Blue Bonds: An Audacious Plan to Save the World’s Ocean

TNC’s Blue Bonds for Conservation model helps governments unlock funding for conservation—and could benefit millions of people in coastal regions.

KEY TAKEAWAYS

·        Smarter decisions about how we use and invest in nature for marine conservation and climate change adaptation will make a profound difference for the more than 2 billion people living in coastal regions.

·        Blue Bonds for Ocean Conservation is one of TNC’s newest innovative solutions, supporting island and coastal nations to refinance their national debt and create long-term sustainable financing for marine protections, sustainable economic development and climate change. 

·        In doing so, TNC is leveraging upfront philanthropy to catalyze as much as 40 times more in additional investments for nature and people, improving more than 4 million square kilometers of ocean over the next five years—helping governments unlock funds to deliver on their conservation goals and ultimately support the well-being of their communities.

There’s no longer any denying that the ocean is in a dire state. Overfishing has decimated global fish populations; climate change and ocean acidity are pushing coral reefs to the brink of extinction; and the loss of those reefs and other ecosystems has left coastal communities more vulnerable to the impacts of storms and rising sea levels.

Indeed, for many island and coastal nations, these are matters of life and death. As storms increase in intensity, so does their impact. In 2017 alone, natural disasters imposed $340 billion worth of damage to the global economy, disrupting the lives of millions of people worldwide and increasing debt loads for countries as they try to rebuild.

The Nature Conservancy (TNC) has an audacious plan that can support these countries build more resilient economies, benefit communities and conserve 15% more of the ocean than what is currently protected—in just the next 5 years.

What Are Blue Bonds for Ocean Conservation?

Blue Bonds for Ocean Conservation presents an opportunity for island and coastal nations to reinvest in their natural resources. Here’s how it works:

TNC works with a country to refinance a portion of their national debt in a way that reduces their debt burden, secures funding for conservation activities, and enables valuable returns in planning and protection to improve resilience of economies and communities. The debt restructuring creates new financial flows that support governments to reach their protection targets for their ocean areas, including for coral reefs, mangroves and other important habitats, and engage in ongoing conservation work such as improving fisheries management and addressing climate change adaptation. To do this, TNC uses credit enhancement and commercial capital often leading to a reduction in debt outstanding, lower interest rates and/or longer repayment periods.

The debt restructuring leads to savings for the government that in turn are applied to development of a marine spatial plan and a blue grants fund to support local conservation activities.  At the government’s request, TNC lends its scientific, technical and planning expertise to design participatory and transparent processes with active stakeholder engagement to expand marine protections and identify areas for sustainable economic activity.

How Blue Bonds Works 

1. Conservation Commitments

Governments are committed to protecting at least 30% of their ocean areas in alignment with global goals. 

2. Marine Spatial Planning

Using our scientific expertise, TNC works with stakeholders to identify activities that combine conservation and sustainable economic opportunities, such as restoring coral reefs for tourism and improving fisheries management. 

3. Unlocking Sustainable Finance

Working with partners, TNC helps refinance countries’ national debt, often purchasing the debt at a discount and restructuring it with better interest rates and/or longer repayment terms. 

Is the Blue Bonds Model Effective?

The idea might be audacious, but we’ve seen that it can work. Cabo Pulmo National Park in Mexico’s Baja Peninsula demonstrates what can be achieved when we give ocean environments an opportunity to heal: 10 years after the park’s establishment as a marine protected area, it has reversed the toll of decades of overfishing and increased fish stocks by over 400%.

The Blue Bonds debt conversion model has a proven track record of producing conservation outcomes including a pilot in the Republic of Seychelles. In 2016, Seychelles worked with TNC to restructure part of its national debt, generating up $430,000 per year for marine conservation and climate change adaptation. As of 2020, the Seychelles government has protected 86 million acres of ocean—exceeding their goal to protect 30% of Seychelles’ Exclusive Economic Zone and Territorial Sea by 2020.

Scaling the Opportunity

Blue Bonds create a win-win-win situation: the national governments get significant financial savings to invest in natural resources that support their economies; local communities, in turn, see their livelihoods and cultural heritage protected; and the donors who provided the original seed funding realize incredible leverage on their philanthropic investment—a multiplier of up to 40 times.

TNC is working with island and coastal countries in the Caribbean, Africa, Latin America, the Pacific Islands and the West Indian Ocean to improve marine area management and create new marine protected areas over the next five years. If we can raise $40.5 million in philanthropic funding to initiate projects in those countries, we can then secure additional private investments to work with countries on restructuring debt and secure long-term sustainable financing for ocean conservation.

The governments’ new marine protections will provide improved management and conservation for 4 million square kilometers of ocean—a 15% increase in the amount of ocean that currently exists. The oceans goal includes half in high protection status to protect marine biodiversity and ecosystem function, and half in biodiversity and sustainable use zones to ensure biodiversity and sustainable livelihoods. 

These territories are home to 13% of the world’s coral reefs, and customized marine protection plans would ensure the reefs are protected and restored. Those healthy reefs in turn provide habitat for fish, sea turtles and other marine species; they can also “seed” surrounding reefs by spreading coral larvae through ocean currents. And protecting these areas will ultimately benefit the more than 2.4 billion people living in coastal regions through more sustainable economies and stronger resilience to climate change.

A Pivotal Moment for Ocean Conservation

A 15% increase in protected ocean in just five years already represents an ambitious plan—but the potential scale is even greater. In fact, TNC estimates there are 85 countries that could use Blue Bonds for Conservation to catalyze ocean conservation in their territories.  

The size of this opportunity is matched by the urgency of our current moment, however. We’re at a pivotal moment where governments’ ocean conservation goals and other interventions can have a significant impact on the state of the world’s fisheries, ocean biodiversity and coastal resilience. But the window of opportunity before ocean degradation becomes irreversible – especially in coastal areas – is growing ever smaller.