Report explains ‘stacking and bundling’ and the importance of nature markets

27th November 2023


Everybody is talking about nature markets. In July, the government published its statutory biodiversity credit (distinct from a biodiversity unit) guide prices and information for calculating costs.

Also in July, the parliamentary Environmental Audit Committee launched the nature finance-focused inquiry on the role of natural capital in the green economy. IEMA responded to the inquiry – our key recommendations are also covered in these pages.

Earlier this year, the government also published Nature Markets: A Framework for Scaling Up Private Investment In Nature Recovery And Sustainable Farming.

Nature markets are a relatively new concept and are seen as a way to deliver environmental policy on reducing greenhouse gas emissions and improve nature by pulling private finance into the biodiversity sector. Nature markets enable land managers (typically) to sell benefits from nature to individuals or organisations. These sales provide an incentive for markets to protect and enhance nature. A key part of this is stacking and bundling.

Stacking and bundling of nature, where nature can provide multiple benefits simultaneously over time, is seen as an essential part of nature markets. Stacking refers to when different ecosystem services on a piece of land are sold as separate units of trade or credits. Bundling refers to when more than one ecosystem service produced on a piece of land is sold as a single trade or credit to a single buyer.

In October, IEMA published a paper that explains what nature markets are and why they are important, what stacking and bundling means, the role of additionality in the process, and the pros and cons of stacking and bundling. It has a list of recommendations to ensure that nature markets are set up in a way that can be most effective and transparent. The paper also includes a useful glossary of terms, a list of examples where different revenues can be stacked, referring to legislation where relevant, and includes two case study examples.

This is an essential document for all environment professionals, especially land managers and project developers who want to better understand the value of nature markets, what stacking and bundling looks like, regulation and opportunities.

The paper is available to read at www.bit.ly/StackingAndBundlingReport

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