Hedge Fund Thinking Applied to Coral Reefs

Professionals who work in the world of finance understand that investing in a variety of assets can protect against loss due to market fluctuation, increasing the likelihood of favorable outcomes. Scientists who study coral reefs are now applying this kind of hedge fund thinking to determine how best to help coral reefs survive climate change.  

The Great Barrier Reef of Australia has been heavily damaged by rising ocean temperatures. If climate change continues, much of the coral will die out. Scientists are now in a race to save as much of the reef as possible. However, with more than 600 species of coral in the Great Barrier Reef, researchers with limited funding are unable to save them all. They must now figure out which types of coral are best suited to survive in the warming ocean and put all their efforts into protecting them. Coral geneticist Madeline van Oppen explained, “If a program only has funds to focus on 20 or 30 coral species, it will want to focus on the sets of species to get the most ecosystem bang for its buck”.

The researchers developed a two-pronged approach that determined which corals were most likely to survive, while also collecting and cataloging a variety of corals that are necessary to the overall functioning of the reef ecosystem. By comparing these lists, they narrowed the 600 species of coral down to 11 corals that are most likely to both endure and to provide ecological benefit in the future. By diversifying their approach and hedging their bets, these scientists have refined their approach to saving the reef.

Published by James Heinsman

James has worked as a hedge fund manager for years. As someone who has always enjoyed multi-tasking, James brings his vast financial experience and his hedge fund background to his position as writer and editor for Hedge Crunch. Editor James Heinsman can be contacted at james(at)hedgecrunch.com.