Slides presented at RICS Wales Rural Conference, Llandrindod Wells, 5 December 2013

1. Payments for Ecosystem
Services
Best Practice Guidance
RICS Wales Rural Conference
Llandrindod Wells
5 December 2013
Charles Cowap
MBA MRICS FAAV

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. Charles Cowap
Peat’s Story
MBA MRICS FAAV

4. Charles Cowap
The mires on Exmoor
Drainage for agricultural
improvement
MBA MRICS FAAV

5. Charles Cowap
MBA for fuel
Domestic and commercial peat cuttingMRICS FAAV
Cutting carried on until the end of the c20th

6. Charles Cowap
MBA MRICS FAAV

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. 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. 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. 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. Charles Cowap
MBA MRICS FAAV
How much does peat’s farming
utility change with rewetting?

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. 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. 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. 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. 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. 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. Charles Cowap
Old Ways with Land
MBA MRICS FAAV
TIMBER
SPORTING
MINERALS
DIVERSIFICATION
ENVIRONMENT AND
SUSTAINABILITY
FOOD
INCOME
DEVELOPMENT
ENVIRONMENT
COSTS
SUSTAINABLE

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. 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. 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. Charles Cowap
Pumlumon Project
MBA MRICS FAAV

23. Charles Cowap
MBA MRICS FAAV

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. 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. Charles Cowap
MBA MRICS FAAV
Question Time

27. Charles Cowap
Contact Details
MBA MRICS FAAV
In-house CPD programmes, professional-technical updates,
organisational consultancy, and more:
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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