Scotland has led the world in so many scientific and engineering endeavours historically that I have no doubt that great things will come of the COP26 and of Riverwoods plans to restore Scotland’s riparian forest to make “a network of thriving riverbank woodlands and healthy river systems across Scotland.” (Source the Riverwoods website)
Restoring Scotland’s riparian forests would no doubt add beauty and character to the lovely landscapes, sequester a lot of carbon, stabilize soils, wick moisture, help clean the air, provide shade and shelter, feed and home wildlife, and allow livestock more scratching points, may God bless the Duke of Argyle! How might it also be a sound financial investment?
There’s an interesting multi-million dollar question, and with the right answers a very great deal might be achieved!
Today I joined a fascinating conference hosted at Ross Priory which focused on conservation finance for the restoration of Scotland’s riparian woodland. Nicola Melville, Senior Scientist at the Scottish Environmental Protection Agency (SEPA) shared a map with Scottish rivers outlined in various colours denoting its current quality of riparian vegetation or other habitat and we all instantly saw what a vast area of land was represented. She made a strong case for replanting riparian woodland and those gathered (including some 200 virtual attendees) then brainstormed ideas about investment. Over the microphone, on the Miro board and in the zoom chat window the questions, comments and ideas flowed in, giving everyone food for thought. One contributor said that it was important to be presented with the whole picture, the bigger vision, so that investment could be made at scale. He said Bankers and financiers don’t necessarily have to make massive returns on environmental investments but they need a clear mechanism with a value proposition so that investment risk can be hedged over a reasonable time-frame, twenty years for instance. Someone suggested that this risk management presents landowners with a valuable opportunity to diversify their business / sources of income. Another said that educating landowners about their options is important. Someone else pointed out that in many floodplain areas the land fertility is high and planting trees would conflict with traditional agricultural practices that aim to maximize returns from farming. Another questioned whether the current regulatory frameworks should be reviewed.
Someone else said that there’s been useful work in the USA reducing risks through an Environment Impact Bond with performance-related returns on green infrastructure. That sounds like something you could hang your hat upon.
I think flood insurance premium reduction is a valuable end in itself. It might be the case that when annual flood risk insurance premiums downstream are established at a certain figure and then the actual flood risk for those properties is reduced by mitigation upstream and then premiums can be reduced a real value is manifested in the pocket – the cost difference represents a value that is quantifiable and worthy of investment on a property-by-property basis.
I recently attended another interesting zoom presentation in Louisiana, well worth watching, linked here on YouTube called “Five Tenets of Mitigating Flood Ri$k for everyone interested in property” by Bob Jacobson.
Bob suggests that within the next decade we won’t see any mortgage agreements made without flood insurance. He’s keen that the risks are properly evaluated and charges are fair and represent reality.
There is unarguably plenty of real value to restoring riparian woodland. The pictogram below shows the projected benefits of Riverwoods in terms of the United Nations Sustainable Development Goals helping meet the twin challenges of averting climate change and biodiversity loss, while reducing flood risk, improving water quality, adding recreational value, and improving conditions for salmon fisheries and distilleries and nature lovers! Yes, it’s long term investment, but that sort of thing pleases pension fund managers and as one contributor suggested, the government has a role in de-risking the long-term commitment.
Thank you COP26 for restoring nature’s place at the heart of the debates!
Wouldn’t it be great to replicate Riverwoods project in the rest of the UK and indeed around the world!