Dr Abigail Barker, chief operating officer at Natural Capital Research considers how complex it is to accurately measure the results of carbon zero initiatives.
The landscaping industry is facing the challenges drafted by the Environment Bill, that requires a demonstrable improvement in the natural capital of areas subject to intervention or construction, with a number of measures.
Last week we analysed how biodiversity objectives can be set out and tracked over time, this week we’ll consider the complex task of objectively and accurately measuring the results of carbon zero initiatives and carbon sequestration such as improving peatland, grasslands or planting woodlands.
To gauge the impact of these measures on carbon sequestration requires rigorous modelling of an ample range of datasets. Add to this that there are multiple market prices for carbon such as the EU ETS prices, the Carbon Floor Price and the possible Carbon Tax set out in the latest Treasury consultation, and it becomes clear that making accurate predictions of the quantity and value of potential carbon offsets is a thoroughly complex task.
A solid academic approach, such as the one we’ve developed at Natural Capital Research, would be to identify the current carbon stocks in natural assets, and capitalise this on the balance sheet. Capital maintenance from the P&L should be deducted and then the costs of enhancements via tree planting, soil restoration and other nature-based sequestration methods should be identified.
As there are no universally correct discount rates to be applied, it is necessary to take a range of values into account for the capitalisation over future periods. These are also not stand-alone but are partly dependent on any company’s overall ethical approach to future generations, its interpretation of its stewardship duty and its net zero objectives. Clearly, only a highly rigorous approach to all these measurements can provide a reliable measurement that satisfies regulation and the needs of the environment.
To find out more visit: www.natcapresearch.com