Funding is required to support and deliver the solutions that our rivers need. Some of this comes in the form of government agri-environment schemes that reward environmental land management, but more is needed. To fill that gap, we can look to private finance. Environmental markets are an innovative approach to leverage and accelerate private finance to preserve and enhance our natural assets, by quantifying and measuring the ecosystem services they provide.
These can then provide opportunities for the private sector to invest in nature based solutions that can reduce the risks to their operations, supply chains and license to operate. Additionally these financial mechanisms support climate change adaption at a catchment scale by enabling land managers to put the right nature based solutions in the right places to deliver multiple benefits for all.
If you are a business who is looking for opportunities within environmental markets, please get in touch as our local Trusts have a pipeline of potential projects that are designed to deliver multiple environmental benefits.
To find out more about the nature-based solutions working to deliver these credits and units, please see our working with nature page.
We are utilising new and established environmental markets to deliver the changes that are required to meet our objectives of wild, healthy, natural rivers valued by all. These include:
Replenishing water, through Volumetric Water Benefit Accounting (VWBA), is defined as increasing the water volume – specifically within a river’s catchment area - through the implementation of an appropriate nature-based solution.
VWBA empowers companies with a comprehensive, standardised and science-based methodology to calculate and evaluate the benefits of their water stewardship activities. This method enables businesses and other key stakeholders to better tackle shared water risks at catchment-scale.
For example, if you build a wetland, it will replenish a set volume of water back into the catchment. This is due to wetlands being able to hold a much larger volume of water than the original field with no green infrastructure in place.
The approach can be applied to a wider range of land management and conservations practices, such as peatland restoration, habitat creation and natural flood risk management – all of these activities will have a VWBA value based on their scale and location within the catchment.
We can help your organisation identify the most appropriate, environmentally beneficial projects in a catchment and support their implementation, monitoring and maintenance.
In addition to a growing number of corporates, we have also received support from DEFRA and the Environment Agency through the Natural Environment Investment Readiness Fund (NEIRF) to develop this market.
As climate change accelerates, it is predicted that we will face increased coastal and river flooding due to factors such as higher sea levels and increased rainfall. This threat poses significant economic risk, with over 1.5 million homes and businesses predicted to be in the highest flood risk category by 2050.
Hard engineered solutions alone will not meet our future flood risk challenges and must be supplemented by natural solutions. Natural flood management is an approach which uses various techniques to restore or mimic the natural functions of rivers, floodplains and the wider catchment to reduce downstream flooding to communities at risk.
For several years, local Rivers Trusts have been implementing NFM techniques across the country in both urban and rural locations. Natural Flood Management uses natural processes to slow the flow of water, reducing the chance of flash flooding, as well as increasing water storage throughout the landscape.
The Catchment Natural Flood Management Model aims to use nature-based solutions to reduce flood risk at a landscape scale, using a blend of public and private finance. Initially developed by The Rivers Trust, Wyre Rivers Trust and partners, it was the first project of its kind to use a new innovative financial mechanism based around locally owned and delivered interventions. The model uses an SPV in the form of a Community Interest Company (CIC) limited by guarantee and with an asset lock that will see multiple beneficiary organisations repay the upfront investment through the sale of ecosystem services. Farmers and land managers are then paid to host and maintain nature-based interventions design to help to reduce flood risk on their land.
The Rivers Trust aims to replicate this model across numerous catchments and look at opportunities for scaling the current approach. The development of revenue streams enables the payment, or financial mechanism, by which upfront capital can then be secured from investors to pay for natural flood management measures. Without revenue streams there is no business model and therefore no project – and so creation of revenue streams through private and business is vital to the success.
If you are interested in discussing this model further, please get in touch with Dan Turner, Land Management & Environmental Markets lead at The Rivers Trust [email protected]
For freshwater habitats like our rivers, wetlands, estuaries and lakes, an increase in nutrients (particularly nitrogen and phosphorus) can lead to major problems for plants and wildlife. Small amounts of nutrients are essential for river ecosystems, but in excess they can cause algal blooms, crashes in dissolved oxygen levels, and the death of fish and insects.
Nutrient pollution is principally caused by agriculture from fertilisers and animal waste, and from inadequately treated sewage. It is the biggest threat to achieving healthy waterways across the country.
The Habitats Directive requires that in designated sites – such as Special Areas of Conservation, Special Protected Areas and Ramsar sites – which are in unfavourable condition; additional nutrient burdens will not be permitted by law. This directive is transposed into UK law through the Conservation of Habitats and Species Regulations 2017 and is retained even after leaving the EU.
In response to this, a nutrient neutrality scheme has been created by Natural England which requires no net increase in nutrient levels from new housing within these catchments. Each effected catchment has a nutrient budget calculator which developers must currently use to calculate the excess nutrient load from their plan or project. This excess nutrient load must then be mitigated onsite through sustainable urban drainage systems or elsewhere in the catchment using nature-based solutions such as constructed wetlands. The purpose of these mitigation measures is to avoid impacts to the designated sites, rather than compensating for the impacts once they have occurred.
Nutrient Neutrality currently applies to 23 member Rivers Trusts and 25 CaBA Partnerships. The Rivers Trust has developed a Constructed Wetlands Hub where you can find out more information on designing wetlands for nutrient neutrality. Some of our member Rivers Trusts have already designed and built very effective treatment wetlands and other interventions using funds from developers to treat sewage effluent more effectively. This means that the nutrient problem is reduced, and new habitats are created.
The United Kingdom is ranked in the bottom 10% globally for species and biodiversity loss. Species have reduced by almost 50% since the industrial revolution; driven by rapid urban and agricultural expansion. For our freshwater habitats in the UK the picture is starker with over 90% of wetland habitats being lost in the past 100 years and only 14% of our rivers in England having good ecological status.
Biodiversity net gain (BNG) is a policy which aims to help reverse this trend of biodiversity loss by requiring developers to leave biodiversity in a measurably better state than before a development took place. The Biodiversity Net Gain (BNG) policy, outlined in the Environment Act 2021, is set to become mandatory as of November 2023. This policy mandates that all planning permissions, excluding small sites, must achieve a 10% biodiversity net gain. Small sites will follow suit in spring 2024 and Nationally Significant Infrastructure Projects in 2025.
This biodiversity is quantified in Biodiversity Units using Natural England’s Biodiversity Metric. If developers are unable to deliver biodiversity net gain onsite, they will be required to provide this biodiversity uplift offsite through habitat enhancement or creation. The demand for offsite biodiversity net gain is expected to create a market for Biodiversity Units with original market analysis estimating an annual market value of £135m.
Biodiversity net gain is already being used by member Rivers Trusts on projects which are restoring rivers to their natural state and by creating and enhancing habitats such as woodlands, grasslands, and wetlands. It presents an opportunity to attract private finance to fund habitat creation and restoration to improve the habitat connectivity and ecological health of our catchments.
Get in touch to discuss Environmental Markets