Building Blue Carbon Projects - An Introductory Guide

cost-effective and economically and financially feasible than plantation style reforestation techniques. In many cases the economic value of the other ecosystem services will significantly exceed the value of Blue Carbon, especially given relatively low current international demand and prices for such carbon credits. However such values typically do not translate into the willingness of buyers to pay for such benefits, though there are increasing efforts to account for such values within national accounting systems 2 . Under most circumstances and conditions, for those entities contemplating the development of Blue Carbon projects, as with other carbon credit projects, it is important to assemble an expert team. Engaging knowledgeable experts, the relevant carbon standard authorities, and potential donors/buyers of future credits will help determine the eligibility and prospects. It will also help develop estimates of the associated benefits and costs, prior to making final decisions to embark upon project implementation. For example, in the case of the Abu Dhabi Blue Carbon Demonstration Project, such preliminary analysis has indicated that the total value of the suite of Blue Carbon ecosystem services associated with increased conservation of such areas would have a strongly positive NPV, whereas the development of Blue Carbon credits associated with mangrove afforestation and reforestation alone, without accounting for the other ecosystem services, would have negative NPVs. While this analysis is based on a number of assumptions, estimates and extrapolations, and so needs to be further refined before any definitive conclusions can be made, it has been instructive in helping to determine which approaches to explore to ensure the generation of Blue Carbon ecosystem services in the future.

Further information on economic considerations for Blue Carbon can be found in the following:

Green Payments for Blue Carbon: Economic Incentives for Protecting Threatened Coastal Habitats (Murray et al ., 2011) http://nicholasinstitute.duke.edu/sites/default/files/publications/blue-carbon-report-paper.pdf

Key takeaways:

Economic analysis of a Blue Carbon project values the full range of ecosystem services provided by a system and is done in a broad, socio-economic context. Financial analysis is likely to move a project forward based on the expected revenue from carbon credit sales. Economic and or financial analysis may illustrate that other ecosystem services provide more value than the carbon itself.

2 For more information refer to the Wealth Accounting and Valuation of Ecosystem Services (WAVES) Partnership of the World Bank ( www.wavespartnership.org ).

Building Blue Carbon Projects An Introductory Guide

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