Presentation by Mark Reed to St George's House consultation on the Future of England's Uplands, December 2012

1. Advances in upland carbon financing
Mark Reed
Reader, Birmingham City University
Research Manager, IUCN UK Peatland Programme

2. Plan
 Underpinning and related ongoing research
 UK Peatland Code

3. 1 Underpinning research

4. Underpinning research
 VNN Valuing Peatlands project
 Links between management, function and flows of
ecosystem services and their value in uplands
 Implications for upland agri-environment schemes
 Pressure-response functions can cost-effectively
show how climate regulation
& other services are likely to
respond to multiple pressures

5. Underpinning research
Process 1
Pressure 1
Ecosystem service
Process 1
Value (£)
Pressure 2 Process 1 Ecosystem service
Process 1
Pressure 3
 Important for managing & valuing
multiple upland services…

6. Underpinning research
 Developing place-based approaches for
Payments for Ecosystem Services in the English
Uplands
 Cost-effective vegetation based proxies for changes
in GHG flux post-restoration to underpin future code
 Feasibility of place-based
PES schemes that
bundle/layer carbon
with other services

7. Underpinning research
 NERC internship with Viki Hirst, Charles Cowap,
Mark Reed & South West Water
 Bundling carbon & biodiversity in a new scheme
to run alongside existing clean water scheme
 Exploring pricing,
payment & contractual
issues

8. Payments for Ecosystem Services Best Practice Guide
1. Identify PES
opportunity
10. Identify opportunities for
multiple-benefit PES
2. Identify potential PES
Implement and actors
9. review PES Identify ES
Monitoring, evaluati agreements
on & review prospects, pote 3. Assess the
ntial buyers prospects for trade
and sellers
4. Establish appropriate
8. Formalise the Negotiate institutional set up
PES scheme
agreements Resolve
institutional, legal
& technical 5. Address legal
issues
issues
7. Develop „win-
win‟ markets
6. Address
technical issues

9. Visitor Payback for ES
 Potential of VP to elicit PES
from the public?
 Suite of smart phone apps for
Lakes plus VP module
 4 investment (not offset)
options including peat
restoration
 Interactive maps to learn more

10. 2 UK Peatland Carbon Code

11. Peatland carbon: in demand
 Legislative targets
 Climate (Kyoto Protocol &
national legislation)
 Biodiversity (many
peatlands in poor condition
designated under UK and
EU legislation)
 Water quality (Water
Framework Directive)

12. Peatland carbon: in demand
 Market demand for UK land-based carbon
reduction: 1-10M tonnes p.a. (BRE, 2008)
 Woodland carbon code secured 1 million tonnes of
CO2 through projects covering 2733 ha in first year
 Premium for local
carbon with
co-benefits
 £8B p.a. corporate
carbon accounting
for FTSE100

13. Demand could increase if:
 Co-benefits can be quantified and either bundled
or layered with carbon schemes
 Benefits can be counted in company carbon
accounts under GHG Accounting Guidelines
 There is effective regulation of UK peatland
carbon projects to ensure benefits are:
 Additional
 Verifiable
 Avoid trade-offs with other ecosystem services

14. Supply
 Restoration & manage-
ment of upland
and lowland peats
can deliver
significant
carbon savings
over the long-term

15. Supply
 Peatland restoration is approximately equivalent
to the carbon benefit provided by woodlands
 Assuming 1km2 restoration delivers 250 tonnes CO2
savings per year, 30 km2 bog rewetting could deliver
0.75 million tonnes CO2 saving over 100 years
 Plentiful supply:
 >80% UK deep peats
damaged
 Potential for 1.8M ha UK
rewetting

16. 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

17. 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

18. 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
 Export expertise to develop similar peatland
regional markets elsewhere internationally

19. 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 CRUs
Peatland 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

20. 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
July 2013
 Market research to tailor the
code to needs of the market

21. 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

22. Top ranked opportunity

23. Conclusions
 Peatland carbon markets are coming soon – we
want to work with people across the sector to
devise effective ways of regulating and paying
 Opportunities to bundle payments for carbon
with existing PES schemes e.g. for clean
water, and to bundle other
services with carbon
schemes to get
premium prices