The Nature Conservancy is making waves — or rather, preventing them — with an innovative approach towards coral reef conservation in Hawai'i.
The method? Insurance.
A particular type of insurance, called parametric insurance, issues payouts when predetermined triggers are reached, such as wind speeds during a storm. In the case of a natural disaster, these policies are viewed as an effective way to distribute money quickly to an affected area.
This accelerated timeline is crucial when it comes to saving coral.
Ulalia Woodside Lee, executive director at TNC, explained, according to Reuters: "We will be able to start damage assessments and reef repairs after a storm as soon as it's safe to get in the water. This is important because corals must be reattached within several weeks after breaking or they will likely die."
TNC's new policy will pay up to $2 million to protect Hawai'i's coral reefs in the event of a storm. It's "a major upgrade," according to their statement, with widespread effects across the island chain.
In addition to harboring biodiversity and marine life, Hawai'i's reefs provide critical protection from flood damage, reducing wave energy by up to 97%.
They're also a major source of income through tourism dollars, contributing more than $1.2 billion a year to the local economy. And given that a single hurricane can wipe out up to 50% of living coral cover, it pays to protect them.
"We are building something that can be really transformative for communities and ecosystems as we respond to increasing storm activity associated with the climate crisis," Woodside Lee said.
The insurance initiative is one of several innovative approaches to conservation. Other arrangements, such as debt-for-nature swaps, employ similar financial incentives to encourage regions to preserve their threatened ecosystems.
Other traditional, hands-on methods continue to show promise, from fragmenting coral to deep-freezing coral. It's even possible to volunteer to help with coral restoration — especially if you're a diver — when you travel. But, as with every complex problem, it's necessary to approach it from every angle.
"Parametric insurance is increasingly demonstrating value … in this case providing Hawai'i with a tangible solution to quickly finance post-storm restoration activities," said Simon Young, senior director in WTW's Disaster Risk Finance and Parametrics team, who helped negotiate the deal with TNC.
That way, he continues, "Reefs [can] better recover and maintain resilience in the face of increasing climate impacts."
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