This document discusses developing sustainable finance strategies for coral reef restoration. It outlines how declining reef health and recreation in Florida Keys National Marine Sanctuary has negatively impacted the local economy. The author proposes establishing economic incentives for conserving coral reefs by developing property rights over restoration sites to create markets. A challenge is that environmental resources are non-rivalrous and non-excludable. The document recommends testing this approach in locations where enabling regulations exist and hosting a workshop to discuss piloting the concept. The goal is to make coral reef restoration financially self-sustaining long-term.

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.

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