Out of the blue: how mangroves and blue carbon can unlock climate change solutions
In this series of blogs, Kita offers an insight to the variety of carbon removal and emissions avoidance project types contributing credits to the VCM. We describe the carbon removal technique, relate the ways in which the methodology operates within the carbon market, outline the potential risks involved and highlight the ways in which insurance can reduce the risk profile and contribute to progress for the approach in question.
Our aim is to demystify these methodologies and clarify their position within the VCM. We hope that greater transparency and understanding of carbon removal technologies helps to increase confidence and drive investment towards these projects.
In this post we consider mangroves and blue carbon.
What is blue carbon? What does it do?
Blue carbon refers to the carbon dioxide that is captured and stored by coastal and marine ecosystems. The term "blue carbon" distinguishes these coastal ecosystems from "green carbon," which refers to the carbon stored in terrestrial forests. Blue carbon ecosystems are found in coastal areas and are influenced by tidal movements, which play a crucial role in the carbon capture process. While these ecosystems have a smaller global footprint in terms of the area they cover, their deep, waterlogged soils can bury more carbon per acre compared to a tropical rainforest.
Blue carbon typically includes ecosystems such as mangroves, seagrasses, and salt marshes that account for almost 50% of the carbon stored in ocean sediments. Seagrass beds are comprised of flowering plants that thrive in salty marine environments. Mangroves, on the other hand, are trees, shrubs, or palms that predominantly inhabit coastal swamps, which are susceptible to saltwater flooding during high tide. Salt marshes, however, are densely populated with salt-tolerant grasses, herbs, and/or shrubs, flourishing in the transitional zone between land and open saltwater.
Kelp (a kind of seaweed) has also gained popularity for storing substantial amounts of carbon. However, seaweed and macroalgae are tricky as they grow in rocky coastal areas with very little build-up of carbon-rich soil. The majority of the carbon that kelp sequesters gets transferred to other locations as fragments of kelp detach and float away. This carbon disperses to other vegetated coastal ecosystems, neighboring sediments on the coastal shelf, and even reaches the deep ocean. Once buried in the seafloor sediments of the deep ocean, kelp carbon can endure for thousands of years.
Collectively, these ecosystems have an exceptional capacity to sequester and retain carbon, making them important natural tools for mitigating climate change. However, the carbon-storing capacity of these ecosystems are of dual nature. When protected or restored, they hold the potential to serve as a valuable instrument for offsetting carbon dioxide emissions, particularly benefiting island nations and developing countries with relatively low greenhouse gas emissions. Conversely, when these ecosystems are disturbed or drained, they can release substantial amounts of carbon dioxide into the atmosphere. Overall, due to the nature of these ecosystems and their low risk of wildfire due to the environment in which they exist, they offer longer permanence.
Beyond carbon sequestration, blue carbon provides other additional benefits such as:
shoreline protection by acting as natural buffers and protecting coastlines from erosion and storm surges
biodiversity support by housing a diverse range of marine and terrestrial species and supporting critical habitats for various plants and animals
improvement in water quality by filtering pollutants and nutrients from the water
supporting fisheries as many species of fish use coastal habitats as nursery grounds
Despite their numerous benefits, coastal ecosystems face significant threats from intense development pressure and climate change. Over the years, substantial portions of salt marshes, mangrove forests, and seagrass meadows have been lost due to human activities. Climate change-induced rising seas necessitate the inland migration of coastal vegetation, but unchecked development impedes their movement, endangering the ecosystems. According to the IPCC, 25-50% of coastal habitats have disappeared over the past century. The degradation and destruction of these habitats can release significant amounts of stored carbon back into the atmosphere, contributing to global warming. Assigning carbon credits and unlocking finance could provide monetary value to these ecosystems, helping withstand development pressures and preserving their multiple benefits for both people and nature.
How do blue carbon projects relate to the carbon markets?
According to the NOAA, current studies suggest that blue carbon ecosystems such as mangroves produce massive amounts of oxygen and sequester ten times more carbon than temperate forests. They can meet 12 of the 17 UN SDG goals, providing a range of co-benefits.
Blue carbon projects and blue carbon credits are typically covered by a combination of existing carbon accounting standards and methodologies, along with some specialised frameworks that focus on coastal and marine ecosystems. Several global standards certify emission reductions relating to blue carbon such as Verra’s Voluntary Carbon Standard (VCS), Climate Action Reserve (CAR), American Carbon Registry (ACR) and Plan Vivo. The most prevalent methodologies include Verra’s VM0024 (Methodology for Coastal Wetland Creation), VM033 (Methodology for Tidal Wetland and Seagrass Restoration) and VM007 (REDD+ Methodology Framework) for conservation and restoration. The ACR offers two blue carbon methodologies – the Restoration of Pocosin Wetlands and the Restoration of California Deltaic Coastal Wetlands. While Gold Standard has pre-approved blue carbon technologies, these are yet to be developed and is a key component of Gold Standard’s 2025 Strategy.
Additionally, OxCarbon, a not-for-profit spin-out by Oxford University Innovation, accepts science-based carbon estimation methodologies that satisfy the OxCarbon Principles. Their first active project is a Mangrove Restoration and Conservation Project in North Sumatra (001-OxC) developed by the Global Mangrove Trust, covering 2,305 ha.
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Located on the south-east coast of Pakistan, Delta Blue Carbon is the world's largest blue carbon project. With a project area spanning 350,000 hectares, the area is bigger than the country of Luxembourg. As the largest mangrove restoration project in the world, tens of millions of mangrove seedlings have been re-planted, restoring more than 86,000 hectares of degraded mangrove forests and tidal wetlands. Over the next 60 years the wetlands will sequester an estimated 142 million tonnes of CO2e. The project aligns with broader sustainability goals, offering resilience to coastal communities against rising sea levels and extreme weather events. Through a combination of scientific research, community engagement, and policy advocacy, the project strives to highlight the significance of blue carbon in the fight against climate change while fostering collaboration among various stakeholders for a more resilient and ecologically balanced future.
What are the specific risks in regard to blue carbon projects?
The methodologies identify several key risk factors that can affect the quality and environmental integrity of blue carbon projects. These risk factors include:
Additionality: This refers to the degree to which the project is additional to what would have happened in the absence of the project.
Leakage: The project should address potential leakage i.e. where emissions are displaced to other areas due to the project's activities. Ensure that the methodology used includes appropriate accounting mechanisms to prevent leakage – both activity displacement (implementation of a project in one location leading to the displacement of environmentally harmful activities to another location) and market leakage (changes in the supply and demand of goods and services influenced by a project resulting in increased environmental impacts outside the project's scope)
Permanence: Assess the project's strategies for addressing permanence risks, such as sea-level rise or erosion, droughts and upstream management. Additionally, some of the major catastrophe risks for blue carbon projects include typhoons and tropical storms. In certain areas, there is a high inherent risk if there is an absence of measures to prevent degradation from saltwater intrusion, which is a key driver of degradation. Look for robust monitoring and mitigation plans to ensure the stored carbon remains sequestered over the long term.
Baseline: This refers to the level of emissions that would have occurred in the absence of the project. Accurately determining the baseline emissions is essential for measuring the carbon mitigation achieved by the project.
Quantification: This refers to the degree to which the carbon sequestration achieved by the project can be accurately measured and verified. If a project does not account for degradation, this could lead to over-crediting risks. Further, as part of the ecosystem’s cycle, organic matter gets buried, some of which is metabolised and released into the atmosphere as methane. This could pose a high over-crediting risk if not monitored and measured properly.
Perceived risks: This refers to any additional risks or uncertainties associated with the project that could affect its environmental integrity or social acceptability, such as impacts on biodiversity or local livelihoods.
Co-benefits: Recognise whether the project and associated methodology includes guidelines for assessing and crediting co-benefits such as biodiversity conservation, community development, and ecosystem services.
Policy risks: While some countries have policies which aim to protect these ecosystems, it does not always translate to conservation on the ground. Degradation of blue carbon systems such as mangroves at a national level implies that these policies are ineffective.
Addressing these key risk factors ensures that these projects deliver real and additional climate benefits while minimising unintended negative impacts.
Can insurance help manage these risks?
Insurance can help manage risks associated with these projects in multiple ways:
Unavoidable risks, like natural catastrophes, can have great impact on nature-based solutions. Insurance can build resilience when unexpected occurrences strike.
Avoidable risks, like acts of fraud or negligence by project developers, or the insolvency of the project developer, can happen in carbon projects across multiple types. Insurance can protect buyers of carbon credits against these types of challenges impacting on their carbon purchases.
Carbon risks, like reassessments to baselines or changes/invalidation of carbon standards/methodologies are broader risks factors in the carbon markets that can impact nature-based projects. Insurance can perform a comprehensive assessment of the project, including risk management and compliance with standards, providing financial protection and coverage against these risks.
Risks specific to blue carbon projects such as erosion and sea-level rise, non-native invasive species, social and economic factors, policy and governance challenges, market, and financial risks as well as the impact of changing climatic conditions. Insurance can perform a detailed risk assessment and provide protection against these particular hazards.
Conclusion
Coastal ecosystems play a crucial role in carbon capture while offering a range of other vital benefits. These environments support diverse marine and terrestrial life, including fish, reptiles, mammals, birds, and invertebrates. For impoverished nations, blue carbon ecosystems sustain subsistence livelihoods like fishing, while in wealthier countries, they enhance commercial fisheries' productivity. Moreover, coastal ecosystems act as natural buffers, stabilising shorelines, and protecting against erosion, safeguarding human cities and infrastructure. In addition, they aid in rainwater absorption and runoff filtration, ensuring water quality protection.
Recognising these advantages, some national policies and international collaborations already exist to conserve coastal wetlands and blue carbon ecosystems. Utilising these established frameworks could facilitate integrating blue carbon conservation into existing practices more easily than developing new policies for ocean-based carbon capture and storage methods.
Conserving and restoring blue carbon ecosystems through initiatives like blue carbon projects is vital not only for climate change mitigation but also for the preservation of valuable coastal habitats and the diverse life they support, thus creating a sustainable and resilient future.