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Creating a place-based PES scheme in the South Pennines


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Presentation given to South Pennine Ecosystem Service Pilot steering group about potential for a place-based Payment for Ecosystem Service scheme in the South Pennines, as part of a project funded by Natural England and DEFRA, January 2013 (by Mark Reed)

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Creating a place-based PES scheme in the South Pennines

  1. 1. Creating a place-based PESscheme in the South Pennines
  2. 2. Plan Why place-based PES? Opportunities Barriers Scheme options Questions UK Peatland Carbon Code
  3. 3. Why place-based PES? Additional funding to help meet existing local goals e.g. conservation & water quality Saving money and creating value for local brands/investors Getting nature working together for everyone  Place-based schemes are more likely to avoid trade- offs than focusing on one service alone e.g. food production or conservation
  4. 4. Why place-based PES? PES is the future:  Common Agriculture Policy reform  DEFRA Natural Environment White Paper  PES Action Plan imminent  Promoted to make NIAs/LNPs financially sustainable  Ministerial support for PES priorities identified by EMTF  It is already happening:  Peatland Plus  Westcountry Rivers Trust/SWW – Upstream Thinking  New SWW scheme layering carbon/biodiversity with water  Westcountry Angling Passport  Pumlumon Project
  5. 5. Opportunities
  6. 6. Opportunities A number of ecosystem services can be co- produced in space/time with similar management  Revegetating bare peat & grip blocking in blanket bogs not exposed to significant historic grazing & burning, with Sphagnum re-introduction & reductions in (or prevention of) grazing/burning where necessary  Grip blocking dry heath on deep peats with changes in grazing/burning where necessary  Afforestation of upland valleys and flood plains
  7. 7. Opportunities Market research (BRE 2009 & ongoing): CSR demand for UK-based projects with multiple benefits  Focus on biodiversity  Interest also in water quality Few likely trade-offs and these can be managed Secure land tenure, interested land owners
  8. 8. Opportunities Grip blocking/revegetation on blanket bog:  Climate regulation (reduced C loss + C sequestration)  Biodiversity (incl. birds of conservation significance)  Reduced water colour (and heavy metals)  Improved recreational access over dissected sites  Improved aesthetics in previously bare sites Grip blocking dry heath/deep peat:  Climate regulation  Improved water quality  Improved recreational access
  9. 9. Opportunities Carbon sequestration potential of restoration: >100t CO2 equivalents/year/km2 for Peak District  6000 t CO2 per year for South Pennines Pilot Area assuming all 60 km2 blanket bog degraded & restored  1.5% Yorkshire Water’s annual carbon footprint  Equivalent to £2000 per km2 per year (£20 per tonne – less than the shadow price of carbon at £26)  ELS & HLS: £800 and £2300 per km2 for moorland  CSR: probably paid by hectare or project (not tonnes)
  10. 10. Opportunities Carbon+: join pilot phase Peatland Carbon Code  Give potential local investors greater confidence  Work with intermediaries to find new investors
  11. 11. Opportunities Biodiversity offsetting:  Up to £25,000 per km2 per year  Unlikely to be much demand for blanket bog credits  More demand for woodland creation on flood plains? Water quality payments  Combined payments from UU & agri-environment schemes were £3800 per km2 per year for SCaMP
  12. 12. Opportunities Tree planting in upland valleys for carbon and biodiversity (and recreation?) Tree planting in flood plains to reduce flood risk plus carbon storage and biodiversity benefits Potential to build on well established market for woodland carbon with multiple benefits via Woodland Carbon Code
  13. 13. Opportunities Buyers  Water Utilities (i.e. Yorkshire Water & United Utilities)  Corporates interested in climate regulation  Corporates/developers purchasing conservation/biodiversity credits to offset impacts generated elsewhere  (Government via agri-environment schemes)  Members of the public paying for ecosystem service projects via Visitor Payback schemes?
  14. 14. Barriers
  15. 15. Trade-offs Grouse moors  Not viable in long-term without burning/grazing  But grazing/burning not needed on active blanket bog  Focus only on grip blocking for dry heath on deep peat, where low level grazing/burning is sustainable?
  16. 16. Trade-offs Hill farming  1,204 farm businesses supporting >300,000 sheep  LFA farms lose >£5000 p.a. without agric. payments  Might private PES offset CAP budget contraction?
  17. 17. Trade-offs If burning/grazing ceased for dry heath on deep peats:  Increase likelihood of wildfire  Reduce visibility for walkers & compromise “sense of place”  Eventual conversion to forest would impact designated species Need to maintain sustainable levels of grazing/burning on these already degraded sites
  18. 18. Barriers Complex and fragmented land ownership The need to work across property boundaries to deliver some ecosystem services Transaction costs associated with the above Perceived incompatibility of PES scheme and land owner objectives  Overcome by focusing on areas that still function as blanket bog and allowing low level grazing/burning for dry heath on deep peat?
  19. 19. Scheme options
  20. 20. Bundled scheme 1 Buyer: water utilities Approach: peatland restoration (and tree planting on flood plains) Ecosystem services marketed:  Water quality  Biodiversity  Climate regulation  (Flood risk management)
  21. 21. Bundled scheme 2 Buyer: corporations Approach: peatland restoration (and afforestation of upland valleys & flood plains) Ecosystem services marketed:  Climate regulation  Biodiversity  Water quality  (Flood risk management)
  22. 22. Bundled scheme 3 Buyer: developers and corporations Approach: woodland creation on flood plains (and peatland restoration) Ecosystem services marketed  Biodiversity  Flood risk management  Climate regulation  (Water quality)
  23. 23. Layered scheme 1 Approach: peatland restoration Buyer & service 1: water utility for water quality Buyer & service 2: government for multiple services (via agri-environment scheme)
  24. 24. Layered scheme 2 Approach: peatland restoration Buyer & service 1: corporations for climate regulation/biodiversity Buyer & service 2: government for multiple services (via agri-environment scheme)
  25. 25. Layered scheme 3 Approach: peatland restoration & afforestation of upland valleys and flood plains  Buyer & service 1: corporations for climate regulation  Buyer & service 2: corporations/developers for biodiversity credits  Buyer & service 3: water utilities for water quality  Buyer & service 4: visitors for access/aesthetics  Buyer & service 5: downstream residents for flood risk management  Buyer & service 6: government for multiple services (via agri-environment scheme)
  26. 26. Questions We need your feedback:  Your views on the viability of establishing a place- based PES scheme for the South Pennines Pilot Area  Help to refine costs:  Peatland restoration costs (questions from Clifton)  Afforestation costs for upland valleys and flood plains?
  27. 27. Group work (1) Operationalising a place-based PES scheme for peatland restoration  Do you think a place-based PES scheme would work in the South Pennines?  What are the main opportunities a scheme could exploit?  What services should get priority?  Do you favour any of the proposed bundled/layered scheme options? Why?  What do you see as the main problems in getting such a scheme to work? How to overcome?  How would it fit with existing payments to land owners?  Overcoming barriers to land owner participation?  Next steps?
  28. 28. Group work (2) Costs…
  29. 29. 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
  30. 30. 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
  31. 31. 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
  32. 32. 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
  33. 33. 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 summer 2013 Market research to tailor the code to needs of the market
  34. 34. 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 Recommended to Secretaries of State for DEFRA/DECC/BIS in March