Mangroves are critical for climate adaptation and mitigation. Globally, mangroves protect more than 18 million people and lessen the flood damage to coastal properties and assets by more than US$ 82 billion a year. At the same time, mangroves provide enormous mitigation benefits, storing up to 10 times more carbon on a per-area basis than terrestrial forests. However, mangroves are in decline; approximately half of the world’s mangroves have been lost in the last 50 years.
The coastal protection and carbon storage benefits provided by mangroves are still underrecognized and often considered ‘free’ ecosystem services. RISCO seeks to create new revenue streams for mangrove conservation and restoration by incorporating mangroves’ risk reduction value into insurance products and monetizing the climate mitigation value of mangroves through blue carbon credits.
RISCO is a first-of-its-kind social enterprise that overcomes existing barriers to mangrove protection by connecting the adaptation and mitigation values of mangroves to the beneficiaries of these values, most of whom do not have the knowledge or resources needed to protect mangroves—including insurance companies.
RISCO will engage in mangrove conservation and restoration in partnership with local communities, selecting sites where mangroves provide high flood reduction benefits and modeling that value. Insurance companies will pay an annual fee for these services. RISCO will also generate and sell blue carbon credits to organizations seeking to meet voluntary or regulatory climate targets.
The planned pilot is in the Philippines, one of the most vulnerable countries to climate change. It will target 3,400 ha of mangrove conservation and 600 ha of restoration. Over ten years, the pilot will provide a climate benefit of more than 600,000 tonnes of avoided and sequestered CO2 emissions, and is expected to generate more than US$ 10 million in revenue from the insurance sector and blue carbon markets.
The five countries that are best positioned for replicating the RISCO pilot are Mexico, Malaysia, Indonesia, Philippines, and Brazil. If RISCO pursues projects in these countries, it is expected to generate more than US$ 200 million in revenue and achieve avoided emissions and sequestration of 16 million tonnes of CO2, over a 10-year period. This is equivalent to the annual electricity use of over 2 million homes.
RISCO will be the first enterprise to assess and monetize the coastal asset risk reduction value and carbon storage benefits of mangroves. In the short-term, RISCO will rely on a blended mix of grants, equity, and loans. Longer term, RISCO aims to become self-financing with the insurance and blue carbon revenue streams.
- Insurance: RISCO will contract directly with insurance companies or associations of insurance companies and will secure an annual payment for continued, verified conservation and/or restoration of mangroves. The annual payment will be linked to a site-specific calculation of the flood reduction benefits provided by the mangroves
- Blue carbon credits: RISCO will utilize forthcoming Verra methodologies for Wetlands Restoration and Conservation to generate and sell blue carbon credits to organizations seeking to meet voluntary or regulatory climate mitigation targets.
In addition to securing initial financing, RISCO will (1) identify viable project sites; (2) coordinate and contract with insurance partners; (3) provide the mangrove conservation and restoration interventions directly or via a third-party; and (4) manage the process to generate and sell blue carbon credits.
News & Events
Lab instruments mobilized USD 816 million in 2021, making it the best Lab year so far for total mobilization figures. Since the Lab’s inception in 2014, Lab instruments have surpassed USD 3.2 billion in climate investments, with roughly USD 1 billion coming from the private sector. Instrument Cycle USD Blockchain Climate Risk Crop Insurance […]
SAN FRANCISCO – In March, Climate Policy Initiative (CPI) hosted the workshop “The Potential for Scaling Innovative Climate Finance in China,” in collaboration with the German Society for International Cooperation in China (GIZ China). This workshop was part of a broader project supported by the Hewlett Foundation, which aims to build on CPI’s experience to […]
Investors launch new solutions for climate action targeting blue carbon, clean energy access, sustainable agriculture, and sustainable cities in developing countriesOctober 2, 2019
Today, the Global Innovation Lab for Climate Finance announced the endorsement and launch of six innovative financial instruments for climate-related projects in developing countries. The Lab, an initiative of over 60 public and private investors and institutions, accelerates much-needed investment solutions to support developing countries to meet their climate change and sustainable development goals. Created […]
Business Green, a UK’s specialized media outlet on green economy and environmental issues, has published a note about the Lab’s 2019 endorsement meeting, which took place on October 2nd at The Rockefeller Foundation, in New York. It quotes Lab director Barbara Buchner, also executive director of the Climate Policy Initiative, saying the projects would unlock investment […]
Investor initiative chooses ideas that will mobilize investment for sustainable cities, energy access, blue carbon, and sustainable agricultureMarch 5, 2019
LONDON – The Global Innovation Lab for Climate Finance, an investor-led initiative that identifies, develops, and launches promising solutions to drive critical investment to action on climate change in developing countries, has selected its top six ideas for 2019. At a time when large-scale action on climate change is more urgent than ever before, the […]