Abstract
Emerging economies face an annual adaptation finance gap of $300–$500 billion. Nature-based resilience solutions (NbRS) such as mangroves and agroforestry remain critically underfunded despite their cost-effective climate benefits. Carbon credits have been examined mainly in mitigation contexts; their role as revenue enhancers in blended adaptation finance for NbRS is untested. This study had three objectives: quantifying revenue uplift from credits, evaluating how certification reduces investor risk, and forecasting scalability under different blend ratios. A qualitative comparative case study was applied to 12 NbRS projects across emerging economies. Eight cases were from India; the rest came from Kenya and Indonesia. Data came from the Climate Policy Initiative, Verra, and Gold Standard. Carbon credits contributed 15–35% of total project revenues across the 12 cases. The average revenue uplift was 24%. Indian projects averaged 22%, compared with 18% in other cases. Verra and Gold Standard certification reduced investment risk in 75% of blended structures examined. Certified projects attracted private capital at 2.5 times the public contribution. The non-certified Coochbehar pilot recorded a 40% drop in investor participation due to verification gaps. Projects with Viability Gap Funding ratios of 25–35% scaled four times faster than higher-subsidy cases. If credits reach a 20% revenue norm across NbRS portfolios, annual mobilisation potential is projected at $50 billion. These findings position carbon credits as "resilience dividends" and extend blended finance theory beyond its mitigation focus. Policymakers and public sector professionals can use these findings to design credit-inclusive green bonds and attract private capital to NbRS. No prior study has empirically tested carbon credits as revenue enhancers in blended NbRS finance across countries or applied a revenue enhancement index to capture co-benefits beyond sequestration. Well-structured carbon credit mechanisms, backed by credible certification, can meaningfully close the adaptation finance gap in emerging economies.
Recommended Citation
Rao, U. (2026). Impact of Carbon Credits as Revenue Enhancers in Blended Adaptation Finance for Nature-based Resilience Solutions Across Emerging Economies. CSID Journal of Infrastructure Development, 9(1). https://doi.org/10.7454/jid.v9.i1.1295