In the coming days, governments will be convening for the third United Nations Ocean Conference to deliberate on the status of the health of the ocean, and how to care for marine ecosystems around the world. This is the third iteration and comes at a time of great stress on our marine ecosystems.

The draft text for consideration calls for market mechanisms to fill the finance gap that stands between the present day state of our ocean and the thriving ecosystems we need to sustain wellbeing in the Pacific. If this is agreed, it will drive the incorporation of marine ecosystems into carbon trading.

This comes off the back of a wave of market-based agreements that aim to put a price on ecosystem relationships over the last few years. In 2021, the International Civil Aviation Authority created a carbon trading scheme to offset international aviation growth. In 2022, the Kunming-Montreal Global Framework on Biodiversity made reference to biodiversity credits and green bonds as part of a blended finance approach to achieving the global biodiversity targets. At the end of last year the annual UN climate negotiations came to an agreement on a new carbon trading mechanism that covers emissions trading between governments globally.

These agreements are reflective of an international push for market-based approaches to address environmental harm. Governments, NGOs, development banks and community members are now calling carbon offsets a game changer for Pacific communities and Indigenous peoples. However, before rushing to include marine ecosystems into carbon markets, it is important that Pacific countries and communities critically evaluate carbon market claims against our own regional experiences and ocean-born guardianship practices.

Proponents of carbon markets claim that blue carbon’s inclusion in such mechanisms will have two benefits: ecosystem protection will absorb carbon to help reduce emissions, and they will bring billions in sustainable finance to coastal communities.

Let’s look at the first claim. Offsetting applies the oversimplified logic that environmental harm can be cancelled out by environmental restoration elsewhere, like a set of scales. For example, oil drilling in one place is justified by the protection of a forest, or the pollution of a coal power plant is balanced out by planting mangroves elsewhere. Offsets don’t stop the pollution in the first instance, or disappear the impacts of industrial activity where it is taking place, but give the impression of being minimised by matching money from the polluter to an environmental project.

Our ecosystems in the Pacific are precious and important and they are also at breaking point. Over a decade ago scientists were already pointing out that the amount of carbon that forests can absorb is diminishing. Even more alarming is that ecosystems are absorbing less than the modelling that carbon markets have budgeted. This results in a net increase in global emissions because polluters are “offsetting” for carbon absorption that just isn’t happening.

The Intergovernmental Panel on Climate Change, the peak body for climate science cohesion, has already raised the alarm on the claim that carbon markets reduce emissions. In addition, a recent court decision in Australia sounded the alarm on carbon markets when it concluded that Energy Australia’s offsetting claims constitute greenwashing and that “offsets do not prevent or undo the harms caused by burning fossil fuels for a customer’s energy use”.

Carbon projects in the Pacific have been plagued by scandals. An ABC investigation into carbon speculation in Papua New Guinea revealed several projects that failed to deliver promised funds and infrastructure projects while carbon project developers keep the millions made from the sale of offsets for themselves. These examples also demonstrated an ongoing issue with carbon markets around the world, that is acquiring land-holder consent through dubious processes and disrupting traditional tenure processes.

And what about the second claim? Billions of dollars annually for blue carbon credits have been promised by the World Bank. But the inherent feature of markets is that they are unstable and prioritise the cheapest product. Previous iterations of carbon markets in the late 2000s have already failed to facilitate promised finance as buyer appetite collapsed.

Carbon markets maintain dependency on fossil fuel extraction by hitching community incomes to ongoing carbon emissions. If emissions and environmental harm decrease then there will be no money to be made from offsets. If the credit price drops then whole financial streams will disappear. Communities will also be liable when a cyclone destroys a wetland or mangrove plantation included in a carbon market, an unseen cost that has no resolution in existing regulations but a tangible possibility in the Pacific.

Carbon markets are reshaping the policy landscape by taking attention and resourcing away from more impactful emissions reduction and finance mechanisms. In the Pacific, we have to be wary of wealthier countries using carbon market claims as a cover for distracting us from Pacific Island Countries demands for stable and adequate financing and meaningful emissions reduction.

The Australia Institute has stated that wealthier governments such as Australia are supporting the growth of carbon markets as a means to green-wash its 114 new fossil fuel projects. In 2024, Australia resourced Fiji to develop its carbon speculation policy with the technical support of the Carbon Market Institute which has members such as BP and Shell. As Australia lobbies for Pacific support to host the UN Climate talks, it is doing so while pushing for ongoing emissions and shifting the burden onto the Pacific communities.

The expansion of carbon markets is an example of a concerning evolution in Pacific relations between countries. While also pushing for the opening of our ocean for deep sea mining, they are seeking to turn our ecosystems into a commodity cash cow that justifies the expansion of environmental harm – if the price is right, the likes of Australia will buy their way out rather than reducing their contribution to climate destruction. This will make climate change worse, which is an immediate concern to the livelihoods and wellbeing of all Pacific communities.

Governments attending the UN Ocean Conference must resist expanding and legitimising a speculative frontier with a long history of evident failures. Pacific governments should also be ready to limit the expansion of offsets if the UN Ocean Conference decisions move to approve these false solutions. The Pacific Ocean is our grandparent and should be treated as such, not by trading and selling it but rising to the moment by stopping emissions at the source and holding true to climate just finance mechanisms.