Blue Carbon Cost Tool

Methodology

Introduction

To better understand the financials of blue carbon projects, The Nature Conservancy (TNC), in collaboration with Bain & Company, has developed the Blue Carbon Cost Tool. This pre-feasibility tool provides high-level estimations of project costs and carbon benefits for blue carbon projects, allowing for project-specific scenario analysis and qualitative metrics for project prioritization. Stakeholders can utilize this tool to gain valuable insights into the financial aspects of blue carbon projects. Designed as an early-stage planning resource, the tool offers both default values and customizable options for tailored assessments, while not being intended for tracking cost over time.

As blue carbon ecosystems—including mangroves, salt marshes, and seagrasses—gain recognition for their critical role in carbon sequestration and climate resilience, this tool addresses key knowledge gaps in project costs and funding needs. Its insights support efficient resource allocation, enabling successful conservation and restoration initiatives in the fight against climate change.

Project size assumptions

In the Project Overview section, project sizes were carefully selected to ensure real-world feasibility and enable meaningful comparisons across different projects. These sizes were determined based on their carbon equivalency and representativeness, allowing for straightforward “apples-to-apples” comparisons across various activities and ecosystem types. The table below outlines the project sizes for each activity and ecosystem:

Project	Project Size	Restoration size in ha	Conservation size in ha (avoided loss area in ha)
Mangroves	Small	100	4,000 (~100)
Salt Marshes	Small	100	800 (~100)
Seagrass	Small	100	400 (~100)
Mangroves	Medium	500	20,000 (~500)
Salt Marshes	Medium	500	4,000 (~500)
Seagrass	Medium	500	2,000 (~500)
Mangroves	Large	1000	40,000 (~1,000)
Salt Marshes	Large	1000	8,000 (~1,000)
Seagrass	Large	1000	4,000 (~1,000)

Project costs – assumptions and methodology

This section provides the assumptions and methodologies used to estimate the cost components of a blue carbon project. For more detailed description, please download the full methodology.

	Cost component	Cost assumption	Duration	What drives the cost
capex	Feasibility analysis	US: ~$100k AUS/ BHS: ~$70k Others: ~$50k	One off cost	Providers typically have minimum fees Location accessibility
	Conservation activity planning & admin	~$167k/ year	4 years (start up time)	Conservation professional salary Duration of project start up phase
	Data collection and field costs	~$27k/ year	3 years	Location accessibility Number, remoteness, and homogeneity of habitats Vendor costs
	Community representation/ liaison	Between ~$65-126k /year, depending on country	4 years (start up time)	Number of communities and their remoteness Duration of project start up phase
	Blue carbon project planning	Between ~$43-120k/ year, depending on country	3 years	Providers have minimums for costs of doing validation Location accessibility
	Conservation activity	~0	N/A	N/A
	Implementation labor and engineering activity	Highly dependent per ha cost by country and ecosystem	Dependent on restoration plan	Type and severity of intervention necessary Location accessibility Labor costs within country
opex	Monitoring/ Guarding/ Surveilling	Highly dependent on salaries in country	Every year after project set up	Project size Degradation driver Desire to employ more community members hired for this role
	Maintenance	8% of implementation cost, for 3 years after the implementation	Three years after implementation	Scale of original implementation
	Community benefit sharing fund	5% of carbon credit revenues (developed countries), 50%-85% (developing country)	Each year with carbon credit revenues	Value of other opportunities from land Degree of economic contribution to community from ecosystem degradation
	Baseline Reassessment	$40,000 / baseline reassessment	Every 10 years	Providers have minimums for costs of doing a baseline reassessment Location accessibility
	Measurement, Reporting and Verification (MRV)	$100k (US, AUS, BA), $75k (others)	Every 5 years	Providers have minimums for costs of doing an MRV Location accessibility
	Long term project operating admin	$17k-130k (depending on country)	Every year	Number of communities and their remoteness Number, remoteness, and homogeneity of habitats
	Carbon standard fees	$0.2 per Verified Carbon Unit (VCU)	Each year when credits are issued	Fee is set by third parties and has breakpoints based on credits sold
financing	Financing cost	5% of CAPEX	One off cost	Cost of doing business in the project country Magnitude of the funding gap

Model assumptions

Table below showcases the model assumptions that are universally applied to all projects:

Assumptions	Units	Value
Verification frequency	yrs	5
Baseline reassessment frequency	yrs	10

Qualitative scorecard details and sources

Methodology and sources used for the non-economic qualitative metrics.

Metric	Weighting	What we can measure	How we will measure	Varies by	Sources
Legal feasibility	12	Country stability, ability to protect legal rights Government’s climate commitment	Weighted average (of percentile): Count of blue carbon projects (all) or AFOLU projects (only in development or completed) Index of Economic Freedom -NDC Commitment Strength	Country	Verra & Plan Vivo Registries World Bank Climate Watch
Implementation risk score	12	Permanence risk from mangrove deforestation, or natural disasters	Weighted average (of percentile): Mangrove loss rate Disaster risk exposure rating (layered with specific info for key countries)	Country	Global Mangrove Watch World Risk Report (RUB, IFHV)
Social feasibility	12	Leakage risk from community activities (e.g., deforestation for shrimp farming)	Qualitative analysis by ecosystem: Likelihood communities will return to the destructive activities that led to initial degradation	Country / Ecosystem	Independent research Expert interviews
Availability of experienced labor	10	Size of labor pool experienced in restoration or conservation work	Percentile: Count of blue carbon projects (all) or AFOLU projects (only in development or completed)	Country	Verra & Plan Vivo Registries
Security rating	5	Safety threat to on-the-ground team	Weighted average (of percentile): Global Peace Index US Travel Risk Rating	Country	Institute for Economics & Peace US Travel Risk Rating
Availability of alternative funding	5	Countries providing funds to / or receiving funds from UNFCCC Green Climate Fund	Percentile: Contribution amount (for contributing nations) Financing amount (for recipient nations)	Country	UNFCCC Expert interviews
Coastal protection benefit	3	Percentile: Count of individuals receiving coastal resiliency benefit over country population in low coastal zones	Percentile: Contribution amount (for contributing nations) Financing amount (for recipient nations)	Country / Eco	TNC Naturebase co-benefit study
Biodiversity benefit	3	Typical biodiversity co-benefits delivered by projects with same ecosystem characteristics	Percentile: Size of overlap between top priority Marine Protected Areas (MPAs) and country Exclusive Economic Zone (EEZs)	Country	Priority Areas for Marine Biodiversity Conservation – University of Auckland

Sources

This section provides the assumptions and methodologies used to estimate the cost components of a blue carbon project. For more detailed description, please download the full methodology.