Part two of a two-part series on blue carbon. Read part one: Blue Carbon Pioneer Says Mangrove Tree Is the 'Best Climate Machine'
Proliferated by a flurry of announcements of projects and funding initiatives to protect coastal ecosystems, blue carbon is the new buzzword in the fight against climate change.
And rightly so, say experts.
"Blue carbon projects produce some of the highest quality carbon credits and are hence realizing some of the highest carbon prices," Emily Pidgeon, vice president of Ocean Science and Innovation at Conservation International, said in an email to OPIS this month.
Prices range from about $18/mt to $29/mt in the voluntary carbon market, according to OPIS pricing data.
What is blue carbon?
Carbon captured from ocean and coastal ecosystems, including mangroves, tidal marshes and seagrass meadows.
"They deliver carbon mitigation value while simultaneously providing verifiable biodiversity, ecological and social benefits," Pidgeon said. "Blue Carbon credits, therefore, have a unique place in the portfolio of carbon credits that is available."
Blue carbon assets include mangroves, tidal marshes and seagrass meadows, all of which are among Earth's most efficient absorbers and long-term storers of carbon, according to the United Nations Educational, Scientific and Cultural Organization (UNESCO).
Asked whether offset project developers should focus on protecting coastal ecosystems instead of tropical forests, Pidgeon said all nature-based solutions are essential to solving climate change.
Blue Carbon Wave
Efforts by UNESCO and non-governmental organizations have helped raise awareness about the benefits of protecting the ecosystems, sparking a global blue carbon rush.
There were several developments last month alone:
- On March 29, the Blue Carbon Accelerator Fund (BCAF) launched its Readiness Support call for project proposals. The BCAF was established by the International Union for Conservation of Nature in partnership with Australia. It is a dedicated funding scheme to support blue carbon restoration and conservation projects in developing countries and help pave the way for private sector finance.
- On March 10, global commodities trader Trafigura and two other buyers snapped up the first tranche of blue carbon credits comprising 3 million units from the Delta Blue Carbon Project (DBC-1) in Pakistan. Spanning 865,000 acres of tidal wetlands, an area bigger than Luxembourg, it is billed as the largest mangrove forest restoration project in the world.
- On March 1, Canada's Carbon Neutral Royalty announced an agreement with Myanmar-based Worldview International Foundation (WIF) to develop blue carbon projects that could generate more than 70 million verified carbon units over their life. A pioneer in blue carbon projects, WIF has planted more than 21 million mangrove trees in Asia and Africa in the past decade.
"There is huge momentum for blue carbon with countries and companies pledging support in the millions," said Pidgeon, who is also affiliated with the Blue Carbon Initiative, a UNESCO-backed global program to mitigate climate change through the restoration of coastal ecosystems.
"But we want to see that growth happen responsibly and support high-quality project development that is fair, equitable and values all the services these ecosystems provide," she said.
To achieve quality, Pidgeon said, the price of blue carbon needs to be commensurate with the effort.
That view is shared by Fanny Douvere, head of World Heritage Marine Programme at UNESCO. She believes prices need to be set correctly and applied consistently.
"Too low prices don't bring the needed result for the local ecosystem and community," Douvere told OPIS last week.
Demand Outstrips Supply
And all signs point to higher prices as demand is outstripping supply.
"The demand for blue carbon credits is incredible, but the supply is limited," said Nadeem Khan, founder and CEO of Indus Delta Capital, which jointly owns DBC-1 with the Sindh provincial government and the global climate change investment and advisory firm Pollination.
"During our sales process, we had 64 counterparties and I still get daily enquiries from interested parties," Khan said this week in an email. "I think blue carbon is in demand for its added environmental co-benefits. Nature-based projects that sequester carbon are also more transparent and have more robust regimes to demonstrate additionality and permanence."
The project will sequester an estimated 142 million metric tons of carbon dioxide equivalent over its 60-year lifetime, Khan said.
Carbon Sink vs. Carbon Source
The coastal ecosystems offer both an opportunity and a challenge: opportunity, because they store up to five times more carbon than the most carbon-rich terrestrial ecosystems; challenge, because if they are not conserved, they will emit the carbon they stored.
"Blue carbon assets are among the most intensive carbon sinks in the biosphere, but they could also release billions of tons of CO2 and further exacerbate climate change if they are not well protected," Douvere of UNESCO said in an interview from Paris where the UN agency is based.
UNESCO said in a report released last October that its 50 Marine World Heritage sites, while making up less than 1% of the global ocean area, host 21% of the world's coastal ecosystems and 15% of the blue carbon stored in the world, equivalent to 10% of global greenhouse gas (GHG) emissions in 2018.
The sites include the Sundarbans shared by India and Bangladesh, which Douvere called the largest mangrove ecosystem on the planet, as well as the Great Barrier Reef in Australia and the Galapagos Islands in Ecuador.
Blue carbon ecosystems, however, face a wide range of conservation threats, from local pressures to global impacts such as marine plastic litter and climate change. Scientists say that they are among the most threatened ecosystems on Earth.
"It is very critical to protect them because what we saw from UNESCO's research is that those carbon assets are capturing CO2 when they are intact," Douvere said.
She said when they are not well protected, they reverse their function and start releasing carbon back into the atmosphere.
In a recent commentary published in the journal Science, Douvere said that the return on investing in blue carbon ecosystems is clear, meaningful and immediate.
"We can't afford to wait," she wrote.
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