macroalgal beds have also been estimated; in particular, large macroalgae, such as kelp beds, are reported to have absorption coefficients as high as or higher than those of seagrass beds (Kuwae et al. 2022; Table 7.2). One study estimated that 10.1% of the net primary production of large macroalgal beds is transported into the deep sea at depths of 1000 m or more, leading to a long-term sink (Krause-Jensen and Duarte 2016). Research in Japan has shown that macroalgae release carbon as refractory dissolved organic matter, which is transported outside the ecosystem (Watanabe 2021). Based on this scientific evidence, the carbon sequestration potential of macroalgal beds is estimated to be equivalent to that of all other blue carbon ecosystems combined. However, since macroalgal beds are distributed in a slightly deeper photic layer than traditional blue carbon ecosystems, it is difficult to accurately understand their distribution area and dynamics, and further development of observation techniques and monitoring networks are required in future. The ecosystem areas cannot be simply compared because of differences in estimation methods and years, but they can be used for semi-quantitative comparison.

Table 7.1 Area of blue carbon ecosystems
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Table 7.2 Estimated CO2 absorption coefficient
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Another feature of macroalgae that is not found in traditional blue carbon ecosystems is that they are also used as food. Thus, the development of cultivation technology for some macroalgal species has been ongoing for a long time. This trend is particularly noticeable in East Asia, including Japan. Macroalgae have been used as a food source in Japan and other parts of East Asia since ancient times. The most commonly consumed macroalgae in Japan are wakame (Undaria pinnatifida), nori, and kelp. We will now look at cold-temperate kelp (or kombu), which is the subject of this paper.

In Japan, natural kelp beds are found only at high latitudes, such as Hokkaido, but their products are transported by Kitamae-bune cargo ships to Kansai, Hokuriku, and even Okinawa, influencing the economy and food culture of each region (Fukutome 2018). Kelp forests form a vast coastal ecosystem from Japan to Alaska, Canada, the northwestern coast of the United States, and Mexico, with the food resources from these forests being considered the reason for human migration to the New World, called “Kelp Highway Hypothesis” (Erlandson et al. 2007). In this way, kelp has influenced the flow of goods and people over a wide area, or in modern terms, the supply chain.

In recent years, kelp decline and “isoyake” (sea desertification) have been reported in many regions worldwide. The main causes are an increase in sea temperature and damage due to feeding by herbivorous organisms. Japan is no exception, and natural kelp beds in Hokkaido and other areas continue to decline, resulting in a marked decrease in natural kelp production. As will be discussed later, the decline in natural kelp production is compensated by the relatively stable production of cultivated kelp. The decline in natural kelp beds will not only have a direct impact on the kelp fishery but will also lead to a decrease in marine resources such as abalone, sea urchins, and turban shells that feed on kelp, leading to concerns about the impact on coastal fisheries.

Kelp forests have a high potential for blue carbon, and it is important to make efforts and policies to sustainably use this coastal resource, which produces various other economic and environmental benefits. In the following section, we review the economic value and economic ripple effects of kelp production in Hakodate, a city with a particularly large kelp production volume in Hokkaido.

3 Economic Importance of Kelp in Hakodate City, Japan

Blue carbon provides job opportunities and coastal prosperity (Nellemann et al. 2009). In particular, kelp has a high economic impact on regions where it is consumed as a food resource. Among these regions, Kelp created one of the pillars of Japanese cuisine and had a sizable economic impact. Japanese seaweed production accounted for 1.15% of the world’s total production and sixth highest in 2019 (The Food and Agriculture Organization of the United Nations (FAO) 2021). Shoku Nihongi, an imperially commissioned Japanese history text completed in 797, reported that kelp was devoted to the imperial court for a long time in the area of current Hokkaido Prefecture.

Hakodate City, located in southwestern Hokkaido Prefecture, especially contributed to kelp production in Japan by supplying Ma-kelp (Laminaria japonica) and Gagome-kelp (Saccharina sculpera). The total production and sales, however, have decreased over the last two decades (Fig. 7.1). The three major factors causing the decrease of total production include (1) decreasing natural resource kelp by changing weather, (2) decreasing number of fishermen, and (3) low working efficiency of labor due to aging (Hatamiya 2014).

Fig. 7.1
A combination chart represents the Japanese yen in millions and time versus years. The highest volume of sales is from the year 1992 at around 9000 M, and the line for the volume of landings exhibits a downward fluctuating trend.

Trend of kelp volume of sales and landings in Hakodate. Source Created from Hokkaido Research Organization (HRO) (2022)

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Hakodate succeeded in cultivating kelp from natural kelp in the 1960s as the first city in Japan (City of Hakodate 2021a). The amount of cultivated kelp was relatively sustainable, whereas that of natural kelp decreased dramatically. Kelp aquaculture is the main employment resource in Hakodate, with 1312 fishery operating units, of which 541 are mainly kelp aquaculture (City of Hakodate 2021b).

3.1 Input–Output Analysis

3.1.1 Inverse Coefficient Matrix

The numbers mentioned above suggest the importance of kelp as a blue carbon resource from both cultural and economic aspects. To further analyze the economic importance of kelp in the Hakodate City, this study used an input–output table analysis. The input–output table explains the economic structure of the region as a matrix of sectors; the row shows the sales of each industry to other industries; and the column explains the expenditure factors of each industry.

One of the important analyzes using the input–output table is to analyze the direct and indirect economic effects of particular final demands that occur in an individual sector in other industrial sectors. Thus, the inverse coefficient matrix in the respective industry sectors could play a crucial role. The Hakodate City regional input–output table created by Furuya et al. (2006) separated fishery-related industries into groups by fishing type, and kelp-related industries were separated into natural kelp-fishery, aquaculture kelp-fishery, and kelp-processing sectors.

To make the input–output table applicable to the current Hakodate City, we updated it with the national statistics of 2015 and interview surveys on related sectors in 2021. The input–output table shows that each kelp-related industry imports goods from outside regions with sizable portions; thus, the study applied inverse matrix coefficients that incorporate imports. The formula for the inverse matrix coefficient is as follows:

$$\left[ {I - \left( {I - \mathop{M}\limits^{\smile} } \right)A} \right]^{ - 1}$$
(7.1)

where \(I{ }\) is the unit vector, \(\mathop{M}\limits^{\smile}\) the import ratio vector, and \(A{ }\) is input coefficient vector.

Table 7.3 shows the inverse matrix coefficient of the kelp-related sectors. The inverse matrix coefficient depicts the magnitude of the ultimate direct and indirect production repercussions on various industrial sectors when one unit of final demand exists for a particular sector. The kelp-processing industry has the highest impact among kelp-related industries, and there is little difference in economic impacts between natural and aquaculture kelp industries.

Table 7.3 Inverse matrix coefficients of kelp-related sectors
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3.1.2 Index of the Power of Dispersion and Index of the Sensitivity of Dispersion

To further analyze the economic importance of kelp-related industries with other industries, the index of the power of dispersion and sensitivity of dispersion was calculated.

The index of the power of dispersion is called to be the “first category index of the power of dispersion,” which is the vertical sum of each column sector in the inverse matrix coefficients table divided by the mean value of the entire vertical sum in the inverse matrix coefficient table to produce a ratio. This indicates the relative magnitude of production repercussions. If the index of the power of dispersion of the sector is higher than 1, the sector exerts great production repercussions on all industries; whereas, if the value is lower than 1, the sector has fewer production repercussions for all industries.

The index of sensitivity of dispersion is referred as the “primary index of the sensitivity dispersion,” which is the horizontal sum of each row sector in the inverse matrix coefficient divided by the mean value of the mean value of the entire sum in inverse matrix table to produce a ratio. This indicates the relative influence of one unit of final demand for a row of sectors. If the index of the sensitivity of dispersion of the sector is higher than one, the sector is relatively sensitive to fluctuations in business cycles in all industries; however, if the value is lower than one, the sector is less sensitive to fluctuations in business cycles in all industries.

The results are summarized in Fig. 7.2. To compare the economic importance of kelp-related industries in all industries, Fig. 7.2 shows the results of only fishery-related industries with the index of power of dispersion on the horizontal axis and index of sensitivity of dispersion on the vertical axis. Each sector is categorized according to industry type and is allocated to four quadrants.

Fig. 7.2
A quadrant diagram of the index of the power of dispersion versus the index of sensitivity of dispersion plots different fishery and processing industries.

Source Compiled by authors, created from a new input–output table

Sectors by index of power dispersion and sensitivity dispersion.

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All fishery-related sectors, which are not influenced by the business cycle of other sectors, are plotted in the second and third quadrants. For the fishery industry, all the fishery sectors are located in the third quadrant. The fixed net fishery, gill and sink net fishery, which caught squid, salmoniformes, codfish, and mackerel, had a strong influence on other sectors. Squid fishery, the symbolic fishery in Hakodate City, has a different magnitude by fishing type; the coastal squid fishery has a higher economic impact as compared to the offshore squid fishery, which is ranked the lowest. The kelp fishery also has a different economic influence on the type of fishery, and aquaculture kelp fisheries have a higher economic influence than natural kelp fisheries; however, the aquaculture kelp fishery is the most sensitive fishery industry. In terms of the processing industry, kelp processing has a higher economic impact than squid processing and other fish processing, which suggests its importance as the core fishery business of the kelp-processing sector in Hakodate.

The results suggest the importance of kelp-related sectors as economic resources in Hakodate. Squid is an iconic fishery as it is a Hakodate city symbol; however, the kelp-related sector has higher economic authority than the squid-related sector as a whole.

3.1.3 Economic Ripple Effect

To evaluate the ripple economic impact of kelp industries, we calculated the additional output of the scenario in which one billion JPY occurred as additional final demand in each sector, but net exports did not change. The formula used is as follows:

$$\Delta X = \left[ {{\text{I}} - \left( {{\text{I}} - \mathop{M}\limits^{\smile} } \right){\text{A}}} \right]^{ - 1} \left[ {{\text{(I}} - \mathop{M}\limits^{\smile} )\Delta Y + \Delta E} \right]$$
(7.2)

where X is domestic production, Y is domestic final demand, and E is net export.

The ripple economic impact comprises indirect and induced economic impacts. The average consumption propensity and employment coefficient followed those of the Donan region located in the southern part of Hokkaido Prefecture, which includes the Hakodate City. Table 7.4 revealed the total economic impact, including the first and second economic ripple effects, and job opportunities created for all sectors from each kelp-related sector. The total economic impact and job opportunity created are the highest for aquaculture kelp-fishery. In terms of income, however, the natural kelp fishery brings the highest increase (0.13), mainly because the sector has the highest ratio of employee compensation to total outputs in fishery sectors (49%), which is 32% in aquaculture kelp fishery and 10% in kelp processing.

Table 7.4 Economic impacts with 1 billion JPY final demand
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4 Concluding Remarks

4.1 Policy Implication

This chapter introduces the role of blue carbon resources as a sink for CO2 and presents the economic role of the kelp sector in Hakodate City, Hokkaido Prefecture, Japan, as a case study. Blue carbon plays a critical role as an ocean carbon sink, and our focus on macroalgal beds, including kelp forests, is highly expected because of their high absorption coefficients. As a food resource, kelp domains have critical economic importance in Hakodate City as a fishery sector. Aquaculture kelp sector, among kelp-related sectors, would bring the highest economic impacts to Hakodate City. The production of the cultivated kelp has relatively sustainable production for recent years compared with natural kelp has. In addition, around 40% of the kelp cut on the process of harvesting flows into the seabed sinks CO2 (Motomatsu et al. 2009). Promoting cultivation of kelp, therefore, would bring the most ecological and economical profits to Hakodate City in the sustainable manner. In order to promote aquaculture kelp sector, conservation and restoration of natural kelp which releases swarm spores are preferentially required.

Our empirical study using input–output analysis provides evidence on the economic effect of kelp-related industries, as well as its growing potential in food manufacturing and its underestimated potential for blue carbon capture. Under the circumstance of the declining fishery sector in Hakodate due to complex reasons such as diminishing fishery resource stock and climate change, Kelp is highly expected to be promoted as a sector with multiple functions of aquaculture, food processing, and most importantly, a sector of blue carbon capture for ecosystem conservation.

4.2 Research Limitation and Future Work

For further research, as fishing operations emit CO2 via fossil fuel consumption, a comprehensive analysis of the reduction effects of CO2 by promoting kelp fishing is required. Using the waste input–output table, Motomatsu et al. (2009) estimated that 31,940 tons of CO2 are stored and sequestered annually in fishing villages. Asakawa et al. (2008) quantified the reduction effects of CO2 by improving the efficiency of fisheries and CO2 fixation in coastal areas from the physical and biological aspects using a waste input–output table.

In Japan, a system to generate carbon credits for activities that contribute to the conservation and restoration of natural macroalgal beds and the sustainability of cultivated macroalgae has been demonstrated (Kuwae et al. 2019). In future, it is important to develop and implement initiatives and policies that support the sustainable continuation of the local kelp industry by utilizing new sources of funding, using these credits.