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Developing Sustainable Conservation
Finance Strategies for Coral Reef Restoration




                      Brett Howell, Georgia Aquarium
Agenda

Project Site – South Florida
Coral Restoration & Economic Incentives
Next Steps
Florida Keys National Marine Sanctuary
 Protective designation for a specific place
           2
 2900 nm /10,000 km
                       2

 Surrounds Florida Keys

 Co-trustee Management with Florida

 1600 Keys/1800 miles of shoreline




                                                Source: Sean Morton, NOAA.
Recreation related to reef use in the Keys
  fell by ~20% between 1995 and 2007
         Annual # of Days of Activity (000’s)
                        1995        2007
Activity                R+V          R+V      Change
Snorkeling – all        2449        2212        -237
SCUBA Diving – all       704         557        -147
Fishing – all           2840        2069        -771
All 3 Activities        5993        4838       -1154
Visiting museums/historic areas                                      879


                    Source: Data from Visitor Study: Selected Comparisons 1995-96 and
                    2007-08 and Monroe County Resident Recreation: Selected
                    Comparisons 1995-96 and 2008. Vernon R. Leeworthy, Office of
                    National Marine Sanctuaries, National Ocean Service, NOAA.
Stakeholders
                             Every US
                              Citizen
                           (existence &
                           option value)
         Producers                                Greater
       earning profits                           Florida &
       from a healthy                          Florida Keys
            reef                                 residents



                                                         Florida
Elected
                                                          Keys
officials
                                                       businesses
                            Who are the
                           stakeholders?




 Municipal
                                                     Tourists
governments



                    State of          Educators
                    Florida          and students
Coral Tree Nursery & Site Locations
Marine Conservation Finance Mechanisms
   FINANCING MECHANISM                                    SOURCE OF REVENUE
Government Revenue Allocations                       Government, Donors, NGOs, Tax Payers,
(Budgets, Debt Relief, Bonds, Lottery, Stamps)       Investors

Grants and Donations                                 Donors, Corporations, NGOs, multisource
(Foundations, NGOs, Trust Funds, Private Sector)

Tourism Revenues                                     Visitors, Divers, Boaters, Hotels, Cruise Lines,
(Fees, Hotel/Passenger Taxes, Voluntary)             Tourism Operators

Real Estate and Development Rights                   Property Owners, Develops, Donors,
(Purchase/Donations, Easements, Surcharges,          Conservation Investors
Concessions, Tradable Development Rights)

Fishing Industry Revenues                            Commercial and Recreational Fishers,
(Licenses, Fines, Quotas, Eco-Labeling)              Seafood producers, Governments

Energy and Mining Revenues                           Energy Companies, Power Producers, Private
(Fines, Royalties, Revenue, Voluntary)               Companies, Donors
For-Profit Investments Linked to Marine              Private Investors, Pharmaceutical Companies
Conservation                                         “bioprospecting,” Global Partnership for
(Private Sector, Biodiversity Prospecting)           Oceans
Source: Spergel, Barry and Melissa Moye. Financing Marine Conservation. 2004. World Wildlife Fund.
Conservation Goal
   Develop a mechanism that allows activities to
    become financially self-sustaining to pay people to
    conserve/ restore nature
     –   Establish economic incentives around social,
         economic and environmental value of reefs
     –   Return of/on capital invested
   Free-market environmentalism
     –   Improving environmental quality through property
         rights (resource tenure) and voluntary markets
     –   Tenure security & exclusive access to secure funding
         and overcome free rider problems
   Work with other groups to establish appropriate
    scientific and performance criteria (% live coral cover)
Challenge with Coral Markets
     Environmental goods/services are not like typical market goods
     Market goods are:
       –   Excludable: I can keep you from breathing the air in my tank
       –   Rivalrous: And I need to because your consumption precludes
           mine
       –   Certain: I know when the tank is filled and when I can use it
     By contrast, environmental resources are usually:
       –   Non-rivalrous: Consumption by one does not preclude
           consumption by others
       –   Non-excludable: Cannot keep non-payers out (free rider)
       –   Uncertain: Not sure when and if consumption will occur

Source: Reed Watson, PERC
Ocean Law – Coral Commons
         Navigable waters in the US are a public good
         Private land rights stop at the mean high water mark

         US Exclusive Economic Zone (EEZ) extends to 200

          nautical miles (NM) from the coast
         Contiguous zone of US 12-24 NM

              –   Full private ownership of submerged lands in Florida
                  is illegal, with limited exceptions




Source: Practitioner’s Field Guide for MCAs, Draft V. 2 September 2012.
Developing Revenue Streams




                Source: Business Model Generation page 44.
Next Steps
• Test feasibility in locations where property
  rights/enabling regulations are already established
      –   Connects buyers and sellers in a self-sustaining
          market
      –   Ensures long-term protection of reef ecosystem
      –   Promotes economic recovery & development
• Host a workshop in April 2013 with coral
  scientists, marine park managers, coral restoration
  practitioners, economists, and “buyers” of coral reef
  restoration to discuss how/where to pilot the concept
Thank you



      bwhowell1@gmail.com
Twitter @BrettWHowell; #GAIcorals

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Developing Sustainable Conservation Finance Strategies for Coral Reef Restoration

  • 1. Developing Sustainable Conservation Finance Strategies for Coral Reef Restoration Brett Howell, Georgia Aquarium
  • 2. Agenda Project Site – South Florida Coral Restoration & Economic Incentives Next Steps
  • 3. Florida Keys National Marine Sanctuary  Protective designation for a specific place 2  2900 nm /10,000 km 2  Surrounds Florida Keys  Co-trustee Management with Florida  1600 Keys/1800 miles of shoreline Source: Sean Morton, NOAA.
  • 4.
  • 5. Recreation related to reef use in the Keys fell by ~20% between 1995 and 2007 Annual # of Days of Activity (000’s) 1995 2007 Activity R+V R+V Change Snorkeling – all 2449 2212 -237 SCUBA Diving – all 704 557 -147 Fishing – all 2840 2069 -771 All 3 Activities 5993 4838 -1154 Visiting museums/historic areas 879 Source: Data from Visitor Study: Selected Comparisons 1995-96 and 2007-08 and Monroe County Resident Recreation: Selected Comparisons 1995-96 and 2008. Vernon R. Leeworthy, Office of National Marine Sanctuaries, National Ocean Service, NOAA.
  • 6. Stakeholders Every US Citizen (existence & option value) Producers Greater earning profits Florida & from a healthy Florida Keys reef residents Florida Elected Keys officials businesses Who are the stakeholders? Municipal Tourists governments State of Educators Florida and students
  • 7. Coral Tree Nursery & Site Locations
  • 8. Marine Conservation Finance Mechanisms FINANCING MECHANISM SOURCE OF REVENUE Government Revenue Allocations Government, Donors, NGOs, Tax Payers, (Budgets, Debt Relief, Bonds, Lottery, Stamps) Investors Grants and Donations Donors, Corporations, NGOs, multisource (Foundations, NGOs, Trust Funds, Private Sector) Tourism Revenues Visitors, Divers, Boaters, Hotels, Cruise Lines, (Fees, Hotel/Passenger Taxes, Voluntary) Tourism Operators Real Estate and Development Rights Property Owners, Develops, Donors, (Purchase/Donations, Easements, Surcharges, Conservation Investors Concessions, Tradable Development Rights) Fishing Industry Revenues Commercial and Recreational Fishers, (Licenses, Fines, Quotas, Eco-Labeling) Seafood producers, Governments Energy and Mining Revenues Energy Companies, Power Producers, Private (Fines, Royalties, Revenue, Voluntary) Companies, Donors For-Profit Investments Linked to Marine Private Investors, Pharmaceutical Companies Conservation “bioprospecting,” Global Partnership for (Private Sector, Biodiversity Prospecting) Oceans Source: Spergel, Barry and Melissa Moye. Financing Marine Conservation. 2004. World Wildlife Fund.
  • 9. Conservation Goal  Develop a mechanism that allows activities to become financially self-sustaining to pay people to conserve/ restore nature – Establish economic incentives around social, economic and environmental value of reefs – Return of/on capital invested  Free-market environmentalism – Improving environmental quality through property rights (resource tenure) and voluntary markets – Tenure security & exclusive access to secure funding and overcome free rider problems  Work with other groups to establish appropriate scientific and performance criteria (% live coral cover)
  • 10. Challenge with Coral Markets  Environmental goods/services are not like typical market goods  Market goods are: – Excludable: I can keep you from breathing the air in my tank – Rivalrous: And I need to because your consumption precludes mine – Certain: I know when the tank is filled and when I can use it  By contrast, environmental resources are usually: – Non-rivalrous: Consumption by one does not preclude consumption by others – Non-excludable: Cannot keep non-payers out (free rider) – Uncertain: Not sure when and if consumption will occur Source: Reed Watson, PERC
  • 11. Ocean Law – Coral Commons  Navigable waters in the US are a public good  Private land rights stop at the mean high water mark  US Exclusive Economic Zone (EEZ) extends to 200 nautical miles (NM) from the coast  Contiguous zone of US 12-24 NM – Full private ownership of submerged lands in Florida is illegal, with limited exceptions Source: Practitioner’s Field Guide for MCAs, Draft V. 2 September 2012.
  • 12. Developing Revenue Streams Source: Business Model Generation page 44.
  • 13. Next Steps • Test feasibility in locations where property rights/enabling regulations are already established – Connects buyers and sellers in a self-sustaining market – Ensures long-term protection of reef ecosystem – Promotes economic recovery & development • Host a workshop in April 2013 with coral scientists, marine park managers, coral restoration practitioners, economists, and “buyers” of coral reef restoration to discuss how/where to pilot the concept
  • 14. Thank you bwhowell1@gmail.com Twitter @BrettWHowell; #GAIcorals