Legal Issues Affecting Blue Carbon Projects on Publicly-Owned Coastal Wetlands

Coastal wetlands play an important role in sequestering atmospheric carbon, but these ecosystems are under threat from sea level rise, land use conversion, and other causes. Restoration projects in coastal wetlands can provide a range of benefits for habitat and ecosystems, including by increasing sequestration of “blue carbon.” Coastal wetland restoration projects that effectively sequester carbon and meet the requirements of the voluntary carbon market can generate tradeable carbon offsets, which have a monetary value and can be used to finance all or part of the restoration needed to generate them. Blue carbon offsets thus represent a promising tool to promote effective restoration and maintenance projects on threatened and degraded coastal wetlands. Agencies must be confident that they will not violate the law before they commit to deployment of blue carbon offset projects on public coastal wetlands. Federal, state, and tribal agencies are critical partners in wetlands restoration projects because they control a substantial portion of the nation’s coastal wetlands. However, land management agencies may justifiably worry about violating their legal mandates if they participate in wetland restoration projects funded through blue carbon offsets. In the absence of past models of successful blue carbon offset projects on public lands, and without explicit authorization for this activity, agency staff can benefit from an analytical framework to understand what legal issues may occur in a blue carbon offset project and how to design projects to avoid legal problems to the extent possible. This study begins to provide that framework by identifying legal considerations for blue carbon offset projects on public coastal wetlands. Agencies are faced with the difficult challenge of both complying with all relevant laws and satisfying the conditions necessary to qualify projects for offsets under voluntary standards. Key conditions for offset markets with legal implications include: (i) additionality – the project must actually sequester carbon; (ii) permanence – the project must provide the promised sequestration benefit over a long time period; and (iii) unambiguous ownership – the entity registering the carbon offset must be the only one able to reasonably claim it. Each of these three core conditions may result in potential legal issues when applied to blue carbon-financed restoration projects on public coastal wetlands. Based on an evaluation of representative federal, state, and tribal law, this study divides these legal issues into two broad categories: (i) title and property rights; and (ii) legal authority