Billions to be gained in coral reef investment, new analysis shows

A new report, The Coral Reef Economy, has found that there are billions to be gained in investing in coral reef protection, preservation and enhancement. The report focused on two of the world’s major coral reef areas: the Coral Triangle (which spans six countries – Indonesia, the Philippines, Malaysia, Papua New Guinea, Solomon Islands and East Timor) and the Mesoamerican Reef (spans Belize, Guatemala, Honduras and Yucatan province in Mexico).

Corals In Mangrove. Indonesia

A split level image showing corals thriving close to mangrove trees. Yanggefo Island, Raja Ampat, West Papua, Indonesia. Tropical West Pacific Ocean. Ceram Sea.

The study compared the estimated economic outcomes of two scenarios from now until 2030: one a Healthy Reef Scenario, where reefs are returned to a healthy state through increased investment in protection and preservation; and two, a Degraded Reef Scenario, where the health of the reefs continues to decline from current levels.

The contrast is stark: a shift to improved coral reef health from one of further decline in the period to 2030 could unlock an additional $37 billion ($2.6 billion per annum) in Indonesia and an additional $35 billion ($2.5 billion per annum) in Mesoamerica in three key reef-dependent sectors: tourism; commercial fisheries; and coastal development.

Jerker Tamelander, head of UN Environment’s coral reef unit, said: “Investing in coral reefs offers a significant prize, not only economic, but importantly also for the marine life, and coastal populations who depend so heavily on healthy coral reefs for their food, livelihoods and protection.”

Coral reefs are exceptionally valuable; they provide food, livelihoods and economic opportunity to more than half a billion people in over 100 countries, and coastal protection from increasing extreme weather events; they are also teeming with life, hosting a quarter of all known marine species.

Yet these vital ecosystems are being rapidly degraded as a result of warming sea temperatures due to climate change, overfishing, destructive fishing, ocean acidification, and a range of land-based activities. According to UNEP, the world has already lost at least one-fifth of the world’s coral reefs, and is facing the very real threat of losing as much as 90 per cent of all its coral reefs within the next 30 years.

Tamelander added: “Climate change is a source of significant uncertainty – and risk. Realizing the full potential financial returns reefs can generate requires that urgent action is taken to limit climate change so as to avoid global scale reef loss.” 

The report’s findings show if coral reefs continue to decline in line with historical trends, the value of the reef to key sectors could fall in real terms by $3.1 billion in Mesoamerica and $2.2 billion in Indonesia per annum by 2030 compared to today. Such losses could have profound follow-on effects on local livelihoods and government taxation revenues in each region, further compounding the potential losses to reef-dependent communities.

Under the healthy reef scenario, live coral cover (identified as a key marker of coral reef health) is expected to increase to 14.1 per cent in Mesoamerica and 36.4 per cent in the Coral Triangle by 2030. Under the degraded reef scenario, live coral cover is expected to decline from an average of 3.7 per cent in 2017 to 1.6 per cent in 2030 in Mesoamerica, and from 16.6 per cent to 11 per cent in the Coral Triangle. 

Protection and management of coral reef ecosystems is mainly funded by the public sector, but it is widely recognized that, at current levels, this is insufficient to maintain reef health and meet internationally adopted targets.

A range of policies and interventions are available to governments and the private sector that could produce a financial net benefit and positive return on investment for stakeholders. The interventions modelled in the report could be implemented in each region to help alleviate key coral reef stressors in the short to medium term, such as overfishing, erosion and improper wastewater management. For example, the potential return on investment for the expansion of no-take marine protected areas in Mesoamerica was 44:1, and for better erosion management on agricultural land in Indonesia, 9:1.

The report represents just part of the broader economic returns that may accrue to other sectors more indirectly linked to coral reefs, and the social and environmental benefits of restoring critical coral reef ecosystems such as biodiversity conservation and cultural heritage values.


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