GUEST BLOG - Applying the Natural Capital Protocol to woodland creation

26th May 2021 By Sarah Krisht, Principal Environmental Economist at AECOM

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Introduction and background

People today have more awareness than ever about their impacts and dependencies on the environment. Perhaps this is due to the COVID-19 pandemic, which has highlighted how important our relationship with nature is, when all we could do is go out for a walk in the park. Or maybe it is because of all the countries that have recognised that we are in a climate emergency and facing a biodiversity crisis. 

Either way, we are hearing about a variety of targets and actions that need to be implemented in the face of these issues. Many of them involve different approaches to land management, including investing in the restoration and enhancement of natural capital. The concept of natural capital covers anything and everything related to the environment, from land and soils to freshwaters and oceans, all of which are underpinned by biodiversity. Importantly, the concept of natural capital helps us recognise the environment as an asset that provide us with many benefits. These benefits range from water, food and clean air, to climate regulation and flood risk protection, as well as the benefits of having a biodiverse environment that we can access for recreational purposes. 

Project overview

Forest creation is an important approach to land management that is relevant to the climate emergency and biodiversity crisis. In this context, AECOM led a study to apply a natural capital approach to a forest creation project in Scotland. The study was commissioned by Scottish Forestry, in association with Tilhill Forestry and the Scottish Environment Protection Agency (SEPA). 

The study applied the steps of the Forest Products Sector Guide, a supplement to the Natural Capital Protocol, which is a framework for organisations within the forest sector to understand and assess their material impacts (i.e. beneficial or adverse effects of forest sector activities) and dependencies (i.e. the forest sector’s use of or reliance) on natural capital.

The study focused on Larriston, a site in the Scottish Borders, where planting was completed in 2017. The site comprises over 1,100 ha, as shown in the inset figure.

The study identified six different material impacts or dependencies including: timber, carbon sequestration, flood risk protection, recreation, aesthetic value and biodiversity.

The analysis showed that ecosystem services that were directly related to the objectives of forest creation were easier to assess. This was the case for timber where the total volume of timber forecast for harvest over 50 years was found to be just under 195,000 tonnes, with a value of around £2.5 million in present value terms. In contrast, the total volume of carbon sequestered by forested areas at Larriston, net of emissions from establishment and ground preparation, was estimated at nearly 145,000 tonnes of carbon dioxide equivalent (CO2e) over 50 years and valued at £9 million in present value terms.

Other ecosystem services covered in the study in quantitative and/or monetary terms included flood risk protection and biodiversity. There was a lack of suitable valuation evidence to assess aesthetic values, and a lack of reliable estimates of visitor numbers to assess recreational values. So, these two services were considered in qualitative terms. 

It is important to note that adopting a natural capital approach means that we can identify, measure and value these benefits in order to factor them into more informed decisions. The approach is not trying to put a price on the environment. Instead, it is allowing the benefits that nature provides to be valued (and appreciated), because the environment itself is recognised as being priceless.

Project successes 

The project was successful in being the first application of the Forest Products Sector Guide in the UK. The study showed that, in general, natural capital assessments for forest creation projects can:

  • Complement conventional Environmental Impact Assessments;
  • Provide evidence to assess performance under the UK Forestry Standard (UKFS);
  • Help assess different design options at the planning stage;
  • Help when engaging with stakeholders and local communities;
  • Inform the feasibility of developing payments for ecosystem services (PES) schemes;
  • Make the case for forest creation as a form of natural capital investment to achieve biodiversity targets and net zero carbon emissions;
  • Help with monitoring efforts and informs future management of forests including identifying lessons learnt for future projects; and 
  • Demonstrate returns on investment in forest creation projects.

Challenges and next steps 

The study also identified some challenges and recommendations for future research as follows: 

  • A natural capital approach can deliver the greatest insights if it is applied at the planning stage, when different forest design and management scenarios are considered.
  • Such assessments could also consider impacts and dependencies on social capital (e.g. relationships and trust) given the potential impacts of forest creation projects on local communities.
  • These issues will become more pertinent as different policies involve competing uses of land and affect a range of stakeholders. Having a better understanding of these issues can help project developers plan for them, and could make the planning and implementation processes run more smoothly and deliver on their expected benefits. 

Further details are provided in the project report available here.

Bio

Sarah Krisht is a Principal Environmental Economist at AECOM. Her work focuses on developing evidence to inform better decisions about the environment. She has extensive experience working with organisations within the public and private sector in the natural capital space.