Unlocking the Potential of Blue Carbon Credits in Wetlands

June 30, 2023By Elke Heiss

Quick quiz. Which country has the longest coastline? 

It’s Canada. U.S.A., Russia, and Indonesia are a distant two, three, and four. Canada logs in at 265,523 km, and the U.S.A. and Russia come in at 133,312 km and 110,310 km. Globally, coastal wetlands are nearly the size of Greenland.

Wetland (and peatland) carbon credits are lesser known than those in forestry or agriculture, see our carbon credit intro blog . But that is changing quickly. Wetlands can sequester carbon annually at a rate ten times greater than mature tropical forests and store carbon three to five times more per equivalent area than tropical forests.

One possible reason for lesser visibility is that the carbon removed and stored is below ground.
Even so, wetlands represent an opportunity for blue carbon credits that can be highly valuable when appraised appropriately.

Wetlands as a Source of Blue Carbon

Coastal wetland ecosystems – think salt marshes, mangroves, and seagrass beds – rapidly grow, and in doing so, they capture large amounts of CO2. Also, its soil decomposes slowly, due to low oxygen levels, offering hundreds or thousands of years of carbon storage.

Organic carbon from decaying plant leaves, woods, roots, and animals captured and stored in coastal ecosystems is often called blue carbon. A study by The Conservation Fund found that wetlands store 81 to 216 metric tons of carbon per acre, depending on their type and location. 

However, these wetlands and peatlands are declining in number and health. Blue carbon credits can help with the vital financing needed to restore and prevent further loss.

Wetland and Peatland Projects

While coastal wetlands are vulnerable to agricultural use and coastal development, they are also endangered by rising sea levels. Projects that can aid in restoring and revitalizing wetland and peatland areas include:

  • Eliminating or reducing wetland drainage and other practices that lead to dewatering.
  • Fire control, especially in areas experiencing prolonged droughts.
  • Allow natural revegetation to occur or restore diverse vegetation to prevent the proliferation of invasive species due to climate change.
  • Control peat harvesting and other practices that remove carbon.
  • Promote re-wetting and restoration of peatland to prevent fire risk and to promote a return to higher carbon sequestration levels.

A 2021 UNESCO Marine Heritage Report notes that these blue carbon ecosystems are the most intensive carbon sinks in the biosphere. Additionally, conversion and degradation of these ecosystems can release billions of tons of CO2 and other greenhouse gasses into the atmosphere. 

The Value of Blue Carbon Credits

Blue carbon credits are worth two to three times more than typical carbon credits – largely because of the significantly higher sequestration and additional ecosystem benefits. 

Remember Canada, the country with the longest coastline? Early estimates suggest Canada’s blue carbon represents a US$3.5 billion market opportunity. In addition to the carbon, the ecosystem benefits include helping fisheries become more resilient, rewarding conservation, and improving national defense by mapping seabeds and coastlines.

Globally, the blue carbon market is estimated to be worth over US$190 billion – that’s 81 million metric tons of carbon! Similar to green carbon credits, blue carbon is based on one carbon credit for every 1 tonne of CO2 emission reduction.

However, as the Asian Development Bank (ADB) points out, “The absence of a mechanism to accurately quantify carbon in an ecosystem means developers do not receive reliable estimates of their financial returns.”

Accurate and Blue Carbon Valuation Needs Data

In this blog, the different tiers used to determine the value of a carbon credit are outlined. Tier 3 is the highest as the carbon credits are validated and verified by a third-party organization using rigorous monitoring and measurement. They also have clearly defined additionality and permanence. 

Projects that can generate Tier 3 carbon credits also have additional social and ecological benefits. We mentioned revitalizing fisheries as an example of a social benefit.

Keep in mind that not all wetlands and peatlands are the same. A peatland in North America or Russia has different environmental and topographical conditions than a tropical peatland in Southeast Asia. Each natural asset needs to be quantified and verified. Only then can the tier level be assigned and the value of the carbon credit applied. Quantifying and verifying requires data collection, monitoring, and analysis.

It’s All in the Data

Today, governments and landowners sell blue carbon credits to corporations or other entities looking to offset their carbon footprint. Income from the sale of blue carbon credits is used in conservation projects or as additional revenue. Owning carbon credits of the highest value is desirable. On the demand side, corporations and financial institutions want assurances that their investments are sound.

Many third-party verification bodies exist that rate and value carbon credits. However, accurately quantifying and valuing blue carbon credits requires a meticulous approach. Each wetland and peatland has unique environmental characteristics demanding data-driven assessments and verifications. These bodies must have accurate and timely data so that the carbon credit is valued correctly for both the buyer and seller.

Until now, no single system can collect and continually monitor environmental data. Laconic’s Environmental Intelligence platform, SADAR™, is the first and only comprehensive system that collects and analyzes environmental data providing the insights needed for assessing, monitoring, and analyzing the data.

Natural Capital Monetization is a component of Laconic’s Environmental Intelligent Services. The service assists corporations, sovereign nations, financial institutions, and their clients in financing conservation and environmental infrastructure projects that restore and revitalize wetlands and peatlands. 

Learn more about Laconic’s Environmental Intelligence platform, SADAR, and our Natural Capital Monetization service.

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