Protecting Paradise

As the global community strives to meet the targets set by the Paris Agreement¹ and limit global temperature increases to well below 2°C, above pre-industrial levels, the importance of preserving and promoting natural capital² has never been more pertinent.

Awareness around climate change – and the global community’s role in adapting to or mitigating its ill-effects – continues to increase and can be seen to be manifesting in many different ways. One such manifestation is the growing understanding of the role the global capital markets can play in helping to combat climate change. This increased awareness has resulted in a surge of innovative approaches being deployed to help protect our planet’s most valuable natural resources, from the issuing of blue and green bonds³ to debt for nature swaps⁴ to the rise of impact investing⁵. 

Amidst this surge of innovative approaches, it is important to acknowledge that while the risks presented by rising temperatures exist at a global level, individual regions often experience these challenges in more nuanced ways. For example, a region with a large concentration of tropical rainforests, such as Central America, will face very different challenges to that of a region with a predominately desert landscape, such as Northern Africa. As a result, climate adaptation and mitigation efforts will require a unique and tailored approach to each region.

The Caribbean is a region that faces its own unique climate-related challenges. Despite contributing minimally to global greenhouse gas emissions, the Caribbean remains one of the most climate-vulnerable regions in the world⁶. While the region experiences a range of negative climate-related risks factors, none are more devastating than hurricanes, which have been growing in both numbers and intensity since the 1980s⁷. For much of the Caribbean, one of the best and most important lines of defense against these intense storms are mangroves⁸. The importance of mangroves is not just rooted in their role in protecting coastlines from storm surges⁹; these ecosystems also play a critical part in both carbon sequestration¹⁰ and biodiversity preservation¹¹.

While the Caribbean has experienced a significant reduction in its mangrove forests, with an estimated 7000km² lost between 1980 and 2010¹², there is still hope for future conservation. Globally, mangrove forest restoration and revegetation efforts are seen as the most common and ‘shovel ready’ type of blue carbon offsetting projects to date, reflecting inclusion in ‘onshore’ carbon offsetting methodologies and verification processes¹³. Generally, a project is defined as ‘shovel ready’ when it is fully planned and funded, requiring only implementation. Example projects include reforestation and restoration projects in Gambia, Guinea , Guinea-Bissau, Kenya, Mozambique, Senegal, and Tanzania. While the Caribbean may lack the ‘shovel ready’ projects that are present in these examples, the Caribbean undoubtedly has an abundance of ‘shovel worthy’ projects, which represent projects that are deemed deserving of investment but may require further planning and resources before they are ready for implementation. 

Given the importance of mangrove ecosystems for the Caribbean, it is vital that both governments and private capital begin to take meaningful steps towards making extensive mangrove conservation in the region a reality. While this may seem like a daunting and complicated task, there are three key considerations that – once addressed – should help to pave a more robust pathway for mangrove conservation.

Financing for Conservation

One of the first and most crucial steps is securing adequate financing. Traditional funding sources can be limited, but innovative finance mechanisms – like green and blue bonds, debt-for-nature swaps, impact investing, and blended financing – offer a pathway to sustainable growth. Governments can build partnerships with experts in these fields, as well as capacity within their administrations to enhance their abilities to access these innovative financing options and drive conservation efforts.

National Development Plans

Another critical step is the development of robust national development plans. These plans can align conservation efforts with broader economic and environmental goals and allow governments to articulate the interconnectivity more clearly. By incorporating global targets like the "30x30" initiative (aiming to conserve 30% of nature by 2030), governments can also attract international support and funding to much-needed causes that benefit multiple stakeholders. Engaging stakeholders through consultations also helps to ensure that these plans reflect local needs and aspirations, paving the way for a sustainable future.

Framework for Carbon Accounting

Finally, establishing a framework for carbon accounting is essential. A robust carbon accounting system allows governments to measure, report, and manage greenhouse gas emissions accurately. This is crucial for mangrove conservation, ensuring that the carbon-sequestering capacity of these ecosystems is accurately valued in both domestic policies and global carbon markets. Proper carbon accounting can also support the exploration of mangrove-based carbon credits, providing additional resources for conservation. However, given the increasing scrutiny around greenwashing, it is key that governments get their frameworks right – otherwise, they run the risks of potentially incurring negative public backlash.

Conclusion

Mangroves are a valuable resource in the Caribbean, offering not only environmental benefits, but also resilience against extreme weather events. By embracing innovative finance, developing comprehensive national plans, and establishing robust carbon accounting frameworks, the Caribbean can lead the way in mangrove conservation, protecting both its people and its unique ecosystems. In doing so, the region can turn challenges into opportunities – helping to ensure a sustainable future for generations to come.

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^{[1]United Nations Climate Change. (2015). The Paris Agreement.} 

^{[2] Natural capital can be defined as the world’s stocks of natural assets which include geology, soil, air, water and all living things. World Forum on Natural Capital. What is natural capital?}

^{[3] World Economic Forum. (November 2023). What are green bonds and why is this market growing so fast?} 

^{[4] World Economic Forum. (April 2024). Climate finance: What are debt-for-nature swaps and how can they help countries?} 

^{[5] World Economic Forum. (January 2023). Impact investors can help at a time of global crisis. Here’s how.} 

^{[6] Global America (2022). Climate Change in the Caribbean.} 

^{[7] National Oceanic and Atmospheric Administration (May 2023). State of the Science FACT SHEET, Atlantic Hurricane and Climate Change.}  

^{[8] Joint Nature Conservation Committee (2019) The role of mangroves in coastal protection.} 

^{[9] United Nations Framework Convention on Climate Change, Climate Champions (July 2021). How mangroves protect people from increasingly frequent and powerful tropical storms.} 

^{[10] Estimated Sequestration rate: 179.6 g C / sq. m / year; KPMG International (2021). The (Blue) Wealth of Nations.} 

^{[11] UN Environmental Program (July 2023). An inside look at the beauty and benefits of mangroves.} 

^{[12] Commonwealth Marine Economies Programme (2017). Impacts of Climate Change on Mangrove Ecosystems in the Coastal and Marine Environments of Caribbean Small Island Developing States (SIDS).} 

^{[13] KPMG International (2021). The (Blue) Wealth of Nations.} 

The views and opinions expressed herein are those of the respondents/authors and do not necessarily represent the views and opinions of KPMG LLP, Cayman Islands.

Alex Robertson 
Associate, ESG,
KPMG in the Cayman Islands

Get in touch with Alex here. 

alexrobertson@kpmg.ky

+1 345 914 4701