Enhancing the resilience of blue foods to climate shocks using insurance

Abstract

Abstract For the Blue Foods economy—those sectors that gain value from the biological productivity of the oceans such as fisheries and aquaculture—climate shocks pose an existential threat. Species range shifts, harmful algal blooms, marine heatwaves, low oxygen events, coral bleaching, and hurricanes all present a serious economic risk to these industries, and yet there exist few financial tools for managing these risks. This contrasts with agriculture, where financial tools such as insurance are widely available for managing numerous weather-related shocks. Designing financial tools to aid risk management, such as insurance, for equitable resilience against marine climate shocks will give coastal communities access to the necessary means for reducing their sensitivity to climate shocks and improving their long-term adaptive capacity. We suggest that a convergence of the insurance industry and marine sectors, fostered through collaboration with governments, academics, and NGOs will help usher in new forms of insurance, such as ocean-index or parametric insurance. These new risk-management tools have the potential to help incentivize sustainable use of living marine resources, as well as strengthening the economic resilience of coastal communities to climate change.