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Nobel-winning stock markets theory used to save coral reefs| Coral
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Nobel-winning stock markets theory used to save coral reefs| Coral

Bleached staghorn coral


Scientists say investors are showing early signs that a Nobel-winning economic theory is helping to save coral reefs.

Researchers at Australia’s University of Queensland used modern portfolio theory(MPT), a mathematical framework that was created by Harry Markowitz in 1950s to help risk-averse investors maximize returns, to identify the 50 coral sanctuaries or reefs around the world that are most vulnerable to the climate crisis. It also allows for the repopulation of other reefs if they are threatened.

The study recommends targeting investment in conservation projects that have the “strongest potential to succeed” in protecting priority reefs. According to Blue Earth Consultants, the benefits go beyond ecological outcomes and provide vital social, economic and nutritional benefits for communities.

Prof Ove Hoegh-Guldberg, a climate scientist at the University of Queensland, who helped lead the “50 reefs” project, said: “It’s essentially a strategy to help us make decisions about what to protect, if we are to have corals at the end of the century.”

“It is our best shot at having a long-term future for coral reefs,” he said.

Coral reefs face a dire future. Even if drastic emission reductions ensured global heating was limited to 1.5C above pre-industrial levels – which would require almost halving global CO2 emissions by 2030 from 2010 levels – 70% to 90% of today’s corals would vanish.

Bleached staghorn coral
Bleached coral at Ko Losin, Thailand. In the last decade, 14% of coral reefs were destroyed by bleaching.Jorge Silva/Reuters

A study of coral reef health found 14% has been lostGlobally, in less than a decade. The biggest culprit is bleaching events due to raised sea-surface temperatures.

“Modern portfolio theory is a framework that aims to reduce risk while maximising returns,” said Hoegh-Guldberg. “It’s treating conservation sort of as an investment opportunity.”

The strategy was developed at a meeting of scientists at Hawaiʻi Institute of Marine Biology in 2017, tapped into the theory to help scientists choose a “balanced” portfolio of coral reefs.

“You’ve got hundreds of these reefs across the planet,” said Hoegh-Guldberg. “Which one do you pick, so that you concentrate your efforts on it?”

Dr Hawthorne Beyer, a fellow at the University of Queensland researching the use of quantitative modelling in managing environmental systems, said: “Talk to people in the business world and they get it immediately. It’s a very logical idea and makes a lot of sense. Ours was the first to apply it on a global scale.”

The scientists divided the world’s coral reefs into “bioclimatic units” (BCU) of 500 sq km (190 sq miles). They used 174 metrics to determine the connectivity of each reef. Then, using a process called “scalarisation”, they produced estimates for each BCU. This gave them the best possible view of the future. “We don’t know which metrics are the best metrics at predicting risk,” explained Beyer.

The MPT was then used to quantify threats and identify reefs that offer the best conservation options. It also allowed for uncertainty about future climate change risks.

“You don’t want to put all your eggs in one basket, or bet on one measure of risk, when we have massive uncertainty about what the risks will be,” he said.

Clownfish in an anemone on coral in the Great Barrier Reef
Clownfish on coral in the Great Barrier Reef. Some of these areas were identified by the study as priority areas.Photograph: William West/AFP/Getty

The project identified reefs in the Middle East, Australia, the Caribbean and Pacific islands, South America and South America. They include parts of the Great Barrier Reef in Australia, the Egyptian and southern Red Sea, and parts of the “coral triangle” around Indonesia, Malaysia, Papua New Guinea and the Philippines. But, based on the criteria for climate and connectivity, the model excluded several ecologically significant areas, such as Hawaii and Central America’s Barrier Reef.

Nearly $93m (£70m) has been invested in the project, funded by Bloomberg Philanthropies’ Vibrant Oceansinitiative and others. The report revealed that the 50-reefs-inspired approach had helped at most 26 organizations, and eight funders have now prioritized 60 coral reef ecosystems in more than 40 countries.

Although coral reefs make up 0.2% of the ocean floor, they are home to at most 25% of all marine species. They also support hundreds of millions of people. Conservation efforts inspired by the study have focused on five threats to coral: fishing; “non-point source pollution”, such as from fertilisers, runoff from roads, or sediment; wastewater pollution; coastal development; and stress to reefs from climatic extremes.

Emily Darling, director coral reef conservation at the Wildlife Conservation Society (WCS)Part of the benefit is having a clear vision of where to focus their efforts.

“One of the biggest benefits of the 50 reef approach has been this compelling message that climate change is the critical threat to coral reefs and this is an approach that can give reefs a fighting chance.”

The WCS has $18m funding to work in 11 countries (including Fiji, Indonesia and Kenya) on 21 of the 50 coral reefs. This money will help communities reduce the pressure on these precious ecosystems.

“We are looking at non-climate threats such as overexploitation, destructive fishing, unsustainable tourism, coastal development, water pollution. We then ask ‘well, what are the top local pressures?’,” said Darling. “And that’s how we identify which intervention to tailor to those different situations.”

A no-take marine protected area between Kenya and Tanzania – in which no fishing, mining, drilling or similar activities are allowed – has been supported by WSC to protect the corals from these other pressures running alongside global heating.

“By doing that, we will not only safeguard coral reef biodiversity, but also the whales, spinner dolphins, the dugong, coelacanth fish, that whole ecosystem,” she said.

One of the 50 reefs identified is the “happy coral” sanctuary discovered in Tanzania, reported by the Guardian last year, where coral species have thrived despite warming eventsThey have also killed reefs nearby.


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