Integrating Aquaculture into Landscapes and Seascapes Case Study Regenerative Aquaculture: The Environmental and Economic Benefits of Nature-Positive Aquaculture FEBRUARY l 2025 INTEGRATING AQUACULTURE INTO LANDSCAPES AND SEASCAPES CASE STUDY REGENERATIVE AQUACULTURE THE ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE 2025 CONTENTS ACKNOWLEDGEMENTSIX GLOSSARYXI ABBREVIATIONSXV EXECUTIVE SUMMARY XVII THE CHALLENGE AND OPPORTUNITY  XVII AIMSXVII ORGANIZATION OF THE REPORT XVIII FINDINGS AND INSIGHTS XX 1 CONCEPTS UNDERLYING AN INTEGRATED LANDSCAPE AND SEASCAPE APPROACH IN AQUACULTURE 1 BACKGROUND2 WORLD BANK PRIORITIES AND GOALS 3 CREATING AN ENABLING ENVIRONMENT 5 WORLD BANK INITIATIVES THAT SUPPORT REGENERATIVE AQUACULTURE, ECOSYSTEM SERVICES, BIODIVERSITY FINANCE, AND PRIVATE SECTOR MOBILIZATION 5 STRATEGIC PRIORITIES IN WORLD BANK PROJECTS 5 ENVIRONMENTAL BENEFITS AND ECOSYSTEM-BASED AQUACULTURE 6 2 ECOSYSTEM SERVICES PROVIDED BY AQUACULTURE 13 BACKGROUND14 EVIDENCE AND EXAMPLES OF ECOSYSTEM SERVICES FROM AQUACULTURE 18 INCORPORATING AQUACULTURE’S ENVIRONMENTAL BENEFITS INTO GLOBAL SUSTAINABILITY TARGETS 22 BRIDGING GLOBAL ECOSYSTEM SERVICES WITH LOCAL COMMUNITY BENEFITS 23 A REGIONAL VIEW OF THE POTENTIAL OF ECOSYSTEM SERVICES 24 EMPOWERING WOMEN IN AQUACULTURE: ADVANCING SOCIOECONOMIC EQUITY, FOOD SECURITY, AND ECOSYSTEM SERVICES 25 SOCIAL AND POLITICAL CHALLENGES IN IMPLEMENTING INTEGRATED AQUACULTURE 26 3 FINANCING ECOSYSTEM SERVICES 29 BACKGROUND30 EXPANDING AND DIVERSIFYING FINANCING MECHANISMS 31 POLICY AND INVESTMENT FRAMEWORKS 32 THE PATH FORWARD: A CALL FOR STRATEGIC AND INCLUSIVE FINANCING 32 CORPORATE-FACING MARKET MECHANISMS INVOLVING TRADING AND CREDITING 32 HOW IFC CAN CATALYZE MARKET-BASED SOLUTIONS FOR NUTRIENT AND CARBON TRADING 36 CONSUMER-FACING MARKET MECHANISMS TO DRIVE FINANCING 37 IFC’S STRATEGIC ROLE IN DRIVING SUSTAINABLE AQUACULTURE THROUGH CONSUMER-FACING MARKET MECHANISMS 40 OVERCOMING CHALLENGES TO CONSERVATION FINANCING 40 EVIDENCED-BASED DECISION MAKING FOR AQUACULTURE PAYMENTS FOR ECOSYSTEM SERVICES 41 COMPREHENSIVE ANALYSIS OF FINANCING MECHANISMS FOR ECOSYSTEM SERVICES: SUPPORTING LARGE- AND SMALL-SCALE PRODUCERS 44 Contents | v 4 NOVEL CASE STUDIES FOR ADVANCING INTEGRATED DESIGN AND ECOSYSTEM SERVICES 49 CASE STUDY 1: SEAWEED AQUACULTURE IN SRI LANKA 49 CASE STUDY 2: OYSTER AQUACULTURE IN SENEGAL 61 CASE STUDY 3: INTEGRATED MANGROVE RESTORATION AND AQUACULTURE SYSTEMS IN GUINEA 70 5 ALIGNMENT WITH WORLD BANK PRIORITIES AND MANDATES 79 SUMMARY AND CONCLUSIONS 85 REFERENCES89 APPENDICES103 APPENDIX A. RESOURCES FOR GUIDING THE DESIGN, MONITORING, AND EVALUATION OF ECOSYSTEM SERVICES FROM AQUACULTURE 104 APPENDIX B. STRUCTURE, FUNCTION, AND CHALLENGES OF INTEGRATED MULTITROPHIC AQUACULTURE 105 APPENDIX C. CRITERIA FOR NATURE-BASED SOLUTIONS AND AQUACULTURE-BASED EXAMPLES 106 APPENDIX D. ANALYSIS OF TRUE PRICING IN AQUACULTURE 109 APPENDIX E. FINANCING APPROACHES EMPLOYED IN AQUATIC SECTORS THAT COULD BE REPLICATED IN CONSERVATION-BASED AQUACULTURE 111 APPENDIX F. METHODOLOGY OF THE AQUACULTURE CONSERVATION FINANCING DECISION-MAKING MATRIX 113 APPENDIX G. IMPLEMENTING INTEGRATED AQUACULTURE IN SRI LANKA 114 APPENDIX H. CONSIDERATIONS FOR THE IMPLEMENTATION OF INTEGRATED AQUACULTURE—SENEGAL 120 APPENDIX I. CONSIDERATIONS FOR IMPLEMENTATION OF INTEGRATED AQUACULTURE—GUINEA 125 BOXES 1: EXAMPLE IN PRACTICE: MAKING SEAWEED FARMING MORE SUSTAINABLE IN TANZANIA 57 2: EXAMPLE IN PRACTICE: ENABLING PRODUCTIVE SEAWEED FARMING UNDER A FUTURE OF CLIMATE CHANGE, BELIZE 59 3: EXAMPLE IN PRACTICE: VALUING THE ECOSYSTEM SERVICES OF OYSTER AQUACULTURE IN VIETNAM 65 4: EXAMPLE IN PRACTICE: INTEGRATED AND CLIMATE-SMART SHRIMP AQUACULTURE IN INDONESIA 72 5: EXAMPLE IN PRACTICE: TAKING A VALUE CHAIN APPROACH TO DEVELOPMENT OF SUSTAINABLE, LOW-CARBON SHRIMP, ECUADOR 76 FIGURES 1: STRATEGIC PRIORITIES OF THE WORLD BANK GROUP’S MISSION 4 2: ECOSYSTEM SERVICES AND ENVIRONMENTAL CO-BENEFITS OF DIFFERENT SPECIES AND SYSTEMS IN MARINE AQUACULTURE, INTEGRATED AQUACULTURE, AND INTEGRATED MULTITROPHIC AQUACULTURE 7 3: INTEGRATED MULTITROPHIC AQUACULTURE: FARMING SPECIES OF DIFFERENT TROPHIC LEVELS TO TAKE ADVANTAGE OF ORGANIC AND INORGANIC NUTRIENTS THAT THE VARIOUS ORGANISMS MAKE AVAILABLE 11 4: EIGHT INTERCONNECTED CRITERIA OF THE INTERNATIONAL UNION FOR CONSERVATION OF NATURE AND NATURAL RESOURCES GLOBAL STANDARD FOR NATURE-BASED SOLUTIONS  15 5: CONTINUUM OF HABITAT AND BIODIVERSITY EFFECTS FROM AQUACULTURE, FROM NEGATIVE TO NEUTRAL TO POSITIVE, DEPENDING ON SPECIES, EQUIPMENT, AND FARM MANAGEMENT PRACTICES USED 16 6: DRIVERS AND ENABLERS OF ECOSYSTEM SERVICES AND ENVIRONMENTAL BENEFITS ARISING FROM AQUACULTURE 18 7: MODELED ESTIMATES OF POTENTIAL EMISSIONS AVOIDED BY FARMING 10 SQUARE KILOMETERS OF GRACILARIA IN SRI LANKA IN A RANGE OF PRODUCT REPLACEMENT SCENARIOS 54 8: MODELED ESTIMATES OF POTENTIAL AVOIDED EMISSIONS FROM FARMING 10 SQUARE KILOMETERS OF ULVA IN SRI LANKA IN A RANGE OF PRODUCT REPLACEMENT SCENARIOS 55 9: NEGATIVE AND POSITIVE IMPACTS OF BIVALVE AQUACULTURE SYSTEMS ON BLUE CARBON HABITATS 64 vi | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE MAPS 1: ECOREGIONAL-SCALE RESTORATIVE AQUACULTURE POTENTIAL, WEIGHTED AT A GLOBAL SCALE 24 G.1: MANGROVE AND SEAGRASS DISTRIBUTION ALONG SRI LANKA’S COAST AND KEY COASTAL DEPTH CONTOUR CLASSIFICATIONS 115 H.1: MANGROVE AND SEAGRASS DISTRIBUTION ALONG SENEGAL’S COAST AND KEY COASTAL DEPTH CONTOUR CLASSIFICATIONS 121 I.1: MANGROVE AND SEAGRASS DISTRIBUTION ALONG THE GUINEA COAST AND MAJOR COASTAL DEPTH CLASSIFICATIONS 126 TABLES 1: GLOBAL PRINCIPLES OF RESTORATIVE AQUACULTURE  8 2: FAO ECOSYSTEM APPROACH TO AQUACULTURE— KEY PRINCIPLES AND CONCERNS  9 3: ECOSYSTEM SERVICE CATEGORIES AND PUBLISHED EXAMPLES OF HOW AQUACULTURE PROVIDES THESE SERVICES  14 4: NEGATIVE, NEUTRAL, AND POSITIVE HABITAT AND BIODIVERSITY EFFECTS FROM AQUACULTURE AND MEASURES THAT CAN MITIGATE HARMS AND ENHANCE BENEFITS 17 5: PUBLIC AND PRIVATE FINANCING MECHANISMS RELEVANT TO CONSERVATION FINANCING FOR ECOSYSTEM SERVICES IN AQUACULTURE 42 6: TAILORED STRATEGIES FOR DIFFERENT PRODUCERS 44 7: DECISION-MAKING MATRIX FOR CONSIDERATIONS IN FINANCING OF ECOSYSTEM SERVICES FROM AQUACULTURE THROUGH CONSERVATION FINANCE OR INDUSTRY-CENTERED ECONOMIC SUPPORT OR INVESTMENT MECHANISMS 46 8: AQUACULTURE PRODUCTION IN SRI LANKA, 2022  51 9: SUMMARY FARM OUTPUT AND ECOSYSTEM SERVICES ASSOCIATED WITH 10 SQUARE KILOMETERS OF GRACILARIA FARMING IN SRI LANKA 54 10: SUMMARY FARM OUTPUT AND ECOSYSTEM SERVICES ASSOCIATED WITH 10 SQUARE KILOMETERS OF ULVA FARMING IN SRI LANKA  55 11: DECISION-MAKING MATRIX FOR POTENTIAL FINANCING MECHANISMS IN SRI LANKA 60 12: AQUACULTURE ANNUAL PRODUCTION IN SENEGAL AS OF 2022 62 13: PROJECTED NUTRIENT REDUCTION FROM 10 SQUARE KILOMETERS OF OYSTER FARMING IN SENEGAL  67 14: DECISION-MAKING MATRIX FOR FINANCING MECHANISMS IN SENEGAL  69 15: AQUACULTURE PRODUCTION IN GUINEA AS OF 2022  71 16: DECISION-MAKING MATRIX FOR POTENTIAL FINANCING MECHANISMS IN GUINEA 82 A.1: KEY RESOURCES FOR GUIDING THE DESIGN, MONITORING, AND EVALUATION OF ECOSYSTEM SERVICES FROM AQUACULTURE 104 C.1: EIGHT CRITERIA OF THE INTERNATIONAL UNION FOR CONSERVATION OF NATURE GLOBAL STANDARD FOR NATURE-BASED SOLUTIONS 106 E.1: FINANCING APPROACHES EMPLOYED IN AQUATIC SECTORS WITH POTENTIAL FOR REPLICATION IN CONSERVATION-BASED AQUACULTURE 111 Contents | vii ACKNOWLEDGEMENTS Regenerative Aquaculture: The Environmental and Economic Benefits of Nature-Positive Aquaculture was undertaken by a multidisciplinary team of World Bank staff and consultants led by Harrison Charo Karisa (Senior Fisheries Specialist and Task Team Leader, SENGL) and April Connelly (Senior Environmental Specialist, SENGL and Co-Task Team Leader). The team included Sheu Salau (Senior Agriculture Specialist, SSAA1), Idriss Deffry (Senior Environmental Specialist, SAWE1), Mercy Amai Emojong (Environmental Specialist, SEAE2), Ruth Garcia Gomez (ET Consultant, SENGL), Amit Kumar Sinha (Consultant, SENGL), and Thuy Dan Khanh Tran (Consultant, SENGL). Support was also provided by Samanmalee Kumari De Alwis (Program Assistant, SENGL), Shane Ferdinandus (Senior Program Assistant, SENGL), and Lanto Ramanankasina (Program Analyst). The team would like to thank Genevieve Connors (Acting Global Director, Global Environment Department) and Tuukka Castren (Acting Manager, Global Environment Department, SENGL) for their timely and useful guidance. Samanmalee Kumari De Alwis (Program Assistant, SENGL) facilitated the preparation of this work and is much appreciated. This report also benefited from technical peer review and advice graciously provided by the World Bank’s Matias Piaggio (ET Consultant, SENGL), Juan Jose Miranda Montero (Senior Environmental Economist, SAEE3), Juliana Castano Isaza (Natural Resources Management Specialist, SAEE3), and Virak Chan (Senior Water Resources Management Specialist, SEAW1). This report is based on field work undertaken by several consultants, including Dr. Heidi Alleway and Dr. Elizabeth (Bess) Ruff (The Nature Conservancy); Leo Godard (COFAD); François Henry (PROBLUE); and Ayubu Singoye, Antonio Santa Marta, Sally McGee, Jonathan Mackay, and Taylor Voorhees (The Nature Conservancy). This study was generously financed by two umbrella multidonor trust funds administered by the World Bank: PROBLUE, which supports the sustainable and integrated development of marine and coastal resources in oceans, and PROGREEN, which supports livelihood development and landscape restoration while addressing declining biodiversity, forest loss, and deteriorating land fertility. Cover: Siti Ali Saidi is an expert farmer who has finished the first installment of 32 farm lines with double-made loops on her plot in the Tumbe seaweed pilot site in Pemba, Zanziba © Roshni Lodhia Acknowledgements | ix Gracilaria. x | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE GLOSSARY* Aquaculture: Farming or cultivation of aquatic organisms such as fish, shellfish, algae, and aquatic plants under controlled conditions; involves breeding, rearing, and harvesting of aquatic species in freshwater, brackish water, and marine environments. Bioaccumulation: The gradual buildup of pollutants like heavy metals and nitrogen in living organisms—such as seaweed and filter feeders like shellfish—that accumulate toxins from their environment through direct absorption from their environment or through what they consume. Biodiversity: Short for biological diversity, variability within and between species and within natural ecosystems that form the complex web of life. Bioextraction: The use of shellfish, like oysters, mussels, and clams, and seaweed to extract pollutants and nutrients such as nitrogen from the ecosystem by cultivating these organisms, which filter and absorb the pollutants or nutrients into their tissues, and then harvesting them, effectively removing the pollutants/nutrients from the water. It is a way of solving the problem of nutrient overload in aquatic ecosystems, which can lead to eutrophication. Blue foods: Foods harvested from oceans, lakes and rivers, including wild and farmed fish, seafood, and seaweed, as well as some plants and algae. Bund: An embankment used to control or inhibit the flow of water. Carbon crediting: A system for incentivizing climate action that allows one entity, typically a business or a country, to pay compensation for the privilege to emit a certain amount of carbon dioxide or other greenhouse gases by investing in projects that avoid, remove, or reduce emissions elsewhere, and thereby make up for its own pollution. One carbon credit allows the buyer to emit a ton of carbon dioxide or its equivalent. The credits are tradeable. Climate change adaptation: Actions and strategies to help ecological and peopled communities adjust to the current and anticipated impacts of climate change. Climate change mitigation: Actions and strategies to reduce or prevent the long-term impacts of climate change by minimizing or stabilizing greenhouse gas emissions into the atmosphere, helping to limit global climate change. Cryptic habitat: An elusive or remote habitat, such as a deep-sea cave, or one that is otherwise difficult to detect or recognize because it is hidden or because the animal is nocturnal or uses camouflage to blend in with its surroundings, making it difficult to spot. Cryptic species: Species (including fish, insects, and plants) that look almost identical to each other and are morphologically virtually indistinguishable yet are genetically distinct, each with its own unique genetic makeup, making them hard to tell apart based on physical features alone. Cryptic species underscore the enormous and sometime unrecognized diversity within ecosystems. GLOSSARY | xi Depuration: The purification process by which shellfish (and other marine or freshwater animals) are held in clean water for a period to let them expel intestinal and physical contaminants from their body through their natural filtering activity. Ecosystem approach to aquaculture: A strategy for integrating aquaculture production into the wider ecosystem so that it promotes the sustainable development, equity, and resilience of interlinked socioecological systems. Ecosystem services: The direct and indirect benefits humans receive from ecosystems, which can be grouped into four types: provisioning services (which include direct goods like food, water, and raw materials), regulating services (which refers to processes like climate regulation and disease control), cultural services (which includes benefits like hiking, kayaking, and spiritual enrichment), and supporting services (which underpin the other three, such as nutrient cycling). Eutrophication: The gradual overaccumulation of phosphorus, nitrogen, and other nutrients in a body of water, resulting in excessive growth of microorganisms such as algae and macrophytes that may deplete the oxygen in the water. Food security: A condition in which all people, at all times, have physical, social, and economic access to sufficient, safe, nutritious food that meets their dietary needs and food preferences for maintaining an active and healthy life, including food availability and stability, and a person’s or community’s access to and use of food. Integrated aquaculture and agriculture: A mode of farming in which different aquatic species and terrestrial foods are grown together on a single parcel of land in a way that involves the interaction of the different components to optimize resource use, increase productivity, and promote sustainability and climate resilience. Integration of aquaculture into land- and sea-scapes: The incorporation of aquaculture activities into the natural environment, considering factors such as spatial planning, ecological impacts, and socioeconomic considerations, and involving assessment of the suitability of a location for aquaculture operations, minimization of negative environmental impacts, and maximization of synergies with other land or marine uses. Integrated multitrophic aquaculture: The cultivation of multiple species from different trophic levels (levels of the food chain) to create a balanced system within a single aquatic environment, with careful selection and management of various organisms to maximize resource use efficiency and minimize environmental damage. Landscape: In the aquaculture context, the ecological and physical features of the aquatic environment in which aquaculture operations take place, including natural elements such as water bodies (lakes, rivers), substrates (the material at the bottom), vegetation, and topography (elevations and depressions, hills and valleys) and human-made structures such as ponds, tanks, and infrastructure. Mariculture: A specialized subsector of aquaculture involving farming aquatic organisms in marine ecosystems including brackish, coastal, estuarine, and offshore waters. Nature-based solutions: Actions taken to protect, conserve, sustainably manage, and restore ecosystems in ways that address various socioeconomic and environmental challenges while enhancing human well-being, promoting climate resilience, and benefiting environmental biodiversity. Nationally Determined Contributions: Commitments countries make to reduce their greenhouse gas emissions in accordance with Article 4, paragraph 12 of the Paris Agreement and actions taken to achieve global targets as part of climate change mitigation (UNFCCC, 2016). xii | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Payments for ecosystem services: A system by which individuals, groups or organizations that benefit from certain environmental services, like clean water or carbon sequestration, pay landowners or land managers to provide, maintain, or enhance those ecosystem services, with the payments designed to incentivize the land managers to adopt conservation efforts such as preserving biodiversity, improving water quality, and sequestering carbon, creating a market for environmental benefits. Provisioning: The providing of various products and benefits by aquatic and other ecosystems, including food for human consumption, the natural food sources for raising farmed aquaculture species, the water quality that supports organism growth, fuel wood from mangroves, sand for construction, and genetic resources for medicines. Recruitment: The process by which newly hatched or small juvenile fish enter the older population, essentially, the number of young fish that survive and enter the fishable stock—a crucial factor in determining fish population size and regulating their population dynamics because it determines how many fish will be available for fishing. Restorative aquaculture: Aquaculture practices that not only produce food but also help restore degraded habitats and improve the health of aquatic environments by cleaning the water, reversing habitat loss, and lessening climate pressures through water filtration, carbon sequestration, and the reduction of pressure on wild populations—in short, aquaculture that provides direct ecological benefits and potentially net-positive environmental outcomes. Seascape: A large, geographically bound area or interacting coastal ecosystem that provides a variety of services and supports the integrated management of marine resources. Sustainable aquaculture: The practice of cultivating aquatic organisms in a way that meets current needs for food production and economic development while ensuring the long-term viability of industry and the health of ecosystems. Target 3: Informally known as 30x30, Target 3 of the Global Biodiversity Framework calls for the protection, conservation, and management of 30 percent of the world’s terrestrial, inland water, and coastal and marine areas— land, waters, and seas—by 2030, especially areas of particular importance for biodiversity and ecosystem services. Watershed: An area or ridge of land that separates waters that flow to different rivers, basins, or seas, it is called a watershed because it “sheds” (or drains or channels) water such as rainfall, runoff, or snowmelt into a stream, river, or other waterbody. Every body of water has a watershed. In aquaculture, watershed ponds are constructed by building a dam across a valley to form a reservoir. *Nonstandard terms and references are discussed in parts 1 and 2. GLOSSARY | xiii ABBREVIATIONS Abbreviation Definition ACIAR Australian Centre of International Agricultural Research CO2 carbon dioxide CSA climate-smart agriculture EAA ecosystem approach to aquaculture EEZ exclusive economic zone FAO Food and Agriculture Organization of the United Nations GBF Global Biodiversity Framework GHG greenhouse gas IFC International Finance Corporation IMTA integrated multitrophic aquaculture IUCN International Union for Conservation of Nature and Natural Resources LMICs low- or middle-income countries NbS nature-based solution(s) NDC Nationally Determined Contribution nei not elsewhere included OECM other effective conservation measure PES payments for ecosystem services R&D research and development SDG Sustainable Development Goal SMEs small- or medium-sized enterprises TMDL total maximum daily load WBG World Bank Group Abbreviations | xv EXECUTIVE SUMMARY Over the last several decades, aquaculture has become the fastest-growing food production sector on the planet, with a growth rate averaging 6.7 percent a year for the past 30 years (FAO, 2022a). In 2022, for the first time, more aquatic foods worldwide was farmed than caught wild (FAO, 2024a). This shift presents a pivotal opportunity to use blue foods to deliver protein and nutrition to humans and animals while decreasing greenhouse gas emissions and the ecological impacts of global food production. To seize this opportunity, integrated approaches that bridge land and sea need to be developed to enable efficient resource use, enhance climate resilience, and promote economic development for both coastal and inland communities. The Challenge and Opportunity Restorative aquaculture is gaining recognition as a dual solution to food security and environmental sustainability. Restorative aquaculture farming in a way that not only produces food but helps restore degraded habitats and improves the health of aquatic environments by cleaning the water, reversing habitat loss, and lessening climate pressures through water filtration. Policy makers and communities increasingly acknowledge its role in mitigating climate change, preserving biodiversity, and supporting sustainable development goals. But expanding the practice requires a focused strategy that draws on innovative financing, innovative policies, and operational guidance. Despite the growing interest, certain barriers remain. Three fundamental ones are • A lack of place-based models that demonstrate clearly how restorative aquaculture can be economically viable while delivering measurable ecosystem services • Limited financing mechanisms to support enterprises seeking to transition to sustainable, restorative practices, particularly in developing economies • Insufficient knowledge at the government, investor, and industry levels about best practices from around the world that balance profitability, scalability, and environmental benefits Aims This report seeks to equip the World Bank Group (WBG), governments, development partners, and aquaculture practitioners with evidence-based strategies to pursue and advance restorative aquaculture. Through a synthesis of data and information from case studies, economic valuations, and ecosystem service assessments, it offers practical insights that Executive Summary | xvii • Highlight aquaculture’s current role and future potential in delivering ecosystem services—such as biodiversity enhancement, water quality improvement, and carbon sequestration—alongside food production • Showcase scalable, financially viable models of restorative aquaculture that align with the World Bank’s mission of poverty reduction and environmental sustainability • Identify policy and investment pathways to support restorative aquaculture at the local, national, and regional levels • Can guide World Bank task teams and partners in prioritizing projects that integrate profitability, circularity, sustainability, environmental protection, and climate resilience By bridging the gap between theory and implementation, this study can assist the World Bank and its stakeholders to unlock aquaculture’s potential to drive both economic growth and ecological restoration—and to ensure that blue foods contribute substantially to a sustainable, equitable future. Organization of the Report The report is structured in four parts: Part 1. Concepts and Frameworks Drawing on location- and sector-based examples, the report assesses the current state of aquaculture theory, along with the extant research on the ecosystem services aquaculture provides. It explains the principles of nature-positive aquaculture practices, emphasizing how they can be incorporated into integrated landscape and seascape programs— which coordinate land and marine resource use to balance ecological, economic, and social goals. The report also evaluates whether current aquaculture frameworks are practical enough to support implementation, monitoring, and adaptive management, emphasizing measurable, on-the-ground approaches. Part 2. Ecosystem Services Provided by Aquaculture Payments for ecosystem services (PES)—mechanisms that compensate individuals or communities for managing ecosystems in ways that provide public environmental benefits—have been proposed as a tool to promote sustainable aquaculture. However, because the environmental, social, and economic benefits of aquaculture can vary widely depending on the specific farming system, species, and local context, policymakers will likely need to adopt a bespoke, context-dependent approach when implementing PES in aquaculture settings. This variability is rooted in the fact that aquaculture provides numerous diverse benefits that reflect the varied ecosystem services offered by nature—from provisioning and regulating services to supporting and cultural services. This evaluation collected and compared recently published studies of ecosystem services across a range of species, farming systems, and benefit categories, to gain a clearer understanding of integrated approaches and how they can maximize the provisioning of environmental benefits. Part 3. Financing Ecosystem Services Financing ecosystem services involves creating economic mechanisms to support the preservation and sustainable  management of natural resources by assigning value to the benefits that ecosystems provide. xviii | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE These  services—such as clean water, carbon sequestration, and coastal protection—often lack formal markets, meaning that they are undervalued and/or overused. In a typical financing arrangement, beneficiaries of ecosystem services, such as governments, private companies, or consumers, compensate those who manage or protect ecosystems, such as local communities, farmers, or aquaculture producers, for maintaining or enhancing these services. This section emphasizes the critical role of ecosystem services in aquaculture while comprehensively exploring diverse financing schemes tailored to the varying needs of aquaculture producers—from large-scale commercial operators to small-scale and less formal producers. Recognizing that financial mechanisms must be adaptable to different production scales, the analysis examines how targeted financing solutions could address the unique challenges small producers face, such as limited access to capital, higher perceived risk, and informal market participation. Opportunities for national governments to align aquaculture-driven conservation outcomes with national, jurisdictional, and global objectives—such as the Paris Agreement—were also examined. To advance a systematic approach for selecting appropriate conservation financing mechanisms, an aquaculture-specific framework was developed by adapting a generic decision-making matrix (Plantinga et al., 2024). This framework incorporated important considerations from the Global Aquabusiness Investment Guide (World Bank, 2024), including its guiding principles, and identified how different financing mechanisms—from blended finance and impact investment to microcredit and cooperative funding models—could support essential components of sustainable aquaculture across diverse producer profiles (outlined in table 6). By prioritizing ecosystem services and equitable financing strategies, this approach is designed to enhance both the environmental and economic resilience of the sector while ensuring that all stakeholders are included. Part 4. Case Studies Using the expanded understanding of current financing approaches in support of payments for ecosystem services (PES), three country- and sector-specific case studies were prepared. The three case studies were chosen based on the World Bank’s interests, and sector- and species-specific models of restorative aquaculture were identified. What is novel about these case studies is their emphasis on integrating restorative aquaculture practices into PES frameworks, and exploring how financial incentives can directly support ecosystem recovery while simultaneously benefiting local communities. Additionally, the case studies introduce specific new models that combine traditional approaches with emerging technologies to enhance the effectiveness and scalability of these financing mechanisms across different environmental and economic contexts. Using data from the growing body of research quantifying the various ecosystem services aquaculture can provide (for example, standard nutrient reduction measures for shellfish and seaweed aquaculture (Barrett et al., 2022), potential benefits of carbon sequestration and mitigation, nutrient reduction, and biodiversity enhancements were explored and estimated. Combined with an understanding of the potential efficacy of the recommended approach and its ecological, social, and economic benefits, factors that could inhibit or enable this approach were then identified—for example, how current or alternative national strategies or policies could reduce entry barriers and increase the use of locally available species and resources, or how they could best reward and encourage restorative aquaculture practices. All analyses were completed through desktop reviews with discussion and input from country and regional experts. These case studies—seaweed aquaculture in Sri Lanka, oyster aquaculture in Senegal, and integrated aquaculture– agriculture in Guinea—were paired with insights and lessons that could be derived from established sectors in other countries, namely, seaweed farming in Tanzania (box 1), climate-adapted approaches to seaweed aquaculture in Belize (box 2), oyster aquaculture in Vietnam (box 3), and integrated shrimp aquaculture systems for climate-smart outcomes in Indonesia (box 4) and in Ecuador (box 5). Considering these examples in practice as part of the novel case studies yielded a better understanding of specific approaches or practices that could address some of the challenges that might be experienced in Guinea, Senegal, and Sri Lanka. For instance, farming systems that are being developed Executive Summary | xix in Belize to mitigate the harmful effects of high sea surface temperatures, such as inhibiting seaweed growth and promoting its vulnerability to disease, provide examples of transferrable approaches that could be used to build a resilient, productive seaweed sector in Sri Lanka. The case study countries, sectors, and operational models were selected and evaluated using the following criteria and considerations of technical needs. High-Level The high-level criteria employed included selecting lessons that could be applied in low- and middle-income countries and that were relevant to countries with well-established but nascent aquaculture industries, including production and supporting (supply chain) industries. A second criterion was that there should be an adequate amount of information to enable understanding of successes and failures, with a focus on the underlying and enabling causes of these outcomes. A third was that the cases should not have been explored in detail in some other study with a similar purpose. Technical The technical criteria included selecting a range of sectors and species of interest (for example, seaweed, bivalves, finfish, shrimp, and echinoderms), with a focus on sectors that could provide ecological benefits (seaweed and bivalves). Another technical criterion was to select a variety of culture species, methods, and markets with different configurations—for example, monoculture, co-culture, and aquaculture integrated with, for instance, agriculture— with an emphasis on species that provide economic and ecological value, ecosystem services, food, and nutritional benefits. The markets were chosen based on product type (for example, fresh, dried, or value-added products); market type (export, regional, or domestic); location (for example, the European Union or North America); and modes of market entry. The case studies also drew insights from other non-aquaculture industries, using them as references to identify potential financing approaches and to better understand how the dynamics of community-based commercial aquaculture differ from those of large-scale corporate producers. The availability of empirical data, the diversity of financing mechanisms (for instance, bonds or grants versus PES) and of consumer interests and preferences, seafood certification, and the role of retailers and large corporations in driving pricing and finance development were also taken into account. Findings and Insights Part 1: Concepts and Framework Restorative aquaculture and nature-based solution frameworks provide a fit-for-purpose approach to monitoring, measuring, and valuing ecosystem services and environmental, social, and economic benefits. These frameworks provide an immediate opportunity to encourage and support data collection and the monitoring and valuing of ecosystem services in the case study countries and in all countries where the World Bank is engaged in aquaculture. xx | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Recommendations • Encourage governments and industry to use existing operational frameworks to design and monitor the ecosystem services provided by aquaculture. • Encourage and facilitate data collection for ecosystem services using a replicable approach, such as the Global Restorative and Regenerative Aquaculture Monitoring, Evaluation and Learning Framework. • Support and provide opportunities for knowledge exchange across geographies and stakeholder groups. Part 2: Ecosystem Services Provided by Aquaculture Aquaculture plays a vital role in delivering essential ecosystem services, contributing to biodiversity enhancement, climate change adaptation, and broader environmental resilience. A robust body of evidence demonstrates how sustainable aquaculture practices can align with and even amplify global conservation and climate goals. This connection is increasingly recognized by World Bank experts and external stakeholders—including policy makers, environmental organizations, and investors—who see aquaculture as a strategic tool for achieving international commitments such as the Paris Agreement and the Kunming–Montreal Global Biodiversity Framework (GBF). The integration of aquaculture-derived ecosystem services into Nationally Determined Contributions (NDCs) and GBF Target 3 presents a good opportunity to scale up sustainable practices. By quantifying benefits such as habitat restoration, carbon sequestration, and species protection, aquaculture can be positioned as a nature-based solution that supports both ecological and socioeconomic objectives. This opens the door for targeted interventions—such as restorative aquaculture projects, innovative farming systems, and species piloting—that could be tailored to local and national contexts while advancing global sustainability targets. To maximize impact, the World Bank and partner institutions can provide critical guidance to governments on incorporating aquaculture into policy frameworks, ensuring that investments deliver measurable benefits for ecosystems and communities. Recommendations • Strengthen monitoring frameworks to ensure that ecosystem benefits are effectively measured and adaptively managed. • Help governments integrate aquaculture-driven ecosystem services into NDCs and GBF Target 3 to align local actions with global goals. • Expand research and valuation efforts to build a stronger evidence base, increase stakeholder engagement, and attract sustainable investment. Part 3: Financing Ecosystem Services Although PES increasingly become a valuable mechanism for supporting and scaling ecosystem service delivery from aquaculture, few operational PES schemes currently exist for aquatic environments. • A broad approach and portfolio of conservation financing mechanisms will be required to catalyze the development and scaling of restorative aquaculture. Private and public entities could be encouraged to explore the utility of a range of approaches, including PES approaches, green and blue bonds, and traditional financing such as concessional financing and loans. Executive Summary | xxi • Crediting methodologies for ecosystem services delivered specifically by aquaculture production are not yet available, although there is great potential to develop such methodologies. • Studies such as Plantinga et al. (2024) offer guidance on effective conservation financing through private, public, and blended finance, including green financing mechanisms such as bonds and offsets. Using a variety of approaches is crucial for derisking investments in new sectors, species, and systems and for deploying aquaculture in new locations. These financing methods are essential for sustainable development of aquaculture, as outlined in the Global Aquabusiness Investment Guide and framework (World Bank, 2024a). The report also offers a strategic decision-making matrix (table 6) to guide investments in aquaculture- related ecosystem services. Recommendations • Take a structured, evidence-based approach to the choice of financing mechanisms deployed. • Advocate for and facilitate the development of nutrients (for example, nitrogen and phosphorous), carbon, and biodiversity-crediting methodologies. • Encourage or partner with standard-setting organizations to advance methodologies in a way that will support the stacking or bundling of credits. • Encourage seafood certification and rating schemes to take greater initiative in communicating to consumers that aquaculture production, when it is restorative, can support ecosystem health and deliver a range of beneficial ecosystem services. Part 4: Case Studies Development of low-trophic, native species for restorative aquaculture in Guinea, Senegal, and Sri Lanka would increase sustainable production of aquatic foods, biodiversity, and climate resilience through direct ecosystem services and improved ecosystem health. • In Sri Lanka, seaweed aquaculture could be developed through a range of farming systems, including monoculture, co-culture, and integrated multitrophic aquaculture (IMTA) within the existing legislative environment. If practiced sustainably, drawing on global best practices and lessons learned in other sectors and countries, production could be linked to water quality improvements and climate change mitigation, including the production of blue foods and seaweed-based products such as biostimulants. For example, farming Gracilaria (a genus of red algae) over a 10-square-kilometer area could support a net reduction in carbon dioxide (CO2) across several products of 2,080 tonnes a year. • Oyster aquaculture is a viable sector for growth in Senegal and could build on an established background of oyster fishing, processing, and consumption in the domestic market. Existing legislation, the country’s Code de l’Aquaculture (Aquaculture Code), and sector-specific best practices could be applied to support the industry. Combined with effective habitat conservation or restoration measures for mangroves, this could provide an opportunity for carbon crediting. Oyster farming also reduces excess nutrients in coastal waters and provides habitats for fish and other fauna. In a 10 square kilometer area, farms and practices designed to support these services could help remove, on average 314 (ranging 150–612) tonnes of nitrogen and produce, on average, 1,147 (ranging 172–2,346) tonnes of fish per year. • Guinea’s coastal ecosystems face mounting pressures from overfishing, mangrove loss, biodiversity decline, and climate change. Implementing integrated aquaculture at a landscape scale offers a sustainable pathway forward but requires strong policy support, funding, and coordinated management. Central to this approach is protecting and restoring mangroves through enforceable, long-term agreements. Conservation could prevent 1 million to 6 million tonnes of CO2 emissions over 25 years while boosting fisheries productivity by $2.8 million annually (in 2020 dollars) per 25 km2 preserved. Restorative aquaculture systems present a unique opportunity to align production with ecosystem recovery, simultaneously advancing food security, climate resilience, and biodiversity conservation. This model demonstrates how economic development can work in harmony with environmental protection. xxii | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Although each country has unique needs, they face similar challenges—in particular, the need for skilled and knowledgeable workers and developed, integrated value chains. The knowledge gained from addressing these challenges in the context of ecosystem services, can be applied to other countries seeking to develop their aquaculture sector while responding to climate change and biodiversity loss. Unique challenges for which the World Bank could support countries include • Investing in systematic planning and development of an integrated aquaculture–agriculture approach over a long-term horizon in Guinea • Developing the infrastructure needed to improve existing integrated aquaculture initiatives (for example, greater hatchery capacity for producing oysters in Senegal) • Investing in research and development (R&D) to identify the best locations and climate-adapted farming systems for large-scale seaweed production in Sri Lanka Recommendations Sri Lanka • R&D: Develop oyster hatchery techniques, assess systems to determine their profitability, financial viability, scalability, and potential returns on investment, prioritize investable models, and evaluate socioeconomic impacts. • Operations: Promote best practices in seaweed farming, monitor ecosystem services (nitrogen, phosphorous, carbon, biodiversity), and quantify ecological benefits. • Financing: Align with the Global Aquabusiness Investment Guide and explore nitrogen and carbon offsets under national legislation. • Policy: Implement Food and Agriculture Organization (FAO) aquaculture guidelines, and include seaweed in Sri Lanka’s NDC as a blue food strategy. Senegal • R&D: Develop oyster hatchery techniques, assess profitable systems, prioritize investable models, and evaluate socioeconomic impacts. • Operations: Leverage World Bank projects (for example, P175915), integrate mangrove conservation, and strengthen food safety monitoring. • Financing: Use national or local financing per the Global Aquabusiness Investment Guide, and track ecosystem service benefits. • Policy: Adopt FAO guidelines and advocate for oyster farming in Senegal’s NDC. Guinea • R&D: Integrate aquaculture into agriculture and conservation via landscape planning, and assess the socioeconomic impacts. • Operations: Identify viable species and systems, evaluate geographic suitability, and monitor ecosystem services (mangroves and agriculture). • Financing: Explore blue and green bonds for sustainable aquaculture funding. • Policy: Implement FAO guidelines for sector governance. Executive Summary | xxiii 1 CONCEPTS UNDERLYING AN INTEGRATED LANDSCAPE AND SEASCAPE APPROACH IN AQUACULTURE Findings and Insights • Sustainable potential of aquaculture • When managed responsibly, aquaculture can provide multiple ecosystem services, including water filtration, nutrient mitigation, habitat provision, and climate adaptation. • Integrated landscape and seascape approaches provide a holistic framework • These approaches coordinate aquaculture with broader land- and sea-use systems to support conservation, climate resilience, and sustainable development. • They emphasize the interconnectedness of ecosystems and the need to manage aquaculture within multifunctional, multi-user environments. • Ecosystem-based and restorative approaches are central to nature-positive aquaculture • Ecosystem approaches to aquaculture (EAA) and restorative aquaculture emphasize sustainability, resilience, and equity. • They prioritize minimizing harm while actively enhancing biodiversity, supporting ecosystem functions, and providing measurable ecological and social outcomes. Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 1 • Multiple frameworks exist to support ecosystem-based aquaculture • Frameworks like the EAA, and the NbS Global Standard, as well as the Food and Agriculture Organization (FAO) Guidelines for Sustainable Aquaculture (FAO, 2025) offer principles and tools to assess sustainability outcomes. • These frameworks vary in their level of operational guidance, with some offering metrics and indicators for monitoring a range of diverse benefits. • PES can incentivize positive outcomes • PES mechanisms provide a promising tool for rewarding aquaculture systems that deliver public goods, such as water purification, erosion control, and biodiversity conservation. • These financial instruments can help bridge the gap between ecological performance and economic viability. • Creating an enabling environment is crucial for scaling impact • Enabling conditions—such as clear policies, regulatory frameworks, research and development support, and incentives—are essential to unlock the full potential of sustainable aquaculture. • The private sector has a critical complementary role to play by aligning investments with nature-positive goals and shaping market demand for responsibly produced aquatic foods. Recommendations • Encourage government and industry to use existing operational frameworks, such as the above-mentioned, to coordinate and monitor ecosystem services provided by aquaculture. • Encourage and facilitate data collection for ecosystem services using a replicable approach such as the Global Restorative and Regenerative Aquaculture Monitoring, Evaluation and Learning Framework. Background As the global community works to halt and mitigate negative global environmental challenges, especially harmful climate change and biodiversity loss, interest in coupling natural resource use and food production systems with conservation and restorative objectives has increased (Duarte, Bruhn, and Krause-Jensen, 2022; Mizuta, Froehlich, and Wilson, 2023). Seafood production systems and the sustainable development of blue foods have emerged as important opportunities to realize a more sustainable, healthier, and more just food system if they can be mainstreamed into global, national, and local decision making and used to support the vital role of small-scale fishery and aquaculture actors (Tigchelaar et al., 2022). The environmental performance of blue foods can also be superior to that of terrestrial-based systems, resulting in fewer greenhouse gas (GHG) emissions and nutrient outputs and reducing pressure on freshwater and terrestrial resources (Gephart et al., 2021). In addition, when sited in the right locations and practiced with an eye to sustainability, aquaculture, including mariculture (marine aquaculture), can contribute to or enhance ecological functions such as water filtration and nutrient mitigation; regeneration of fisheries stocks; habitat for shelter, feeding and breeding of a diversity of species; and climate adaptation by buffering local effects of ocean acidification or wave energy (Loring, 2023; Overton et al., 2023; Theuerkauf et al., 2022; Weitzman, 2019). These environmental benefits co-occur with the resource that is produced and its economic value, generating environmental and social co-benefits in the provision of food, nutrition, and livelihoods. 2 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Together with the resource itself, these environmental and social co-benefits present an emerging opportunity to link demand for seafood with food security activities that support the sustainability and resilience of ecosystems and communities and potentially restore degraded habitats, lost biodiversity, and impaired ecosystem functions. Yet although aquaculture provides rich benefits, it can also cause environmental and social damage. Disturbance of habitat is one. Historically, this has been high. In recent decades, although the conversion of critical habitats such as mangroves to aquaculture ponds has slowed, rates of loss continue to be high—1 percent a year globally and between 2 and 8 percent a year in Southeast Asia. Waste pollution from fed finfish aquaculture is persistent, although technological and operational improvements have been made to reduce the overuse of feed. There are also ongoing challenges, such as the transmission of disease and parasites, which can harm wild populations and necessitate chemical treatment (Naylor et al. 2021). Additionally, many fed aquaculture sectors continue to depend on wild-caught fish and on extensive land use to grow crops, particularly soy, as ingredients for fishmeal (Froehlich et al., 2018a; 2018b; Naylor et al., 2021). This means that, although aquatic foods can often be produced with fewer GHG emissions and resource requirements like land and freshwater than terrestrial livestock (Gephart et al. 2021), the environmental benefits cannot be taken for granted as a matter of course. Any focus on the provisioning of ecosystem services from aquaculture practices must therefore be coupled with attention to practices that enable iterative improvements in sustainability rather than exacerbate environmental and social threats. This is especially true for the interlinked crises of biodiversity loss and climate change. It should not be assumed that aquaculture systems, including approaches and designs intended to facilitate ecosystem services, will inevitably have lower GHG emissions and biodiversity impacts. The better approach is to anticipate these goals, appropriately plan for them—for example, through evidence-based decision-making on location, careful design of the farming system, and informed choices of species farmed—and then adapt, adjust, and monitor the system’s implementation as it proceeds by gathering and processing data-rich feedback. Climate change also poses a major risk to resource use and the sustainable development of the aquaculture industry. For production systems such as aquaculture that depend on natural resources and ecosystems, climate change can also be a threat multiplier, exacerbating underlying problems such as habitat degradation and poor water quality. Making nature central in decision-making and development efforts across sectors is fundamental to reducing climate change threats and ending poverty on a livable planet—the mission of the World Bank Group (WBG). Future food production systems must therefore be designed to be not only sustainable but also resilient, efficient, and wherever possible, regenerative. In light of the continued exploitation of natural resources, rising pollution, the increasing impacts of climate change on the ocean, and the corresponding loss of marine biodiversity (Jaureguiberry et al., 2022), greater attention must be paid to the intentional development of aquaculture practices and farms that support the health and function of aquatic environments. World Bank Priorities and Goals In recent years, the World Bank has increased its investment in aquaculture in both the public and the private sectors. The PROBLUE-funded AquaInvest Platform, by exploring the potential for sustainable economic growth along the entire aquaculture value chain, has stimulated increased demand for investment in aquaculture among all of the Bank’s projects and operations, fostering a unified World Bank approach. This has provided an opportunity for the Bank to play an influential, catalytic role in expanding and transforming aquaculture globally. Supporting aquaculture’s growth can contribute to the Bank’s vision and development objectives as long as sustainability remains at the core of these investments. Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 3 The Integrated Aquaculture into Land and Seascape Programs Global Advisory Services and Analytics, funded by PROBLUE and PROGREEN, is a clear indication of the importance the World Bank attaches to developing aquaculture investments that enhance ecosystem services while enabling sustainable livelihoods, employment, and food and nutrition security. Integrating aquaculture into landscape and seascape programs can enhance the design and implementation of sustainable aquaculture activities and cultural and ecological priorities (for example, biodiversity). It can also empower women and youth by boosting rural employment and jobs and by increasing community engagement in income-generating businesses. Additionally, integrating aquaculture into landscape and seascape programs can raise the efficiency of resource use, making more from existing land and inputs (for example, fresh water) and enhancing the outcomes of climate change mitigation. Globally, integrated aquaculture is emerging as a pathway that supports the circular economy, bringing with it the capacity to provide novel products and approaches that can support ecosystem services, lessen carbon emissions, and finance approaches that encourage nature-positive behaviors. This means that integrated models that provide both social and environmental benefits while increasing climate resilience and enhancing the adaptive capacity of coastal communities and food systems to provide blue foods—must increasingly become the norm. In this way, aquaculture can contribute to several of the strategic priorities of the World Bank, such as ending extreme poverty, boosting shared prosperity, narrowing the inequality gap, reducing carbon footprints, addressing food and nutrition insecurity, and enhancing the resilience of aquatic ecosystems (figure 1). FIGURE 1: Strategic priorities of the World Bank Group’s mission Source: Authors’ own work 4 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Creating an Enabling Environment Building a supportive environment and enabling conditions for aquaculture that provide ecological and social benefits will require attention and investment from both the public and private sectors. The public sector can contribute to a favorable development environment, although poorly designed policies and regulatory frameworks have been shown to be a significant constraint on sustainable industry activities (Ruff, Gentry, and Lester, 2020). Public sector investment is also commonly required in the nascent stages of aquaculture activities, for example, to support research and development into species cultivation techniques and infrastructure. The private sector also needs to play a substantial role in securing restorative, nature-positive outcomes from aquaculture. This support is often best provided in the form of direct investment and indirect influence through shaping markets. It will also be necessary for the public and private sectors to work together to develop a more favorable operating and financial environment. For example, payments for ecosystem services (PES) is a way to promote conservation and manage the health of ecosystems by using economic incentives to induce various actors to provide services that offer broad benefits to the public—for instance, ecosystem services such as water filtration, waste-water treatment, and the reduction of erosion, and other public goods. These services extend beyond the direct outputs of resources (for example, crops) and include additional ecological and social values such as biodiversity preservation and community well-being (Farley and Costanza, 2010). Public and private sector engagement is essential for effective governance and administration because it unlocks economic potential and helps ensure scalability. By aligning the interests of the two sectors, PES can serve as a powerful tool to promote sustainable aquaculture practices while delivering tangible benefits to communities and the environment. World Bank Initiatives That Support Regenerative Aquaculture, Ecosystem Services, Biodiversity Finance, and Private Sector Mobilization The World Bank has been actively advancing regenerative aquaculture through a combination of strategic financing, policy support, and innovative ecosystem service incentives. Although not exclusively focused on aquaculture, several Bank projects (see below) contribute to an enabling environment for regenerative aquaculture by advancing PES, nature-smart financing, and integrated coastal management. These initiatives align with the broader goals of climate resilience, biodiversity conservation, and sustainable food systems—the pillars for scaling regenerative aquaculture. Strategic Priorities in World Bank Projects Ecosystem-Based Incentives: Projects such as “Reducing Hunger with Payments for Ecosystem Services (PES): Experimental Evidence from Burkina Faso” (WPS8974) and “Promoting Market-Oriented Ecological Compensation Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 5 Mechanisms: Payment for Ecosystem Services in China” (42177) demonstrate how financial incentives can encourage sustainable land and water use, indirectly supporting aquaculture systems that depend on healthy ecosystems. Moreover, “Integrating the Values of Nature into Policy and Investment Decisions: Wealth Accounting of Ecosystem Services” provides methodologies to quantify the benefits of aquaculture-driven ecosystem services such as water filtration and habitat restoration; and “East Asia and Pacific—Capturing Coral Reef and Related Ecosystem Services” (78333) and “Using PES to Implement REDD (86273)” emphasize integrated approaches that protect critical habitats (for example, mangroves and wetlands) while supporting sustainable aquaculture. Nature-Smart and Private Finance Mobilization: Reports such as “Mobilizing Private Finance for Nature,” “Kenya Climate and Nature Financing Options Analysis,” “Scaling Up Finance for Nature,” and International Finance Corporation’s (IFC’s) Biodiversity Finance Reference Guide provide practical tools that can be used to derisk investments in sustainable aquaculture, particularly for small-scale producers who face barriers to capital access. Case studies from “Blueprints for Private Investment in Ecosystem Restoration: Lessons from Case Studies,” “Nature-Related Risk Assessment Approaches for the Financial Sector—Applicable Approaches and Implications in East Asia and Pacific,” and “Nature-Related Financial Risks in Brazil” offer replicable models for engaging the private sector to invest in regenerative aquaculture while ensuring ecological and economic returns. Policy and Governance Alignment: Projects such as “Unlocking Nature-Smart Development” (P161281) emphasize the need for robust legal frameworks and institutional support to align aquaculture growth with climate and biodiversity goals, including those under the Paris Agreement and the Kunming–Montreal Global Biodiversity Framework (GBF). In summary, by leveraging these cross-cutting initiatives, the World Bank is fostering an enabling environment in which regenerative aquaculture can thrive—balancing productivity, ecological health, and inclusive economic growth. Through a strategic focus on ecosystem restoration, equitable finance, and scalable solutions, the Bank is transforming aquaculture into a driver of sustainability, particularly for small-scale producers who face barriers to traditional financing. This approach advances several Sustainable Development Goals (SDGs), including climate resilience, food security, and nature-positive development. Environmental Benefits and Ecosystem-Based Aquaculture Aquaculture is emerging as a food system that can provide diverse, valuable environmental and social co-benefits (in  addition to the primary ones of producing food, resources, and business) by providing ecosystem services (figure 2). These services span all the four major categories of the benefits nature provides—provisioning, regulating, habitat supporting, and cultural services (Alleway et al., 2023; van der Schatte Olivier et al., 2020; Weitzman, 2019). They highlight an important contribution aquaculture can make to recovering biodiversity and improving the health of aquatic ecosystems and thereby their climate resilience. Overton et al. (2023) identify 12 potentially beneficial ecological outcomes of aquaculture: species recovery, habitat restoration, habitat rehabilitation, habitat protection, bioremediation, assisted evolution, biological control, removal of overabundant species, ex situ conservation, coastal defense, climate change mitigation, and wild harvest replacement. 6 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE FIGURE 2: Ecosystem services and environmental co-benefits of different species and systems in marine aquaculture, integrated aquaculture, and integrated multitrophic aquaculture Source: TNC (2024a) Several concepts and frameworks have recently been developed to enable detection, monitoring, and evaluation of these outcomes of aquaculture activities. These concepts and frameworks could help industry and government to design and support intentional delivery of ecosystem services and broaden ecological and socioecological benefits. They include new frameworks for restorative aquaculture (Alleway et al., 2023; TNC, 2021) and the IUCN Global Standard for NbS (Le Gouvello, Brugère, and Simard, 2022; Le Gouvello et al., 2023), which align with well-established concepts and science, including stock enhancement strategies for fisheries (Lorenzen et al., 2021), the significance of species of conservation (Froehlich, Gentry, and Halpern, 2017) and an ecosystem or ecological approach to aquaculture (Brugère et al., 2019; Costa-Pierce, 2021). Each of these concepts and frameworks shares a similar vision for enhancing the sustainability of aquaculture systems while also encouraging greater benefits for coastal communities and ecosystems, but they vary to the extent in which they provide a basis for measuring the benefits provided (Alleway et al., forthcoming). Central to each is the expectation that environmental harms will be mitigated and that environmental benefits should not come at the expense of ecological or social harm. Of these concepts, NBS and restorative aquaculture provide frameworks within which benefits can be valued, benchmarking these outcomes against predefined indicators—the NbS Global Standard (IUCN, 2020a) and the Global Monitoring, Evaluation and Learning Framework for Regenerative and Restorative Aquaculture (TNC, 2024a). The ecosystem approach to aquaculture establishes a set of principles that can guide ecological and social outcomes (from aquaculture) but does not prescribe indicators or other metrics against which positive effects can be measured. Further reading and practical resources for use of these frameworks are provided in appendix A. Many of the practices valued within these frameworks are founded on or improved by the knowledge and management of indigenous communities. Validating customary and indigenous practices, and their peoples’ leadership in food production and food systems, will likely lead to better, more effective, and more cost-effective outcomes for people and nature while fostering food sovereignty and social outcomes for indigenous communities, including greater equality and cultural reconciliation (Brugère et al. 2023; Kennedy et al. 2022). Mainstreaming local and indigenous knowledge within the design of aquaculture systems will also help ensure that the development of the sector, especially rapid development in pursuit of growing a blue economy, reduces rather than exacerbates social injustices (Bennett et al. 2021). Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 7 Restorative Aquaculture Regenerative and restorative aquaculture practices involve the cultivation of species or the use of aquaculture systems, infrastructure, and practices that generate ecological benefits and net-positive environmental outcomes, such enhancing biodiversity by providing additional habitat, reversing habitat loss, and reducing climate pressures through water filtration and carbon sequestration (TNC, 2021). Regenerative approaches that create such benefits fall into two groups: • Approaches that are applied to the farm landscape and surrounding area, such as interventions to protect or support the rehabilitation of wild species and ecosystems • Approaches that are applied to the farming practice itself, such as practices that optimize stock rotation, making production more efficient, or intentional management of nutrient cycling to enhance productivity or improve the carrying capacity of the surrounding environment (Miralles-Wilhelm, 2021) Species that have the largest, most inherent opportunity to generate ecosystem services are primarily unfed species, such as bivalves and seaweeds, because, unlike finfish, they filter and absorb excess nutrients such as nitrogen from the surrounding environment rather than releasing additional waste. Across all species and culture systems, six restorative aquaculture global principles have been identified that influence the nature and extent of benefits provided and can therefore help industry and governments decide how to guide the design of aquaculture practices to maximize benefits (table 1). TABLE 1: Global principles of restorative aquaculture Principle Why? Example A farm sited in an area where the Principle 1: Site farms where Accounts for the influence of local habitat has declined is more likely environmental benefits can be environmental characteristics and the to provide a habitat benefit that generated health of the surrounding ecosystem enhances biodiversity Principle 2: Farm species that can Species cultivated are a significant Extractive species such as bivalves provide the environmental benefits driver of the ecosystem services and seaweeds increase the rates of intended provided nutrient uptake Certain equipment for bivalve Cultivation equipment and supporting Principle 3: Prioritize farming cultivation provides a complex, structures provide habitats for equipment that enhances the cryptic habitat for invertebrates and foraging, breeding, and refuge for delivery of environmental benefits larval fish that prefer to hide for wild species in different ways safety Construction, seeding, harvesting, Habitat benefits can be maximized Principle 4: Adopt farming and maintenance practices and the by timing the harvest of farmed management practices that can configuration of farms influence biomass to avoid periods of fish enhance local environmental whether certain benefits are provided aggregation or spawning (around benefits or removed the farm) Farmed shellfish biomass can Principle 5: Endeavor to farm at an Aquaculture is thereby practiced at be increased (up to the carrying intensity or scale that can enhance a scale and intensity commensurate capacity) to raise the rates of water ecosystem outcomes with the needs of the water body filtration Principle 6: Contribute data, Community understanding of information, knowledge, and Overlaps and competition for aquaculture’s ecosystem services technical capacity to enable space and resources can constrain can increase the recognition of quantification and recognition the productivity and benefits of restorative practices and reduce of environmental, social, and aquaculture conflicts economic benefits Source: Alleway et al. (2023); TNC (2021) 8 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE The Ecosystem Approach to Aquaculture EAA is a “strategy for the integration of the activity [aquaculture production] within the wider ecosystem such that it promotes sustainable development, equity, and resilience of interlinked social-ecological systems” (FAO, 2010). EAA is a process or strategy for governments and aquaculture sectors to follow that has stakeholder engagement at its core and emphasizes the importance of ecologically sustainable development. The FAO uses it as a primary framework for enabling sustainability. It also provides an important basis upon which to design and deploy other integrated and regenerative solutions, such as integrated multitrophic aquaculture (IMTA) or circular economy solutions. This approach is guided by specific principles and key concerns, which ensures its effective application across different scales (from farm to global) (table 2). EAA is virtually universal in its potential application because all farming systems can take an ecosystem approach, supporting the potential scalability of sustainable, nature-positive practices. TABLE 2: FAO ecosystem approach to aquaculture— Key principles and concerns Key issues at the Principle Examples ­ mplementation stage i Aquaculture is developed within the Principle 1: Aquaculture limits of its ecological and social development and management Estimating resilience and carrying capacity—that is, the amount of should account for the full the limits to “acceptable aquaculture farming that can be supported range of ecosystem functions environmental change,” and without creating unacceptable changes in and services and should not ensuring a precautionary ecosystem processes or species or creating threaten their sustained delivery approach adverse cultural or societal impacts to society (McKindsey et al., 2006) Principle 2: Aquaculture should Ensuring equal opportunities Nutritional needs and access to aquatic improve human well-being for development of aquaculture food are optimized, and harmful and equity for all relevant so that its benefits are widely environmental impacts are minimized stakeholders. shared (Shepon et al. 2021) Restorative aquaculture practices are Principle 3: Aquaculture should Recognition of the interactions designed and sited to enhance biodiversity, be developed in the context between aquaculture and the contributing to Target 3 of the Global of other sectors, policies, and surrounding natural and social Biodiversity Framework (i.e., conserve goals. environment 30 percent of the land, inland water bodies, and seas) Source: Costa-Pierce (2021) Note: The examples of aquaculture systems that illustrate the application of each of the principles are from published studies. Integrated Farming and Multitrophic Aquaculture Integrated aquaculture is the culture of multiple species in a single, consolidated farm area. This includes co-culture, typically the growing of two or more species in the same area, often in an arrangement in which the species complement or benefit each other symbiotically. Integrated aquaculture also includes a landscape-scale view of how aquaculture could be incorporated into a watershed or practiced seasonally alongside the cultivation of other crops such as rice or vegetables and livestock. These approaches are common in many mature aquaculture sectors, particularly in Asia, and have been the basis of traditional aquaculture practices for millennia. For example, more than 1,500 years ago, Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 9 in Hawai’i, integrated approaches were used in traditional fish ponds, linking watershed areas to coastal habitats across the landscape. Farmers there grew crops in upland areas, while nutrient-rich runoff from these fields flowed downstream to fertilize coastal fishponds. In turn, fish harvested from the ponds were traded with upland farmers, forming an integrated system that sustainably linked agriculture and aquaculture (Costa-Pierce, 1987). More than 1,000 years ago, in China, polyculture was practiced by feeding smaller fish species to larger carnivorous species. Farmers also developed integrated agriculture–aquaculture systems, such as the mulberry-dike fishpond system, where mulberry leaves (grown on pond dikes) fed silkworms, silkworm waste fertilized fish ponds, and fish waste in turn nourished the mulberry plants. This system produced multiple economic outputs, including fish, silk, and mulberry fruit (Lin et al., 2024). Integrated Multitrophic Aquaculture IMTA, “the integrated culturing of fed species, such as finfish, inorganic extractive species such as seaweeds, and organic extractive species such as suspension and deposit-feeders” (Troell et al., 2009, p. 2), is an approach to co- culture with an explicit intent: to co-culture species that can extract excess nutrients from fed finfish with the aim of increasing the sustainability of the aquaculture system, mitigating harms that can arise from fed aquaculture, maximizing the use of the system and the space, and increasing profits through commercial production of additional species (figure 2). This requires farming species from multiple trophic levels (different levels of the food chain) to create balance and provide the ecological functions needed to remove the waste that higher-trophic-level species, such as finfish, generate. That is done by including species that consume animal particulate matter and detritus, such as abalone, bivalves and other species of shellfish, and primary producers, specifically seaweed, that rely on dissolved nutrients, including nutrients that the fed species produce. Appendix B offer more information on the operational requirements and challenges of IMTA. Nature-Based Solutions Nature-based solutions (NbS) are “actions to protect, manage, and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and bio-diversity benefits” (IUCN, 2016). They have been shown to be applicable to aquaculture, including practices that align with the IUCN Global Standard for NbS (Le Gouvello, Brugère, and Simard, 2022; Le Gouvello et al., 2023), which provides eight interconnected criteria and 28 indicators (table C.1) to help design, assess, implement, strengthen, and expand NbS interventions (figure 3) (IUCN, 2020a; 2020b; Le Gouvello, 2020). Several location-specific aquaculture systems have been assessed through case studies and pilot projects in diverse geographical contexts, and the potential role of aquaculture examined according to the Global Standard for NbS. The case studies explored were all existing aquaculture operations and were not intentionally designed with NbS from the Global Standard as an operational objective. This indicates that, even when aquaculture operations are not designed to provide NbS, they may align with the principles and criteria of this approach. Le Gouvello et al. (2023) provide detailed case studies and results assessed by the NbS criteria for seaweed farming in Tanzania and shrimp–mangrove aquaculture in Indonesia. In addition to offering a global standard and technical guidance, the IUCN furnishes an online self-assessment tool1 that can be used to design new NbS, expand pilots by identifying gaps, and self-assess past projects and future proposals. Further information regarding the Global Standard for NbS criteria and examples of aquaculture projects that have been assessed by this standard are provided in appendix C. 1 See the IUCN online self-assessment tool at https://nbs-sat.iucn.org. 10 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE FIGURE 3: Integrated multitrophic aquaculture: Farming species of different trophic levels to take advantage of organic and inorganic nutrients that the various organisms make available Source: Chopin et al. (2010) Concepts underlying an Integrated Landscape and Seascape Approach in Aquaculture | 11 2 ECOSYSTEM SERVICES PROVIDED BY AQUACULTURE Findings and Insights • Global goals, targets, and frameworks such as the Paris Agreement and the Global Biodiversity Framework permit aquaculture and blue foods to be included in country commitments such as GHG emission reduction goals and 30x30.1 • Ecosystem services, including enhanced nutrient and carbon cycling and biodiversity, are most often associated with unfed aquaculture species and systems because these species avoid the environmental impacts of feed and waste and take up excess nutrients from aquatic ecosystems. • Although ecosystem services can be associated with many aquaculture systems, maximizing co-benefits requires planning, siting, design, deployment, maintenance, and monitoring. 1 Target 3 of the Global Biodiversity Framework, informally known as 30x30, calls for the protection, conservation, and management of 30 percent of the world’s terrestrial, inland water, and coastal and marine areas—land, waters, and seas—by 2030, especially areas of particular importance for biodiversity and ecosystem services. For more information, see TNC (n.d.); WWF and IUCN WCPA (2023). Ecosystem Services Provided by Aquaculture | 13 Recommendations • Encourage monitoring to ensure that benefits are provided and managed adaptively. • Work with national governments to provide advice on measures that can be included in NDCs and Target 3 of the GBF. • Support ongoing research and valuation of ecosystem services to expand the evidence base and increase awareness and investment. Background Ecosystem services, in all environments, are often placed in four categories (table 3) (de Groot, Wilson, and Boumans, 2002). The individual services attributed to these categories are based on ecological processes and mechanisms, such as water filtration and denitrification, that various animal and plant species provide. These same processes are provided by some aquaculture species and systems. In some instances, it may be preferable to use aquaculture species to provide these processes in order to emphasize the enhanced services available in an aquaculture setting, as a way of reducing the pressure on wild-caught species to support their recovery (figure 4). Many of these processes can be defined, quantified, and valued economically—for instance, the value of wastewater treatment. This makes it possible for the gains in, and enhancement of, ecosystem services resulting from aquaculture practice to be more readily recognized and assessed in the broader context of other factors such as the potential tradeoffs or inequities in who pays and who benefits. TABLE 3: Ecosystem service categories and published examples of how aquaculture provides these services Ecosystem Example of aquaculture-based service Ecosystem service ecosystem service category Farming of low-input, low-GHG-emission proteins Provision of products, raw materials, or Provision of nutritional supplements such as energy outputs such as food, water, genetic omega-3 fatty acids, calcium, and vitamin A Provisioning resources for medicines, fuel wood from Farming of raw materials for products like mangroves, sand for construction, and other pearls, bivalve shells, or bioplastics can enhance resources aquaculture’s economic viability Water filtration and denitrification by bivalves Services that regulate ecological processes Bioextraction of nitrogen, phosphorous, or carbon such as water filtration and nutrient cycling, by seaweed Regulating erosion and flood control, climate regulation Reduction of wave energy and stabilization and air quality, pollination, and biocontrol of sediment from on-bottom oyster-farming equipment Services that serve as a basis for other Aquaculture farms providing habitat for wild fish services, such as providing habitat and to shelter, feed, breed, or recruit Supporting support for life cycles and gene flow for Spillover of larvae from the farmed stock of native genetic diversity species to degraded wild populations Aquaculture as a source of employment and Other non-material benefits that people livelihoods obtain from ecosystems, such as recreation, Cultural Aquaculture for tourism or education tourism, and support for cultural and spiritual Farming of species of cultural significance for identity community engagement and spiritual connection Note: Published studies quantifying ecosystem services are reported in Alleway et al. (2023) 14 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE FIGURE 4: Eight interconnected criteria of the International Union for Conservation of Nature and Natural Resources Global Standard for Nature-Based Solutions Source: IUCN (2020a) When developed in the right locations and with practices that minimize the risk of environmental harm, aquaculture can generate ecosystem services and create a range of benefits for surrounding ecosystems (for example, water quality improvements through nutrient filtration, greater biodiversity through habitat provision) (Gentry et al., 2017; van der Schatte Olivier et al., 2020; Weitzman, 2019). These environmental benefits are in addition to the food, other resources, cultural values, and economic opportunities the industry offers (Alleway et al., 2019; forthcoming). These co-benefits can have a measurable impact. For example, the value of nitrogen removal provided by bivalve aquaculture in the EU has been modeled to be equivalent to $17.5 billion to 24.1 billion (Cubillo et al., 2023). The economic value of nutrient bioremediation services provided by global seaweed aquaculture production is estimated to be between $1.1 billion and $3.4 billion for nitrogen and $51.8 million for phosphorus (Costa-Pierce and Chopin, 2021). If restorative practices are used effectively, the global value of nitrogen removal and of fish production from aquaculture could reach $17 billion to $56 billion annually (Barrett et al., 2022). The type and extent of benefits provided are highly context-dependent and will likely differ from one region or location to another (Alleway et al., 2023). Environmental impacts from the same species sometimes can be negative, neutral, or positive depending on the practices employed, and even when the best practices are used, benefits may not always occur (figure 5). For example, a four-year study of similar seaweed farming systems in relatively comparable conditions Ecosystem Services Provided by Aquaculture | 15 in two distinct temperate and cold-water ecosystems showed that kelp and kelp–mussel co-culture both provided new habitat, but the extent to which wild fauna made use of this new habitat in sites in Maine varied from what was observed in New Zealand. The study shows that the habitat benefits seaweed farms provide can be strongly context- dependent (TNC, 2024a). FIGURE 5: Continuum of habitat and biodiversity effects from aquaculture, from negative to neutral to positive, depending on species, equipment, and farm management practices used Source: TNC (2024b) 16 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE The scale of these impacts can also vary; some accrue at the farm level and others across the ecosystem or ecoregion (TNC, 2021). Many management measures exist in aquaculture to mitigate and eliminate harmful effects and increase the potential for beneficial effects. The management measure to be used depends on the species farmed, the system employed, and operating and ecological factors, such as water depth and wave energy (table 4). These factors also often interact. For example, although shellfish can enhance water filtration, the extent to which they improve the water quality depends on the scale of farming, local environmental conditions, where the farm is, and whether anthropogenic activities are contributing to eutrophication, generating excess nutrients. These factors can be managed by taking a structured approach to considering each driver of variability and the needs of the environment and local communities (figure 6). TABLE 4: Negative, neutral, and positive habitat and biodiversity effects from aquaculture and measures that can mitigate harms and enhance benefits Type of Examples of mitigating and enhancing Examples of effects on biodiversity impact measures Aquaculture farm deters species from Consider whether the site of the farm or the type or visiting an area amount of equipment used is appropriate for the area Waste from farmed aquaculture stock or can be changed exceeds local ecological carrying capacity Ensure that farming occurs within local assimilative Negative and decreases water quality capacity, accounting for other stressors and cumulative Aquaculture equipment or farmed stock changes increases the risk or incidence of invasive Routinely monitor biofouling to ensure early detection species or disease of non-native species or disease events Continue farming activities with effective monitoring Aquaculture farm neither deters nor attracts to ensure that negative impacts are rapidly addressed, species and to identify opportunities to enhance ecological Neutral Waste from farmed stock is within local processes by modifying practices (e.g., changing the ecological carrying capacity (in conjunction timing of harvesting to support habitat for spawning of with other sources of waste to the area) wild species at certain times of the year) Aquaculture equipment and farmed stock provide habitat for shelter, feeding, or Continue monitoring to ensure that positive effects are breeding consistently provided and to identify opportunities to Positive Farmed stock increases water filtration enhance ecological processes by further developing or rates, nutrient cycling, and local ecological modifying practices carrying capacity Ecosystem Services Provided by Aquaculture | 17 FIGURE 6: Drivers and enablers of ecosystem services and environmental benefits arising from aquaculture Source: TNC (2021) Evidence and Examples of Ecosystem Services from Aquaculture Increasing interest in the potential for aquaculture to provide ecosystem services in recent years has resulted in a growing body of research identifying and quantifying the potential environmental and social co-benefits of farming. This section provides examples of ecosystem services from aquaculture. These examples provide insights into the optimal way to apply integrated, sustainable, and restorative aquaculture and therefore how these benefits—and the 18 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE practices that generate them—can be replicated and scaled in different economic circumstances (for example, low or high capital costs) and operational constraints (for instance, environmental regulations versus production intensity). They were selected based on recent case studies of ecosystem services from aquaculture to provide a snapshot of the current state of play. Biodiversity Enhancement from Bivalve Shellfish and Seaweed • Shellfish (clams, mussels, oysters, scallops) and seaweed can provide a range of habitats supporting ecosystem services. • Fish and invertebrates can use aquaculture farms to feed, shelter, and breed, although which species, when, and to what extent they use these areas are spatially and temporally variable. • When habitat ecosystem services supplement lost or degraded habitat or add new habitat to an ecosystem, this can enhance biodiversity to a greater degree than at similar non-farm sites. For example, on mussel farms in New Zealand, it has been found that cryptic fish species—species that like to hide— use farm areas for spawning and recruitment, that is, transitioning into the adult population (Underwood and Jeffs, 2023). It has also been found that snapper foraging within aquaculture farms have more diverse, better-quality diets with less foraging effort (Underwood et al., 2023). As a result, they weigh more and have higher lipid concentrations in their flesh than snapper foraging outside the farms (Underwood et al., 2024). In mussel farms in the United Kingdom, it has been found that the abundance and diversity of sessile, sedentary, and mobile species are higher than at non-farm sites. Species of commercial interest, such as lobsters and crabs, were exclusively recorded beneath the mussel longlines that serve as a refuge and foraging area for these species (Mascorda-Cabre et al., 2024; Stamp et al., 2024). Also in the UK, it has been observed that farmed kelp provides seasonal habitat for local fish assemblages, although this habitat is temporary since the seaweed biomass is harvested at the end of the winter growing season. In Belize, monitoring studies of nearshore seaweed farming activity in sandy areas in the beach resort of Placencia have shown that it causes minimal harm and has the potential for ecological benefits, including consistently greater fish species richness and abundance at some farms than in control sites (Foley, 2019; Tucker and Jones, 2021). How Bivalve Shellfish Improve Water Quality • Of the species and sectors with the potential to generate ecosystem services, much of the existing knowledge and data are associated with shellfish (oyster) farming and its effect on water filtration and nutrient extraction. • These benefits are found in all farming systems where best practices are applied (for example, where the ponds are not overstocked) because oysters are filter feeders; they constantly filter water to extract algae and suspended matter. • Improving water quality by reducing eutrophication is a critical step for addressing biodiversity loss and strengthening ecosystem climate resilience. Oyster aquaculture has the potential to improve water quality in the Chesapeake Bay in the United States, contributing to the legislated bay-wide management of nutrient inputs under the US Environmental Protection Agency total maximum daily load (TMDL) program. This case study indicated that oysters, in reef and aquaculture configurations, Ecosystem Services Provided by Aquaculture | 19 can provide water filtration and wastewater treatment that ecosystem services needed to meet the requirements of nutrient management according to the program (Kellogg et al., 2018; Rose et al., 2014) and therefore could be considered an example of restorative aquaculture. However, the impact of oyster aquaculture farms may be small in comparison to the needs of broader water body and nutrient reduction targets. There are ongoing efforts—through the quantification, verification, and recognition of the benefits provided—to resolve the water filtration and nutrient benefits of shellfish aquaculture at successive spatial scales to help scale these approaches. This includes research efforts and emerging tools to help farmers and governments estimate the value of such ecosystem services, such as the recent development of the publicly available Aquaculture Nutrient Removal Calculator tool. Developed by the US National Oceanic and Atmospheric Administration (NOAA), this tool predicts the amount of nitrogen removed from coastal waters through oyster farming (specifically the Eastern oyster, Crassostrea virginica) along the northeastern coast of the United States (Rose et al., 2024). The tool has been designed to produce a report that is consistent with regulatory permissions of the US Army Corps of Engineers public interest review process and similar state-level permitting processes. Although it is species specific, it provides a blueprint for the development of similar calculators once sufficient species data are available on growth, morphometrics, and shell and tissue nutrient concentrations (TNC, 2021).2 The benefits of pearl oyster farming may be similar to those of aquaculture food production because pearl oysters and their products can support specific ecosystem services, such as water filtration, habitat structure, and nutrient cycling. Pearl oysters, which take up various elements in their shells and pearls, have high rates of water filtration and are tolerant of waters with heavy metals. When oysters are used to extract heavy metals and other impurities from water, it is unsafe to consume the meat unless the oysters are first depurated and held in clean water to allow them to flush out any contaminants and toxins they may have absorbed (Willer and Aldridge, 2020). Pearl production is also important economically because it generates higher prices and creates jobs since pearl oysters have greater handling requirements than food-based oysters. In Cygnet Bay, Australia, an assessment of the lifecycle effects of production and the broader environmental conditions of a pearl-farming operation concluded that it had lower environmental impacts than for other gems. The GHG emissions were comparable with those from other aquaculture production systems such as other oyster and finfish farms (TNC, 2024c). The Carbon Cycling Benefits of Seaweed • Seaweed aquaculture can have nutrient benefits similar to those of shellfish, assimilating nitrogen, phosphorous, and carbon. • But because of uncertainties in carbon sequestration and a lack of verifiable carbon crediting requirements for additionality (for example, a targeted change in behavior), it is unlikely that current blue carbon prices of approximately $30/MT (on a global basis) will provide enough supplementary income to create an economic incentive for new seaweed farms (TNC and Bain & Co. 2023). • Efforts to harness the carbon-cycling benefits of seaweed aquaculture in the near term will therefore be best directed toward increasing market demand for lower-emission, seaweed-based products such as biostimulants and bioplastics. Many of these products also provide an opportunity to enter new markets that have established growth trends (PROBLUE and World Bank 2023; TNC and Bain & Co. 2023). 2 See NOAA Fisheries, “Aquaculture Nutrient Removal Calculator” (Washington, DC: National Oceanic and Atmospheric Administration), https:// connect.fisheries.noaa.gov/ANRC. 20 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Extraction of nitrogen by seaweed has been estimated to average 275 (range 96–678) kg per hectare per year (Barrett et al. 2022). But an even greater interest in recent years has been seaweed’s high growth rate and ability to fix CO2, which can then be directed toward carbon sinks in the ocean or seaweed-based products that can offset emissions from more-carbon-intensive products. Although seaweed plays an important role in carbon cycling and may have the potential to increase carbon sequestration rates, significant uncertainties remain in quantifying the net impact seaweed makes on carbon export and the permanence of seaweed-generated carbon (Ross et al. 2023). Additionally, the impact on carbon export is not traceable to reductions in atmospheric CO2, because this effect relies on multiple biophysical processes that do not usually occur over timescales that are consistent enough to establish causality (Boyd et al., 2024). In the near term, carbon-crediting methodologies for seaweed are unlikely. Voluntary carbon markets may more accurately reflect project financing for corporate environmental and social goods, which means that payments or investments would be made more for the perceived broad benefit to the environment than for specific, traceable units of CO2 that are then offset or sequestered (Vanderklift et al., 2022). Integrated Farming and Co-culture • Co-culturing seaweed with shellfish could enhance certain ecosystem services or introduce services that a monoculture approach does not provide. • Integrated approaches to inland aquaculture have the potential to yield direct and indirect restorative outcomes, especially in systems that pair the production of aquatic animals with the production of crops such as rice or vegetables. Although it is not a globally common practice, co-culture—typically of seaweed and shellfish—is nonetheless a mature farming system used especially in China and more broadly in Asia (Mao et al., 2019). Because seaweed absorbs CO2 for growth during photosynthesis, the plants create a localized zone (or “halo”) of better water quality with reduced ocean acidification. This “halo” effect makes it easier for other species such as bivalves and other calcifying organisms to thrive. Studies show that shellfish grown within this halo of healthier water surrounding seaweed have thicker and stronger shells and exhibit greater resilience (Fernández et al., 2019; Xiao et al., 2021). This benefit from the interaction enabled by co-culturing seaweed and shellfish is in addition to the ecosystem services that would be generated by farming each species each by itself in isolation—such as bioaccumulation of pollutants in the shellfish or seaweed. Although studies of the efficacy of this interaction at various intensity levels and under different environmental conditions are limited, experimental studies of integrated systems in closed environments have tested this co-culture interaction and found positive effects on shellfish growth and water quality (Hamilton et al., 2022; TNC, 2024d). In inland and freshwater aquaculture, the explicit ecosystem service benefits of rice–fish co-culture in a case study in China were found to be 37.9 percent greater than those of rice monoculture alone, and the value of these services to be 2.3 times that of the direct economic value of production (Liu et al., 2020). In Thailand, rice–fish co-culture on 19 farms in 11 provinces had, on average, an economic value 25.4 percent greater than that of rice monoculture (Arunrat and Sereenonchai, 2022). These higher ecosystem service and economic values stem from the higher yields of multiple products grown in these integrated co-culture systems and from their ecological benefits. Rice–fish systems can increase efficiencies in use of water and land resources and reduce the need for chemicals in rice production because fish provide a degree of pest control while adding nutrients as fertilizer for the rice, which can increase overall biodiversity in these ecosystems (Freed et al., 2020). These integrated systems, while reducing the environmental impacts of food production, and of the aquaculture sector in particular, can also increase micronutrient supplies, thus helping local communities to access a wider range of daily required nutritional resources (Shepon et al., 2021). It has been found that, in Bangladesh, where micronutrient supply is a critical public health concern, aquaculture systems that co-produce fish and rice decrease the environmental burden of farming, according to multiple indicators, Ecosystem Services Provided by Aquaculture | 21 and generate opportunities to supply nutrient-dense small fish species (Shepon et al., 2020). It offers the country an immediately achievable path for improving the social and ecological outcomes of aquaculture. Incorporating Aquaculture’s Environmental Benefits into Global Sustainability Targets As interest in ecosystem services from aquaculture rises, it is likely that more evidence of environmental benefits will be found and that we will gain a better understanding of the ecological and operating principles that determine when and whether these benefits will occur and to what extent. Greater awareness and availability of data present opportunities for governments and companies to consider whether sustainable, nature-positive aquaculture activities and products could be included in their respective national contributions to global and regional goals—for example, a country’s commitments to reducing GHG emissions through their NDCs in accordance with the Paris Agreement (UNFCCC 2016) and the Global Biodiversity Framework, including Target 3, colloquially known as the 30x30 target (Convention on Biological Diversity, 2022). Private actors and companies may also be able to align aquaculture investments and activities with the Science-Based Targets Initiative (SBTi) (Science-Based Targets, 2024). Nationally Determined Contributions A recent review of the potential role of blue foods in national climate strategies and processes associated with the United Nations Framework Convention on Climate Change has highlighted the alignment and critical importance of fisheries and aquaculture production in achieving climate targets (Stanford Center for Ocean Solutions et al., 2024). The review stressed the policy options already linked to countries’ NDCs. For aquaculture production systems, two of the four options identified are: “promote the expansion of low-input, integrated, and/or non-fed aquaculture systems” and “support climate-adaptive technologies and practices to increase aquaculture’s resilience to climate change.” In addition, policies that can support shifts in consumption toward diets and lower-emission systems, and farming practices that reduce damage to blue carbon habitats, could be considered as contributions to NDCs. These options could be realized through a focus on restorative aquaculture approaches and the environmental co- benefits of aquaculture because the species and systems most likely to provide ecosystem services are low-trophic, unfed species and integrated systems. In all instances, the greater challenge is in measuring the benefits, not designing or implementing an effective contribution per se. For example, although a national government could include targets for industry development of bivalve or seaweed species, the capacity to measure the contribution this makes to climate change mitigation or adaptation will depend on several other external factors, and on the ability to measure GHG emission reductions and attribute them to the intervention. Programs (for example, policy development and investment programs) that intentionally aim for a change in the use of blue foods as they relate to a country’s NDC, and have clear measurable targets, will be paramount. Guidance on concrete measures and targets for all policy options identified in this review is provided (Stanford Center for Ocean Solutions et al., 2024). 22 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Global Biodiversity Framework To meet Target 3, there is growing momentum for various countries and their aquatic sectors to identify Other Effective Area-Based Conservation Measures (OECMs)—area-based management measures outside of protected areas that provide positive outcomes for biodiversity. The Convention on Biological Diversity defines an OECM as “a geographically defined area other than a Protected Area, governed and managed in ways that achieve, or are expected to achieve, positive and sustained long-term outcomes for the in-situ conservation of biodiversity, with associated ecosystem functions and services and where applicable, cultural, spiritual, socio-economic, and other locally relevant values” (Convention on Biological Diversity, 2018). Because aquaculture can provide environmental benefits directly attributable to the farming practice or farm itself, and these benefits can be quantified, they may align with regional and local conservation goals. Recently, there has been a focus on engaging fisheries managers to identify area-based fisheries management measures as OECMs. But a comprehensive approach that enables aquaculture’s contribution to inland and marine OECMs to be validated has not yet been identified. Examples of OECMs in fisheries sectors, and to a lesser extent in aquaculture, are emerging. For example, offshore mussel farming in the UK in historical fishing areas that now excludes trawlers is contributing to the recovery of seabed environments, including an increase in the presence of biogenic reef structure and complexity (Mascorda-Cabre et al., 2024). Because these changes are also driving increases in biodiversity—acting as de facto marine protected areas—they too may represent OECMs (Mascorda- Cabre et al., 2024). Bridging Global Ecosystem Services with Local Community Benefits The growing body of evidence demonstrating aquaculture’s capacity to deliver ecosystem services underscores its potential as a tool for ecological restoration, climate resilience, and sustainable development. But to maximize stakeholder engagement and investment, it is important to differentiate between benefits that accrue at the global or regional level (for example, climate mitigation or biodiversity conservation under international frameworks) and those that manifest at the local level (for instance, improved water quality, enhanced fisheries, and livelihood opportunities). This distinction, as discussed below, is essential for promoting investments by providing clarity on the value proposition for various stakeholders. By highlighting the local benefits, policy makers, investors, and community leaders can better assess how aquaculture aligns with immediate socioeconomic and environmental priorities. For instance, although the role of bivalve aquaculture in filtering nutrients contributes in hard-to-quantify and nontangible ways to broad regional water quality goals (for example, Chesapeake Bay Total Maximum Daily Load compliance), its local benefits are more tangible and include supporting nearshore fisheries, enhancing habitat for commercially valuable species like snapper and lobster, and improving water clarity for coastal tourism. Similarly, potential carbon sequestration from seaweed farming may be difficult to quantify for global carbon markets, but its localized benefits—such as buffering ocean acidification for shellfish, providing seasonal habitat for fish, and Ecosystem Services Provided by Aquaculture | 23 supplying raw materials for bio-based industries—offer tangible incentives for coastal communities. Integrated rice– fish systems exemplify this as well, with local farmers benefiting from greater yields, less pesticide use, and diversified income streams, even as these systems contribute to broader sustainability goals such as less nitrogen runoff and greater agro-biodiversity. By categorizing aquaculture’s ecosystem services in terms of both higher-level policy alignment (for example, NDCs or the Global Biodiversity Framework) and direct local impacts, stakeholders can more effectively prioritize their investments, tailor management strategies, and engender community support. This dual focus ensures that aquaculture development is not only ecologically sound, but also socially and economically viable at the scales in which it operates. A Regional View of the Potential of Ecosystem Services An analysis of the global potential for restorative aquaculture, specifically bivalve shellfish and seaweed aquaculture, to hasten ecosystem recovery while bringing substantive benefits to human communities identified marine ecoregions that possess the greatest potential to meet this opportunity (Theuerkauf et al., 2019). This analysis combined data and indicators for environmental factors (for example, nutrient pollution status), socioeconomic factors (for example, governance quality), and human health factors (for example, wastewater treatment prevalence) to generate an overall index for global restorative aquaculture potential. It identified a substantial opportunity for the strategic development of shellfish and seaweed sectors, with the greatest opportunity for marine ecoregions for shellfish aquaculture in Oceania, North America, and portions of Asia and the greatest opportunity for seaweed aquaculture distributed throughout Europe, Asia, Oceania, and North and South America (map 1). MAP 1: Ecoregional-scale restorative aquaculture potential, weighted at a global scale Source: Theuerkauf et al. (2019) 24 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Marine ecoregions along the west coast of Africa and northern Indian Ocean were found to have medium to low opportunity for restorative aquaculture to support gains in ecosystem health and food production. This finding, however, stemmed mostly from scanty data on key indicators, together with a lack of supporting and enabling conditions such as operational capacity, sound infrastructure, and regulatory efficacy, rather than stemming from the identification of national or subnational environmental challenges that restorative aquaculture could address. More information on enabling conditions and environmental needs, particularly data on water quality, rates of land- based nutrient runoff, and loss in the extent and function of critical habitats, is needed and would facilitate further assessment at the national and local levels. This is especially the case to gain a better understanding of what kind of ecosystem services aquaculture could provide to address declines in biodiversity. Quantification of the contribution of ecological processes that are enhanced by aquaculture and that could contribute to biodiversity recovery—such as greater capacity for water filtration that reduces eutrophication and its negative impacts on seagrasses and the habitat they provide for fish and other fauna—would be valuable to determine local opportunities that are inevitably context-dependent. Analysis of the potential of blue foods to contribute to NDCs revealed that the inclusion of keywords (such as fisheries, seafood, and aquaculture) for blue foods in the 2020 NDCs was high—73 countries in total. The number of countries that had multiple references to blue foods in their NDCs was highest in Africa, Southeast Asia, and Oceania (Stanford Center for Ocean Solutions et al., 2024). For all the countries of particular interest in this analysis—Guinea, Mozambique, Senegal, Sri Lanka, Vietnam—references to blue foods in their NDCs was rated as “high” (Stanford Center for Ocean Solutions et al., 2024). This presents a valuable opportunity to leverage this initial awareness and commitment to blue foods in country NDCs to extend the contribution of aquaculture to climate change mitigation and adaptation. Countries will submit their next round of NDCs in 2025. Empowering Women in Aquaculture: Advancing Socioeconomic Equity, Food Security, and Ecosystem Services Aquaculture holds immense promise to improve livelihoods, enhance food security, and support biodiversity, but these benefits are not equitably shared, particularly along gender lines. Although aquaculture is often perceived as a male-dominated sector—largely because of its capital-intensive, labor-heavy nature—women play vital but frequently overlooked roles. Sociocultural barriers, including traditional norms and systemic biases, tend to marginalize both women’s participation and their contributions when they are able to contribute. Studies reveal persistent gender gaps that confine women to lower social, economic, and familial status. For instance, a survey conducted of 565 men and women in Jiangsu Province, China, found that factors such as lower education levels, historical discrimination, and restrictive policies fuel and entrench these disparities (Fang et al., 1997). Similar challenges are apparent across diverse regions in the Global South. In Kenya, women struggle to access productive resources, credit, and technology, which further restricts their capacity to thrive in the aquaculture sector (Githukia et al., 2020). In Rwanda, the lack of adequate technical training has hindered women’s ability to engage fully in production systems (Agbebi et al., 2016). These disparities not only result in lower profits for women but also reinforce cycles of poverty and food insecurity, underscoring the need for more-inclusive practices in the aquaculture sector. Ecosystem Services Provided by Aquaculture | 25 Despite the existing barriers, when women are more equitably integrated into the aquaculture value chain—particularly in roles linked to biodiversity and to ecosystem services such as mangrove restoration, water-quality monitoring, habitat rehabilitation, and feed management—studies show that there are economic, nutritional, and environmental gains that benefit not just the individual women themselves but also entire households and even communities. Adopting sustainable aquaculture practices—such as IMTA, aquaponics, and mangrove-friendly shrimp farming—can create new and empowering avenues for employment that enhance autonomy, dignity, and self-respect for women in various roles. One such area is ecosystem restoration, in which women can play vital roles in planting mangroves, monitoring water quality, and managing aquatic habitats. These activities not only contribute to environmental sustainability but also offer meaningful, long-term employment. Similarly, sustainable feed production such as cultivating insect- or plant-based feeds, which reduces reliance on wild-caught fish, can open doors for women to innovate in the area of alternative feed systems (see also World Bank report on Eco-Friendly Aquafeeds: Reducing the Carbon Footprint of Aquaculture Ingredients through Innovation). Social and Political Challenges in Implementing Integrated Aquaculture Integrated, ecosystem-based aquaculture holds significant promise for addressing environmental challenges and promoting sustainable development, particularly in developing economies. But implementation faces substantial social, economic and political hurdles, especially in regions prone to fragility, conflict, or violence. Additionally, much of the current knowledge about aquaculture, and many best practices, derive from the developed or emerging economies, where stable governance, robust infrastructure, and access to technology are more prevalent. Although the potential benefits of integrated aquaculture—greater resource efficiency, enhanced biodiversity, lower carbon footprint, livelihood support—are likely similar in different contexts, the strategies required to achieve these outcomes need to be tailored to local sociopolitical realities when that knowledge is transferred to the Global South. In settings of fragility, conflict, and violence, the challenges are even more multifaceted. Socially, communities may face inequalities, limited access to education, and entrenched power structures that hinder access and equitable participation in aquaculture initiatives. Politically, weak governance, corruption, and a lack of institutional capacity can impede the development and enforcement of policies needed to support sustainable practices. Additionally, the risk of violence or conflict is a significant barrier because it can disrupt project implementation, deter investment, and even exacerbate some of the negative consequences of mismanaged aquaculture, such as habitat degradation and resource overexploitation. For example, competition over water or land resources for aquaculture versus other more conventional uses could intensify existing tensions or create new ones, undermining the very goals of sustainability and social cohesion that integrated, ecosystem-based aquaculture is designed to achieve. To address these challenges, integrated aquaculture approaches must be designed with a deep understanding of local sociopolitical contexts. This includes engaging with communities to build trust, ensuring inclusive decision- making processes, and developing conflict-sensitive strategies that mitigate the risk of violence or of displacement. Partnerships with local governments, civil society organizations, and international stakeholders are essential to build credibility and create an enabling environment for equitable participation in sustainable aquaculture. By aligning interventions with local needs and realities, integrated aquaculture can not only deliver ecological and economic benefits but also contribute to social stability and resilience in some of the world’s most vulnerable regions. 26 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE 3 FINANCING ECOSYSTEM SERVICES Findings and Insights • The efficacy of paying farmers for ecosystem services generated by aquaculture is based on sound evidence, but a portfolio of financing mechanisms will be required to catalyze the kind of development that enables appropriate compensation to farmers for aquaculture that provides such ecosystem services. • Although PES may be a valuable approach, there are a few examples of operational PES schemes (for example, nutrient or carbon trading) in aquatic environments and limited relevant analogues. • Market-based approaches, such as eco-labeling or certification schemes, could help incentivize ecosystem services by creating demand for environmentally sustainable aquaculture products. But if consumers are not well-informed, they may not recognize or value the differences between production practices that deliver distinct environmental benefits. • Mechanisms could be deployed across a range of user groups or implementation levels to facilitate financing at the local level (for example, trading or concessional finance) and the national or regional level (for example, green or blue bonds). • Poorly designed and implemented financing can worsen inequalities in investment and hamper development opportunities. Equitable access to the opportunities and benefits of ecosystem services and safeguards for communities needs to be ensured. Financing Ecosystem Services | 29 Recommendations • Take a structured, evidence-based approach to the choice of financing mechanisms deployed. • Advocate for and facilitate the development of carbon-crediting and nutrient (for example, nitrogen and phosphorous) methodologies. • Encourage or partner with standards-setting organizations to advance methodologies in a way that will support stacking or bundling credits. • Encourage seafood certification schemes to better communicate to consumers the ecosystem benefits of aquaculture. Background PES is a way to manage ecosystems using economic incentives, particularly for services that provide broad benefits to the public (for example, ecosystem services such as water filtration, waste-water treatment, and the reduction of erosion, and other public goods). These services extend beyond the direct outputs of the ecosystem (for example, harvested goods) and include broader ecological and social benefits (Farley and Costanza, 2010). Yet although PES approaches are gaining traction for their role in influencing ecosystem-based management, real-world working examples of effective application of such financing schemes in aquatic ecosystems and industries are limited. This includes the aquaculture sector, despite increasing understanding of the quantifiable ecosystem services aquaculture can provide and their associated valuations (Custódio et al., 2020), there are few working examples of financing schemes that pay directly for these ecological and societal benefits. An exploratory study by van den Burg et al. (2022) that employed the example of mussel, oyster, and seaweed aquaculture identified six potentially viable payment mechanisms for consumers of aquaculture ecosystem services—taxpayer-funded payments, tradeable credits, subsidies, social licenses to produce, production cost-sharing schemes, and increased utility—but also noted that significant challenges remain in implementing these mechanisms at scale due to regulatory, economic, and social barriers. Current financing models are predominantly limited to niche approaches such as nutrient trading, broader blue carbon crediting (primarily for natural habitats such as mangroves and seagrasses rather than aquaculture systems), and large-scale public–private partnerships aimed at conservation. Crucially, these financing approaches often overlook the financial needs of the majority of small- and medium-size enterprises (SMEs) and favor a few, well-capitalized, large-scale producers who can meet the high upfront costs, complex investment structures, and administrative demands of participation. Small- and medium-scale aquaculture operators—despite their critical role in supporting local food systems, preserving biodiversity, and employing low-impact practices—are frequently excluded from financial incentives because of limited resources and smaller operational footprints, and a lack of institutional support makes it difficult for them to determine what adjustments they need to make to qualify. A more inclusive approach is needed, one that tailors financing schemes to the distinct capacities and needs of different producer scales, ensuring that both industrial-scale operations and smaller, community-based farms can benefit from PES. Although aquaculture production is increasing globally—surpassing seafood production from wild-capture fisheries in 2022 (FAO, 2024a)—and has sustained relatively consistent growth over the last several decades (FAO, 2022a; 2024a), investment in the sector has been variable. Funding for industries associated with the development of blue economies, including aquaculture, appears unevenly distributed across regions and is relatively low in comparison with other industries such as renewable energy and tourism (Schutter et al., 2024). 30 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE In 2019, it was conservatively estimated that an additional $150 billion to $300 billion in capital investment—averaging $37.5 billion to $75 billion a year—would be required by 2023 to meet the growing demand for aquaculture products sustainably (O’Shea et al., 2019). In reality, a review of blue economy financing (Schutter et al., 2024) found that just $585 million in public funding and loans—averaging $146 million a year—was directed toward all aquatic foods globally (never mind aquaculture) between 2017 and 2021—a figurative drop in the ocean. Limited access to farm- and business-scale capital, particularly for small- and medium-sized enterprises, which are vital to the aquaculture value chain, widens this financing gap (World Bank, 2024a). Additionally, startups and expanding operations often struggle to secure farm- or business-scale financing, hindering innovation and scalability. Expanding and Diversifying Financing Mechanisms To bridge this gap, a diversified approach to financing is needed, combining traditional and innovative mechanisms. The most promising strategies include the following five: Public–private partnerships • Governments can incentivize private investment through tax exemptions, reduced import duties on aquaculture equipment, and land-use permits for foreign investors. • Conditional incentives, such as requiring adherence to best management practices or local ownership quotas, can ensure sustainable development (World Bank 2024a). Blended finance models • Development banks and impact investors could derisk private investments through guarantees, concessional loans, and first- loss capital mechanisms. • Green and blue bonds could mobilize large-scale capital for sustainable aquaculture projects, particularly in emerging markets. Conservation financing for aquaculture • As defined by Meyers et al. (2020), conservation financing includes PES, biodiversity offsets, and sustainability-linked loans that align financial returns with environmental outcomes. • Eco-certification premiums and carbon credit schemes could provide additional revenue streams for farmers adopting climate- smart practices. SME-focused financial solutions • Microfinance institutions and cooperative lending models can improve access to credit for small-scale producers. • Digital lending platforms leveraging alternative credit scoring (for instance, based on production data) could reduce barriers for unbanked farmers. Government and multilateral support • Public funding should prioritize R&D, hatchery development, and disease management to strengthen sector resilience. • Export credit agencies could facilitate international trade by underwriting risks for aquaculture exporters. Financing Ecosystem Services | 31 Policy and Investment Frameworks The World Bank’s Global Aquabusiness Investment Guide (2024) outlines eight principles for sustainable aquaculture growth, emphasizing the need for private-sector investments that prioritize socioecological risk over short-term economic gain (Jouffray et al., 2019). For the public sector, Principle 8.4 highlights the importance of investment incentives, including: • Tax incentives (for example, corporate tax holidays, duty-free imports of feed and equipment) • Non-tax incentives (for example, streamlined permitting, land lease agreements) • Conditional subsidies tied to sustainability certifications or local employment generation The Path Forward: A Call for Strategic and Inclusive Financing Closing the aquaculture financing gap requires coordinated action from governments, investors, producers, and development agencies. By leveraging public incentives, private sustainability investments, and innovative conservation financing mechanisms, the industry can secure the capital required for scalable, environmentally sound, and socially equitable growth. Without such interventions, the financing gap will continue to hinder progress, leaving SMEs and developing economies at a disadvantage in a rapidly evolving blue economy. Corporate-Facing Market Mechanisms Involving Trading and Crediting Many ecosystem services generated by aquaculture—including cleaner water, less air pollution, and climate regulation— are public goods that directly or indirectly benefit people and living organisms, and that meet a range of physical, social, economic, and cultural needs. Because these benefits are not directly bought or sold like fish or other aquaculture products, there is growing interest in trading and crediting systems that can assign specific value to these environmental services, encouraging investment in the practices that provide them. Despite this enormous interest, the goal has been a bit elusive: few effective trading programs exist. The ones that do take a market- based approach to financing. They are therefore most accessible to corporate entities. For the same reason, their features and structure are most responsive to corporations and to regulatory authorities. Examples are presented in appendix B. Nutrient (Nitrogen and Phosphorous) Trading The US Environmental Protection Agency (EPA) has established a Total Maximum Daily Load for the Chesapeake  Bay  that  sets nitrogen, phosphorus, and sediment limits for the six states in the watershed and the 32 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE District of Columbia  (EPA, 2010). The TMDL serves to control nutrient loads in order to meet the standards of an anti-pollution diet1 and has provisions that validate pollution control measures. In 2016, the TMDL Best Management Practice panel recommended oyster-associated reduction protocols to help states comply with the TMDL standards. This formal recommendation established the nitrogen and phosphorus benefits of oyster restoration and aquaculture, based on the science that oysters filter and consume organic matter, mostly algae, from the water and store the nutrients in their tissue (Kellogg et al., 2018; Rose et al., 2021). Several states have worked to operationalize the Best Management Practice panel’s recommendations through state- based nutrient-trading programs. In 2019, Blue Oyster Environmental made the first oyster aquaculture nutrient trade, in Maryland, selling nutrient credits to the Baltimore Convention Center to offset the impact of their events through the Maryland Water Quality Trading Program (Viviano, 2020). Although this program has been highly influential in setting a benchmark for this approach, establishing the first viable nutrient-trading platform, challenges remain in tracing the benefits of oyster-mediated denitrification and quantifying how oyster-related water quality improvements (for example, water filtration and habitat enhancement) directly offset land-based nutrient pollution. (Kellogg et al., 2018; Rose et al., 2021). Secondly, smaller, individual, oyster aquaculture farms may not be able to manage harmful nutrients like nitrogen on a larger scale, for example, on the scale of a bay, a watershed, or a region (TNC, 2021b). To expand the role of aquaculture in providing environmental benefits, the State of Maryland recently established a Bill for a Restorative Aquaculture Pilot Program, requiring “the Department of Natural Resources to establish and implement a Restorative Aquaculture Pilot Program to provide financial incentives to a holder of an aquaculture lease to maintain their lease, or a part of their lease, under specified restorative conditions for at least four years.”2 This program recognizes that water quality benefits are one part of a set of restorative functions that oyster aquaculture can provide in the Chesapeake Bay but directs the monetary credit that would be paid toward the broader benefits of oyster stock being kept on site for at least four years, including water filtration and the benefits of creating a temporary habitat for fish and other biodiversity. Carbon Trading The crediting of aquaculture’s carbon sequestration potential, in particular seaweed but also oysters and other calcifying organisms, is gaining interest but is not yet a verified, actionable pathway for PES (Howard et al., 2023). For seaweed aquaculture, there are ecological uncertainties about how CO2 is cycled and stored that mean that sequestration cannot reliably be attributed to the practice of aquaculture (Hurd et al., 2022; Ricart et al., 2022). Additionally, if these technical considerations can be addressed through science and technology to support the monitoring of CO2, current blue carbon prices of approximately $30/tonne would not provide enough supplementary income for existing farmers or create economic incentives to establish new seaweed farms, even if carbon sequestration rates were high (TNC and Bain & Co., 2023). Furthermore, sinking seaweed deep into the sea, where carbon sequestration is more likely, raises ethical questions, including why an accessible source of protein and nutrition should be used for this purpose instead of using it to supply food and nutritional security (Ricart et al., 2022). A more effective way to direct carbon crediting in seaweed aquaculture could be to leverage the benefits that seaweed-based products, like fertilizers or biostimulants, can provide in replacement of more intensive products. PROBLUE and the World Bank have identified ten seaweed products with 1 The Anti-Pollution Diet, also known as the Pollution Diet, is designed to support the human body’s natural defense mechanisms against the effects of pollution through a focus on food rich in antioxidants and omega-3 fatty acids to combat inflammation, oxidative stress, and the accumulation of toxins in the body. 2 Senate Bill 434, Department of Legislative Services, Maryland General Assembly, 2023 Session, Fiscal and Policy Note. https://mgaleg.maryland​ .gov/2023RS/fnotes/bil_0004/sb0434.pdf. Financing Ecosystem Services | 33 very good prospects for market growth. These products, which include biostimulants, animal feed, feed additives, bioplastics, and other biomaterials, are considered sustainable or serve as alternatives to conventional options. Modelling theoretical demand scenarios for several of these seaweed species suggests that integrating seaweed into human diets, livestock feed, and biofuels could reduce GHG emissions by 1.3 gigatons of CO2 equivalent per year by 2050—which is 3.7 percent of total global carbon emissions in 2021 (Spillias et al., 2022). A detailed description of sustainable, eco-friendly aquafeed is provided in Eco-Friendly Aquafeeds: Reducing the Carbon Footprint of Aquaculture Ingredients through Innovation World Bank report. The modeling exercise, specifically, (i) substituted 10 percent of human diets with seaweed by 2050; (ii) used 10 percent seaweed in global livestock feed; (iii) used 50 percent feedstock for the production of biofuels (like ethanol and biodiesel); (iv) substituted the seaweed Asparagopsis for 0.5 percent of all ruminant diets to reduce methane emissions and increase the efficiency of feed conversion; and (v) undertook an “all” demand that combined the human food consumption scenario, livestock feed, and fuel scenarios. Substituting consumption at a rate of 10 percent globally was modeled to spare up to 110 million hectares of land that could then be used for conservation, restoration, or regenerative agriculture (Spillias et al., 2023). Displacing land-based pressures by shifting production toward seaweed and farming in the ocean would open up space for the mitigation of land-based pressures. In 2024, Japan announced the extension of a regulated blue carbon credit program, the Yokohama Blue Carbon Offset System. Under this system, the carbon sequestered by existing seagrass beds and other seagrass systems has become a tradable value (Fukuoka City. n.d.). Its purchase can be used to offset CO2 emissions, and the proceeds from the sale of credits will be used to support conservation and the creation of eelgrass beds in Hakata Bay. The sale of carbon already stored within blue carbon habitats—seagrasses, mangroves, tidal marshes—is not usually considered a viable credit because the carbon sequestered by an intervention must be in addition to what already occurs, referred to as creating additionality. This example, therefore, represents an offset mechanism rather than a credit under a verified GHG emissions reduction scheme, but it is a useful illustration of how corporate entities and governments can work together to develop and administer effective trading processes. Examples of voluntary credit schemes and methodologies are also emerging. For example, Verra is a standards development and delivery organization that manages the world’s leading voluntary carbon markets (the Verified Carbon Standard), alongside a range of other programs such as the Climate, Community and Biodiversity Standards. This includes a methodology framework for seaweed carbon projects that is in development (Verra, n.d.). None of these methodologies is presently available for aquaculture as a verified pathway. There are other voluntary schemes that appear to raise the potential for aquaculture to provide a GHG emissions mitigation benefit, but these are more appropriately considered impact financing. For example, the seaweed cultivation company Canopy Blue, in Western Australia, sells kelp restoration credits, which it is claimed can be incorporated as a credit from a designated carbon standard (see Blue Canopy, n.d.). These credits represent a per-unit price for investment made to support the financing of wild kelp restoration and the development of a kelp aquaculture site. The unit price does not currently have a direct attribution to an ecological unit value of carbon sequestered because of the absence of a verified voluntary or regulated carbon methodology that permits either wild kelp habitats or aquaculture. Industry Analogues for Trading and Crediting In other industry sectors and domains, PES schemes via trading or crediting may be more mature. In aquatic environments, these schemes typically focus on verifying the benefits of ecosystem restoration—such as improvements in carbon sequestration, water purification, or habitat enhancement—linked to specific ecosystem services. The restoration of mangroves and tidal marshes or the physical processes that these habitats depend on (tidal flows, for instance) have 34 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE been verified through several standards. For example, in the Dominican Republic, CI-Atabey Foundation is developing the Dominican Republic’s first Blue Carbon Exchange mechanism (ORRAA, n.d.). The Blue Carbon Accelerator Fund and Blue Natural Capital Financing Facility under the Blue Natural Capital Initiative, supported by IUCN, are primary mechanisms and financial and support mechanisms leading the development of restoration and blue carbon frameworks that can support the implementation of crediting standards and methodologies (voluntary standards and those regulated by national governments3). In agriculture, Verra, a leading organization in voluntary carbon markets, maintains the improved Agricultural Land Management (IALM) methodology (which is under the Verified Carbon Standard program but distinct from it). The standard is centered on regenerative agricultural practices and helps quantify the GHG emission reductions and soil organic carbon removals that result from adopting improved agricultural practices. To be eligible for crediting, project developers must demonstrate that they have implemented project activities that reduce or remove CO2, methane, and nitrous oxide. Eligible project activities include • Reduced fertilizer application. • Improved water and irrigation management. • Reduced tillage and improved residue management. • Improved crop planting and harvesting (for example, crop rotations and cover crops). • Improved grazing practices (for example, rotational grazing). These practices reflect farm management approaches that are applied in restorative aquaculture (Alleway et al., 2023; Miralles-Wilhelm, 2021) and could provide a valuable model for a regenerative aquaculture methodology. But the science underpinning the traceability of GHGs in agricultural practices that directly influence their release may be more precise, particularly in comparison with aquatic environments where the causal pathway of a particular process can be difficult to identify among numerous other natural influences and anthropogenic changes. Furthermore, the requirement for additionality could be an ongoing challenge for crediting aquaculture-related practices. Additionality is the assessment of whether a specific project or practice has added something new, had an impact, or changed something from a stated reference baseline. In the case of aquaculture, a new site or species, or a change in practice, would need to be implemented to demonstrate additionality. Initiatives such as the US Department of Agriculture’s Conservation Stewardship Program (Natural Resources Conservation Service, 2024) could provide a useful comparison for PES when quantifying carbon sequestration, GHG reduction, or other ecosystem services for a crediting or trading scheme is not feasible. The Conservation Stewardship Program works with farmers to develop targeted conservation plans with practices and activities that enhance environmental benefits and improve agricultural operations. Terrestrial farmers receive annual payments to implement these conservation strategies, with higher payment rates offered for providing multiple ecosystem services. This approach could be readily translated to restorative aquaculture to provide incentives for ecosystem service generation, even when those services cannot be readily quantified. Payments can be made to aquaculture farmers who pursue sustainable practices that are known to generate environmental benefits, such as integrated cultivation that both produces shrimp and conserves mangrove habitats. 3 See Blue Natural Capital website, https://bluenaturalcapital.org. Financing Ecosystem Services | 35 Building an Approach to Trading and Crediting In marine environments, as well as other environments and sectors, trading and crediting programs are also being explored for the multiple ecosystem services and benefits that could be provided. This approach is often referred to as stacking or bundling credits. Stacking of ecosystem service credits is the generation of multiple individual credits from a single piece of land, or body of water, such as biodiversity enhancement, water quality, and carbon storage, or sequestration credits from a biodiverse forest plantation or agricultural landscape (Lau, 2013; Robertson et al., 2014). In this instance, ecosystem services must be discrete and measured distinctly to ensure that the value of the services is not double counted (Torabi and Bekessy, 2015). Bundling of ecosystem credits is the generation of a combined credit that values multiple ecosystem services from an area as a single unit (Lau, 2013; Robertson et al., 2014; Shortle, Ollikainen, and Iho, 2021). Torabi and Bekessy (2015) provide an example of a premium carbon credit being sold for a higher-than-usual price because the intervention used also brings a co-benefit to biodiversity conservation. Stacking and bundling have the advantage of allowing spatially overlapping credits from multiple different ecological impacts to co-occur, so long as each of the ecological functions being enhanced can be adequately differentiated and accurately verified (Robertson et al., 2014; Torabi and Bekessy, 2015). They could encourage action by providing higher-than-typical monetary compensation (Shortle, Ollikainen, and Iho, 2021). Valuing the multiple benefits an aquaculture farm or activity provides could therefore be an important way to overcome several challenges to payments for ecosystem services for specific benefits. In particular, • A low level of economic return for individual services, which does not encourage a farmer to undertake a specific practice • Lower per-unit economic value of some services than of the same service from some other source: for example, carbon prices are standard across industries but may be more expensive to generate through aquaculture There are unique challenges to adequately accounting for these multiple services because each must be accurately measured, in isolation and then together (Lau, 2013; Robertson et al., 2014). For many of these functions, in restoration projects and in aquaculture, accounting processes and verified methodologies are lacking. For aquaculture, there is also an absence of consistent, science-based indicators that can adequately account for and monitor ecosystem services for all sectors and species, including those that are already known to be able to provide these benefits, such as shellfish and seaweed (van den Burg et al., 2022). This inhibits the inclusion of aquaculture in existing methodologies (for example, restoration project credits) and emerging methodologies (for example, blue carbon, biodiversity and resilience credits). Addressing this gap and encouraging and enabling the development of crediting and trading methodologies that are accessible to aquaculture is a critical need as well as a significant opportunity. How IFC Can Catalyze Market-Based Solutions for Nutrient and Carbon Trading IFC is well positioned to advance market-based mechanisms for ecosystem services in aquaculture—such as nutrient and carbon trading—by leveraging its investment strategy and technical expertise. With a $1.1 billion portfolio in sustainable protein and extensive advisory services, IFC can support corporate-facing trading platforms through targeted financing and strategic guidance. Projects like oyster aquaculture for nutrient credits, in Maryland, 36 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE and seaweed farming for carbon sequestration exemplify how such investments can align with IFC’s practices for sustainable investment while maintaining high environmental and social standards. Its policy frameworks—focusing on decarbonization, biodiversity, and resource efficiency—offer a foundation on which companies and agencies can implement robust methodologies for ecosystem service crediting. Through a combination of capital and technical support, such as promoting alternative feed or emissions reduction strategies, IFC can help expand these emerging markets and explore opportunities for stacked or bundled credits. Complementary initiatives, including PROBLUE’s seaweed sponsored studies and collaborations with organizations like Verra, further strengthen the case for aquaculture as a valuable contributor to ecosystem services, reinforcing IFC’s broader mission to mobilize private sector solutions for sustainable development. Consumer-Facing Market Mechanisms to Drive Financing Alongside the use of structural mechanisms to reward and incentivize ecosystem services, intentionally targeting growth in consumer demand and the prices paid for products that provide these benefits could result in measurable differences in their economic gains. These pathways can be broadly associated with creating price premiums linked to consumers’ knowledge of ecosystem services, which could be associated with spontaneous growth of this knowledge in society or intentional and consolidated processes such as organized market campaigns. Consumers could also be corporate entities, purchasing the market benefit of ecosystem services through a form of PES. Consumers and retail Consumers There is some evidence that, once environmentally-conscious consumers are aware of the ecosystem services provided by aquaculture—water filtration, habitat creation, and carbon sequestration, for instance—they may be willing to pay more for aquaculture products. For example, a survey of 41 consumers in the US showed a significant increase in their willingness to pay for a range of seaweed-based products regardless of their price and several demographic factors (for example, their income) after watching a one-minute video on the ecosystem services that that seaweed species can provide (Bolduc, Griffin, and Byron, 2023). But there are few other studies corroborating this effect and little data on actual, sustained industry influence. The lack of information or data quantifying and corroborating this effect is no doubt partly caused by the growing interest in scientifically tracing the environmental benefits of aquaculture. Communities have been aware, in a general anecdotal way, of these benefits—for example, traditional fish ponds in Hawai’i have been used for centuries to enhance coastal fisheries and the function of watersheds (Costa-Pierce, 2002). But more recently, there has been a focus, driven by consumer interest, on validating—using seafood certification schemes—the sustainability credentials of various seaweed and other aquaculture products by scientifically verifying the actions and pathways that are claimed to reduce environmental damage. The schemes have become a primary way of benchmarking aquaculture’s environmental effects. Consumers recognize and value these certification schemes, although it is not always certain the extent to which the schemes, or an aquaculture producer’s certification under them, determine actions taken by producers to affect positive environmental and social outcomes (Alfnes, Chen, and Rickertsen, 2018; Rector et al., 2023). Financing Ecosystem Services | 37 In addition, although there is evidence that consumers may be willing to pay more for products that have lower environmental impacts, or a higher, verified standard of sustainability, or that provide ecosystem services (Bolduc et al., 2023; Yip et al., 2017), it remains unclear whether consumers can distinguish between different aquaculture farming systems when making purchasing decisions. For example, if someone is purchasing seaweed from a co- culture of seaweed and shellfish as opposed to a full IMTA system, a consumer may not strongly prefer one over the other if both products have the same substantiated claim, for example, that “the seaweed is farmed alongside other species to minimize environmental impacts and GHG emissions.” Studies in Europe and North America have found that consumers are supportive of these systems and are willing to pay more for products from IMTA (Alexander, Freeman, and Potts, 2016; Barrington et al., 2010) but largely because they are an approach to more sustainable farming, not because of the formation of this model per se, likely because there is low societal and consumer awareness of the benefits of this approach (Alexander, Freeman, and Potts, 2016; Yip et al., 2017). This means that focusing on a product’s general sustainability credentials and ecosystem services may be as effective as, if not more effective than, attempting to communicate to the public the benefits of aquaculture practices such as IMTA. Retailers There is an important emerging role for retailers to employ market mechanisms to promote the environmental goals of the aquaculture sector because the sector is in part driven by consumer preferences at the store. Walmart’s North Star Program is an example of how retailers could be central to promoting aquaculture-driven environmental improvements, such as enhanced water quality, habitat restoration, and sustainable resource use, by ensuring that aquaculture farmers receive higher market prices for the environmental improvements they make. Launched in 2024 in response to consumers’ increasing preference to buy sustainable products, the program is also an example of how retailers, aquafeed suppliers, shrimp producers, environmental NGOs, and the buying public can collaborate to realize environmental sustainability goals that top-down government and supranational policies may at times struggle to achieve. In partnership with the Ecuadorean shrimp farmer Omarsa, the Dutch aquafeed producer Skretting, and The Nature Conservancy, the Walmart program combines multiple interventions along the value chain to provide consumers with an environmentally-friendlier shrimp product that has a lower carbon footprint and has been certified as sustainable. The interventions include on-farm technologies that raise the efficiency of feed conversion, security for sourcing and including deforestation-free soy in the aquafeed, and the channeling of a portion of financing to mangrove restoration.4 This program leverages the growing expectations of corporate entities for better environmental, social, and governance outcomes. The Walmart program illustrates how a supermarket’s proactive, preemptive approach to sustainability, based on a larger vision and a sense of corporate social responsibility, can build a self-reinforcing ecosystem of investments and improvements that is often more effective than a direct attempt to gain market entry. It presents to the public the image of a retailer willing to share risk in aquaculture investments, and which has found a way to help create a sustainable movement in Ecuador, with shrimp producers now competing to see who is more sustainable. Regarding the program, the chief executive of Omarsa remarked: “Walmart was seeking a product that had certified soy feed with a low carbon footprint…. The project has all of the certifications that exist, even certifying that the soy used in the shrimp feed has been sustainably grown and does not come from deforested land. It will go towards strengthening our sustainability qualifications, backed by Walmart” (Molinari, 2024). 4 See program announcements: https://www.nature.org/en-us/what-we-do/our-priorities/provide-food-and-water-sustainably/food-and-water- stories/future-of-shrimp-farming/ and https://www.seafoodsource.com/news/ aquaculture/walmart-partners-with-omarsa-skretting-tnc-to-sell- more-environmentally-friendly-shrimp). 38 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Another example from the Ecuadorian shrimp aquaculture sector is the Sustainable Shrimp Partnership, a collective of companies that are working together to share good practices, knowledge, and technology to support sustainability and therefore better prices for their products (SSP, 2022). Through their collaborative improvements, the members of the collective are gaining greater visibility, security, and access to their primary export market—the United States. Pricing Mechanisms Development of effective pricing mechanisms is critical to encouraging sustainable aquaculture practices while ensuring market viability. Coordinated efforts to enhance consumer awareness and demand can establish premium pricing for products that demonstrate superior sustainability performance and ecosystem service provision. This approach not only creates market differentiation for responsibly farmed seafood, but also alleviates the marketing burden on individual producers and sector-specific organizations, which often lack the resources to promote their sustainability credentials independently. By aligning price signals with environmental and social values, the aquaculture sector can transition toward more equitable, more ecologically sound production models. Industry-led initiatives play a pivotal role in shaping consumer perceptions and purchasing behavior. Marketing campaigns spearheaded by aquaculture associations—such as those promoting certified sustainable shrimp or organic salmon—help standardize messaging and amplify market recognition of eco-friendly products. These efforts are complemented by broader economic innovations such as true pricing, a framework developed by the True Price Foundation and Impact Economy Foundation that internalizes the hidden social and environmental costs of production (Galgani et al., 2021). True pricing operates on the principle that conventional market prices often fail to account for externalities such as water pollution, habitat degradation, and labor inequities. By quantifying and incorporating these costs into retail prices, the model empowers consumers to make informed choices that reflect the genuine societal value of products. The implementation of true pricing has significant implications for corporate responsibility. Producers and retailers adopting this framework assume accountability for remediating negative impacts—whether through environmental restoration, fair wage adjustments, or supply chain reforms. This creates a market environment in which ethical practices are economically rewarded, fostering competition in sustainability rather than cost cutting. But the model currently faces limitations in its aquaculture applications. Complex, multistage supply chains—common in seafood production—pose challenges for accurate cost internalization. Moreover, the administrative and operational demands of true pricing may disproportionately advantage large-scale producers with established compliance infrastructures, potentially marginalizing SMEs. To address these barriers, targeted policy interventions and sector-specific adaptations will be necessary to ensure the equitable scaling of value- based pricing mechanisms. Further refinement of True Pricing methodologies and their integration with existing certification schemes could enhance their practicality for diverse aquaculture sectors. Pilot programs focusing on high-value species or direct- to-consumer sales channels may provide actionable insights for broader implementation. As detailed in appendix D, ongoing analysis of True Pricing’s aquaculture applicability will be essential to developing viable pathways for its adoption across industry segments of varying scales and complexities. When combined with robust consumer education and industry collaboration, such innovative pricing strategies can transform market dynamics to favor environmentally regenerative and socially responsible aquaculture production. Financing Ecosystem Services | 39 Building Consumer Awareness and an Approach to Fair Pricing Given the current baseline understanding of consumers and retailers of aquaculture species and systems that may be more sustainable than others, there is an opportunity to extend and expand this awareness and further differentiate the benefits of, for example, IMTA. The capacity and capability of most farmers to undertake this scale of communication and to communicate strategically for the purposes of increasing market penetration are limited. Seafood certification schemes could be used as a starting point, but concerted development of these schemes to better communicate the benefits of specific farming systems and species is needed, along with a sustained strategy and effort to increase consumer awareness and quickly adapt to changes in preferences. Alternatively, organizations or sectors could come together to bridge this gap, communicating the importance of seafood certification in combination with sector-specific advantages through coordinated strategies (for example, the Sustainable Shrimp Partnership). IFC’s Strategic Role in Driving Sustainable Aquaculture Through Consumer-Facing Market Mechanisms IFC can drive sustainable aquaculture financing by leveraging its investments and guidance. Its focus on sustainability— through decarbonization, biodiversity protection, and responsible antimicrobial use—aligns with consumer demand for eco-friendly products. By financing and advising aquaculture firms such as Omarsa and Santa Priscila in Ecuador, IFC could promote certifications (for example, Best Aquaculture Practices, Aquaculture Stewardship Council) and innovations (for example, alternative feeds, IMTA) that justify price premiums. Blended finance and advisory services could bolster industry initiatives such as the Sustainable Shrimp Partnership and retailer programs (for example, Walmart North Star), enhancing consumer awareness and collective sustainability efforts. IFC’s guidance also supports True Pricing models, ensuring that market prices reflect environmental and social costs. Overcoming Challenges to Conservation Financing To be viable, conservation financing schemes need to link ecosystem service valuations with available financing mechanisms, or have the capacity to develop an effective, equitable financing approach (Plantinga et al., 2024; Salzman et al., 2018; Schutter et al., 2024). Within the aquaculture sector, there are several overarching challenges that must be overcome to develop the proper tools and establish an effective set of investment opportunities. Aquaculture systems and the ecosystem services they provide inherently vary from location to location, species to species, and even between comparable farming systems in different locations. This means that determining the extent of the ecosystem service provided and attributing an economic value to these benefits will depend on developing an 40 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE effective approach to validating and measuring these outcomes. It will also require financing mechanisms that take into account how industry and environmental conditions may affect the risk–returns profile. Additionally, examples of institutional frameworks specific to financing of ecosystem services are lacking. This means that, in most geographies, the status and readiness of legislation and policy and the underlying enabling conditions for conservation financing are largely unknown. For example, although interest in seaweed (wild habitats and farmed) has increased in recent years, in part because of their potential for carbon sequestration, there are few carbon trading or crediting approaches beyond the voluntary market and financing. Furthermore, poorly designed and implemented financing approaches can exacerbate inequalities in investment and development opportunities. At the national, regional, and global levels, financing mechanisms must be designed to avoid enclosure (transferring public assets to private actors), exclusion (limiting access to resources or marginalizing a particular group of stakeholders), encroachment (projects intruding on and interfering with public lands or ecosystems), and entrenchment (work that aggravates existing disadvantages or inequalities in social, political, and economic structures) (Schutter et al., 2024). In contrast, initiatives that embed community interests and a focus on equity are widely perceived as more just and can be more effective (Fletcher et al., 2021). Improvements in governance and land rights have often encouraged conventional traditional ways of financing seafood production via market-based mechanisms such as certification schemes and by engaging with large corporations to drive stewardship. Financial institutions play a critical role in shaping the global economy and on-the-ground investment priorities (Jouffray et al., 2019). Macro-scale financing priorities, such as the recent emphasis on financing the blue economy, could lead to biases favoring certain country sectors over others when it comes to investment. These biases may have unintended consequences, particularly for low- and middle-income countries (LMICs) and rural or resource-dependent communities, including exacerbating dependency on aid or excluding minority groups by limiting their access (Bennett et al., 2022; Schutter et al., 2024). This means that financing approaches to support ecosystem services from aquaculture must be developed with appropriate social and human rights safeguards in place. It also means that a portfolio approach to financing will likely be needed, with a range of mechanisms deployed that work across user groups or scales of financing (facilitating financing at the local and national levels). Evidenced-Based Decision Making for Aquaculture Payments for Ecosystem Services To develop a structured approach to decision making about what type of financing mechanisms may be most suitable for local industries based on their current structure, important insights concerning capacity and development needs and general decision-making approaches can be gained from analogous sectors. Using several case studies of conservation financing, Plantinga et al. (2024) developed a framework, also referred to as a decision matrix, that identifies the conditions a project must meet for a particular financing mechanism to be viable. This methodology and the foundational framework were used to draft a similar, but aquaculture-specific, conservation financing matrix (see appendix E for the description of the methodology). This matrix enables government, industry, and private sector actors to systematically consider the relevance of a range of financing mechanisms for payment for ecosystem services from aquaculture within the context of their specific geography. It also helps identify operational, policy, and other organizational gaps that may need to be addressed to build locally adapted valuation and crediting approaches. Financing Ecosystem Services | 41 The financing mechanisms described through the approaches outlined in table 5 could be implemented in isolation or used alongside support mechanisms to mainstream those sustainable aquaculture activities that have the greatest chance of enhancing ecosystem services. These mechanisms aim to enhance ecosystem services by guiding development toward certain practices and improving the viability of aquaculture businesses (table 6). For example, this might involve encouraging farming cooperatives or enabling access to blended financing and targeted lending by negotiating appropriate standard schemes or terms with lenders. Such approaches are reflected in the country case studies—seaweed farming in Sri Lanka, oyster farming in Senegal, and integrated mangrove-aquaculture in Guinea. In these cases, a range of financing approaches could be viable, including conservation financing mechanisms such as green and blue bonds and traditional financing mechanisms such as loans. These cases illustrate the opportunity for governments, development banks, or NGOs to assess their role in supporting financing and the instruments that it uses, depending on the aims of a given strategy and aquaculture project or activity. Organizations such as the World Bank could then also think critically about the role they should assume among other actors that could also support financing, determining whether and where a direct intervention (for example, funding) or indirect intervention—for example, negotiating or advocating for the terms of concessional finance, or backing the development of crediting methodologies—may be more valuable. TABLE 5: Public and private financing mechanisms relevant to conservation financing for ecosystem services in aquaculture Class Description Mechanisms Category 1—Green and blue finance Finance strategies that seek positive environmental impacts as well as financial returns Cooperation between government and private enterprises, leveraging public Public–private Co-contribution of matching funds and grants; resources and private sector innovation partnership memorandum of understanding and entrepreneurship; most suitable for government-led aquaculture Loans from private entity to be paid back from Green bonds; environmental investment funds; revenue or shares in a company; most suitable impact or venture investing; peer-to-peer Private capital as a direct exchange between investor and investing; capital markets (bonds or stocks); company bank loans Loans secured by a local, state, or national Municipal government and paid back using general revenue or Environmental impact bonds; green bonds revenue (for example, from property or general bonds development tax) Loans that a national government secures International Official development assistance; from an international finance organization, general bonds environmental impact bonds; green bonds paid back using general revenue Domestic Conservation payments for projects of Grant schemes: subsidies (could be in the form government jurisdictional (local, state, national) benefit of official development assistance) funds (Table Continued) 42 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE TABLE 5: Continued Class Description Mechanisms Category 2—Economic mechanisms and support mechanisms Fiscal and other economic incentives (and disincentives) to incorporate environmental costs and benefits into users’ budgets; the use of finance mechanisms to safeguard and enhance sustainability and ecosystem services through effective, viable business Payments in which goods or services are paid Compensation payments (for example, from a Offsets for regulatory obligations to mitigation developer to central pool); in lieu of fees Payments or incentives offered to farmers Crediting and for verified ecosystem services that can be Municipal credit and trading markets; trading schemes measured and have a traceable economic mitigation credits value Below-market-rate finance provided by major financial institutions (for example, development banks, multilateral funds) to Concessional developing countries to accelerate sustainable Capital markets (bonds or stocks); bank loans; finance development objectives or financing from impact or venture investing local institutions for operational changes (for example, capital, infrastructure) that enhance ecosystem services Collaborative effort of two or more entities or investors and stakeholders jointly owning and Joint venture or Capital markets (bonds or stocks); impact or investing, combining resources and expertise, shared equity venture investing spreading financial risk, and encouraging collective responsibility Contract farming (delivery of Agreement between producers and buyers the ecosystem to, ensure a stable market for a product or services portion ecosystem service produced or agreements Capital markets (bonds or stocks); impact or alongside the targeted at small to medium-sized enterprises venture investing; contracting payments economic or contracted by larger enterprises for food portion) production, providing necessary market or out-grower access scheme Source: Plantinga et al. (2024) Note: Classes and mechanisms outlined in the World Bank Global Aquabusiness Investment Guide are incorporated to generate a set of aquaculture- specific opportunities for financing. Financing Ecosystem Services | 43 TABLE 6: Tailored strategies for different producers Producer type Recommended mechanisms Key interventions needed Strengthen environmental, social, and Private–public partnerships, private capital, Large-scale governance reporting; align with global crediting schemes, joint ventures sustainability markets Small-scale, Domestic funds, concessional finance, Simplify certification; promote cooperative informal contract farming financing models Comprehensive Analysis of Financing Mechanisms for Ecosystem Services: Supporting Large- and Small-Scale Producers Table 7 is a decision-making matrix for financing ecosystem services in aquaculture, categorizing mechanisms into conservation finance (green and blue finance) and industry-centered economic incentives. (A detailed methodology of the financing decision-making matrix is provided in appendix F.) The matrix evaluates key conditions—such as capital needs, ecosystem benefits, property rights, and risk factors—to determine which financing approaches are most suitable. But the applicability of these mechanisms varies significantly between large-scale producers (with established capital access and market linkages) and small-scale or informal producers (who often face financing barriers because of limited collateral and higher perceived risk). These differences and proposed tailored recommendations are explored below. Financing Mechanisms and Their Suitability Conservation Finance (Green/Blue Finance) This category includes PPPs, private capital, municipal bonds, international bonds, and domestic government funds, primarily aimed at sustainability-driven projects. Large-Scale Producers • PPPs and private capital are well suited to large-scale producers because of their ability to secure upfront funding for high-cost infrastructure (for example, IMTA systems). • International bonds may support climate-aligned projects (for example, carbon sequestration) but require strong governance and reporting frameworks, which large operators are better positioned to meet. 44 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Small-Scale and Informal Producers • Domestic government funds and municipal bonds are more accessible to small-scale and informal producers because they often include subsidies or low-interest loans for community-based aquaculture. • Challenges: Smallholders may lack the documentation or credit history to qualify for private capital or PPPs. Economic Mechanisms and Incentives This category includes offsets, crediting and trading schemes, concessional finance, joint ventures, and contract farming, which link financial returns to sustainability performance. Large-Scale Producers • Crediting schemes (for example, carbon or nutrient trading) are viable if producers can quantify ecosystem benefits (for example, mangrove restoration alongside shrimp farming). • Joint ventures attract investors by sharing risks and profits but require legal frameworks that smallholders often lack. Small-Scale and Informal Producers • Contract farming (pre-agreed purchases with processors or retailers) reduces market volatility and can include sustainability premiums. • Concessional finance (low-interest loans with relaxed terms) is critical for smallholders but depends on government or NGO intermediation. • Challenges: Offset schemes require costly verification. One solution is group certification (for example, cooperatives), which can lower transaction costs Critical Considerations for Equity and Risk Table 7 also indicates that high-risk projects, which are common among smallholders, align best with government funds or concessional finance because private capital typically avoids such exposure; risk-sharing instruments (for example, guarantee funds) could incentivize private investment in small-scale aquaculture. Many small-scale farmers lack formal land titles, excluding them from mechanisms requiring collateral (for example, private capital), highlighting the need for adaptive policies recognizing customary rights or communal tenure to expand access. In addition, although large projects can tap into international bonds for global goals (for example, SDGs), small-scale producers benefit more from local public goods (for example, water quality), which could be funded via municipal bonds, underscoring the importance of tailored financial solutions (summarized in table 7) for different scales of aquaculture development. No single mechanism fits all producers. Large-scale producers can leverage market-driven tools, whereas smallholders require policy-supported, de-risked finance. Financing Ecosystem Services | 45 TABLE 7: Decision-making matrix for considerations in financing of ecosystem services from aquaculture through conservation finance or industry-centered economic support or investment mechanisms Conservation finance (green or blue finance) Economic mechanisms and incentives Municipal Joint Public- International Domestic Crediting Private revenue, Concessional venture, Contract private general government Offsets and trading capital general finance shared farming partnership bonds funds schemes bonds equity Project requires upfront capital ✓ ✓ ✓ ✓ ✓ ✓d ✓ ✓b ✓ Capital needs Project requires ongoing ✓c ✓ ✓ ✓ ✓ ✓ funding Market goods are produced ✓ ✓ ✓ ✓ ✓ ✓ ✓ Local public goods are provided (for example, water ✓ ✓ ✓ ✓ ✓ quality improvements) Public goods are provided at a local scale but connected to global level, or targets are provided (for example, ✓ Ecosystem greenhouse gas emission goods and reduction, climate adaptation, services biodiversity benefits) Farmer has effective property 46 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE ✓ ✓ ✓ ✓ rights for benefit produced Farmer can use contribution mechanism to raise public ✓ ✓ fundsa Farmer is at high risk of failure ✓ ✓ or loan default Note: Finance mechanisms are listed along the top, and key conditions applicable to use of this approach are listed on the left. ✓ indicates where a condition should be fulfilled for that mechanism to be effective. a. Condition may be present only occasionally (for example, domestic government funds) and is not relevant to all instances of aquaculture. b. Failure risk is a key consideration for conservation financing and aquaculture investment. This should be considered in the aims of the benefit sought and which mechanisms may be most appropriate across the lifecycle of a project (that is, different financial mechanisms may be required at different stages). This may make the condition relevant to additional mechanisms not highlighted, such as use of a joint venture, shared equity, or contract farming. c. Likely that private entity in the partnership provides upfront funding or makes a stipulated co-contribution. d. May not always be required (for example, a farm that begins to engage in nutrient trading), but crediting schemes such as those for carbon sequestration or stacked credits typically require that the credit be based on new activities or a change that generates the value and therefore for project costs to be included. 4 NOVEL CASE STUDIES FOR ADVANCING INTEGRATED DESIGN AND ECOSYSTEM SERVICES CASE STUDY 1: Seaweed Aquaculture in Sri Lanka Insights and Entry Points • Sri Lanka’s seaweed aquaculture is a viable and promising sector for growth that could be developed through a range of farming systems including monoculture, co-culture, and IMTA with fed species. • The country’s existing legislative environment for aquaculture, combined with globally recognized best practices and climate adaptation strategies, could be applied to ensure that the industry develops effectively and sustainably. • Constraints center on current capacity and the lack of facilities to support sustainable development, in particular, the availability and selection of seeds and expanded processing innovations, such as value-added product development or waste-reduction technologies. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 49 • There is an opportunity for seaweed production in Sri Lanka to be used to support blue food policies and their inclusion in NDCs. • Opportunity may also exist for Sri Lankan seaweed production to be credited through offsets through association with other forms of coastal development or nutrient or carbon trading, including use of seaweed-based products in land-based GHG emission reduction such as soil enhancement from biostimulants, if these methodologies are developed. Key Recommendations Research and Development • Support research and development and in-water piloting of • the local species best suited to aquaculture production • feasible, profitable seaweed uses and product applications • feasible, profitable farming systems • effective farming systems, products, and economic models to support socioeconomic outcomes, in particular for food, nutrition, and livelihood • site selection of new farming activities (for example, high-resolution multicriteria suitability assessment, siting analysis for climate change projections) • systems, species, and operating models that are the most likely to be viable investments Operations • Support development of seaweed aquaculture using best practices and approaches to preemptively address emerging climate change threats and impacts. • Advocate for effective monitoring and evaluation of ecosystem services (for example, nitrogen, phosphorus, carbon, biodiversity enhancement) that can support the valuation of ecological benefits. Financing • Encourage and support seaweed aquaculture development using a range of national and local financing approaches, consistent with guidance in the Global Aquabusiness Investment Guide and framework. • Support the development of regulated offsets for development and trading or crediting methodologies linked to national environmental legislation, in particular nitrogen and carbon. Policy • Encourage and support the implementation of the FAO Guidelines for Sustainable Aquaculture as a basis for effective governance for a sustainable sector. • Advocate for including the expansion of seaweed aquaculture in Sri Lanka’s NDC as a blue foods policy option. 50 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Status of Aquaculture in Sri Lanka Sri Lanka first reported aquaculture production in 1971, farming just tilapia until 1978 when production of the giant tiger prawn, Penaeus monodon, was listed for the first time. Currently, production consists of 2 marine species, 7 brackish species, and 11 freshwater species (table 8). In 2022, the most recent year for production data reported to the FAO, the country produced approximately 59,000 tonnes of aquaculture valued at approximately $104 million. Other than shrimp farming in brackish water, very little aquaculture in Sri Lanka is conducted on a commercial scale (FAO, 2019). Shrimp are predominantly cultured in coastal earthen ponds and fish tend to be farmed in seasonal village tanks (FAO, 2024d). The World Bank and FAO have identified significant potential for the country to develop commercial aquaculture and diversify production to include higher-value species such as sea bass, mud crab, sea cucumber, seaweed, and milkfish (FAO, 2019; 2024d; World Bank, 2022). TABLE 8: Aquaculture production in Sri Lanka, 2022 Volume (tonnes) Value ($1,000) MARINE Barramundi 825 2,246.63 Sandfish 563 2,394.54 BRACKISH Whiteleg shrimp 13,277 45,175.49 Giant tiger prawn 776 2,772.39 Elkhorn sea moss 271 55.33 Tilapia nei 196 433.48 Barramundi 27 73.85 Indo-Pacific swamp crab 0.79 6.72 Milkfish 0.02 0.03 FRESHWATER Nile tilapia 26,410 35,944.41 Cyprinids nei 7,923 6,739.58 Roho (Labeo rohu) 2,565 2,181.88 Catla 2,368 2,014.3 Mrigal carp 1,883 1,601.74 Common carp 1,578 1,342.30 Labeo dussumieri 170 144.61 Giant river prawn 135 551.21 Bighead carp 42 35.73 Grass carp 41 34.88 Silver carp 29 24.67 Total 59,080 103,773.75 Source: FAO, “FishStatJ—Software for Fishery and Aquaculture Statistical Time Series,” accessed May 10, 2025, https://www.fao.org/fishery/en/ statistics/software/fishstatj. Note: nei = not elsewhere indicated. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 51 Opportunities for Integrating Aquaculture into Landscapes and Seascapes Seaweed aquaculture is a viable sector for development in Sri Lanka, with growing interest and effective pathways for supporting the provision of ecosystem services. The baseline of production (271 tonnes in 2022) provides an opportunity to establish and expand a sustainable, moderate-volume seaweed sector. But the operating and business models for these approaches, and the products that could be produced, require piloting or further development to ensure commercial viability. Seaweed production could occur through multiple system approaches and designs, including • monocultures in nearshore areas, where best farming practices to avoid and mitigate negative impacts are implemented • through co-culture with other unfed species such as echinoderms (for example, sea cucumbers) • IMTA with fed finfish aquaculture Seaweed Monocultures Seaweed farming in nearshore areas could be pursued using restorative or NbS approaches, targeting improvements in water quality, climate adaptation, and to some extent climate change mitigation. Agricultural run-off remains a challenge in Sri Lanka. Farming seaweed in areas of high nutrient loads or eutrophication can therefore be expected to provide a wastewater treatment service. Given the high seafood consumption in the country, seaweed protein and nutrition would also be a valuable social outcome. Sri Lanka has been identified as a country with the highest potential to address nutritional deficiencies because of the alignment of nutritional and economic opportunities and the country’s reliance on seafood (Liu et al. 2018). But currently, the country exports seaweed and seaweed products (wild-harvested and farmed) primarily to Europe, with smaller amounts to India and several non-EU countries (Sumanarathna, 2024). A range of seaweeds may be well suited to cultivation in Sri Lanka, but the local suitability of specific species needs to be understood better and go through in-water farming trials. Native species that have the potential to be cultivated are widespread and include numerous species of the red alga Gracilaria and green algaes Ulva and Caulerpa (Vinobaba and Ganeshamoorthy Umakanthan, 2016). The cultivation of Gracilaria edulis and Gracilaria verrucosa has been piloted but they are not yet commercially farmed (Galdolage et al., 2024). Gracilaria species are generally robust, with a tolerance for wide temperature ranges and salinity. They account for 90 percent of the global production of agar and are used in China to feed abalone, where they have been shown to improve both growth and survival (Hatch Innovation Services, 2022). Global demand for Gracilaria has steadily increased over the last two decades and is expected to continue to grow (Hatch Innovation Services, 2022). Seaweed Co-Culture and Multitrophic Aquaculture The inclusion of seaweed in co-cultures with finfish and shellfish farming, such as in IMTA, could be pursued to mitigate the effects of waste from fed species while providing an additional system to farm seaweed and therefore expand production. Finfish aquaculture in Sri Lanka is not widespread, and a full-scale IMTA can be capital-intensive to implement and operate (Buck et al., 2018; Knowler et al., 2020). Pilot applications for sea bass have been deployed and farming has been piloted in Cod Bay, Trincomalee (Asoka, 2019; Thassim et al., 2019). 52 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Oceanpick, Sri Lanka’s first open-ocean fish farm, is farming barramundi in this area and in October 2024 announced a partnership with the Global Fund for Coral Reefs to receive investment in support of developing aquacultural best practices, supporting and engaging local communities, and contributing to long-term ecosystem health (Pegasus Capital Advisors, 2024). The Global Fund for Coral Reefs is a public–private coalition that employs a range of financial solutions and support for sustainable businesses to strengthen the resilience of coastal ecosystems, economies, and communities. This investment highlights the potential role of private equity in supporting the development and growth of aquaculture ventures to advance sustainability and achieve positive environmental outcomes. In addition to providing an environmental benefit, seaweed farmed in these systems could be used for the same products and markets as species farmed in monocultures (for example, food, food additives, biostimulants, bioplastics). In addition to finfish, seaweeds are also often used in abalone feed in Asia, and the cultivation of mollusks with passive or supplementary feeding of algae could be explored. This would provide a direct wastewater treatment service from the effluent arising from the farming of sea bass (or other species) and maximize the utilization of space. The seaweed biomass harvested could be explored for similar use in abalone or other marine species feeds, building up a circular approach and economy. It is reported that abalone is exported from Sri Lanka (Export Development Board of Sri Lanka, 2025), but there is not yet any commercial production via aquaculture. Because of the comparatively nascent status of the seaweed sector in Sri Lanka, IMTA or a circular approach could be an accessible way to increase seaweed production volumes and achieve a stable supply (adding seaweed production to existing facilities, improving access or stability and security in existing markets) while the sector becomes established. Estimates of Ecosystem Services from Seaweed Production Nutrient and CO2 Emissions Reductions Seaweed farming in Sri Lanka is currently concentrated in the production of elkhorn sea moss (Kappaphycus). Farming of other species could increase the climate resilience of the industry, provide greater access to existing or new markets, and yield different environmental benefits, depending on the characteristics of the species and farming system. The red alga Gracilaria has lower global production than other algae but is on a growth trend—more than 200 percent growth since 2010. It also has diverse uses (Hatch Innovation Services, 2022). The Regional Seaweed Services Model V2.0 (SciTech Environmental Consulting and TNC, n.d.) is an open-access model that uses methods and results from a range of ecological and farming studies to estimate the environmental benefits of a range of seaweed species, farming systems, and inputs—for example, farming footprint, farm type, location. Using a baseline farming model of off-bottom or submerged cultivation of Gracilaria over a 10-square kilometer area along a vegetated coastline, with diesel as the primary energy source in the hatchery, it is possible to estimate the nutrient and CO2 mitigation-related ecosystem services of this approach. From this modeling, a total farm output of 32,700 tonnes wet weight could be expected, along with the removal of 86.9 tonnes of nitrogen and 9.01 tonnes of phosphorous a year (table 9), amounting to 0.3 percent of the annual flow of nitrogen to coastal waters (Green et al., 2004). Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 53 TABLE 9: Summary farm output and ecosystem services associated with 10 square kilometers of Gracilaria farming in Sri Lanka Result Median (interquartile range) Harvested biomass (tonnes of wet weight/year) 32,700 (29,400–36,300) Net primary production (tonnes of carbon/year) 1,330 (1,220–1,450) Total detrital sequestration (tonnes of CO2/year) 389 (182–511) Ecosystem nourishment (tonnes of carbon/year) 414 (359–619) Nitrogen removed (tonnes/year) 86.9 (66.8–120) Phosphorus removed (tonnes/year) 9.01 (7.87–16.2) Total CO2 avoided or retained within the ocean and seaweed 4,740 (3,530–5,140) biomass (tonnes of CO2/year) Total emissions from the farm system (tonnes of CO2/year) 2,240 (2,040–2,660) Net reduction in CO2 across all products (tonnes of CO2/year) 2,080 (1,290–2,560) Note: Model is specific to South India and Sri Lanka Large Marine Ecosystem, and species- and product-specific LCA (Life Cycle Assessment) data. Modeled estimates are calculated with uncertainty. A total net reduction of 2,080 tonnes of CO2 could be expected in comparison to the GHG emissions profile of other non- seaweed products—namely seaweed as a source of protein for humans, aquaculture feed, fertilizer, biostimulants, and bioplastics (table 9). These species (Gracilaria, Ulva, Saccharina spp.) have been identified as important pathways for the development of seaweed products and markets, supporting broader growth in the sector (Seaweed Markets reports), and provide important opportunities to couple aquaculture with climate change mitigation and adaptation (for example, crediting of carbon reductions, inclusion of low-trophic-level species in blue foods policies). Considering the individual impact of these products, it is likely that the greatest CO2 emissions benefit would be associated with directing seaweed biomass toward food products or aquaculture feed, avoiding 1,900 and 1,300 tonnes of CO2 per year, respectively (figure 7). FIGURE 7: Modeled estimates of potential emissions avoided by farming 10 square kilometers of Gracilaria in Sri Lanka in a range of product replacement scenarios Source: Authors’ own work 54 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Using these same modeling inputs but for an alternative seaweed species, the green alga Ulva, markedly different ecosystem service outcomes could be expected, including lower rates of removal of nitrogen and phosphorous and potentially a net release of CO2 because of the energy required to produce and process Ulva for the specific products considered (table 10). Of these products, the use of this species as food and aquaculture feed may provide the biggest gains in CO2 mitigation, 714 and 440 tonnes of CO2 per year, respectively (figure 8). These differences highlight the value of paying attention to the market proposition of specific species alongside the technical feasibility of farming. TABLE 10: Summary farm output and ecosystem services associated with 10 square kilometers of Ulva farming in Sri Lanka Result Median (interquartile range) Harvested biomass (tonnes wet weight/year) 19,600 (13,200–26,000) Net primary production (tonnes of carbon/year) 493 (385–977) Total detrital sequestration (tonnes of CO2/year) 126 (93.4–237) Ecosystem nourishment (tonnes of carbon/year) 177 (122–345) Nitrogen removed (tonnes/year) 31.2 (19.3–38) Phosphorus removed (tonnes/year) 3.57 (2.64–4.64) Total CO2 avoided or retained within the ocean and seaweed biomass 1,580 (1,070–2,260) (tonnes of CO2/year) Total emissions from the farm system (tonnes of CO2/year) 1,770 (1,200–2,220) Net reduction in CO2 across all products (tonnes of CO2/year) –137 (–244–36.9) Note: The model is specific to South India and Sri Lanka Large Marine Ecosystem and species- and product-specific Life Cycle Assessment data. Modeled estimates are calculated with uncertainty. FIGURE 8: Modeled estimates of potential avoided emissions from farming 10 square kilometers of Ulva in Sri Lanka in a range of product replacement scenarios Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 55 Biodiversity and Conservation Benefits Seaweed aquaculture can have negative, neutral, or positive effects on biodiversity. Local environmental conditions (TNC, 2024a; Corrigan et al., 2024a) and the scale of the culture and practices used, influence whether these effects will be negative, neutral, or positive, with poor practices such as overstocking and shading, trampling, or clearance of vegetated habitats to build farms generating the most common negative effects (Campbell et al., 2019; Corrigan et al., 2022). If best practices are applied to the selection of the seaweed farm site, it is likely that biodiversity will increase, but the variability in these effects, and whether the effects on the surrounding ecosystem will be neutral, mildly positive, or strongly positive, can be difficult to project and need to be validated through on-the-ground research. Using data from a meta-analysis of seven studies of reported benefits of seaweed farms that enhanced the abundance and richness of fish, Barrett et al. (2022), employing a comparison to nonfarm reference sites, estimated an average additional production value of 529 kg (range from –144 to 2,452 kg) per hectare per year. One thousand hectares of seaweed farming could therefore support production of an additional 529 tonnes of fish per year, supporting additional landable production of 494 tonnes per year. These systems, however, could depress local fish populations, and for that reason, these interactions need to be carefully monitored during the early stages of farm development and ongoing operations. An additional biodiversity benefit of seaweed grown and used in land-based products, particularly biostimulants, is the improvement in soil health and productivity. Biostimulants, including seaweed-based biostimulants, can increase plant growth, crop yields, and tolerance to abiotic stress (Bell et al., 2021). Biostimulants could also be used to regenerate degraded farmland. For example, they could be applied to heavily used, degraded fruit, vegetable, or crop areas to improve soil health and enhance microbial communities, which in turn reinforces soil health and supports biodiversity (Ochoa-Hueso et al., 2024). To ensure that the benefits of replacing traditional chemical fertilizers and biostimulants with seaweed-based products can be realized, these products should be used in tandem with a reduction in more harmful products or interventions that can enhance yields from existing farming areas rather than expanding the spatial footprint of farming. Potential Financing Approaches and Socioeconomic Outcomes Determining which financing approaches will be most suitable for ecosystem service generation through seaweed aquaculture in Sri Lanka requires consideration of the activities necessary to produce ecosystem services, the specific ecosystem services generated, and the conditions under which these services are produced. The primary expected ecosystem services from seaweed aquaculture in Sri Lanka are food, livelihoods, habitat provision, nutrient reduction, and carbon sequestration. The primary activities that could enable these ecosystem services to be provided are expansion of seaweed production through monoculture systems to provide food, economic security, and integration of seaweed culture into existing production practices (for example, co-culture, IMTA). Financing will therefore be needed to support the establishment of new farms pursuing practices that can enhance ecosystem services and provide the necessary training, equipment, and incentives for existing farms to integrate seaweed culture into their methods. In the context of the finance decision-making matrix (table 11), upfront capital is needed to facilitate the integration of seaweed culture into existing farm systems, and ongoing capital is needed to expand participation in the seaweed aquaculture sector and to incentivize continued participation in ecosystem service generation. The seaweed produced, 56 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE whether for consumption or for use in biostimulants, fertilizer, or aquafeeds, is a market good, and local public goods are provided in the form of habitat provision and nutrient reduction. The potential for carbon sequestration at the local level can be connected to larger global targets for CO2 reduction, and the farmers will maintain property rights for seaweed produced. Challenges and Risks Several challenges associated with developing a seaweed aquaculture industry in Sri Lanka require consideration, further analysis, and management. They include • Building capacity for supply and demand through sustainable activities, for example, the selection of seed tissue and supply. • Ensuring that the approaches and equipment used adhere to global best practices. A nearshore approach to seaweed farming may be needed but this can introduce unique or cumulative harmful environmental impacts, including trampling and shading of sensitive habitats such as seagrasses. These negative effects are well known and, in other locations where they have presented a challenge to the sustainability of the industry, they are being tackled through a concerted approach to identifying, communicating, and training to ensure best practice. For example, growth and expansion of seaweed aquaculture in Tanzania has contributed to environmental damage that is being addressed through adapted farming approaches that can better ensure the sector’s sustainability (box 1). • Using practices and equipment adapted to managing climate impacts and threats from climate change. For example, in Belize, seaweed farmers have been testing a submerged seaweed array that can be lowered and raised in the water in response to environmental conditions (box 2). • Increasing operational capacity and improving infrastructure throughout the production cycle and value chain (for example, processing facilities and logistics). Risks associated with loans to individual farmers or businesses should be considered, given that the seaweed aquaculture sector is new in Sri Lanka and that the piloting of sites and different approaches during the initial stages of farming may yield variable results. Additionally, severe nearshore pollution with heavy metals can be problematic for seaweed and could hinder production in these spaces. The choice of financing mechanisms used to support seaweed aquaculture in Sri Lanka should be extended and adjusted based on more detailed information about the sector’s operational capacity in the near term and any national or local influences, based on needs identified in consultation with industry and communities. Environmental and social conditions that will influence seaweed aquaculture development and key considerations for implementation, risk, and risk management are described in appendix G. BOX 1: EXAMPLE IN PRACTICE: MAKING SEAWEED FARMING MORE SUSTAINABLE IN TANZANIA Tanzania is one of the world’s largest seaweed producers, with most of this activity occurring in the Zanzibar archipelago. In 2024, the country produced 167,000 tonnes of algae, an increase from the stable or declining trend that had held since 2010 (FAO, 2024a). The industry primarily serves the hydrocolloids market and is an extensive form of artisanal aquaculture, with low inputs and high importance as a livelihood for coastal women (Le Gouvello et al., 2023; Msuya et al., 2013). But the location of seaweed farming in nearshore shallow waters, often over seagrass beds, has resulted in damage to these habitats and corals, primarily through shading, trampling, and deliberate removal (Lyimo, et al., 2007; Moreira-Saporiti et al., 2021). Changing climatic factors over the last several decades—including (Box Continued) Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 57 BOX 1: Continued rising sea surface temperatures, higher wind speeds and waves, and more irregular rainfall, which intensifies variation in salinity—have depressed seaweed production in recent years (Hassan and Othman, 2019; TNC, 2023). In response to these challenges, there has been a focus on developing more sustainable farming practices to reduce harmful environmental impacts and increase productivity from existing sites. For example, there have been improvements in peg-and-line farming, a common method worldwide. Traditionally, it involves cultivating seaweed on the lines tied between two wooden pegs in shallow, intertidal areas (photo B1.1). But to increase yield sustainably, Tanzanian farmers are applying best practices transferred from other regions, such as using good-quality propagules, and experimenting with using double-made loops—doubling hangings of propagules— which reduces the overall farm footprint without exceeding its ecological carrying capacity (TNC, 2023). Emerging innovative methods of moving lines into deeper waters have also been tested but are not yet widely practiced (Msuya et al., 2013). Deeper-water floating-line farming (figure B1.1) reduces the common environmental impacts of shading and trampling, but it may also provide greater opportunity for integrated farming, such as the co-culture of shellfish or echinoderms (like starfish and sea urchins) with seaweed (Msuya et al., 2013; TNC, 2023). Economic analysis of both deeper-water floating-line farming and integrated farming/co-culture indicates that they are both viable and can sustain high profit margins (61 and 66 percent, respectively) and that higher productivity resulting from less die-off would offset the slightly higher costs of equipping and operating a floating-line farm (Msuya et al., 2013). PHOTO B1.1: Seaweed plot, Pemba Island, FIGURE B1.1: Schematic of floating longline seaweed farm Tanzania in deeper water © Harrison Charo © Harrison Karisa Charo Karisa © Harrison Charo © Harrison Karisa Charo Karisa © Harrison Charo Karisa © Colin Hayes 58 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE BOX 2: EXAMPLE IN PRACTICE: ENABLING PRODUCTIVE SEAWEED FARMING UNDER A FUTURE OF CLIMATE CHANGE, BELIZE In contrast to other places with well-established, high-output seaweed aquaculture sectors, seaweed farming in Belize is an emerging industry. But it is being positioned to supply high-quality carrageenan to the US market, value-added products for local human consumption, and nutraceuticals that bring high prices. Dried seaweed, for instance, sells for between $22/kg and $44/kg (TNC, 2024e). Seaweed in Belize is converted to powder or gel to make beverages and ice cream, added to meals as a food ingredient, and put in value-added nonfood products such as nutraceutical gels, powders, and infusions (TNC, 2024d). The monitoring of farm pilot sites in Placencia has found minimal environmental damage and potential for ecological benefits, including consistently greater species richness and abundance at some farm sites than at the control sites (Foley, 2019; Tucker and Jones, 2021). This includes greater diversity of fish and invertebrates, including ecologically important species such as reef grazers and species of commercial interest (Foley, 2019). Evaluation of the interactions between farm activities and local ecosystems, guided by the principles of restorative aquaculture, indicates that the current farming practices align with the goals of a restorative approach, promoting positive ecological outcomes (TNC, 2021). But as with seaweed cultivation in many tropical areas, climate change threatens Belize’s seaweed industry through rising sea surface temperatures and severe weather events. To combat these threats, seaweed farmers are trialing farms that are submerged 1.2–2.4 meters (4–8 feet) in shallow subtidal environments (photo B2.1). This is deep enough to ensure that the farm stays submerged even at low tide yet allows enough light to penetrate for photosynthesis. Water temperatures are lower at those depths than that at the surface, and there is less exposure to fluctuations in temperature and salinity, reducing direct atmospheric impacts and the “domino” effects of die-off and diseases such as ice-ice (TNC, 2024e), a condition caused when red algae are stressed by environmental changes like greater fluctuations in temperature, light intensity, and salinity, along with the presence of opportunistic bacteria. The design, technical specifications, and maintenance requirements of a submerged seaweed farm in shallow subtidal waters is detailed in Belize Seaweed Industry Technical Guide (TNC, 2024f). PHOTO B2.1: Snorkeler inspecting a submerged seaweed farm five feet below the water’s surface, Belize © Seleem Chan Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 59 TABLE 11: Decision-making matrix for potential financing mechanisms in Sri Lanka Conservation finance (green/blue finance) Economic mechanisms and incentives Municipal Joint Potentially Crediting revenue International Domestic venture viable? Public-private Private and Concessional Contract and general government Offsets and partnership capital trading finance farming general bonds funds shared schemes bonds equity Capital needs Project requires upfront capital Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Project requires ongoing funding Y ✓ ✓ ✓ ✓ ✓ ✓ Ecosystem goods and services Market goods are produced Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ Local public goods are provided (for example, water quality Y ✓ ✓ ✓ ✓ ✓ improvements) Public goods are provided at a local scale but connected to the global level, or targets are provided (for example, Y ✓ greenhouse gas emissions reduction, climate adaptation, biodiversity benefits) 60 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Farmer has effective property Y ✓ ✓ ✓ ✓ rights for benefit produced Farmer can use a contribution mechanism to raise public N X X funds* Farmer has high risk of failure or Y ✓ ✓ loan default Note: Y and N indicate whether or not all conditions relevant to a finance mechanism are likely to be met for the case study, sector, and country, making this approach potentially viable. Specific conditions that are likely to be met are indicated in green; conditions not likely to be met are indicated in red. * Condition may be present only occasionally, e.g., domestic government funds, and is not relevant to all instances of aquaculture. CASE STUDY 2: Oyster Aquaculture in Senegal Insights and Entry Points • Oyster aquaculture in Senegal is likely a viable sector for growth that would build on an established background of oyster fishing, processing, and consumption. • Existing legislation, the country’s Code de l’Aquaculture (Aquaculture Code), and sector-specific best practices could be applied to help the industry develop using restorative aquaculture practices. • Aquaculture development should be coupled with effective habitat conservation or restoration measures for mangroves, which could provide an opportunity for carbon crediting. • Development constraints on the industry center on a lack of capacity and appropriate facilities to shift production of seed from wild-caught to hatchery production, based on current low production volumes and therefore a lack of demand for seed. • These opportunities could be supported by a range of financing mechanisms, in particular mechanisms that enable joint ventures or public-private investment (for example, for hatchery development), and municipal grants to establish effective support processes such as food safety standards and monitoring. Key Recommendations Research and Development • Support the research and development and in-water piloting of • cultivation methods for local oyster species, including hatchery methods • feasible profitable farming systems • effective farming systems, products, and economic models to support socioeconomic outcomes, in particular food, nutrition, and livelihood • the site selection of new farming activities (for example, suitability assessment, siting analysis) • the systems, species, and operating models that are the most likely to become viable investments • Support socioeconomic assessment of the benefits of oyster aquaculture and mangrove protection or restoration, and their impacts on local communities. Operations • Support the development of an oyster aquaculture industry using best practices and building on existing World Bank projects such as “Senegal: Natural Resources Management Project, Subcomponent 2.3: Supporting the Development of Aquaculture” (P175915). • Encourage combining aquaculture practices with mangrove protection and support for other conservation measures such as marine protected areas. • Encourage and support development of an effective food safety monitoring regime. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 61 Financing • Encourage and support oyster aquaculture development using a range of national and local financing, consistent with guidance in the Global Aquabusiness Investment Guide and framework. • Advocate for effective monitoring and evaluation of ecosystem services derived from oyster aquaculture. Policy • Encourage and support implementation of the FAO Guidelines for Sustainable Aquaculture as a basis for effective governance for a sustainable sector. • Advocate for including oyster aquaculture development in Senegal’s NDC as a blue foods policy option. Status of Aquaculture in Senegal Senegal first reported aquaculture production in 1970 but produced only cupped oysters until 1984, when freshwater Nile tilapia (Oreochromis niloticus) and brackish giant river prawn (Macrobrachium rosenbergii) production was first reported. The country currently produces three marine species, one brackish species, and three freshwater species (table 12). Production peaked in 2016 (2,079 tonnes; approximately $6.5 million) but fell to 1,586 tonnes valued at approximately $5.5 million. As of 2021, Senegal was the sixth-largest aquaculture-producing country in West Africa (of 17 countries), with inland aquaculture in freshwater ecosystems accounting for 53.1 percent of production (FAO, 2023a). Efforts to develop the industry have included sea bream and modest fish-farming projects initiated by the General Directorate of Planning and Economic Policies (USDA, 2022). TABLE 12: Aquaculture annual production in Senegal as of 2022 Volume (tonnes) Value (US$) MARINE Gasar cupped oyster 573 22,965,600 Blue mussel 142 455,3000 Meristotheca senegalense 16 2,565,100 BRACKISH Blackchin tilapia 192 4,617,200 FRESHWATER Nile tilapia 425 12,264,300 North African catfish 236 7,567,000 Spirulina (not elsewhere included) 1 10,5800 Total 1,5852 54,638,000 Source: FAO, “FishStatJ—Software for Fishery and Aquaculture Statistical Time Series,” accessed May 10, 2025, https://www.fao.org/fishery/en​/ statistics/­software/fishstatj. 62 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE The Senegalese aquaculture industry employs several types of culture. They include extensive fish farming in natural water bodies using retention basins, ponds, and dams, and semi-intensive fish production in cages, enclosures, ponds, and basins (FAO, 2024c). Oysters and other shellfish are farmed in bags and lantern nets in coastal areas, and spirulina is cultivated in freshwater retention basins (FAO, 2024c). Most aquaculture operations in Senegal are small and the industry’s contribution to the national economy is negligible, particularly in comparison with fishing, which contributes 1.8 percent to national GDP (FAO, 2024c). Oyster aquaculture currently occurs in four primary areas: Saloum Delta, Petite-Côte au Sud de Dakar, Casamance (Sud), and Saint Louis (Nord). Opportunities for Integrating Aquaculture into Landscapes and Seascapes Shellfish harvesting is common in Senegal and has contributed to recent interest in farming several species, including oysters. In conjunction with this, FAO is supporting FISH4ACP, an initiative to increase social equity by assisting local fisher associations with access to loans, social security, and education, and to develop designated value chains for the industry (FAO, 2021a). Annual oyster production amounts to 16,000 tonnes, with a value of $4.6 million, but aquaculture contributes only a small portion of this (573 tonnes in 2022). A number of World Bank projects currently under implementation dovetail with this opportunity, in particular, “Senegal: Natural Resources Management Project” (P175915), which includes subcomponent 2.3: “Supporting the development of aquaculture.” Oyster and mussel production is largely directed toward high-income consumers in the capital, Dakar. Concerted effort to expand this and other domestic markets that tap into consumer interest in native species and sustainable foods could help direct more financing toward the development needs of the aquaculture industry, for example, financing for food safety monitoring. FAO reports that demand for oysters exceeds supply and that 99 percent of oysters produced in Senegal are sold processed (dried, grilled, or boiled) (FAO, 2021c). This indicates a degree of market readiness to expand production through mariculture. Although the country’s ongoing challenges with the lack of food security is currently a higher priority, it is conceivable that well-designed and well-sited oyster aquaculture could be developed to meet domestic demand for protein and to engage in regional trade. Senegal already has a high level of inclusion of blue food terminology in its NDC (Stanford Center for Ocean Solutions et al., 2024), paving the way for further activities targeted toward aquaculture development. The FISH4ACP project targets the development of preparedness along the entire value chain, specifically: • Developing a value chain analysis and upgrading strategy to increase the oyster sector’s productivity and sustainability • Making the oyster sector more environmentally friendly with science-based knowledge on areas and species suitable for oyster farming • Establishing a sanitary surveillance and monitoring system to ensure quality and safety of fresh and processed oysters • Boosting oyster farming to increase production and safeguard abundance of oyster stocks • Supporting the development of higher-value products with longer shelf life to strengthen food security and women’s economic empowerment • Fostering controlled, sustainable oyster production and increasing the knowledge of areas and species suitable for farming This established base of aquaculture activity, and current investment in the sustainable development of the oyster production value chain, form a solid foundation for further growth, including the development of approaches that would maximize the provision of ecosystem services and environmental and social co-benefits. Senegal already has a high level of inclusion of blue food terminology in its NDC (Stanford Center for Ocean Solutions et al., 2024), paving the way for further activities targeted toward aquaculture. Oyster monoculture could provide these benefits if farming activities are sited appropriately and management practices developed that mitigate the potential for harm, and through integrated approaches such as IMTA with finfish farming. Such benefits could also be provided by intentionally using the ecosystem services of bivalve aquaculture to protect carbon stores. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 63 Managing Oyster Aquaculture for Blue Carbon Benefits Oyster farming in seagrass and mangrove habitats could have either positive or negative impacts. Especially damaging impacts include disturbance of habitats or the sediment underlying these habitats through the clearing of vegetation. This disrupts long-term carbon stores, which are highest within 100 centimeters of the sediment surface, and reduces the rates of carbon deposition and sequestration (Santos-Andrade et al., 2021; Sasmito et al., 2020). In contrast, oyster aquaculture farms and practices that avoid direct physical disturbance could generate benefits in these habitats, for example, by reducing eutrophication, turbidity, and sedimentation and thereby increasing light availability, or by reducing wave energy and erosion (figure 9; Alleway et al., forthcoming). FIGURE 9: Negative and positive impacts of bivalve aquaculture systems on blue carbon habitats Source: Alleway et al. (forthcoming) © TNC Nature-based solutions and restorative aquaculture approaches that can support climate change mitigation and adaptation could include aligning aquaculture development or practices with local or national climate adaptation strategies. Effective integrated NbS could support broader ecosystem outcomes—for example, the protection of mangroves and seagrasses—with oyster aquaculture and thereby generate direct and indirect coastal protection benefits (Hanley, 2023). These approaches could focus on benefits in the water, such as nutrient bioextraction, but could also be applied to other areas of the value chain, such as shell recovery and reuse, to create circular economy solutions, such as that being developed in Vietnam, where shells are used as the substrate for the settlement of spat (oyster larvae) (box 3). Circular approaches such as these could be used in Senegal to establish a highly sustainable industry from the outset by implementing this process for waste recovery and to reduce the costs of purchasing equipment (if equipment is needed for waste recovery in place of oyster shell). 64 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE BOX 3: EXAMPLE IN PRACTICE: VALUING THE ECOSYSTEM SERVICES OF OYSTER AQUACULTURE IN VIETNAM Oyster aquaculture in Vietnam is relatively new but production of the Portuguese oyster (Crassostrea angulata) has grown rapidly. There were challenges during the early stages of development—including poor spat fall and poor hatchery production. Spat are oyster larvae. Once they are released into the water, they drift until they find an appropriate place to settle, such as an empty oyster shell, where they attach and start to grow. Spat settlement—which is influenced by water temperature, salinity, food availability, and how much oxygen there is in the water—is a critical stage in the oyster life cycle. Needing greater R&D capacity, Vietnam sought the support of international experts, cross-jurisdictional collaboration, and resourcing from aid agencies such as the Australian Centre of International Agricultural Research (ACIAR). The international assistance led to increased hatchery reliability, superior broodstock and seed quality, better cultivation methods, and a clearer understanding of the social and economic benefits of improved bivalve culture (O’Connor, 2019). The latest analysis in a series of ACIAR Australia–Vietnam collaborations is an assessment of the potential for Portuguese oyster aquaculture to contribute to carbon sequestration in Vietnam and to support other climate change mitigation and adaptation approaches, such as shell recycling and value adding, including through carbon-crediting mechanisms (Ugalde, Van In, and O’Connor, 2024). Oyster aquaculture in Vietnam uses a variety of methods, including bottom culture, hanging culture, and raft culture (photo B3.1). In hanging culture, oyster spats are seeded onto oyster shells and other materials, strung together, and hung from bamboo rafts or stakes. The premise for carbon crediting leverages this approach to reuse oyster shell (a circular-waste solution)1 for farming and other value-added products—for instance, as a livestock mineral supplement, in soil acidity management, and in crop and vegetable growth (Ugalde et al. 2023). Because oysters are calcifying organisms, they are not likely to meet the requirements of oyster sequestration in the water. They are likely a minor source of carbon dioxide rather than a sink (Howard et al., 2023; Pernet et al., 2025). But directing shell biomass toward an appropriate carbon store could valorize this benefit. The ACIAR analysis estimated that shell produced across the four provinces of Vietnam sequester an average of 0.4 (range 0.15 to 1.33) tonnes of carbon per hectare per year. Using a carbon price of $7–17 per tonne of CO2 equivalent, the value of this carbon would be between $3.95–9.60 per hectare per year and $34.09–82.78 per hectare per year (Ugalde, Van In, and O’Connor, 2024). Vietnam recently passed a law on environmental protection that legalizes the establishment of a carbon market. Oyster aquaculture has not yet been included in a specific crediting strategy, but this already available additional economic value for a circular approach to aquaculture could support greater economic resilience and improve the business case for developing this industry (Ugalde et al., 2023; Ugalde, Van In, and O’Connor, 2024). (Box Continued) 1 Circular waste solutions attempt to minimize the generation of waste and to maximize the value of resources by keeping materials in the economy for as long as possible by reusing, repairing, recycling, refurbishing, repurposing, and remanufacturing them. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 65 BOX 2: Continued PHOTO B3.1: Bamboo rafts used to suspend oyster lines in Vietnam Source: Ugalde et al. (2024) A country-level analysis of the feasibility of applying climate-smart approaches to aquaculture revealed that Senegal is highly vulnerable because of fluctuations in seafood production from year to year (all seafood, fisheries included). This creates a good opportunity to replace large quantities of seafood imports with domestic production (Alleway et al., 2023). An estimated 95 percent of people in Senegal involved in oyster fishing are women. This presents a chance to introduce a gendered approach, and actions supporting equality, into ecosystem-centered aquaculture and the benefits of ecosystem services. Increasing the opportunity for livelihood through new aquaculture ventures could become an intentional goal in the development of this sector. Estimates of Ecosystem Services from Oyster Production Nutrient and CO2 Emission Reductions Research shows that the rates of nutrient bioaccumulation and extraction are fairly comparable across species, particularly within genera. Using 22 studies of reported estimates of nitrogen removal by bioextraction, Barrett et al. (2022) estimated a removal rate of 314 (range 150–612) kg per hectare per year for a value $10,147 (range $4,854– 19,781) per hectare per year (using a price of $32.3 per kg of nitrogen) and 25 (range 16–39) kg per tonne of fresh weight, for a value of $505 (range $801–1,255) per tonne of fresh weight. These estimates provide an indication of the standard impact that nitrogen extraction from oyster aquaculture can be expected to have. They will likely be higher in areas where nutrient loads are greater, including areas of eutrophication, and lower in nutrient-poor waters. Using the example of a farming system of off-bottom oyster raft-and-rack culture for mangrove oysters (Crassostrea tulipa) or tropical rock oysters (Crassostrea spp.) across 10 square kilometers in nearshore areas that is accessible by boat and by foot at low tide, the nutrient bioextraction benefit of oyster aquaculture in Senegal can be estimated. 66 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE A  harvestable biomass of about 5,710 tonnes of wet weight of oysters per square kilometer per year could grow. This scale of farming, in the form of individual farms over a disaggregated or aggregated area, could reduce nitrogen by 314 tonnes per year (table 13), representing an estimated but relatively small 0.8 percent of anthropogenic nitrogen flowing to the coast. TABLE 13: Projected nutrient reduction from 10 square kilometers of oyster farming in Senegal Nitrogen removed 314* (range: 150–612) tonnes a year Nitrogen removed by harvest 22* (range: 16–39) tonnes a year Percentage of anthropogenic nitrogen flowing to coast removed 0.8 percent per year Note: * Based on production and bioextraction estimates Biodiversity and Conservation Benefits Similar to estimating the benefits of nutrient extraction and water quality, the biodiversity effects of adding habitat to an ecosystem can be estimated through known effects on fish enhancement—for example, adding habitat may increase areas for fish to shelter, feed, and breed. The likely effects of habitats have been evaluated using meta- analysis, but the benefits they generate are far more variable than those of nutrient extraction. Barrett et al. (2022) estimated an average additional production value of oyster aquaculture of 1,147 (172–2,346) kg per hectare per year of additional fish, and an additional production value of 1,110 (158–2,237) kg per hectare per year of landable fish biomass. This means that, when aquaculture activities and equipment are added to an ecosystem, it is likely that they will have a positive effect on fauna (fish and invertebrates). Using the same example of square kilometers of oyster farming, it can be estimated that this activity could support additional production of more than 1,000 tonnes of fish per year (table 14). Because this benefit is provided afresh each year that the aquaculture site is present, these ecosystem services can support wild populations and potentially their protection or recovery or fishable biomass. With the latter, it is critical to ensure that fish populations are not overexploited as a result of being associated with the aquaculture farm. In addition to these direct benefits, the shells provided through oyster aquaculture could be recovered and used in shell recycling as a substrate for catching, settling, and growing wild spat to adulthood, rather than using less effective mangrove wood. In addition, oyster shell is commonly used in shellfish reef development and restoration. Crams, an aquaculture company in Senegal, has been developing a shallow-water IMTA system in the Joal Fadiout Marine Protected Area, using conch shells to create benthic structures for wild fauna as part of a broader co-culture system of fish and crustaceans. Potential Financing Approaches and Socioeconomic Outcomes Determining which financing approaches will be most suitable for generating ecosystem services through Senegal’s oyster aquaculture industry requires considering the activities necessary to produce the ecosystem services, the specific services generated, and the conditions under which they are produced. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 67 The primary ecosystem services expected to be generated through oyster aquaculture in Senegal are food, livelihoods, water filtration, and coastline protection. Activities include integration of sustainable aquaculture practices into existing farms (for example, IMTA, nondestructive cultivation in mangrove habitats), a greater number of industry participants, and an increase in food production and economic security benefits. As such, financing is needed primarily to provide training, equipment, and incentives for individuals to integrate sustainable ecosystem service-generating practices into their aquaculture farm operations and expand opportunities to participate in oyster aquaculture that contribute to ecosystem services. See table 14 for financing opportunities. Challenges and Risks Developing an oyster aquaculture industry in Senegal has several challenges that require analysis and management. Two in particular: • Minimizing threats to mangroves, including those caused by aquaculture expansion, coastal development, and other competing land-use activities • Ensuring that the approaches and equipment used are adapted to suit the local context, making the facilities operational and economically viable, and ensuring that threats from climate change and persistent pollution are mitigated In the context of the financing decision-making matrix (table 14), upfront capital is needed for the integration of aquaculture practices into existing oyster farms. Capital is also needed for continued development such as expanding the farm, adding new equipment, and undertaking initiatives that encourage broader industry participation, such as training programs, market access support, or sustainability certifications—which can incentivize the continued uselong-term adoption of sustainable practices. Oyster meat (and possibly pearls) is a market good, and local public goods are provided in the form of water filtration and coastline protection. The potential for carbon sequestration at the local level can be connected to larger global targets for CO2 reduction. Farmers would maintain property rights over the food they produce. The level of risk for loan default is likely lower given that oyster production is already a relatively common aquaculture practice in Senegal and there is an existing market for oyster products. Although coastal pollution could jeopardize oyster production for food in some areas, alternatives such as pearl farming offer potential pivots for generating ecosystem service. Appendix H further describes the environmental and social conditions that will influence oyster aquaculture development and key considerations for implementation, risk, and risk management. 68 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE TABLE 14: Decision-making matrix for financing mechanisms in Senegal Conservation finance (green/blue finance) Economic mechanisms and incentives Municipal Potentially Crediting Joint Public- revenue International Domestic viable? Private and Concessional venture Contract private and general government Offsets capital trading finance and shared farming partnership general bonds funds schemes equity bonds Capital needs Project requires upfront capital Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Project requires ongoing funding Y ✓ ✓ ✓ ✓ ✓ ✓ Ecosystem goods and services Market goods are produced Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ Local public goods are provided (for example, water quality Y ✓ ✓ ✓ ✓ ✓ improvements) Public goods are provided at a local scale but connected to the global level, or targets are provided (for example, Y ✓ greenhouse gas emissions reduction, climate adaptation, biodiversity benefits) Farmer has effective property Y ✓ ✓ ✓ ✓ rights over benefits produced Farmer can use a contribution N X X mechanism to raise public funds* Farmer is at high risk of failure or N X X loan default Note: Y and N indicate whether or not all conditions relevant to a finance mechanism are likely to be met for the case study, sector, and country, making this approach potentially viable. Specific conditions that are likely to be met are indicated in green; conditions not likely to be met are indicated in red. * Condition may be present only occasionally, e.g., domestic government funds, and is not relevant to all instances of aquaculture. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 69 CASE STUDY 3: Integrated Mangrove Restoration and Aquaculture Systems in Guinea Insights and Entry Points • Integrated aquaculture on a landscape scale could help mitigate the cumulative impacts on Guinea’s coastal ecosystems, such as overfishing, mangrove loss, biodiversity loss, and climate change. • Effective, enduring agreements to protect and restore mangrove habitat would be central to the development of aquaculture in coastal areas. • Public support and resources will be needed to achieve effective integrated landscape-scale planning, implement sustainable practices, mitigate negative impacts, and monitor ecosystem and social outcomes, including food and nutritional security improvements. • Private capital for an integrated approach could be incentivized using carbon credits from conservation or restoration activities, rather than solely from aquaculture production, if carbon credits are applied to mangrove restoration rather than aquaculture. Recommendations Research and Development • Support further evaluation of a landscape-scale planning approach through technical, on-the-ground assessment of where aquaculture activities could be integrated into existing agriculture and priority conservation areas. • Support the socioeconomic assessment of an integrated aquaculture–agriculture approach and impacts on local communities (positive and negative impacts). Operations • Advocate for and support the evaluation of landscape-scale planning for the development of aquaculture through the assessment of viable aquaculture systems, including: • Likely viable species for cultivation • Effective, sustainable, low-cost farming systems • Product applications from aquaculture activities that can be used to support sustainable industry activities • The geographic suitability of locations for aquaculture • Encourage the effective monitoring and evaluation of ecosystem services derived from mangroves, agriculture, and aquaculture to better understand how integrated approaches can be adapted to enhance biodiversity and climate adaptation. Financing • Assess the potential for international and national conservation financing options, such as green and blue bonds, to provide funding for the systematic development of sustainable, restorative aquaculture. Policy • Encourage and support the implementation of the FAO Guidelines for Sustainable Aquaculture as a basis for effective governance for a sustainable sector. 70 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Status of Aquaculture in Guinea Guinea first reported production of farmed tilapia and North African catfish (Clarias gariepinus) in 1984 (FAO, n.d.-a) and, as of 2021, was the seventh-largest aquaculture-producing country in West Africa out of 17 countries (FAO 2023b). But information on the present status of aquaculture activities and species farmed is limited. Guinea currently reports production of five freshwater species (table 14). In 2022 (the most recent year in which production data were reported to the FAO), the country produced 1,180 tonnes of aquaculture products valued at $3.5 million. TABLE 15: Aquaculture production in Guinea as of 2022 Type Volume (tonnes) Value ($1,000) Tilapia nei 550 1266.17 Heterobranchus catfish nei 300 1105.02 African bonytongue 220 709.05 North African catfish 60 221.00 Freshwater fish nei 50 184.17 Total 1,180 3,485.42 Source: FAO, “FishStatJ—Software for Fishery and Aquaculture Statistical Time Series,” accessed May 10, 2025, https://www.fao.org/fishery​ /en/statistics/software/fishstatj. Note: nei = not elsewhere included Opportunities for Integrating Aquaculture into Landscapes and Seascapes Building on Guinea’s existing capacity in inland aquaculture and widespread coastal rice farming systems alongside mangrove ecosystems, it may be possible to develop a landscape-scale approach to the industry through integrated mangrove aquaculture and agriculture–aquaculture systems. This could include spatial overlap in farming systems (for example, co-culture of rice and fish) or integrated management on a greater spatial scale (that is, the management of individual activities side by side across a region) to lower individual and cumulative environmental damage and maximize yields and socioeconomic benefits. To provide or restore ecosystem services, the approach must incorporate protection or restoration mechanisms for mangroves, which would have multiple flow-on benefits, including supporting fisheries through the nursery function they provide and supporting adaptation to climate change by reducing the impacts of severe weather and coastal erosion. Several World Bank projects currently under development dovetail with this opportunity, in particular Guinea Integrated Agricultural Development Project (P164326), which sought to advance several development objectives related to increasing agricultural productivity and market access for producers and aquaculture SMEs in selected value chains, including the production of fish. Notably, taking an integrated approach to aquaculture, particularly where the approach includes production of multiple foods from different industries and biomes, can improve social outcomes by increasing nutritional and economic security (Shepon et al., 2021). In integrated systems, the farming of aquatic animal species could be explored for development within or near the coastal margin,2 where crop production and fisheries are common, but aquaculture does not yet occur. 2 In integrated systems, a coastal margin is the nearshore area where land and aquatic activities overlap, making it suitable for combining crops, fisheries, and aquaculture. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 71 Integrated practices in coastal areas that are employed elsewhere in the world include: • Integrated rice–fish culture, which has been shown to benefit farming landscapes by increasing yields from existing farming areas and reducing negative environmental effects (Freed et al., 2020) • Adaptations of rice farming infrastructure and bunds (embankments used in India) to support pond aquaculture • Integrated shrimp–mangrove aquaculture and silviculture or silvofisheries, with mangroves actively cultivated alongside aquaculture ponds to increase the productivity of wild or hatchery-bred fish or shrimp (Fitzgerald, 2000) Examples of targeted interventions that could be included in these models under a landscape-scale approach include: • Farming aquaculture species that can readily be included in agricultural systems to maximize the yields from both (for example, aquaculture combined with rice or livestock systems and infrastructure) • Timing farming of crops and aquatic foods from season to season to maximize land area that has already been converted for farming • Stocking aquatic species that can reduce pests that decrease rice production • Replanting mangroves along the edges of bunds or in latent land to improve water quality (through water filtration and the uptake of nutrients) and provide a food source for aquatic species • Siting replanted mangroves in areas that can help manage water flows (for example, seasonal inputs) to maximize freshwater use and reduce erosion In addition to these interventions, climate-smart approaches to shrimp aquaculture have recently emerged as an opportunity to reduce the significant environmental impacts of this sector, acknowledging that demand and production volumes are likely to increase because of the popularity of shrimp. For example, climate-smart approaches in shrimp farming are being developed to mitigate the ongoing degradation of mangrove habitats (box 4). Reducing mangrove loss and recovering historical declines is a critical pathway for coastal climate change adaptation and should be considered as a core objective of integrated aquaculture in coastal areas in Guinea, building on models used and lessons from other countries such as Indonesia. The FAO describes climate-smart agriculture (CSA) as an approach that helps guide actions to transform agri-food systems into green and climate-resilient practices. Planning that uses a CSA lens can help identify species or farming systems that are particularly vulnerable to climate-related risks. It can also help direct the focus on implementing systems that work together to increase climate resilience, such as farming multiple species that share adaptations to local environmental stresses because they come from a single area, and on selecting species that will be the most tolerant of projected climatic conditions. Taking a CSA approach can help countries comply with international agreements and reach international goals, such as the Paris Agreement and SDGs. CSA stresses the need to meet the increasing global demand for food while also achieving GHG emission reductions by aiming to tackle three objectives: • Sustainably increase agricultural productivity and incomes • Adapt and build climate resilience • Reduce and remove GHG emissions BOX 4: EXAMPLE IN PRACTICE: INTEGRATED AND CLIMATE-SMART SHRIMP AQUACULTURE IN INDONESIA Shrimp aquaculture has historically damaged coastal habitats and water quality and led to the clearance of vast areas of mangrove habitat in many countries (Boyd and Clay, 1998). Globally, shrimp aquaculture used an estimated 3.49 million hectares of land in 2018 and required an additional 1.718 million hectares to produce ingredients to feed the shrimp (Boyd et al., 2022). Extensive, integrated shrimp farming among mangroves (Box Continued) 72 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE BOX 4: Continued is not always a practical measure to increase production because of the risk posed to mangrove habitats by high densities of farmed shrimp. But farming a lower density of shrimp in these integrated mangrove systems requires a larger land area , which can intensify land-use threats and pressures (Boyd et al., 2022). But where mangrove protections are already in place, or pond aquaculture infrastructure and practices in and adjacent to mangroves can be improved, balancing traditional shrimp cultivation approaches with mangrove restoration could be an important way of achieving climate-smart agriculture. Indonesia has the world’s largest mangrove ecosystem and is one of world’s top five shrimp producers and the largest shrimp exporter (FAO, 2024a). Most of the country’s extensive shrimp farming areas with low productivity has been converted from intact mangrove forests. As a result, ecosystem-based approaches to reforming these areas to improve mangrove habitats and increase shrimp productivity are becoming a priority. SECURE, a collaborative initiative led by Yayasan Konservasi Alam Nusantara, a nonprofit organization established in 2014 with the mission of protecting Indonesia’s land and waters, is an approach to increasing coastal and community resilience by returning 50–80 percent of the country’s converted pond area to natural mangroves. The remaining area can be used for cultivation activities with environmentally friendlier cultivation management practices to increase production. SECURE shrimp ponds are divided into two plots: a main shrimp cultivation area and a plot for the natural restoration of the mangrove ecosystem (photo B4.1). This approach supports multiple ecological and social objectives, in particular, restoring mangrove ecosystems, reducing carbon emissions, increasing shrimp production, enhancing shrimp quality through certification, raising community incomes, and lessening the risk of disasters. PHOTO B4.1: Layout of the SECURE Shrimp Pond Approach at Pegat Batumbuk Village, Berau Regency Shrimp Mangrove Shrimp Shrimp Fry Pond Water Restoration Rearing Plot Nursery Plot Reservoir Plot Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 73 The FAO eLearning Academy has a 1.5-hour course on climate-smart fisheries and aquaculture that provides technical knowledge on the concepts and specific practices that can enhance mitigation and adaptation to climate change in specific sectors (FAO, 2020). Further examples of CSA in shrimp aquaculture are the Climate-Smart Shrimp program and Climate-Smart Shrimp Fund led by Conservation International. The Conservation International initiative focuses on converting shrimp ponds that have poor environmental performance, that use gray infrastructure, and that have a poor layout of farming and treatment ponds, low water circulation, and high diesel requirements to pump water, and to support sufficient aeration for a green-grey solution (Conservation International, n.d.-a). Strategies applied in this approach include using renewable energy for pumps, restoring mangroves to support pond stability and wetland health, and using wetlands to support treatment of pond effluent. The Climate-Smart Shrimp Fund provides loan packages, bundled with technical assistance, to help farmers transition to these strategies in a long-term sustainable way (Conservation International, n.d.-b). Estimates of Ecosystem Services from Integrated Production Nearly 90 percent of Guinea’s coastal areas have mangrove habitat (Global Mangrove Alliance 2024). This provides an opportunity to direct aquaculture activities toward operating models that can protect these areas, restore mangrove habitat and the ecosystem services they provide (for example, carbon storage and habitat for fish and other fauna), and simultaneously support ecosystem services by, for example, increasing opportunities for livelihood and access to a range of foods and raw materials. In Guinea: • The avoided emissions of CO2 over the next 25 years from mangrove protection that arises from aquaculture activities could amount to 1 million–6 million tonnes, depending on the rate at which mangrove deforestation is reduced. • Avoiding the loss of 25 square kilometers of mangroves per year could produce approximately $2.8 million (in 2020 dollars) of additional fish by enhancing the security of fishery stocks. Nutrient and CO2 Emission Reductions Rates of carbon sequestration and storage in mangroves, as a blue carbon habitat, can be estimated with a degree of confidence. The Mangrove Carbon App developed by the Global Wetlands Project (GLOW, n.d.) is an online tool that maps the global distribution of mangroves down to a country scale, along with their regional carbon sequestration rates and stores, and enables time-bound scenarios to be explored with respect to current known deforestation. In Guinea, this tool identifies a baseline deforestation rate of 0.037 percent per year, which, over the next 25 years, would result in emissions (from deforestation) of 1.47 MT of CO2 equivalent. Using this same time horizon for implementation of operational and incentive mechanisms that can reduce the rate of deforestation, the effects of these interventions on emission reductions can be projected. For example, policies that reduce the current rate of deforestation from 0.037 to 0.03 percent per year would reduce emissions to 1.19 MT of CO2 equivalent over 25 years, avoiding the release of 0.28 MT CO2 equivalent. Further reducing the deforestation rate to 0.02 percent per year would reduce emissions to 0.8 MT, avoiding 0.67 MT of CO2 equivalent. More aggressive interventions to reduce deforestation to 0.005 percent per annum would reduce emissions to 0.2 MT avoiding 1.27 MT of CO2 equivalent. At a carbon price of $5 per tonne, these annual emissions have a net price of $1.39 million, $3.37 million, and $6.35 million, respectively (as per the deforestation rates of 0.03, 0.02, and 0.005 percent per year). This is financing that could be used to support sustainable development of aquaculture. 74 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE An intentional approach to protecting existing carbon stocks and enhancing carbon sequestration through integrated mangrove aquaculture also aligns with recommended policy options for a country’s NDC (Stanford Center for Ocean Solutions et al., 2024), meaning that the quantity of CO2 avoided by protecting mangrove habitat to facilitate aquaculture could be counted toward CO2 mitigation targets. The Blue Foods NDC Guidelines identify concrete measures associated with the policy option of implementing blue carbon habitat management and restoration for carbon storage and adaptation, including actions relevant to implementation of an integrated mangrove-aquaculture approach, namely: • Establishing comprehensive management plans for blue carbon habitats in blue food strategies, incorporating adaptive management principles and community input • Including blue carbon and other coastal habitats in broader climate change and adaptation plans, recognizing their role in buffering storm surges and coastal flooding • Developing plans and programs to restore previously removed or degraded coastal ecosystems Biodiversity and Conservation Benefits Given the dependence of coastal fishery productivity on mangrove ecosystems in Guinea, the benefits of providing habitat for fish species through effective integrated management can be estimated. A technical report by the World Bank assessing the benefits of mangrove afforestation programs in West Africa and Guinea-Conakry (IBRD and World Bank, 2023) assumes that 70 percent of the annual coastal catch of 128,000 tonnes is the result of the presence of mangroves, generating $232 million in 2020 ($1,119 per hectare). Protecting the loss of a modest amount of mangrove habitat, for example one-quarter of the estimated deforestation rate of 0.037 percent per year (25 square kilometers per year based on the estimate of 2,700 square kilometers of existing mangrove forest; IBRD and World Bank, 2023) and a deforestation rate of 0.037 percent, would generate an additional co-benefit of approximately USD$2.8 million per year by increasing the security of fisheries stocks and production. Based on a willingness-to-pay approach, this report also estimates the social value of protecting biodiversity (non-extractive biodiversity) along the western coast to be $911 to $1,651 per hectare ($189 million–$343 million per year; IBRD and World Bank, 2023). Potential Financing Approaches and Socioeconomic Outcomes Determining which financing approaches will be most suitable for ecosystem service generation through integrated mangrove–aquaculture and agriculture–aquaculture co-production systems in Guinea requires consideration of the activities necessary to produce the ecosystem services, the specific ecosystem services generated, and the conditions under which these services are produced. The primary ecosystem services that could be expected from integrated aquaculture in Guinea are food, habitat provision, water quality improvements, coastal protection, and carbon sequestration. Activities to generate these services include development of sustainable, integrated cultivation practices (for example, rice–fish, shrimp–mangrove) that can provide food and economic security benefits alongside incentives for effective, enduring mangrove protection and repair. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 75 Financing is needed primarily to provide the necessary training, equipment, and incentives to integrate sustainable, integrated cultivation practices into existing agricultural systems and to expand opportunities to participate in integrated aquaculture and generate ecosystem services. Key Challenges and Risks Developing integrated aquaculture in Guinea will encounter several challenges that require consideration, further analysis, and management. They include • Ensuring that unsustainable development and increased cumulative stress from aquaculture on coastal ecosystems is avoided • Ensuring that mangrove clearance is reduced or avoided • Developing cultivation methods and infrastructure for native species • Building more diverse, stable markets There are examples of market-based approaches that meet the interests of consumers and direct finance toward sustainable development interventions. For example, consumer interest in the sustainability of shrimp (and other seafood products) has contributed to the development of identifiably higher-sustainability offerings in one of the world’s largest shrimp-producing countries, Ecuador (box 5). BOX 5: EXAMPLE IN PRACTICE: TAKING A VALUE CHAIN APPROACH TO DEVELOPMENT OF SUSTAINABLE, LOW-CARBON SHRIMP, ECUADOR Ecuador is the world’s largest producer of farmed shrimp. Despite lower annual growth than in recent years, 2024 production projections by the Global Seafood Alliance indicated an increase of approximately 6 percent over 2023. The industry in Ecuador has benefited from sustained investment in genetic improvements and farm technology that have enabled it to excel in intensive shrimp farming and gain a strong market position in the United States. But the intensity of the farming systems used in Ecuador means that the energy inputs required to produce shrimp, and the quantity of feed needed, release more GHGs than other farm products (Gephart et al., 2021). Interventions to reduce GHG emissions will therefore help improve the sector’s emissions profile and bring co- benefits to the ecosystems surrounding shrimp farms and feed production. For example, farm technology and automatic feeding that can enhance the conversion of feed will improve the quality of wastewater, reducing the treatment burden and impact on natural habitats at the point of discharge. Increasing feed conversion will also reduce the amount of feed needed, which in turn will reduce the burden of feed production on Ecuadorian land (for example, for soy) and at sea (for fish meal and fish oil). Walmart’s North Star Program, launched in 2024 in partnership with the Ecuadorean shrimp farmer Omarsa, Dutch aquafeed producer Skretting, and The Nature Conservancy, combines multiple interventions along the entire value chain to deliver lower-carbon, higher-sustainability shrimp products to Walmart supermarkets (see “Consumers and retail” in Part 3: Financing Ecosystem Services). The interventions include using on- farm technologies to improve feed conversion, providing security in the sourcing of deforestation-free soy in aquaculture feed, and directing a portion of financing to mangrove restoration (Jones, n.d.; Molinari, 2024). The proactive engagement of a retailer to supply sustainable shrimp by supporting a secure financing environment that facilitates such interventions is a clear signal that, with the right approach, the consumer can have access to lower-GHG aquaculture foods. Additional consumer awareness campaigns could help build even greater interest in these products but would require targeted development of communication strategies and marketing programs. 76 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE In the context of the finance decision-making matrix (table 16), upfront capital is needed to facilitate the integration of aquaculture (for example, fish or shrimp) into existing agricultural production (for example, rice). Ongoing capital is needed to expand participation in integrated aquaculture and to incentivize continued participation in ecosystem service generation. The shrimp or fish produced using this approach are a market good, and local public goods are generated in the form of habitat provision, water quality improvements, and coastal protection. The potential for carbon sequestration through mangrove conservation is a locally generated benefit that can be connected to larger global targets for CO2 reduction, and the farmers will maintain property rights over aquaculture production. The risk of defaulting on loans is likely higher than usual given that coastal aquaculture is not currently practiced in Guinea (based on aquaculture production statistics reported to FAO in 2022), and it is unclear whether the necessary infrastructure and supply chains to produce new species and the corresponding value chains to sell these products exist and, if not, how difficult they will be to establish. A further description of the environmental and social conditions that will influence integrated aquaculture development and considerations for implementation, risk, and risk management are offered in appendix I. Novel Case Studies for Advancing Integrated Design and Ecosystem Services | 77 5 ALIGNMENT WITH WORLD BANK PRIORITIES AND MANDATES Integrating aquaculture into landscapes and seascapes in World Bank client countries aligns with the Bank’s mission and strategic goals, in particular, the following seven: (i) Ending Extreme Poverty and Boosting Shared Prosperity Restorative aquaculture has tangible economic and livelihood benefits, particularly in LMICs such as Sri Lanka, Senegal, and Guinea. Promoting sustainable aquaculture offers opportunities to create jobs and increase incomes and food security for vulnerable communities. For example: • Seaweed farming in Sri Lanka and oyster aquaculture in Senegal are viable sectors for economic growth, with the potential to generate employment and improve local livelihoods. • The focus on integrated aquaculture–agriculture systems in Guinea demonstrates how merging land- and sea-based production can enhance economic resilience and shared prosperity. Alignment with World Bank Priorities and Mandates | 79 (ii) Reducing High Inequality Focusing on community-led aquaculture initiatives and the inclusion of small-scale producers in value chains addresses inequality through better use of farm resources. By emphasizing locally available species and resources, this report promotes equitable access to economic opportunities and resources in rural areas. For instance: • Case studies demonstrate that community-led commercial aquaculture can distribute benefits more evenly among stakeholders. • This report highlights the critical role of capacity building and skill development in bridging knowledge gaps and enhancing access to resource, especially for women and marginalized groups in aquaculture-dependent communities. (iii) Reducing the Global Carbon Footprint Restorative aquaculture is positioned as NbS to mitigate climate change through carbon sequestration and nutrient reduction in coastal waters. The report highlights: • The role of seaweed and oyster aquaculture in sequestering carbon, improving water quality, and mitigating climate change, thus contributing to global climate commitments such as the Paris Agreement • Case studies showing significant CO2 reductions, such as Sri Lanka’s potential to offset 2,080 tonnes of CO2 annually over a 10 square kilometer seaweed farming area • The combination of aquaculture and mangrove conservation in Guinea, which could prevent emissions of 1 million to 6 million tonnes of CO2 over 25 years (iv) Enhancing Climate Resilience Restorative aquaculture plays a significant role in strengthening climate resilience through • Climate-adaptive farming systems such as seaweed aquaculture in Belize, which mitigates the impacts of rising sea surface temperatures • Integrated landscape-scale planning in Guinea, which addresses cumulative impacts such as overfishing, mangrove loss, and biodiversity decline (v) Preserving the Earth’s Ecosystems As a contributor to biodiversity enhancement and ecosystem health, aquaculture can be a major factor in the preservation of the earth’s ecosystems. For example: • Oyster aquaculture in Senegal provides habitat for fish and other fauna, supporting biodiversity • Integrated aquaculture in Guinea combines production with mangrove restoration, yielding significant benefits for ecosystem health and climate change mitigation • By advocating for aquaculture practices that restore ecosystems—such as mangrove rehabilitation and fish habitat enhancement—this report supports the World Bank’s biodiversity conservation goals and the Global Biodiversity Framework. 80 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE (vi) Addressing Food and Nutrition Insecurity With food security identified as a World Bank priority, particularly in light of climate change and population growth, aquaculture’s focus on sustainable blue foods aligns with this mandate by • Underscoring the potential of aquaculture to provide nutrient-rich food with a smaller environmental footprint than traditional agriculture • Emphasizing species such as seaweed and bivalves that are rich in essential micronutrients, which supports the Bank’s efforts to combat malnutrition and enhance dietary diversity in LMICs • Offering examples of integrated aquaculture–agriculture models that enhance food production and nutritional outcomes in food-insecure regions (vii) Expanding Access to Water, Sanitation, and Hygiene Although not a primary focus, restorative aquaculture indirectly supports improved water quality. For example: • Oyster aquaculture in Senegal helps reduce excess nutrients in coastal waters, improving water quality. • Seaweed farming in Sri Lanka can enhance water quality by absorbing pollutants and excess nutrients. Summary A comprehensive framework for advancing restorative aquaculture aligns closely with World Bank strategic priorities. By addressing the Bank’s vision “to create a world free of poverty on a livable planet,” aquaculture delivers practical, evidence-based solutions with the potential for scalable, transformative impact. Its focus on LMICs, inclusive growth, and nature-based approaches underscores its relevance as a resource for promoting sustainable development and achieving global environmental and economic goals. Alignment with World Bank Priorities and Mandates | 81 TABLE 16: Decision-making matrix for potential financing mechanisms in Guinea Municipal Joint Public- revenue International Domestic Crediting Potentially Private Concessional venture Contract private and general government Offsets and trading viable? capital finance shared farming partnership general bonds funds schemes equity bonds Capital needs Project requires upfront capital Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ Project requires ongoing funding Y ✓ ✓ ✓ ✓ ✓ ✓ Ecosystem goods and services Market goods are produced Y ✓ ✓ ✓ ✓ ✓ ✓ ✓ Local public goods are provided (for example, water quality Y ✓ ✓ ✓ ✓ ✓ improvements) Public goods are provided at a local scale but connected to the global level, or targets are provided (for example, Y ✓ greenhouse gas emission reduction, climate adaptation, biodiversity benefits) Farmer has effective property 82 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Y ✓ ✓ ✓ ✓ rights for benefit produced Farmer can use a contribution N X X mechanism to raise public funds* Farmer at high risk of failure or Y ✓ ✓ loan default Note: Y and N indicate whether or not all conditions relevant to a finance mechanism are likely to be met for the case study, sector, and country, making this approach potentially viable. Specific conditions that are likely to be met are indicated in green; conditions not likely to be met are indicated in red. * Condition may be present only occasionally, e.g., domestic government funds, and is not relevant to all instances of aquaculture. SUMMARY AND CONCLUSIONS Food systems that are sustainable and can support adaptation to climate change and nature repair are urgently needed. Appropriately designed and sited aquaculture can provide ecosystem services, making it an important opportunity to advance regenerative food production. Low-trophic-level species such as seaweed and bivalves and integrated farming systems such as co-culture and IMTA will be especially important to advancing a restorative industry because these species and farming systems are most effective in supporting climate adaptation, biodiversity recovery and enhancement, and associated community outcomes. Frameworks exist to measure, quantify, and adaptively manage aquaculture practices to provide ecosystem services, including frameworks for restorative aquaculture and NbS. If they are widely applied, these frameworks could increase market and non-market recognition of these ecosystem benefits and of the industry, thereby assisting in scaling these approaches. A range of financing mechanisms are available to encourage and mainstream aquaculture ecosystem services. But important approaches in PES such as crediting and trading methodologies for ecosystem services, such as carbon and biodiversity, are not yet available to aquaculture, and greater support is needed to facilitate their development. Until these methodologies are developed, financing approaches that could presently be used to incentivize nature-positive activities from the farm to the national or regional scale include conventional finance mechanisms such as concessional financing and loans, but also more-ambitious, wider-reaching approaches such as appropriately structured green and blue bonds. Poorly designed and implemented financing approaches can exacerbate inequalities in investment and development opportunities. Large-scale producers benefit from established capital access and market linkages, whereas small- scale and informal producers face barriers such as limited collateral and higher perceived risk. The development of an aquaculture-specific decision-making matrix (table 7) that highlights how financing mechanisms for ecosystem services in aquaculture—ranging from conservation finance to industry-centered incentives—must be tailored to the producer scale has assisted in the development of a structured, context-dependent approach to choosing which financing mechanisms may be viable in this evaluation. Adopting a differentiated approach that considers the specific needs and capacities of various producer types is crucial to ensuring that financing for sustainable aquaculture is both inclusive and effective for all stakeholders. Sustainable development of low-trophic-level native species aquaculture in Guinea, Senegal, and Sri Lanka would increase production of valuable blue foods and support biodiversity and climate resilience through direct ecosystem services and improved ecosystem health. The countries will all face certain shared challenges, such as the need to support development throughout the value chain and to train and attract more skilled and knowledgeable workers. But they will also face unique challenges, such as the need for specific kinds of research, infrastructure, and capacity development, and challenges related to different climate conditions and species types. Within the context of aquaculture providing ecosystem services, the practices, techniques, and knowledge that arise from addressing these challenges may be transferable to other country environments where aquaculture development Summary and Conclusions | 85 provides an important opportunity to increase the production of blue foods while responding to climate change and biodiversity loss. In the case study countries and in others, the development of ecosystem service–centered aquaculture industries could build on lessons from large, well-established sectors and, if successful, could in turn be positioned as exemplars of establishing and advancing regenerative aquatic food systems in nascent and emerging sectors. To ensure that these developments proceed in an evidence-based, equitable way, investment should be made in detailed, on-the- ground assessment of native species suitability, farming system development, socioeconomic benefits and risks, and the most appropriate financing approaches to achieve systematic development of a restorative aquaculture industry. At the policy level, recognition for blue foods and the benefits of sustainable aquaculture in achieving global targets is increasing. This means that investment in restorative aquaculture sectors and practices is timely. 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Resources for Guiding the Design, Monitoring, and Evaluation of Ecosystem Services from Aquaculture TABLE A.1: Key resources for guiding the design, monitoring, and evaluation of ecosystem services from aquaculture Concept Resource type Reference Principles for farming TNC, 2021 Restorative Science paper—examples of restorative aquaculture Alleway et al., 2023 aquaculture Monitoring and evaluation framework (for example, TNC, 2024a report, indicators, metrics, methods) Ecosystem Technical guidance and concept report FAO, 2010 approach to Technical guidance, how to implement EAA FAO, 2021b aquaculture Review of technical guidance and recommendations for (EAA) Brugère et al., 2019 improvement Technical report OECD, 2010 Integrated Technical report and concept document Soto, 2009 multitrophic Concept paper Troell et al., 2009 aquaculture (IMTA) Review paper—operations Buck et al., 2018 Review paper—economics Knowler et al., 2020 Concept report and criteria IUCN, 2020a Technical report and implementation guidance IUCN, 2020b Nature-based solutions (NbS) Self-assessment tool (online) IUCN, 2020c Le Gouvello, Brugere, and Simard, Science paper—examples of NbS 2022; Le Gouvello et al., 2023 104 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Appendix B. Structure, Function, and Challenges of Integrated Multitrophic Aquaculture Integrated aquaculture and integrated multitrophic aquaculture (IMTA) are important methods of increasing the sustainability of aquaculture practices. They do not typically emphasize provision of ecosystem services to benefit the broader environment, such as enhancing biodiversity by providing habitat. Rather they take a concerted, managed approach to mitigating the potentially harmful impacts of certain aquaculture practices and thereby have a direct ecological benefit that markets and consumers can embrace (Knowler et al., 2020). In addition, various shellfish and seaweed species absorb nitrogen and other chemical nutrients released through finfish waste, maximizing the flow of nutrients throughout the system. This can increase overall profits and make the system more resilient in the face of certain risks, such as severe weather events and market variability, that affect one but not all species cultured at the site (Ridler et al., 2007). However, because IMTA typically involves multiple trophic levels and, therefore, different growing equipment, it can also present a more challenging operational setting and require a complex farming system to implement than conventional aquaculture. This means that, although this system is a logical choice for sustainable aquaculture, the practicalities of establishing a true IMTA site can be challenging. For example, over the last several years, Fisheries and Oceans Canada has invested extensively in research and development to support IMTA in Canada’s marine waters. This has highlighted the need for a concerted, coordinated approach to IMTA development and the formation of the Canadian Integrated Multi-Trophic Aquaculture Network (CIMTAN), involving eight universities situated near six Fisheries and Oceans Canada locations, and established under the Natural Sciences and Engineering Research Council Strategic Network Grants program (DFO, 2013). And in Europe, BLUEBOOST (SBEP, n.d.), a multipartner research consortium, invested in IMTA in 2024 to advance the culturing of low-trophic species and IMTA. These R&D initiatives are multi-million-dollar investments. Simpler models of integrated aquaculture are more common and may be more readily implemented in countries where there is less existing aquaculture capacity, for example, where hatcheries, maritime operations, and logistics do not yet exist or are not widespread. Those simpler, more common approaches include polyculture of carp in freshwater environments, rice–fish culture, multi-species culture of shellfish (for example, oysters and clams), and co-culture of seaweed and shellfish. Appendices | 105 Appendix C. Criteria for Nature-Based Solutions and Aquaculture-Based Examples TABLE C.1: Eight criteria of the International Union for Conservation of Nature Global Standard for Nature-Based Solutions Criteria Indicators 1.1 The most pressing societal challenge(s) for rights-holders and beneficiaries are Criterion 1: NbS effectively prioritized address societal challenges 1.2 The societal challenge(s) addressed are clearly understood and documented (societal challenges) 1.3 Human well-being outcomes arising from the NbS are identified, benchmarked and periodically assessed 2.1 The design of the NbS recognizes and responds to interactions between the economy, society and ecosystems Criterion 2: Design of NbS 2.2 The design of the NbS is integrated with other complementary interventions informed by scale (design at and seeks synergies across sectors scale) 2.3 The design of the NbS incorporates risk identification and risk management beyond the intervention site 3.1 The NbS actions directly respond to evidence-based assessment of the current state of the ecosystem and prevailing drivers of degradation and loss Criterion 3: NbS result in 3.2 Clear and measurable biodiversity conservation outcomes are identified, a net gain to biodiversity bench- marked and periodically assessed and ecosystem integrity 3.3 Monitoring includes periodic assessments of unintended adverse (biodiversity net gain) consequences on nature arising from the NbS 3.4 Opportunities to enhance ecosystem integrity and connectivity are identified and incorporated into the NbS strategy 4.1 The direct and indirect benefits and costs associated with the NbS, who pays and who benefits, are identified and documented 4.2 A cost-effectiveness study is provided to support the choice of NbS including Criterion 4: NbS are the likely impact of any relevant regulations and subsidies economically viable 4.3 The effectiveness of the NbS design is justified against available alternative (economic feasibility) solutions, taking into account any associated externalities 4.4 NbS design considers a portfolio of resourcing options such as market- based, public sector, voluntary commitments and actions to support regulatory compliance (Table Continued) 106 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE TABLE C.1: Continued Criteria Indicators 5.1 A defined and fully agreed upon feedback and grievance resolution mechanism is available to all stakeholders before an NbS intervention is initiated 5.2 Participation is based on mutual respect and equality, regardless of gender, age or social status, and upholds the right of Indigenous Peoples to Free, Prior Criterion 5: NbS are based and Informed Consent (FPIC) on inclusive, transparent, 5.3 Stakeholders who are directly and indirectly affected by the NbS have been and empowering governance identified and involved in all processes of the NbS intervention processes (inclusive governance) 5.4 Decision-making processes document and respond to the rights and interests of all participating and affected stakeholders 5.5 Where the scale of the NbS extends beyond jurisdictional boundaries, mechanisms are established to enable joint decision-making of the stakeholders in the affected jurisdictions Criterion 6: NbS equitably 6.1 The potential costs and benefits of associated trade-offs of the NbS balance trade-offs between intervention are explicitly acknowledged and inform safeguards and any the achievement of their appropriate corrective actions primary goal(s) and the 6.2 The rights, usage of and access to land and resources, along with the continued provision of responsibilities of different stakeholders, are acknowledged and respected multiple benefits (balance 6.3 The established safeguards are periodically reviewed to ensure that mutually trade-offs) agreed trade-off limits are respected and do not destabilize the entire NbS 7.1 A NbS strategy is established and used as a basis for regular monitoring and evaluation of the intervention Criterion 7: NbS are managed 7.2 A monitoring and evaluation plan is developed and implemented throughout adaptively, based on evidence the intervention lifecycle (adaptive management) 7.3 A framework for iterative learning that enables adaptive management is applied throughout the intervention lifecycle 8.1 The NbS design, implementation and lessons learnt are shared to trigger Criterion 8: NbS transformative change are sustainable and 8.2 The NbS informs and enhances facilitating policy and regulation frameworks mainstreamed within an to support its uptake and mainstreaming appropriate jurisdictional context (sustainability and 8.3 Where relevant, the NbS contributes to national and global targets for human mainstreaming) well-being, climate change, biodiversity and human rights, including the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) Source: IUCN (2020a) Note: Example analysis and actions according to indicators identified in Le Gouvello et al. (2023). Appendices | 107 Examples of Ecosystem Services Linked to NbS The IUCN Global Standard for NbS highlights the importance of using NbS to address societal challenges. It provides an operational framework for deploying ecosystem-based approaches, including restorative aquaculture practices and an ecosystem approach to aquaculture (EAA). The emphasis on actions to protect and restore nature in response to societal challenges means that benefits to human well-being and biodiversity must be considered simultaneously. Cases of Aquaculture Assessed Against the Global Standard An assessment of seaweed farming in marine conservation areas of Tanzania against the IUCN Global Standard for NbS revealed that seaweed farming in Zanzibar may be consistent with many of the objectives and criteria of nature-based assets, including the provision of income to coastal communities, and may contribute to the general management framework of marine conservation areas and the blue economy strategy (Le Gouvello, 2020). But negative environmental impacts from farming on surrounding habitats continue to occur, including overstocking of farmed species and equipment; trampling, which has especially affected seagrass beds; and greater prevalence of diseases and epiphytes (Le Gouvello, Brugere, and Simard, 2022; Le Gouvello et al., 2023; Msuya et al., 2013). This resulted in an overall assessment of adherence to the Global Standard of partial or insufficient for all eight criteria. (Adherence to the criteria are assessed as either insufficient, partial, adequate, or strong; Le Gouvello, Brugere, and Simard, 2022; Le Gouvello et al., 2023.) Explicitly considering seaweed aquaculture as a potential NBS helped to reveal shortcomings in the ability of seaweed aquaculture to adhere to the Global Standard, particularly in relation to marine biodiversity, socioeconomic development, and governance. These shortcomings were largely related to the sector’s incapacity to respond to negative environmental effects from farming and make the necessary changes to mitigate these impacts, particularly damage to seagrasses from a high degree of overlapping infrastructure and physical activity (Le Gouvello, Brugere, and Simard, 2022; Le Gouvello et al., 2023). Another example of aquaculture activities assessed by the Global Standard is integrated shrimp–mangrove culture in Indonesia, specifically Selva shrimp in the Kalimantan Mangrove Shrimp Project in the Sesayap River Delta. Assessment of this project identified approaches and practices that adhere partially or adequately to most of the Global Standard criteria (Le Gouvello, Brugere, and Simard, 2022; Le Gouvello et al., 2023), including the avoidance of supplementary feed, fertilizers, or antibiotics. This project’s strong attributes include adherence to the standards expected for societal challenges, economic feasibility, and widespread use of sustainable practices. However, because this approach is in its early stages, this may limit the quality and precision of the data available for this assessment. For example, although striving to eliminate the need for supplementary feeding in shrimp aquaculture is important, the viability of this approach is variable either because of the need to maintain lower stocking densities (and therefore production outputs because of the limited availability of naturally occurring feed) (Johnston et al., 2022) or because the need to maintain mangrove habitats as a part of these systems can require a trade-off between the potential yield of shrimp and economic output (Ahmed et al, Thompson and Glaser, 2018; Jonell and Henriksson, 2015; Lai et al., 2022). To make these integrated shrimp–mangrove systems feasible and economically profitable, an additional source of financing for the benefits they bring to mangrove systems, biodiversity, or maintaining carbon stocks and sequestration may be needed. 108 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Appendix D. Analysis of True Pricing in Aquaculture The “true price” of a food is its market price, together with its social and environmental costs. (This applies just as well to nonfood products—think, for example, about the true price of blood diamonds, the true price of cotton produced by plantation slaves in the American South, or the true price of cigarettes produced by indentured, out-of-school child servants in Pakistan—but the present concern is food from aquaculture.) The idea behind the concept of true price is that the production of certain foods has hidden costs, and that those hidden costs are not reflected in the price the consumer ends up paying at the grocery store. Until those hidden social, human rights, and environmental costs are made more visible, consumers unknowingly underpay for certain products, and the unsustainability of their production ends up being hidden away from public view. The goal of the true pricing movement is not to make people pay more for food but to make the production of certain foods more sustainable by revealing what actually goes into creating the end product one buys at the supermarket. Although some economic activities may generate social or environmental benefits, the true pricing framework maintains that such positive externalities should not be used to offset the negative impacts. In other words, a product’s social and ecological benefits should not be subtracted from its hidden costs when calculating its “true price”—the full cost that includes environmental degradation, labor exploitation, and other external harms not captured in the market price (Galgani et al., 2021). This stance ensures that all unsustainable practices are transparently accounted for, rather than masked by any associated benefits, ultimately encouraging more responsible and sustainable production. In aquaculture, true pricing implies effective ecologically sustainable development and compliance that ensures no environmental harm and equitable local labor laws and standards. At the least, effective management measures (such as environmental safeguards, habitat protection, and efficient resource use across the supply chain) will mitigate the negative impacts that create a true price gap. Because aquaculture supply chains can be long and complex, requiring multiple sectors to have input into production, it is foreseeable that some of the negative effects associated with aquaculture will be generated by actors other than farmers. This means that a coordinated, cross-sectoral approach to mitigating negative externalities may be required. For example, a farmer may need to work with feed suppliers to urge them to address labor and environmental concerns in their production of feed, because, if not, then the farmer will need to shoulder this burden and ultimately absorb it as part of the total, or true, price of the feed. With greater awareness of true pricing as an approach, governments and markets may work with consumers to create preferences for products that have narrower market-price-to-true-price gaps. But this higher standard of product could, at least in the short or medium term, marginalize smaller, less-resourced aquaculture businesses and limit their market access because it typically requires capital to switch to producing environmentally sustainable foods. Consequently, true pricing as it currently stands could favor well-established sectors and companies that have the resources and capacity to address costs and the market position to capitalize on creating the target product. This would be valuable for aquaculture sectors in some regions, but there is a risk that it could marginalize those with less capacity to respond or that do not have a supporting regulatory environment (to create a transparent and effective cost response). How this will apply to varied aquaculture and seafood products, with their disparate, complex, and lengthy value chains, is not altogether apparent or easy to predict. Also, although the structural mechanism in true pricing may be a good way to account for basic universal rights for consumers and workers in aquaculture, its applicability to this industry and, in particular, to the equitable, sustainable distribution of benefits, has not been tested. To ensure that businesses and communities in low- and middle-income countries can benefit from this approach, two immediate needs are clear: First, the market incentives (for example, premiums, certifications, or subsidies) must directly support aquaculture producers who have less capacity to finance Appendices | 109 the production adjustments they need to make to bridge the true price gap; and, second, consumers must place roughly equal value on comparable products from different geographical areas rather than, for example, favoring seafood farmed in one country based purely on the perception that if it comes from there, then it must have better sustainability credentials. To create this responsive environment, national governments must ensure an effective regulatory and compliance environment. Nongovernment certification schemes could play a support role in verifying the sustainability of specific systems, species, and companies. They could also encourage and support seafood markets and value chains to prioritize equitable purchasing of products. Valuable next steps in true pricing will be to identify the market actors that should and can pay for the negative effects of externalities in low- and middle-income countries, and to gauge the interest of these actors in using true pricing as an accounting mechanism. 110 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Appendix E. Financing Approaches Employed in Aquatic Sectors that Could Be Replicated in Conservation-Based Aquaculture TABLE E.1: Financing approaches employed in aquatic sectors with potential for replication in conservation-based aquaculture Financing mechanism and Is it still occurring? Resources and documents where applied If not, why? Nutrient credits and trading World Resources Institute, comparison of programs Chesapeake Bay Watershed Yes in the Chesapeake Bay European shellfish production (currently theoretical, under Maryland Water Quality Trading Program Not available development) Carbon credits and trading Italy (brackish and lagoon finfish EuroChoices, voluntary carbon market description TBC aquaculture) EuroChoices, voluntary carbon market description Japan (seaweed aquaculture) TBC Urchinomics, kelp restoration credits for blue carbon EuroChoices, voluntary carbon market description Netherlands (seaweed Seaweed sponsorship and certificates (non-credited, aquaculture but linked to free market contributions) TBC agriculture offsetting) The Seaweed Company (also Canopy Blue in Australia) Plan Vivo-Mikoko Pamoja, community-led blue carbon credit mangrove conservation and restoration Kenya (mangrove restoration), project in Gazi Bay, Kenya Yes Gazi Bay Keys to successful blue carbon projects: Lessons from global case studies Payments for ecosystem services State of Maryland law requiring the establishment Maryland, United States of a pilot program for incentives paid to oyster In development aquaculture farmers for restorative benefits Corporate and social investment North Star Program announcement by Walmart, Shrimp aquaculture improvement outlining partnership with Omarsa, | Skretting, and Yes program, Ecuador TNC to source and sell more environmentally friendly shrimp | SeafoodSource (Table Continued) Appendices | 111 TABLE E.1: Continued Financing mechanism and Is it still occurring? Resources and documents where applied If not, why? Price premiums associated with fair price structuring (e.g., the Fair Price Initiative) Natural Climate Solutions Alliance, Kasigau Corridor REDD+ Kenya (wildlife premium Enhancing Conservation, Ecosystem Services, Yes, as of 2023 mechanism), Kasigau Corridor and Local Livelihoods through a Wildlife Premium Mechanism Madre de Dios Amazon REDD Project Peru (wildlife premium Enhancing Conservation, Ecosystem Services, mechanism), Madre de Dios Likely and Local Livelihoods through a Wildlife Premium corridor Mechanism Emission Reductions Program for Addressing Drivers of Deforestation and Forest Degradation: An Insight Nepal and India (wildlife premium from the Terai Arc Landscape in Southern Nepal Yes mechanism), Terai Arc Landscape Enhancing Conservation, Ecosystem Services, and Local Livelihoods through a Wildlife Premium Mechanism Vietnam (markets and SNV Netherlands Development Organization, Unclear mangroves), Mekong Delta Mangroves and Markets shrimp model Debt for nature US Department of Agriculture, debt for nature in farm United States (agriculture) Yes services Site-specific concessional financing (e.g., low-interest loans, insurance) Australia (fisheries and New South Wales, Australia, Rural Assistance Yes aquaculture—low-interest loans) Authority, low-interest loans Kazakhstan (renewable energy) World Bank concessional financing Unclear United States (fisheries and National Oceanic and Atmospheric Administration Yes aquaculture—fixed-rate loans) (NOAA), fixed-rate industry loans Conservation trust funds Mini case studies across Mexico, International Institute for Environment and Bangladesh, Belize, Bhutan, Development, A Review of Conservation Trust Funds Cameroon, the Caribbean, Central for Sustainable Marine Resources Management Likely African Republic, Guatemala- Conservation Finance Alliance, Trust Fund Risk Honduras, Kiribati, Mauritania, Assessment Mexico, Republic of Congo 112 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Appendix F. Methodology of the Aquaculture Conservation Financing Decision-Making Matrix The aquaculture conservation financing matrix was developed in three steps. Step 1. Identifying Potential Financing Mechanisms Potential financing mechanisms and types of aquabusinesses in the World Bank Aquabusiness Investment Guide were considered, and the type of investment, financing, or business relationship most suitable to delivering finance was identified (table 1; World Bank, 2024a). Green or conservation financing approaches that could be relevant to aquaculture, such as municipal bonds, debt-for-nature swaps, offsets, and disaster risk insurance, were identified (table 1; Plantinga et al., 2024). These were classified into categories of financing approaches using categorization and definitions from Plantinga et al. (2024) (table 7 in the main report). Step 2. Identifying Conditions Likely to Influence the Viability of the Mechanism Taking a structured, evidence-based approach to identifying potential financing mechanisms and determining which are likely to be viable will avoid pursuing poorly suited or potentially harmful approaches. For each classification and mechanism, there are conditions that a project or initiative should satisfy for that financing instrument to be viable, such as whether it requires upfront capital, ongoing investment, or both. These conditions were analyzed for each financing approach, revealing that certain mechanisms have specific limitations—for instance, international bonds and grants typically cannot support projects requiring continuous funding, while instruments like carbon-crediting schemes, concessional finance, or contract farming can accommodate this need (see table 8 in the main report). Step 3. Discovering and Assessing Country-Scale Viability Based on Case Studies The draft matrix was used to test and refine these conditions and make a preliminary consideration of potential financing approaches for aquaculture in novel case studies of ecosystem services. In these case studies, the status of the proposed activity, the policy, governance, and investment in the geography, and the needs physical, political, and socioeconomic setting of each study location, were considered together with the requirements for effectively implementing the practice, were considered such as technical capacity, stakeholder engagement, funding mechanisms, and regulatory support. This provided a clearer picture of the type of financing that is likely to be the most effective in increasing the success and ecological/social benefits of restorative or nature-based aquaculture activities, and highlighted the most important mechanisms to assess and develop (see case studies in part 4 of this report). Appendices | 113 Appendix G. Implementing Integrated Aquaculture in Sri Lanka Current and Future Environmental and Social Conditions The impacts of climate change are expected to affect Sri Lanka drastically, particularly in coastal areas. A 20- to 58-centimeter rise in sea level is expected by 2060, threatening 25 percent of Sri Lanka’s population (USAID, 2018). National food security will likely be threatened by a rise in ocean temperatures of 0.8°C to 2°C by 2060, changing precipitation patterns, and an increase in the frequency and severity of extreme weather events (USAID, 2018). The combination of overfishing, species range shifts, and biodiversity losses will negatively impact capture fisheries and threaten national food security and coastal livelihoods. Seafood makes up approximately half of Sri Lankans’ animal protein intake, three times the global average, with high domestic demand for these products, and nearly 250,000 families making their living from coastal and offshore fishing (USAID, 2018). The aquatic environment in Sri Lanka also currently faces several systemic challenges, particularly in the coastal zone, including overfishing, coastal erosion, pollution, mangrove deforestation, and degradation of tidal marsh (Coast Conservation and Coastal Resource Management Department, 2024. Several natural factors (for example, extreme wave and weather events, sea level rise, and coastal vegetation loss), many of which are exacerbated by a changing climate and underpinned by stressors such as sand mining, coastal development, and dredging, drive coastal erosion in Sri Lanka. Coastal pollution is largely attributable to agricultural runoff and expansion of shrimp pond farming (especially in the Northwestern Province), which discharges high loads of effluents into coastal waters. Development of shrimp aquaculture is also threatening mangrove and tidal marsh habitats, particularly in the Northern and Western provinces (Coast Conservation and Coastal Resource Management Department, 2024). Coastal marine ecosystems in Sri Lanka, which occur wholly within the Bay of Bengal Large Marine Ecosystem, are characterized by a discernible continental shelf and an extensive, offshore, exposed ocean area, with 866,501 hectares of marine ecosystem within 0 to 10 meters of mean high water (1.6 percent of Sri Lanka’s exclusive economic zone (EEZ)), 1,138,595 hectares within 10–30 meters (2.1 percent of the EEZ), and 415,858 hectares within 30–50 meters (0.8 percent of the EEZ) (map G.1). Seagrass habitat, mangroves, and tidal flats are ubiquitous. This means that, in many locations, but particularly in the northern and southwestern regions, activities like the placement of fish cages, ponds, and farming infrastructure must take these habitats into account during planning and management if such aquaculture practices are close to or overlap these habitats (map G1). Modeling finfish and bivalve mariculture areas indicates good potential growing conditions, with an estimated 23,621 km2 and 4,818 km2, respectively, considered highly suitable (Gentry et al., 2017). As a result, it may be possible to use approximately 0.1 percent of the country’s EEZ to supply domestic seafood consumption from finfish mariculture and 0.2 percent from bivalve mariculture (Gentry et al., 2017). Global modeling of the suitable area for seaweed farming suggests that the country may be able to utilize less than 10 percent of its Exclusive Economic Zone (EEZ) (Liu et al., 2023). This limited potential is likely because much of the EEZ consists of deeper, and more waters, which create operational challenge difficulties for seaweed farming. For all sectors, more detailed, high-resolution suitability analysis should be undertaken to allow multiple criteria (ecological, social, and economic) to be considered and the most appropriate and viable sites for farming to be selected. 114 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE MAP G.1: Mangrove and seagrass distribution along Sri Lanka’s Coast and key coastal depth contour classifications Appendices | 115 Key Challenges and Risks Ensuring Sustainable Practices in Nearshore Aquaculture The exposed ocean environment, narrow coastal shelf area, and escalating threat of climate impacts, including an increase in the frequency of severe weather events, may make offshore or exposed aquaculture activities technically challenging or require significant additional infrastructure. A nearshore approach to seaweed farming may be needed. Nearshore areas often require fewer resources for infrastructure and maintenance (for example, they may not require boats). But they can also introduce unique or cumulative negative environmental impacts, including trampling and shading of sensitive habitats such as seagrasses. These harmful effects are well known and, in other places where they have presented a challenge to the sustainability of the industry, are being addressed through a concerted approach to identifying, communicating, and training to ensure best practice. For example, the growth of seaweed aquaculture in Tanzania has contributed to environmental damage that is being tackled through adapted farming approaches that can better ensure the sector’s sustainability (box 1 in the main report). In Sri Lanka, best practices that have been applied elsewhere, such as in Tanzania, or are now being developed to reduce harmful impacts on wild habitats, could be employed to support sustainable development. Mitigating the risks of environmental damage is a condition for providing ecosystem services and environmental benefits, because benefits cannot be provided if they are accompanied by damage elsewhere. Adapting to the Threats and Impacts of Climate Change • In shallow waters, higher surface temperatures can decrease productivity by increasing seaweed die-off and the prevalence of diseases such as ice-ice, which arises when changes in temperature, salinity, and light stress seaweed, which attracts bacteria (Ward et al., 2022). • Equipment commonly used in seaweed farming can be adapted to reduce these threats. For example, in Belize, seaweed farmers have been testing a submerged seaweed array that can be lowered and raised in the water in response to environmental conditions (box 2). A similar seaweed array could be tested in Sri Lanka to support development of the sector in a way that will be resilient amid the effects of climate impacts and variability. Establishing Sustainable Supply and Value Chains • In addition to in-water operational considerations, supporting mechanisms throughout the production cycle and value chain have not yet been developed for seaweed aquaculture, which would require pivoting or expanding similar aquaculture facilities or constructing new facilities. For example, additional processing and transport facilities will likely be required to dry larger quantities of seaweed and provide access to markets. • Technical surveillance for disease, the genetic integrity of seaweed stock, and the quality of product (in the water and during processing) will be required (Gamage, Senthuran, and Herath, 2021). Seaweed propagules for farming in tropical areas are 116 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE often taken from the wild and other farm sites, which can affect wild stocks or, over time, reduce the genetic integrity and diversity in farmed stock. Building Community Capacity Drawing on interviews of 20 key in-country persons, Galdolage et al. (2024) provide an important review and collation of the opportunities and challenges facing the aquaculture industry in Sri Lanka. Their assessment concludes that, in all sectors, the government should increase access to capital, ensure a steady supply of seed, and develop a regulatory framework that encourages best practices through increased investment (public and private), and prioritize the use of advanced technology and best management practices. This could be supported, in particular, by • Advocating for the adoption of global standards, such as the FAO Guidelines for Sustainable Aquaculture, along with its associated policy, administrative, regulatory, and planning frameworks, to support sustainable industry development. These standards include specifications for conserving aquatic biodiversity, managing genetic resources, ensuring sustainable seed supplies, and facilitating their use. • Supporting knowledge exchange with other researchers and government authorities, including through formal bilateral agreements • Implementing an effective capacity-development program to address known knowledge, technical, and operational limitations, such as strengthening research into the cultivation of native seaweed species, establishing seed banks, establishing biosecurity protocols, and developing post-harvest technologies (Gamage, Senthuran, and Herath, 2021). Considerations for Implementation Sri Lanka has a longstanding legislative and policy framework for managing the aquaculture industry that could be leveraged for the effective implementation of the proposed integrated approach. Beyond the country’s Fisheries and Aquatic Resources Act (Department of Fisheries and Aquatic Resources, 2016), which issues aquaculture licenses and regulates the operation of farming operations, the National Aquaculture Development Authority, established in 1998, is responsible for the growth and support of the industry through the preparation and implementation of aquaculture development and management plans (National Aquaculture Development Authority of Sri Lanka Act 1998). Under this directive, two of its main responsibilities are promoting environmental sustainability and biodiversity conservation within the industry, objectives that are well aligned with the ecosystem services approach. The Spring of the North presidential development program, aimed at rehabilitating war-torn areas of the country, could offer additional support to the industry, because aquaculture was deemed a high-priority sector (FAO, 2019). Although there is a framework to support and manage the ecosystem services approach, there are notable limitations in the government’s preparedness for effective implementation of new farming practices. According to the World Bank World Governance Indicators, government effectiveness and regulatory quality have both declined substantially over the past decade, particularly the latter. This is of particular concern with respect to the cultivation of algae (Ruff, Gentry, and Lester, 2020), particularly in nearshore areas, where coastal pollution can be more severe if not effectively managed. The FAO Guidelines for Sustainable Aquaculture provide definitive guidance on establishing and maintaining an effective regulatory regime for aquaculture across policy, administrative, regulatory, and planning frameworks. Implementing the GSA guidelines would provide a sufficiently robust and supportive environment for development of seaweed aquaculture in Sri Lanka. Appendices | 117 Beyond governance, there are also environmental and socioeconomic risks in the implementation of the ecosystem services approach. The increasing frequency and severity of extreme weather events threatens nearshore infrastructure and survival of farmed species. Although nearshore areas are more likely to benefit directly from seaweed farming through nutrient reduction, the severity of coastal erosion and coastal pollution from shrimp farms, agriculture, and commercial ports could limit production or overwhelm any expected benefits from seaweed farming. Another concern is the ability to scale up production to be commercially viable and environmentally effective. Currently, shrimp is the only commercial-scale aquaculture production in the country because there is limited understanding of the challenges involved in expanding other types of aquaculture production to commercial scale. The capacity to expand seaweed farming sustainably throughout the production chain will also influence the eventual impacts of CO2 emissions and whether seaweed farming can in fact be used to mitigate emissions from other sources, or whether farming becomes a net source itself. Greenhouse gas (GHG) emissions from seaweed farming are typically lower and less variable than from other sectors, but post-harvest processing activities can markedly increase emissions from the life cycle of production. From a synthesis of published studies, Jones et al. (2022) report GHG emissions in seaweed mariculture from upstream, on-farm, and downstream processes ranging from 11.4 to 28.2 kg (median 22 kg) of CO2 equivalent per tonne of seaweed produced. But once emissions from postharvest transport and processing are included, this could increase to 231 kg of CO2 equivalent per tonne unless appropriate mitigating strategies and targets for low or neutral carbon emissions in this stage of the lifecycle are also implemented. Assessment of Mechanisms to Finance Ecosystem Services Potentially viable financing mechanisms for development of ecosystem services from seaweed aquaculture in Sri  Lanka include public-private partnership, private capital, offsets, crediting and trading schemes, concessional finance, joint ventures and shared equity, and contract farming. A public-private partnership could provide upfront and ongoing funding to facilitate expansion of the seaweed aquaculture sector and to support the integration of seaweed culture into existing farm systems. Private capital could provide upfront financing to farmers, with investment returns realized through the production of seaweed for food, biostimulants, fertilizer, and aquafeed. Private capital could also be paired with offsets, crediting and trading schemes, concessional finance, joint ventures and shared equity, and contract farming opportunities to provide ongoing funding for ecosystem service generation. Considerations for Applying Financing Private capital: Private capital, on its own and in conjunction with a public partnership, might be difficult to secure given that the seaweed aquaculture sector is nascent and there has been a lack of commercial-scale aquaculture development for any species other than shrimp. But investors looking for substantive investment returns could be encouraged if the government is willing to cover losses from loan defaults. Domestic government funds could provide a direct capital injection into the seaweed aquaculture sector, although this approach would need to be paired with financing that provides ongoing funding, such as offsets, crediting and trading schemes, concessional finance, joint venture and shared equity, and contract farming. Offsets: Offsets could be a viable option given that sand mining, development, and dredging are exacerbating coastal erosion driven by climate impacts and contributing to nearshore pollution. Companies conducting these activities could be required to make compensation payments to a central pool that is spread across farmers, generating ecosystem 118 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE service benefits through seaweed aquaculture. The government’s ability to enforce these payment schemes would be critical to the application of this financing mechanism. This approach would also need to be paired with another finance mechanism that could provide upfront funding, such as concessional financing, joint ventures or shared equity, or contract farming. Carbon crediting and nutrient trading: These schemes have so far proven difficult to establish in marine industries (van den Burg et al., 2022). Further, the lack of commercial-scale production beyond shrimp in Sri Lanka suggests that seaweed production is likely several years away from generating the level of nutrient reduction or carbon sequestration that would be influential in a crediting and trading market and viable for farmers. Concessional finance: Concessional finance could provide loans at accessible rates to cover farm start-up costs, training, equipment for co-culture, and integrated multitrophic aquaculture of seaweed and other species. Joint venture and shared equity: These approaches could face problems similar to those of private capital outlined above, despite the investment emphasis on social and environmental benefits. Joint venture and shared equity are well suited to small- to medium-sized enterprises, but the seaweed aquaculture sector in Sri Lanka is still developing and might not be mature enough to encourage this type of financing. Contract farming: Given that Sri Lanka exports most of its seaweed and seaweed products to Europe, India, and other countries (Sumanarathna, 2024), contract farming could be a particularly suitable financing mechanism that can leverage these existing value chains to establish investment agreements between farmers and wholesalers or importers in international markets. Appendices | 119 Appendix H. Considerations for the Implementation of Integrated Aquaculture— Senegal Current and Future Environmental and Social Conditions Senegal faces severe climate risks in the form of droughts, floods, sea level rise, and coastal erosion, the last of which is likely to be exacerbated by sand mining and coastal development (Amara et al., 2019; GFDRR, 2011; USAID, 2024). Marine pollution is also a critical concern because most domestic wastewater is drained through open channels that flow directly into the ocean (Amara et al., 2019). In highly urbanized areas such as the capital, Dakar, sampling has found high metal concentrations in the edible tissue of marine organisms (Amara et al., 2019). In addition, pressure on Senegal’s fisheries has altered the trophic structure and composition of catches, particularly along the country’s northern coast, which has experienced declines in mean trophic level, biomass of high-trophic-level species, and species diversity (Ndour et al., 2014). An estimated 95 percent of people engaged in oyster fishing are women (FAO 2022b). Oysters are supplied to local markets and provide a source of economic livelihood for coastal communities. Fish and seafood account for approximately 43 percent of the country’s animal protein intake—24 kg of fish per capita per year (FAO, 2022b). Food security is an increasing concern, for a variety of reasons, including inadequate access to food, inappropriate infant and childcare and feeding practices, poor hygiene and sanitation practices, and increasing impacts from climate change (WFP, 2024). Prior modeling of the potential suitable area of mariculture indicates that 4.7 percent of the country’s exclusive economic zone (EEZ) would supply the country’s current bivalve consumption and 0.1 to 0.2 percent from finfish farming (Gentry et al., 2017). This area includes an estimated 7,627 km2 suitable for bivalve farming and 14,266 km2 for finfish farming. Senegal also has a relatively high proportion of nearshore and subtidal areas compared to other West African countries: 341,072 hectares within 0 to 10 m (2.1 percent of the EEZ), 731,549 hectares within 10 to 30 m (4.6 percent of the EEZ), and 479,546 hectares within 30 to 50 m (3.0 percent of the EEZ) (map H.1). 120 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE MAP H.1: Mangrove and seagrass distribution along Senegal’s coast and key coastal depth contour classifications Appendices | 121 Key Challenges and Risks Mitigating Threats to Mangroves from Aquaculture Development • Mangrove forests in Senegal are widespread in areas of existing shellfish harvesting and are therefore likely areas of oyster farming for the native Crassostrea tulipa and the non-native Crassostrea gigas. • Oyster farming will likely also interact with seagrass habitats and tidal flats, which introduces the risk of damage to these habitats and to carbon storage if poor practices are applied (Alleway et al., forthcoming). Aquaculture practices that could reduce the likelihood and severity of direct physical disturbance include cultivation of oysters using rafts, although there remains a risk of disturbance from trampling if rafts are tended to at low tide or farmers walk repeatedly over mangrove and tidal flats. A key benefit that has been noted in the early stages of oyster aquaculture development near mangroves is that catching spat and cultivating oysters avoids the practice of cutting down mangroves to remove oysters, which occurs in oyster fishing when oysters cannot be readily removed from the tree (FAO, n.d.-b). Determining Effective Operating Models In addition to nearshore monoculture of oysters, possible viable operating models include co-culture of oysters with finfish or in a full integrated multitrophic aquaculture (IMTA) system. The extensive area of shallow shelf waters in states south of Dakar could, however, present a challenge to effective, sustainable models of finfish aquaculture and IMTA, because shallower waters may not support a large biomass of fed species, unless the facility can be purposefully designed to suit these conditions (for example, shallower net pens or cages). In this instance, farming species of detritivores— organisms that feed on dead organic matter—would also be required because they can consume solid waste from the net pens, as would farming species that remove suspended solids and dissolved organic nutrients (that is, full IMTA). Threats to Oyster Production from Climate Change and Pollution • Given the anticipated effects of climate change, including coastal erosion, which could be an average 0.5 to 2 m per year (Amara et al., 2019), and rising surface water temperatures and ocean acidification, which are expected to negatively affect fisheries, climatic impacts will likely threaten oyster production, requiring that a climate-smart approach be taken. • Ongoing impacts on coastal water quality from agricultural and land-based sources is a concern. These inputs can increase the risk of Escherichia coli and concentrations of heavy metals in bivalve meat. A wide range of biotoxins, pathogenic bacteria, and viruses can also be present in aquaculture products and must be removed before consumption (Martinez-Albores et al., 2020). Food safety standards and mitigating approaches must be developed and maintained in tandem with growth in production, particularly if consumption expands to raw product (as opposed to primarily cooked or dried). But food safety approaches can be implemented to lessen the risk of biotoxins and pathogens through the preemptive water-quality monitoring and sampling of oyster products, or through depuration (decontamination in clean water). Depuration, which expels pathogens, and high hydrostatic pressure treatment, which inactivates pathogens with minimal heating (Willer and Aldridge, 2020), make it safer to eat cooked as opposed to raw oysters. 122 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Considerations for Implementation Senegal’s aquaculture industry is growing faster than regional and world averages, suggesting potential for further development and diversification through strategic support (FAO, 2023a). Senegal has a well-established legislative framework that has the capacity to manage and support implementation of the proposed integrated approach. The country’s Code de l’Aquaculture (Aquaculture Code) provides a framework for permitting, managing, and regulating the industry and defines the role of the state in the sustainable development of the industry (Law No. 2022-06). These responsibilities include the establishment of training programs, promotion of sustainability, and overall supervision of industry activities. The extent to which these supportive initiatives and programs have been employed is unclear. But in addition to this framework, l’Agence Nationale de l’Aquaculture (National Aquaculture Agency), under the oversight of the Ministry of Fisheries, offers further government support for aquaculture development and has been credited with supporting aquaculture production since its establishment in 2010. The proposed ecosystem services approach aligns well with Senegal’s policy priorities. Senegal’s President Faye has prioritized food sovereignty as a policy objective since his March election (Marotte, 2024), and the government has been attempting to restore 200,000 hectares of mangroves (FAO, 2022b). But the ability to leverage these policy objectives for effective implementation of the proposed ecosystem services approach is unclear. For example, Senegal developed a national strategic plan for aquaculture development in 2001, but a lack of resources resulted in ineffective application (USDA, 2022). Although government effectiveness has improved over the past 10 years, according to the World Bank’s World Governance Indicators, Senegal’s regulatory quality has declined (World Bank, 2024b), a troubling trend given the importance of regulations to shellfish production (Ruff, Gentry, and Lester, 2020). This could limit the efficacy of implementing a sustainable approach to aquaculture, which would be required for the industry to provide ecosystem services with a restorative outcome. Demand for oysters in Senegal currently exceeds supply, presenting an economic opportunity for the proposed ecosystem service approach (FAO, 2022b). Senegal is part of FAO’s FISH4ACP program, which is providing technical and organizational support to increase the productivity and sustainability of Senegal’s oyster value chain, including farmed species. This initiative could prove important to encouraging broader market access to farmed oyster products because current production is aimed at high-income consumers in the capital, Dakar (USDA, 2022). Market access is a problem within Senegal’s broader aquaculture industry as well, with farmed fish generally more expensive than wild capture because of higher production costs (USDA, 2022). Although there is unmet demand for oyster products from high-income consumers, the extent of this supply gap is unclear, and the expansion of supply through the proposed ecosystem service approach could lead to a market mismatch if oysters are not priced affordably for a broader base of consumers. Wastewater pollution is also of potential concern with the proposed ecosystem service approach, and better understanding of the extent of nearshore pollution in non-urban areas where farms will be sited is needed. It is possible that ecosystem services can be generated in areas with high levels of water pollution through the cultivation of pearl oysters, which can provide environmental benefits through their high rates of water filtration, and economic benefits through pearl production without the food safety risks. Appendices | 123 Assessment of Mechanisms to Finance Ecosystem Services Possible financing mechanisms for development of ecosystem services from oyster aquaculture in Senegal include private capital, which could provide upfront funding to farmers, with investment returns realized through production of oysters for food and pearls, and offsets, crediting and trading schemes, concessional finance, joint venture and shared equity, and contract farming, which offer opportunities to obtain ongoing funding for ecosystem services. Considerations for Applying Financing Private capital: Oyster farm in Senegal are, particularly initially, likely to be smaller-scale, which could discourage private capital investors looking for substantial investment returns, because small-scale operations are less likely to achieve the kind of production volumes that ensure a return on investment. Offsets: Offsets could be a particularly viable option because sand mining and development are major drivers of coastal erosion in Senegal. Corporations participating in these activities could make compensation payments to a central pool that is spread across farmers, providing coastal protection directly through oyster aquaculture or indirectly using nondestructive culture practices in mangrove habitats. But this approach would need to be paired with another finance mechanism that could provide upfront funding, such as concessional financing, joint venture or shared equity, or contract farming. Crediting and trading: Carbon crediting and nutrient trading schemes have proven difficult to establish in marine spaces, with few examples of effective, enduring programs (van den Burg et al., 2022). For carbon crediting in particular, there is still substantial uncertainty regarding how to attribute sequestration accurately to aquaculture practices, even for species for which there is more knowledge of this potential benefit, such as seaweed (Hurd et al., 2022; Ricart et al., 2022). Concessional finance: Concessional finance could provide accessible finance to cover farm start-up costs, training, and equipment for more sustainable culture practices. Joint venture and shared equity and contract farming: Although the small scale of farming in Senegal might deter private capital investment, joint ventures or shared equity could be well suited to the country’s small to medium-sized enterprises, especially through impact investing, where positive environmental and social outcomes are the expected investment returns. Given the robust demand for oyster products and the higher value of aquaculture products compared to wild capture in Senegal, contract farming could be a useful financing mechanism because it can mitigate the risk of excess supply and facilitate access to regional and international markets. 124 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Appendix I. Considerations for Implementation of Integrated Aquaculture—Guinea Current and Future Environmental and Social Conditions Climate projections estimate a 1.1°C to 3°C increase in temperature in Guinea by 2060, a 0.4- to 0.7-meter rise in sea levels by 2100, and an increase in heavy rainfall events, with substantial impacts on Guinea’s fisheries, mangrove habitats, and water supplies (USAID, 2018) Guinea is a net exporter of fisheries products, but climate change, combined with a fisheries management framework that has been ineffective in managing exploitation of fisheries stock sustainably, threatens the livelihoods of 450,000 Guineans in the industry. With fish consumption accounting for 40 percent of animal protein in local diets, it also threatens food security (FAO, 2024b; USAID, 2018). In the coastal zone, mangroves provide critical habitat for biodiversity and for coastal protection from erosion, flooding, and severe weather events. Mangrove habitats in West Africa and Guinea are vital to fishery productivity, with a tendency throughout the country for fisheries near or on the coast to be more productive because of the nutrients that mangroves and riverine input provide (IBRD and World Bank, 2023). Forests extend along most of the coast and up to 40 km inland, and although large tracts remain intact, the areal extent of mangrove habitat has declined by more than 30 percent since the early 1980s, and mangrove trees continue to be widely used for wood for construction and fuel (IBRD and World Bank, 2023). Inland from these ecosystems, rice farming is extensive in coastal areas. Seasonal rice farms next to mangroves account for 23 percent of national rice production; “mangrove rice,” grown on approximately 78,000 hectares, supports the livelihoods of more than 50,000 rice farmers, mostly women (IBRD and World Bank, 2023). These rice fields capitalize on seasonal freshwater influx and use mangroves and bunds to protect the rice from sea water inundation (Diop et al., 2002). Offshore, the marine environment has a high proportion of shallow shelf environments. The Guinea Current Large Marine Ecosystem is one of the world’s most productive large marine ecosystems but also one of the most degraded (Chukwuone et al., 2009). Across all the main coastal depth classifications, 699,230 hectares of shallow-water marine ecosystems (for example, coral reefs and seagrass beds) are within 0 to 10 m of mean high water (6.8 percent of the total area of the exclusive economic zone [EEZ]), 1,564,359 hectares are within 10 to 30 m (15.3 percent of the EEZ), and 1,716,438 hectares are within 30 to 50 m (16.8 percent of the EEZ) (map I.1). Appendices | 125 MAP I.1: Mangrove and seagrass distribution along the Guinea Coast and major coastal depth classifications 126 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Key Challenges and Risks Avoiding Unsustainable Development and Increasing Cumulative Stress Although integrated approaches to food production and aquaculture promise high returns, the planning and implementation of aquaculture activities on a landscape or regional scale—coordinated across multiple sites or communities—is not common. An integrated approach will be most successful if it ensures measurable progress toward both local- and regional-scale mangrove conservation or recovery, rather than running the risk of exacerbating existing stressors. Stressors on coastal habitats in Guinea and climate change mean that unsustainable aquaculture development — rather than providing economic or environmental benefits, will instead degrade coastal habitats and communities, and further reduce their climate resilience. Because these ecosystems support coastal water quality and productivity, they are fundamental to reducing the environmental burden of farming in coastal areas and protecting coastal areas from sea level rise, coastal erosion, inundation and saline intrusion. Avoiding Mangrove Clearance • Clearing wild mangrove habitat to create or expand integrated farms should also be avoided because removing intact mangrove forest permanently eliminates their ecosystem services. Although new aquaculture systems may eventually provide some services, they cannot replace the full range of ecological functions performed by mature, undisturbed mangroves. • The ecosystem services generated by intact mangrove habitats are considerably greater than those that restored habitats generate. For example, up to 10 times as much carbon can be sequestered in intact mangrove forests as in restored forests. Additionally, clearing and replanting mangrove trees replaces continuous mangrove forests with smaller, isolated patches, which reduces the efficacy of this ecosystem in providing a nursery habitat for fish (Gilby et al., 2021; McSherry et al., 2023). Additionally, carbon sequestration rates in mangroves depend on site-specific characteristics. Once mangrove trees are disturbed, carbon stocks recover at highly variable rates (Lovelock et al., 2017). Developing Appropriate Species for Aquaculture • Current aquaculture production in Guinea comes from inland activities in freshwater systems. This means that species and cultivation methods that are appropriate for brackish and more saline inland waters (such as estuaries and lagoons) in coastal areas need to be identified and developed. • Grey mullet (Chelon bandialensis) and milkfish (Chanos chanos), both of which can be grown among and near mangroves, are both widely consumed finfish that may be possible to consider. Hybrid tilapia could also be resistant to higher salinity levels than species currently grown in the country; there are breeding and cultivation programs to support resilient strains of tilapia in other African countries. • Shrimp aquaculture is another approach communities could consider, although farming methods for native shrimp species have not yet been developed. Guinea shrimp (Holthuispenaeopsis atlantica) is currently widely exploited in fisheries in the Appendices | 127 Gulf of Guinea (Okpei, Aggrey-Fynn, and Okyere, 2020), but there is no history or prominent research supporting production of this species in an aquaculture setting, for example, hatchery production methods. Some research into the cultivation of the giant river prawn (Macrobrachium vollenhovenii) indicates that larval rearing in a hatchery is possible, but further work is needed to address challenges such as increasing their survival rates to the point where commercialization becomes possible (Akinwunmi, Bello Olusoji, and Sodamola, 2014). • Globally, the giant tiger prawn (Penaeus monodon) is one of the primary species used in aquaculture production and has a well-established base of science. But it is not native to West Africa, and although it is farmed elsewhere along the West African coast, it has not been found in Guinea. The introduction of non-native species into aquaculture can create significant negative environmental impacts that must be considered and mitigated (Kovalenko et al., 2021; Ojaveer et al., 2018). As a result, farming this species in the country may not be viable, and if viable, should be practiced only in closed-water farming systems such as ponds rather than integrated systems with a moderate or high degree of water exchange. In cultivating this species (as well as others), it is important to use only small amounts of feed, or even none, because the production of feed and the excess waste that results from its use can often be the leading negative environmental impact within the entire value chain (Gephart et al., 2021; Primavera, 2006). Securing and Building Markets • Approaches that leverage consumer and corporate interests to create enabling conditions for an integrated approach will be needed, particularly because many species that may be suitable for an integrated approach in coastal areas are not produced in the country. • Growth in market opportunities will require financial support to gain, sustain, and broaden market access. There are examples of market-based approaches that align with the rising consumer interest in and demand for sustainably sourced seafood, and direct finance toward interventions that support sustainable development. For example, consumer interest and demand are among the driving forces behind the development of an identifiably higher-sustainability offering from one of the world’s largest shrimp producing countries—Ecuador (box 5). Such examples provide confidence to retailers, producers, and other aquaculture stakeholders that investments in reducing the environmental impact of their products can lead to recognizable and marketable differences, making such products stand out in the marketplace. This creates a pathway to attract additional financing that is not reliant on public funding. As Guinea develops new sectors and products, it highlights how low-impact goods can be successfully positioned and valued in established markets. Ensuring Equitable Access, Opportunities, and Benefits • Increasing food, nutrition, and economic security through aquaculture, while maintaining equitable development, can be challenging. There is a risk that the development of new sectors and species will marginalize certain communities or community groups or exacerbate existing inequalities (Bennett et al., 2022; Tigchelaar et al., 2022). • Women’s involvement in rice farming could be at risk if aquaculture is developed at the expense of other industries, rather than by taking an integrated approach that enhances multiple aquaculture and agriculture sectors and outcomes. A thorough socioeconomic assessment that includes the collection of on-the-ground data and values-based information from local communities should be undertaken to fully understand the positive and potential negative effects of an integrated aquaculture– agriculture approach and of protecting and restoring mangrove trees. 128 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE Considerations for Implementation The growth rate of Guinea’s aquaculture industry exceeds subregional, regional, and world averages, indicating that there are likely opportunities to further develop the sector using an integrated approach (FAO, 2023b). Because the country is already a net exporter of fisheries products, there is potential for new culture species and systems to leverage the country’s already existing processing, transport, and fishery export infrastructure (FAO, 2024b). The country’s aquaculture industry is regulated and managed according to the Aquaculture Code and is further supported by the Framework Document for Fisheries and Aquaculture Policy, which is part of a national economic and social development strategy (Ministère des Pêches, de l’Aquaculture et de l’Economie Maritime, 2015) that outlines key strategies for the promotion of sustainable aquaculture development, including training and research through demonstration centers and capacity building in the form of professional organizations and institutional support (DOCPA, 2015), all important building blocks for industry growth (Ruff et al., 2019). Although the support outlined in the Document for Fisheries and Aquaculture Policy is promising, there are concerns regarding the Guinean government’s effectiveness and regulatory quality, both of which rank extremely low (16th percentile) in the World Bank World Governance Indicators (World Bank, 2024b). Production from Guinea’s fisheries sector has declined dramatically because of overexploitation facilitated by an inefficient management system (FAO, 2024b), which could indicate potential for regulatory and broader governance issues with the proposed ecosystem service approach. Since all of Guinea’s current aquaculture production is inland, brackish and coastal production will likely face operational and economic hurdles. These include establishing supply and logistics chains and infrastructure—hatcheries, cold storage, transport networks—particularly for shrimp, which is not yet cultivated in the country, along with creating a supporting value chain infrastructure, particularly regulatory, institutional, and service support, from the production stage all the way to market. As a net exporter of seafood products, the country can develop value chains for new products. Currently, it sends half of its exports to South Korea (FAO, 2024b). To diversify Guinea’s markets for shrimp products, a deeper understanding of demand in South Korea and in additional markets (including domestic and regional) is needed. Assessment of Mechanisms to Finance Ecosystem Services Potentially viable financing mechanisms for development of ecosystem services from oyster aquaculture in Guinea include public-private partnership, private capital, offsets, crediting and trading schemes, concessional finance, joint venture and shared equity, and contract farming. Public and private funds could also be used to catalyze other financing mechanisms that can provide ongoing funding, such as offsets, crediting and trading schemes, concessional finance, joint venture and shared equity, and contract farming opportunities. A public-private partnership could provide both the upfront and the ongoing funding to support integrated aquaculture and mangrove conservation and aquaculture sector expansion. Private capital could provide upfront financing to farmers, with investment returns realized through the production of fish and shrimp for food. Appendices | 129 Considerations for Applying Financing Private capital: On its own, or in conjunction with a public partnership, private capital may be difficult to secure given that coastal aquaculture is not currently practiced in the country, and the lack of experience and infrastructure for this sector casts uncertainty over the production potential (and as a result, the investment returns) of integrated aquaculture systems. Nevertheless, in the context of integrated systems that support conservation of mangrove habitat, directly (on site of the aquaculture facility) or indirectly (offsite of the aquaculture facility), initial private capital investment and investment returns could be supported through the generation of carbon credits from the conservation or restoration activity as opposed to or in addition to aquaculture production. Crediting/trading schemes: As a blue carbon habitat, mangroves are one of the few marine examples where crediting/trading schemes have been effective. The carbon credits generated by integrated aquaculture that protects mangrove habitats could be used to meet the investment returns in a public–private partnership or in a private capital agreement. This could be supported by • Encouraging engagement with a voluntary verified carbon standard such as that provided by Verra • Developing a national or regional regulated carbon-trading scheme • Combining multiple regulated carbon and biodiversity credits using a bundled approach (selling multiple credits from a single area), which would bring a higher return on project investment. Domestic government funds: Public financing could also be paired with a carbon crediting scheme to provide upfront funding. Although carbon crediting schemes can be complex and costly to establish and maintain, Guinea’s large expanse of mangroves—the largest in West Africa—presents a unique commercial proposition (Global Mangrove Alliance, 2024). Offsets: The potential for offsets as a financing mechanism is unclear. Because virgin mangrove forests provide greater ecosystem service benefits than restored forests, coastal development should be avoided in or near mangrove ecosystems, regardless of whether offsets are available. But in less ecologically critical areas, offsets could be a useful tool to further finance integrated aquaculture and mangrove conservation. Concessional finance: Finance provided at accessible rates could help cover farm start-up costs, training, and equipment for integrating aquaculture into agricultural or mangrove systems. But the lack of experience in, and established infrastructure for, coastal aquaculture could make it difficult to secure joint venture or shared equity financing. Contract farming: Contract farming could face similar problems without proof of product to entice investors. But consideration could be given to whether existing markets for Guinean seafood exports (especially South Korea) could be leveraged to sell the farmed version of their wild-capture products. This, of course, would depend on the sustained, effective development of integrated aquaculture with native species. 130 | REGENERATIVE AQUACULTURE: ENVIRONMENTAL AND ECONOMIC BENEFITS OF NATURE POSITIVE AQUACULTURE