Conservation of Tropical Coral Reefs : A Review of Financial and Strategic Solutions

This book critically engages with how the conservation of tropical coral reefs is financed. Beginning with the context of tropical coral reef degradation and loss, alongside an overview of tropical ecology, global environmental policy and finance, the book reviews several conservation financing instruments. These include ecotourism, debt-for-nature swaps, impact investments, and government domestic budgetary expenditures. From the Great Barrier Reef, to the Coral Triangle, to the Mesoamerican Reef, tropical coral reef degradation and loss are serious global environmental issues, contributing to loss revenue and food insecurity for coastal communities, and species extinction. Yet, many leading companies, individuals, and governments are making a positive impact on tropical coral reef conservation through the use of conservation finance. __Conservation of Tropical Coral Reefs__, using 30 case studies which span 23 countries and 6 continents, tells the history of international conservation finance and provides a variety of options for individuals, businesses, and governments to support conservation financing projects. Foreword Preface Acknowledgments Timeline Contents About the Author Acronyms List of Figures List of Tables 1 Executive Summary 2 The Context of Coral Reef Degradation and Loss Where Are the World’s Coral Reefs? Where Is Coral Reef Degradation and Loss Occurring Today? Global Climate Change Ocean Acidification Natural Disasters Pollution Runoff Plastics Overfishing Noise Pollution Disease Invasive Species High-Human Traffic Why Are Coral Reefs Valuable? Provisioning Services Regulating Services Habitat or Supporting Services Cultural Services Other Resources on the Context of Coral Reef Degradation and Loss Resources on Global Climate Change, Bleaching and Ocean Acidification Resources on Fishing Resources on Plastics and Pollution Resources on Related Topics 3 Coral Reef Ecology Introduction Ecosystem Diversity Species Diversity Genetic Diversity Connectivity to Seascapes Other Resources on Coral Reef Ecology 4 Global Environmental Policy Introduction Local Policies Federal Policies Bilateral, Multilateral, and Regional Policies International Policies Law of the Sea Treaty Paris Agreement Convention on Biological Diversity Ramsar Convention Sustainable Development Goals Other International Policies Company Policies Dates of Global Environmental Policy Dates When Government Institutions Were Established Other Resources on Global Environmental Policy 5 International Finance Introduction Capital Markets Equities and Bonds Short-Term and Long-Term Debt Insurance Conservation Trust Funds Currencies Interest Rates Project Finance Public Finance Trade Finance Financial Intermediaries Cash Flows Conservation Finance Financial Frameworks Efficient Frontier Financial Risk Management Portfolio Management: Risk, Return, Time (Horizon), Tax, Liquidity, Legal and Unique Other Resources on International Finance 6 The Origins and History of Coral Reef Conservation Finance Other Resources on the Origins and History of Coral Reef Conservation Finance 7 Government Domestic Budgetary Expenditures Introduction Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: Australia’s Great Barrier Reef Marine Park Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Great Barrier Reef Case Study #2: Papahānaumokuākea Marine National Monument Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Case Study #3: The Chagos Archipelago Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for the Chagos Archipelago Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Government Domestic Budgetary Expenditures 8 Conservation Easements Introduction Historical Overview Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: The Palmyra Atoll Purchase Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Palmyra Atoll Purchase Case Study #2: The Phoenix Islands Protected Area Conservation Trust Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Phoenix Islands Protected Area Conservation Trust Case Study #3: The Pez Maya Land Purchase Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Pez Maya Land Purchase Case Study #4: Chumbe Island Coral Park Ltd. Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Chumbe Island Coral Park Ltd. Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Conservation Easements 9 Government International Budgetary Allocations Introduction Historical Overview Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: The Marine and Coastal Protected Areas Project of Brazil Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Marine and Coastal Protected Areas Project of Brazil Case Study #2: Binational Red Sea Marine Peace Park Between Jordan and Israel Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Binational Red Sea Marine Peace Park Between Jordan and Israel Case Study #3: Mesoamerican Reef Fund Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Mesoamerican Reef Fund Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal, and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Government International Budgetary Allocations 10 Impact Investing Introduction Historical Overview Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: Mirova’s Althelia Sustainable Ocean Fund Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Althelia Sustainable Ocean Fund Case Study #2: Parametric Insurance for the Mesoamerican Reef Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Parametric Insurance for the Mesoamerican Reef Case Study #3: Arrecifes Del Sureste Marine Sanctuary of the Dominican Republic Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Arrecifes Del Sureste Marine Sanctuary Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal, and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Impact Investing 11 Payments for Ecosystem Services Introduction Historical Overview Mechanisms of Instrument Biodiversity Offsets Watershed Payments The Mechanisms of Developing Forest Carbon Projects Size of Instrument Biodiversity Offsets Watershed Payments Forest Carbon Introduction to Case Studies Case Study #1: Reef Credit Initiative Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Reef Credit Initiative Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal, and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Payments for Ecosystem Services 12 Ecotourism Introduction Historical Overview Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: The Galápagos Islands Introduction Identify Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Galápagos Islands Case Study #2: Ecotourism in Belize Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Ecotourism in Belize Case Study #3: Bonaire National Marine Park Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Bonaire Case Study #4: Palau National Marine Sanctuary Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Palau National Marine Sanctuary Case Study #5: Lady Elliot Island Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Lady Elliot Island Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal, and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Ecotourism 13 Debt Conversions Introduction Historical Overview Mechanisms of Instrument Size of Instrument Introduction to Case Studies Case Study #1: Seychelles’ Climate Adaptation and Impact Investment Debt Swap Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Seychelles’ Climate Adaptation and Impact Investment Debt Swap Case Study #2: Debt-for-Nature Swaps in the Philippines Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Debt-for-Nature Swaps in the Philippines Case Study #3: Jamaica Debt-for-Nature Swap and the Environmental Foundation of Jamaica Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Jamaica Debt-for-Nature Swap and the Environmental Foundation of Jamaica Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal, and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Debt-for-Nature Conversions 14 Blue Procurement Models Introduction Historical Overview Mechanisms of Instrument Size of Instrument Aquaculture Stewardship Council (ASC) Marine Aquarium Trade Marine Stewardship Council (MSC) Introduction to Case Studies Case Study #1: LINI’s Sustainable Ornamental Fish Aquaculture Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for LINI’s Sustainable Ornamental Fish Aquaculture Case Study #2: Western Australia’s MSC-Certified Rock Lobster Fishery Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Western Australia’s MSC-Certified Rock Lobster Fishery Case Study #3: Rare’s Fish Forever Work in the Philippines and Indonesia Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Rare’s Fish Forever Work in the Philippines and Indonesia Case Study #4: Blue Ventures’ Work with Locally Managed Marine Areas in Madagascar Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources for Blue Ventures’ Work with Locally Managed Marine Areas in Madagascar Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Blue Procurement Models 15 Blue Bonds and Seascape Bonds Introduction Historical Overview Mechanisms of Instrument Development Impact Bonds (DIBs) Social Impact Bond (SIBs) Environmental Impact Bonds (EIBs) Size of Instrument Introduction to Case Study Case Study #1: The Seychelles’ Blue Bond Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on the Seychelles’ Blue Bond Financial Analysis Return Risk Business Risk Strategic Risk Reputation Risk Liquidity Risk Operational Risk Legal and Regulatory Risk Credit Risk Market Risk Risk, Return, Time (Horizon), Taxes, Liquidity, Legal and Unique (RRTTLLU) Risk and Return Time Horizon Taxes Liquidity Legal Unique Policy Analysis Defining the Problem Establishing Goals Selecting a Policy Implementing a Policy Evaluating the Policy Future Outlook for Instrument Other Resources on Blue Bonds and Seascape Bonds 16 Additional Solutions Introduction Historical Overview Mechanisms of Instrument Introduction to Case Studies Case Study #1: Bureo’s Reuse of Discarded Fishing Nets Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Bureo Case Study #2: Coral Restoration FoundationTM, the World’s Largest Restoration Program Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Coral Restoration FoundationTM Case Study #3: Coral Vita, the World’s Largest, Land-Based Coral Restoration Initiative Introduction Identify the Problem Why the Problem Is Important How Problem Was Identified Effectiveness of Process for Identifying Problem Steps Taken to Address the Problem Results Challenges and How They Were Met Beyond Results Lessons Learned Other Resources on Coral Vita Future Outlook for Instrument Other Resources on Additional Solutions 17 The Future of Coral Reef Conservation Finance Clean Up Plastic Pollution and Reduce Plastic Usage Protect Adjacent Land Restoration of Degraded Areas Utilize Technology Mitigation of Global Climate Change Conservation of Large Seascapes Investable, Scalable Projects for the Private Sector Develop New Financing Structures Public Funds Used to Leverage Private Financing Education, Reduced Public Apathy, and the Next Generation Inspired Develop a New Economic System that Values Natural Capital Environmental Justice Effective Public Policies Other Resources 18 Concluding Thoughts About Conservation Finance Epilogue By Peter Gash Bibliography Index This book critically engages with how the conservation of tropical coral reefs is financed. Beginning with the context of tropical coral reef degradation and loss, alongside an overview of tropical ecology, global environmental policy and finance, the book reviews several conservation financing instruments. These include ecotourism, debt-for-nature swaps, impact investments, and government domestic budgetary expenditures. From the Great Barrier Reef, to the Coral Triangle, to the Mesoamerican Reef, tropical coral reef degradation and loss are serious global environmental issues, contributing to loss revenue and food insecurity for coastal communities, and species extinction. Yet, many leading companies, individuals, and governments are making a positive impact on tropical coral reef conservation through the use of conservation finance. Conservation of Tropical Coral Reefs, using 30 case studies which span 23 countries and 6 continents, tells the history of international conservation finance and provides a variety of options for individuals, businesses, and governments to support conservation financing projects. Brian McFarland is the Senior Vice President at Carbonfund.org Foundation. Brian is a certified Project Management Professional by the Project Management Institute, a Certified Sustainability Professional from the International Society of Sustainability Professionals, and holds dual graduate degrees in Business Administration and Global Environmental Policy. Brian has also published two previous books entitled, REDD+ and Business Sustainability and Conservation of Tropical Rainforests: A Review of Financial and Strategic Solutions