Adding monetary value to mangrove restoration projects through carbon credits

Abstract

One prominent emission reduction mechanism is the Voluntary Carbon Market. Carbon offsetting through the reforestation of mangroves possesses a significant potential for climate change mitigation, as their restoration efforts result in the substantial sequestration of carbon. Besides carbon benefits, restoring mangrove ecosystems also provides multiple co-benefits, such as coastal protection. This study has therefore examined how carbon credits can add monetary value to mangrove restoration projects, to increase project development. This was investigated through literature reviews, expert interviews, a stakeholder analysis, and a feasibility frontier. The study presents a comparison between three distinct certification standards that can generate carbon credits for mangrove projects, namely Gold Standard, Plan Vivo, and Verra. This research also identifies the key stakeholders involved in the mangrove carbon offset ecosystem and evaluates the cost-effectiveness of using a certification standard to generate carbon finance. It was found that average mangrove restoration projects are cost-effective over a 25-year period based on income from VCM credits alone, but require the inclusion of co-benefits to break-even with current mangrove restoration carbon prices if a 5-year payback period is required. Challenges that hinder project development exist in not overestimating carbon storage due to the inherent difficulty of accurately accounting for additionality, permanence, and leakage. Other challenges exist in the high costs, especially the high transaction costs for mangrove restoration offset projects, as well as low carbon prices in the volatile carbon market. Furthermore, a common inadequacy or insufficiency in stakeholder involvement was found in projects, whilst local stakeholder involvement was found to be crucial for effective project development. The findings were then applied to a case-study in Northen-Java, Indonesia, that applied the Building with Nature approach. These results indicate that full financing of the case-study through carbon credits is not achievable, and additionally, maintaining environmental integrity cannot be guaranteed. Overall, this research serves as a valuable guide for mangrove restoration projects seeking to utilize the carbon market. It provides insights into the certification standards, the cost-effectiveness of these projects, and identifies potential hurdles that may arise.