{"id":36535,"date":"2023-05-19T17:49:53","date_gmt":"2023-05-19T16:49:53","guid":{"rendered":"https:\/\/newsblogsnew.ihbc.org.uk\/?p=36535"},"modified":"2023-05-19T17:49:53","modified_gmt":"2023-05-19T16:49:53","slug":"ihbcs-competence-signpost-finance-economics-pioneering-new-approaches-in-scotlands-emerging-natural-capital-markets","status":"publish","type":"post","link":"https:\/\/newsblogs.ihbc.org.uk\/?p=36535","title":{"rendered":"IHBC\u2019s Competence Signpost (Finance & Economics): Pioneering new approaches in Scotland\u2019s emerging natural capital markets"},"content":{"rendered":"

\"\"As the UK Infrastructure Bank announces its intention to commit to its first natural capital deal, Kate McGavin and Helen Williams, job-share Director of Strategy and Policy, highlight how this investment can help deliver for climate and biodiversity \u2013 and grow the future market for nature-based investment.<\/h3>\n

image: for illustration – Highland Rewilding website<\/em><\/h6>\n

<\/p>\n

\u2026 Private investment into high-integrity natural capital markets\u2026.is a key component of realising net zero\u2026<\/span><\/em><\/h2>\n

UK Infrastructure Bank writes:<\/p>\n

Located at the head of the Knapdale Peninsula, the 1,300-hectare Tayvallich Estate is situated in an area known for its beauty, and for some of the most important ecological landscapes in Scotland. On the face of it, this serene and seemingly changeless landscape appears an unlikely location for a significant milestone on the road to net zero. Yet, despite its remote coastal location, Tayvallich is at the forefront of a movement towards ecological restoration and social regeneration, underpinned by emerging natural capital markets.<\/p>\n

The Scottish Government is committed to protecting and enhancing Scotland\u2019s natural capital, which has been identified as an investment priority in the nation\u2019s\u00a0Economic Strategy. Habitat restoration, such as increases in tree cover and peatland restoration, can reduce and lock up greenhouse gas emissions, enhance biodiversity, and lead to wider social and economic co-benefits.<\/p>\n

Whilst public funding and philanthropy remain critical to achieving the large-scale landscape recovery required to deliver on this commitment, private sector investment needs to scale significantly to help bridge the financing gap for nature-related outcomes.<\/p>\n

Into this space, natural capital markets have emerged as a way of generating sources of revenue from improvements to our natural environment. These diverse new income streams include the sale of credits for carbon captured by ecosystems and for improved biodiversity.<\/p>\n

The markets underpinned by these revenues are nascent \u2013 but with huge potential to grow if barriers to scale are overcome, such as high transaction costs, data gaps, and novel risks.<\/p>\n

As highlighted in\u00a0our recent discussion paper\u00a0covering UKIB\u2019s role in natural capital markets, the Bank is well placed to invest in emerging areas of the natural capital market, by deploying our capital flexibly to help address barriers and provide a route to large scale private investment.<\/p>\n

So, it is significant that we have today announced a commitment to our first natural capital deal and first deal exclusively in Scotland. UKIB intends to commit \u00a312million to support an innovative nature restoration project in the Scottish Highlands.<\/p>\n

Our short-term bridging loan facility will enable Highlands Rewilding Limited to acquire the Tayvallich Estate and pursue their aims of tackling climate change, boosting biodiversity, and delivering benefits for local communities.<\/p>\n

Tayvallich is home to fragments of temperate rainforest, an internationally important and threatened habitat which today makes up only 2% of Scotland\u2019s woodlands. In these unique, rain-drenched woodlands almost every surface is covered with lichens, mosses, liverworts, and ferns. Their restoration by Highland Rewilding will both increase biodiversity and help to lock up carbon.<\/p>\n

The project will also work to restore peatland on the Estate, which is currently degraded and emitting carbon to the atmosphere, and will explore the potential for carbon capture by marine ecosystems \u2013 an important emerging segment of the natural capital market.<\/p>\n

Highlands Rewilding intend to use Tayvallich as a testing ground for innovative natural capital approaches, working with their\u00a0wide-range of academic partners\u00a0to generate new data and insights with the potential to help shape high-integrity natural capital markets across the UK.<\/p>\n

For example, plans to improve the verification of biodiversity uplift at Tayvallich may have applications both in Scotland, where a voluntary market for biodiversity credits is emerging, and in England, where mandatory biodiversity net gain is set to be introduced later this year.<\/p>\n

This is in line with our ambition, as set out in our\u00a0Strategic Plan, to invest across the infrastructure landscape, including in new infrastructure technologies and demonstrator projects that can create, scale and accelerate markets beyond the scope of an individual project.<\/p>\n

Considering the relationship between natural capital projects and the communities that live within or alongside them is also central to our thinking on nature-based investment \u2013 including the alignment of our dealmaking with the Scottish Government\u2019s Interim\u00a0Principles for Responsible Investment in Natural Capital.<\/p>\n

The project is expected to deliver against these principles by providing opportunities for affordable housing through self-build co-ops and joint ventures with the community. To support this, Highlands Rewilding are progressing an agreement with the local community, which will have community prosperity and regeneration as its basis.<\/p>\n

Private investment into high-integrity natural capital markets \u2013 at scale and at pace \u2013 is a key component of realising net zero, reversing biodiversity loss, and regenerating rural communities. We look forward to working with partners in Scotland, including the Scottish Government, the Scottish National Investment Bank and NatureScot, and others across the UK, on realising this potential.<\/p>\n

We hope our investment in Tayvallich is the first of many steps we will take along this path.<\/p>\n

Read more….<\/a><\/p>\n

For more background see Highland Rewilding’s Blog<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

As the UK Infrastructure Bank announces its intention to commit to its first natural capital deal, Kate McGavin and Helen Williams, job-share Director of Strategy and Policy, highlight how this investment can help deliver for climate and biodiversity \u2013 and … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-36535","post","type-post","status-publish","format-standard","hentry","category-ihbc-newsblog"],"_links":{"self":[{"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/36535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36535"}],"version-history":[{"count":1,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/36535\/revisions"}],"predecessor-version":[{"id":36537,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=\/wp\/v2\/posts\/36535\/revisions\/36537"}],"wp:attachment":[{"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsblogs.ihbc.org.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}