Emerging Opportunities for Coastal Wetland Carbon Projects

www.silvestrum.com - [email protected]

Emerging Opportunities for Coastal Wetland Carbon Projects

COP 20 Side Event, Tuesday, 9 December, Indonesia Pavilion

Dr. Moritz von Unger, Silvestrum

http://www.silvestrum.com/

mailto:[email protected]


Coastal Wetland Opportunities

• LULUCF and Wetlands in the Current Climate Architecture

• Main Barriers

• Emerging Opportunities

• Practical Considerations

Agenda

“Water is the best of all things…” (Pindar)




LULUCF and Wetlands in the Current Architecture




LULUCF and Wetlands in the Current Architecture

• There are few coastal countries in the world without a carbon intensive wetland ecosystems

• Tidal marshes, seagrass meadows and tidal forests (such as mangroves) are under increasing threat from conversion, degradation and sea-level rise

• 450 m tCO2eq. lost every year

• Both industrialized and developing countries are affected




LULUCF and Wetlands in the Current Architecture: UNFCCC

• “All Parties, taking into account their common but differentiated responsibilities…, shall… promote sustainable management, and promote and cooperate in the conservation and enhancement, of sinks and reservoirs…, including biomass, forests and oceans as well as other terrestrial, coastal and marine ecosystems… develop and elaborate appropriate and integrated plans for coastal zone management…“(Article 4.1)




LULUCF and Wetlands in the Current Architecture: Implementation To Date

• Despite the clear mandate under the UNFCCC, coastal wetlands had largely disappeared from policy-making under the UNFCCC

• No specific reporting guidelines had emerged in the first 20 years of the UNFCCC (see however IPCC 2006 land-use chapter, wetlands 1 out of 6 categories)




LULUCF and Wetlands in the Current Architecture: UNFCCC: Implementation To Date

• The Kyoto Protocol and the Marrakesh Accords (under the mandate of Article 3.4 KP) ignored the matter

• The flexible mechanisms, notably the Clean Development Mechanism (CDM), did not offer a financial mechanism outside mangrove afforestation/reforestation

• Crediting was negligible (around 10 m temporary credits)




Main Barriers




Main Barriers

• Kyoto Protocol designed as an accounting and trading framework

• At the time of its adoption:

– accurate measurement formats were not yet available

– Carbon cycle in vegetation was not deemed compatible

– Risk of leakage

– Risk of non-permanence




Main Barriers

• Cross-cutting nature of coastal wetland protection (mitigation and adaptation) became a barrier (non-responsibility)

• Lack of policy knowledge about below-ground/sea-level carbon stocks




Emerging Opportunities





• Growing understanding of climatic value of coastal wetlands grew from the adaptation work under the UNFCCC

• Wetland Drainage and Rewetting (WDR) category in Article 3.4 KP since 2011

• 2013 IPCC Supplement on Wetlands

• Opening of LULUCF categories within the CDM





• Warsaw Framework for REDD+

• NAMAs and LULUCF (60% of countries)

• Platform to discuss 2015 Agreement (Ad hoc Working Group on the Durban Platform or “ADP”) addresses LULUCF and REDD

• New momentum: Green Climate Fund (scaling up from projects to country-wide interventions)








Emerging Opportunities: Voluntary Markets

• A number of voluntary standards recognizes wetland interventions

• Verified Carbon Standard (500 m USD transaction value in 2013): 4 wetland related methodologies are currently undergoing approval process

• American Carbon Registry

• UK Peatland Carbon Code

• Germany: MoorFutures




Practical Considerations




• Policy Caveat

• 2015 Agreement is far from secured

• How to address and incentivize LULUCF/Wetlands in 2015 Agreement far from clear (holistic accounting, landscape approach, differences Annex I/Non-Annex I/permanence etc.

• CDM/LULUCF has been postponed this week/COP 20




• Policy Caveat

• REDD+ does not fully cover coastal wetlands

• Differentiation emission reductions vs. sequestration remains little understood

• Robust climate finance format for “Coastal Wetlands” or “Blue Carbon” not yet developed, let alone tested

• Eligibility for Green Climate Fund funding?




• Market Caveat

• International carbon prices are depressed

• The CDM spot market is close to 0 USD

• The voluntary markets fare better, yielding 5 USD and more, but demand is limited (about 100 m credits per year)

• REDD+ credits has started flooding the market

• Prices vary heavily




• Implementation Caveat

• Running a coastal conservation or regeneration intervention is not simple

• Engineering, natural threats, ecosystem users, ecological leakage etc.

• Running a coastal carbon project on top of it, makes the intervention even more complex:

• Carbon documentation

• Identification of a long-term project entity

• Carbon rights and title




And yet the benefits by far outweigh the risks…

• Practitioners cannot control the process towards the 2015 Agreement, but they can develop robust blueprints for coastal wetland and coastal carbon interventions

• They can, in particular, present a robust NAMA template (addressing measurement/ MRV, ambition, co-benefits, long-term goals etc.)

• They can also raise awareness and work towards clear country prioritization on both mitigation and adaptation.




Merits of a Carbon Project

• Cover for a portion of the costs and link the intervention to other climate finance streams (also increasing domestic credit demand);

• Create a long-term financial prospect that secures maintenance and management for 30+ years;

• Turn donors into investors with a long-term commitment for the future;

• Provide a good common metric for project evaluation; and

• Produce exact figures for policy makers on mitigation benefits, abatement costs and longevity




Roadmap to a Successful Coastal Carbon Project

• Assess the technical, operational, legal and financial needs of the intervention, before you start

• Engage with all affected communities

• Assess public and private funding opportunities

• Prepare for the creation of a project entity (existing or special purpose vehicle) (public, private or mixed)

• Benefit from the direct and indirect carbon commodity benefits, and

• …demonstrate that investing in coastal wetland conservation and restoration is feasible!




Thank you.

For more information:

Dr. Moritz von Unger

[email protected]; +491794716457



Environment

Emerging Opportunities for Coastal Wetland Carbon Projects