The above principles of the Ecosystem Approach are evident (light green) or significant (dark green) within this case study

Exmoor – Developing a place-based Payments for Ecosystem Services scheme for South West Peatlands

What is this case study about?

This study is about the development and design of a payments for ecosystem services (PES) scheme for peatland rewetting on Exmoor National Park to achieve water management, carbon and biodiversity benefits, building on work undertaken by the Mires on the Moors Project and South West Water’s (SWW) Upstream Thinking programme. Initially, work was jointly-funded by a SWW-NERC (Natural Environment Research Council) internship through the Environmental Sustainability Knowledge Transfer Network, with continuing work now funded by SWW and other interested parties in the South West.

What is its contextual setting?

Work has initially focussed on a target area of 2,000 ha in Exmoor. This forms part of the catchment of the River Barle, a tributary of the Exe. Water is extracted from the Exe for Tiverton and Exeter, and the Environment Agency licence requires that SWW must top up the river’s flow in order to continue extraction when river levels threaten to fall below a stipulated level. Water is released from Wimbleball Reservoir for this purpose, and in drier years this reservoir can only be replenished by costly pumping from Exe Bridge pumping station where three diesel-powered pumps have the capacity to pump a total of 150 megalitres of water per day over a distance of five miles and a rise of 120 metres.

Peatland restoration on Exmoor has the potential to hold back water in times of peak rainfall, evening out the summer flow of the Exe, requiring fewer releases of water from Wimbleball reservoir and therefore less replenishment pumping in the winter. This all offers potential cost savings to SWW with which to pay for peatland restoration on privately owned farmland.

Restoration work to date has been undertaken as part of HLS (Higher Level Stewardship) land management agreement options, using the peatland rewetting supplement of £10 per hectare. SWW and local land managers are interested in how a longer term solution than HLS can be developed, given considerable interest in the carbon benefits of peatland restoration, as well as the benefits to local biodiversity within the Exmoor National Park. Local interest has therefore come from farmers and land managers, the Exmoor Society and the National Park Authority.

How has the Ecosystem Approach been used?

The particular focus has been on PES within the Ecosystem Approach as a whole (Principle 4). The leading farmers of the area and others with a key interest in the project are familiar with the language of ecosystem services, and wide interest has been shown in this practical project by local interest groups and the rural professional community. The work has taken place in close consultation with local stakeholders throughout the development of the PES scheme, where possible drawing on local knowledge in addition to scientific evidence, and balancing local interests with wider public interest (Principles 1 and 2).

What has happened?

Meetings have been held with local farmers and their representatives, as well as local groups of surveyors, valuers, agricultural lawyers and other rural professional advisers. This has allowed us to explore the practical concerns and aspirations locally regarding the development of PES. As a result of this we are developing a ‘prospectus’ for the terms on which SWW may be able to ‘purchase’ ecosystem services from local providers. This embodies advice to prospective vendors on how they may be able to appraise the financial and non-financial implications, positive and negative, for their businesses and land-holdings.

What is the added value of using the Ecosystem Approach?

• PES in particular has allowed us to frame the development of this scheme economically and practically. Public funding for peatland restoration is currently very limited, because it can only pay for the costs of restoration and any income foregone as a result of restoring the land, due to World Trade Organisation rules. Creating a market for the climate change mitigation, water and biodiversity benefits of peatland restoration can facilitate flows of private investment, which may incentivise wider uptake of restoration actions among the land management community in ways that are aligned with biodiversity conservation and sustainable land use.
• Although not yet realised in practical terms, it has also allowed us to consider the practical issues around the development of PES from a supplier/vendor perspective – in some respects balancing the emphasis in the academic literature to date on purchasers/users and theoretical perspectives.

What are the key barriers to progress/mainstreaming?

• Assembling the necessary financial data on water management costs in order to arrive at a sound financial basis for PES.
• Farmer and land manager concerns at the long term implications of rewetting for other land management activities – grazing livestock in particular.
• Legal concerns over the nature and duration of agreements, as well as an unsatisfactory legal framework under English law for the creation of such agreements (this allowed us to feed comments based on our experience into the Law Commission’s review of conservation covenants).
• Lack of comprehensive data on water management benefits and peatland carbon sequestration pending the outcome of long-term monitoring work being undertaken on Exmoor.

What are the lessons learnt?

Work is now moving into the final stages on the economic assessment for Exmoor. Attention is now turned to Dartmoor where different issues present themselves. The concern for water from Dartmoor is more about quality than quantity and flow management, and the land tenure considerations on Dartmoor include common grazing rights.

What next?

• There are genuine concerns amongst land managers and landowners over the long-term impact on their business of taking part in a PES scheme.
• The Ecosystem Approach has helped consider the development of policies for land management in a broader perspective using Exmoor as an example. The lessons from this are potentially relevant to the management of all rural land, but in particular in considering the future economy of hill and upland areas.
• The case study helped affirm the importance of PES needing to benefit all stakeholders, in particular in this case land managers and farmers, but also SWW as a company, the water users of the south west and shareholders in SWW.
• Further work is still being undertaken on the underlying economics of this scheme, but this looks as if it will provide valuable lessons in the practical development of PES programmes from a financial perspective and the adoption of ‘costing/pricing’ approaches rather than the ‘valuation’ approaches which have been more widely discussed in dealing with ESS and PES to date.

Case study author: Charles Cowap