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Mangrove forests are well-known for their vital role in sequestering carbon, reducing flood risks, providing food security, and improving water quality for coastal communities. What is less widely recognized is that over 50% of mangroves and the critical ecosystem services they provide are facing the threat of collapse. This endangers 2.1 million people on the frontlines of the climate crisis and puts $36 billion worth of property at risk. The destruction of these forests could also release 1.8 billion tons of carbon stored within them, exacerbating the climate crisis.
Because mangrove ecosystems store up to four times the carbon of terrestrial forests, carbon credits have long been touted as a critical solution for protecting and restoring mangroves, often delivering transformational results. But carbon credits have limitations and should be considered part of a broader set of solutions that can help align financial investments with projects that support mangrove conservation and restoration.
Launched at COP27 in 2022, the Mangrove Breakthrough initiative is a bold effort to mobilize $4 billion to protect and restore 15 million hectares of mangroves by 2030. To reach this ambitious goal, the initiative leverages a diverse range of financial mechanisms that not only address the climate mitigation benefits of mangroves but also drive investments in climate adaptation, coastal infrastructure, resilience, biodiversity, and food security.
One of the Breakthrough’s major innovations is the Mangrove Transition Bond Series, a regional investment vehicle that channels funds to local financial institutions and businesses in sectors such as aquaculture, tourism, and coastal agriculture. Paired with a dedicated Technical Assistance facility, it supports companies that commit to shifting their practices toward mangrove deforestation-free practices, even in contexts where carbon credits aren’t viable.
Mangrove forests and other blue carbon ecosystems sequester a disproportionate amount of greenhouse gases, making them prime candidates for carbon offsets.
While previous efforts to conserve and restore mangroves were primarily fueled by philanthropic donations to drive small-scale impact, the voluntary carbon market (VCM) has been a transformative force for mangrove conservation and restoration, with the potential to unlock billions of dollars in institutional financing.
The International Finance Corporation (IFC) estimates that the price of carbon credits, which ranged from $15 to $24 per metric ton in 2022, could rise to between $40 and $65 by 2040. For mangrove restoration and afforestation/reforestation projects, carbon credits –currently priced at $50 to $70 per credit– are expected to command above-market prices, with the potential for additional premiums driven by sustainable development benefits.
However, revenues can be insufficient to cover project implementation and operational costs, provide a modest return on investment for funders, and deliver a meaningful share of income to local stakeholders—except in the largest or lowest-cost projects. Smaller projects typically rely on additional fundraising alongside credit income.
By generating revenue through the sale of carbon credits, the VCM facilitates the growth of other financial mechanisms, such as the Payment for Ecosystem Services (PES) model, which plays a crucial role in supporting long-term conservation efforts. The VCM is a powerful tool for directing private sector capital to local projects that benefit people, biodiversity, and the climate.
While carbon markets are certainly a promising source of revenue for mangrove-positive projects, the model has several challenges.
Carbon trading has historically favored large-scale commercial projects (i.e., large logging concessions) that are often at odds with preferred practices, such as community-led mangrove conservation and restoration models. Building a business model through carbon credits requires allocating funds for measurement, reporting, and verification (MRV), which increases upfront costs and can delay the return on initial investments.
One study shows that roughly one-fifth of the world's mangrove forests (2.6 Mha) are eligible for blue carbon financing, and even with extremely conservative estimates on pricing, the carbon market could contribute up to 29.8 MtCO2e year−1 and yield a return on investment of ∼US$3.7 billion per year. However, reports such as the Best Practice Guidelines for Mangrove Restoration, the Global Mangrove Alliance, and the Blue Carbon Initiative highlight that not all mangrove restoration projects are eligible to generate carbon credits, since eligibility is constrained by laws and policies regarding mangroves and carbon trading.
It should also not be overlooked that carbon markets have attracted criticism. Key concerns include a lack of safeguards in some nature-based crediting projects, which may worsen inequalities and land tenure issues, particularly for Indigenous Peoples and local communities. The Mangrove Breakthrough Principles, as outlined in the High-Quality Blue Carbon Practitioner's Guide, provide a framework for implementing projects, including appropriate safeguards and best practices.
Carbon markets have proved to be a valuable avenue for financing mangrove ecosystem conservation. However, it’s essential to view carbon credits and their revenue as part of a broader solution, rather than a catch-all fix. The Mangrove Breakthrough is considering the multiple avenues for directing finance to mangrove ecosystems.
The Breakthrough embraces mangrove investments as a "nexus solution" that harnesses the carbon sequestration, climate resilience, and ecosystem benefits of mangrove ecosystems to mobilize $4 billion. Its Financial Roadmap outlines seven key financial mechanisms to build, prove, and scale mangrove-positive investments. These include mangrove microfinance, debt for mangrove-positive small and medium-sized enterprises, and mangrove-linked insurance, providing investors with a diverse range of options to choose from.
The impact of mangroves is profound in well-established economic sectors, including tourism, aquaculture, ports, and agriculture. Recognizing this, the Mangrove Breakthrough is introducing a new lens: mangrove transition finance, investment that enables these sectors to shift toward mangrove-positive operations. Like climate transition finance, this approach moves beyond niche projects and unlocks real system change.
A key insight from the Roadmap is that investing in mangroves and other blue carbon ecosystems (salt marsh and seagrass) can generate financial returns while building resilient coastal communities and creating a host of environmental benefits. Initiatives like Blue Carbon Plus accelerate business models that incentivize the conservation of blue carbon ecosystems, support local economies with technical assistance and grant funding, and attract additional financing for scaling impact.
In creating value from restoring and protecting standing mangroves, the Roadmap examines not only existing business models tied to carbon credits and PES, but also models utilizing ecotourism and recreation, marine protected areas, and mangroves as green infrastructure for adaptation and resilience.
Carbon credits are foundational to the Mangrove Breakthrough’s ambitious goals, but they are just one of many tools to achieve the initiative’s 2030 targets. Moving at the required scale and speed is a significant yet attainable challenge that will demand a collaborative, all-hands-on-deck approach. The Mangrove Breakthrough is creating the financial ecosystem necessary to scale investment in mangrove protection and restoration, one that goes beyond carbon to unlock the full value of nature.
