Corals require the cleanest water quality of any coastal ecosystem, and suffer if it deteriorates. Coral reefs have evolved in the lowest nutrient environment in the world, the tropical ocean, where plants often consume all available nitrogen and phosphorus, at which point new growth is limited to rates at which these elements are provided by decomposition of dead organisms.

Tiny increases in nutrients above the near zero level are probably beneficial to corals, but it takes only very small increases for the net effect to turn negative. This is not because high nutrients harm corals directly, but because corals are quickly overgrown by much faster growing algae which need higher nutrient levels than corals. Only very little excess nutrients are needed to turn healthy coral reefs into waving fields of algae which smother and kill corals. This phenomenon is called eutrophication.

Eutrophication takes place in all ecosystems and is responsible for green scummy layers of algae covering ponds into which sewage and manure flows. Coral reefs go eutrophic at the lowest level of nutrients of any aquatic ecosystem: nutrient levels which would be regarded as very low in any other marine or freshwater habitat will kill coral reefs.

Major sources of excessive nutrients include sewage, livestock manures, and agricultural fertilizers, soils eroding away after deforestation and land clearing to make way for industrial or commercial development.

Due to the large increase of nutrients released into coastal waters from sewage discharged directly into the ocean or delivered via rivers and ground waters, the reefs of nearby coastal areas will eventually turn into coral graveyards covered by algal gardens.

Many coral reefs around the world, especially those near populated coasts, are being increasingly smothered and killed by dense blooms of bottom dwelling ("benthic") algae. The dead, algae-covered coral is no longer able to serve as high quality habitat for marine animals such as clams, crabs, lobsters, and fish, so fisheries and biodiversity decline.

Once the corals die, the reef framework begins to be broken up by boring organisms and wave energy. Its capacity to protect the coastlines from erosion steadily deteriorates, coincident with globally rising sea levels and increasing storm energy.

As a result, coral reef countries stand to lose much of the economic benefits of tourism, fisheries, shore protection, and biodiversity that only healthy reefs can provide.