At COP27, a global coalition of ocean leaders along with Conservation International and Salesforce unveiled a new set of guidelines aimed at creating investable and high-quality blue carbon projects. This initiative comes at a time when the demand for blue carbon credits is increasing, with corporations such as Apple, Microsoft, Ingka, Respira and Trafigura, involving themselves in these projects. A term for carbon captured by the world's coastal and marine ecosystems, blue carbon is gaining prominence due to its vast potential to sequester carbon. Coastal ecosystems, such as mangroves, can store up to ten times) more carbon than terrestrial forests, making them attractive for companies looking to offset their carbon emissions.
Advancements in remote sensing, data analysis, and monitoring technologies are facilitating better measurement and verification of the impact of carbon sequestration projects, proving the benefits associated with them. This, in turn, is bolstering investors' and buyers' trust in these projects. Consequently, prices of these credits are currently high due to overwhelming demand, far outstripping the supply.
Learn more about carbon credits in our blog here.
Assessing the Importance of Blue Carbon in Combatting Climate Change
Blue carbon projects hold tremendous potential in addressing the climate crisis as coastal ecosystems such as mangroves, tidal marshes, and seagrass meadows act as carbon sinks by capturing and holding carbon. Despite their smaller size compared to forests, coastal systems are capable of sequestering carbon at a much faster rate and over much longer periods of time. According to the Blue Carbon Initiative, although coastal habitats only cover 2% of the ocean's surface, they store 50% of the carbon in their sediment, creating a massive carbon sink that amounts to 75 gigatons. This is equivalent to eight years of CO2 emissions caused by the use of fossil fuels.
A weforum analysis puts forth insightful numbers reflecting the benefits attached with mangroves. It states: “Mangroves have been estimated to prevent more than $65 billion in property damages and reduce flood risk to some 15 million people every year, with overall ecosystem service benefits estimated to fall between $462 billion and $798 billion per year. In fact, economic analysis shows that the benefits of mangrove restoration and conservation could outweigh the costs by 3:1.”
At present, conservation and restoration of mangroves, salt marshes, and seagrass meadows are the most common types of blue carbon projects but several new approaches and solutions too are emerging. This includes the protection and restoration of seaweed forests, as well as strategies to reduce bottom trawling and restore marine fauna.
Despite their importance, oceans and coastal ecosystems have come under pressure from atmospheric and marine warming, habitat destruction, pollution, and the impacts of industrial activity, putting them under threat. According to the Intergovernmental Panel on Climate Change, about 25-50 percent of coastal habitats have disappeared in the past century. These destructive factors undermine the role of coastal systems in slowing climate change, as they often lead to a significant loss of biodiversity and the release of hundreds of years of emissions that had been sequestered underwater. By helping prevent this, the role of blue carbon credits becomes even more critical.
Assessing its Growing Demand
While relatively nascent compared to land-based sequestration projects, there's a growing demand for blue carbon credits, leading to a proliferation of coastal rehabilitation programs. Besides companies, countries like the Bahamas and Indonesia too are involving themselves in blue carbon trading. The growing interest is linked to the many benefits of restoration projects, which qualify them as high-quality credits. Mangroves, for instance, are more durable and have longer permanence in comparison with tropical forests.
Ben Scheelk, program officer at The Ocean Foundation, stated in this regard: "That carbon has been there for hundreds, if not thousands, of years, and will continue to accumulate and stay there. You immobilize [it], essentially," he said. "So, I think that's really attractive from a buyer's perspective."
Further, blue-carbon solutions are particularly rich in co-benefits, including biodiversity conservation, coastal protection, supporting sustainable fisheries and providing livelihoods for local communities, improving water quality and protecting curtal heritages.
MRV-related Challenges in Blue Carbon Market
Efficient Monitoring, Reporting and Verification infrastructure, however, is important for the market to meet its true potential as it can increase the confidence of investors and buyers by demonstrating real sequestration potential and attracting more risk-tolerant financing. However, blue carbon projects face several MRV-related challenges, such as difficulty in measuring carbon stocks, limited understanding of the processes that affect carbon storage in blue carbon ecosystems, expensive monitoring techniques and lack of consistent standards for MRV activities among others.
At the heart of most of these challenges lies the data problem. First, the lack of baseline data makes it difficult to monitor changes over time. Establishing a baseline for carbon stocks and fluxes in a given coastal ecosystem is crucial for quantifying the carbon sequestration potential of restoration and conservation activities. In many cases, baseline data is incomplete, outdated, and unavailable, which makes it difficult to accurately measure the impact of blue carbon projects.
Second, there are challenges with regard to data quality and consistency. Ensuring data quality and consistency is essential for accurate and reliable carbon accounting. However, data may be subject to measurement errors, biases, and inconsistencies due to various factors such as equipment malfunctions, human error, or environmental variability. Collecting data is also challenging, as blue carbon projects are usually located in remote and hard-to-traverse areas.
Third, carbon sequestration in coastal ecosystems occurs over long timescales and requires long-term monitoring that can continue for decades to track changes in carbon stocks and fluxes accurately.
Satellite Technology: Measuring Real Impact and Directing Growth
By making up for the shortcomings of traditional MRV methods, remote sensing technologies are revolutionising the monitoring, reporting and verification processes in the carbon market. Satellite technology specifically minimises some of the MRV-related challenges in blue carbon projects as they can track carbon restoration across temporal and spatial scales at high levels of accuracy. Satellite-based remote sensing thus provides valuable data which can be used to estimate changes in vegetation cover, biomass, and other ecosystem indicators, that are important for evaluating carbon stocks and assessing the health and productivity of blue carbon ecosystems. To learn more, read our blog “Leveraging Satellite-Based MRV for Carbon Projects.”
Furthermore, they are capable of scanning very large areas, including remote locations which were previously inaccessible. Its value in this regard is articulated by N Vasudevan who discusses the role of satellite data in a project undertaken by the Maharashtra state mangrove cell for tracking the health of mangrove forests using real-time satellite remote sensing data.
N Vasudevan, additional principal chief conservator of forest, state mangrove cell, states in this regard, “Many of the mangrove patches in the state, especially denser areas are inaccessible by foot or boats. We can see the edge of the creek but owing to degradation and siltation, it is difficult to enter these areas…We need an eye in the sky or more advanced technology to monitor the mangrove cover. This will help us to deploy manpower and resources from our space organisations and mangrove cell optimally.”
Further, by providing verifiable data, it increases the credibility of the blue carbon offset market. In turn, this can help increase confidence in the market, which is plagued by a trust deficit and can boost investment in the sector. To know more about how satellite-based MRV can bridge the trust deficit in the carbon market read our blog here.
Abhilasha Purwar, CEO of Blue Sky Analytics, remarked, "The solution to the ongoing climate emergency lies in boosting scientifically-proven approaches, like blue carbon sequestration. The good news, however, is that carbon markets are becoming blue at a rapid pace. Despite being at a nascent stage today, the demand for blue carbon credits far outweighs the supply. Satellite technology can play a significant role in driving the growth of this market. With the aid of satellite imagery, researchers and practitioners can now inventory the planet's surface, monitor changes, and gain a never-before-seen understanding of ecosystem dynamics, revolutionising conservation efforts.”
It also helps stakeholders across the market, such as:
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Buyers: Independent and objective information can be supplied through monitoring and verification, which can validate that a project is achieving its intended impact. This, in turn, promotes transparency and accountability in the reporting process by providing dependable and consistent data.
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Project developers: By providing baseline data to monitor and assess the state of blue carbon ecosystems prior to project implementation, it becomes possible to track and evaluate changes in these ecosystems over time, which enables a comprehensive understanding of a project's impact on the environment and identification of areas where additional measures may be necessary.
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Verification bodies: The use of satellite technology can be crucial in verifying blue carbon projects, as it offers impartial and reliable data that can confirm the accuracy of reported information, pinpoint areas that need on-site verification, and ultimately reduce verification time and costs. Additionally, this technology allows for the continuous tracking of a project's impact, rather than solely at its conclusion.
Utilization of satellite-based MRV can thus be instrumental in unlocking the full potential of blue carbon markets, which can expand the supply of high-quality carbon credits. This plays a crucial role in enabling companies to achieve their net-zero and nature-positive goals and in promoting accountability and transparency in the process while safeguarding some of the world's most valuable ecosystems.
