The Blue Carbon Lab has received funding from the Lord Mayor’s Charitable Foundation to “Build the Blue Carbon Business Case: Cost-benefit analysis of coastal wetland restoration”.
As Australia’s largest independent community foundation, Lord Mayor’s Charitable Foundation inspires philanthropy to create positive social change. As a community foundation, they work in partnership with their stakeholders to lead positive change. They do this through innovative and inspired philanthropy. This includes granting, community engagement, partnerships, research, sharing knowledge, influencing policy and impact investment.
This project is funded under the Environment and Sustainability impact area and is helping to reduce urban impacts on the natural environment by contributing research that improves our understanding of aquatic ecosystem health, threatening processes and management strategies.
Why is this project needed?
As we have now entered the UN Decade of Ecosystem Restoration 2021-2030 an increase of ecosystem restoration projects is expected to occur over the next decade. However, there remains many unanswered questions when it comes to the business side of upscaling coastal wetland restoration. Specifically, the financial and economic potential for large-scale coastal wetland restoration programs in Victoria has not yet been assessed, and in many cases, the right financing is missing to upscale successful pilot projects.
Despite tremendous appetite from industry, NGOs, and government in blue carbon ecosystems and the potential carbon credits they can generate, there has not been significant investment into large scale restoration efforts. Before we begin to see large investments into the wetland restoration space, investors are wanting to have a better understanding of the return on investment and the social and environmental benefits created as a result of their investment.
What does the project entail?
We will develop the business case for upscaling coastal wetland restoration, which will look at ‘blue carbon’ credits as well as achieving other important co-benefits such as improvements to biodiversity, coastal adaptation, fish production, tourism and recreation, and helping to meet obligations under the Ramsar Convention.
This project will undertake the assessment of the direct financial and broader economic feasibility of coastal wetland restoration projects. This will consider the direct financial costs and benefits of wetland restoration from current land uses (such as agricultural land) from the perspective of a potential investor, such as the landholder or an external party (carbon developer). We will then build upon this analysis to consider the broader economic business case for investment from a policy perspective, expanding from direct costs and benefits to incorporate a range of ecosystem services produced from wetlands that can in many cases be quantified in economic terms.
What will be achieved?
Overall, this project seeks to deliver practical information needed to seed investment in on-ground works through preparation of a business case for restoration. Data from this project will allow the benefits of alternative land use scenarios to be evaluated quantitatively to find the most cost-effective options across ecosystem types and management alternatives. This will be a significant advance from the current approach to fund allocation for restoration of coastal wetlands, which is mostly ad hoc, motivated by local politics (societal values of a popular, charismatic species) or payouts (offsets) from developers.