Return on investment for mangrove and reef flood protection

There is a growing need for coastal and marine restoration, but it is not clear how to pay for it given that environmental funding is low, and national budgets are stretched in response to natural hazards. We use risk-industry methods and find that coral reef and mangrove restoration could yield strong Return on Investment (ROI) for flood risk reduction on shorelines across more than 20 Caribbean countries. These results are robust to changes in discount rates and the timing of restoration benefits. Data on restoration costs are sparse, but the Present Value (PV) of restored natural infrastructure shows that ROI would be positive in many locations even if restoration costs are in the hundreds of thousand per hectare for mangroves and millions per km for reefs. Based on these benefits, we identify significant sources of funding for restoring these natural defenses.

Automated summary

There is a growing demand for coastal and marine restoration in the Caribbean to reduce flood risks. By using risk-industry methods, researchers find that restoring coral reefs and mangroves can generate a strong return on investment, even with high restoration costs. These findings provide valuable insights for identifying funding sources for these restoration projects.