The ocean has emerged as a key site of action against climate change. Right now, 83% of the world’s carbon is circulating through the ocean, with mangrove forests, seagrasses and tidal marshes acting as vast carbon sinks. These rich ecosystems are being lost at a rate of 1-2% per year, turning sinks into sources. Preserving these ecosystems and capturing and storing carbon in the ocean is an emerging facet of climate discourse, included in mainstream discussions for the first time at COP26. Although gaining momentum, ocean conservation is consistently underfunded, representing just 9% of financial flows into nature-based solutions last year.

At COP15 in December 2022, the Global Biodiversity Framework (GBF) was agreed upon. The 30×30 target grabbed headlines worldwide, seeking to conserve 30% of the world’s lands, inland waters, oceans, and coastlines by 2030. As of October 2022, 6.6% of the Earth’s oceans fell under protected status. However, only 3% is covered by high-quality protections strong enough to maintain and safeguard biodiversity. According to scientists, the current slow rate of protected area expansion will lead to catastrophic declines in biodiversity and habitats.

Last year, $14bn was spent on marine nature-based solutions, with $980m going towards Marine Protected Areas (MPAs). Protected area finance needs to increase by nine to 12 times to meet the 30×30 goal, according to the UNEP. In North Africa and the Middle East, the funding gap is particularly severe – here, an increase of 93 to 125 times is required.

A similar pattern can be found in the Sustainable Development Goals (SDG). A study examining SDG14 (Life below Water) concluded that it receives the lowest funding of all SDGs. Achieving its targets, from tackling pollution to supporting small island states, requires $174bn annually. Data from 2019 shows that $19bn was committed to the goal, representing a funding gap of approximately $155bn.

To reach the hundreds of billions required for 30×30 and SDG14, the private sector will need to be more actively incentivised to invest in the blue economy. Of the $14bn spent on marine projects in 2022, 82% was public money. There is a range of tools and mechanisms to entice the private sector, with blue carbon credits emerging as a front-runner.

Blue carbon credits are generated by quantifying the amount of carbon that is captured and stored by ocean restoration projects. Businesses can buy these credits to offset their emissions and continue operating but at a higher cost. The voluntary carbon credit market is expected to grow by 15 times between 2020 and 2030, reaching a value of $50bn. Revenue generated from blue carbon credits can be used to improve and expand MPAs.

The beginning of 2023 was marked with two important stories surrounding carbon credits. First, an investigation revealed that up to 94% of credits issued by the world’s biggest rainforest accreditor have no positive impact on the environment. Meanwhile, the EU rolled out new legislation which forces large companies to disclose their use of carbon offsetting. These developments may increase the demand for high-quality blue carbon credits as a greater volume of companies seeks trustworthy, impactful credit schemes to avoid accusations of greenwashing.

It is important that credit schemes are robust and transparent, not only benefitting the environment but supporting those most vulnerable to climate change, building community resilience and reducing inequalities. There are examples of successful schemes in various countries. In southern Kenya, for instance, the Mikoko Pamoja project has successfully planted 56,000 trees, restoring 117 hectares of mangrove forest. Around 2,500 credits are sold each year generating approximately $24,000, 65% of which is returned to the community providing clean water and education to three villages. More examples can be found here.

This year, Carbonplace will launch, offering businesses an accessible platform to browse credits globally. Meanwhile, the Taskforce on Scaling Voluntary Carbon Markets aims to remove barriers to the market. Blue carbon credits are one piece of the ocean conservation puzzle and may prove instrumental in bridging the funding gap for ocean goals over the coming decade.