The 2022 UN Ocean Conference closed on 1 July and saw a tide of renewed commitments to scale ocean action and achieve SDG 14.
by Alexis Wilkman
Fair Carbon’s Mark Beeston took part in a panel discussion at the official Blue Carbon Workshop side event to share the lessons learned in blue carbon development so far. Here, we reflect on the key messages from the workshop: the challenges for blue carbon projects and the solutions to scale blue carbon ecosystem conservation rapidly and equitably.
The social impact of blue carbon projects cannot be taken for granted.
Blue carbon ecosystems support fisheries, control pollution and erosion, mitigate sea level rise and storms, and provide food, fuel, and other resources that more than 3 billion people rely on. They are also highly efficient carbon sinks, often sequestering and storing carbon at rates that far exceed their terrestrial counterparts. Despite their importance to human wellbeing, these ecosystems are among the most threatened on Earth. Blue carbon ecosystems have lost 35% of their global cover over the last 50 years to human-driven impacts.
Increasingly, investors and governments are looking to incorporate blue carbon projects into their portfolios and NDCs. The demand for blue carbon offsets has the potential to translate into much-needed funding to fill the blue financing gap--recent estimates show that upwards of US$35 billion is needed annually to protect and restore coastal ecosystems.
However, ill-conceived projects may do more harm than good for local people. Communities undertaking a conservation project often forgo potential income or lose access to resources, such as wood fuel. Coastal communities already face the disproportionately severe effects of climate change. In much of the world, these challenges are compounded by development needs. If local people lack viable alternatives and are not compensated for their stewardship, they risk being further marginalized.
“Employing people to work on a project site is a good thing, but it’s not everything; it doesn’t equate to full social engagement.” – Mark Beeston, Fair Carbon
Projects that prioritize community involvement and benefit-sharing are more effective in the long term, but simply employing community members on a project is not adequate. Communities must be meaningfully engaged in all aspects of project development, from inception to implementation, to re-investment of revenues. Front-line communities have intimate knowledge of the landscapes in which they live, and are best suited to identify the challenges, risks, and opportunities of conservation projects. Establishing shared goals for a project generates buy-in, and decreases the likelihood that grievances are raised or human-rights abuses occur.
Further, when communities are paid their fair share of project revenues, they may make investments where they are needed most, helping to achieve ancillary development goals such as food security, education, and improved infrastructure. The Mikoko Pamoja project is one example of the social impact that is possible. Certified by Plan Vivo in 2013, the project generates US$24,000 per year of which 70% goes back to the Gazi Bay community in Southern Kenya. Community members have used these funds to provide clean water, improve education, and construct buildings, among other priorities.
High-integrity blue carbon projects are complex and require collaboration on the part of governments, NGOs, developers, and investors.
The body of knowledge and best practices around blue carbon ecosystems are relatively well-established, but this knowledge is not always readily available or accessible. Project accreditation is challenging and time-consuming; skilled staff must be recruited to navigate the process, and it is often necessary to hire consultants to design a project or assess its feasibility. This can be prohibitively expensive or confusing for project proponents.
The opacity of the process is overwhelming not only for project proponents but for governments and funders whose support is critical to project success. Bringing all ends of the value chain up-to-speed on how projects are initiated, monitored, reported, and managed is necessary to scale blue carbon project development more rapidly. Fair Carbon is tackling this challenge by providing high-quality and accessible information on blue carbon project development.
Blue carbon projects that have robust social and environmental benefits may command a higher price per credit on the market, but require significant funding to get off the ground and continued support to see the project through to the end. Investors are wary of committing in the pre-feasibility phase when returns are not guaranteed. This forces developers to rely on seed funding from philanthropic sources. With a growing pool of potential investors and unprecedented demand for high-integrity projects, developers may have the power to negotiate and ensure the cost of the project is covered.
Still, reducing the perceived risk for investors will be key. It is the responsibility of developers to communicate to investors that if they want to build capacity and ensure communities benefit, it is going to cost. In addition, governments may encourage investment by providing backstopping to communities seeking accreditation and creating a conducive policy environment; policies that allow payments for ecosystem services and frameworks for secure land tenure, community land management, user rights, and benefit sharing are critical.
Transparency and communication across the value chain are crucial to increase confidence and replicate success.
Transparency in all aspects of project development ensures the benefits claimed by credit sellers align with the actual outcomes, which is central to high-integrity carbon offsets. Demonstrating what is possible and how it is done—by disclosing project design, monitoring methods, the number of credits sold, challenges, and indeed, failures—encourages stakeholders to learn from and improve upon what has been achieved already.
There remain many false narratives about blue carbon projects. For one, that to restore the world’s mangroves simply requires the mass-planting of mangrove species in coastal mudflats. Not only does this set unrealistic expectations for investors, but it also reinforces the use of methods that rarely work. Scientists and developers must communicate the realities of bringing blue carbon projects to fruition and avoid enforcing misconceptions.
“It is really important that there are pathways to ensure that this finance is channelled to where it needs to go, to all actors, to support the local governments which are responsible for supporting the implementation of management plans, and to communities that are forgoing livelihoods.”
– Leah Glass, Blue Ventures
A wave of blue carbon finance is coming as corporations and countries increase their climate ambition. However, firms buying offsets for voluntary net-zero goals are not required to publicly disclose offset usage, and they are hesitant to do so. Similarly, there are concerns that project developers are not adequately divulging where project revenue is spent. Encouraging financial transparency—both in the prices paid for credits and in where the revenue from carbon projects goes—serves to promote cost efficiency, keep consumers informed, and build the confidence of future investors, project proponents, and credit buyers alike.
Watch the full workshop below
Mangrove in Tamarindo Wildlife Refuge, Costa Rica. Image author’s own.