Nobel-winning market theory could help us better protect coral reefs

A group of researchers from Australia’s University of Queensland used a revolutionary stock market theory to identify 50 coral reefs around the world that will likely be less affected by the climate crisis and use them as ‘arks’ to help repopulate other reefs. The researchers suggest focusing future conservation efforts in specifically protecting these reefs. 

Image credit: Flickr / WorldFish.

Coral reefs are threatened by local and global stressors, including declining water quality, overfishing, and ocean warming. They are likely to disappear entirely or almost entirely by mid-century if the target of the Paris Agreement on climate change to limit global warming to 1.5 degrees Celsius isn’t met. And even if it is, an estimated 70% to 90% of the world’s corals would still vanish.

However, the remaining coral populations are still very important to replenish coral reefs once ocean surface temperatures hopefully stabilize in the future. The challenge is to identify these reefs and direct resources focused on achieving long-term coral conservation amid the climate crisis, according to the Australian researchers behind the new study. 

Seeking to address this, the team applied the Modern Portfolio Theory or MPT (a mathematical framework from the 1950s to help investors maximize returns) to identify coral reefs sanctuaries that could survive the climate crisis and repopulate other reefs when things stabilize. They identified 50 reefs from around the world.

“By applying MPT to conservation planning, the expected variance in those conservation outcomes can be reduced by investing in areas that tend to behave in different ways. This is of particular interest when decisions about where to act are informed by uncertain projections about future states of the world,” the researchers wrote.

Better protecting corals

For the study, the researchers classified the world’s coral reefs into bioclimatic units (BCU) of 500 square kilometers (190 squared miles). They used over 170 metrics in five categories to classify each coral reef’s odds of surviving (including risks from invasive species, temperature and ocean acidification). Then, they produced estimates for the future of each BCU, capturing different possibilities. 

The team then applied MPT to identify the corals with the best chances for conservation. The market theory is based on the idea that you have stocks that are high risk and high reward, and stocks that are low risk and low reward — and you want to balance your portfolio to include both in different proportions, based on your tolerance to risk.

Researchers applied this idea to coral reefs as well, finding the 50 coral reefs most likely to survive climate change, and recommend using them as arks to repopulate the other corals. For this list, they identified reefs all over the world, including Pacific Islands, South America, northern and eastern Africa, Australia and south-east and south Asia. The list includes parts of the Great Barrier Reef in Australia and the “coral triangle” in the Pacific but also excluded ecologically relevant areas, such as Central America’s Barrier Reef. 

For the researchers, while widespread loss and degradation of corals are soon expected because of climate change — it’s not a matter of ‘if’, it’s a matter of ‘when’. But there are still things we can do. Strategic management of threats and the use of emerging technologies provide opportunities to improve conservation of corals. Nevertheless, success in saving them ultimately depends on reducing our greenhouse gas emissions as quickly as possible. 

The study was published in the journal Conservation Letters. 

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