Blue carbon – the carbon stored in the Earth’s marine and coastal ecosystems – holds massive potential to stash away our runaway carbon emissions, and it’s attracting a growing amount of attention from the public.
Today, a market is emerging for carbon credits to finance coastal restoration projects. But what could this growing financial interest mean for the countries that are rich in blue carbon, especially those in the Global South?
The blue carbon sink
The world’s oceans store immense amounts of carbon, which have removed roughly 30 percent of humanity’s carbon emissions from the atmosphere since the Industrial Revolution. The plants and sediments that form coastal habitats, such as mangroves, tidal marshes and seagrasses, are particularly effective at storing carbon.
Mangroves in Asia, for example, may sink over 900 tons of carbon per hectare underground – much more than forests on land. That’s why blue carbon restoration projects tend to be focused on mangroves, not only for their carbon storage but also because of the other ecosystem benefits they provide, like preventing coastal erosion.
This vast carbon storage potential has led to growing interest in coastal restoration projects financed using carbon credits. Companies, individuals and governments can buy carbon credits to offset their carbon emissions, with one credit equating to one ton of carbon dioxide removed from the atmosphere.
Elizabeth Guinessey, manager of food and blue carbon at leading carbon credit certifier Verra, says the voluntary carbon market gives ecosystems an economic value beyond for purely extractive purposes.
“I think there’s an understanding of the intrinsic value of ecosystems, but you need to have food on the table. The voluntary carbon market can bring this added value by creating carbon credits that can be accessed and bring value to keeping systems intact,” she says.
Founded in 2014, Mikoko Pamoja in Kenya was the world’s first mangrove restoration project to produce carbon credits. Then, in 2021, Colombia’s Cispatá mangrove forest became the first to have its carbon value fully calculated. The project, known as Vida Manglar, is now being enlarged to include all mangroves in the Gulf of Morrosquillo.
María Claudia Díazgranados Cadelo, director of blue carbon at Conservation International, which coordinates Vida Manglar, has overseen the initiative for the past few years.
“The Gulf of Morrosquillo is one of the best conserved areas in the Colombian Caribbean,” she says. “It holds a huge amount of biodiversity, including birds, reptiles and mammals.”
During its first round in May 2021, the projects offered more than 20,000 credits, all of which have since been sold for around USD 15 per credit. From those sales, 92 percent of revenues were reinvested in the protection of Cispatá Bay’s mangroves, supporting the livelihoods of 12,000 people who live near the project site, as well as the 11 local experts who run the project’s daily operations.
Guinessey has also noticed an uptick of interest in such projects. Around 40 blue carbon projects are listed in Verra’s registry, 30 of which are under validation or development – a sign that they are recent additions. While miniscule in number compared with projects on land, she sees coastal projects as an emerging sector.
“A lot of projects are in tropical areas, and the majority of them are mangrove projects,” she says. “I think it’s easier to translate what’s been done in terrestrial areas over to these mangrove areas, but we are starting to see increased interest in salt marsh and seagrass projects as well.”
An emerging market?
It’s difficult to place a dollar amount on the financial opportunities that carbon credits may hold for blue carbon-rich countries, but a study from 2013 estimated that mangroves store around 6.5 gigatons of carbon globally, compared to 2.0 gigatons for salt marshes and 2.3 gigatons for seagrasses.
These habitats, however, are highly vulnerable: over a million hectares of mangroves have been lost since 1990. This vulnerability makes them particularly valuable in carbon markets due to a crucial concept: additionality. If greenhouse gas emissions reductions are additional, that means they would not have occurred if they had not been funded through the sale of carbon credits.
A 2021 study found that 20 percent of the world’s mangroves are in danger and thus qualify for credits based on additionality. At a carbon credit price of USD 9.40 per ton, the projects that remain profitable could generate USD 3.7 billion in sales per year. These investible mangrove forests mainly grow in Southeast Asia and the Pacific, though Madagascar and Nigeria also have large areas of profitable mangroves.
Today, nature-based carbon offsets are priced at less than USD 2 per credit on the voluntary market – a steep drop from their value of USD 18 in early 2022. But Guinessey believes blue carbon credits can fetch a higher price because of the recognized ecosystem benefits of coastal habitats.
Meanwhile, several large-scale blue carbon projects have emerged that could take the sector to new heights. One involves restoring 350,000 hectares of mangroves and tidal marshes in Pakistan’s Indus delta, making it one of the largest blue carbon projects ever. Another mangrove restoration project in Mexico’s Sinaloa state could sequester up to 3 million tons of carbon emissions each year.
Getting registered for credits, however, can be a challenge. For blue carbon projects, Guinessey says a lack of research on coastal or marine ecosystems has delayed the development of blue carbon credits. In particular, the difficulty of accessing such ecosystems can hamper projects in lower-income countries.
“With blue carbon work, historically, a lot of the data and research has come from the Global North,” says Guinessey, “and there hasn’t been as much peer-reviewed literature from tropical countries. But you do need data to support a project.”
The future of blue carbon credits
Several new organizations are now working to make it easier to finance blue carbon projects. For instance, the Blue Carbon Accelerator Fund (BCAF) aims to help connect projects in developing countries with private finance. Likewise, the International Blue Carbon Institute seeks to become a hub of blue carbon research to help governments develop climate mitigation policies.
As for Vida Manglar, a second round of blue carbon credits will soon be offered – most likely later this year.
Diazgranados Cadelo sees the project as just the start of an emerging blue carbon credit market. She says that Vida Manglar’s success depends on support from local communities, which are part of the project’s governance and actively monitor and collect data on species conservation.
“The effective engagement with communities is based on trust and transparency, which are pillars of Vida Manglar’s program,” she explains. “Creating them requires time, active listening, openness to innovative ideas, and constant presence in the area.”
When looking at the future of blue carbon credits, Guinessey gets the sense that the market will continue to grow and broaden to include seagrass meadows and tidal marshes – or perhaps even stretch the concept of blue carbon to include seaweed farming or kelp conservation.
But for now, she has some wise words for those who want to cash in on carbon credits: “I always advise potential project developers to look at what other projects have done and learn from what others have already learned. There’s no reason to reinvent the wheel.”