Page
20
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
