Mangroves are carbon-rich ecosystems found in tropical and subtropical areas around the world. However, they are threatened by a combination of natural and human-induced factors. When mangroves are lost or degraded, their co-benefits to human society are greatly diminished along with the ecosystem’s ability to sequester carbon. The current study assessed mangrove cover and cover change, as well as measuring carbon stocks and their emissions levels from the mangroves of Lamu County, Kenya. We sampled above-and below-ground carbon pools, including soil organic carbon (SOC), in 191 plots distributed throughout the study area. Lastly, we evaluated the economics of avoiding mangrove deforestation based on the carbon-offset market. The total carbon stock of mangroves in Lamu was estimated at 20 million Mg C, with an average density of 560.22 ± 79.79 Mg C ha–1. Southern swamps recorded significantly higher carbon densities (p < 0.05) than other mangrove management blocks in Lamu. At least 1,739 ha of mangroves in Lamu were lost between 1990 and 2019 due to anthropogenic activities, representing a decline of 60 ha yr–1. Total emissions from loss and degradation of mangroves in Lamu is estimated at 140.1 Mg C ha–1; which translates to 30,840.1 Mg CO2e yr–1. Assuming an offset price of US$10/Mg CO2e, the estimated costs of avoided emissions in Lamu is US$308,401 yr–1 plus other co-benefits such as fishery functions and shoreline protection. Mainstreaming mangroves and associated blue carbon ecosystems into national development and climate change agenda could accelerate Kenya’s achievements of both Sustainable Development Goals (SDGs) and the Paris Agreement.