Potential for Payments for Ecosystem Services in UK Uplands

Potential for PES in the uplands Mark Reed

Plan
Upland ecosystem services
Opportunities and barriers for PES in uplands
Focus on carbon
Considering water quality and other ecosystem services

A land of many uses The Future?

Opportunities for PES
Climate regulation through carbon sequestration and storage in peat soils
Regulation of water quality
Regulation of flood risk
Regulation of wildfire risk
Cultural ecosystem services

1. Climate regulation
Potential to enhance this service:
UK’s largest carbon store
Losing carbon from degraded peatlands
Restoration can stem loss & absorb carbon
Short-term CH 4 problem, long-term GHG benefit
Co-benefits

Market demand
Market demand estimated between 1-10M tonnes carbon reduction p.a. (BRE, 2009)
Companies and individuals
Companies interviewed more interested in CSR than tradable credits
Pay premium for UK-based carbon from land-based project that has co-benefits
Must meet rigorous, recognise standards

Supply
Many land owning organisations want to restore damaged peatlands but do not have the means
Keen to use private investment
For example:
National Trust, Country Land & Business Association, National Park Authorities, AONBs

Intermediaries
Many exist and have expressed an interest in carbon sequestration in peatlands
Need cost-effective verification and some form of accreditation
e.g. Voluntary Carbon Standard (VCS)

Barriers
May not be possible to satisfy additionality criteria to access voluntary carbon markets
Peatland restoration in RDPs
Accessing compliance carbon markets under Kyoto would require legislative changes at UK and EU levels
To count towards Government commitments under Kyoto and domestic climate legislation, all peatlands need to be counted in GHG inventory

One way around this...
CSR scheme: private investment in restoration
Co-ordinate/integrate with existing schemes?
UELS, Glastir
Conservative analysis: carbon payments could subsidise restoration options by around 20%
In some cases, could completely pay for options or generate surplus
Depends on carbon price & restoration costs/access
If in GHG inventory, CSR scheme (no tradable credits) counts towards legislative targets

One way around this...
GHG Accounting Guidelines allow UK companies who have reduced emissions at source to become carbon neutral via offsetting
Consultation on a UK forest carbon code
Worth consulting on a peatland code?
Initial work done to outline technical, legal, financial and organisational design of code
If consistent with VCS requirements, voluntary carbon markets remain future option

2. Regulation of water quality
Land management (including restoration) can reduce DOC and POC
Benefits for water companies
United Utilities (paid by OFFWAT) already paying for WQ via land managment
Interest varies between companies
Those without major DOC problems not interested
Those who perceive WQ legal responsibility of land managers under WFD won’t pay people to keep law

3. Regulation of flood risk
Evidence that restoration reduces steam peakflow and hence may reduce downstream flood risk
Effect is short-lived and once the capacity of the soil to store water has been reached (e.g. following a heavy storm), restoration has little effect on flood risk

4. Regulation of wildfire risk
Restoration raises water table
Reduces risk of wildfires burning deep into peat
No market for wildfire risk regulation, but may contribute towards the attractiveness of PES schemes based on carbon or water

5. Cultural Ecosystem Services
Hard to monetarise, but options emerging
Visitor payback
“ Our Man at the Top”: £50K from £2 accommodation surcharge in the Lake District
Spatial planning approaches
Section 106 agreements/CIL
Habitat banking: biodiversity credits to offset impacts of development
Like for like under Habitats/Birds Directives
Given upland designations, unlikely to be significant

Conclusion
PES by water companies happening already
Possible to overcome carbon scheme barriers?
Markets for cultural services at early stage of development, no markets for wildfire regulation
Bundling co-benefits with carbon and/or water may increase the attractiveness/value of carbon/water schemes

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Potential for Payments for Ecosystem Services in UK Uplands

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