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

Appendix 2. Methodology and detailed results of mangrove conservation economic analysis

Methodology Decisions on the use of mangrove forests often do not factor in the economic value of the services provided by these forests such as potential payments for blue carbon. A more complete analysis of the net benefits of various uses of mangrove forests would account for the wider services that they provide when intact, such as storage of blue carbon (Siikamäki, Sanchirico et al., 2012; Alongi, 2014; Hutchison, Manica et al., 2014; Jardine and Siikamäki, 2014). A preliminary analysis of the net present value (NPV) of the benefits frommangrove conservation in West, Central and Southern Africa is performed in this study, considering the potential payments for blue carbon storage in the below- and above-ground biomass, and topmeter of soil, as well as the opportunity costs of conservation, i.e. the benefits of conversion to agriculture. The benefits that intact mangrove forests provide to the region’s fisheries (Rönnbäck, 1999; Barbier, 2000) are not included in our analysis due to the absence of locally estimated values for West, Central and Southern Africa. This analysis calculated the future values of upfront and annual costs and benefits in present value, using 5 per cent and 8 per cent discount rates and a 20- year time-horizon, the midpoint recommended by UNEP and CIFOR (2014). Following the methodology of Pendleton, Murray et al. (2014), the NPV analysis includes blue carbon payments (i.e. carbon credit revenue), mangrove conservation project establishment costs, and opportunity costs of conservation (i.e. value per hectare of alternative use), but not forest carbon project transaction costs (Galik, Cooley et al., 2012). The alternative use was assumed to be agriculture, for which returns per hectare were collected from IFAD (2001) and adjusted to current dollar years using the CPI (BLS, 2015). For countries without data, adjacent countries were used to estimates agriculture returns (see Table 1 below). The analysis explicitly gives the estimated financial flows from blue carbon payments, based on avoided carbon emissions due to mangrove conservation, two reasonable carbon offset prices of US$ 3 and US$ 5 per Mg CO2e (Goldstein and Gonzalez, 2014) and use of the low end of global mangrove loss rates. Assuming the low-end global conversion rate of 0.7 per cent per year across the region (Pendleton, Donato et al., 2012), we estimate the value of avoided emission reductions from blue carbon conservation using the two carbon prices. Specifically, at the time of conversion we assumed that all biomass (above- and below-ground) carbon is lost in the year a given area of mangroves is converted. Soil carbon is emitted with a half-life of 10 years (Pendleton, Donato et al., 2012). Mean carbon stocks per hectare in the region ranged from 314.4 to 456.1 Mg C / ha. For comparison, according to measurements on

Table 1: Agriculture returns for West, Central and Southern African countries

Returns per hectare (2015)

Returns per hectare (2001)

Country

37.52 459.62 282.74 432.82

*28.00* 343.00 211.00 323.00 *28.00* 28.00 *28.00* 231.00 *168.50* 201.00 *168.50* *175.50* *168.50* *126.00* 153.00 126.00 *168.50* ND *287.00*

Nigeria Guinea Guinea-Bissau Cameroon Gabon Senegal

37.52 37.52 37.52

Sierra Leone The Gambia D. R. of the Congo Angola Côte d’Ivoire Equatorial Guinea

309.54 225.79 269.34 225.79 235.17 225.79 168.84 205.02 168.84 225.79 ND 384.58

Congo Liberia Ghana Benin Togo Mauritania São Tomé and Príncipe

Note: Values marked with * are either from adjacent country, or average of adjacent countries, where data are available

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