Abstract: Coastal development and climate change are dramatically increasing the risks of flooding, erosion, and extreme weather events. Coral reefs and other coastal ecosystems act as natural defenses against coastal hazards, but their degradation increases risk to people and property. Environmental degradation, however, has rarely been quantified as a driver of coastal risk. In Quintana Roo, Mexico, a region on the Mexican Caribbean coast with an annual tourism economy of 10 billion USD, coral reefs constitute a natural barrier against flooding from hurricanes. This study spatially quantifies the risk reduction benefits of the Mesoamerican Reef in Quintana Roo for people, buildings, and hotel infrastructure. The risk reduction benefits are substantial. For example, the reefs prevented 43% additional damage during Hurricane Dean in (2007) and provide nowadays hazard risk reduction for 4.3% of the people, 1.9% of the built capital, and 2.4% of the hotel infrastructure, per year. The annual benefits are estimated in 4,600 people, 42 million USD damage prevention for buildings, and 20.8 million USD for hotel infrastructure. The study also compares the risk reduction of coral reefs with (i) the protection offered by dunes and (ii) the increase in coastal risk from sealevel rise (SLR). The risk reduction of dunes is more critical where there are no coral reefs offshore and for small return-periods storms. Sea-level rise, however, will make the more frequent storms more impactful and will drive significant increases in annual expected damages across the region. However, we demonstrate that, in coral reef environments, the contribution of reef degradation to coastal risk is larger than the expected increase in risk from SLR. However, the spatial distribution of the risk reduction benefits from reefs differs for people and infrastructure, and in particular for hotels, which receive the most protection from reefs. Furthermore, many sections present larger benefits than the typical costs of restoration. This valuation makes a compelling case for protecting and maintaining this natural infrastructure for its risk reduction service, but also allows the development of piloting innovative strategies, such as risk finance and insurance strategies, that can align environmental and risk management goals.
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