Review Reports

Round 1

Reviewer 1 Report

This is a timely and interesting paper and provides a perspective on coral restoration and reef ecosystem services that is not well covered in the literature. I think it would be prudent to add a section on the efficacy of coral restoration to provide the scale of recovery that is required, especially in terms of area of reef to restore compared to that which has actually been achieved to date - how could such upscaling be achieved? Another factor to consider is whether restoration - especially from coral gardening - has been successful in terms of survivorship of out-planted corals to achieve stated goals in terms of justifying the investment and recovered ecosystem services. Such aspects would be important to the decision processes in regard to investment.

The text does need checking for grammar - especially the placement and use of commas - and there is a degree of repetition in the text that should be removed.

Author Response

Response to Reviewer 1 Comments

Point 1 : I think it would be prudent to add a section on the efficacy of coral restoration to provide the scale of recovery that is required, especially in terms of area of reef to restore compared to that which has actually been achieved to date - how could such upscaling be achieved?

Response 1: Agreed and done in terms of adding text on the efficacy of coral restoration. The scale is at the level of a coral reef as with the NbS, the idea is to rebuild the reef so that it can continue to provide the service. Roelvink et al (2021) provide information on the size of the restoration for coastal protection via numerical models – which we included, but we were unable to locate any actual cases where coral restoration has been carried out for coastal protection.

Point 2 : Another factor to consider is whether restoration - especially from coral gardening - has been successful in terms of survivorship of out-planted corals to achieve stated goals in terms of justifying the investment and recovered ecosystem services. Such aspects would be important to the decision processes in regard to investment.

Response 2: Answered in Response 1

Point 3 : The text does need checking for grammar - especially the placement and use of commas - and there is a degree of repetition in the text that should be removed.

Response 3: Grammar checked and repetition removed.

Author Response File: Author Response.pdf

Reviewer 2 Report

The manuscript overall seems to be well written, but I am having a hard time understanding some parts of it.  My backgrounding is 100% coral reef ecology, so my unfamiliarity with some of the terms in the manuscript is likely the cause...

I could follow the manuscript from section 1 to section 5.   In section 6, 2 financing mechanisms were introduced, and at the end of the section, the manuscript states blended solutions are suitable for the hybrid NbS solutions (I cannot follow this logic, either).  Then in discussion, it talks about private sectors, hoteliers, government etc. I do not understand exactly how these parties play roles in the 2 financing mechanisms discussed in section 6, and how the main text support the final paragraph of the discussion (though I do not disagree with the paragraph).

Here are a few specific comments.

L128. It is not clear what you mean by "hybrids" here. Hybrids of transplantation and something else? Please be specific.

L182 - 193. I  cannot fully understand this paragraph, likely again due to my unfamiliarity with the terms used (catalytic capital, impact investments). Please rephrase the sentences and maybe add a diagram like Figure 1.

L195 - 197. Perhaps this is due to my lack of understanding of the prior paragraph, but I do not understand why blended finance solutions are suitable.  Please explain more.

Author Response

Response to Reviewer 2 Comments

Point 1: In section 6, 2 financing mechanisms were introduced, and at the end of the section, the manuscript states blended solutions are suitable for the hybrid NbS solutions (I cannot follow this logic, either)

Response 1: In the interests of brevity,  we did not previously, fully explain why blended financing solutions are better for hybrids. We have improved on this by adding table Table 1 in section 4 which summarises some characteristics of hybrids (and coral gardening) and in section 6, included extra paragraphs explaining that impact investors have minimum levels of investment, below which they will not consider a project. The higher costs of hybrids are therefore more attractive to them. We also included a paragraph in section 6 explaining why gardening is more suited to a PES scheme.

Point 2: Then in discussion, it talks about private sectors, hoteliers, government etc. I do not understand exactly how these parties play roles in the 2 financing mechanisms discussed in section 6,

Response 2: Coastal hoteliers are part of the private sector and were previously identified as primary beneficiaries of coastal protection (Section 2). It was perhaps not highlighted. We’ve strengthened this and added a diagram (Section 6) to show their potential roles in the investment mechanisms.

In the discussion, we mention governments, as they still have a social responsibility to protect coral reefs and can also make the investment environment more attractive to private investors via policy and regulations.

Point 3: how the main text support the final paragraph of the discussion (though I do not disagree with the paragraph).

 Response 3: The paragraph has been amended to “The years 2021-2030 have been designated the UN Decade on Ecosystem Restoration. It is a good opportunity, with a global focus on restoration, to highlight private investment as means of financing this type of intervention. Practitioners in the conservation and investment fields, must learn and understand each other’s worlds, so that this emerging source of funding can be effectively engaged and deployed. “

We think it is fortuitous that these years have been designated as the UN Decade on Ecosystem Restoration, at a time when we urgently require investment in this innovation to help with coastal erosion. We’re also trying to highlight that time is running out for us to act.

We tried to show in the main text that being able to access private monies in NbS, is an opportunity — that allows for a different (and much needed) stream of financing to aid in marine conservation — thereby helping coral reefs and also benefitting investors financially

We identified the lack of engagement between private investors and those involved in marine conservation – whether as considering it to aid their businesses (coastal hoteliers) or as their work (marine conservation practitioners) as a major impediment (Section 5). In the last lines, we’re suggesting that it will take these groups to understand each other and know about the opportunities available, so that the money can be accessed and used.

Point 4: L128. It is not clear what you mean by "hybrids" here. Hybrids of transplantation and something else? Please be specific.

Response 4: Hybrids were defined in line 128 - Gardening can occur either on its own as a fully green solution, or in combination with artificial substrate, as a gray-green, hybrid solution.  I added the following ... “Gardening can occur either on its own as a fully green solution, or in combination with artificial substrate, as a gray-green or hybrid solution. The green solution refers to out-planting reared corals directly onto a coral reef, while the hybrid entails out-planting corals onto artificial reefs”.  

Point 5: L182 - 193. I  cannot fully understand this paragraph, likely again due to my unfamiliarity with the terms used (catalytic capital, impact investments). Please rephrase the sentences and maybe add a diagram like Figure 1.

Response 5: Diagram added and paragraph amended to below

“There is available money, as evidenced by the market size of impact investments which averaged $USD715 billion in 2020 [75]. Even with good intentions and available funding however, impact investment has not succeeded in addressing many critical environmental needs, primarily as a result of “inflexible expectations for financial returns” [82]. Combining impact investments with catalytic capital however, allows for investments more suited towards emerging technologies, such as coral restoration. Catalytic capital is defined as capital that allows for inordinate risk and/or sacrifices some financial gain for social benefits [83]. It can be in the form of grants and/or a de-risking instrument, such as a loan guarantee for the impact investor from a development bank. Catalytic monies are therefore more patient and flexible than those from solely impact investment. This combining of capital with different risk levels, in order to meet the objectives of all, is called blended finance [84] and has been recommended as a means of financing NbS [77]. Blended finance solutions, are complicated to develop and expensive [76]. Transaction costs for example, to ensure investment readiness can be high, and there is a minimum investment requirement for impact investors, below which they will not invest. “

Point 6: L195 - 197. Perhaps this is due to my lack of understanding of the prior paragraph, but I do not understand why blended finance solutions are suitable.  Please explain more.

Response 6: We amended the paragraph to below

The hybrid NbS solution with its high up-front investment cost and relatively short time frame to high effectiveness, is more suited to blended finance. In this case, the hotelier or the marine conservation practitioner would interact with external investors, who require financial and environmental returns on investment, within specific time-frames. The higher upfront costs will be more attractive to impact investors, coupled with a reduction in both engineering risk and time-frame, due to the presence of the artificial reef, that immediately allows for wave breakage and beach protection. At the same time, the financial risk linked to the NbS performance, could be reduced by a loan guarantee from a development bank, to the impact investors

Reviewer 3 Report

The title and theme of the manuscript sounds vey interesting. However, I found the work lacked depth, focus, and a true analtiyical approach. If this is a review paper then I recommend the authors provide a number of relevant case studies, e.g. from French Polynesia or even Chapwani in Zanzibar. Overall, there is a lot of potential in this work and I recommend the authors continue to build a stronge argument. I also recommend the authors draw up some actionable solutions for the discussion/conclusions. There were a number of formating errors, the resolution of the figure is poor, and the references need to be updated and correctly cited e.g. Ref. 8.

Author Response

Response to Reviewer 3 Comments

Point 1: I found the work lacked depth, focus, and a true analtiyical approach.

Response 1: The authors believe the work has all three and we continue to build on them in this revision. We are providing, succinctly, a rationale for using restoration as a means of enhancing coastal protection and suggesting methods for financing which have not been previously utilised. We have also shown how these new financing mechanisms are suited to ecological complexities and risk. The authors have attempted to strengthen these arguments in this revision, and have provided additional information e.g. Table 1 summarising the aspects of coral gardening and hybrid solutions that make them suitable for the investment opportunities suggested. We further added Figure 2 to demonstrated how Impact Investment might work in this context.

Point 2: If this is a review paper then I recommend the authors provide a number of relevant case studies, e.g. from French Polynesia or even Chapwani in Zanzibar

Response 2: It is not a Review, but a Commentary. We appreciate the suggestion of case studies, and have included a footnote to the work of Blue finance, the only organisation we are aware of that has used impact investment for coral reef conservation. We also provided information from an extensive review carried out on the suitability of PES for coastal protection (by one of the authors) and a case study carried out in Barbados that examined the use of coral gardening and hybrid as means of reducing beach erosion.

Point 3: I also recommend the authors draw up some actionable solutions for the discussion/conclusions

Response 3: We provided the action of improving interactions between investors and marine conservation practitioners, such as has been done by the IUCN and the Global Impact Investing Network. We believe that this will provide the foundation for better uptake.

Point 4: There were a number of formating errors, the resolution of the figure is poor, and the references need to be updated and correctly cited e.g. Ref. 8.

Response 4: Any formatting errors identified were corrected. The figure has been changed to one of better resolution and errors identified in references, corrected.

Round 2

Reviewer 3 Report

This manuscript could be really good if the authors put a little more time and thought into the development of the argument, structure, and presentation of figures.

For example, if the main case study is Barbados then perhaps the title should also reflect that? Additionally, I am wondering how different this work to the submitted work by the same authors on the same topic e.g. Ref. 67? 

Additionally, do the authors have permission to reproduce the newly added figures/tables (e.g. figure 1. or should be figure 2. because the first figure is missing a caption) from their previous publication. 

Also, the structure of the manuscript doesn't make sense to me. If it is an option piece why does it even have an introduction and discussion, when the whole work is essentially a discussion.

I like the topic and think it is interesting, however, with the best intentions for the journal and the authors I highly recommend they continue to work on making a very concise, focused, and original option piece.

I also don't see that much improvement from the previous draft, to me it seems like the authors just deleted and reworded the paragraphs then put it back in but it hasn't actually added any benefit. 

Author Response

Please see attachment.

Author Response File: Author Response.pdf