As climate change makes coastal storms more destructive, an environmental group is trying a new approach to protecting Hawaii’s coral reefs. It could become a model for defense of natural structures across the country – if it works.
The plan includes an urgent series of actions that will theoretically unfold as follows:
Step 1: The Nature Conservancy, a major environmental nonprofit, takes out an insurance policy for all 400,000 acres of coral reefs around Hawaii’s 137 islands, despite not owning those reefs, which are on public land.
Step 2: If Hawaii experiences a storm strong enough to damage the reefs, the Nature Conservancy will receive a payout from the insurance company in about two weeks. (Compared to most insurance policies, that’s about the equivalent of the speed of light.)
Step 3: The Nature Conservancy asks the state of Hawaii, which owns the reefs, for a permit to repair the storm damage. While permission isn’t guaranteed, the odds seem good since Hawaii doesn’t have the money to do the work itself.
Step 4: If government officials say yes, the conservancy will use the insurance money to pay teams of divers to begin repairing the damage. This leg is most like a race: they have about six weeks, starting at the storm. After that, the broken coral dies, further diminishing Hawaii’s best protection against future storms.
On Monday, the Nature Conservancy, based near Washington, D.C., completed the first step, purchasing a $2 million insurance policy for Hawaii’s coral reefs. It is the first natural structure insurance policy in the United States, following similar efforts in Latin America. The conservancy says that if the experiment is successful, it will look at expanding the model to other states and other natural features that protect against storms, such as mangroves, wetlands or coastal dunes.
“We think we can help our state government of Hawaii put this on as a pilot project,” said Makale’a Ane, who leads community engagement and partnerships in Hawaii for conservation. “It’s not easy.”
While governments struggle, insurers see an opening
The Hawaii test is at the intersection of two trends that demonstrate the difficulty of adapting to climate change. First, the effects of warming are increasingly overwhelming for governments to respond, even in affluent areas. The problem is not just money, but the inability to adapt quickly enough to overlapping and evolving threats.
Coral reefs highlight that challenge. They work much like seawalls, dampening the destructive force of waves crashing towards the shore and protecting the people, land and structures behind them. But reef repair isn’t eligible for Federal Emergency Management Agency money, even though work to repair seawalls is. And Hawaii’s Division of Aquatic Resources doesn’t have the budget to restore storm-damaged reefs.
“We can’t do everything,” said Ryan Okano, the division’s program manager for ecosystem protection.
This leads to the second trend in climate adaptation: insurance companies present themselves as a solution and offer a series of products that promise payouts for all kinds of calamities.
Cities and states have bought policies against hurricanes; the federal government has taken out insurance against unexpectedly large flood insurance policies; rich countries have offered to help less developed countries buy insurance against disasters. The new insurance policy in Hawaii represents the next step in that evolution by applying insurance to a natural structure.
The conservation organization can send crews to repair the reef faster than the state can, Mr Okano said. He added that the conservancy can raise private funds to pay for that insurance, while the state cannot.
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Aimed at wind speeds
Still, it won’t be easy.
The money must be available quickly to be effective, but estimating damage to coral reefs takes time. After a hurricane, it can take a week or more for the water to calm down enough for divers to even safely access reefs.
So instead of depending on a damage assessment, the insurance policy depends on the strength of the wind generated by the storm, which is measured in near real time. Under that approach, known as parametric insurance, a storm with winds of 50 knots (57 miles per hour) or more triggers a payout.
Wind speeds reflect the strength of a storm; the more powerful the storm, the more likely it is to damage the reefs. At 50 knots, gale-force winds are strong enough to cause reef damage, generate large waves that break off pieces of coral, or knock tree branches and other debris into the water causing further damage.
One of the most recent storms to see winds reach that speed is Hurricane Douglas, which passed close to Oahu in July 2020, said Eric Roberts, the senior manager for climate risk and resilience at the Nature Conservancy.
A storm with lower wind speeds can still damage the reefs. But starting insurance coverage at less than 50 knots would have increased the cost of coverage. “The policy we chose was reasonably priced,” Ms Ane said.
While healthy coral reefs can usually recover after storms, today’s weakened reefs need intervention, said Robert H. Richmond, a research professor at the University of Hawaii at Manoa, who was not involved in the insurance effort.
In Hawaii and around the world, coral reefs have been damaged by a cascade of chronic conditions. Overfishing reduces the fish species needed to keep the ecosystem in balance. Sediment gets into the water when people do things like clear land, smother corals. Sewage causes destructive algal blooms. Most existentially, climate change threatens to make the oceans too warm and acidic for corals to survive.
Those stressors mean the reefs need help to recover after storms, said Dr. Richmond. At the same time, repairs will never be enough because they don’t address the underlying problem.
“If the reason why corals died in the first place hasn’t been determined,” he said, “there’s little point in putting things back in the water.”
A 2018 report from the National Oceanic and Atmospheric Association found Hawaii’s coral reefs to be “fair” on a scale of “very good” to “critical” condition, placing them in the middle of the scale.
‘I’d rather try something and fail’
The importance of coral reefs to Hawaiians cannot be overemphasized, said Ekolu Lindsey, a co-founder of Polanui Hiu, a group working to monitor and restore a reef off the coast of Maui called Nā Papalimu O Pi’ilani.
“It really is that foundation of life,” he said, pointing out that the coral polyp is the first form of life to emerge in the Kumulipo, a Hawaiian creation song.
When the Nature Conservancy proposed the idea of high wind reef insurance to Mr. Lindsey, he was intrigued but skeptical.
“It’s hard for me to understand that the reef is going to completely break down and you’re going to send a bunch of divers over there and glue it all back together,” Mr Lindsey said.
If it worked, he wondered, what about tsunamis or swells that tumble coral reefs without strong winds? Still, he saw no downside.
“If we have to test this thing in the United States,” he said, “I’d rather try something and fail than not try at all.”
The Nature Conservancy has trialled a similar model in other countries. In the summer of 2019, the group purchased insurance for a coral reef off the coast of Puerto Morelos on Mexico’s Yucatán Peninsula. Two years later, the group helped arrange reef insurance for Turneffe Atoll off the coast of Belize.
The results of those experiments were mixed. The Mexico policy generated a payout in 2020 after Hurricane Delta hit the coast. The insurance company paid out the money quickly.
But it took about a year for local officials, who were in charge of spending that money, to release that money, said Claudia Padilla, a researcher at Mexico’s National Fisheries and Aquaculture Institute who has been involved in restoring the reefs.
“They have to be more efficient,” Ms Padilla said.
This month, the model got another chance. After Hurricane Lisa hit Belize on Nov. 2, it took just 12 days for the insurance money to reach the MAR Fund, a group created to protect the Mesoamerican Reef that is the policyholder for that insurance.
Three days later, divers were in the water making repairs, said Claudia Ruiz, the fund’s Reef Rescue Initiative coordinator.
When asked if she had any advice for the Hawaii project, Ms. Ruiz said, “Be ready in advance.”
