Climate Action Plan - our expert evidence on why the natural capital approach is key to success
Natural Capital Ireland made submissions across several key areas of the recent Climate Action Plan 2021 Call for Expert Evidence, which called for views grounded in a comprehensive cross-sectoral perspective on the changes required to meet Ireland’s 2030 and 2050 climate ambition – read some of the key points from our submission here.
Members of NCI's Steering Committee and Working Groups added their expert views on a number of specific categories and areas across the Climate Action Plan, particularly those areas where natural capital accounting can be a valuable tool in achieving success - Enterprise, Agriculture, Forestry, Peatlands, Marine, Taxation and Tourism.
We made the case for the natural capital approach to become the key perspective for informing and underpinning the Climate Action Plan as a whole, as it provides the tools necessary to integrate environmental risks and opportunities, so often ignored at our peril, into government and business policy and decision-making.
The EU has taken the lead on advancing natural capital policies and is bringing the member states with it, requiring them to map and assess the state of ecosystems and their services. In Ireland, the approach is beginning to be integrated into major national policy documents, such as the National Planning Framework to 2040 and the Biodiversity Action Plan. But we are only beginning to map out how we can apply the natural capital approach across all policy sectors.
We believe that the natural capital approach is especially helpful in considering actions to mitigate the climate crisis. In his report to the British government in 2007, Sir Nicholas Stern described climate change as “a result of the greatest market failure that the world has seen”. This market failure arose from the universal focus on the benefits of exploiting fossil fuels, without any regard to the massive costs incurred by their contribution to global heating.
The natural capital approach seeks to avoid such dangerous blind spots by revealing the full range of environmental costs and benefits of any policy. We therefore propose that the Climate Action Plan should seek, in every policy sector, to identify and evaluate environmental costs and benefits as a guide to sound, science-based, policy creation and regulation.
Here is a summary of some of NCI's specific recommendations across various categories of the Climate Action Plan:
The challenges of climate change and biodiversity loss are interdependent, and present a variety of material risks to Irish businesses, which depend upon a stable climate and healthy ecosystems for supplies of raw materials, food products, and the provision of recreational amenities. Climate action from the enterprise sector therefore not only requires a reduction of emissions from enterprise to net-zero, but also the protection, management and restoration of ecosystems.
In Ireland, large businesses (+500 employees) are presently required to report on climate risks and opportunities and are typically well resourced in doing so. However, around 75% of Irish businesses are SMEs and/or family businesses who do not have the knowledge or expertise that is required to undertake reporting duties. As many large organisations are decarbonising their supply chains, SMEs who are not disclosing their own operations face greater transitional risks, as they may be dropped by large corporate customers.
A study undertaken by Natural Capital Ireland in 2020 shows that only 22% of Irish businesses have completed a review of their direct environmental footprint, and 13% have completed a review of environmental impacts in their supply chain. Only 20% have a policy which addresses the UN Sustainable Development Goals.
NCI's suggested measures to tackle this issue include:
- Mandatory climate and environmental reporting by SMEs, accompanied by appropriate tax incentives, grants and/or training supports to empower them to fulfil such obligations
- Free promotional and other supports and incentives to businesses of any size who can independently validate that their activities adhere to the EU Sustainable Finance Taxonomy list of approved ‘green’ activities.
- Public funding should be conditional upon disclosure and reporting of climate risks and opportunities by applicants.
- A greater emphasis on biodiversity-related risks and opportunities should be included in initiatives, with incentives provided for the implementation of recommended technologies and solutions. - Tax and other financial incentives should be provided to businesses to implement ‘natural climate solutions’ either directly where they own large landholdings, or indirectly through credit systems.
Actions might include preventing deforestation, improving carbon sequestration through ecosystem restoration, e.g. wetlands or peatlands, or the reduction of carbon and other greenhouse gas emissions through improved land management, e.g. grasslands, responsible timber management. If scaled up quickly on a global basis, Girardin et al (2021) suggest that nature-based solutions could deliver a 0.3C temperature reduction under the 1.5C by 2055 scenario.
- Knowledge Transfer programmes should be scaled up to provide businesses with affordable access to cutting-edge technologies to help reduce their carbon and environmental footprint. - Cultural attitudes towards environmental action vary between business sectors and communities. Initiatives and communications campaigns should be sensitively designed to break down cultural and behavioural barriers to progress.
Nature-based solutions can significantly contribute to climate change mitigation, adaptation, and disaster risk mitigation. Such solutions in turn usually reduce social and environmental vulnerabilities, and offer a variety of health and wellbeing and economic benefits. As the Government moves towards a wellbeing budget, natural capital accounting at a national level, and across all business sectors, should be integrated as a core supporting element to national wellbeing. According to our recent Business & Biodiversity study, less than half of Irish businesses view action on biodiversity as a business opportunity. Awareness of biodiversity-related risks and opportunities could be enhanced through the introduction of mandatory biodiversity reporting and natural capital accounting for businesses alongside climate reporting. Accepted metrics and frameworks to support natural capital accounting for businesses have been developed e.g. the Natural Capital Protocol. This should be supported by training and other rewards and incentives from Enterprise Ireland, Local Enterprise Offices, BICs and other such entities. Reporting by businesses would provide data to support natural capital accounts at national level. The development of a National Business and Biodiversity platform will further support the enterprise sector and facilitate peer-to-peer learning and networking supports.
Measures are needed to support farmers to diversify farm activities to include opportunities such as bioenergy, vegetable growth, forestry, organic farming. Ireland produces an abundance of beef and dairy produce, 90% of which is exported. By contrast, the vast majority of the fruit and vegetables consumed in Ireland are imported, elevating Ireland’s national carbon footprint and reducing our national food security.
One of the challenges facing farmers and food producers is the price offered by retailers, which is often too low to make small-scale farming activities or vegetable growing financially viable.
- Projects which shorten supply chains and allow farmers to sell locally grown food directly to consumers in their local area can make alternative farming practices more attractive, allowing farmers to cut out the middleman.
- Community-Supported Agriculture (CSA) is a collaborative framework in which local communities directly engage into a contract with a farmer to supply them with organic food. CSA is supported by fiscal subsidies in other EU Countries such as France, which has resulted in over 2,000 CSA farms springing up. In Ireland, only 10 CSA projects exist to date. The recently launched document Our Rural Future cites an ambition to encourage more citizens to relocate to rural areas and work remotely. The development of financial subsidies, training in organic farming methods, and other supports for CSA projects should be considered alongside other incentives to attract citizens back to rural regions. A working model here is demonstrated by Cloughjordan Ecovillage & CSA Farm and this has driven significant local employment, repopulation and community revival in the area.
There are considerable opportunities to encourage individual farmers and farm communities or cooperatives to invest in biodigesters, especially where farms are large and have high energy needs or where there is the potential for connections to the gas network. This will reduce the spreading of excess slurry where it is performed more as a means of waste disposal rather than fertilisation, with the added benefit of reducing methane emissions and pollution of watercourses.
As temperatures rise with the risk of extended dry periods, it will be essential to protect our watercourses from additional pressures. Land use has to be assessed and managed on a catchment scale to reduce the risk of nutrient seepage into watercourses through a redirection of supports to farmers to encourage the re-establishment of wetlands, the use of soakaways, maintenance of hedgerows and planting or set aside of buffer strips beside rivers.
Catchment management can also provide for landscape management of our countryside to facilitate the restoration of natural features and allow wildlife to adapt to climate change by being able to move through the landscape without being confined to severed remnant habitats. New agri-environmental measures will meet the criteria of adaptation to climate change and restoration of biodiversity likely to be encompassed in forthcoming CAP reforms and supported through the European Green Deal.
The Green Party’s ‘Close to Nature’ forestry strategy proposes to diversify Coillte forests away from ‘cash crops’ and increase the proportion of native broadleaf forest cover. These plans are in alignment with the natural capital approach, as they should significantly enhance the biodiversity and carbon sequestration capacity of forests, while reducing damaging impacts to soil and water that result from growing non-native conifer species.
Ireland should follow in the footsteps of other EU Nations in banning clear felling, and a continuous cover forestry policy should be adopted. Clear felling is an ecologically damaging practice often resulting in the acidification and/or siltation of downstream water bodies, with negative impacts on sensitive aquatic species, such as the freshwater pearl mussel.
The diversification away from ‘cash crops’ requires the development of alternative revenue streams e.g. from tourism and recreation. While significant plans are under way to develop walking and cycling trails in many parts of Ireland, liability concerns and insurance costs are creating barriers to the diversification of rural tourism on state lands. Ireland’s National Trails insurance policy, managed by Sport Ireland, only extends liability cover to private lands and should be extended to cover state lands (Coillte, NPWS, BnM, etc.), and to cover a broader range of activities to enable the growth of the rural ecotourism and activity tourism industry and accelerate a just transition.
On our peatlands /wetlands:
Large-scale peatland restoration is being supported financially by the EIB Natural Capital Financing Facility and will help Member States meet commitments in relation to mitigating carbon emissions.
- A Peatland Code, similar to that in other European countries, is needed that will affirm carbon reductions through peatland restoration and put Ireland at the forefront of international carbon offsetting opportunities, especially given the very large area of degraded peatland we have.
- Peatland restoration will provide additional public good gains in terms of water storage, water quality and protection from climate events such as flooding.
- There are opportunities for employment in restoration and for the engagement of rural communities, including holders of turbary rights, in remunerative restoration works. Restoration using public money should benefit the entire community.
On our marine environment:
Our coastal natural capital such as salt marsh, dunes and mudflats provide essential ecosystem services in protecting the coastline from sea level rise and storm events. Very little is spent on the protection of these environments which are a frontline defence and represent nature-based solutions that are more sustainable, and cheaper alternatives, to the structural defences currently favoured. Unlike structural defences they provide additional economic and social benefits in terms of biodiversity, landscape, amenity and tourism - benefits of which would be more evident if Ireland adopts a national system of natural capital accounting.
Given the extent of Ireland’s marine territory, it is encouraging that the Government plans to legally designate 30% of its marine waters as Marine Protected Areas by 2030. It is critically important that these MPAs are provided with active enforcement and sufficient protection against damaging activities, to ensure that they do not become ‘paper parks’.
- Data from the ongoing seabed mapping survey should be used to create a set of natural capital accounts for Ireland’s marine ecosystems, and habitats such as seagrass beds, which are extremely effective at carbon sequestration, should be prioritised for protection.
On carbon pricing and cross-cutting issues, including taxation:
In line with our commitments to the UN Sustainable Development Goals, particularly Goals 12 on sustainable production and consumption patterns, Ireland’s taxation system should account for the whole societal impacts which arise from the degradation of ecosystems, particularly those which play a role in carbon sequestration, including less direct threats such as biodiversity loss leading to climate change, risks to communities and infrastructure from weather effects, loss of cultural capital, reduced resilience of local communities and economies, and human health effects associated with loss of access to green spaces.
- Adoption of specific, targeted taxes and penalties for activities which degrade ecosystems, particularly those most critical for carbon sequestration such as wetlands (including freshwater, coastal marshes, peatlands) and native woodlands, based on the “polluter pays” principle.
- Implementing a higher tier of VAT or new tax mechanism to account for the social, environmental and economic costs of products extracted from key ecosystems (e.g. peat, native timber)
- Financial incentives to offset the impact of tax changes on low-income households, along the lines of “payments for ecosystem services” for protection of ecosystems at local community level.
On urban centres - the potential of a '15-minute city':
- Prioritisation of urban green infrastructure – green roofs, living walls, rain gardens, parks and nature reserves – must form a key pillar of climate mitigation and preparedness.
- Natural capital and nature-based approaches to urban design which put mobility, accessibility and biodiversity at the centre of design considerations can have multiple social and economic benefits beyond climate action, including for community health and well-being, resilience to climate impacts, social cohesion and sustainable urban regeneration.
- ensuring landscape impact assessments take place as part of urban planning.
On sustainable growth in rural areas:
- Planning at all levels should prioritise actions to tackle the loss of those aspects of natural capital which are important for carbon sequestration and to identify, protect, enhance and restore those ecosystems most essential for building community resilience to the impacts of climate change.
- Address the loss of wetland, hedgerow and wooded habitats which fall outside of formally protected nature conservation areas but which provide refuges for biodiversity and ecosystem services to rural communities. These communities and associated businesses should be given a greater sense of custodianship over their local natural capital and encouraged to view nature conservation as a means of contributing to local climate mitigation and adaptation in a meaningful manner.
- Additional supports for existing community-based initiatives for nature conservation in terms of finance and training, with a particular focus on nature-based solutions, creating an all-island/cross-border approach to rural community action on nature-based solutions, to enhance policy coherence for sustainable development in line with the SDGs.
How can we channel private finance into low-carbon investments in Ireland?
A citizen green bond should be issued, to allow Irish citizens to invest directly into climate and nature-based solutions, that will protect their future and also generate a financial return.
How to improve research policy to channel research funding into climate action-related topics?
- Ireland’s research policy should take account of the recommendations from the recent interim review report of the National Biodiversity Forum (www.biodiversityimpactplan.ie).
- In the context of climate action, improvements in systems for the monitoring and evaluation of those aspects of natural capital of greatest importance to climate change mitigation and adaptation should be given appropriate consideration and financing.
- The availability of biodiversity data of relevance should be enhanced.
It is important that the individual elements of Ireland’s electricity system are viewed as existing within an 'energyscape', incorporating the wider natural and man-made landscape elements within which they sit and operate.
- The use of nature-based solutions for reducing the risks to energy infrastructure must be considered; this can include restoration of coastal and inland ecosystems to create buffer zones to reduce flood risks at vulnerable points in the system;
- Enhancing natural capital in and around urban areas to reduce the impacts of extreme weather events and minimise the demands placed on electricity supply e.g. greater investment in urban green space and development of urban green infrastructure can minimise urban heat-island effects, reducing energy demand for cooling systems.
One sector that is highly vulnerable to climate and transitional risks, and which can benefit most from the preservation of our natural capital, is the Tourism and Outdoor Recreation sector.
- This sector is of growing importance to Ireland. In 2018, international tourist spending in Ireland reached over €5bn, and with over 10m tourist visits, the entire sector was estimated to be worth almost €9.4bn, and generated approx. 260,000 jobs, many located in rural areas.
- Whilst the economic benefits of tourism are clear, the social and economic benefits of the sector need to be balanced with its environmental impacts, in order to ensure that climate targets are met. Cumulative pressures from Covid-19 and the climate transition mean that the sector is at high-risk in the short to medium term, and requires considerable supports.
- The Tourism Action Plan 2019-2021 cites an ambition for Ireland to become a leader in sustainable tourism. While this is positive, the potential for ecotourism in Ireland appears to be under-recognised and under-supported. The ecotourism sector is growing at three times the rate of the overall tourism sector globally, and there are significant leadership opportunities for Ireland to capitalise on its clean, green image and develop a variety of signature ecotourism offerings.
- We suggest that a comprehensive ecotourism development plan and associated business supports are developed and implemented for Ireland. This would support a just transition by diversifying revenues away from extractive and polluting industries, into activities that support ecosystem protection and restoration, job creation and wellbeing. This activity aligns with the guiding principles listed in the Tourism Action Plan, ‘focusing on tourism activities and businesses that identify and support initiatives which support ecological restoration, and the enhancement of Ireland’s environment, culture and heritage’.
What specific investments should be considered to support a just transition in Ireland?
Public funding mechanisms should be made available through Enterprise Ireland, specifically for innovative greentech, cleantech, and biotech solutions to climate challenges. Such funding could be allocated on a competitive basis through e.g. the Competitive Start Fund, according to specific calls for solutions that are most urgently required.
Finally, we need to recognise the value of and adequately fund the conservation sector, particularly our National Parks & Wildlife Service.
The environmental conservation sector continues to be radically under-funded and under-supported. An under-supply of secure and well-paid jobs in the sector is causing a brain drain, as many highly qualified and experienced environmental professionals are forced to move into other sectors and roles, in order to have a reasonable standard of living, purchase a property, or raise a family. The sector needs a radical overhaul, in order to make it self-sustaining and fit for the future.
Implementing the natural capital approach would help to ensure that ecosystem services, and the full value of natural capital's contribution to enterprise sectors, national wellbeing, and climate change mitigation and adaptation, are appropriately recognised in the national accounts. This would help to justify a greater allocation of the national budget towards the sector, and in particular to support the National Parks and Wildlife Service.