Blue Finance: Evaluating the Role of Blue Bonds in Supporting Ocean and Coastal Biodiversity

Abstract

This thesis explores the role of blue finance in supporting marine biodiversity by examining whether the issuance of blue bonds contributes to improved biodiversity outcomes at the national level. The central research question asks: Do blue bonds and related marine-themed sustainability instruments have a measurable impact on marine biodiversity, as captured by the Ocean Health Index? To answer this, the study develops a novel bond classification framework inspired by the Seychelles Blue Bond model and applies a two-way fixed effects panel regression across 34 countries from 2018 to 2023. The quantitative analysis finds no statistically significant short-term effect of blue bond issuance on national biodiversity indicators, with results remaining consistent across several robustness checks. Complementing this, case studies of Seychelles and Belize reveal how governance quality, implementation delays, and local capacity challenges shape the effectiveness of blue finance in practice. These findings suggest that blue bonds might not lead to quick ecological improvements, but they still hold meaningful long-term potential. Whether they succeed will depend on future efforts to set clearer rules, build stronger oversight, and make better data available. Based on these insights, the thesis ends with practical policy recommendations aimed at making blue finance more transparent, trustworthy, and effective in driving real conservation outcomes.