Applying portfolio theory to benefit endangered amphibians in coastal wetlands threatened by climate change, high uncertainty, and significant investment risk

The challenge of selecting strategies to adapt to climate change is complicated by the presence of irreducible uncertainties regarding future conditions. Decisions regarding long-term investments in conservation actions contain significant risk of failure due to these inherent uncertainties. To address this challenge, decision makers need an arsenal of sophisticated but practical tools to help guide spatial conservation strategies. Theory asserts that managing risks can be achieved by diversifying an investment portfolio to include assets – such as stocks and bonds – that respond inversely to one another under a given set of conditions. We demonstrate an approach for formalizing the diversification of conservation assets (land parcels) and actions (restoration, species reintroductions) by using correlation structure to quantify the degree of risk for any proposed management investment. We illustrate a framework for identifying future habitat refugia by integrating species distribution modeling, scenarios of climate change and sea level rise, and impacts to critical habitat. Using the plains coqui (Eleutherodactylus juanariveroi), an endangered amphibian known from only three small wetland populations on Puerto Rico’s coastal plains, we evaluate the distribution of potential refugia under two model parameterizations and four future sea-level rise scenarios. We then apply portfolio theory using two distinct objective functions and eight budget levels to inform investment strategies for mitigating risk and increasing species persistence probability. Models project scenario-specific declines in coastal freshwater wetlands from 2% to nearly 30% and concurrent expansions of transitional marsh and estuarine open water. Conditional on the scenario, island-wide species distribution is predicted to contract by 25% to 90%. Optimal portfolios under the first objective function – benefit maximization – emphasizes translocating frogs to existing protected areas rather than investing in the protection of new habitat. Alternatively, optimal strategies using the second objective function – a risk-benefit tradeoff framework – include significant investment to protect parcels for the purpose of reintroduction or establishing new populations. These findings suggest that leveraging existing protected areas for species persistence, while less costly, may contain excessive risk and could result in diminished conservation benefits. Although our modeling includes numerous assumptions and simplifications, we believe this framework provides useful inference for exploring resource dynamics and developing robust adaptation strategies using an approach that is generalizable to other conservation problems which are spatial or portfolio in nature and subject to unresolvable uncertainty.