Innovative financing and legal mechanisms for reef restoration and emergency response in

selected sites of the MAR Region

Mesoamerican Reef Rescue InitiativeMesoamerican Reef Fund

32nd ICRI General MeetingNairobi

December, 2017

The Mesoamerican Reef: A local treasure, a global resource

• Largest reef in the Atlantic Ocean

• Over 1000 km of coastline

• Four countries: – Mexico, Belize, Guatemala,

Honduras

• Biologically diverse

• Economic importance for local communities and development of the four countries

MAR Fund, a long-term financial mechanism

• Designed to raise and distribute funds at a regional scale

– Complementary funds – Additional to national funds– Endowment and sinking funds

• Effective regional funding mechanism

• Responds to the needs of the region

Mesoamerican Reef RescueInitiative

• Donor: German Cooperation through KfW (endowment)

• Grant: €7 million

• Implementer: Mesoamerican Reef Fund (MAR Fund) and

• Central American Commission on Environment and Development (CCAD)

• Technical Committee: México, Belize, Guatemala and Honduras

Mesoamerican Reef RescueInitiative

Objective

To increase the resilience and ability torecover of the MAR and the environmentaland cultural services it provides throughcapacity building, regulations, economicincentives and financial sustainabilityrequired for the effective and timelyrestoration of the coral reefs.

Four key strategies :

1. Ensure sustainable long-term funding for continuous and emergency restoration

q Emergency Fund q Insurance mechanism

2. Support and develop reef restoration

3. Develop alternative sources of income

4. Promote commitment of governments towards policies and regulations

Project proposal

ICRI/UN Environment

Specific objectives

1. Design and establish a parametric insurance model to cover the cost of coral reef restoration after damages caused by hurricanes

2. Promote adequate legislation along the four countries

1. Establish emergency response protocols

2. Establish effective reef restoration guidelines.

Primary Objective:

Contribute to the conservation of the Mesoamerican Reef by enablinginnovative financing and legal mechanisms to restore coral reefs afterhurricane damage

Designing an insurance for reefs (main steps and key questions)

1. Decision on: compensatory or parametricinsurance

a. Compensation costs are hard to assess and take time, and are subject to litigation.

b. A parametric insurance is a pre-agreed payout based on parameters or “triggers”

c. Insurance to cover the costs of emergency response & restoration actions

OB1: Design and establish a parametric insurance model to cover the cost of coral reef restoration after damages caused by hurricanes.

Outcome: A financing mechanism to improve emergency response actions and restoration of key sites in the MAR Region has been established.

Terms of coverage designed

Risk assessment and vulnerability analysis for coral reef ecosystems developed

Key sites for insurance cover prioritized and characterized

Restoration costs and payout estimated

• The characteristics of a hurricane that relate better with damages caused to the reefs (e.g. surge, wind speed, duration of event, etc.)

• Define an area(s) within which a hurricane, if it passes thru, would damage the reef of interest.

• A hurricane with the defined characteristics passing thru the box triggers the insurance.

Parameters (triggers) and the Box (Catastrophe in the box)

Outcome: Regional and national frameworks to facilitate emergency response and coral reef restoration have been strengthened.

Rapid response protocol designed

Share and discuss results of legal analysis and recommendations

(CCAD)

Legal analysis by country in the MAR region completed

Reef restoration guidelines designed

Outcome: Participatory science-based adaptive rapid response interventions and restoration techniques have been developed

Recommendations for building and adopting regional protocols and

new financial mechanism

Strategic Alliances

1. The Nature Conservancy à model Puerto Morelos National Park, Mexico.

2. Central American Commission on Environment and Development –CCAD-

3. RRI Technical Committee Mexico, Belize, Guatemala and Honduras,

4. Reef Restoration Network (MAR)

Development of baseline:

1. GIS baseline for vulnerable reefs, key site identification.

2. Legal analysis (restoration, permits, rapid response intervention).

Impacts

1. Increase information about risks to corals

2. Increase information on insurance for natural assets

3. Preparedness

4. Helps to mitigate risk

5. Immediate funds for rapid response and restoration

6. Leverage funds for conservation

7. Increase coastal resilience

Regional opportunities:

The Declaration of Tulum creates a logical framework under which the four MAR country governments can work together to take action needed to advance restoration of the Reef.

Thank you

www.marfund.orgwww.facebook.com/MARFund/twitter.com/MAR_Fund