Building Blue Carbon Projects - An Introductory Guide

2. the estimated volume of carbon credits that a given project could develop; 3. the timeframe for developing the credits; and 4. the associated costs.

They also tend to estimate the level of risk involved, or the likelihood that the project can be successful. Then they estimate the likely revenue that they can obtain, typically based on a range of  future  carbon  credit  prices,  given  historical market  conditions  and  trends,  and  the  investors’   sense of future demand and market dynamics. Such analysis often incorporates various scenarios, typically a  “pessimistic”,  “most  likely”, and  “optimistic”  scenario. If the project is determined to be sufficiently attractive by the investors, they would then move forward with project development activities, committing their financial and human capital. Most investors choose to do this in phases and then assess whether to continue with full implementation based on if the reality they experience as they move forward, and if their assumptions about market conditions and other key variables, comply sufficiently with the projections in the project design. In most cases, if there is significant variance between the projections and the actual experience, the project is modified based on new information and its feasibility reassessed, or, in the worst-case scenario, abandoned. There are often important considerations of how local communities living in and or adjacent to projects sites should benefit. Interacting with these communities and or those representing their interests is essential to ensure genuine acceptance of what is proposed and the long-term viability of any project. Such interactions also provide the opportunity to begin capacity building for coastal communities: the capacity to participate in the process, frame the project, and implement and manage the project over time. Government approval is also required for private sector and or other independent actors involved in the development of restoration projects, which also tends to add additional uncertainty, time, and costs. These costs are in addition to those needed to meet the requirements of international carbon credit standards. It is worth noting that these processes

and consultations often entail significant extra time and costs for government agencies and project developers. In very general terms, for Blue Carbon projects doing either conservation or restoration there tend to be economies of scale-involved. Thus, working in larger areas is typically more cost-effective than working in smaller areas. Also, where carbon stocks and sequestration rates are relatively high, and where the protected area establishment, management and opportunity costs are relatively low, the projects are likely to be more economically and financially feasible. For mangrove reforestation and afforestation projects, supporting practices that assist natural regeneration or expansion of these areas, typically by focusing on hydrological management issues, tend to be more

“We  regard Blue Carbon  credits as offering a win-win-win scenario for responsible investors. They represent a scientifically robust route to offset carbon emissions, provide much needed sustainable investment in sensitive, biologically diverse coastal ecosystems, and provide essential development support to the communities that rely on  them.”

Nigel Winser Executive Vice President Earthwatch Institute

Building Blue Carbon Projects An Introductory Guide

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