This week, our podcast host Tim Dangen sat down with climate economics expert Dr David Hall. David is a researcher who studies climate policy, climate finance, and land-use among other topics. He is also the Climate Policy Director at Toha, which is helping to build an economic market for investment in land regeneration. 

‍

Now, unlike our other episodes, this episode is less about direct advice to apply on farm, and more an exploration of what might be possible now and in the future when it comes to getting payment for biodiversity management on farm. This is because the policy and work on economic incentives for biodiversity management is currently under development and best practice is still being established. 

‍

Our first key takeaway from the conversation is that while there is not currently a system for farmers to receive payment for biodiversity on their farms, there are carbon credits which reward landowners for certain types of forests on their land. Carbon credits are exchanged on the basis of  “carbon dioxide, which has been removed from the atmosphere by the process of sequestration as a forest grows.” Then these credits have a value per tonne based on current market prices. Qualification for carbon credits is set by the New Zealand Emissions Trading Scheme (NZ ETS) to meet International standards. David explained that to qualify for the NZ ETS, a forest has to be “over a hectare, wider than 30 meters, and more than 30% canopy cover. And it also needs to be land that wasn't in forest prior to 1990.” This means that riparian plantings and wetlands are often left out because they don’t meet these conditions. While these sorts of native vegetation may not currently qualify for carbon credits, they provide many other benefits that may hopefully be supported by something like “biodiversity credits,” in the future.

‍

Another takeaway is that because restoring biodiversity can lead to improved on-farm and ‘down-stream’ resilience, farmers may be able to be paid for restoration work. Already, improvements to on-farm environmental resilience is getting financial recognition by banks in the way of improved lending costs. David says that a lot of farmers have been “improving the resilience of rural landscapes,” through doing things like riparian planting and planting wetlands. Biodiversity restoration like this improves the landscape by providing benefits like water quality improvement and land stabilisation. “And there [is] the intersection with the economy around avoided costs, because potentially, by using nature based solutions, you're avoiding costs from things like erosion, sedimentation, flooding, and the flow on effects of flood floods downstream, and if farmers could be paid for the resilience improvements that they're making on farm, then I think that could be a really great way to integrate biodiversity into the economy…the agricultural produce [could be] food, fibre, and landscape resilience.”

‍

Our final takeaway is that if a biodiversity payment is established, it will do even more to incentivise farmers to plant native vegetation. David says that often “farmer’s are driven by [a] kind of land ethic,” where they want to plant native trees to restore habitat and get native animals back, but the economic decision is hard to make. At the end of the day, David says there are lots of farmers who value native bush beyond the economic benefits, but biodiversity payments would “reduce that gap,” between the pay-off from exotic and native forests.

‍

This conversation was just the tip of the iceberg, when it comes to the economics of biodiversity, but it's a great starting point!

‍

Listen to the full podcast episode at this link: https://open.spotify.com/episode/5KC2yyybSGEAz0BYtGXQzN?si=f523ed2e41b94b41. You can also find the Our Farms, Our Future podcast on Apple Podcasts and Google Podcasts. And to hear more from David Hall, follow him on Twitter @dvdjhnhll.