Insuring the reef: Governance and risk for a public trust resource in a changing climate

Abstract

Insurance, as a technology of risk governance, is playing new roles in mediating human-nature relations and (re)shaping the channels through which power and authority are exercised over marine domains. The world's first coral reef insurance policy was purchased in 2019, and, in 2022, the first US policy was established in Hawaiʻi. These parametric insurance policies promise quick access to funding following a triggering weather event to support rapid restoration of coral reefs that are valued for their coastal protection. Less attention, however, has been paid to the socio-political aspects of financialized risk management for coral reefs. Policy and governance landscapes are critically understudied aspects of coral restoration, and marine-climate interventions have also received limited attention with respect to the speed of innovation and the lag of governance preparedness, which increases risks for both coastal communities and the marine environments they rely on. This research responds by examining how coral reef insurance was mobilized as an intervention and implemented in Hawaiʻi, where coral reefs are a public trust resource managed by the state. Tracking key actors, relevant climate and economic data, and ensuing governance processes, this research demonstrates that reef insurance has all the hallmarks of a misaligned climate solution that parametric insurance literature has dutifully pointed out. While parametric insurance offers unique financial tools for responding to coral reef damage, a critical review of the development and implementation of the Hawaiʻi reef insurance policy reveals how private interests can reshape the governance of a public trust resource, introducing new social-ecological risks along the way. This article argues that broader work on financialized risk management for climate hazards must attend more robustly to marine contexts beyond coastal infrastructure.