Payments for Ecosystem
Services
Best Practice Guidance
RICS Wales Rural Conference
Llandrindod Wells
5 December 2013
Charl...
Ecosystem Services
Is it:

1. Eco-babble – leave it to the
sandal and beard brigade
2. It’s the environment stupid, just
g...
Charles Cowap

Peat’s Story

MBA MRICS FAAV
Charles Cowap

The mires on Exmoor

Drainage for agricultural
improvement

MBA MRICS FAAV
Charles Cowap
MBA for fuel
Domestic and commercial peat cuttingMRICS FAAV

Cutting carried on until the end of the c20th
Charles Cowap
MBA MRICS FAAV
Context: Exmoor example

Charles Cowap

Wimbleball Resr &
MBA MRICS FAAV
River Haddeo

R Exe
Exmoor
R Barle

Exebridge
Pum...
Charles Cowap

Economics
CARBON

+ OTHER ESS
PAYMENTS???

MBA MRICS FAAV

Future
Storage/Abstraction
Costs

Profit for rei...
Charles Cowap
MBA MRICS FAAV

Questions for consideration
• Contractual aspects
• Land tenure
• Effects on other
intereste...
Financial evaluation
Costs saved
• Eg some livestock
purchases

Extra Revenue eg
• PES income
• Contracting opportunities
...
Charles Cowap
MBA MRICS FAAV

How much does peat’s farming
utility change with rewetting?
Charles Cowap
MODEL HECTARE BEFORE AND AFTER
REWETTING

MBA MRICS FAAV

600 sq m
unuseable

One hectare: 100 m
x 100 m

2,...
Charles Cowap
MBA MRICS FAAV
Financial Impacts (£/ha, Annual Costs)
Farmer Scenarios (FBS Data
2011/12)
Loss of
Revenue
10...
Charles Cowap
MBA MRICS FAAV

Modelled' Loss across One Hectare

Loss of Useability across one hectare
Area
Loss
£
0.06
1
...
Charles Cowap
MBA MRICS FAAV

Is this a market opportunity?
• Working with the positives
• Addressing the negatives

• Mar...
Charles Cowap
MBA MRICS FAAV

New land management and
valuation requirements are emerging
New markets
New challenges to
pr...
Charles Cowap
MBA MRICS FAAV

Defra 2013
Payments for
ecosystem services:
a Best Practice
Guide
Published May 2013

https:...
Charles Cowap

Old Ways with Land

MBA MRICS FAAV

TIMBER
SPORTING
MINERALS
DIVERSIFICATION

ENVIRONMENT AND
SUSTAINABILIT...
New Ways with Land
PROVISIONING SERVICES
Food
Fibre
Energy
Timber
REGULATING SERVICES
Carbon cycle
Water cycle
NATURAL
CAP...
Charles Cowap

New Ways of Working
•
•
•
•
•

New forms of appraisal
New opportunities
New values
New ways to collaborate
...
Charles Cowap
MBA MRICS FAAV

Value of Environment
to Wales
• £6 billion to the
Welsh economy;
• 1in 6 Welsh jobs;
• £821 ...
Charles Cowap

Pumlumon Project

MBA MRICS FAAV
Charles Cowap
MBA MRICS FAAV
Thinkpiece
• Royal Charter
– Promote the usefulness
of the profession to
public advantage

• New opportunities in
land man...
And we should
offer:
• Our expertise
• In Land Tenure and its
relationship to land
management and
development
• Our experi...
Charles Cowap
MBA MRICS FAAV

Question Time
Charles Cowap

Contact Details

MBA MRICS FAAV

In-house CPD programmes, professional-technical updates,
organisational co...
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Ecosystem Services Best Practice Guidance

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Ecosystem Services Best Practice Guidance

  1. 1. Payments for Ecosystem Services Best Practice Guidance RICS Wales Rural Conference Llandrindod Wells 5 December 2013 Charles Cowap MBA MRICS FAAV
  2. 2. Ecosystem Services Is it: 1. Eco-babble – leave it to the sandal and beard brigade 2. It’s the environment stupid, just got up in some new imperial clothing 3. The knell of doom for traditional estate management and valuation services 4. A potentially interesting opportunity and challenge for valuers and estate managers Charles Cowap MBA MRICS FAAV
  3. 3. Charles Cowap Peat’s Story MBA MRICS FAAV
  4. 4. Charles Cowap The mires on Exmoor Drainage for agricultural improvement MBA MRICS FAAV
  5. 5. Charles Cowap MBA for fuel Domestic and commercial peat cuttingMRICS FAAV Cutting carried on until the end of the c20th
  6. 6. Charles Cowap MBA MRICS FAAV
  7. 7. Context: Exmoor example Charles Cowap Wimbleball Resr & MBA MRICS FAAV River Haddeo R Exe Exmoor R Barle Exebridge Pumping Station CO 2 Replenishment Pumping Approx 5 miles, lifting water from 120 to 240 m AOD
  8. 8. Charles Cowap Economics CARBON + OTHER ESS PAYMENTS??? MBA MRICS FAAV Future Storage/Abstraction Costs Profit for reinvestment or distribution Treatment Costs Savings for water buyers Pumping Costs Incentive payments to landowners – managers - occupiers
  9. 9. 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
  10. 10. Financial evaluation Costs saved • Eg some livestock purchases Extra Revenue eg • PES income • Contracting opportunities for SWW + Balance: financially worthwhile • Consider capital and tax implications Charles Cowap MBA MRICS FAAV Extra costs, eg • Access time to more difficult ground • Vet and med bills • Insurance • Feed • Machinery costs (if contracting to be offered) Lost Revenue • Eg some livestock LWG or sales Balance positive: not financially worthwhile
  11. 11. Charles Cowap MBA MRICS FAAV How much does peat’s farming utility change with rewetting?
  12. 12. Charles Cowap MODEL HECTARE BEFORE AND AFTER REWETTING MBA MRICS FAAV 600 sq m unuseable One hectare: 100 m x 100 m 2,400 sq m: 50% useable Leaves 7,000 sq m as before
  13. 13. Charles Cowap MBA MRICS FAAV Financial Impacts (£/ha, Annual Costs) Farmer Scenarios (FBS Data 2011/12) Loss of Revenue 100% £/ha £/ha Net Margin before rewetting Of which, SFP Livetock Output based on Variable Costs based on Machinery wear and tear based on Margin after rewetting Therefore Loss of 151 179 600 280 60 -600 280 -15 -184 335
  14. 14. Charles Cowap MBA MRICS FAAV Modelled' Loss across One Hectare Loss of Useability across one hectare Area Loss £ 0.06 1 20.1 0.24 0.5 40.2 0.7 0 0 0 0 0 Total Loss/'model' ha Margin before rewetting Margin after wetting and before PES 60.3 151 91 So the Figure to Beat is £61/ha Can PES do it?
  15. 15. Charles Cowap MBA MRICS FAAV Is this a market opportunity? • Working with the positives • Addressing the negatives • Market infrastructure – Eg willing buyer – Trading terms • Eg Peatland Carbon Code – Intermediary Role • Contractual infrastructure – Eg Law Commission Conservation Covenant Review
  16. 16. 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
  17. 17. Charles Cowap MBA MRICS FAAV Defra 2013 Payments for ecosystem services: a Best Practice Guide Published May 2013 https://www.gov.uk/government/publication s/payments-for-ecosystem-services-pesbest-practice-guide
  18. 18. Charles Cowap Old Ways with Land MBA MRICS FAAV TIMBER SPORTING MINERALS DIVERSIFICATION ENVIRONMENT AND SUSTAINABILITY FOOD INCOME DEVELOPMENT ENVIRONMENT COSTS SUSTAINABLE
  19. 19. New Ways with Land PROVISIONING SERVICES Food Fibre Energy Timber REGULATING SERVICES Carbon cycle Water cycle NATURAL CAPITAL SUPPORTING SERVICES Pollination Soil Formation CULTURAL SERVICES Recreation Inspiration Creativity Reflection Charles Cowap MBA MRICS FAAV EXISTING MARKETS PUBLIC SUPPORT NEW MARKETS PES Biodiversity offsetting Carbon Conservation covenants
  20. 20. Charles Cowap New Ways of Working • • • • • New forms of appraisal New opportunities New values New ways to collaborate But will farmers be entrepreneurial enough? • A new paradigm: farmers as ecosystem entrepreneurs …… ????? MBA MRICS FAAV And New Brokerage Intermediary Agency Advisory Opportunities?
  21. 21. Charles Cowap MBA MRICS FAAV Value of Environment to Wales • £6 billion to the Welsh economy; • 1in 6 Welsh jobs; • £821 million in tourism spending; • 15 per cent of goods and services produced in Wales. Welsh Assembly 2011
  22. 22. Charles Cowap Pumlumon Project MBA MRICS FAAV
  23. 23. Charles Cowap MBA MRICS FAAV
  24. 24. Thinkpiece • Royal Charter – Promote the usefulness of the profession to public advantage • New opportunities in land management • New ways of working in development • New points to reflect in conventional valuations • New types of valuation Charles Cowap MBA MRICS FAAV
  25. 25. And 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 Charles Cowap MBA MRICS FAAV
  26. 26. Charles Cowap MBA MRICS FAAV Question Time
  27. 27. Charles Cowap Contact Details MBA MRICS FAAV In-house CPD programmes, professional-technical updates, organisational consultancy, and more:   Twitter: Blog: Slideshare: cdcowap@gmail.com 07947 706505 @charlescowap http://charlescowap.wordpress.com/ http://www.slideshare.net/cdcowap Translating new knowledge for rural professional practice www.harper-adams.ac.uk

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