NatureScot Research Report 1272- Facilitating Local Natural Capital Investment - project report.
NatureScot and its partners are exploring approaches to secure more varied and sustained investment in nature through the Facilitating Local Natural Capital Investment project. The project aims to identify business cases, financing mechanisms and supporting tools that can help to unlock significant investment in the natural environment and have the potential to be scaled up and replicated across Scotland. The present report aims to summarize the process, outputs and learnings of the project conducted between August 2020 and March 2021. The background section briefly sets out the domestic and international context of the project and the process carried out by NatureScot and project partners to date. The next section considers the breadth of natural capital investment opportunities identified by the project team across the selected project area of the Tweed catchment. Key opportunity themes assessed include: peatland restoration; woodland creation; nature friendly farming; natural flood management and water environment; riverwoods; nature-based tourism; and biodiversity offsetting. This is followed by a summary of the analysis of the natural capital investment opportunities identified. The next section provides a deep dive into the priority investment structure, a 'Scotland Carbon Fund', and includes an analysis of aligned financial structures and market mechanisms to further facilitate investment in parallel with the Scotland Carbon Fund. This is followed by a summary of the financial analyses carried out to underpin the market impact of the proposed mechanisms and structures. Learnings and recommendations of the initiative are then presented.