New funding options expand opportunities to protect the world’s coastal wetlands

Coastal wetlands such as salt marshes, mangroves and seagrass beds play a key role in climate regulation, harboring large carbon stocks in their soils, and sequestering more carbon in the atmosphere than the same area. terrestrial forest would not. Conserving and restoring mangroves on a global scale could yield a return on investment of US $ 3.7 billion per year based on their carbon values ​​alone.

And yet, this may not even be their most valuable service: Mangroves, for example, reduce the annual flooding of more than 18 million people worldwide, and the loss of these ecosystems could result in 82 billion people. US dollars in losses due to flood damage.

Coastal wetlands also provide opportunities for ecotourism and food, purify water, buffer runoff and river flow, and provide habitat for a variety of species, which in turn helps to support local communities and traditional cultures.

Despite their many values, coastal wetlands have been lost, degraded or heavily altered around the world. An average of 54 to 57% of natural wetlands have been lost globally, experts say, with some areas experiencing up to 90% loss.

So far, investments in the protection of coastal wetlands have been insufficient to prevent their continued loss and degradation. But renewed action on climate change and a wider recognition of the multiple benefits provided by these ecosystems have led to an emerging series of new funding opportunities.

Leading this charge are Seychelles, Belize and Costa Rica, all of which have recently made major commitments to conserve, manage and restore their coastal wetlands through their updated Nationally Determined Contributions (NDCs). to the Paris Climate Agreement. Each NDC represents the commitments made by a government to fight climate change; Because coastal wetlands sequester and store so much carbon, their protection helps countries reduce their net greenhouse gas emissions.

Yet limited funding remains one of the main obstacles to protecting coastal wetlands.

During a research project in Belize, Stacy Baez of Pew takes soil samples from a mangrove forest. Monitoring the carbon stored in mangrove soils provides essential information for the development of carbon finance solutions.
Courtesy of Dr Stacy Baez

Studies have shown that restoring mangroves, seagrass beds and salt marshes to historic levels by 2050 would cost US $ 27 billion to US $ 37 billion per year; stopping the current degradation of these habitats would increase costs.

One of the reasons for the funding gap to date is that many of the services provided by coastal wetlands do not generate financial returns, even though they are valuable and investing in these services would bring positive returns to society. . However, some benefits of coastal wetlands, for example maintaining healthy natural areas for tourism and commercial fishing, can be directly linked to economic activity.

Investors may also perceive wetland projects as high risk investments; this is not helped by the relative paucity of demonstrated success stories. That is now starting to change, with coastal wetland investment projects coming to an end in Colombia, Kenya and elsewhere.

In addition, regulatory and legal uncertainty, such as unclear property rights and shifting policies, can complicate the viability of projects.

Funding for the protection of coastal wetlands will require governments to commit to channeling significant additional funding to biodiversity and to working towards the creation of national biodiversity funding plans under the post-2020 framework of the Convention on Biological Diversity. biodiversity, which is expected to be finalized in early May in Kunming, China. .

Here are some of the funding mechanisms that could help close this funding gap, and which are expected to grow over time:

  • National government budgets. It is currently the main source of funding, especially in the wealthier countries.
  • Natural infrastructure. As landowners, insurers and municipal governments begin to realize how much these ecosystems protect assets, it becomes clearer that investing in them as “green infrastructure” – to complement infrastructure investments built – is a wise choice.
  • Impact investing. These private investments aim to generate positive and measurable social and environmental impacts as well as a financial return.
  • Green bonds and loans. These debt and loan instruments issued by public or private organizations raise capital to finance projects generating environmental impacts as well as financial returns.
  • Carbon markets and payments for ecosystem services (PES). Carbon credit programs or other PES programs are means of establishing tangible financial value for the services provided by coastal wetlands, including their climate change mitigation value.
  • Philanthropy and odevelopment aid abroad. This source is smaller than other sources, but can be more flexible, pursue non-financial goals such as biodiversity and local livelihoods, and can support projects at an earlier stage than private investors would otherwise consider. .
  • Mixed funding. This mechanism uses philanthropy and public sector funding to take on some of the project’s risks and make investments more attractive to private investors, thereby leveraging larger funding flows.

Countries vary widely in their track record for taking advantage of these opportunities; positives include the recent blended finance agreement to improve management of the Turneffe Atoll Marine Reserve in Belize; Costa Rica’s ongoing work to explore a PES program for its mangroves; and Seychelles debt for nature swap and blue bond issuance.

Pew works with research consultancy firm Silvestrum Climate Associates and others to provide advice to the governments of Belize and Seychelles on the financing instruments and strategies available to them, and to provide investors with information on investment opportunities. investment for wetlands.

Countries can bring real benefits to their people, nature and the global climate by protecting coastal wetlands. A concerted effort by governments, civil society and the private sector can help them find the funding to realize this opportunity.

Peter Edwards is an officer in the conservation science program of The Pew Charitable Trusts, and Keith Lawrence is a senior officer in the Pew International Conservation Unit.

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