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Charles Cowap
MBA MRICS FAAV
NATURALLY ENOUGH
THINKING NATURALLY
LATERALLY ….
Charles Cowap
@charlescowap
North Wales Agri...
Charles Cowap
MBA MRICS FAAV
New Waves in Rural Estate Management
This Photo by Unknown Author is licensed under CC BY-NC-...
Charles Cowap
MBA MRICS FAAV
New Waves in Rural Estate Management
This Photo by Unknown Author is licensed under CC BY-NC-...
Charles Cowap
MBA MRICS FAAV
BREXIT
This Photo by Unknown Author is licensed under CC BY-SA
International
Trade
Public
Goo...
Charles Cowap
MBA MRICS FAAV
Which of these are ecosystem services?
Ecosystem Services
1. Growing food and timber
2. The w...
Charles Cowap
MBA MRICS FAAV
Perrot-Maître, D. (2006) The Vittel payments for ecosystem
services: a “perfect” PES case? I...
Charles Cowap
MBA MRICS FAAV
Stanlow Oil Refinery
Charles Cowap
MBA MRICS FAAV
Gowy Meadows
Charles Cowap
MBA MRICS FAAV
Holnicote Estate – National Trust
• Leaky sluices
• Low profile mounds
• New barn for a tenan...
Charles Cowap
MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAV
What value water and carbon
from Devon’s Culm Grasslands?
A project for Devon Wildlife Trust
Charles Cowap
MBA MRICS FAAV
Total Economic Value
• Use and Non Use Values
• Direct market valuations
– Transaction eviden...
Charles Cowap
MBA MRICS FAAV
In the absence of market evidence
• Revealed Preference Methods (RPM) v Stated
Preference Met...
Charles Cowap
MBA MRICS FAAV
Stated preference methods
• Contingent Valuation Methods (CVM)
– Willingness to Pay (WTP)
– W...
Charles Cowap
MBA MRICS FAAV
Direct v Indirect Value studies
• Direct
– Methods already outlined
• Indirect
– Benefit (or ...
Charles Cowap
MBA MRICS FAAV
DCF: Discounting Future Cash Flows
Total NPV +
Worthwhile
Total NPV –
Not
worthwhile
Choice o...
Charles Cowap
MBA MRICS FAAV
Headline Figures
• Loss of water and carbon value from 1900
Culm converted to IMG: £32.3 mill...
Charles Cowap
MBA MRICS FAAVContext: Exmoor example
Exmoor
R Barle
R Exe
Wimbleball Resr & R
Haddeo
Exebridge
Pumping
Stat...
Charles Cowap
MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAV
Questions for consideration
• Contractual aspects
• Land tenure
• Effects on other
interested...
Charles Cowap
MBA MRICS FAAVFinancial evaluation
Extra costs, eg
• Access time to more difficult
ground
• Vet and med bill...
Charles Cowap
MBA MRICS FAAV
New land management and valuation
requirements are emerging
New markets
New challenges to
pro...
Charles Cowap
MBA MRICS FAAV
Thinkpiece
• New opportunities in
land management
• New ways of working
in development
• New ...
Charles Cowap
MBA MRICS FAAVAnd we should
offer:
• Our expertise
• In Land Tenure and its
relationship to land
management ...
Charles Cowap
MBA MRICS FAAV
Valuing Natural Capital
Charles Cowap
MBA MRICS FAAVValuations Compared
Charles Cowap
MBA MRICS FAAV
Valuation: a broad scheme
Agree Terms
of
Engagement
Must include:
Defined Basis of
Value .......
Charles Cowap
MBA MRICS FAAV
IS IT SO DIFFERENT (1) : BASES OF VALUE
NATURAL CAPITAL VALUATION
► Altruistic
► Bequest
► Ec...
Charles Cowap
MBA MRICS FAAV
IS IT SO DIFFERENT (2): VALUATION METHODS
NATURAL CAPITAL VALUATION
Stated Preference
Methods...
Charles Cowap
MBA MRICS FAAVNew Ways with Land
NATURAL
CAPITAL
PROVISIONING SERVICES
Food
Fibre
Energy
Timber
REGULATING S...
Charles Cowap
MBA MRICS FAAVSo what?
► Land Use and development decisions
► Client advice
► Competition with traditional v...
Charles Cowap
MBA MRICS FAAV
NATURAL CAPITAL COMMITTEE
Charles Cowap
MBA MRICS FAAV
Workbook: How to do it
Natural Capital Committee 2017
Charles Cowap
MBA MRICS FAAV
25 Year Environment Plan
NCC Advised:
• One ha of nature reserve per 1,000 people
• Two ha of...
Charles Cowap
MBA MRICS FAAV
#25YEP
• An environmental net gain principle for
development, housing and infrastructure;
• A...
Charles Cowap
MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAVGove’s Command Paper:
Health and Harmony
• More travel in the same direction?
• Simpler stewar...
Charles Cowap
MBA MRICS FAAV
WELSH DIMENSIONS
Charles Cowap
MBA MRICS FAAV
Wellbeing and Future Generations
(Wales) Act 2015
Charles Cowap
MBA MRICS FAAV
Three New Laws
Charles Cowap
MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAV
Q&A, DISCUSSION
Charles Cowap
MBA MRICS FAAV
Contact Details
In-house CPD programmes, professional-technical updates,
organisational consu...
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Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 1 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 2 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 3 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 4 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 5 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 6 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 7 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 8 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 9 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 10 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 11 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 12 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 13 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 14 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 15 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 16 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 17 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 18 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 19 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 20 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 21 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 22 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 23 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 24 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 25 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 26 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 27 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 28 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 29 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 30 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 31 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 32 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 33 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 34 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 35 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 36 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 37 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 38 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 39 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 40 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 41 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 42 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 43 Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018 Slide 44
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Presentation at the North Wales Agricultural Valuers Association, 15 March 2018 on natural capital, public goods and ecosystem services in the management and valuation of rural land

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Naturally Enough with N Wales Ag Valuers, Betws y Coed 15 March 2018

  1. 1. Charles Cowap MBA MRICS FAAV NATURALLY ENOUGH THINKING NATURALLY LATERALLY …. Charles Cowap @charlescowap North Wales Agricultural Valuers 15 March 2018
  2. 2. Charles Cowap MBA MRICS FAAV New Waves in Rural Estate Management This Photo by Unknown Author is licensed under CC BY-NC-SA Agriculture Act 1947 Agricultural Improvement Output & Self sufficiency Efficiency Joining the Common Market Environmental Impact More food than we can eat Milk Quotas, Set Aside and More CAP, Pillar II, Stewardship Diversification Farm Business Tenancies Housing Reforms Tax and Regulation
  3. 3. Charles Cowap MBA MRICS FAAV New Waves in Rural Estate Management This Photo by Unknown Author is licensed under CC BY-NC-SA The Market Place Getting Older The best and the rest New entrants Land Values Energy Automation and Robotics Big data Contract Farming Rents and Returns Planning Reform Breeding and genetics Tax and Regulation
  4. 4. Charles Cowap MBA MRICS FAAV BREXIT This Photo by Unknown Author is licensed under CC BY-SA International Trade Public Goods Agricultural Support Labour mobility European Trade Terms Ecosystem Services Natural Capital Tax Reform Biggest Opportunity since 1947
  5. 5. Charles Cowap MBA MRICS FAAV Which of these are ecosystem services? Ecosystem Services 1. Growing food and timber 2. The water cycle 3. Pollination by bees and insects 4. The carbon cycle 5. Rural recreation 6. Inspiration for poetry about daffodils and meadows
  6. 6. Charles Cowap MBA MRICS FAAV Perrot-Maître, D. (2006) The Vittel payments for ecosystem services: a “perfect” PES case? International Institute for Environment and Development, London, UK
  7. 7. Charles Cowap MBA MRICS FAAV Stanlow Oil Refinery
  8. 8. Charles Cowap MBA MRICS FAAV Gowy Meadows
  9. 9. Charles Cowap MBA MRICS FAAV Holnicote Estate – National Trust • Leaky sluices • Low profile mounds • New barn for a tenant farmer • Restoration of woodland water bodies • Early Experience – Positive – Maize and Organic Swedes
  10. 10. Charles Cowap MBA MRICS FAAV
  11. 11. Charles Cowap MBA MRICS FAAV What value water and carbon from Devon’s Culm Grasslands? A project for Devon Wildlife Trust
  12. 12. Charles Cowap MBA MRICS FAAV Total Economic Value • Use and Non Use Values • Direct market valuations – Transaction evidence – Production cost – Replacement cost – ‘Avoidance’ costs
  13. 13. Charles Cowap MBA MRICS FAAV In the absence of market evidence • Revealed Preference Methods (RPM) v Stated Preference Methods • RPM includes – Travel cost methods (TCM) – Hedonic Pricing – USE values only  not existence, bequest and altruism values
  14. 14. Charles Cowap MBA MRICS FAAV Stated preference methods • Contingent Valuation Methods (CVM) – Willingness to Pay (WTP) – Willingness to Accept (WTA) • Deliberative approaches – Choice modelling – Group valuations
  15. 15. Charles Cowap MBA MRICS FAAV Direct v Indirect Value studies • Direct – Methods already outlined • Indirect – Benefit (or value) transfer – Various databases: EVRI, TEEB, NEA
  16. 16. Charles Cowap MBA MRICS FAAV DCF: Discounting Future Cash Flows Total NPV + Worthwhile Total NPV – Not worthwhile Choice of Discount Rates?
  17. 17. Charles Cowap MBA MRICS FAAV Headline Figures • Loss of water and carbon value from 1900 Culm converted to IMG: £32.3 million • Potential value of DWT restoration work for carbon and water: £9.139 million • Remaining Culm area water and carbon value: £35.46 million - £9 million more than if it had been lost to IMG.
  18. 18. Charles Cowap MBA MRICS FAAVContext: Exmoor example Exmoor R Barle R Exe Wimbleball Resr & R Haddeo Exebridge Pumping Station Replenishment Pumping Approx 5 miles, lifting water from 120 to 240 m AOD CO 2
  19. 19. Charles Cowap MBA MRICS FAAV
  20. 20. Charles Cowap MBA MRICS FAAV Questions for consideration • Contractual aspects • Land tenure • Effects on other interested parties • Practical farming considerations • Animal welfare and health • Public liability • Relationship other schemes • Other business considerations • Maintenance obligations • Tax • Impact on value • Security/risk
  21. 21. Charles Cowap MBA MRICS FAAVFinancial evaluation Extra costs, eg • Access time to more difficult ground • Vet and med bills • Insurance • Feed • Machinery costs (if contracting to be offered) Costs saved • Eg some livestock purchases Lost Revenue • Eg some livestock LWG or sales Extra Revenue eg • PES income • Contracting opportunities for SWW + Balance: financially worthwhile • Consider capital and tax implications Balance positive: not financially worthwhile
  22. 22. Charles Cowap MBA MRICS FAAV New land management and valuation requirements are emerging New markets New challenges to professional practice New environmental, social and economic opportunities and challenges
  23. 23. Charles Cowap MBA MRICS FAAV Thinkpiece • New opportunities in land management • New ways of working in development • New points to reflect in conventional valuations • New types of valuation
  24. 24. Charles Cowap MBA MRICS FAAVAnd we should offer: • Our expertise • In Land Tenure and its relationship to land management and development • Our experience of valuation in challenging commercial markets • Our expertise in brokerage
  25. 25. Charles Cowap MBA MRICS FAAV Valuing Natural Capital
  26. 26. Charles Cowap MBA MRICS FAAVValuations Compared
  27. 27. Charles Cowap MBA MRICS FAAV Valuation: a broad scheme Agree Terms of Engagement Must include: Defined Basis of Value .... Apply Valuation Methods Formal Reporting Requirements Follow up advice - publication issues Market Value Fair Value Worth Existing Use Value Other Basis?? Competence Purpose Assumptions Special Assumptions Inspection etc Sales comparison Investment approaches DRC Other? Extensive Revaluation Reinspection Appropriate publication
  28. 28. Charles Cowap MBA MRICS FAAV IS IT SO DIFFERENT (1) : BASES OF VALUE NATURAL CAPITAL VALUATION ► Altruistic ► Bequest ► Economic ► Existence ► Non-Use ► Option ► Total economic
  29. 29. Charles Cowap MBA MRICS FAAV IS IT SO DIFFERENT (2): VALUATION METHODS NATURAL CAPITAL VALUATION Stated Preference Methods Revealed Preference Methods Value (Benefit) Transfer • Contingent Valuations • Choice modelling • Travel cost • Hedonic pricing • Avertive expenditure • Replacement cost • Direct market valuation • Comparison!
  30. 30. Charles Cowap MBA MRICS FAAVNew Ways with Land NATURAL CAPITAL PROVISIONING SERVICES Food Fibre Energy Timber REGULATING SERVICES Carbon cycle Water cycle SUPPORTING SERVICES Pollination Soil Formation CULTURAL SERVICES Recreation Inspiration Creativity Reflection EXISTING MARKETS PUBLIC SUPPORT NEW MARKETS PES Biodiversity offsetting Carbon Conservation covenants
  31. 31. Charles Cowap MBA MRICS FAAVSo what? ► Land Use and development decisions ► Client advice ► Competition with traditional valuation and appraisal approaches ► Extending our knowledge and skills base ► Opportunities to build on existing experience and skills ► Who will be first to broker a commercial ecosystem service deal with Network Rail or another buyer to protect vital infrastructure or other interests? ► Or have you done it already?
  32. 32. Charles Cowap MBA MRICS FAAV NATURAL CAPITAL COMMITTEE
  33. 33. Charles Cowap MBA MRICS FAAV Workbook: How to do it Natural Capital Committee 2017
  34. 34. Charles Cowap MBA MRICS FAAV 25 Year Environment Plan NCC Advised: • One ha of nature reserve per 1,000 people • Two ha of natural greenspace within 300 m of every home • Twenty ha of greenspace within 2 km of every home • Farm funding limited to public goods and high welfare standards • 250,000 ha of woodland by 2040
  35. 35. Charles Cowap MBA MRICS FAAV #25YEP • An environmental net gain principle for development, housing and infrastructure; • A new Environmental Land Management system; • New farming rules for water; • More efficient fertiliser use; • Crop protection while reducing pesticide impacts; • Better information on soil health • Peatland restoration and an end to the use of peat in horticulture by 2030; • Larger scale woodland creation and the appointment of a national Tree Champion; • More use of natural flood management; • More sustainable drainage systems; • Flood risk properties to be made more resilient; • Opportunities for the reintroduction of native species; • Improved biosecurity to protect and conserve nature; • Potentially more National Parks and AONBs; • New approaches to water abstraction, greater efficiency in water use, less personal use of water; • Environmental therapies through mental health services; • More green infrastructure and more trees in towns and cities; • 2019 Year of Green Action; • Reducing food supply chain emissions and waste; • Improved management of ‘residual’ waste and wastewater; • Fly tipping crackdown; • Reduced chemical contamination in water.
  36. 36. Charles Cowap MBA MRICS FAAV
  37. 37. Charles Cowap MBA MRICS FAAVGove’s Command Paper: Health and Harmony • More travel in the same direction? • Simpler stewardship • Polluter pays: a higher bar? • Cap on individual [CAP] payments • Ill defined transitional period • What WILL the farmer and farm of the future look like? • Much hangs on AI, robotics, ‘quality’ and de-regulation – from Don Curry to Glenys Stacey • Ill defined on new entrants and opportunities • Labour issue – undeveloped? • Agriculture Act 1947 defined good husbandry and good estate management – do we need new definitions for 2019 and beyond?
  38. 38. Charles Cowap MBA MRICS FAAV WELSH DIMENSIONS
  39. 39. Charles Cowap MBA MRICS FAAV Wellbeing and Future Generations (Wales) Act 2015
  40. 40. Charles Cowap MBA MRICS FAAV Three New Laws
  41. 41. Charles Cowap MBA MRICS FAAV
  42. 42. Charles Cowap MBA MRICS FAAV
  43. 43. Charles Cowap MBA MRICS FAAV Q&A, DISCUSSION
  44. 44. Charles Cowap MBA MRICS FAAV Contact Details In-house CPD programmes, professional-technical updates, organisational consultancy, and more:  cdcowap@gmail.com  07947 706505 Twitter: @charlescowap Blog: http://charlescowap.wordpress.com/ Slideshare: http://www.slideshare.net/cdcowap Translating new knowledge for rural professional practice

Presentation at the North Wales Agricultural Valuers Association, 15 March 2018 on natural capital, public goods and ecosystem services in the management and valuation of rural land

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