[Coral-List] Coral Reef Insurance

Wed Dec 9 04:55:00 UTC 2020

What is interesting about this, and isn't made clear in the otherwise excellent NYT article, is that the premiums for the insurance policy are being paid for not by the government but by a group of hotel owners and operators with properties along the coast.  So in effect the protection of the reefs ecosystem services (particularly storm surge protection and tourism activity) that are public goods is being financed by private sector companies that stand to benefit from these services.  One could imagine application of a similar approach to other habitats (e.g. mangrove or seagrass) where there are private entities that benefit from the ecosystem services these habitats provide and may be willing to pay for their protection or restoration.  Moreover, the fact that the hotel companies in Mexico are willing to pay to protect the reef against storms gives hope that they may also be willing to invest in better solid waste and sewage treatment if it can be demonstrated that these investments will similarly help to protect the reef and preserve the ecosystem services from which they benefit.  

The other interesting feature of the scheme in Mexico is that the insurance policy is parametric.  Payout is automatic with the amount determined by the strength and duration of the storm.  This means that there isn't a requirement for a time-consuming and expensive damage assessment.  The article does note that there was a delay of several weeks, partly because the trust that manages the scheme had to decide how to utilize the payout, but this is in comparison to the several months or more that it would take with a more traditional type of insurance policy.  

Phil Karp
Pkarp24 at gmail.com
Twitter @pkarp24

On 12/6/20, 10:05 AM, "coral-list-bounces at coral.aoml.noaa.gov on behalf of coral-list-request at coral.aoml.noaa.gov" <coral-list-bounces at coral.aoml.noaa.gov on behalf of coral-list-request at coral.aoml.noaa.gov> wrote:

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    Today's Topics:

       1. Re: Coral reef insurance (sealab at earthlink.net)
       2. Re: Coral reef insurance (Risk, Michael)

    ----------------------------------------------------------------------

    Message: 1
    Date: Sat, 5 Dec 2020 16:57:15 -0500
    From: sealab at earthlink.net
    To: Vassil Zlatarski via Coral-List <coral-list at coral.aoml.noaa.gov>
    Cc: "=?utf-8?Q?coral-list=40coral.aoml.noaa.gov?="
    	<coral-list at coral.aoml.noaa.gov>
    Subject: Re: [Coral-List] Coral reef insurance
    Message-ID: <cf1841c1-d8e9-4e3f-858b-d6a8273f5370 at Steves-iPad>
    Content-Type: text/plain; charset="utf-8"

    Hi Vassil,

    I?ve been trying to wrap my head around this for some time. While I applaud the effort of ?the Brigade? and would likely volunteer to help with the restoration if I lived in close proximity, I can?t help but wonder what the net effect will be especially since the major stressors responsible for wreaking havoc on the coral reefs of Quintana Roo are nowhere near being adequately addressed. I?m also wondering how long insurance companies will be willing to underwrite these policies as the frequency and intensity of hurricanes continues to increase. Once again, perhaps the best we can hope for is that efforts like this will help to raise awareness of the value of coral reefs worldwide and that that will ultimately lead to the development of the political will needed to finally come to terms with water quality issues, over-fishing and climate change.

    Regards,

    Steve

    On 12/5/20, 8:19 AM, Vassil Zlatarski via Coral-List <coral-list at coral.aoml.noaa.gov> wrote:

    Hope of interest:

    https://www.nytimes.com/2020/12/05/climate/Mexico-reef-climate-change.html?referringSource=articleShare

    Cheers,

    Vassil

    Vassil Zlatarski

    D.Sc. (Biology), Ph.D. (Geology)

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    ------------------------------

    Message: 2
    Date: Sun, 6 Dec 2020 12:58:31 +0000
    From: "Risk, Michael" <riskmj at mcmaster.ca>
    To: Vassil Zlatarski via Coral-List <coral-list at coral.aoml.noaa.gov>,
    	"sealab at earthlink.net" <sealab at earthlink.net>
    Subject: Re: [Coral-List] Coral reef insurance
    Message-ID:
    	<YQXPR01MB35592384B05A3302AE53D167C0CF0 at YQXPR01MB3559.CANPRD01.PROD.OUTLOOK.COM>

    Content-Type: text/plain; charset="Windows-1252"

       Steve, Vassil:

       I too was touched by the energy and dedication of those young
       Mexicans-but I fear their work may be in vain.

       It's called the Mexican Riviera because it's wall-to-wall hotels. All
       the sewage from those hotels is pumped into the shallow porous
       limestone substrate. Every now and then raw sewage bubbles up on the
       beach, prompting frantic work with backhoes and shovels to cover it all
       up before the Sargassum does. Cave divers exploring the systems, coming
       from the landward side, report encountering huge subterranean rooms
       filled with human excrement.

       Reefs and hurricanes have co-existed since the Ordovician. Now they
       don't. Now the reefs die.
         __________________________________________________________________

       From: Coral-List <coral-list-bounces at coral.aoml.noaa.gov> on behalf of
       Steve via Coral-List <coral-list at coral.aoml.noaa.gov>
       Sent: Saturday, December 5, 2020 4:57 PM
       To: Vassil Zlatarski via Coral-List <coral-list at coral.aoml.noaa.gov>
       Cc: coral-list at coral.aoml.noaa.gov <coral-list at coral.aoml.noaa.gov>
       Subject: Re: [Coral-List] Coral reef insurance

       Hi Vassil,
       I've been trying to wrap my head around this for some time. While I
       applaud the effort of "the Brigade" and would likely volunteer to help
       with the restoration if I lived in close proximity, I can't help but
       wonder what the net effect will be especially since the major stressors
       responsible for wreaking havoc on the coral reefs of Quintana Roo are
       nowhere near being adequately addressed. I'm also wondering how long
       insurance companies will be willing to underwrite these policies as the
       frequency and intensity of hurricanes continues to increase. Once
       again, perhaps the best we can hope for is that efforts like this will
       help to raise awareness of the value of coral reefs worldwide and that
       that will ultimately lead to the development of the political will
       needed to finally come to terms with water quality issues, over-fishing
       and climate change.
       Regards,
       Steve
       On 12/5/20, 8:19 AM, Vassil Zlatarski via Coral-List
       <coral-list at coral.aoml.noaa.gov> wrote:
       Hope of interest:
       [1]https://www.nytimes.com/2020/12/05/climate/Mexico-reef-climate-chang
       e.html?referringSource=articleShare
       Cheers,
       Vassil
       Vassil Zlatarski
       D.Sc. (Biology), Ph.D. (Geology)
       _______________________________________________
       Coral-List mailing list
       Coral-List at coral.aoml.noaa.gov
       [2]https://coral.aoml.noaa.gov/mailman/listinfo/coral-list
       _______________________________________________
       Coral-List mailing list
       Coral-List at coral.aoml.noaa.gov
       [3]https://coral.aoml.noaa.gov/mailman/listinfo/coral-list

    References

       1. https://www.nytimes.com/2020/12/05/climate/Mexico-reef-climate-change.html?referringSource=articleShare
       2. https://coral.aoml.noaa.gov/mailman/listinfo/coral-list
       3. https://coral.aoml.noaa.gov/mailman/listinfo/coral-list

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