Marine Natural Capital Finance 

Marine natural capital finance (how we pay for restoration in marine habitats) is not a single market or mechanism. Funding can come from a range of private, public, philanthropic, and hybrid sources, and can be about carbon, biodiversity, or something else altogether. 

To my question above, ‘blue carbon’ projects do have the potential to generate income from verified carbon credits in much the same way as woodland or peatland projects do, and while the marine market is still in its infancy and heavily focussed on mangrove regeneration, it is growing, from ~160,000 blue carbon credits issued globally in 2014 to nearly 7 million in 2024.  

Private investment in marine natural capital needs to be a much broader conversation than just carbon markets though. Carbon may be the most prominent lever for attracting investment, but it is not the only value that nature provides, nor is selling carbon credits the only way that investment in nature can work. Thus, we risk carbon becoming the deciding factor in which projects attract investment and how those projects are designed if we don’t look beyond the traditional carbon market approach. Restoring a mangrove forest or a seagrass meadow doesn’t just increase carbon storage, it increases coastal resilience, water quality, biodiversity, fish numbers, and the opportunity to get out and enjoy a truly spectacular marine environment. What is easiest to put a price on is not necessarily what matters most to the ecosystem, or to the community living alongside it. 

Internationally, alternative (non-carbon based) private funding mechanisms are already operating at multiple scales, from  debt-for-nature swaps that refinance sovereign debt in return for commitments to marine conservation and blue bonds which raise capital from investors for ocean-related projects to ‘self-financing‘ mechanisms such as fishing licenses and park entrance fees which direct tourism and recreational income towards the management of marine protected areas. Other models can create a commercial revenue stream from the restored environment itself. Blue Alliance, for example, combines grants with private impact loans to establish businesses in sustainable fisheries, community-based aquaculture, and ecotourism, with profits subsequently contributing towards the cost of managing Marine Protected Areas, and the Fisheries Improvement Fund uses private investment to fund improvements to fisheries upfront, with investors repaid through volume-based fees paid by businesses in the seafood supply chain. None of this is about trading carbon. 

The Scottish Context 

Marine natural capital is still an emerging market in the UK, and in Scotland by extension. The Green Finance Institute notes that marine and coastal projects are “mostly remaining small scale and short term” and that the environmental and social benefits they create are “not yet consistently translating into market opportunities and securing long-term funding”. In other words, the challenge here is not simply finding investors: projects need a credible mechanism through which the benefits of restoration can generate revenue or attract long-term funding. 

The Facility for Investment Ready Nature in Scotland (FIRNS) is testing the market by helping develop business models and proposals capable of attracting private investment and using market-based mechanisms to finance nature restoration. Since 2023 FIRNS has awarded £6 million across more than 45 projects which have included marine initiatives ranging from the development of a Scotland-specific business case for saltmarsh carbon sales through to scoping the potential for private finance to fund seascape-scale restoration in the Solway Firth.  

Scotland already has an example of a different model, too.  The Scottish Marine Environmental Enhancement Fund (SMEEF) allows businesses and organisations operating in Scottish waters to make voluntary financial contributions towards marine restoration and enhancement.  Rather than purchasing a tradeable credit, businesses contribute to a fund which then awards grants to projects. Since its formal launch in 2022, SMEEF has secured and distributed almost £10 million to almost 100 projects, many of which have been community led. Some of this work I’ve seen firsthand, including in the Argyll Hope Spot, an area of global significance and beauty where local people are working with charities like Seawilding to restore the marine habitat. Scotland’s 2025 Marine and Coastal Restoration Plan specifically identifies SMEEF as a mechanism for leveraging private funding into community-led projects, alongside developing new public and private funding streams. 

Taken together, these examples show that marine natural capital finance in Scotland can mean carbon markets, but it can also mean businesses voluntarily financing restoration, investment in nature-dependent enterprises, or public and philanthropic money being used to develop projects until they can attract longer-term private finance.  

Community Benefits vs Community Agency 

Scotland already has experience of what can happen when nature acquires new financial value. Investment in woodland, peatland, and carbon has created opportunities for restoration and new sources of finance, but it has also prompted debate around land ownership, land values, decision-making, how benefits are shared, and the ethics of commercialising nature. 

Marine natural capital gives us the opportunity to ask some of those questions earlier.  

The Scottish Government’s Natural Capital Market Framework already establishes the principle that natural capital investment should produce community benefit, but there is an important distinction between community benefit and community agency.  

A community fund, local employment, or procurement can all be valuable, but they are different from communities having a meaningful role in deciding what happens. So perhaps the question should not only be how can communities benefit from marine natural capital? but how can communities participate in it, how can those who own, manage, or finance it help facilitate and encourage that participation, and what might that look like at sea? 

With much of the seabed forming part of the Crown estate and the marine environment being subject to its own system of rights, regulations, and licensing restrictions. Community involvement in marine natural capital may not look like community ownership on land, but owning the seabed is not the only way to have a stake in what happens there. We can learn from efforts being made on land to ensure communities have a voice in, and benefit from, nature restoration and natural capital projects. Several of the community organisations we work with are already exploring, developing and/or delivering marine natural capital projects themselves, whether through building partnerships, participating in governance, undertaking restoration and monitoring activities, negotiating a share of the income generated by private projects, and even working together where restoration needs to happen at scale. But can we further (and better) support, encourage, facilitate, and normalise this? 

In closing… 

Good science remains essential and claims about carbon, biodiversity, and restoration need to be credible and evidence based, whether on land or at sea. But science cannot answer questions about ownership, governance, or how benefits should be shared. Those are choices. Marine natural capital is still developing in Scotland, which gives us an opportunity to think about those choices before systems and expectations become established.