How Wetlands Can Be Monetised Through Carbon Credits to Support Climate Financing

Wetlands are the quiet giants of our planet. They do not roar like oceans or tower like mountains, yet their ecological weight is immense. They store carbon in quantities that rival the world’s forests, protect coastlines from storms, filter water, and provide refuge for a staggering array of species. And yet, in the eyes of many policymakers, they remain little more than “unused land,” waiting for drainage, reclamation, or development.

In an age when the climate crisis is accelerating, this attitude is a luxury we can no longer afford. Greta Thunberg’s famous warning, “Our house is on fire”, is more than a soundbite. It is a reminder that we cannot simply cut emissions and hope for the best; we must also protect and expand the Earth’s natural carbon stores. Wetlands, particularly peatlands, mangroves, and tidal marshes, hold one of the keys to that solution.

The challenge is obvious: conservation costs money. Restoration costs even more. And yet, global finance often flows towards the destruction of wetlands, funding agriculture, construction, and infrastructure that undermine them. The question, then, is whether we can flip the economics. Can we make wetlands worth more alive than destroyed? The answer lies in carbon credits.

The Logic of Carbon Credits for Wetlands

At its core, the carbon credit system is simple: if you can prove that you’ve either prevented greenhouse gas emissions or removed them from the atmosphere, you can sell that achievement as a credit to entities seeking to offset their own emissions. For wetlands, this comes in two forms:

1. Avoided emissions, conserving intact wetlands to prevent the vast stores of carbon locked in their soils from escaping into the atmosphere.

2. Carbon removals, restoring degraded wetlands so they begin to re-accumulate biomass and peat, gradually pulling carbon back out of the air.

However, the system is only as credible as its safeguards. To be recognised as legitimate, a project must show that its benefits are additional (they would not have happened without the project), permanent (the carbon stays stored for decades, ideally centuries), and free from leakage (protecting one area shouldn’t simply push destruction elsewhere). This is where wetlands shine; if managed well, their carbon stores can be locked away for millennia.

A Marketplace in Transition

In 2025, the carbon market is undergoing a credibility reckoning. Years of loose accounting, over-inflated claims, and poor oversight have made buyers more cautious. Wetland projects, however, still stand out in the voluntary carbon market because they offer more than just carbon: they deliver tangible co-benefits like flood protection, biodiversity conservation, and fisheries recovery.

At the same time, a new frontier is opening under the Paris Agreement’s Article 6 framework, which allows countries to trade emissions reductions with one another. If a nation can demonstrate that its wetland restoration is delivering measurable emissions cuts, it can sell those results to another country trying to meet its climate commitments. This opens the door for large-scale public–private partnerships that blend voluntary corporate demand with government-to-government transactions.

The lesson for project developers and governments is clear: design wetlands programmes that can meet both today’s voluntary market standards and tomorrow’s compliance-grade requirements.

What Makes a Wetland Credit Valuable?

First, credibility. Modern wetland projects are no longer monitored by a person with a clipboard and a tape measure. They use satellites, drones, hydrological sensors, and sometimes even AI models to track water levels and vegetation growth. This level of measurement reassures buyers that they’re paying for real, verifiable climate impact.

Second, stability. Wetlands are vulnerable to storms, fires, and political decisions. Successful projects include insurance buffers, contingency funds, and long-term community agreements to ensure that the stored carbon isn’t suddenly released.

Third, local benefit. Wetland carbon projects are far more likely to last when they have the active support of nearby communities. This means jobs in restoration work, revenue-sharing agreements, and benefits such as improved fisheries or flood protection. Projects that ignore this social dimension often collapse once the initial funding dries up.

Turning Restoration into Cash Flow

A wetland carbon project typically moves through several stages. First comes identifying a site, often degraded but with strong potential for recovery, and confirming the amount of carbon it could store or protect. Next, a baseline study establishes how much carbon would be lost without intervention.

The restoration itself can be as straightforward as blocking drainage channels to re-flood peatlands, or as complex as re-engineering entire tidal flows for a marsh. Once the system is functioning again, regular monitoring and verification produce the data needed to issue credits. These credits are then sold, sometimes years in advance, under long-term purchase agreements, to companies or governments that value both the carbon and the ecological co-benefits.

The most sophisticated projects even “stack” revenue streams: selling carbon credits alongside biodiversity certificates, water-quality credits, or resilience bonds that monetise the flood protection wetlands provide.

Why Wetlands Matter Beyond Carbon

Although carbon finance is the hook, the deeper value of wetlands lies in their role as living infrastructure. A restored mangrove forest blunts the impact of cyclones, preventing billions in coastal damage. A re-wetted peatland reduces wildfire risk and dust storms. A healthy marsh filters pollutants and safeguards agricultural land from saltwater intrusion.

These adaptation benefits are measurable, and increasingly, they are being monetised. Insurance companies are starting to recognise that wetland restoration can reduce their payout risks, and some are even paying for it directly. This is the future: climate financing that values both carbon storage and resilience.

Facing the Doubts Head-On

It would be dishonest to ignore the criticisms of carbon offsets. Many projects in the past promised far more than they delivered, undermining trust. The solution is not to abandon the idea but to rebuild it with transparency, rigour, and community ownership at its core.

Wetland carbon credits, done right, are not a licence for pollution. They are a way of channelling urgent finance into landscapes that desperately need protection. When paired with strong emission-reduction commitments from buyers, they become part of a balanced climate strategy.

The Road Ahead

To unlock the full potential of wetlands in climate financing, several steps are essential:

• Governments must map and legally protect high-carbon wetlands.

• Standards bodies must continue tightening rules for measuring, verifying, and selling credits.

• Developers must ensure projects serve local communities, not just distant buyers.

• Corporate buyers must prioritise high-integrity credits and treat them as a complement to, not a substitute for, reducing their own emissions.

If we succeed, wetlands will cease to be invisible in economic planning. They will appear on national balance sheets as strategic assets, generating revenue, protecting communities, and storing carbon for generations.

The opportunity is there. The science is clear. The markets are evolving. What remains is the political will to see wetlands not as swamps in the way of “progress,” but as some of the most valuable land on Earth.

If Greta’s warning about our burning house still rings in your ears, consider wetlands as part of the fire brigade, quietly, steadily, and naturally dousing the flames. The money is ready to flow. All we have to do is turn the water back on.