Nature's future series: What could high-quality investment in nature look like?

(c) Andy Hay (rspb-images.com)

In this blog, project consultant Jack Rhodes looks at how we can use high-quality private investment to help protect and restore nature. This is the fourth in an exciting blog mini-series exploring our vision for a Nature Positive future and how we can make it a reality. Please check our previous blog posts. 

Private investment is finally an option for nature conservation. As a nation, our big challenge is to make good use of this money. 

The RSPB have joined other organisations to publish the Financing UK Nature Recovery series which looks at attracting greater amounts of private investment into wildlife projects. Major new markets are being put in place, investment funds are being established, and conservation organisations (old and new) are reviewing their project pipelines with fresh eyes. 

Investing for the nation 

We know that nature is underfunded, and public and charitable spending still fall far short of what’s needed to meet our national environmental priorities: halting species extinctions and pollution, protection from flood and heat, preventing a climate breakdown, ready access to nature. But a great strength of this existing spending is that most of it goes to valuable and high-quality projects. There are processes for allocating and overseeing much of this funding, developed over decades and based on robust logical and project management frameworks. 

This has delivered world-leading projects, such as Europe’s largest open-coast realignment at Medmerry in Sussex. Medmerry’s new saltmarshes and embankments are thought to save a life each year on average. They protect the 10,000 people who live in Selsey from being entirely cut off by floods and from losing essential services, and they also allowed rare (dramatically long-legged) black-winged stilts to raise chicks in the UK again for the first time in a generation. 

Good use of public money has also delivered a fleet of smaller but life-improving projects. Community gardens and orchards, and parks that hold back floodwaters. Projects to keep swifts, sparrows, turtle doves and hedgehogs living in our towns and countryside. 

Securing good use of private money 

The new environmental markets – notably in carbon, net gain, water and nutrient management – are going to need something similar, and they are going to need it rapidly. Otherwise the known risks of environmental markets will grow into serious problems. Projects will be judged on cost above all, and money will be locked in to low-quality projects that are difficult to monitor and improve. 

This would not just be a private problem. Many companies are forced to buy environmental credits in order to get government consents or planning permission, giving government a responsibility for the good use of money levied through this route. And critically, buyers of nature credits are usually purchasing the right (officially or implicitly) to pollute or damage nature elsewhere. 

In exchange for this right and to justify this compulsion, environmental markets need to be clearly and provably good. They must fund transformative changes – on whatever scale is appropriate – and deal with our agreed and urgent national priorities. This is not yet happening, but is increasingly a focus for government and for us as charities. For us at least, and drawing on experience from other countries with established markets, a broad picture is emerging of what a high-quality marketplace might look like. 

What do the solutions look like?  

Although details will vary between markets, we believe the foundations of a good marketplace should include most of these key elements: 

• Market design that locks in public benefits, and favours those projects that deliver government objectives. The metrics and policies that allow a project to create credits, indirectly do the job of prioritising projects. They need to be designed for this job above all else.  
• Appropriate democratic accountability. Citizens need the information and tools to understand what is happening, and local authorities and government agencies need some ability to steer investment. 
• Accreditation of providers, to help drive up the standard of practice and to prevent bad faith. 
• Sensible use of government purchasing power. There is a lot of potential for government to buy projects directly through environmental markets. If government requires high standards and multiple benefits then many projects would start to design these in. 
• Support for community groups. These are the engine of many conservation projects around the country and there is a genuine risk of them being frozen out of this work, if it starts to require access to large-scale finance and detailed negotiation of credit sales. Thought is needed about how to link and aggregate local groups into new markets. 
• Clear enforcement. Many projects will fail to meet their objectives – and it needs to be clear what the consequences of this will be. Policies that escalate directly from advice to large financial penalties are bound to fail and government will need to look at greater use of consent and works orders. 

We are in a very fluid situation. Environmental markets are new to the UK, and we are not yet sure how they will develop and play out. We will all need to act with care, and to remain open to learning from experience.