A professor of finance at the Business School of Trinity College has called for private sector funding to pay farmers and landowners for “ecosystem services”.
Prof. Martha O’Hagen-Luff was speaking at the Joint Oireachtas Committee on Environment and Climate Action this week when she suggested that the private sector should fund biodiversity action by landowners through a system of credits.
Prof. O’Hagen-Luff said this funding should come on top of public sector funding, such as the funding available through agri-climate measures.
“We also need private sector funding. A regulated market for biodiversity or nature-positive credits would allow both businesses and investors to buy credits that pay landowners for ecosystem services provided by their land.”
She added that the purchase of credits should be viewed as “an investment in nature’s recovery, rather than as an offset for damage caused”.
The Oireachtas environment committee meeting was discussing the report of the Citizens’ Assembly on Biodiversity Loss, and specifically on how biodiversity action can be financed.
Prof. O’Hagen-Luff outlined two other approaches to financing biodiversity action, apart from through the private sector.
One is public sector funds, or investment by government.
The Trinity professor said: “The majority of our land is privately owned. We need to offer strong financial incentives for farmers and landowners, through results-based payments, for the provision of ecosystem services.
“Current targets in schemes such as the Agri-Climate Rural Environment Scheme (ACRES), need to be more targeted and ambitious, with increased funding to support this ambition,” she added.
Prof. O’Hagen-Luff also said that financing biodiversity action can come through investment by citizens, through a “citizens’ green bond”.
“A citizens’ green bond issued by government would allow individuals to provide funding for nature restoration and climate-related projects.
“This bond would have the dual purpose of an educational element about projects being undertaken, as well as a sense of contributing to the funding of nature restoration,” she told the committee.
Prof. O’Hagen-Luff called on the government to take action to “restore and protect” woodlands, waterways, peatlands, grasslands, hedgerows, and marine areas.
“To do so we need to incentivise and reward the custodians of our land, our farmers and landowners, to provide these benefits, and to pay for the ecosystem services in every year in which they accrue,” the Trinity professor added.
Meanwhile, Prof. Tadhg O’Mahoney of Dublin City University (DCU) told the committee that, in his view, the current “status quo” is contributing to biodiversity issues while also not benefiting farmers.
“The status quo is driving the biodiversity crisis, declines in water quality and increased greenhouse gas (GHG) emissions, to name but a few factors. At the same time, as acknowledged by the Irish Farmers’ Association (IFA)…most farms in Ireland are not financially viable,” Prof. O’Mahony said.
“The status quo does not benefit most farmers and often puts them at increased financial risk. We are upholding this status quo by considerable public subsidy. The status quo, built on maximising production, cheap food policy and driving export demand for dairy and meat, is not working for rural Ireland or biodiversity,” he claimed.