The peatlands finance industry should mature between 2030 and 2050, including investments in biodiversity credits bundled with water-related payments, a report has said.
Once impact investors have proven the concept in the market, corporates and institutional investors can inject larger sums of capital into the sector via blended finance, a report by non-profit Landscape Finance Lab, NGO Climate Catalyst, and the WaterLands project has said.
“The scale of ambition for peatland restoration globally is clear, yet this is not yet matched by adequate sources of funding,” said Shane McGuinness, co-coordinator of WaterLands, a €23.6 million EU-funded conservation initiative.
“Mobilising non-state finances for peatland restoration is key in not only reaching these targets, but generating reportable impact in terms of emissions, water, biodiversity and community benefits,” McGuinness said in a statement.
Source: Investing in Peatlands
The mature market will be characterised by established standards, recognised asset classes, and blended finance mixing public and private capital, the report predicted.
Blended finance structures are often the most effective way to catalyse private sector capital towards emerging asset classes like peatland.
A peatland restoration fund with blended finance could mobilise private money, with the aim of creating impact for peatlands while generating co-benefits such as sustainable wildfire reduction, the report said.
*** Read our feature on the UK’s fast-growing peatland market ***
BIODIVERSITY CREDITS
Last September, Landscape Finance Lab said an emerging Republic of Ireland peatland standard aims to address biodiversity credits before the end of 2025.
Biodiversity credits, a measurable unit of biodiversity that is being conserved or enhanced without offsetting harm elsewhere, could be applicable to peatland restoration through three types, the report said:
- Biodiversity-linked carbon credits
- ‘Beyond value chain’ biodiversity credits such as the UK’s
- Insetting for companies integrating conservation into their supply chains
“Peatland landscape initiatives aim to supplement financing from carbon credits with those from biocredits.”
Biodiversity credits could be bundled with water-related payments for ecosystem services in peatlands, with the same area of land generating two separate products. The benefits of restoring a blanket bog site near Dublin for water companies is under assessment.
The report authors issued a call to action asking investors to support pilot landscapes, catalyse private sector capital, and adopt science-based targets.
By Thomas Cox – t.cox@carbon-pulse.com
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