Findings from the 2015 EEP-Ecobank feasibility study

Pembrokeshire Marine SAC is in unfavourable status and environmental pressures could limit future commercial development. This project through the Nature Fund is to establish whether offsetting can be used to give industry confidence in investing in Pembrokeshire, using that opportunity to mitigate any negative effects of development and by creating a market for environment improvements, producing ecosystem resilience.

The Ecosystem Enterprise Partnership (EEP) project aims to address this challenge through establishing a collaborative forum of land managers, industry, commerce, government and third sector to find multiple benefits for society, economy, environment and people.

It will build a relationship between economic, social and environmental drivers recognising how interdependent they are – working across policies and sectors. Due to the competing demands and value of the study area, it provides a policy nexus of business, land management, biodiversity and spatial challenges.   This creates an opportunity to “test out” emerging national policy and in particular the Planning, Environment and Future Generations Bill through practical local delivery.

EEP proposes to develop of a nutrient offsetting scheme, creating headroom for potential projects using mitigation or compensation either by developers or land managers.  These credits could then be sold through private contractual arrangements.  This would incentivise habitat creation by land managers and encourage developers to build mitigation into their forward planning.  Only projects offering a net ecosystem gain would be eligible for this scheme and therefore projects would be dealt with on a case by case basis with some developments failing to meet the improvements or maintenance test.

With the 6 month timeframe for this project in 2015 the main focus is testing the validity of development of a Welsh nutrient offsetting scheme.

Background Research
Initial groundwork will be required to establish the framework for the development of the project through four key areas of research:-

1. Global Ecosystem Banking Initiatives
2. Review and analysis of Pembrokeshire case studies
3. Land Manager Assessments – Credits
4. Credit Purchasing Potential Assessment – Debits

In order for this project to be a success it is vital that a collaborative partnership approach is established from the outset. This will include forming the following groups:

Ecosystem Enterprise Delivery Group;  Ecosystem Enterprise Technical Advisory Group;  Ecosystem Enterprise Stakeholder Forum

Global Ecosystem Banking Initiatives

There are already a large number of offsetting schemes that have been attempted or successfully implemented around the world. This section details the results of a desk based review of current global ecosystem banking initiatives, using relevant elements from the Rapid Evidence Assessments methodology, as published by the UK civil service[1]. The review analysed published and unpublished literature and looked to evaluate the successes and failures of similar projects and how the relevant elements of each scheme could be applied to the Milford Haven Catchment.

This report sets out the results of this analysis and a list of recommendations and potential barriers which have fed into the development of the later work packages and the final proposed toolkit.

[1] http://www.civilservice.gov.uk/networks/gsr/resources-and-guidance/rapid-evidence-assessment/what-is

Ecosystem Services

Review and analysis of Pembrokeshire case studies

Over the previous ten years there had been a number of projects developed and funded within Pembrokeshire which appeared to be delivering some form of PES. These were suggested as case studies for review to identify useful information which could be utilised in the development of an eco-bank toolkit.

ADAS undertook a review of five completed or current projects (listed below) and the reports of this work can be found in Appendix C. A summary of the work undertaken and main findings is included in the next section.

The summary outlines the main areas of interest including; costs, effectiveness of schemes, participants and stakeholders, value and innovation. Each of these sections also outlined the potential implications for a PES scheme in the Milford Haven and Cleddau catchments.

The Pembrokeshire case studies analysed for this work were:

  • First Milk
  • Bluestones
  • Llys-Y-Fran
  • Deepford Brook
  • Castlemartin

Land Manager Assessments – Credits

This work package has two main parts, the first part sought to define and understand the problems within the Milford Haven and Cleddau Catchment in order to understand what the required load reduction targets within the waterbodies would be. The second part was designed to identify where the land management opportunities are within the catchment areas in order to achieve the required nutrient loading reduction.

In order to ensure the end scheme is based on sound data we collated and reviewed available information on the catchments including; nutrient loads, SAC condition, known pollution sources and data on nutrient load analysis. Subsequently this information has been analysed to better understand the local nutrient reduction requirements and how these might be delivered by initiatives across the catchment.

Due to the absence of a known threshold to which the initiative could work towards, additional work has been undertaken to identify the most appropriate thresholds based on the data, to use.

In addition, the second element of work for this work package sought to identify potential buyers and sellers within the catchment. This has been established by utilising “Farmscoper” to undertake land management assessments, from which to identify opportunities for land to enter the nutrient offsetting programme.

Credit Purchasing Potential Assessment – Debits

The purpose of this work package was to bring together the findings from previous work, primarily WP3(Land Manager Assessments- Credits), to identify the potential for a PES scheme within the Milford Haven and Cleddau catchments. This section details the main actors within a PES scheme as well as the types of structure which are most likely to deliver a functioning PES scheme.

Ecobank Toolkit

The research and analysis undertaken for the previous work packages demonstrates the potential benefits of instigating a PES scheme in the Milford Haven and Cleddau Catchments. After suggesting two possible options in WP4 this section outlines the structure of a Reverse Auction scheme that we believe the evidence shows is likely to deliver the best chance of successfully reducing nutrient loading in the waterbodies.

The main benefit of a reverse auction in the Pembrokeshire context is that the market is driven by those who provide the funds and is therefore not dependent on the numbers or scale of buyers. As indicated previously the size and number of buyers has always appeared to represent a potential barrier to successful PES schemes in Pembrokeshire. Though there are disadvantages (namely the source of the funding) the ability to run a scheme without any buyers in the traditional sense outweighs the other concerns.

Ecobank Business Development Plan – Recommendations for Project Implementation

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.