Anthony Carrigan, CEO Kyeema Foundation
Kyeema Foundation is focused on the intersection of human, animal, and environmental health across the globe, and implements many of Palladium's Let's Make it Possible initiatives. CEO Anthony Carrigan shares his thoughts on the power of financial literacy to equip coastal communities to secure their futures.
Removing and storing the excess carbon we’ve emitted into the atmosphere is key to controlling the climate crisis. Huge sums are being funnelled into technology solutions (U.S. President Biden recently announced an investment of $1.2 billion to kickstart the U.S. carbon removal industry), and there’s no doubt that direct air capture removal projects are going to be part of the solution. But our natural environment is the original “carbon sink”, and it goes beyond the forests and peatlands we often envisage.
Enter: Blue Carbon. This is the carbon captured and stored by coastal and marine ecosystems such as mangroves, seagrasses, and salt marshes. These ecosystems are incredibly effective at sequestering carbon dioxide from the atmosphere, and while the science is solid, the commercial applications are relatively untested.
Kyeema is investing heavily in effective local marine area management – particularly in communities in Papua New Guinea but increasingly across the globe. Long-term carbon sequestration is one driver, certainly, but the reality on the ground right now is that vulnerable communities rely on local ecosystems for food and income, and these are being threatened by climate change, biodiversity loss, and increasing climate shocks.
Mangroves, seagrass, and saltmarsh are important carbon sinks. By conserving and restoring these ecosystems, we can reduce greenhouse gas emissions and, potentially, generate blue carbon credits; provide alternative livelihoods for local communities through ecotourism, eco-friendly product development, and sustainable fishing practices; attract investment from companies seeking to offset carbon emissions; and provide opportunities for research and education.
These are all investible opportunities with commercial outcomes beyond saving the planet, and it’s crucial that local communities get a piece of the commercial pie.
This belief has led us to build financial literacy options into our coastal programs. Financial literacy will be pivotal for coastal communities to maximise and utilise funds from blue carbon projects in eight ways:
1. Financial literacy empowers communities to access funding sources. Some coastal communities are skilled at applying for grants and public funds. But handling private investors and carbon offset market players is a new game, and community members should have access to the skills required to navigate the complex landscape of funding options so they can select the ones that align best with their needs.
2. Communities need project planning and management capabilities, including the ability to realistic budgets, allocate funds appropriately across various project components (such as restoration, monitoring, and community engagement), and ensure that financial resources are managed efficiently to maximize project outcomes.
3. Financial literacy helps communities understand and manage financial risks associated with blue carbon projects. These projects often involve uncertainty in terms of costs, revenues, and market dynamics. Communities will need to identify and develop strategies to mitigate risks, such as creating contingency funds or establishing risk-sharing mechanisms.
4. Blue carbon projects typically require long-term commitment and engagement. Financial literacy and economic growth activities should be aimed at protecting the environment in the short term and enabling communities to create sustainable financial models that ensure ongoing funding for project maintenance, monitoring, and adaptive management.
5. Negotiating favourable terms with potential investors is a more difficult proposition than negotiating with government donors or NGO partners. Even with general goodwill in the sector, communities don’t always produce win-win agreements. The first step to addressing the imbalance of power in that negotiation is to speak the language (financially speaking), so whether it's negotiating funding agreements or profit-sharing arrangements, communities are more likely to secure deals that are in their best interests.
6. Financial literacy encourages transparency in financial matters and accountability in fund utilisation. When communities have a clear understanding of financial principles, they are more likely to maintain accurate financial records, follow ethical financial practices, and build trust among stakeholders. This is a positive for future investors and helps to build a stable economic environment.
7. Blue carbon projects have the potential to deliver not only environmental benefits but also socioeconomic advantages to coastal communities. Financial literacy will help guide communities to make informed decisions about how to allocate funds to address local needs, such as job creation, capacity building, education, and healthcare.
8. Finally, communities need to be able to assess the return on investment from activities that are protecting environmental assets and, by association, downstream blue carbon projects. By understanding financial metrics, communities can evaluate the project's economic impact, cost-effectiveness, and contribution to environmental and social well-being.
Blue carbon projects are coming to the Pacific. Increasing financial literacy is one of the best ways coastal communities can secure their future.
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