Other ecosystem services markets
The following potential markets, based upon the trading of units related to specific ecosystem services, all offer opportunities to develop long-term, sustainable income streams. It should be noted that ecosystem services markets are still in their infancy and most are still in their development phases. So, these income streams (with the exception of woodland and peatland carbon) should be viewed as potential, medium term income generating opportunities.
Carbon Sequestration
Carbon markets now...
The only fully accredited and independently verified voluntary carbon markets currently available in the UK are the Woodland Carbon Code (Home - UK Woodland Carbon Code) and the Peatland Code (Peatland Code | IUCN UK Peatland Programme (iucn-uk-peatlandprogramme.org)), with projects and carbon units being registered via the UK Land Carbon Registry and recorded on the IHS Markit Carbon Meta-Registry. Full information on the current Woodland and Peatland carbon codes is available via these links and these websites are constantly being updated. It is relatively straightforward to register carbon sequestration sites and to achieve accreditation and acceptance.
When trading through the Woodland or Peatland Carbon codes there are a number of project developers and other intermediaries, for example Accelar, Sequest, Wilder Carbon, the Woodland Trust or Zellar, that you could work with. We recommend you get in touch with one or some of these orgnaisations and check out the guidance provided by the respective carbon codes, to figure out your carbon market options.
Carbon markets in the near future...
A number of other carbon codes are currently being developed, however these are all currently ‘work in progress’ and so little published information is currently available on them. The next carbon codes to be developed are likely to be a hedgerow carbon code and an arable soil carbon code. These codes are expected to be completed in 2023 and markets set up in 2024. Research is also being carried out to develop carbon codes for rewilding, saltmarsh and meadow, grassland and pasture soil carbon.
At the time of writing, the carbon market is in a state of flux and prices vary significantly. It is possible to purchase high integrity carbon from organisations such as Wilder Carbon (www.wildercarbon.com) for £75 per tonne CO2e as an Estimated Issuance Unit and lower integrity carbon can also be purchased for less than this. However, it has been calculated that the cost of creating woodland and maintaining it in good condition for 100 years could cost approximately £114,260 per hectare, or £221 per tonne CO2e. However this cost assumes that land is already available on which to plant the trees, should you need to purchase land, it would add approximately £20k per hectare to the cost, taking the total to around £134,260 per hectare, or £259 per tonne CO2e.
LJMU Opportunity Mapping
It is important to note that different habitats capture and store carbon differently. To find out more go to the LJMU mapping tool (ADD LINK HERE) and take a look at this Natural England report Carbon Storage and Sequestration by Habitat 2021 - NERR094 (naturalengland.org.uk)
See Case study 5: The Crystal Clear Clyst Bond here
Natural Flood Management and Flood Risk Mitigation
The Environment Agency’s recent publication ‘Natural Flood Management Programme: evaluation report (December 2022)’ (Natural Flood Management Programme: evaluation report - GOV.UK (www.gov.uk) ) highlights the opportunities for income linked to natural flood management and mitigating flood risk. We recommend that you discuss flood risk options with the Environment Agency and your Regional Flood and Coastal Committee at an early stage in your project development, they will offer support, information and further advice on funding and income. One income stream, from insurers or local authorities, would be for the avoidance of costs associated with flood damage.
Given that river-related flood risk is invariably location-specific, new revenue opportunities will be based on the convergence of interests by interested parties such as FloodRe (a reinsurance service) (Flood Re - A flood re-insurance scheme), individual insurers, local authorities, transport infrastructure providers and water utilities.
As with a nutrient neutrality market, below, we would encourage flood management and flood risk mitigation to employ nature-based solutions such as:
River and floodplain restoration
Creation of wet woodlands
Restoration of floodplain meadows
Lowland peatlands rewetting
Development of wetlands and scrapes
Constructing leaky dams
Flood water storage and SuDs
Improved agricultural land management
It is also important to consider water retention, often referred to as water security, within a catchment. Such projects hold back water allowing it to be available within the environment or to specific users at other times. For example in order to reduce flood risk an area of land might be developed into a wetland or water storage area. In turn, this could become a haven for wildlife, a recreational resource or farmers might use the water to irrigate their land in drier periods.
A precedent for the private financing of natural flood management is found in the Wyre Catchment in Lancashire.
See Case study 2: The Wyre Catchment Natural Flood Management Project here