2. Valuing Nature Network
Valuing Peatlands project
Valuing changes in stocks and flows of ecosystem
services in complex socio-ecological systems – using
peatlands as a case study
Using this information to help design financial
mechanisms to pay for the provision of ecosystem
services in future
3. Why are we here?
Huge interest in Payments for Ecosystem Services
4. Why are we here?
National policy:
Natural Environment White Paper, Payments for
Ecosystem Services Action Plan &
Best Practice Guide (this pm)
Emphasis on valuing the
environment and
incorporating these values
in decision-making in
Living Wales Green Paper
and Scotland’s Land Use
Strategy
5. Why are we here?
Growing interest from water companies and other
businesses in PES:
Presentations from water companies today
See case studies being developed for DEFRA PES Best
Practice Guide
Ecosystem Markets Taskforce exploring PES and other
mechanisms to “develop green goods, services,
investment vehicles and markets which value and
protect the environment”
6. Why are we here?
New research and networking initiatives:
Valuing Nature Network
Ecosystems Knowledge Network
Follow-on to the National Ecosystem Assessment
NERC KE fellows e.g. Viki Hirst
Upland Hydrology Group: Water companies & uplands, the next
chapter (15th March)
NERC workshop “Natural Capital and Ecosystem Services for
Business: collaboration opportunities" (13th March)
Natural Capital Initiative: Forging interdisciplinary links to inform public
policy (8th May)
CIWEM event: Water & Ecosystem Goods and Services, Translating
this into routine operation (12th June)
IUCN/BES Investing in Peatlands conference (26-28 June)
7. Goal
To exchange ideas from ongoing research and
networking initiatives & experience from water
companies, regulators etc. (using
upland/peatland catchments to illustrate where
useful) to inform Government and business
about opportunities to spread the cost of
producing clean water
(helping meet WFD
requirements) using
Payments for Ecosystem
Services
8. Rationale
Improving water quality at source can reduce
water treatment costs and help implement WFD
Water companies aren’t the only beneficiaries:
Recreational water
users and visitors to
restored or more
sensitively managed
catchments
http://www.ukriversguidebook.co.uk/news/the-home-of-uk-canoeing-and-kayaking-news-reports-river-guides
9. Rationale
Water companies aren’t the only beneficiaries:
Freshwater habitats and species
Terrestrial habitats and species in restored or more
sensitively managed catchments
http://www.allposters.co.uk/-sp/White-Clawed-Crayfish-Male-Norfolk-UK-Posters_i4016570_.htm
10. Rationale
Water companies aren’t the only beneficiaries:
Global society by reducing carbon emissions (in
stream water and from water treatment) and
increasing carbon sequestration and storage (in
restored peatlands)
11. Rationale
Payments for Ecosystem Services is all about
getting society to pay for the benefits we take for
granted from nature
By creating markets for the carbon, biodiversity
and visitor co-benefits of producing clean water,
might it be possible to:
Share the costs of reaching WFD targets; and
Meet these targets whilst minimising trade-offs with
other ecosystem services and optimising co-benefits?
12. Bundling
In most natural systems, services are produced
in bundles – they are all linked together
Improve your water quality by reducing DOC and you
reduce fluvial carbon loss
Restore peatland for carbon
and improve biodiversity
By paying for bundles of
services, you can avoid trade-
offs and exploit co-benefits to
increase revenues by paying
for a wider range of services
13. Types of bundling
Direct sale Shopping basket approach
approach (sometimes referred to as layering/stacking)
“grouping multiple ecosystem “schemes where payments are made
services together in a single for different ecosystem services
package for payment” separately from the same system”
e.g. bundling carbon water quality, e.g. the restoration project runs a
biodiversity, visitor benefits and carbon offset scheme in parallel with
wildfire risk benefits in a peatland a scheme where water companies
restoration scheme pay for water quality, whilst doing
visitor payback
14. Shopping basket approach
Shopping basket approach may lead to double-
counting, assumes services are produced
independently and can be delineated, quantified
and valued separately
However shopping basket may
be necessary if no buyers for
direct sale of multiple bundled
services – still have opportunity
to co-ordinate between services
to avoid trade-offs
15. Direct sale approach
Trade-offs between services less likely
Can charge a premium if co-benefits quantified
Makes payments more diverse = resilient
Less transaction costs than establishing
multiple markets
Attract new buyers interested in
Specific co-benefits
Wider spatial scales
May increase political/public support
for scheme
16. Bundling peatland PES
1. Regulation of water quality
2. Climate regulation through carbon
sequestration and storage in peat soils
3. Regulation of wildfire risk
4. Cultural ecosystem services
17. 1. Regulation of water quality
Some water companies already paying for WQ
via land management
In peatlands, most interest from companies:
With high proportion of peatland catchments upon
which they can influence land management
With current Dissolved
Organic Carbon problems
(brown water)
With concerns about future
DOC problems under
climate change
18. Flood regulation
Evidence too equivocal for inclusion in PES
schemes
Impact of restoration on flood regulation
depends on:
Type of peat
Its topographic and catchment location
Intensity & type of restoration
Location of restoration
with respect to river
channels (danger of
flood wave synchronicity)
19. 2. Climate regulation
Potential to enhance this service:
Restoration can stem loss & absorb carbon
Short-term CH4 problem, long-term GHG benefit
Co-benefits
e.g. biodiversity
20. Market demand
Market demand estimated between 1-10M
tonnes carbon reduction p.a. (BRE, 2009)
Pay premium for UK-based carbon from land-
based project that has co-benefits
Voluntary carbon markets and CSR operating at
a very small scale
Need Government guidance to help regulate &
expand this emerging market to ensure:
Long-term, additional climate benefits
Avoid trade-offs with other important services
21. UK Peatland Code
Provide projects & investors with scientific basis
for good practice in peatland restoration
Option to include peatland restoration in official
carbon accounting to become “carbon neutral”
via Corporate Social Responsibility payments
Greenhouse Gas Accounting Guidelines
Can count towards Government climate targets
Option to trade on voluntary carbon markets
Similar to UK Woodland Carbon Code – we can
learn from their experience
22. 3. 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
23. 4. Cultural Ecosystem Services
Biodiversity benefits of restoration
Hard to monetarise, but options emerging
Spatial planning approaches to pay for
restoration of sites that could be used for
restoration near new developments
Section 106 agreements
Habitat banking/ biodiversity offsets
24. Visitor Payback as a PES
X
Where visitor payback
schemes elicit payments
from individual visitors or
companies that pay for
specific projects that
enhance ecosystem services
Bundling visitor payback with
other ecosystem services via
shopping basket approach?
e.g. offset your travel
?
25. DEFRA PES Best Practice Guide
See handouts
Opportunity to
discuss this
afternoon
We want your
feedback
26. Next
Some of the latest research: natural science &
economics
Regulator and water company perspectives
A land owner’s perspective
Discussion to feed into
briefing note to inform
policy and business
A mechanism to integrate
insights from future meetings
& continue the conversation?
