Capturing Climate Co-benefits of Wetlands: Opportunities & Challenges

23 Apr, 2025

Healthy wetlands provide significant climate benefits including natural protection against extreme events such as storm surges and flooding, contribute to water and food security and act as natural carbon sink. Wetlands, including mangroves, peatlands, and marshes, have the potential to store carbon at much higher rates than many other ecosystems, if managed properly. However, when wetlands are degraded or drained or not managed properly, they can release significant amounts of carbon back into the atmosphere, exacerbating climate change. As a result, restoring and conserving wetlands can play a pivotal role in reducing these emissions and enhancing carbon sequestration.

Wetlands have a unique potential to help meet the country’s climate goals. Considering India’s Nationally Determined Contributions (NDCs), it is critical to enhance carbon sinks and wetlands play a crucial role in supporting these mitigation efforts. Initiatives such as the Amrit Dharohar, National Plan for Conservation of Aquatic Eco-systems (NPCA) and the Indian Green Credit Programme are addressing the urgent need to protect and restore wetlands while encouraging sustainable practices through innovative financial mechanisms. The Green Credit Programme, for example, has the potential to drive substantial investments into wetland conservation by linking Ramsar Sites to carbon markets, offering a unique opportunity to mobilize resources for wetland conservation & restoration.

The challenge, however, lies in developing a robust framework for wetland carbon accounting and financing that can align with national climate and financial objectives. To address this, the Ministry of Environment, Forest, and Climate Change (MoEF&CC), in collaboration with GIZ and Wetlands International South Asia, organised a workshop on “Capturing Climate Co-benefits of Wetlands” on April 23, 2025. The workshop aimed to explore innovative solutions to financing wetland management and carbon sequestration, with a particular focus on leveraging carbon markets for wetland restoration.

The workshop, held at MoEF&CC, brought together experts from across sectors, including government agencies, environmental organisations, carbon advisory services and financial institutions. The workshop was inaugurated by Mr. Rajat Agarwal, Joint Secretary, MoEF&CC, Ms Rajasree Ray Economic Advisor, MoEF&CC C and Mr. Sharath Kumar Pallerla, Scientist G, Climate Change: NATCOM; IPCC. Their keynote address emphasised the importance of integrating wetland conservation into India’s broader climate strategies, particularly considering the country's ambitious NDCs and National Adaptation Plan. The workshop brought together participants from various organisations like the National Centre for Sustainable Coastal Management (NCSCM), Carbon Markets Association of India (CMAI), Verra, Gold Standard, Indian Oil Corporation, VNV Advisory, Kosher Climate, GAIT Global, AXA Climate, CTRAN Consulting, World Wide Fund for Nature (WWF), Centre for Water Resources Development and Management (CWRDM), Council on Energy, Environment and Water (CEEW) and Emergent Ventures. Ms Rajasree Ray highlighted that the workshop would support development of a climate rationale for wetlands and build bankable projects to leverage climate finance including GCF and AF. Mr Rajat Agarwal emphasised the need for building transformative projects with target setting. Mr Sharath Pallerla spoke about the need to report on GHG inventory for wetlands in collaboration with NATCOM. The workshop included discussion on existing efforts to develop a GHG inventory for India’s wetlands and emphasised the need for a comprehensive system to track carbon stocks. This kind of data is crucial for developing strategies that accurately measure and report on the carbon sequestration potential of these ecosystems.

Another important topic was the role of carbon markets. There was a thorough discussion about the potential of voluntary carbon markets to finance wetland restoration, especially in regions like Gujarat and the Sundarbans, where carbon projects are already being assessed. These projects face challenges, from technical hurdles to policy alignment, but they also present opportunities for scaling up and integrating wetland management into broader climate finance strategies. The potential for blue carbon projects & wetland-based carbon offset initiatives was highlighted as a key tool for attracting international climate finance.

The focus was also on the financial tools that could support wetland management. A major takeaway was the role of blended finance in unlocking funding for wetland restoration. Blended finance combines public and private investments to reduce risk and make projects more attractive to investors. Additionally, insurance-based risk transfer mechanisms were discussed as viable models to support wetland conservation projects.

The workshop concluded with a discussion on the need for continued collaboration across sectors to build a sustainable financial ecosystem for wetland conservation in India. Key takeaways included the importance of integrating carbon markets into wetland management strategies and the need for scalable financing mechanisms that can attract both public and private sector investment.

Following the success of this workshop, MoEF&CC, in collaboration with GIZ and Wetlands International South Asia, plans to continue developing the framework for wetland carbon accounting in collaboration with NATCOM. Future efforts will focus on strengthening the integration of carbon markets with wetland management strategies and exploring ways to mobilise financial resources for large-scale restoration efforts. This includes further developing policies that support the link between wetland management and broader climate objectives, such as the NDCs and the Green Credit Programme.

As India works to meet its climate goals, the workshop highlighted the critical role wetlands play in achieving both carbon sequestration and climate resilience, positioning them as key assets in the country's climate action strategies.

A glimpse of the workshop | © WISA

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About the project

The Wetlands Management for Biodiversity and Climate Protection project aims to strengthen the institutional framework and capacities for an ecosystem-based integrated management of wetlands of international importance (Ramsar sites) in India. The project is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH on behalf of the German Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) in partnership with the Ministry of Environment, Forest and Climate Change (MoEFCC) in close cooperation with the National Plan for Conservation of Aquatic Ecosystems (NPCA). This project is part of the International Climate Initiative (IKI). The Federal Ministry for the Environment, Nature Conservation, Nuclear Safety and Consumer Protection (BMUV) supports this initiative on the basis of a decision adopted by the German Bundestag. Read More

For more information contact: biodiv.india@giz.de