Using your land for natural capital and carbon credits

As Governments across the globe wake up to the vital role of ecosystems in climate mitigation and adaptation strategies, natural capital is becoming an increasingly important concept. Combine this with an increasing number of businesses looking to nature-based solutions to offset their emissions and a site's natural capital value becomes the big question.

The list of reasons to utilise land for nature-based solutions is growing at pace and some landowners are in a lucrative position. RPS’ Director of Ecology, Mike Barker, discusses how land can provide financial value through carbon credits and how landowners can seize the opportunity.

Carbon credits are certificates landowners can apply for representing measurable, verifiable emission reductions from certified climate action projects. They remove, reduce and avoid greenhouse gas (GHG) emissions and these are certified by the ‘Carbon Code’ provider.

In the pursuit of net zero carbon, a business may need to offset the emissions it can’t eliminate. To do so, they will need to buy carbon credits, a product of natural capital, typically delivered through nature-based solutions. These include water quality improvements and biodiversity habitat units for developers, which compensates for the environmental damage such as nutrient loading and biodiversity loss during construction.

Natural capital is composed of many assets, including soils, wetlands, urban greenspaces, hedgerows and so on, as well as a range of services. But not all of these are easily measured or monetised and their interactions can be complex.

The natural capital assets we work on with landowners typically fall into five categories:

1. Water

Erosion, the run-off of fertiliser and slurries from farmland can all affect water quality.

Cover crops and grass margins are just a couple of effective land management practices that help to reduce run-off, pollution and limit nutrient losses to water.  Simple land management interventions can have significant benefits, and these are measurable.

2. Biodiversity

Biodiversity Net Gain (BNG) requires developers to offset any loss in biodiversity caused by their activities that they cannot accommodate on their sites. This is a good opportunity for landowners that have land with potential for ecological enhancement.  Developers would pay for these ecological enhancements and the landowners would get paid for maintaining this interest for 30 years. These are long-term land-use change agreements so do need to be balanced against other future uses and our advice can assist in determining the right way forwards.

3. Trees

Woodland and tree planting is a well-publicised means of mitigating climate change and reversing biodiversity loss.

Incentives for woodland creation and management of existing woodlands come in three possible revenue streams: government support, carbon payments and private finance. This carbon code has also now been extended to hedgerows too.

4. Air

Taking steps to improve slurry storage, incorporate manures and increase the accuracy of nitrogen fertiliser applications can help reduce emissions, particularly of methane, ammonia and NOx.

With agriculture responsible for 10% of UK greenhouse gas emissions, farmland activities and land management are important considerations. Trends like regenerative farming and other practices can help move farms onto a net zero carbon track. The activities undertaken to tackle carbon emissions can also have other natural capital benefits that should also be measured and where possible rewarded.  

5. Soil

Soil plays a pivotal role in nutrient carbon storage, water quality, nutrient cycling and flood prevention. All of these factors can attract financial support in the future, but are also paramount in sustainable food production now.

Rewetting of peatland soils and peat restoration is another recognised carbon code process. Mechanisms for recognising soil carbon and wetland carbon capture are coming, so it is important to quantitatively measure any planned changes now so these can be registered and certified in due course.

When trading in environmental gain it’s necessary, before anything, to measure and quantify that ‘credit’.

Landowners can measure BNG through Natural England’s (NE) Biodiversity Metric 3.1. As an example, when a farmer plants a hedge, creates a pond or sets up a field margin, the NE metric converts that into a number of biodiversity habitat units, which someone such as a housebuilder may then purchase.  

And to ensure carbon credit projects do what they claim to do, the UK’s Woodland Carbon Code (which accounts for almost a quarter of new woodland planted in the UK each year) and Peatland Code have been created. They not only monitor the adherence levels of carbon projects, but they also ensure no harm is brought to habitats and species in the process.

As the natural capital market is very much in its infancy, a number of needed metrics are still being developed. Tools to track factors such as soil health, deforestation and carbon sequestration will be welcome additions and if managed appropriately, natural capital strategies will positively impact several linked environmental and social issues.

Replacing intensive methods of land management practices with more sustainable options can lead to more carbon sequestration and improved biodiversity, creating a positive impact on local communities.

Our ecologists, carbon assessors and landscape architects deliver a robust assessment to determine the carbon sequestration potential of your land. Our assessment will detail your carbon credits, natural capital benefits, flood risk reductions, nutrient improvements, and potential biodiversity net gain credits through habitat creation.