A project that will allow companies to offset their carbon footprint by supporting environmental areas that naturally absorb carbon from the atmosphere, is under way.

XL Catlin and The Nature Conservancy are collaborating to bring blue carbon credits to the market.

The move coincides with the Ocean Risk Summit, being held in Bermuda this week, which is discussing ways governments and businesses should respond to the risks of existing and projected changed in the ocean, from factors such as overfishing, pollution, and climate change. XL Catlin and The Nature Conservancy are sponsors of the summit.

The project will value the combined carbon sequestration and resilience benefits provided by coastal wetland ecosystems. The Nature Conservancy will explore the development of a system of credits assigning a market value to the resilience services provided by those ecosystems.

It is hoped that insurance firms and other businesses will be able to offset their carbon footprint while simultaneously better understanding the contribution they are making to reducing coastal hazards in the world’s most vulnerable coastal areas.

Coastal wetlands, such as salt marshes, seagrass meadows and mangroves, sequester billions of tonnes of carbon from the atmosphere at concentrations up to five times greater than terrestrial forests. The carbon sequestered and stored in these coastal wetlands is called “blue carbon”. As an increasing number of companies are purchasing carbon credits to offset their footprints, this credit will enable a valuation of the carbon sequestration and coastal resilience benefits that wetlands provide both businesses and communities.

Coastal wetlands sequester carbon and protect coastlines by absorbing incoming wave energy and providing storm protection, often at lower costs than built infrastructure like seawalls and levees.

According to a statement by The nature conservancy, scientists estimate that it only takes 100 metres of mangroves to reduce wave height by 66 per cent, and a recent study found that wetlands prevented $625 million in direct flood damages from Hurricane Sandy in the US.

Maria Damanki, global managing director for the ocean at The Nature Conservancy, said: “Blue carbon is an emerging opportunity for wetland conservation and restoration, gaining popularity in international policy spheres. Wetlands help to fight both climate change and achieve greenhouse gas mitigation targets, whilst helping to make coasts more resilient to the impacts of climate change.

“An economic incentive is vital for coastal wetland conservation to curtail wetland destruction by creating a financial value for the resilience these systems offer; this is why the Blue Carbon Resilience Credits are so important.”

It is estimated that half of the world’s mangroves and seagrasses have been destroyed, and that at the current rate, unprotected mangroves could be gone entirely by 2100.

The Nature Conservancy said that when these systems are lost or degraded, they become a source of greenhouse gases. It said that, with support from XL Catlin, it will explore different options to value the resilience services provided by coastal wetlands and to develop a credit product to support ongoing wetland conservation.

One of these options could include a numeric ranking system assigning a dollar value to wetlands based on factors such as their potential for storm impact reduction, location relative to vulnerable communities, local economic activities and assets, and potential benefits from habitat restoration. The figures generated by the rankings, combined with the carbon storage capacity of a given wetland, would generate Blue Carbon Resilience Credits.

These credits would then offer organisations the capacity to manage their carbon footprints whilst acting as the funding mechanism for wetland conservation, increasing coastal resilience for communities.

Paul Jardine, chief experience officer for XL Catlin, said: “In 2017 XL Catlin launched its Ocean Risk Initiative to help identify solutions and build resilience at local, regional and global levels to the implications of ocean related risk.

“Our collaboration with The Nature Conservancy is an exciting and real-world example of our commitment.”

The Nature Conservancy said carbon mitigation and risk reduction benefits of coastal wetlands present an unprecedented opportunity: natural coastal infrastructure is often the first line of defence when severe weather hits, and a very effective one.

In a statement it said: “Billions of dollars are invested to reduce risks from coastal hazards, but most of these funds are used on grey infrastructure. This pilot’s goal is to establish coastal wetlands as a new frontier for carbon storage.

“We know that between 30-50 per cent of coastal ecosystems have been lost in the last century. Even if less than a quarter of lost coastal wetlands were restored, they could sequester as much as 350.6 million tonnes of CO2 per year — enough to power 40 million homes. Add to this tens of millions of tonnes of carbon emissions averted due to avoided wetlands loss and the global scale of this work is undeniable.”