The coquí llanero seems like an unlikely mascot for bold investing. Pale yellow and no wider than a dime, the tiny Puerto Rican frog bears little resemblance to the bulls, sharks and bears that frequent stock trading lingo.

But this endangered amphibian has now become a new test case for how conservation biology can be fused with the calculus of capitalism.

Using the same thinking that investors use to guard against the unpredictable economic ups and downs of the future, a team of scientists has found they can improve the odds of protecting this rare frog from the unforeseeable effects of threats such as climate change, according to a new paper in Frontiers in Conservation Science.

Central to the approach is what’s known as portfolio theory. Rather than focusing on a single investment, such as one company’s stock, under portfolio theory a person spreads their bets across a range of different ways to earn money. Some will perform better than others in certain situations, much as the value of stocks and bonds often move in opposite directions. While holding bonds might not seem like the best money maker during soaring stock prices, over the long term that kind of diversity can guard against being too vulnerable to the roller coast of financial markets.

“Diversification of investments is kind of a magic bullet for stability under future market uncertainty,” said Mitch Eaton, an ecologist at the U.S. Geological Survey’s Southeast Climate Adaptation Center and the paper’s lead author. “The idea behind using modern portfolio theory is to manage risk under future climate uncertainty, and to help managers consider investments more carefully.”

This isn’t the first time such thinking has been applied to conservation. I’ve written about similar thinking among people trying to decide which coral species to try to save. Nature is, in many ways, the original practitioner of portfolio theory, with evolution rewarding species that can maintain genetic diversity. Scientists used the portfolio term to explain the remarkable productivity of sockeye salmon runs in Bristol Bay, Alaska.  

At first glance, the coquí llanero looks like a bad bet no matter how you approach it. The tiny frog inhabits less than 3 square kilometers of coastal freshwater marshes along the northern shores of Puerto Rico. There, it pierces the air with its high-pitched “ko-kee,” a call similar to ones from 15 other species of more common coquí frogs that are a cultural icon of the island.

That swampy habitat is among the world’s most endangered. Rising seas threaten to flood low-lying lands. Climate forecasts predict the island will become drier and hotter, not good news for creature dependent on moist surroundings. Add to that land loss due to urbanization, wetland draining, invasive plant species, and polluted runoff from a nearby landfill, among others. In 2012, the U.S. Fish and Wildlife Service listed the coquí llanero as endangered, in response to a lawsuit by the Center for Biological Diversity.  

Depending on how much sea level rises, the places where the little frog occurs could shrink between 25% and 90% in coming years, the scientists found. Kermit the Frog famously noted that it’s not easy being green. Apparently the same thing goes for being yellow.

“There’s only so much the coquí can do on their own to avoid climate risks,” said Eaton. “So, it’s important that we think about how to manage and mitigate risk within this complex ecosystem.”

Eaton and two other colleagues wanted to see whether thinking like savvy investors might help clarify which conservation strategies are the best bet.

So, like investment bankers they went digging for information. They amassed a pile of data about the frog’s biology and habitat to better understand what conditions helped the animal thrive. They added to the mix information about where these places occurred around the island, and how climate change might alter the landscape in the future.

With all that information, plus different hypothetical budgets, the researchers calculated the pros and cons of two different investment strategies. On the one hand, they considered a conservation strategy that would maximize the benefit – the most frogs for the price. On the other, they modeled a more conservative approach in which they put more emphasis on not being tripped up by surprise problems.

The results showed that the different approaches did, in fact, lead to different recovery plans. And it showed that overall, the frogs are likely to fare better under the more conservative strategy.

If conservationists wanted to get the most frogs per buck, costs were held down by spending money to relocate frogs to places that were already protected. By contrast, trying to balance risks and benefits pointed toward spending more money to buy new parcels of land where frogs could live. That’s in part because the scientists found a significant amount of drained wetlands that have the potential to be rehabilitated, expanding the size of potential habitat to seven times the amount of land where they are currently thought to live. The findings suggest that it might be worth pursuing a long-term strategy of buying and restoring high quality habitat, even if the up-front costs appear higher.

Whether government officials charged with reviving this little frog can find the money or embrace such a long-term strategy is another question. As any startup company will tell you, if you can’t find investors, it doesn’t matter how good your plan is.

Eaton, et. al. “Applying portfolio theory to benefit endangered amphibians in coastal wetlands threatened by climate change, high uncertainty, and significant investment risk.” Frontiers in Conservation Science. Oct. 7, 2024.

Photo by Luis J. Villanueva via Flickr