Five Questions on How a Conservation Market Could Protect the World’s Oceans

Can you explain what 30×30 is, why it’s important, and where progress stands?

The 2022 Kunming-Montreal Global Biodiversity Framework calls for the effective protection and management of 30 percent of the world’s terrestrial, inland water, and coastal and marine areas by 2030, an objective informally referred to as “30×30.” Many scientists say humanity must meet the ambitious 30 percent target if we are to secure the planet’s long-term health. Failure to do so could seriously threaten some of the benefits humanity receives from the ocean, ranging from food to leisure and employment opportunities, to name a few.

The world has a long way to go over a few short years, particularly with respect to the world’s oceans. Today, only 8 percent of the ocean falls within marine protected areas, and only 3 percent is within fully or highly protected areas. Innovative new policies are needed to make 30×30 a reality in the next few years.

Your study is the first to propose and evaluate a market-based approach to achieving 30×30. Why a market mechanism?

This project started four years ago, when the UN commitment was to protect just 10 percent of the globe’s marine environment. The world fell well short of this target, but instead, nations at that time were drafting plans to increase ambitions and protect 30 percent of the world’s oceans.

To us, it seemed like most nations were genuinely committed to marine conservation, but that the costs of conserving ocean ecosystems were preventing some from engaging in it at all. At the same time, a lot of research had already shown that if you could get nations to cooperate around conservation, you could substantially reduce the costs for them to conserve.

The question remains, how do you get nations to do this? The world lacks institutions, policies, or frameworks that could support this cooperation and incentivize conservation. A market-based approach seemed like an interesting way of galvanizing action.

There is ample evidence showing that market-based policies are quite efficient at meeting a given goal when compared to mandates. For example, markets have already been successful in lowering the costs of reducing air pollution—like in California’s Clean Air Act—or controlling overfishing, like Iceland’s Individual Transferable Quotas.

These programs alleviate the problems that arise when the costs of meeting a given target are not the same for the various actors involved. Through a trading mechanism, policies like these can incentivize reductions in environmental harm if one actor—who can achieve these targets at lower cost—does so in the name of others who would otherwise face higher costs. The actor that goes beyond its own requirements is compensated for it—so the party that faces higher costs pays them to meet targets on their own behalf. This allows the paying party to achieve its targets more cheaply.

How would this “transferable conservation market” work?

Like existing mandates, this market-based approach requires every country to protect a certain fraction—say, 30 percent—of its marine habitat.  But unlike other approaches, we allow those obligations to be traded across countries, within strict ecological constraints.

For example, Norway, which has relatively valuable fisheries, might pay Palau, a small island nation that has already invested significantly in coastal conservation by implementing one of the world’s largest marine protected areas, to conserve additional area on Norway’s behalf. This enables Norway to fulfill its conservation obligations at a lower cost than it would incur from lost fishery revenues. Palau, meanwhile, is compensated above the low cost it pays for preserving more of its marine habitat

In this market, countries can balance the amount and suitability of habitat being protected based on how much it costs to protect them. Because exchanges are voluntary, they will only happen if both parties benefit from it. A country could always go it alone by fulfilling precisely its own 30 percent obligation. But our analysis suggests that very few countries will do this—most find it way more economical to trade conservation obligations.

How did you test this mechanism and what were the results?

We simulated how costly it would be for nations to conserve their marine ecosystems by themselves—without trading their conservation obligations—and then repeated the process, this time allowing for trade. We then calculated the difference between the costs of conserving under uniform mandates and the costs of conserving when trade is allowed. We also tried imposing different restrictions to avoid agglomeration of all conservation in just a few ecosystems or nation’s waters—in one example, a patch of coral reef in Mexico could not be traded for a patch of coral reef in Indonesia.

We found that allowing trade could reduce the costs of achieving 30×30 by 37-98 percent, depending on the stringency of the restrictions. We also found that, the more you restrict trade based on space, the lower the cost savings. However, because the per-unit costs of conserving are not the same between countries, trade is always more efficient than country-level mandates at achieving a target.

What are the next steps for your research? How can these findings be put into action?

Our first goal was to determine if there was a more efficient way of attaining conservation. There was always the possibility that trade would only reduce costs by a small amount and that it wouldn’t be worth disrupting the current approach. We showed that the cost savings are not trivial, and that it justifies reevaluating how we think about 30×30 in the oceans.

Regardless of how we go about conserving the marine environment, some of the next steps for our research include thinking about how we can incorporate climate change and shifting species distributions into this market-based framework, how other existing or developing uses of ocean space might interact with this policy, how different sources of data like habitat quality and degradation can be incorporated, and—most importantly—establishing the causal effects of these policies.

Juan Carlos Villaseñor-Derbez, is a Ph.D. graduate from the Bren School of Environmental Science & Management at UC Santa Barbara and a former IGCC dissertation fellow (2021-22). Christopher Costello is the Research Director of emLab and a professor of resource economics at the Bren School of Environmental Science & Management at UC Santa Barbara. Andrew J. Plantinga is a emLab research associate and professor of resource economics and policy at the Bren School of Environmental Science & Management at UC Santa Barbara. Read their study, “A Market for 30×30 in the Ocean,” published by Science.

Thumbnail credit: Benjamin L. Jones (Unsplash)