Bringing Wetlands to the Carbon Market

 Recently, there has been a lot of attention directed towards the role of wetlands in climate change mitigation, perhaps to make up for the fact that generally speaking they have largely been ignored by mainstream carbon offsetting programmes. For example, wetlands hardly get a mention in the UN collaborative initiative on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD). To the present time, a degree of progress has been made in developing methodologies for wetlands carbon offsetting projects of potential use in generating carbon credits. One of the most recent developments in the field is a unique study reported in the March issue of BioScience, the journal of the American Institute of Biological Sciences (AIBS). The study looks into the environmental benefits of created wetlands and it may prove to be useful downstream as a model for wetland reclamation or replacement projects.

The study was conducted as a 15-year experiment aimed at developing two one-hectare wetlands in the state of Ohio, to be created by pumping water from the nearby Olentangy River. One of the wetlands was planted manually, with vegetation in the other being left to develop naturally. Bioscience reported the study as suggesting that wetlands created to replace losses due to environmental degradation or land development can also take carbon from the atmosphere and thus assist in mitigating the greenhouse effect. The study indicated that while the manually planted wetland showed more variety, the naturally generated one took more carbon from the atmosphere. In any event, the study provides a basis for future wetland restoration projects and may be particularly useful in determining the degree of human intervention necessary for such projects to be successful.

As noted at the outset, wetlands in general have largely been overlooked by climate policy decision-makers, especially with regards to compliance markets carbon project developer for carbon credits. Yet wetland areas provide valuable ecosystem services, notably biodiversity maintenance, flood support and storm mitigation and, in the case of freshwater wetlands such as peatlands, they even supply drinking water. And to the extent that wetland areas act as carbon sinks, their loss can have serious environmental consequences. Happily however, the ability of wetlands to sequester carbon might provide the very incentive for their restoration inasmuch as projects aimed at preserving and restoring wetlands are a potential source of carbon credits.

Pertinently, the American Carbon Registry (ACR), a voluntary offset programme, announced in January 2012 that it was planning to approve a modular methodology for deltaic wetland restoration. According to the ACR press release, the new methodology, which is to be applied to restoration activities for degraded wetlands of the Mississippi delta, might in the future be expanded to wetland restoration in other regions.

The option for earning carbon credits through wetland restoration and conservation (WRC) projects is also being explored by the Verified Carbon Standard (VSC). Its website indicates that new requirements for crediting the climate benefits of WRC activities are currently under development and will be released in mid-2012. The purpose of those requirements is to create a broad new category for carbon credit projects from all wetland areas, including freshwater tidal coastal wetlands, mangroves, salt marshes and peatlands.

Peatlands in particular are already covered by the existing VCS requirements for peatland rewetting and conservation (PRC), a classification which has been an important step in bringing this wetland subcategory to the carbon credit market. In the UK, for instance, peatlands are the focus of significant environmental concerns, with a report prepared by the International Union for Conservation of Nature (IUCN) in November 2011 warning that the loss of as little as five percent of the 2.7 million hectares of peatland in Britain would equal the UK's annual carbon emissions and thus imperil achievement of the country's emission reduction targets. The IUCN report, entitled "Cinderella habitat: overlooked and undervalued", asserts that there is potential for peatland funding through private financing initiatives under carbon markets and urges focused action and investment in peatland restoration as a cost-effective approach to carbon emissions reduction.