Ecobank Business Development Plan – Recommendations for Project Implementation

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The aim of the final work package was to develop a business development plan for whatever scheme type was chosen. This included evaluating the business case for implementation and identifying the financial opportunities in the study area.

In terms of the business case for implementation there is a clear case to be made for implementing a PES scheme in order to reduce nutrient loading in the Milford Haven and Cleddau Catchment. However, what has not yet been agreed is whether the cost of any scheme is worth the financial input when the problem appears to be constrained to algal mats on a small number of SAC features. The evidence from this work has been provided in this report in order that this decision can be made based on the most appropriate and robust evidence.

In addition, the financial opportunities in the study area have not been specifically identified mainly because an additional pilot study is required in order to move such a scheme forward. Only through a pilot study would this kind of information be adequately identified and without this it is hard to make the case for further work in this area.

The link below shows a table that details some ideas for a pilot proposal that could be put forward to funding bodies to identify whether there is any appetite to fund a proposal to identify whether a PES scheme is going to be achievable in Pembrokeshire.

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OVERALL CONCLUSIONS

Based on the current nutrient loading of the Milford Haven and Cleddau catchments, there is clear evidence of the need for a PES scheme, or at least that some effort is made to reduce the scale of nutrient loading in the catchment. Evidence gathered from the review of global initiatives and the Pembrokeshire case studies highlighted both good and bad practice and these lessons have been incorporated into the recommendations contained within this report.

The main conclusions and recommendations are that:

In the absence of any other desired values, the WFD standard for the High / Good status boundary of Transitional and Coastal Waterbodies should be chosen as the threshold to which nutrient loading should be reduced. This is a tough measure to meet and will require a significant land area to be included in the scheme; however it does provide a universally accepted figure that is easily defendable.

Due to the uncertainty over the number of buyers and whether there are sufficient to provide a constant throughput of money, it is suggested that a reverse auction mechanism is utilised. Although there are funding requirements and some of the benefits will be offset by increased Broker input (identified as important in the context of these catchments to maximise the selling capacity), it is considered that this type of scheme would be most likely to succeed.

It may also be advantageous to combine a bank and auction in a hybrid scheme in order to reduce the burden on public funding and if a significant number of buyers (or one large buyer) need to discharge planning or permitting requirements. In this situation, the buyer(s) could either co-fund the auction or could refund the costs of the funding body that initially paid thereby reducing the need for public money within the scheme.

In order to understand if the applied mitigation measures are effective, particularly with respect to agriculture, a long term monitoring plan is required. This should be sufficiently detailed to allow changes to be identified over the entire catchment.

Furthermore, a monitoring programme will be required of the measures implemented on farms within the scheme to ensure that the measures for which they have secured funding are delivered within the agreed timescale, and to the specification required. This is a key component of the monitoring of First Milk and it is recommended that it is a key element of this proposed scheme too.

It is vital that all stakeholders engaged in the scheme, irrespective of the form it takes, understand the absolute necessity of monitoring and evaluation. Adequate funding should be made available (even if the monitoring is carried out as part of standard statutory monitoring) and the results should also be systematically recorded. The success of a PES scheme in Pembrokeshire can only really be judged on the reduction in N loading within the catchments. If this is not apparent after a sufficient monitoring period, the scheme would either have to fundamentally change or would have to be closed. However, choices such as this can only be made on the back of robust data and it is paramount that data are collected and monitored from now onwards to achieve the required robustness.

Finally, it is recommended that a pilot / trial scheme should be tested prior to any further investment. This should be funded and involved the complete process from identifying the funding pot to delivering measures on the ground. Most of the successful initiatives analysed had some form of pilot and without this step the prospect of failure is much higher. It is therefore recommended that any scheme is effectively planned and tested before it is launched.

This pilot should also include assessing whether there are alternative mechanisms for achieving the required loading targets. Whilst an innovative approach, utilising the market wherever possible, demonstrates leadership in this area by the EEP more traditional methods of reducing loading may actually be the best approach. This needs to be considered due to the size of the problem and the apparent gap between the value of a buying fund and the N reductions this would ‘buy’. The EEP should not be averse to combining approaches wherever possible to deliver the headroom required.

Finally, what has not yet been agreed is whether the cost of any scheme is worth the financial input when the problem appears to be constrained to algal mats on a small number of SAC features. This is not a decision that can be resolved through this work or in this report but the problem should be discussed further during Task 1 of the business plan outlined above.