Blue carbon which is organic carbon captured and stored in coastal and marine ecosystems like mangroves, tidal marshes, and seagrasses, holds significant potential for climate mitigation. These ecosystems are highly effective carbon sinks, storing up to four times more carbon per unit area than terrestrial forests. Despite this, blue carbon credits are largely underutilized in voluntary carbon markets (VCMs), including in India, primarily because land-based projects are often easier and cheaper to implement.
The Potential of Blue Carbon in India’s VCM
India possesses vast blue carbon resources, with a coastline of over 7,500 kilometers and some of the world’s largest mangrove ecosystems, such as the Sundarbans. This makes the country well-positioned to become a global leader in issuing blue carbon credits. However, despite being a top supplier of carbon offsets globally, India’s VCM is dominated by renewable energy and forestry-based projects, with blue carbon remaining a niche segment.
Key Barriers to Blue Carbon Adoption
The limited uptake of blue carbon credits in India’s VCM is due to several key challenges:
•Institutional Barriers: The lack of a clear, centralized regulatory body for blue carbon projects creates a fragmented institutional landscape involving multiple authorities. This results in slow approvals and bureaucratic delays. Unlike land-based projects with clear ownership models, blue carbon ecosystems are often common or protected property, leading to ambiguity in long-term carbon tenure rights and benefit-sharing with local communities.
•Measurement, Reporting, and Verification (MRV) Gaps: The processes for MRV are crucial for the credibility of carbon credits, but for blue carbon, these methods are still developing. They are often expensive, time-consuming, and lack standardized, region-specific data. This underdevelopment makes it difficult to accurately value blue carbon credits and can lead to low investor confidence.
•Environmental Risks: Blue carbon ecosystems are particularly vulnerable to climate change-related risks like sea-level rise and coastal erosion, which can compromise the permanence of carbon sequestration. This environmental instability makes them a less attractive investment compared to terrestrial projects, which can often be better protected through legal and conservation policies.
Opportunities for Scaling Blue Carbon
Despite these barriers, strategic interventions can help unlock India’s blue carbon potential.
•Enhancing Finance Mechanisms: Blended finance models, such as blue bonds and accelerator funds, can help address the high costs associated with blue carbon projects. India could replicate successful international models like the Seychelles Blue Bond, which raised funds for marine conservation. The country has already seen success with municipal green bonds, and a similar framework could be used to raise capital for coastal restoration projects. A dedicated national blue carbon fund, similar to Australia’s Blue Carbon Accelerator Fund, could provide upfront capital and technical support to early-stage projects.
•Building Policy and Regulatory Frameworks: Creating a centralized blue carbon authority would streamline project approvals and overcome regulatory fragmentation. Integrating blue carbon into India’s existing carbon markets, such as the Green Credit Programme, would also drive greater corporate investment. Moreover, establishing clear benefit-sharing mechanisms would encourage community participation and ensure the long-term sustainability of projects.
•Strengthening MRV and Certification Processes: Adopting standardized MRV protocols and establishing a domestic registry for blue carbon credits would simplify the verification process, which currently relies on complex international standards. Leveraging new technologies like environmental DNA (eDNA) can help to strengthen the valuation of co-benefits and improve the accuracy of monitoring.
•Addressing Environmental Risks: Implementing climate-resilient frameworks with criteria for site selection, species choice, and adaptive management is crucial. Exploring insurance mechanisms like the Mesoamerican Reef Insurance Programme, which links projects to parametric insurance to mitigate financial losses from climate-induced events, and introducing buffer credit mechanisms can help enhance investor confidence.
The Path Forward
Blue carbon ecosystems are an underrated tool in the fight against climate change. The projected growth of the VCM presents a significant opportunity for India to position itself as a leader in this space. By addressing the current institutional, financial, and technical barriers, India can leverage its extensive coastline and blue carbon resources to achieve its sustainable development and climate mitigation goals while also providing critical co-benefits such as food security, income generation, and disaster risk reduction for local communities.