Should nature restoration projects be able to stack multiple revenue streams from ecosystem services? Full impact accounting as a clear way forward

In recent years, a number of opportunities have emerged for land managers in the United Kingdom (UK) to generate new income streams if they dedicate a portion of their land to nature restoration projects, thanks to novel ‘payments for ecosystem services’ such as carbon removal or biodiversity enhancement. To strengthen the economic attractiveness of nature projects, some landowners are considering whether it may be possible to accept multiple payments for different Ecosystem Services (ES) generated from the same piece of land. The improved returns from projects with multiple, ‘stacked’, revenue streams may in turn help to facilitate greater uptake of nature restoration activities in the UK. However, stacked payments present certain risks to the integrity of the UK's nascent ES market. The purpose of this policy analysis is to address these market risks by proposing solutions to enable the stacking of ecosystem service payments. Our methods are as follows: we propose a simplified concept of the market for ES in the UK, and describe how a functioning market should operate to deliver no net loss in ES, as a minimum. We then identify specific risks to integrity within this market. We describe two potential solutions to enable stacking, and argue for the comprehensive accounting of ES gains and losses among all market participants as an optimal solution. We conclude by discussing the implications and supporting policy for this solution.