Creating a place-based PES scheme in the South Pennines

Plan Why place-based PES? Opportunities Barriers Scheme options Questions UK Peatland Carbon Code

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

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

Opportunities

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

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

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

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)

Opportunities Carbon+: join pilot phase Peatland Carbon Code

Give potential local investors greater confidence Work with intermediaries to find new investors

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

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

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?

Barriers

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?

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?

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

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?

Scheme options

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)

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)

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)

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)

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)

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)

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?

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?

Group work (2) Costs…

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

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

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

Legislative targets

Funding

Peatland carbon markets

Re-wetting/conservation

Climate regulation

Co-benefits

Voluntary C market

Compliance C market

Regional Carbon Market

GovernmentPrivate

CAP Rural Development eg

Agri-environment

Changes to EUETS & JI

Peatland CRUs

Value of carbon outweighs accreditation

& other costs

VCS accred-itation

Peatland AAUs

UK Peatland Carbon Code

GHG Accounting Guidelines integration

Higher uptake if carbon accounting

becomes mandatory across all sectors

Peatland projects used in

corporate C accounting

UK climate targets

Targets under WFD & Habitats Directive

Underpinned by robust scientific evidence and monitoring, overseen by a science panel

REDD & Art 3.4

Corporate Social Responsibility

GHG change from peats damaged/restored since 1990 in GHG inventory

UK opt into WDR Art 3.4 Kyoto

Kyoto targets

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

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