Thesis – Blue Carbon Sequestration and Valuation in Australian Coastal Wetlands

Abstract

Coastal vegetated ecosystems, namely mangroves, tidal saltmarsh and seagrass, sequester organic carbon at rates that far exceed most terrestrial forests, yet this value is rarely captured in Australian climate policy or coastal land-management decisions. This thesis quantified organic carbon stocks across the three habitats within a temperate estuarine embayment in south-eastern Australia and modelled the economic value of tidal restoration under the Australian Carbon Credit Unit (ACCU) scheme. Soil cores and biomass plots were sampled across replicated sites, and total ecosystem carbon was estimated to a one-metre soil depth. Mangroves held the largest stock at 452 tC/ha, followed by saltmarsh at 264 tC/ha and seagrass at 192 tC/ha, with soil organic carbon dominating in every habitat. A 350-hectare restoration scenario was projected to abate 46,900 tonnes of carbon dioxide equivalent over a 25-year crediting period, generating gross carbon revenue of between A$1.56 million and A$3.34 million depending on price. The findings support integrating blue carbon into national abatement accounting and coastal management.

Introduction

The term blue carbon refers to the organic carbon captured and stored by coastal and marine vegetated ecosystems, principally mangrove forests, tidal saltmarshes and seagrass meadows (Nellemann et al., 2009). Although these habitats occupy a small fraction of the global ocean floor, they bury carbon in their soils at rates an order of magnitude greater than temperate and tropical forests, and they do so continuously over centuries to millennia (Mcleod et al., 2011; Duarte et al., 2013). This disproportionate contribution has prompted growing interest in their protection and restoration as a nature-based strategy for climate change mitigation.

The mechanism underlying blue carbon storage is distinctive. Waterlogged, saline soils are largely anaerobic, which slows the microbial decomposition that returns carbon to the atmosphere in drier terrestrial systems. As tidal wetlands accrete vertically in step with sea level, buried organic matter is progressively locked away, and the vegetation also traps allochthonous carbon transported from the surrounding catchment (Fourqurean et al., 2012; Rogers et al., 2019). Consequently, the overwhelming majority of the carbon in these systems resides not in the standing biomass but in the soil profile, where it can persist for very long periods provided the sediment remains inundated and undisturbed. Australia holds a globally significant share of this resource, with its extensive temperate and tropical coastlines recognised as international hotspots for coastal carbon sequestration (Serrano et al., 2019), a position reinforced by national research coordinated through bodies such as the CSIRO and Deakin University’s Blue Carbon Lab (Macreadie et al., 2019).

The policy relevance of this resource has sharpened as Australia works towards its legislated net zero emissions target for 2050. The Clean Energy Regulator administers the ACCU scheme, under which eligible abatement activities earn tradeable carbon credits, and the Department of Climate Change, Energy, the Environment and Water (DCCEEW) has introduced a dedicated blue carbon method covering the tidal restoration of previously drained or bunded coastal wetlands (DCCEEW, 2022). Despite this framework, large areas of Australian coastal wetland remain degraded by historical drainage, tidal restriction and reclamation, and the economic case for restoring them is not yet well characterised at the site scale.

This thesis addresses that gap by combining field measurement with economic modelling. Three research questions guided the work. First, how do total ecosystem carbon stocks differ among mangrove, saltmarsh and seagrass habitats within a single temperate embayment? Second, what quantity of abatement could a realistic tidal-restoration project generate over a standard crediting period? Third, what is the economic value of that abatement under plausible carbon-price scenarios, and how sensitive is it to price and to the permanence provisions of the ACCU scheme?

Literature Review

A substantial international literature has established the magnitude and drivers of blue carbon stocks. Global syntheses report that mangroves and seagrasses store several hundred tonnes of carbon per hectare when the soil profile is included, with the soil compartment typically accounting for 50 to 90 per cent of the total (Fourqurean et al., 2012; Mcleod et al., 2011). Stocks vary widely with hydrology, sediment supply, salinity and species composition, so locally derived measurements are consistently preferred over transferred global averages (Lovelock & Duarte, 2019). This variability is the principal source of uncertainty in any subsequent valuation.

The Australian evidence base has expanded rapidly. Serrano et al. (2019) estimated that the continent’s vegetated coastal ecosystems store carbon equivalent to a meaningful proportion of national annual emissions and that their loss represents a substantial and avoidable source of emissions. Regional studies have shown that saltmarsh carbon storage in south-eastern Australia is governed by sedimentary setting rather than by vegetation alone (Kelleway et al., 2016), while dated soil cores have linked long-term carbon accumulation to millennial-scale patterns of relative sea-level rise (Rogers et al., 2019). Collectively, this body of work provides defensible ranges for both standing stocks and annual accumulation rates in Australian conditions.

The economic dimension is comparatively underdeveloped. Ecosystem-service valuations have long assigned high per-hectare values to coastal wetlands once regulating and provisioning services are included (Costanza et al., 2014), but translating a standing carbon stock into realisable revenue requires a market instrument, an approved measurement method, and treatment of additionality and permanence. The recent introduction of an Australian blue carbon method (DCCEEW, 2022) and the maturing ACCU market (Clean Energy Regulator, 2023) make such a valuation feasible for the first time, yet few studies have applied the scheme’s own rules to measured field data. This thesis contributes to closing that gap.

Methodology

Fieldwork was undertaken across three tidal wetland complexes within a temperate estuarine embayment in south-eastern Australia, selected because the three focal habitats occur in close proximity under comparable tidal and climatic conditions. At each habitat, replicated sampling stations were established along the intertidal gradient, and the design balanced the number of soil cores against the labour available for laboratory processing.

Soil organic carbon was quantified from cores collected to a depth of one metre using a manual gouge auger, sectioned into depth increments. Each increment was oven-dried at 60 degrees Celsius to constant mass to determine dry bulk density, then analysed for organic carbon content by elemental analyser after acidification to remove inorganic carbonates. Carbon density in each increment was calculated as the product of dry bulk density and organic carbon fraction, and the increments were integrated over depth to yield the soil stock per hectare. Aboveground and belowground biomass were estimated using established allometric relationships for mangroves and by destructive harvest of replicated quadrats for saltmarsh and seagrass, with biomass converted to carbon using a factor of 0.45.

Annual carbon accumulation rates were derived from a subset of cores dated by lead-210 (210Pb) chronology, which resolves sediment accretion over the past century, and expressed as carbon mass per unit area per year. These rates were converted to carbon dioxide equivalent using the stoichiometric ratio of 3.67 (44/12); for example, a mangrove accumulation rate of 1.74 tC/ha/yr corresponds to 1.74 x 3.67 = 6.4 tCO2-e/ha/yr. The economic model then combined restored area, habitat-specific abatement rate, a crediting period of 25 years, and a risk-of-reversal buffer consistent with the permanence provisions of the ACCU scheme, before applying a range of carbon prices. Figure 1 summarises the full workflow from field collection to economic valuation.

Results

Total ecosystem carbon stocks differed markedly among the three habitats (Table 1). Mangroves held the largest stock at 452 tC/ha, roughly 1.7 times the saltmarsh stock of 264 tC/ha and 2.4 times the seagrass stock of 192 tC/ha. In every habitat the soil compartment dominated, accounting for 74 per cent of the mangrove stock, 93 per cent of the saltmarsh stock and 96 per cent of the seagrass stock. This pattern confirms that standing biomass is a poor proxy for the carbon significance of these systems and that management must protect the soil profile above all else.

Annual abatement rates followed the same ranking, with mangroves accumulating carbon fastest. Applying these rates to a hypothetical restoration of 350 hectares of degraded, tidally restricted land, apportioned as 150 hectares of mangrove, 120 hectares of saltmarsh and 80 hectares of seagrass, produced the abatement projection shown in Table 2. Annual abatement for each habitat is the product of restored area and the habitat rate; for mangroves this is 150 ha x 6.4 tCO2-e/ha/yr = 960 tCO2-e/yr. Summed across habitats, the scenario abates 1,876 tCO2-e each year, or 46,900 tCO2-e across the 25-year crediting period.

The ACCU scheme withholds a share of credits as a risk-of-reversal buffer to insure against future carbon loss. Applying a 5 per cent buffer to the gross figure gives net creditable abatement of 46,900 x (1 – 0.05) = 44,555 ACCUs, since one ACCU represents one tonne of carbon dioxide equivalent. Valuing this net quantity across three carbon-price scenarios produced the range in Table 3. Under the central price of A$50 per ACCU, the project would generate gross carbon revenue of A$2.23 million over the crediting period.

A worked calculation for the mangrove component under the central scenario illustrates the full chain of reasoning. Annual abatement is the restored area multiplied by the habitat rate: 150 ha x 6.4 tCO2-e/ha/yr = 960 tCO2-e/yr. Over the crediting period this yields 960 tCO2-e/yr x 25 yr = 24,000 tCO2-e. Applying the 5 per cent buffer gives net creditable abatement of 24,000 x 0.95 = 22,800 ACCUs, and at A$50 per ACCU the mangrove component alone is worth 22,800 x A$50 = A$1,140,000. Expressed per unit area, the central-scenario revenue of A$2,227,750 across 350 hectares equates to A$6,365 per restored hectare over 25 years, or approximately A$255 per hectare each year, before deducting restoration and transaction costs.

Discussion

Restoration feasibility

The results confirm that mangrove and saltmarsh restoration offers the greatest abatement per hectare, driven by higher accumulation rates and, in the case of mangroves, by larger biomass. The dominance of soil carbon across all three habitats has a clear management implication: interventions that re-establish tidal inundation on drained or bunded land, thereby restoring the anaerobic soil conditions that preserve carbon, are likely to be the most effective and are precisely the activities recognised under the Australian blue carbon method (DCCEEW, 2022). Reinstating tidal flow to formerly reclaimed agricultural land is technically straightforward relative to many engineered abatement options, although it requires secure land tenure, hydrological modelling and community agreement, particularly where existing land uses would be displaced.

Carbon markets and value realisation

The valuation in Table 3 should be read as gross carbon revenue rather than net profit or present value. Three qualifications matter. First, the figures are undiscounted; applying even a modest discount rate would materially reduce the present value of revenue received in later years, so the nominal totals overstate the value to a proponent deciding today. Second, restoration, measurement, reporting and verification carry real costs that must be subtracted, and for small projects these transaction costs can erode margins substantially (Clean Energy Regulator, 2023). Third, the ACCU price is volatile and policy-dependent, which is why a scenario range rather than a point estimate is appropriate. Even so, the central estimate of roughly A$255 per hectare each year is competitive with the returns from the low-intensity grazing that often occupies such land, which strengthens the economic case for restoration once co-benefits are considered.

Co-benefits beyond carbon

Focusing on carbon revenue alone understates the value of these ecosystems, because the same restoration generates a suite of co-benefits that markets rarely price (Costanza et al., 2014). Restored tidal wetlands provide nursery habitat that supports commercial and recreational fisheries, attenuate wave energy and storm surge along low-lying coasts, filter nutrients and sediment before they reach sensitive receiving waters, and sustain shorebird and fish biodiversity. These regulating and provisioning services align with the objectives of the Australian and New Zealand water quality guidelines (ANZG, 2018) and with national coastal-adaptation priorities. Where such co-benefits can be quantified and, increasingly, stacked alongside carbon credits, the total social value of restoration is considerably greater than the carbon revenue modelled here.

Limitations

Several limitations qualify these findings. The stock estimates derive from a single embayment during one sampling campaign and may not transfer to sites with different sediment supply, tidal range or species composition, given the high spatial variability documented for blue carbon systems (Lovelock & Duarte, 2019). Soil carbon was measured to one metre, so deeper stores were not counted, rendering the totals conservative. The abatement model assumes constant accumulation rates and full project success, whereas real restorations establish gradually and face risks from extreme weather, disease and renewed sea-level pressure. Finally, the valuation omits discounting and project costs, and the true financial return would be lower than the gross revenue reported. These constraints point to clear priorities for further work.

Conclusion

This thesis quantified organic carbon stocks across mangrove, saltmarsh and seagrass habitats in a temperate south-eastern Australian embayment and modelled the value of restoring them under the ACCU scheme. Mangroves stored the most carbon at 452 tC/ha, and soil organic carbon dominated every habitat, underlining that protecting and re-wetting coastal soils is the central management task. A 350-hectare restoration scenario was projected to abate 46,900 tonnes of carbon dioxide equivalent over 25 years, worth between A$1.56 million and A$3.34 million in gross carbon revenue before discounting and costs. While these returns are sensitive to carbon price and permanence rules, they are meaningful, and they sit alongside substantial co-benefits for fisheries, coastal protection and water quality. Integrating blue carbon into Australia’s abatement accounting and coastal-management frameworks is therefore well justified. Future research should extend measurement across multiple estuaries, incorporate discounting and full project costing, and test methods for stacking carbon credits with co-benefit payments to improve the financial viability of restoration.

References

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