Title
Conservation Finance for Coral Reefs: A Vibrant Oceans Initiative Whitepaper
Author(s)
Victurine, Ray; Meyers, David; Bohorquez, John; Box, Steven; Blythe, Jessica; Callow, Martin; Jupiter, Stacy; Schweigart, Kate; Walsh, Melissa; Bieri, Tamaki
Published
2022
Abstract
Coral reefs face threats from climate change and local pressures, but many initiatives designed to deliver conservation outcomes for them and the social-economic systems they support are limited by sustainable finance and the availability of funds over the long term. Conservation finance is viewed as part of a holistic approach to coral reef conservation that integrates science-based biodiversity, social, and economic solutions tailored to local socio-cultural, environmental, and economic conditions to ensure their effective design and implementation. Specifically, conservation finance is defined as the “mechanisms and strategies that generate, manage, and deploy financial resources and align incentives to achieve nature conservation outcomes” (Meyers et al. 2020). Increasingly, there are diverse finance solutions that could support coral reef conservation and associated community wellbeing. This whitepaper reviews a broad range of finance solutions related to coral reef conservation, including conservation trust funds, blended finance, small and medium-sized enterprises, blue carbon, blue bonds, environmental impact bonds, debt for nature swaps, insurance products and biodiversity offsets. We highlight opportunities and solutions for both well-documented successful finance solutions and a range of innovative approaches that are currently being piloted. We also provide guidance on how governments, reef managers, and conservation stakeholders can identify, prioritize and implement a portfolio of finance mechanisms to achieve their desired conservation outcomes. We highlight a practical approach to conservation finance that requires an understanding of the objectives of conservation and resilience initiatives, the threats facing coral reef social-ecological systems, the actors who either benefit from the ecosystems or impact them, and how capital and incentives can be used to mitigate threats and improve equitable social and ecological outcomes. In its most simplistic terms, we suggest conservation finance solutions can be broken down into the following four interrelated approaches: discourage harmful actions; incentivize positive actions; optimize cost efficiencies; and increase capital for conservation. While most finance solutions for coral reefs focus on increasing the funds available for conservation, all four approaches are needed since some actions - especially those that reduce harm or optimize costs - can be extremely cost efficient and rapidly implemented to great effect. Additionally, achieving coral conservation and resilience outcomes requires a combination of finance solutions and management approaches as a portfolio of solutions. Successfully financing coral reef conservation will require a mix of funding sources, finance mechanisms, and partnerships. Funding sources will include governments, institutional investors, foundations, companies, donors, financing institutions, NGOs and individuals. Success will require expanding and enhancing existing finance mechanisms and sources, developing and testing new programs and ensuring that resources are deployed effectively. As well, it is essential to ensure that measures to improve reef conservation are not canceled out by capital investments and public finance flows that degrade the environment or put greater pressures on reef resources. Here, we explore how diverse conservation finance mechanisms can be used to provide effective and sustainable finance for coral reef protection and management and better align the financial and economic incentives of governments, companies, and individuals towards ensuring reef conservation and resilience. Ultimately, the ability of conservation finance to scale up requires that available funds can reach programs on the ground that are typically characterized by limited project pipelines, low absorptive capacity of local groups, and complex mechanisms for deploying capital. Finally, we address the potential risks that exist for local communities engaging with the various financing mechanisms, and highlight the ongoing need for equitable and effective coral reef finance in the blue economy (Bennett et al. 2021). We conclude with the following key recommendations: -Strong collaboration between the public and private sectors, and greater inclusion of the informal sector to strengthen local economies; -Adequate planning for the long-term financing needs that build on the demonstrated successes of blended finance models, debt swaps, blue bonds, trust funds, and insurance products; -High quality safeguards to minimize unintended social and environmental impacts from market interventions; -Mainstream coral reef protection into investment decisions to avoid and reduce coastal ecosystem harm; -Support regional development banks to mobilize resources for coral reef conservation and leverage support from multilateral and bilateral donors and impact investors; -Address climate change with blue carbon projects at jurisdictional scales.
Full Citation
Victurine, R., D. Meyers, J. Bohorquez, S. Box, J. Blythe, M. Callow, S. Jupiter, K. Schweigart, M. Walsh, and T. Bieri (2022). Conservation Finance for Coral Reefs: A Vibrant Oceans Initiative Whitepaper. Bronx, NY: Wildlife Conservation Society, Vibrant Oceans Initiative, Conservation Finance Alliance, Stony Brook University, Brock University, RARE Conservation, Asian Development Bank, and The Nature Conservancy, 1-19.

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