PEATLAND RESTORATION AND INVESTMENT IN THE SOUTH WEST

The Natural Environment Research Council has funded practical research work in the South West to develop a scheme for the practical restoration of peatland for water management, the reduction of atmospheric carbon and biodiversity habitat management.  This work has been led from Leeds and Birmingham City Universities, and supported with additional funding from South West Water (SWW).  A prospectus is planned to be one of the major outputs from the project, providing advice to landowners, farmers and land managers as to how a scheme could work, what factors need to be considered in deciding on site suitability, and how land managers can decide if participation is right for them.  The prospectus should also be helpful to potential investors in deciding if they wish to invest in the carbon and biodiversity aspects of the scheme.

The prospectus is now being prepared and the purpose of this synopsis is to invite feedback and comments on its overall structure, and the matters which it is proposed it will cover.  All comments are welcome.  Please send them to Charles Cowap, Project Team, at cdcowap@gmail.com.  Charles Cowap and Dr David Smith (SWW) are happy to discuss any questions arising from this work: Charles Cowap 07947 706505; Dr David Smith: 07824 460274 (dmsmith@southwestwater.co.uk).  There will be further opportunities to comment on the full prospectus in due course.

Introduction

  • What this document is about
  • How it is structured
  • How it aims to help you to consider if PES (Payments for Ecosystem Services) is for you including some important factors to consider in deciding to sign up for PES
  • Status of document in contractual terms
  • Desirability of seeking independent advice

The proposed PES scheme

  • What we are offering for SWW (South West Water) and other investors to ‘buy’: peatland management for water supply and quality, with an option to bundle carbon and biodiversity management/development for corporate CSR (Corporate Social Responsibility) purposes
  • Potential interest for other investors in carbon and biodiversity benefits
  • Background to ESS (Ecosystem Services) and PES more generally, including links to the development of a UK Peatland Carbon Code
  • The relationship of this prospectus to the important and growing role of ESS and PES thinking in government policy and land management more generally

Basis (es) of offer

  •  The ‘offer’ to landowners and managers interested in selling their ESS
  •  The offer to companies and other potential investors in biodiversity and carbon in the south-west

Factors and issues for sellers and buyers to consider in deciding whether to join PES programme

  • Contractual aspects: length of agreement, review terms, break clauses, succession, other key terms and what they mean
  • Land tenure arrangements
  • Effects on other interested parties, eg tenants, landlords, graziers, commoners, rights of turbary, manorial rights, owners of sporting and mineral rights, implications for succession and inheritance,
  • Practical farming considerations
    • Series of sub-headings
    • Animal welfare and health considerations
    • Relationship with statutory schemes and designations (ESA, HLS, ELS, GAEC obligations etc)
    • Public liability and insurance questions/CROW Access Land
    • Other business considerations, eg relationship to diversification opportunities
    • Maintenance obligations and concerns
    • Taxation: VAT, Income Tax, Inheritance and Capital Gains Tax, Stamp Duty Land Tax [Corporation Tax]
    • Ongoing obligations [may be covered by contractual aspects or cross-linked]
    • Impact on capital values
    • Security/risk judgements

Decision Tree

Two decisions trees, one for site selection; the other to help land managers to work through the options.

Site suitability, eg

  • Peatland – known mapped damage – further investigation by survey team – detailed mapping – determine if damage restorable – evaluate impact on farming activity – evaluate drainage/wetness implications for surrounding farmland

 

  •  Identify all interests in site: tenure, other rights, designations, schemes
  • Liaise with other interests and stakeholders
  • Identify new management requirements
  • Consider compatibility with existing management and schemes, and potential to gain funding from conservation related initiatives through providing more sustainable habitat
  • Identify any needs for adapted management or farming policy
  • Consider scope to release other resources for alternate uses
  • For non-compatibility, evaluate ‘better’ option: in or out of PES and review for alternatives
  • Assess financial benefits and costs

A suggested approach to financial aspects

Costs saved

  •   Eg some livestock purchases
Extra costs, eg

  •   Time for access to more difficult ground
  •   Vet and med bills
  •   Insurance
  •   Feed
  •   Machinery costs if contracting to be offered

 

Extra Revenue, eg

  •   PES Income
  •   Contracting opportunities for SWW
Lost Revenue

  •   Eg some livestock LWG or sales
Balance positive: financially worthwhile

– Consider capital and tax implications

Balance positive: not financially worthwhile

Conclusion: pulling it all together

Next steps and who to contact for further information

Please forward comments on this draft to:

Charles Cowap, MRICS FAAV

NERC Project Team

cdcowap@gmail.com

For further information or to discuss any points on this synopsis, please contact either Charles Cowap as above (or phone 07947 706505), or Dr David Smith, SWW, 07824 460274 (dmsmith@southwestwater.co.uk)

[Reproduced in full from a document circulated on 5 March 2013 to stakeholder representatives]

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