The government of New South Wales (NSW) has launched a five-year strategy to support the development of blue carbon markets. Various actions have been outlined, with primary goals including emissions reduction and the restoration of coastal biodiversity.
NSW has announced its blue carbon strategy, outlining its plans for conserving and restoring aquatic ecosystems through 2027.
The strategy adds to ongoing efforts by Australia to maximise its blue carbon assets, amid growing political pressure to engage in climate action.
Committing to blue carbon development could help address ongoing challenges in meeting demand for associated offsets, while simultaneously boosting local economies and protecting coastal communities from the impacts of climate change.
Blue carbon ecosystems refer to vegetation that grows in aquatic environments, such as seagrasses, saltmarshes and mangroves.
These habitats can provide long-term carbon sequestration, storing up to four times the volume of carbon by area than is captured by terrestrial forests. Carbon is released, however, when such ecosystems are destroyed or degraded.
Australia is estimated to hold around 12% of global blue carbon habitats, but a 2019 study published in Nature Communications indicates that substantial volumes have been lost since the beginning of European settlement. Losses occur for multiple reasons, including land clearance and coastal development, severe weather events and other impacts of climate change.
What does the NSW government’s strategy involve?
The strategy launched by NSW provides a five-year roadmap, spanning from 2022 to 2027, outlining how the state will support projects attempting to restore blue carbon ecosystems while contributing to Australia’s goal of achieving net zero emissions by 2050.
It aims to catalyse action, expand participation and provide access to additional co-benefits such as improved water quality, climate change mitigation, storm surge protection, financial opportunities and providing a healthier breeding ground for both commercial and recreational fisheries.
Five priority areas have been identified, with multiple targeted actions designed to deliver each one. The selected areas are:
- Ecosystem conservation, including support for adaptation and migration
- Delivering projects on public, private and First Nations peoples-owned/managed land
- Embedding blue carbon in coastal/marine policy and management
- Progressing blue carbon research
- Promoting blue carbon investment
The Australian context
Australia is increasingly falling under pressure to increase its engagement in climate action, as its commitments lag behind fellow OECD countries including the United States and United Kingdom.
The general election held in May 2022 has been described as a ‘climate election’, with the Australian Greens party securing a record number of seats as voters demanded an increase in political action against climate change.
Prime Minister Anthony Albanese, of the country’s Labor party, was elected into power and has since enshrined emissions reduction targets of 43% by 2030 and 100% by 2050 into law. The same targets have also been added to Australia’s latest Nationally Determined Contribution.
Although these motions highlight Australia’s recent drive to increase its engagement with climate action, blue carbon has been gaining traction in the country since before its change in government.
The state of Southern Australia, for example, introduced its own five-year blue carbon strategy back in 2019, with similar aims to the roadmap released by NSW. Since January 2022, several months before Albanese’s election, blue carbon projects were made eligible for support from Australia’s emissions reduction fund (ERF).
The challenges and opportunities of blue carbon in Australia
The Emissions Reduction Fund (ERF) grants businesses, landholders or communities access to Australian Carbon Credit Units (ACCUs) for each tonne of carbon dioxide equivalent stored or avoided by their projects. These ACCUs can then be sold to companies, private investors or back to the government as a means of generating income.
Whistleblower claims that were made in March 2022, however, have prompted harsh criticism of Australia’s carbon market, with particular concerns around financial additionality and assessment based on historic baseline information.
Australia will need to regain the trust of investors if it hopes to access the blue carbon offsets market, which a 2022 study in PLOA Climate estimated to be worth $10 billion.
There are other challenges facing the development of the market which range from the high costs of implementing and verifying blue carbon storage, concerns around double-counting of credits between commercial and national institutions and the relatively short track record of blue carbon solutions as opposed to other nature-based alternatives.
Work is already underway to build investor confidence, with a A$3.3 million research program launched by CSIRO, Australia’s government agency for scientific research, and industrial partner BHP. The program aims to measure and quantify the emissions reduction potential of blue carbon ecosystems and assess the value of project co-benefits.
The project’s co-leader Dr Andy Steven said blue carbon ecosystems could provide “natural solutions to some of the most pressing problems the world faces”, with CSIRO researcher Dr Mat Vanderklift adding that “demonstrating the additional benefits that these projects bring can increase their value, helping them to become financially viable”.
