Peatland carbon finance scoping study.

Published online
12 Aug 2022
Published by
Natural England
Content type
Miscellaneous
Website(s)

Author(s)
Tribe, N. & Drake, D. & Isaac, D. & Scholz, E. M. & Worfolk, C.

Publication language
English
Location
England & UK

Abstract

Peat soils in England store a vast quantity of organic material that has the potential to emit greenhouse gases (GHG) (HMG. 2021c). Emissions from degraded areas of peatlands are estimated at 24.5 Mt CO2 equivalent (CO2-eq) per year, representing 4.5% of total UK GHG emissions (CCC 2020a & b). Urgent action is therefore needed to abate or reduce emissions source. The government's Net Zero Strategy (HMG. 2021b) contains an ambitious target of 280,000 ha of peatland restoration by 2050, which if realised, would have the potential to make an estimated 1.58 million to 3.51 million GHG/carbon units available1. This restoration could also make a significant contribution to the 25 Year Environment Plan which commits the UK government to restore or create 500,000 ha of wildlife-rich habitat including peatland habitats (Defra. 2018). Assuming conservative market prices, income from the sale of these GHG/carbon units could, in principle, make a significant overall contribution in the region of £1bn2 to the total cost of this restoration (estimated to be up to £1.1 bn) and ongoing management, if a fully functioning market could be established. The extent of this financial contribution does, however, vary considerably across different peatland types, with a relatively low potential contribution (circa 25%) for landowners undertaking upland peatland restoration and a much higher contribution (typically >50%) for those delivering lowland restoration. Significant progress has been made over the last two decades in our understanding of effective techniques for peatland restoration, associated costs and projected impacts on GHG emission abatement (reduction in GHG emissions rather than sequestration that is the removal/absorption of GHG from the atmosphere). This, combined with a robust methodology for the validation and verification of carbon units provided by the Peatland Code (IUCN. 2017), creates a strong foundation to secure private investment in peatland restoration through carbon finance. The carbon market generally considers both sequestration and abatement but the Peatland Code currently only covers abatement and its associated trading. The potential to generate carbon revenue from GHG sequestration from a peat bog in favourable condition is limited at the moment by a lack of scientific evidence, so the primary focus of this report is on financing restoration through emissions abatement (IUCN. 2021). Peatland carbon finance is a new funding source for the land management sector and has the potential to significantly contribute to environmental goals alongside public funding if a functioning market can be established. In comparison to the market for woodland carbon units, which is now well established and rapidly growing, the peatland carbon market is at an earlier stage of development (Confederation of Forest Industries. 2021).

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