Small Island Developing States (SIDS) face complex socio-economic and environmental threats, making them particularly vulnerable to climate change. Blue Carbon (BC) ecosystems (mangrove forests, tidal marshes, and seagrass meadows) provide climate regulation services by sequestering and storing carbon, presenting an opportunity for SIDS to address climate change and implement Paris Agreement commitments in their Covid-19 recovery. BC habitat decline not only reduces carbon sequestration benefits provided, but can also result in sediment disturbance and the release of previously stored carbon back into the atmosphere. In this work, a scenario analysis informed by a stakeholder workshop and scientific and socio-economic expectations is used to assess the economic importance of Grenada’s BC (mangroves and seagrasses) over the next 10, 25 and 50 years. Our findings indicate that sequestration benefits are severely diminished under Business-as-Usual habitat loss, but still marginally outweigh losses from carbon emissions, with overall welfare gains of US$0.5–1.9 million over 50 years. To stimulate economic recovery post-pandemic, stakeholders anticipated a realistic scenario of increased habitat decline resulting in overall losses of US$5.4–19.4 million in the next 50 years. However, if ecosystems are maintained, overall carbon benefits could reach US$10.7 million, while a 20% increase in mangroves over the next 25 years provides benefits reaching US$11.1 million between 2020 and 2070. These results demonstrate a significant increase in value when BC ecosystems are maintained and not disturbed, preventing the release of previously stored carbon and enhancing sequestration capacity. Restoration benefits are marginal, compared to conservation, supporting claims that conservation is more cost effective.
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