Blue carbon: the untapped potential of coastal ecosystems for climate action

Blue carbon ecosystems offer a powerful, yet underfunded, solution for climate action, biodiversity conservation, and community livelihoods along the world’s coasts.

A recent webinar highlighted the enormous potential of blue carbon ecosystems to accelerate climate solutions while delivering critical biodiversity and community benefits. Despite their exceptional carbon storage capacity, these coastal ecosystems remain significantly underfunded in climate strategies.

The blue carbon advantage

Blue carbon ecosystems demonstrate remarkable efficiency, sequestering carbon up to 10 times faster per unit area than terrestrial forests. The carbon captured is primarily stored in waterlogged soils, where it can remain locked for hundreds to thousands of years. Beyond carbon benefits, these ecosystems provide coastal protection from flooding and erosion while supporting the livelihoods of millions of people worldwide.

Yihan Wang from Terraformation emphasised that mangrove ecosystems alone provide habitat for over 1,500 plant and animal species globally, making them crucial for both biodiversity conservation and community support. However, these ecosystems are disappearing rapidly, requiring an 85% increase in current funding levels to meet international conservation targets by 2030. Wang also highlighted the importance of helping communities secure land tenure and ownership rights, and ensuring that benefits go beyond carbon credits to include legal land ownership, infrastructure, education, and other socio-economic gains.

Project implementation: lessons from the field

Terraformation's Ghana project serves as a model for large-scale blue carbon initiatives. The project aims to restore 2,300 hectares of mangroves in its first phase, with potential expansion to 10,000 hectares. Over its 40-year lifetime, the full-scale project could sequester 5 million tons of carbon while providing substantial community benefits.

The project's design prioritises community leadership, with 60% of full-time positions filled by women and 70% of total revenue shared with local communities, an unprecedented level of benefit sharing. The initiative includes aquaculture development, skills training, and establishment of a community trust fund supporting infrastructure, education, and healthcare.

Amy Schmidt from Conservation International described their Vida Manglar Carbon Project, which protects 7,500 hectares of mangroves and expects to generate close to one million tons of CO2 equivalent in emission reductions over 30 years. The project works closely with local communities to prevent mangrove loss from pressures like cattle expansion and timber extraction while offering alternative income-generating opportunities. Both projects are Verra verified and demonstrate the potential for blue carbon initiatives to combine ecological restoration with socio-economic development.

Unique challenges and solutions

Blue carbon projects face distinct challenges compared to terrestrial carbon initiatives:

Scale and location: Blue carbon ecosystems are often small, highly specific coastal habitats that need precise conditions to thrive and are frequently located in densely populated areas.
Ownership and governance: Multiple stakeholders, overlapping jurisdictions, and varying project priorities require careful collaboration, transparency, and shared mission alignment.
Measuring and managing carbon: The dynamic nature of coastal ecosystems and upstream influences complicate carbon accounting and project sustainability.

Schmidt noted that effective solutions require close coordination with governments, community engagement, and well-structured benefit-sharing mechanisms to prevent conflict and ensure equitable outcomes. Ledama Madisa from Kind World Project added that communities must be supported to manage resources confidently, with traditional knowledge incorporated into project design

Financing and market development

The panellists identified funding as the primary barrier to scaling blue carbon projects. Wang suggested several solutions, including innovative financing mechanisms that combine concessional capital from foundations and development banks to de-risk private investments. There's urgency for early investment, as blue carbon credit prices have reached record highs.

Whitney Johnston from Salesforce highlighted the importance of early movers committing to high-quality projects, supporting enabling conditions through policy development, and collaborating through initiatives like the Symbiosis Coalition. This advanced market commitment, launched by major tech companies, aims to simplify market access through shared due diligence processes and unified quality criteria.

Salesforce has developed the Octopus Platform through its partnership with the Ocean Risk and Resilience Action Alliance, which matches investors to ocean-based projects based on risk-return profiles, geography, and investment size requirements.

Community-centred approaches

Ladama Masidza from Kind World Project stressed that successful conservation requires community ownership and stewardship. Working in Kenya's coastal areas, the organisation has developed a six-step process for establishing community-based marine management: forming legally constituted groups, defining boundaries, conducting resource assessments, developing management plans, establishing bylaws, and securing tenure rights.

The approach emphasises that laws alone don't create stewardship, communities must be supported to step into management roles with confidence while having their traditional knowledge respected and incorporated into project design. Recognising the diversity within communities – youth, women, and indigenous groups – is critical to equitable benefit-sharing. Clear collaborative spaces, accountability mechanisms, and capacity-building help ensure long-term success.

Looking forward

The panellists identified several critical success factors for scaling blue carbon initiatives:

Community leadership: Projects must be built around active community participation and decision-making from the outset, as long-term success depends on local stewardship.
Rigorous science: Effective measurement, reporting, and verification systems must combine field data collection, remote sensing, and third-party verification while incorporating local knowledge.
Co-benefits design: High-quality projects must deliver biodiversity and community benefits beyond carbon sequestration, with buyers able to look for CCB (Climate, Community & Biodiversity) certification under carbon standards.
Early finance: Catalytic funding is essential to cover high development costs in early project years before carbon credits can be issued.
Policy alignment: Projects need supportive national and regional frameworks with clear standardisation around regulations to help buyers and developers identify high-quality initiatives.

The discussion concluded with a call to action for immediate investment in blue carbon projects. As Johnston noted, the foundation for high-quality blue carbon development is now in place, from matching platforms to established principles and maturing projects. The time for corporate buyers, investors, and project developers to move from the sidelines into active participation has arrived.

Blue carbon represents far more than carbon sequestration; it's about biodiversity, livelihoods, and coastal resilience. Success requires viewing investments as contributions to holistic ecosystem protection rather than simply purchasing the cheapest available credits.

As Yihan highlighted during the session, you can explore Terraformation's mangrove restoration project in Ghana to learn more about their on-the-ground blue carbon work. If you’re a forester or part of an organisation interested in scaling restoration efforts, visit their accelerator page to review criteria and get in touch.

The Terraformation team will also be at Climate Week next week in New York City and would love to connect in person. You can schedule a meeting with their team here.

Additional resources