Phoenix Islands Protected Area Conservation Trust — Avoided-Cost Marine Payment for Ecosystem Services (Kiribati)

The Phoenix Islands Protected Area (PIPA), designated in 2008 and UNESCO World Heritage-listed since 2010, is a 408,250 km² marine reserve — about 1.5 times the size of New Zealand. Because foreign fishing-licence revenue supplies over 70% of Kiribati's national government revenue, full protection from commercial tuna fishing carries a direct fiscal cost, which Kiribati and Conservation International's Global Conservation Fund sought to offset through a 'reverse fishing licence' trust fund.

The trust was designed to pay Kiribati directly to forgo commercial fishing-licence revenue inside PIPA, compensating the government for the opportunity cost of a full no-take closure, with a long-term funding target of US$25 million.

The trust was capitalised with an initial US$5 million (US$2.5 million from Kiribati matched by Conservation International, committed 23 September 2013). In 2015 Kiribati closed the entire reserve to commercial fishing, up from just 3% no-take coverage previously.

The trust's raised balance fell well short of its US$25 million target — one Kiribati government statement put total funds raised at only about US$7 million. In November 2021, Kiribati's Cabinet reopened PIPA to commercial fishing, citing lost purse-seine revenue estimated at US$60-140 million since 2015 and roughly US$850,000 per year in lost longline revenue.

Former President Anote Tong, who championed the original closure, publicly disputed the government's stated rationale for reopening. The case is documented here as a cautionary example of the limits of avoided-cost PES trust mechanisms at national scale when compensation fails to match the real opportunity cost.