The new fund, called the Coastal Zone Management Trust, was designed in
partnership with The Nature Conservancy and is to be funded by municipal
governments and the tourism industry on the Mexican Caribbean coast. It
will be a new source of funding dedicated to maintenance projects to
protect the reef before and after storm surges.
A key element of
the financial strategy will be to buy coral reef insurance—to protect
the reef that protects the beach and adds value to businesses and
communities. Once established, the insurance will pay out if the policy
is triggered by a major hurricane, providing funding to rebuild and
regenerate the reef, and protect it for the future.
and beneficiaries of this innovative climate risk insurance mechanism
are manifold. The local community benefits because reef preservation
enables the hotel industry and ecotourism to thrive, and with it the
services, income and jobs on which they depend.
benefit because there is less beach erosion, and reduced risk to income
and assets, thereby protecting a $9 billion tourism industry.
benefits because increased coastal resilience means fewer costs from
infrastructure loss, and more resilient coastal industries.
benefits because sustained financing mechanisms for maintenance and
restoration result in a valuable natural system being preserved. And the
insurance industry—now finally recognized as a critical tool for
sustainable development—can benefit through the creation of a new
market while also growing resilience.
But this is just one
coastline, in one country. More than 150,000 km of shoreline in 100
countries and territories are protected by reefs, and much of that is
under threat. Scaling up the concept being implemented in Quintana Roo
has the potential to maintain or enhance protection for millions of
UNDP and The Nature Conservancy are working together to
look at what is needed well beyond this critical first example. The task
is how to create similar markets for nature-based insurance products in
We are jointly exploring how to raise the
resources to protect 500 km of critically at-risk coastline across
multiple countries. If successful, that will protect the lives of 10
million people and more than $100 billion of assets.
This is an ambitious task, but as our climate continues to change, an essential one.