Overcoming legal barriers to coastal wetland restoration: lessons from Australia's Blue Carbon methodology

Globally, there is a recognized need for widespread restoration of coastal wetlands. Despite this recognition, progress in many places has been slow, for reasons including legal and policy barriers. In Australia many of these legal barriers have been overcome in the development of the Carbon Credits (Carbon Farming Initiative ‐ Tidal Restoration of Blue Carbon Ecosystems) Methodology Determination 2022, which allows for certain coastal restoration projects to be accredited and ultimately receive Australian Carbon Credit Units. This paper describes the new methodology, outlines the key legal barriers which had to be addressed in its development, and analyzes the legal solutions utilized. It concludes with some general observations for fucoastal wetland restoration projects. Despite the jurisdictional focus on Australia, it is anticipated that these lessons will be of broader relevance to other countries grappling with restoration projects in the intertidal zone.


Introduction
Coastal wetlands like mangroves and saltmarsh deliver significant ecosystem services, including carbon sequestration, coastal stabilization, habitat for fish, and water filtration (see e.g. Barbier et al. 2011;Costanza et al. 2014). The carbon sequestration function of coastal wetlands has been the subject of intense scientific research since early in the 21st century, with scientists recognizing that these ecosystems provide a particularly effective, long-term, and stable carbon sink (McLeod et al. 2011;Fourqurean et al. 2012). However, despite this early promise of blue carbon as a nature-based solution to climate change, uptake of restoration projects has been slow compared to the terrestrial realm (see e.g. Saunders et al. 2020). One reason for this is the complex legal and policy challenges that exist in the intertidal zone (Bell-James 2016).
In January 2022, the Australian Government passed a legislative instrument -the Carbon Credits (Carbon Farming Initiative-Tidal Restoration of Blue Carbon Ecosystems) Methodology Determination 2022 (Cth) ("Blue Carbon methodology") -to allow some blue carbon projects to be included in Australia's domestic climate change mitigation framework, the Emissions Reduction Fund ("ERF"). In particular, the methodology applies to removal or modification of a tidal restriction mechanism, which will allow tidal flow to be reintroduced and coastal ecosystems to naturally reestablish (Clean Energy Regulator 2022). The Blue Carbon methodology is the culmination of years of scientific (e.g. Kelleway et al. 2020;Lovelock et al. 2022b) and legal and policy work (Bell-James 2016;Bell-James et al. 2021), and the product of a lengthy codesign process involving government, industry, potential end-users, Author contributions: JB-J designed the study, conducted the research, and wrote the manuscript. 1 scientists, and technical and legal experts (Minister for Industry, Energy and Emissions Reduction 2022). The process of developing the methodology offers some transferrable lessons in overcoming legal barriers to coastal restoration projects which may be of significant interest in other jurisdictions. This paper will commence with a brief introduction to the ERF to contextualize the Blue Carbon methodology. It will then provide an overview of the key legal issues that arise in the coastal restoration space with an analysis of how these issues were addressed in Australia. Finally, it will conclude with some lessons for overcoming legal barriers to coastal wetland projects more generally.

The ERF and the Blue Carbon Methodology
The key domestic climate change mitigation policy measure in Australia is the "ERF." The ERF consists of a pool of government funds which is utilized to purchase carbon abatement delivered by projects which have been accredited by the Clean Energy Regulator ("CER"). Specifically, this carbon abatement is credited with Australian Carbon Credit Units ("ACCUs") which may be purchased by the ERF. Alternatively, ACCUs may be sold or traded on Australia's voluntary carbon market, which exists to serve corporations which may be required to purchase carbon credits to meet legal requirements, or may choose to purchase carbon credits to validate claims of carbon neutrality in their operations.
In order to be accredited, a proponent must apply to the CER prior to undertaking the project and seek to be registered as an "eligible offsets project" (Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) ss 22, 27[2]). One of the major prerequisites to being declared an "eligible offsets project" is that there must be a methodology determination in force setting out the requirements for a project, and the method by which abatement is to be calculated (Carbon Credits [Carbon Farming Initiative] Act 2011 [Cth] s 106).
Once a proposed project receives accreditation, the proponent can commence work. When the project has delivered eligible carbon abatement, the Regulator must issue ACCUs (Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) s 11(2)). The Blue Carbon methodology sets out how abatement is to be calculated in a reestablished coastal wetland ecosystem, which may consist of supratidal forest, saltmarsh, mangroves, and/or seagrass (Blue Carbon methodology s 5).
Prior to 2022 there was no methodology determination in place applicable to blue carbon projects, and therefore there was no opportunity for blue carbon projects to be accredited and generate ACCUs for sale in ERF auctions or in voluntary market schemes. The finalization of the Blue Carbon methodology is consequently a watershed moment for coastal wetland restoration projects in Australia as reintroduction of tidal flow projects can now, subject to a number of requirements being met, attract ACCUs and provide restoration project proponents with a clear financial incentive to invest in coastal projects. Along with the accompanying Blue Carbon methodology guide (Clean Energy Regulator 2022), the methodology provides scientific and legal guidance to proponents who propose to undertake a restoration of tidal flow project.

Lack of Dedicated and Fit for Purpose Policy
The development of the Blue Carbon methodology exposed a number of key legal and policy challenges in the coastal restoration space which had to be addressed and overcome. Historically, a key barrier to coastal wetland restoration projects has been the lack of dedicated, fit-for-purpose restoration policy (Shumway et al. 2021). This policy gap means that proponents must engage with legal and policy frameworks and processes designed for development projects which are likely to cause environmental harm, rather than redress it.
In the restoration of tidal flow context, a proponent will need to obtain the necessary legal and regulatory permits and consents to remove, modify, or replace any structure, with these arrangements differing from state to state in Australia. For example, in New South Wales, the following major permits may be needed depending on the location of works: • Consent must be obtained to undertake "coastal protection works" (defined to include seawalls) under the Coastal Management Act 2016 (NSW) and associated laws and policies; • Consent is required for "dredging" activities (which means excavating water land or moving material on or from water land) under the Fisheries Management Act 1994 (NSW) and associated laws and policies; and • Consent is required to undertake work within a marine park, or aquatic reserve under the Marine Estate Management Act 2014 and associated laws and policies.
There may also be other permits required based on the type of land, and if there are other features present such as protected vegetation and acid sulfate soils (Clean Energy Regulator 2022).
This need to navigate a complicated legal regime comprising multiple pieces of legislation and policy and government agencies can make coastal restoration projects costly and inefficient, particularly in comparison to some terrestrial restoration contexts. This has potentially been a barrier to coastal restoration project uptake in the past (Shumway et al. 2021), especially when such projects have been unable to attract ACCUs.
The Blue Carbon methodology does not obviate the need to engage with these processes, because under the legislative regime governing the ERF, a proponent must hold all regulatory approvals for a project (Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) ss 27-28). Therefore a proponent will still be required to engage with state/sub-national level permitting processes, and reform to these state permitting processes is outside of the jurisdictional remit of the CER. However, the CER has made an effort to coordinate and streamline this permitting process for proponents, and the method guide developed to accompany the methodology lists the permits required and the agencies responsible for granting these permits (Clean Energy Regulator 2022). While there remains a lack of fit-for-purpose restoration policy, this compilation of permits required and relevant agencies Restoration Ecology September 2023 involved may assist proponents to navigate a complex legislative regime (see Clean Energy Regulator 2022, appendix 2) which, combined with a clear financial incentive to do so, may hopefully progress efforts in the coastal wetland restoration space.
Land Tenure, Ownership, and Use Another legal barrier to any type of coastal wetland restoration project is the existing legal arrangements surrounding land tenure, ownership, and use. Coastal wetlands such as mangroves and saltmarsh occupy the intertidal zone, where the boundary between land and tidal waterways is often ambulatory (i.e. moves landward or seaward with processes such as erosion and accretion), not fixed on a map, and therefore not always easy to identify (Bell-James & Lovelock 2019a). Many Australian states use the mean-high water mark as the boundary between land tenures, but this is a measurement which often requires independent verification (Bell-James & Lovelock 2019a). Additionally, structures to modify tidal flow may have changed the location of the mean high-water mark (Bell-James et al. 2021), and this mark will also shift in the future due to sea-level rise. The existence of native title rights and interests in land and water must also be considered (see e.g. Kimberley Land Council 2021).
This uncertainty of tenure means that it is not always clear who has an entitlement to carry out a project, who is required to apply for permits to carry out a project, and who has the entitlement to any benefits flowing from the project, such as carbon credits (see e.g. Macreadie et al. 2022). Having to identify the exact boundary with a high degree of certainty would require significant hydrological and geomorphological expertise and be expensive (adding to project costs), and "development of methodologies that are simple and inexpensive to implement is an important element in promoting uptake of restoration projects" (Lovelock et al. 2022).
A suggested solution in the Blue Carbon methodology planning phase was to obtain agreement from the relevant parties (e.g. State government) to assign legal rights to the project area to the proponent, irrespective of where the boundary lies. It will also be necessary for these parties to assign the legal right to any ACCUs generated through the project. These agreements will be given on the understanding that the boundary may be unclear, but the proponent is assigned the legal rights regardless . Ultimately this was the approach taken in the Blue Carbon methodology guide, which recommends that project proponents identify anyone who has a legal interest in the proposed project area, obtain their written agreement, and contractually agree on allocations of carbon credits (Clean Energy Regulator 2022). This is a pragmatic and cost-effective measure which assists with meeting the goal of "simple and inexpensive to implement" (Lovelock et al. 2022). However, it should also be recognized that there are continuing issues surrounding recognition of native title rights and interests which need to be resolved at the broader ERF level (see Indigenous Carbon Industry Network 2021).

Impacts on Other Landholders
Removal of a structure to restrict tidal flow may result in flooding of land beyond the boundaries of any land owned or controlled by the project proponent, and may therefore have adverse impacts on other land and landholders (Bell-James & Lovelock 2019b). The nature of hydrological regimes and the topography of floodplains means that affected land may not necessarily be only those parcels directly adjacent to the property in question, and there may be instances where impacts are felt across a broader geographic scale. It may also be possible that a larger and potentially undetermined class of parties will be affected in the future as sea-level rise materializes . If these projects are implemented without the knowledge and consent of neighboring landholders, the proponent may be vulnerable to legal claims in negligence or nuisance in the future as impacts occur (see e.g. Bell-James & Lovelock 2019b).
This potential for carbon projects to impact negatively on other parties is contemplated in the general ERF legislative regime. In making a methodology determination, the relevant government minister must have regard to whether any adverse environmental, economic, or social impacts are likely to arise from the carrying out of the kind of project to which the determination applies (Carbon Credits (Carbon Farming Initiative) Act

(Cth) s 106[4][c]).
To this end, prior to applying for accreditation, a proponent of a reintroduction of tidal flow project must undertake a hydrological assessment and prepare project maps that identify all "impacted land" (Blue Carbon methodology ss 15-16, defined in s 5 as land that experiences tidal introduction relating to the eligible project activities implemented). If the mapping identifies impacted land that is not part of the project area, then the proponent is required to obtain consent from the landholder (s 21). These measures should alleviate some of the liability issues that arise in the context of altering floodplains. However, it should be noted that this consent is not required prior to project commencement; it must be obtained and communicated to the CER by the end of the first reporting period (generally 7 years). Thus there is some potential for consent issues to arise post project commencement.

Carbon Project-Specific Legal Issues
The legal issues discussed above are generic to any coastal wetland restoration project, and there are also some legal barriers that are specific to carbon projects in the coastal wetland context. The Verified Carbon Standard, one of the major international carbon standards, sets out principles for greenhouse gas removal projects, including that the carbon abatement is real, measurable and verifiable, additional, and permanent (Verified Carbon Standard 2022). These principles are enshrined in the legislative framework underpinning the ERF, and creating a legal regime to credit restoration of tidal flow projects raised issues with each of these principles.

Real and Independently Verifiable Carbon Abatement
The fundamental purpose of a carbon project is to generate genuine carbon abatement. Most carbon standards and rules are underpinned by key criteria which a project must meet, including that carbon abatement is real, additional, permanent, and independently verified (Verified Carbon Standard 2022). These rules have been integrated into the ERF legal framework (see Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth); Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth)).
The criteria of real and independently verified generated some challenges due to difficulties in measuring carbon abatement in coastal wetlands. This issue was overcome by a decision to use a modeled approach, whereby abatement can be estimated with a high degree of accuracy from measurement of the area of blue carbon vegetation types that develop within the area of tidal introduction (Lovelock et al. 2022a(Lovelock et al. , 2022b. The Blue-CAM model developed for the methodology is based on empirical data and robust in its design, and overcomes the potential problem of high costs of measuring carbon abatement outweighing the possible economic value of carbon credits that may be generated (Köhl et al. 2020). An additional benefit is that the area of blue carbon habitats can be assessed from remote sensing (Murray et al. 2022), enabling independent verification of change after project initiation.

Additionality
Additionality under the ERF means that a project must (a) not have begun to be implemented ("newness"); (b) not be likely to be carried out under another scheme; and (c) not be required to be carried out under another law (Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) s 27). Australia, like many other countries, has an extensive history of coastal protection works constructed without formal government approval (Sydney Coastal Councils Group 2013), and some tidal modifications may have been constructed without the necessary permits and consents having been obtained. Technically then, removal could be ordered under state government planning law as the structure is illegal. This would preclude a project from meeting the regulatory additionality requirement. Therefore there may be a need to confirm that a tidal modification was lawfully carried out at the time of construction (Bell-James et al. 2021).
The Blue Carbon methodology guide addresses this issue by requiring that proponents provide evidence that the tidal restriction mechanism was permitted under the relevant state and territory laws at the time of construction, such as the relevant planning approval/s (Clean Energy Regulator 2022). This will ensure that the criteria of regulatory additionality are met.

Possibility of No Net Benefit
Another related threat to additionality is the possibility of no net benefit accruing from the project. For example, a proponent may be accredited for the removal of a tidal modification in one location, but may then construct a tidal modification in another location which results in a loss of coastal wetlands. This means that there is no overall net carbon benefit and generates a problem similar to that of "carbon leakage" (see e.g. Jakob 2021). This could be addressed by a variety of mechanisms, including obtaining a contractual undertaking from the proponent to not undertake any works in another location that would affect the net carbon benefit to be gained from the proposed project .
The approach taken in the Blue Carbon methodology is to require the proponent to include within their project operations and maintenance plan information about any tidal restriction mechanism that the proponent intends to install as part of the project's activities (Blue Carbon methodology s 14). This plan must be prepared prior to the proponent applying for the project to be accredited as an eligible offsets project under the ERF, and will therefore inform the regulator's decision whether to accredit the project.

Permanence
Carbon abatement generated by a project should be "permanent," which is generally considered to be 100 years in carbon offsetting programs (Watson et al. 2000). Under the ERF a permanence period of 100 years or 25 years may be chosen, although the number of carbon credits will be discounted for 25-year projects (Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) ss 86A-87; Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth) r 16 (2)). Twenty-five-year permanence periods are particularly useful in vegetation projects. Carbon sequestered in vegetation, by its nature, cannot be guaranteed to have been removed from the atmosphere indefinitely-or even for a very long timebecause it may be reemitted through deliberate or inadvertent actions (Palmer 2010).
To have the best chance at achieving "permanence"however defined-there must be some obligations imposed on a project proponent. Under the ERF regime proponents must provide a permanence plan in their first report to the regulator outlining the steps they have taken, and intend to take, to ensure the carbon remains sequestered for the chosen permanence period (Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth) r 70(4A)).
To further promote permanence of outcomes, the Blue Carbon methodology prohibits and restricts some activities on project land, including cropping, grazing, aquaculture, and some vegetation removal (ss 12 and 13). The method guide also suggests that a permanence plan may include actions the proponent will take to reduce the threat of carbon abatement being lost, such as fire hazard reduction and weed or feral animal management (Clean Energy Regulator 2022).
The other major threat to permanence in a blue carbon project arises from the possibility of other land becoming part of the project site through inundation and inland migration and the possibility of sea-level rise affecting tidal boundaries (see discussion above). Therefore ensuring that the required consents are obtained is essential to securing project permanence.

Conclusion and Lessons for Overcoming Legal Barriers to Coastal Wetland Restoration Projects
Although Australia's Blue Carbon methodology is still in its infancy, the experience in its development and drafting offers Restoration Ecology September 2023 valuable lessons for coastal wetland restoration projects in other sectors and other jurisdictions, in terms of the science underpinning it (Lovelock et al. 2022b), the various mechanisms employed to clear the legal hurdles, and the process of developing the methodology itself. In particular, the methodology development process drew heavily upon the expertise of science and legal experts, and the responsible government agency convened numerous expert workshops over several years (Minister for Industry, Energy and Emissions Reduction 2022), obtained expert reports (e.g. Bell-James et al. 2021), and ultimately produced a methodology that reflected the best available scientific and legal knowledge.
The legal mechanisms employed span a combination of legislative rules, policy guidance, and project-specific contracts and plans. In particular, the following lessons may be of use in the development of other coastal restoration projects: (1) While fit-for-purpose coastal restoration policy should remain a priority area for government, restoration projects can be facilitated by government agencies gathering information on permitting processes for proponents and assisting them to navigate the regulatory environment.
(2) Land tenure, ownership and use issues are pervasive in the intertidal zone, and many of these issues could also benefit from structural reform. In the interim though, many of these complexities can be dealt with through robust contractual arrangements that clearly outline the rights, liabilities, and obligations of any parties likely to be impacted by the project. (3) Hydrological mapping incorporating projected sea-level rise can ensure that the proponent has a clear indication of these parties likely to be impacted, which can in turn ensure that all relevant contractual arrangements are secured. (4) Specifically in the restoration of tidal flow context, regulatory additionality issues can be overcome by ensuring that proponents provide evidence of the lawfulness of the structures that they intend to remove. (5) A detailed project plan can include provisions to protect, to the extent possible, the project's permanence and guard against "leakage" through detrimental activities conducted elsewhere by the proponent.
In making these observations it is acknowledged that this paper provides an evaluation of a policy as drafted, and the actual success of the Blue Carbon methodology in action is yet to be demonstrated. As projects are developed and carried out under the methodology there may be a need to further refine the science and legal rules underpinning it to ensure it provides a robust framework for carbon abatement. There are also some pervasive issues that remain, including the complexity of the underpinning legal framework for coastal restoration projects and the tenure regime, and the need to ensure that indigenous peoples and are engaged in a consultative and meaningful way.
Despite these limitations, the commencement of the Blue Carbon methodology is an important moment in coastal wetland restoration policy in Australia, as it offers clear financial incentives for project proponents to invest in coastal restoration. It is hoped that the momentum generated by this methodology will translate into further Blue Carbon methods, as restoration of tidal flow was one of approximately a dozen project types contemplated for the first method (Kelleway et al. 2020). The lessons learned in navigating the legal and regulatory hurdles to blue carbon projects will be of assistance in developing these further methodologies in Australia, and beyond its shores as other jurisdictions develop blue carbon policy.