In a first, a nonprofit is buying insurance for Hawaii’s threatened coral reefs

As climate change makes coastal storms more destructive, an environmental group is trying a new approach to protect Hawaii’s coral reefs. It could become a model for the defense of natural structures across the country – if it works.

The plan involves a sequence of urgent actions which, in theory, will go like this:

• Step 1: The Nature Conservancy, a large non-profit environmental organization, takes out an insurance policy for the 400,000 acres of coral reefs surrounding Hawaii’s 137 islands, although they do not own these reefs, which are found on public land.

• Step 2: If Hawaii experiences a storm strong enough to damage the reefs, the Nature Conservancy will receive compensation from the insurance company within approximately two weeks. (Compared to most insurance policies, this is the approximate equivalent of the speed of light.)

• Step 3: The Nature Conservancy will apply to the State of Hawaii, owner of the reefs, for a permit to repair storm damage. While clearance isn’t guaranteed, the odds look good considering Hawaii doesn’t have the money to do the job itself.

• Step 4: If state officials say yes, the reserve will use insurance money to pay for dive teams to begin repairing the damage. This stage is most like a race: they are about six weeks old, from the storm. After that, the broken coral dies, further reducing Hawaii’s best protection against future storms.

On Monday, the Nature Conservancy, which is based near Washington, DC, took the first step and purchased a $2 million insurance policy on Hawaii’s coral reefs. It is the first insurance policy in the United States for a natural structure, according to the group, after similar efforts in Latin America. The conservation says if the experiment is successful, it will consider expanding the model to other states and include other natural features that protect against storms, such as mangroves, wetlands or coastal dunes.

“We think we can help the Hawaii state government get this in place as a pilot project,” said Makale’a Ane, who leads community engagement and partnerships in Hawaii for the Nature Conservancy. “It’s not simple.”

The Hawaii test sits at the intersection of two trends that demonstrate the difficulty of adapting to climate change. First, the effects of global warming are increasingly beyond the ability of governments to respond, even in wealthy regions. The problem is not just money, but also an inability to adapt quickly enough to overlapping and evolving threats.

Coral reefs highlight this challenge. They act much like seawalls, blunting the destructive force of waves rushing towards the shore, protecting the people, land and structures behind them. But repairing reefs isn’t eligible for Federal Emergency Management Agency money, even though repair work on seawalls is. And Hawaii’s Division of Aquatic Resources doesn’t have the budget to restore storm-damaged reefs.

“We can’t do it all,” said Ryan Okano, manager of the division’s ecosystem protection program.

This leads to the second trend in climate adaptation: insurance companies present themselves as a solution, offering a suite of products that promise payouts for all kinds of calamities.

Cities and states bought hurricane policies; the federal government purchased insurance against unexpectedly large flood insurance claims; wealthy countries have offered to help less-developed nations buy disaster insurance. The new insurance policy in Hawaii represents the next step in this evolution by applying insurance to a natural structure.

The Nature Conservancy can send crews to repair the reef faster than the state can, Okano said. He added that the reserve can raise private funds to pay for this insurance, while the state cannot.

Focus on wind speed

Still, it won’t be easy.

Money needs to be available quickly to be effective, but assessing damage to coral reefs takes time. It can take a week or more after a hurricane for the waters to calm down enough for divers to even be able to safely access the reefs.

Thus, instead of depending on a damage assessment, the insurance policy depends on the strength of the winds generated by the storm, which is measured in near real time. Under this approach, known as parametric insurance, a storm with winds of 50 knots (57 miles per hour) or more results in a payout.

Wind speed reflects the strength of a storm; the stronger the storm, the more likely damage to reefs will be. At 50 knots, storm winds are strong enough to damage reefs, generating large waves that break off pieces of coral or knock tree branches and other debris into the water, causing even more damage.

One of the most recent storms to see winds reach this speed is Hurricane Douglas, which passed near Oahu in July 2020, said Eric Roberts, senior climate risk and resilience manager at the Nature Conservancy. .

A storm with lower wind speeds could further damage the reefs. But starting insurance coverage below 50 knots would have increased the cost of coverage. “The policy we chose was reasonably priced,” Ms Ane said.

While healthy coral reefs can generally rebound after storms, today’s weakened reefs require intervention, said Robert H. Richmond, a research professor at the University of Hawaii at Manoa who was not involved. to the insurance effort.

In Hawaii and around the world, coral reefs have been damaged by a cascade of chronic conditions. Overfishing reduces the species of fish needed to maintain the balance of the ecosystem. Sediment gets into the water when people do things like clean up the land, smother corals. Wastewater causes destructive algal blooms. More existentially, climate change threatens to make the oceans too hot and too acidic for corals to survive.

These stressors mean reefs need help recovering from storms, Dr Richmond said. At the same time, repairs will never be enough because they do not solve the underlying problem.

“If it hasn’t been resolved why the corals died in the first place,” he said, “it doesn’t make much sense to put things back in the water.”

A 2018 report by the National Oceanic and Atmospheric Association found that on a scale from “very good” to “critical” condition, Hawaii’s coral reefs were “fair,” putting them in the middle of the scale.

“I’d rather try something and fail”

The importance of coral reefs to Hawaiians cannot be overstated, said Ekolu Lindsey, co-founder of Polanui Hiu, a group that works to monitor and restore a reef off Maui called Nā Papalimu O Pi’ilani.

“It’s really that foundation of life,” he said, noting that the coral polyp is the first life form to emerge in the Kumulipo, a Hawaiian creation song.

When the Nature Conservancy proposed the idea of ​​reef insurance against high winds to Mr. Lindsey, he was intrigued but skeptical.

“I find it hard to understand that the reef is completely destroyed and you send a group of divers down there to put everything back together,” Mr Lindsey said.

If it worked, he wondered, what about tsunamis or swells that bring down coral reefs without strong winds? Still, he saw no downside.

“If we need to fly this thing in the United States,” he said, “I’d rather try something and fail than not try at all.”

The Nature Conservancy has tried a similar model in other countries. In the summer of 2019, the group took out insurance for a coral reef off Puerto Morelos on Mexico’s Yucatán Peninsula. Two years later, the group helped set up a reef insurance policy for Turneffe Atoll off the coast of Belize.

The results of these experiments were mixed. Mexico’s policy generated a payout in 2020 after Delta hurricanes hit the coast. The insurance company quickly paid the money.

But it took about a year for local authorities, who were responsible for deciding how that money should be spent, to release that funding, said Claudia Padilla, a researcher at the National Institute of Fisheries and Aquaculture in Mexico who participated in the repair of the reefs.

“They need to be more efficient,” Ms Padilla said.

This month, the model got another chance. After Hurricane Lisa hit Belize on Nov. 2, it took just 12 days for insurance money to reach the MAR Fund, a group that was set up to protect the Mesoamerican Reef and is the subscriber of this insurance.

Three days later, divers were in the water to begin repairs, said Claudia Ruiz, coordinator of the fund’s Reef Rescue Initiative.

When asked if she had any tips for the project in Hawaii, Ms. Ruiz replied, “Be prepared ahead of time.”