Landowning is a long game and with successively low volumes of land coming to market each year, many of those fortunate enough to own land appear to agree…and there are new opportunities…
One relatively new item on virtually all landowners’ agenda is how to best monetise the carbon sequestration properties of land. To that end, I am delighted and hugely appreciative that Julian Metherell a director of NatCap Research has joined us as our guest to share some insights into that market and how, or even if, landowners can take advantage of it.
As landowners, estate managers and farm businesses adapt to the post-EU subsidy regime and the 2020 Agriculture Act they must produce robust evidence of environmental improvements and enhancements. To do this, an accurate natural capital baseline will be required.
Professor Sir Dieter Helm and Professor Kathy Willis identified the need for a scientifically rigorous and comprehensive online mapping tool consequently developing NatCap Map (natcapresearch.com), which builds on 20 years of peer-reviewed science to enable landowners to quickly and easily identify and measure their natural capital assets and the ecosystem services they provide.
This baseline provides the critical platform to measure enhancements to habitat, biodiversity, natural carbon sequestration in soils, hedgerows and trees, flood risk reduction, pollination and recreation. Launched in March and resulting in an overwhelmingly positive response from clients, the online tool provides data at a 25m resolution and can give baselines for any given area in the UK within minutes.
Predicting the future
In a post-BPS world, landowners are having to optimise their assets and identify incremental long-term revenue streams. Monetising natural capital, whether through public subsidy or private funding is a significant opportunity.
At Natural Capital Research we are working with our clients to create a natural capital baseline and map potential enhancements across their portfolios. For example, we can use our modelling approaches to predict future carbon sequestration with significant accuracy, allowing the landowner to explore value uplift from alternative land uses such as reafforestation, soil and peat restoration and hedgerow planting.
The cost of carbon
How one monetises the value of the carbon is a critical issue. The EU ETS price is currently trading at all time highs (north of €50 per ton) today and demand for voluntary carbon credits should grow as countries pursue aggressive net-zero targets. To affect the required transition away from fossil fuels many commentators are forecasting a carbon price between Eur 75-100 per ton by the end of the decade, considerably ahead of schemes such as the Woodland Carbon Guarantee auctions. We continue to explore how landowners might aggregate their pools of carbon and market this to corporate buyers and intermediaries at a price that more closely reflects prevailing carbon markets.
Similarly, the NatCap mapping tool, together with our bespoke service, is being used to evaluate “Net Biodiversity Gain” options in partnership with developers and to evaluate opportunities for natural capital options to enhance water catchments through mitigation of flood risk management, soil erosion, and nitrate and phosphate run off.
The farming transition is accelerating and while natural capital is now part of the vernacular many market participants lack the tools and methodology to evaluate this opportunity. Nat Cap Map is a low cost, digital, rigorous and science-based response to this market opportunity. It is providing vital assistance to our clients as they plan the future of their respective enterprises.
Founded in 2018, Natural Capital Research (NCR) is a data led science-based organisation which specialises in measuring natural capital* assets globally. Using leading modelling and data techniques, NCR enables landowners and corporates to map the natural capital provided by their landholdings. These include assets important for carbon storage, carbon sequestration, soil erosion protection, flood risk management, biodiversity, water quality and recreation. It also specialises in advising asset owners on how to enhance their natural capital value and providing the tools to report and validate increases in value over time.