Blue Carbon Financing of Mangrove Conservation in the Abidjan Convention Region: A Feasibility Study

carbon at a lower market-average price of US$ 4.90, with REDD+ credits applicable to blue carbon averaging US$ 4.20 according to 2013 data from Forest Trends (Goldstein and Gonzalez, 2014). So while US$ 10 per ton is achievable on the compliance market, the voluntary market, where blue carbon credits could more likely be traded, are still below that level. This does not mean that the blue carbon projects are not viable at the lower price range of carbon, but there must be other revenue streams associated with the project (e.g. tourist revenues) to cover some of the higher costs of the project, such as large-scale restoration activities. In general, carbon market prices and trading volumes have fluctuated over the past few years. Experts, however, are optimistic about future carbonmarket developments both in terms of volume and prices (Goldstein and Gonzalez, 2014). Regulated carbon markets are driven by an arbitrary cap on emissions and the marginal cost of carbon offset alternatives, for example, from the power sector. The price of carbon may also be bolstered by recent global political events, such as the United Nations Conference on Climate Change (COP) 21, held in Paris in December 2015. This COP meeting sent a strong signal to the global

decade and may, through payments for blue carbon storage, provide a channel of international support to West, Central and Southern African countries in their goals for conserving mangrove ecosystems.

The following paragraphs provide a brief description of some of these mechanisms (see Appendix 1 for the full list).

Potential viability of blue carbon payments Regardless of the specific market, private carbon finance offers a potentially viable source of blue carbon payments. Economic analyses have estimated that large-scale conservation of the blue carbon stocks in mangroves is feasible, even at relatively low carbon prices such as US$ 10 per ton of CO 2 equivalent, while also taking into account opportunity costs (i.e. the revenue streams from economic activities on converted mangrove habitats) (Murray, Pendleton et al., 2011; Siikamäki, Sanchirico et al., 2012). To put US$ 10 per ton into perspective, at the end of 2015 carbon was trading at US$ 12.70, US$ 8.45 and US$ 5.50 per metric ton on the California compliance carbon market, European Union Emissions Trading Scheme (EU ETS) and Regional Greenhouse Gas Initiative (RGGI) markets, respectively. The voluntary markets have been trading

Figure 4: Main climate (dark) and biodiversity-related (light) finance mechanisms for blue carbon payments Source: (Herr, Agardy et al., 2015), Figure 3, page 14.

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