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Advances in upland carbon financing


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Presentation by Mark Reed to St George's House consultation on the Future of England's Uplands, December 2012

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Advances in upland carbon financing

  1. 1. Advances in upland carbon financing Mark Reed Reader, Birmingham City University Research Manager, IUCN UK Peatland Programme
  2. 2. Plan Underpinning and related ongoing research UK Peatland Code
  3. 3. 1 Underpinning research
  4. 4. Underpinning research VNN Valuing Peatlands project  Links between management, function and flows of ecosystem services and their value in uplands  Implications for upland agri-environment schemes  Pressure-response functions can cost-effectively show how climate regulation & other services are likely to respond to multiple pressures
  5. 5. Underpinning research Process 1 Pressure 1 Ecosystem service Process 1 Value (£) Pressure 2 Process 1 Ecosystem service Process 1 Pressure 3  Important for managing & valuing multiple upland services…
  6. 6. Underpinning research Developing place-based approaches for Payments for Ecosystem Services in the English Uplands  Cost-effective vegetation based proxies for changes in GHG flux post-restoration to underpin future code  Feasibility of place-based PES schemes that bundle/layer carbon with other services
  7. 7. Underpinning research NERC internship with Viki Hirst, Charles Cowap, Mark Reed & South West Water Bundling carbon & biodiversity in a new scheme to run alongside existing clean water scheme Exploring pricing, payment & contractual issues
  8. 8. Payments for Ecosystem Services Best Practice Guide 1. Identify PES opportunity10. Identify opportunities for multiple-benefit PES 2. Identify potential PES Implement and actors 9. review PES Identify ES Monitoring, evaluati agreements on & review prospects, pote 3. Assess the ntial buyers prospects for trade and sellers 4. Establish appropriate 8. Formalise the Negotiate institutional set up PES scheme agreements Resolve institutional, legal & technical 5. Address legal issues issues 7. Develop „win- win‟ markets 6. Address technical issues
  9. 9. Visitor Payback for ES Potential of VP to elicit PES from the public? Suite of smart phone apps for Lakes plus VP module 4 investment (not offset) options including peat restoration Interactive maps to learn more
  10. 10. 2 UK Peatland Carbon Code
  11. 11. Peatland carbon: in demand Legislative targets  Climate (Kyoto Protocol & national legislation)  Biodiversity (many peatlands in poor condition designated under UK and EU legislation)  Water quality (Water Framework Directive)
  12. 12. Peatland carbon: in demand Market demand for UK land-based carbon reduction: 1-10M tonnes p.a. (BRE, 2008)  Woodland carbon code secured 1 million tonnes of CO2 through projects covering 2733 ha in first year Premium for local carbon with co-benefits £8B p.a. corporate carbon accounting for FTSE100
  13. 13. Demand could increase if: Co-benefits can be quantified and either bundled or layered with carbon schemes Benefits can be counted in company carbon accounts under GHG Accounting Guidelines There is effective regulation of UK peatland carbon projects to ensure benefits are:  Additional  Verifiable  Avoid trade-offs with other ecosystem services
  14. 14. Supply Restoration & manage- ment of upland and lowland peats can deliver significant carbon savings over the long-term
  15. 15. Supply Peatland restoration is approximately equivalent to the carbon benefit provided by woodlands  Assuming 1km2 restoration delivers 250 tonnes CO2 savings per year, 30 km2 bog rewetting could deliver 0.75 million tonnes CO2 saving over 100 years Plentiful supply:  >80% UK deep peats damaged  Potential for 1.8M ha UK rewetting
  16. 16. UK Peatland Carbon Code Develop a UK Peatland Carbon Code to:  Open, consistent, credible and verifiable basis for good practice peatland restoration  Register to account for projects & avoid double counting  Standards to ensure projects are of high environmental quality & genuinely additional  Technical guidance to calculate emissions savings
  17. 17. UK Peatland Carbon Code Option to include peatland restoration in official carbon accounting to become “carbon neutral”  Greenhouse Gas Accounting Guidelines  Not possible to trade this carbon  Government could count it towards Kyoto targets if we opt in to Wetland Rewetting & Drainage under Article 3.4 Kyoto Protocol
  18. 18. UK Peatland Carbon Code If also designed to meet the requirements of the Verified Carbon Standard:  Peatland Code would be cheaper alternative, better tailored to the UK context, that would still provide investors with confidence  Possible to generate tradeable carbon credits for voluntary carbon market (and compliance in future?) Similar to UK Woodland Carbon Code & German MoorFutures: we can learn from their experience Export expertise to develop similar peatland regional markets elsewhere internationally
  19. 19. Targets under WFD & Habitats Directive Legislative targets UK climate targets Funding Kyoto targets Co-benefits GHG change from peats UK opt into WDR damaged/restored since Art 3.4 Kyoto 1990 in GHG inventory Climate regulation Private Government CAP Rural Re-wetting/conservation Development eg Agri-environment Peatland CRUsPeatland carbon markets Changes to REDD & Peatland Art 3.4 VCS AAUs EUETS & JI accred- Compliance C market Value of carbon itation Voluntary C market outweighs accreditation & other costs Regional Carbon Market Higher uptake if carbon accounting Peatland becomes mandatory Corporate Social across all sectors UK Peatland projects used in Responsibility Carbon Code corporate C GHG Accounting accounting Guidelines integration Underpinned by robust scientific evidence and monitoring, overseen by a science panel
  20. 20. Next steps Developing metrics DEFRA PES Pilot with German MoorFutures and learning from UK Woodland Carbon Code Plan to launch draft code for CSR (not offset) investment July 2013 Market research to tailor the code to needs of the market
  21. 21. Next steps Consider for inclusion in Defra/DECC GHG Accounting Guidelines for corporate carbon accounting Option to trade on voluntary C markets if prices increase
  22. 22. Top ranked opportunity
  23. 23. Conclusions Peatland carbon markets are coming soon – we want to work with people across the sector to devise effective ways of regulating and paying Opportunities to bundle payments for carbon with existing PES schemes e.g. for clean water, and to bundle other services with carbon schemes to get premium prices