Marine conservation finance: strategies and finance mechanisms to improve the amount and efficacy of investment into marine conservation

Global natural capital - including marine ecosystem goods and services - sustain human wellbeing. The economic cost of environmental degradation is greater than the investment into conservation and management, resulting in a large and growing conservation finance gap. There is ongoing research in sustainable development and environmental finance, but much of this is focused on terrestrial ecosystems. Due to unique features of the marine environment, explicit focus on marine conservation finance is also needed. At the same time, literatures describe factors that constrain the success of marine conservation, e.g. governance, but a key constraint not adequately addressed in research or practice is finance. Gaps in the literatures include a systematic analysis of the reasons for and solutions to resolve the marine conservation finance gap, a rigorous analysis of how to engage with businesses to close the marine conservation finance gap, and how to integrate finance into marine conservation planning. The aim of this thesis is to investigate strategies and financial mechanisms to decrease impacts on marine resources and increase effective investment into marine resource management. This research is both interdisciplinary and cross-sector, and addresses the issue at both the global scale and at the scale of individual case studies. Chapter 2 reviews the relevant literature and articulates the need for and scope of the new and emerging field of marine conservation finance. The paper identifies five challenges associated with marine conservation finance, and proposes five potential ways forward. This piece of research illustrates how government, private, academic, and non-profit sectors can better collaborate to reduce the marine conservation finance gap, identifies specific priority research which was pursued in Chapters 3-5, and lays the foundation for many years of further research in this field. Chapter 3 focuses one example tool for engaging with profit-maximising businesses: marine biodiversity offsets in the Great Barrier Reef. Offsets are a regulatory mechanism to make companies compensate for permitted damage to the environment. The potential for and efficacy of marine biodiversity offsets is investigated in the case study site of the Great Barrier Reef World Heritage Area, Queensland, Australia. Chapter 4 investigates the use of a revolving loan fund to incentivise improvements in water quality in the Great Barrier Reef. Revolving loan funds are a mechanism whereby debt is used to create both environmental benefits and profits, which can be reinvested into new loans. This study investigated if and how the creation of a concessionary (low-interest) loan fund could incentivise changes to agricultural practices, resulting in improved water quality for the Great Barrier Reef World Heritage Area. Chapter 5 assesses the opportunities and challenges for using impact investing to achieve marine conservation outcomes. This chapter is a global review of the opportunities for and challenges to using impact investments to create marine conservation outcomes. A review of the impact investing literature is followed by a summary of existing marine impact investments and then an analysis of if and how the marine impact investing industry could grow to achieve both ecological and financial outcomes. Chapter 6 synthesises the findings from Chapters 2-5. This chapter summarises the orginal contributions and effectiveness of research for each chapter, followed by an analysis of two cross-cutting themes that emerged across all chapters. Limitations of the research and general conclusions are also presented herein. Results indicate that the marine conservation finance gap is large and growing, and that a systematic and rigorous focus on this "new and emerging field" is warranted. There are numerous finance mechanisms available to increase investment into marine conservation, but the type of mechanism must be suited to the ecological, social, political, and economic context of the site. When engaging with businesses, the finance mechanism or strategy must be suited to the objective of the business. Biodiversity offsets, for example, can be an effective tool to make businesses compensate for permitted damage to the marine environment, but numerous improvements to the assessment and implementation of offsets are needed to make them more effective, as illustrated by the Great Barrier Reef case study. As another example, loans can be used to deliver both marine outcomes and private profits for businesses so that they can account for the natural capital in their value chains. Impact investing - producing social or environmental outcomes alongside financial returns - has a large potential to deliver marine conservation outcomes, but is currently limited by the availability of "investible" deals to accept the available capital. Specialist capacity and transition capital are required to advance marine conservation finance. A balance of effort between preventing impacts and funding recovery / management is needed to squeeze the marine conservation finance gap from both sides. This research identifies actionable solutions for addressing both prevention and funding, and articulates how cross-sector partnerships and specialist capacity are needed to advance marine conservation finance