Financial think tank Planet Tracker has developed a theoretical framework for a blue recovery bond that would allow investment in blue recovery bonds to fund fisheries that reduce or completely stop fishing in designated areas while stocks recover.

Investors should financially support such initiatives, as they could contribute to improving the health of fish populations that billions rely on globally, Planet Tracker said in a report released Thursday.

“Fishers and investors in fishing companies rely on healthy ecosystems. With a blue recovery bond, the interests of investors, fishers, and fish are aligned. Returns can be high since fish populations regenerate quickly,” said Francois Mosnier, head of Planet Tracker’s ocean programme.

Overexploitation is one of the five main drivers of biodiversity loss globally, particularly in marine ecosystems, and as demand for seafood is set to grow, the situation could get worse in the years to come, according to the think tank.

“The demand for seafood is projected to rise to 267.5 million tonnes by 2050, up from 157.4 million in 2020,” the report noted.

“Whilst many hope that aquaculture will supply much of this growth, the demand on marine fisheries resources is set to grow, pushing many fish stocks further towards, and into, unsustainability. This will increase the risk of food insecurity and likely further damage marine ecosystem integrity and resilience in many areas, particularly lesser developed regions.”

Planet Tracker’s bond would allow investors to provide up-front capital investment to fisheries that cease or reduce fishing of an overfished population, and then get repaid once the stock has recovered and fishing is resumed.

The group developed a set of 19 criteria to determine a fishery’s suitability for joining a blue recovery bond programme based around fishery size and operations, target species, bycatch and ecosystem impacts, management and monitoring, relationships, and social and economic issues.

It analysed 295 fisheries based on those criteria, and found that 65 of them – 22% – would be strong candidates.

“Most of them operate in the North Atlantic, North Pacific, and South Pacific, although this is skewed by data availability constraints,” Planet Tracker said.

To address that, the group also launched a tool for fisheries to help them determine whether or not they would be suitable candidates.

“In theory, blue recovery bonds enable fishers to conserve their depleted fish stocks without having to forfeit their incomes and enable investors to fulfill their Environmental, Social, and Governance (ESG) and/or general sustainability goals, as well as generate financial returns,” Planet Tracker said.

However, it also noted several challenges in getting such bond arrangements right, including finding the right bond issuer agreement, establishing methods to measure success, implementing appropriate monitoring and enforcement of permanence, and overcoming a range of potentially negative social and economic impacts on supply chains.

The idea for the recovery bond was inspired by a fishing community in Valparaiso in Chile, which seven years ago set aside for marine conservation 19% of the area in which they usually fished, and in return saw a rapid increase in abundance and size of many marine species.

By Stian Reklev – stian@carbon-pulse.com

** Click here to sign up to our biweekly biodiversity newsletter **