COP15 has provided
another historic moment in the history of efforts to protect our planet. The
Global Biodiversity
Agreement,
agreed at the UN meeting that ended Monday in Montreal, is a shared
commitment by countries around the world to protect 30 percent of our land and
seas by
2030.
Many have called it a ‘Paris moment’ for biodiversity — something crucially
important at a time of plummeting populations of
insects,
including crucial
pollinators;
acidifying
oceans
and a soaring population of more than 8 billion continuing rampant consumption
of Earth’s natural resources. Many scientists have warned that we’re causing the
largest loss of
life
since the time of the dinosaurs.
Negotiated over two weeks, the COP15 deal — known as the Kunming-Montreal
pact — includes goals to reform $500 billion of potentially damaging subsidies,
and restore 30 percent of the world’s degraded land and marine ecosystems.
As ever, and just like at last month's COP27 climate
summit, money remains a sticking point. In the final hours of negotiations,
nations decided to set up a new fund within the UN’s existing financing
mechanism for biodiversity — and talk about creating a separate one in the
future. By the end of the decade, richer countries — including the UK and
EU nations — will provide $30 billion in aid to protect, enhance and
restore biodiversity by 2030.
It is a move that will no doubt appease the group of 150 financial institutions
that called on world
leaders
to make ambitious commitments to preserve nature — or, better still, commitments
to nature positivity — in
Montreal. The group, which collectively manages more than $24 trillion in
funds, pointed to the inextricably linked challenges of climate change and
biodiversity loss, and the systemic risks to
investors.
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COP15 once again highlighted the importance of ensuring money moves in the right
direction to bring about lasting environmental protection. One interesting, and
relatively new, concept for using financial mechanisms to shield important
ecosystems is to use insurance policies to finance protection and restoration in
the event they are damaged.
For example, The Nature Conservancy (TNC) recently
purchased
a coral reef insurance policy in the US to protect the important marine
environment surrounding Hawai‘i. It will provide funding for rapid coral
reef repair and restoration
work
across the region should any reefs get damaged by hurricanes or tropical storms.
Our coasts are at serious risk from intense storms and erosion — and coral reefs
provide the best natural defense against these and other climate-related
threats. Despite covering less than 1
percent of
the ocean floor, they provide critical ecosystems to more than 25 percent of
marine life, provide millions of jobs globally, protect coastlines from storms
and erosion, and offer a vital food source for local populations.
In 2021, the Hawai‘i State Senate passed
a resolution
asking for reef insurance to be evaluated as a viable approach to environmental
protection. A feasibility
study
found that coral reefs in Hawai‘i could be similarly insured against natural
disasters. The TNC-developed policy will be triggered if wind speeds exceed 50
knots (57 mph) sufficiently close to reefs. Pay-outs of up to a maximum of $2
million will allow for immediate repair and restoration efforts, and will be in
place throughout the 2023 hurricane season.
Reef insurance was first trialled in Mexico back in 2019. Local businesses
and the government bought a policy to cover and protect the Mesoamerican
Reef, just off a coastline that houses some of the country’s famous Mayan
ruins. The environmental group MAR Fund
then took out a policy to protect the same reef that also stretches south of
Mexico to Belize, Guatemala and Honduras.
In 2020, the policies paid out following storms in Mexico and Belize — prompting
an
admission
from Secretary of Ecology and Environment Josefina Huguette Hernández Gómez
that “the cost is higher when you have the loss of biodiversity or corals than
what you pay in insurance.”
Up to now, environmental conservation has relied on philanthropy, business
intervention and government grants. Using insurance is an innovative way of
channelling private sector money to pay for biodiversity conservation.
“By investing in nature, our insurance and finance partners are demonstrating
its
value
as a critical natural, cultural and economic resource,”
says
Ulalia Woodside Lee, Executive
Director at TNC Hawai’i.
For a $110,000 premium, the Hawaii'an state will get up to $2 million of
insurance protection until the end of December 2023.
“Even with just the flood-risk reduction value — usually that’s enough to make a
business case to say, yes, we need to protect these reefs,"
says
Eric Roberts, a senior risk and
resilience program manager at TNC. With Hawai‘i’s reefs providing coastal flood
protection to property and jobs worth more than $836
million, and the state’s
reef fisheries generating $13.4 million a
year, it is
a compelling argument.
While the COP15 agreement has been warmly welcomed as a breakthrough moment,
much of the criticism aimed at the latest climate negotiations at COP27 centered
on a failure to effectively link biodiversity with wider climate-caused
environmental damage. Coral reef insurance is a concept that dovetails the
“loss and
damage”
conversations on helping poorer nations cope with climate disasters and build
resilience.
As a 2020 reef insurance feasibility study by TNC concluded, “an unprecedented,
coordinated global effort among public, private and philanthropic sectors will
be required for reefs to survive beyond the end of this century.” Wider rollout
of these types of insurance policies could help provide the protection they
need.
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Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.
Published Dec 20, 2022 7am EST / 4am PST / 12pm GMT / 1pm CET