Benefit-cost analysis of small-scale active restoration in blue carbon ecosystems

Coastal wetland (‘blue carbon’) restoration is widely recognised as a strategy for climate change mitigation and coastal resilience, yet the economic viability of small-scale projects (< 12 ha), the scale at which local councils and community groups most commonly operate, remains poorly understood. This study presents a benefit-cost analysis of active mangrove and saltmarsh restoration using biodegradable structures at five coastal wetland sites in Victoria, Australia. We evaluated four structure coverage intensities (20–80%) over three temporal horizons (25-year, 100-year, and full vegetation maturity). Implementation costs scaled proportionally with coverage intensity, with imported biodegradable structures representing the largest single expense. Subsequent deployments substantially reduced costs through equipment reuse. A medium-intensity strategy (40% coverage) achieved the most favourable economic outcomes, balancing upfront investment against long-term ecosystem service delivery across carbon sequestration, nitrogen cycling, fisheries enhancement, and coastal protection. Critically, the cumulative cost of inaction, foregone ecosystem services at unrestored sites, exceeded total restoration investment within 11–42 years at every site, well within local government planning horizons. However, full cost-recovery timescales substantially exceed the 25-year timeframe of existing Australian carbon credit schemes, revealing a structural misalignment between current market mechanisms and restoration economics. These results provide empirical evidence that small-scale active coastal restoration delivers net economic benefits over multi-decadal timescales. Three priorities emerge: 1) adopting medium-intensity coverage to optimise cost against long-term service delivery, 2) developing local supply chains to reduce structure costs, and 3) reforming carbon crediting frameworks to recognise progressive ecosystem service accumulation in restored coastal wetlands.