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Habitat Banking Report: CCC & eftec Joint Announcement

Scaling up private investment in the protection and restoration of our natural world

(London, 15 February 2011)  A call to scale up private investment in the protection of nature, by creating a habitat banking system and biodiversity credits, has been made in a joint report by Climate Change Capital, the investment manager and advisory group, and eftec, the leading environmental economic consultancy. The foreword has been written by Stanley Johnson, a leading environmentalist, author and UN Ambassador.

The report says that by creating a new market in biodiversity credits the UK Government and the EU can help meet targets to address the loss of biodiversity. Existing UK laws are insufficient to achieve no net loss of biodiversity and habitat banking is a new and potentially vital policy tool to change this.

The authors argue that we need a paradigm shift in the way we raise capital for nature conservation and that progress will require us to rapidly increase the money available from the private sector. Part of this should involve the UK extending biodiversity protection laws towards the goal of no net loss and net gain and making the parties responsible for activities that damage biodiversity pay for fixing it.

Ben Caldecott, head of UK and EU policy at Climate Change Capital and one of the report's authors, said:

"Britain's Coalition Government is committed to introducing new ways to better protect habitats and encourage biodiversity conservation. Designing a credible habitat banking system is a real opportunity to scale up investment in the protection and restoration of our natural world."

"The way money has been raised historically - primarily through public sector expenditure or voluntary donations to charities - while important, is highly unlikely to generate the scale of capital needed to finally halt the loss of biodiversity, or turn the tide through ecological restoration. Progress will require us to rapidly increase the money available for biodiversity protection and restoration from all sources and in particular, this means scaling up the private sector's contribution."

The authors also argue for the creation of a common unit of account or "currency", with established equivalences or "exchange rates", for biodiversity credits which will be essential for attracting investment by creating a deeper and more liquid market than would otherwise have been in the case. This would be similar to CO2 equivalents in the carbon markets.

Caldecott said: "The standards and regulations that would make a biodiversity credit market scalable internationally do not yet exist. There is a unique opportunity to successfully render a working and effective system in the UK that can be replicated, improved and expanded across Europe and throughout the world. Getting it right here could transform the way we value nature and finance its protection globally."

Ian Dickie of eftec and co-author of the report, said:

"Strong regulation and governance is vital for the market to succeed. Credits should aim to provide a new layer of protection for biodiversity in a more efficient way than could be achieved through strict regulation. It can be more efficient if, rather than a piecemeal approach, compensation is planned strategically and can take account of the future needs of biodiversity in the face of climate change. Moreover, any habitat banking system should be overseen by independent bodies with clear public duties and local and transparent accountability."

"One way for Government to support the development of the market would be through corporation tax relief on the costs to the buyer of purchasing credits that go beyond the minimum needed to provide no net loss. Government could also underwrite a set number of credits to encourage early investment and participation, in a way similar to underwriting mechanisms proposed and utilised for the international carbon market."

To read the research paper visit /thinktank/publications.aspx

ENDS

ENQUIRIES:

Climate Change Capital Ltd

Daniel Cremin  +44 (0)20 7939 5319    dcremin@c-c-capital.com

NOTES TO EDITORS

Notes to Editors

About eftec (www.eftec.co.uk)

eftec is a UK consultancy specialising in environmental economics. It collects and interprets economic evidence on the environmental costs and benefits of projects, programmes and policies; uses this evidence in investment and policy appraisal; designs economic instruments for environmental policy and provides training in environmental economics. eftec was founded in 1992 and collaborates with environmental scientists, engineers and market researchers to provide economic analysis for sound, effective and sustainable environmental management. In 2004, it set up the UK Network of Environmental Economists (UKNEE), which holds regular seminars and the annual conference on applied environmental economics, envecon, with growing attendance from the UK and around the world.

About the authors

Ben Caldecott is Head of UK & EU Policy at Climate Change Capital. Ben runs the CCC ThinkTank and advises CCC's funds and clients on the development of policy-driven markets. In addition to his role at CCC, Ben is on the Board of the Green Alliance and has a number of other advisory appointments with organisations working on environment policy.

Before joining CCC, Ben was a Research Director and Head of the Environment & Energy Unit at Policy Exchange, a leading UK based think tank. He has also worked for the United Nations Environment Programme and Foreign & Commonwealth Office, as well as in Parliament. Ben is a Fellow of the Royal Asiatic Society, Royal Geographical Society and LEAD International. He read economics and specialised in development and China at London, Beijing and Cambridge universities.

Ian Dickie joined eftec in November 2007. He has led a range of projects concerning the management and regulation of the natural environment, including on marine Natura 2000 site designation, regulation of the UK trade in wildlife, potential use of habitat banking in Europe and implementation of the Marine Strategy Framework Directive. His interests include biodiversity and natural resources policy, and the impacts of environmental policies on economic objectives. He is also a Director of the Aldersgate Group.

Previously Ian was head of economics for the Royal Society for the Protection of Birds, whom he joined in April 2000. He has experience of most aspects of UK and EU natural environment policy, and working to advocate recognition of the value of the environment in decision-making. Ian co-authored several RSPB reports on the impacts of nature conservation on local economies and wellbeing. After an Economics degree at St. Andrews University and a postgraduate European Environmental Policy and Regulation Masters from Lancaster University, Ian worked as a consultant on economic development and sustainable construction before joining the RSPB.

Stanley Johnson is a former MEP, serving between 1979 and 1984 as Vice Chairman of the European Parliament's Environment Committee. He has also worked in the European Commission as Head of Pollution Prevention and as Director of Energy Policy. He is currently Chairman of the Gorilla Organisation and an Ambassador for the United Nations Environment Programme's Convention on Migratory Species.

He has had eleven books published dealing with environmental issues. His latest book (with Robert Vagg) is SURVIVAL: Saving Endangered Migratory Species, published by Stacey International.