Money for mangroves
Mangroves spanning the world’s tropical waters perform many functions, including locking up carbon. By working out how much carbon they store, and how much it would cost to preserve them, a new study in Proceedings of the National Academy of Sciences found that protecting mangroves is actually cheaper – for each tonne of carbon dioxide emissions avoided – than buying into the EU’s Emissions Trading Scheme (ETS).
Or at least it was. But since the research was completed, the carbon price – the cost of emitting one tonne of carbon dioxide under the Emissions Trading Scheme, has fallen. So, purely in terms of avoiding greenhouse gas emissions, is preserving mangroves still the cheaper option of the two?
What the study did
Before the study could get down to the finer economic details, it first mapped out how much carbon is stored in the world’s mangroves.
The authors used satellites to work out the area mangroves in the tropics cover and the amount of carbon they store. This method is similar to those used in recent studies looking more broadly at emissions from tropical deforestation. Although this system isn’t perfect, it allows scientists to build a reasonably accurate picture of carbon stock and to estimate how fast mangroves are being lost.
Working out the cost of keeping carbon locked up in mangroves is more complicated. The authors had to work out the most profitable way of using that land if it were not being preserved, and add to this the cost of setting up and managing a protection area. And all of these costs depend on where in the world the mangroves are located.
But once you know about the amount of carbon being stored, and how much it costs to prevent it from being released if the land is developed for other uses, it’s relatively simple maths to work out how much each tonne of stored carbon dioxide is worth.
The economic case
Essentially, the study finds that a big chunk of global emissions can be avoided at a relatively low cost, before protecting mangroves becomes prohibitively expensive. The authors say:
“the majority of potential emissions from mangroves could be avoided for less than $10 per [metric] ton”
Here’s how it looks:
Image - Screen Shot 2012-07-30 At 12.22.32 (note)
Fig. 1. Avoided emissions from mangrove preservation. Source: adapted from Siikimaki et al., 2012
Their conclusion is demonstrated in the central (blue) estimate, when looking at the global picture. Working out what quantity of emissions are avoided depends on how much would have been released if the land had been converted. Since this is only partially understood, the authors also give a high (black) and low (red) estimate.
But figuring out how good a deal this is is pretty difficult unless you can compare it to other mechanisms which essentially aim to do the same thing – avoid emissions. Like the EU Emissions Trading Scheme.
The grey band on the graph above demonstrates the carbon price under the ETS. Looking at the central estimate, and as the authors summarise, you can see a lot of those avoided emissions could be achieved for less than $10 per tonne, which is the bottom end of the spectrum for ETS prices in 2011.
So if you’re looking to spend some serious pocket money by taking future greenhouse gas emissions off the market, mangroves appear to be better value for money. The only trouble is, the price of carbon permits can plummet and suddenly buying into the ETS becomes the cheaper option.
Does it still make economic sense?
This is what is happening now, in mid-2012. The price of permits has collapsed over the past nine months. The market is oversupplied, and the tough economic conditions are reducing demand. In terms of this new study, it may mean that the range of ETS permit prices no longer reflect the actual price.
Let’s take a quick, crude look. The authors give a range for 2011 carbon prices between $10-$20 per tonne. That’s roughly â?¬8-â?¬16. In the past week the carbon price has been around â?¬7-â?¬8. And over the past 6 weeks it has at times dropped to around â?¬6.50 and peaked just above â?¬8. Convert that range back into US dollars, that’s $8-$10 ish per tonne.
Image - Screen Shot 2012-07-30 At 15.36.49 (note)
Fig. 2. Avoided emissions from mangrove preservation, including current price range of EU carbon permits. Source: adapted from Siikimaki et al., 2012
That means currently, the carbon price is really sitting on or just beyond that lower line of the grey band. Looking at the orange line which is the $8 cut off, this really is the crucial point. If carbon prices fall any lower, the economic case for preserving mangroves looks much weaker.
This comparison is of course very simplistic, and doesn’t really capture all the economic and environmental benefits that mangroves provide. In tropical regions, they are a natural defence against rising sea levels, growing upwards out of shallow water and raising the height of the land in their wake. They are also a first line of defence against storm surges, absorbing energy and preventing erosion. And they provide food, building materials, firewood and medicines for surrounding communities.
All of this doesn’t really matter, it’s just a fun comparison. What it does tell you is this: protecting mangroves is cheap, and buying permits is only just slightly more expensive. The ETS is supposed to make carbon cost a reasonable amount, enough to encourage industry and big business to become more efficient and less polluting. But its failing to do so. The EU have made some intervention but at the moment it’s not enough.