Financing the Mesoamerican Reef’s resilience to extreme climatic events
The Mesoamerican Reef (MAR) is the largest transboundary coral reef system in the Atlantic Ocean. In a region where hurricanes put lives and property at risk, the MAR provides critical protection against storm damage. It also supports the food security, livelihoods, and health of coastal communities in Mexico, Belize, Guatemala and Honduras.
Investing in the health of the reef is vital to maintaining its role as a natural seawall, hub of marine life, and source of jobs and income. Analysis shows that immediate response to reef damage from hurricanes can result in a cost-benefit ratio of close to 1:101. But reef restoration is often not at the top of the agenda for governments in post-disaster recovery mode. Coastal communities need dedicated resources to plan and execute post-hurricane reef recovery actions.
ORRAA is contributing to the MAR project by creating an innovative financial mechanism to provide predictable, timely funds for rapid response reef restoration in the wake of damaging hurricanes. Project partners the MAR Fund and Willis Towers Watson, are working with local governments and stakeholders to design and, ultimately, deploy parametric insurance products for at least one priority reef site in each of the four MAR countries.
Reliable financing for community response restoration activities, with a particular focus on the role of women, will allow low-income stakeholders to participate in reef recovery and build the resilience of their natural infrastructure. Coastal communities and businesses will benefit directly from faster reef recovery, reduced disruption of vital ecosystem services, and new job opportunities connected to reef restoration.
This transformative project is accelerating the integration of coral reefs into mainstream risk management frameworks and storm response protocols, including disaster-risk financial planning. The targeted analysis, tools, and recommendations produced by the four pilot products will lay the foundations for delivering efficient risk financing for the entire MAR region, with the potential to scale to other regions.
1 Willis Towers Watson and MAR Fund 2019. Beneficiaries of Rapid Response Reef Risk Financing in the MAR Region. Report for
InsuResilience Solutions Fund. https://www.insuresilience-solutions-fund.org/content/4-news-events/8-beneficiaries-of-rapid-response-reef-risk-financing-in-the-mar-region/mar-reef-risk-financing_beneficiaries-study.pdf