Can this new fund save coral reefs before it's too late?

Coral reefs have been called the "canary in the coalmine" for the devastating impacts of climate change.

While these colorful underwater ecosystems cover less than 0.2% of the sea floor, they are critically important: 25% of all marine life depend on them at some point in their life cycle, and nearly 1 billion people rely on them for everything — from food security to tourism and livelihoods, and to protection from storms.

But they’re dying fast. Coral reefs face the greatest extinction risk of any ecosystem on earth. More than half of them have been lost over the past 50 years. Even if leaders succeed in hitting the 1.5 degree Celsius climate targets, the world is projected to still lose up to 90% of its coral reefs, posing a major disruption of coastal communities.

The Global Fund for Coral Reefs hopes to save coral reefs and the communities that rely on them. Launched just over a year ago, it’s the first and only global blended finance instrument dedicated to coral reefs, and it uses grants to incubate projects that de-risk private-sector investments. The fund was established by a coalition of United Nations agencies, government donors, private philanthropy, and financial institutions.

GFCR seeks to raise and invest $625 million over the next 10 years. With new funding commitments at COP 26, the team is developing a plan to support what it describes as “coral positive businesses.”

So far, GFCR programming has launched in Fiji, Kenya, Tanzania, the Bahamas, and Papua New Guinea. Coral reef conservation experts are hopeful the fund will allow financing to catch up with technological advancements in coral reef conservation and restoration before it’s too late.

Closing the coral reef funding gap

At the fund’s initial planning meetings in 2018, stakeholders wondered why the global response to coral reef degradation was not commensurate with the threat.

“Only 1/100th of 1% of climate finance was going to coral reefs,” said Chuck Cooper, the GFCR’s executive board chair and managing director of Vulcan Inc., the company founded by Microsoft co-founder Paul G. Allen to support his business, and philanthropic and nonprofit work.

“Not only was there a coral reef crisis, but there was a huge coral reef funding gap,” he said at an event for GFCR hosted by the Green Climate Fund at COP 26 Saturday.

The fund has been hard at work to close that funding gap.

Last week, Prime Minister Justin Trudeau announced that Canada will contribute 6 million Canadian dollars ($4.80 million), joining the United Kingdom, France, and Germany as government donors. That funding, together with contributions from the Paul G. Allen Family Foundation and Prince Albert II of Monaco Foundation, will incubate projects with the goal of de-risking and unlocking private sector investment.

And last month, the Green Climate Fund announced a $125 million anchor investment in the GFCR investment window, which will back a global portfolio of scalable projects in the fields of sustainable ocean production, ecotourism, and sustainable infrastructure.

In addition to fundraising, GFCR’s executive board is considering and approving programs with the promise of increasing the resilience of coral reefs and the communities that depend on them. In March, it approved GFCR’s first round of programming. It includes a $4.7 million proposal led by the U.N. Fiji country office that will incubate reef-positive business models, use nonsynthetic fertilizers in coral reef plantations, and introduce educational programs to reduce agricultural runoff, among other activities.

“We also want to move from a project by project to a programmatic approach,” Cooper said.

It remains to be seen whether GFCR will succeed in protecting and restoring coral reef ecosystems on the brink of extinction. But experts working to address the coral reef crisis say it’s an important step in the right direction.

Innovation in conservation and restoration

While money is certainly needed to take coral reefs to scale, there’s also a need for capacity building to help governments utilize technologies for coral reef conservation and restoration, and tackle some of the problems on land that threaten these reefs, including overfishing, coastal development, and pollution.

“It is money,” said Greg Asner, director of Arizona State University’s Center for Global Discovery and Conservation Science. “But the money needs to be used to build expertise beyond these cottage industry projects.”

His Global Airborne Observatory uses highly modified aircraft to image coral reefs and other aquatic habitats and measure biodiversity. Asner has also led work for the Allen Coral Atlas, a project backed by Vulcan Inc., which just completed the first high-resolution maps of the world’s shallow water coral reefs in September.

Now, he’s also the chief scientist for Carbon Mapper, which will launch satellites into space not only to measure gases in the air, but also chemical signatures from the ground, including changes in coral reefs.

This work to map and monitor coral reef changes at a global scale will inform GFCR’s work to identify and select priority coral reef projects.

A growing number of innovators, similar to Asner, are working to leverage technology and innovation to save coral reefs. But time is not on their side.

“Unfortunately, coral reefs are rapidly sounding their alarms as they face ever increasing synergistic pressures from ocean warming pollution and habitat degradation,” said Elizabeth Maruma Mrema, executive secretary of the secretariat of the U.N. Convention on Biological Diversity, at the Green Climate Fund event for GFCR.

Because action to protect and preserve coral reefs is not happening at the necessary scale, and the drivers of degradation continue to increase, there is a need for innovation not only in conservation but also in restoration.

An emerging leader in coral reef restoration is Coral Vita, an organization that is growing coral reefs in tanks at a rate that is 50 times faster than in nature, with plans to rebuild the reefs starting in the Bahamas but potentially expanding globally.

When it comes to coral reef restoration, the technology is on its way, but financing really needs to catch up, Sam Teicher, Coral Vita co-founder, said.

“There are interesting initiatives like direct payments for restoration, reef insurance, and debt-for-nature swaps that are catalyzing growth,” he said in an email to Devex. “But most major financial players don’t want to write checks to smaller projects looking to scale.”

Teicher said he thinks GCFR, which is supporting Coral Vita as part of a larger program proposal in the Bahamas, has potential to galvanize large-scale funding to coral and marine ecosystem preservation and restoration activities.

Bending the curve of risk and reward

The GFCR effort seeks to “generate more private investment in coral positive solutions,” said David Meyers, executive director of the Conservation Finance Alliance, which helped develop GFCR’s investment plan and provides outside technical support.

That means not only building up the pipeline of coral reef innovations but also addressing the underlying conditions that have kept private investors away from this space in the past.

“The blended finance approach really bends the curve of risk and reward and creates hopefully long term conditions for getting these private investors to come in,” Meyers said.

GFCR is taking a portfolio approach, in recognition of the fact that there is no one solution for coral reefs, he added. Examples of revenue-generating projects GFCR might invest in include direct conservation activity, such as marine protected areas and coral reef restoration, and the reduction of local threats including sustainable fisheries, eco tourism, and plastic waste management.

“Economies are systems, and they interact in ways you can’t necessarily predict, and you need to take a holistic approach,” Meyers said. “Technology’s part of that, but if you focus too narrowly on one piece, you miss the big picture.”

He said he is hopeful that GFCR can create the kinds of connections needed between NGOs, donors, governments, and the private sector, which have worked in silos for too long, in order to decrease the drivers of degradation.

This coverage exploring innovative finance solutions and how they enable a more sustainable future, is presented by the European Investment Bank.