Debt and data – the ‘secret sauce’ of protecting our blue economy

Conservationists haven’t always spoken the language of bankers or economists – but they are learning quickly. Debt, data, and models are increasingly providing a shared language for those who normally talk bonds and those whose language may focus on saving coral reefs.

I learned this from an EarthOptimism talk given by Mark Spalding, who works on oceans with the Nature Conservancy. Two decades ago, he helped map all the coral reefs in the earth’s oceans – the first time this had been done. That led, 10 years ago, to a collaborative project to map the ocean’s wealth which has found that the ocean may represent as much as $1.5 trillion to $3 trillion – or three to five per cent of global GDP.

The Nature Conservancy

The project has led to powerful new ways to achieve conservation goals in collaboration with bankers and economists.

While coral reefs, for example, have always been a magnet for tourists, no one had actually put a dollar figure on such tourism. It turned out that reefs are generating $36 billion a year worldwide, and 70 countries had what are called ‘million dollar reefs’. The award-winning work has had powerful impacts, and continues, using artificial intelligence.

Putting together such figures matters because so many interests have plans that involve the ocean. Conservationists need to be at the table with all those other users, he says. And to do that, they need solid data and analysis that justify investments in conservation.

In practical terms, this means they can be part of discussions about abstruse matters like restructuring a country’s sovereign debt, with conservation measures offering a way to reduce high interest rates. And, while these complicated deals take a long time to develop, there may be at least ten more that can be developed over the next few years.

While eleven such debt-restructuring deals involving biodiverse tropical forest resulted in almost $250 million for forest protection between 2001 and 2011, the idea of applying the idea to the ocean first popped up in 2012. 

Seychelles, an archipelago of 115 islands in the Indian Ocean, was desperate to protect its tourism and fisheries industries which were threatened by global warming. The Seychelles government approached Rob Weary of the Nature Conservancy, who had been involved in all those deals, to see if such a debt swap deal could be negotiated for marine ecosystems.

Four years later, the Seychelles set aside 30% of its marine space for conservation – 410,000 square kilometres, larger than Germany – in exchange for refinancing more than $21 million of its debt. The government agreed to spend the savings of about $200,000 on such ocean conservation work as coral restoration and trash cleanup, with projects approved by an independent trust, and to designate the 30% of ocean as special zones where fishing, drilling and other such activities were highly regulated or forbidden.

Since that first deal was signed, the Washington Post reported, other investors have become involved. The World Bank helped the Seychelles issue the world’s first “sovereign blue bond””, worth $15 million, in 2018, and Prudential Financial, Nuveen and Calvert Impact Capital, which each manage billions of dollars globally, provided $5 million apiece. Calvert chief executive Jenn Pryce explained why: 

“The belief is that having a healthier ocean is going to make the government of Seychelles a healthier economy. If it succeeds, the impact is huge. The Seychelles has a sustainable economy forever, in theory.”

And more ocean conservation deals are in the works. The Nature Conservancy has set a target of generating $1.6 billion for ocean protection around the world and within the next five years, hopes to negotiate debt-restructuring arrangements, funded by blue bonds, in 20 coastal and island nations, the Post reported.

The use of the kind of data and models developed by the Ocean Wealth project offer a whole new way to think about conservation and to assess costs and impacts of different kinds of development.

For example, it shows that restoring recently lost mangroves of the world could be the equivalent of sequestering yearly emissions from 25 million US homes and avoiding the equivalent of emissions from 117 million homes. It could also reduce flood damages worldwide by US$82 billion each year, with major beneficiaries including China, USA, India, and Mexico. Other insights:

  • Coastal wetlands sequester enough CO2 each year to offset the burning of over 1 billion barrels of oil
  • In some areas, one hectare of seagrass can store 4x the carbon captured by an average terrestrial forest
  • Healthy and well-managed coral reefs generate 5-10 tons of fish per square km/ year
  • Coral reefs reduce 97% of wave energy- acting as a barrier from storms
  • Mangroves reduce 66% of wave height easing erosion and flood risk
  • Oyster reefs save communities $85,000 per year per hectare when used in place of artificial breakwaters
  • Coral reefs drive up to $36 Billion per year globally in tourism revenue.

“The combined contribution of the ocean economy has recently been estimated as being in the order of US$1.5–3.0 trillion annually—roughly 3 to 5 percent of global GDP,” says the Nature Conservancy. “More countries are looking to the ocean as a new economic frontier. Meanwhile, the ecosystems upon which many ocean economic activities depend are also changing at an unprecedented rate, and not necessarily for the better. Ensuring ocean health is now synonymous with maintaining ocean wealth.”

That kind of data is now adding a new kind of ‘secret sauce’ to our discussions about how to conserve the natural world, whether it is a discussion of how the economic value of surfing rests on protecting coastal ecosystems or a discussion of the value of shark tourism to countries such as the Maldives or Palau. As the saying goes, money talks, and now conservationists can talk that same language as the investment funds.


How investors are coming up with the green to save the ocean blue. Washington Post, Oct. 28, 2020.

Atlas of Ocean Wealth. Nature Conservancy.

Big data, big ideas and the big blue ocean. Mark Spalding. EarthOptimism.