Glossary
Key words and phrases referenced in the Guide materials are explained in more detail below. Links to further information are included where relevant. If you have any comments on anything written in this glossary, please email [email protected].
This refers to two ‘tests’ that a project must pass for Peatland Code eligibility. These ‘additionality’ checks are in place to ensure that a project would not have gone ahead in a ‘business as usual’ scenario, thus demonstrating that carbon finance is a catalyst or necessary intervention for restoration to take place. For a further breakdown, see the Guide’s Booklet.
The Agri-Environment Climate Scheme (AECS) is the current go-to subsidy and grant scheme relevant to crofters, which promotes land management practices that protect and enhance Scotland’s natural heritage, improve water quality, manage flood risk and help to mitigate and support adaptation to climate change. Once POBAS (still in its trial stages) is developed, AECS will be slowly phased out in favour of switching to this novel ‘outcomes-based’ agri-environment scheme.
Avoided Emissions are referred to in this guidance documentation as carbon dioxide that is not emitted from damaged peatlands as a result of restoration activity. For example, if a drain is blocked leading to the re-wetting of a peatland, as part of a restoration programme, the peat will not decompose and so carbon dioxide will not be emitted. Without restoration activities underway that peatland would have continued to emit carbon dioxide. Thus, restoration has led to the avoidance of potential emissions under a ‘business as usual’ scenario. In the official Emissions Reporting performed by businesses, avoided emissions are referred to as ‘Scope 4’ emissions, as illustrated by the figure within this blog (which discusses the different ‘scopes’ of emissions measured and reported by businesses adhering to the Greenhouse Gas Protocol Corporate Standard). These are emissions that a consumer avoids producing through the use of a particular product/service from a company which has developed a low/zero-carbon alternative.
Blended Finance refers to the strategic use of public funds to attract private investment. It is “blending” public money with money sourced from businesses and banks in the form of investments or loans. In the case of peatland restoration, public money (through Peatland ACTION) is generally currently used to cover the high initial costs of restoration, ‘de-risking’ the project from an investor’s point of view, as they avoid these up-front costs.
A broker is typically an intermediary between a ‘buyer’ and a ‘seller’. Carbon brokers may purchase carbon credits from the UK Land Carbon Registry and subsequently sell them on to corporations and organisations. They are no different than carbon buyers and sellers, but if the landowner wishes to know who they are selling to and what activities they are using the credits to report against, then landowners should sell directly rather than through brokerage.
A carbon credit represents either the permanent removal of a tonne of CO2e (tCO2e) from the atmosphere, or the avoidance of one tonne of CO2e being emitted in the first place.
This refers to income generated through the sale of carbon credits. For eligibility, Peatland Code projects require that a minimum of 15% of the total project funding must come through the sale of carbon credits, demonstrating financial ‘additionality’. This means, in brief, that the project would not have gone ahead in a ‘business as usual’ scenario; that carbon income was necessary for the restoration project to be financially viable.
The carbon market is divided into two separate markets: the ‘voluntary’ carbon market and the ‘compliance’ carbon market. A carbon market typically involves the following actors: landowner (seller), the buyer, brokers (who also buy and sell carbon units and can act as intermediaries between landowners and corporations), investors (providers of private finance, who may seek control of the rights to some or all of the carbon credits), the Peatland Code (accreditation and guarantee), the UK Land Carbon Registry, and the independent validator/verifier who oversees whether restoration has been successful.
This refers to the way carbon credits are ‘marketed’ to attract a higher price. Carbon buyers and investors may be willing to pay higher prices for projects that can demonstrate novelty, or ‘additional’ benefits alongside restoration, such as community benefit, local involvement, improvements to biodiversity, etc.
Please refer to FAQ What makes a peatland healthy or unhealthy? for further information.
“Scotland’s 2018-2032 Climate Change Plan sets out the Scottish Government’s pathway to our new and ambitious targets set by the Climate Change Act 2019. It is a key strategic document on our green recovery from COVID-19.” (Scottish Government, 2020)
This is a market “created through legal obligations or mandates on entities to cover their emissions with carbon assets, such as offsets or allowances.”[1] Woodland credits may be purchased on compliance markets (such as the UK Emissions Trading Scheme) but peatland credits in the UK are currently restricted to UK-based voluntary markets.
[1] Peatland Carbon Finance Scoping Study, Natural England, 2022. Available at: https://publications.naturalengland.org.uk/publication/5101422143340544
Consultation is a necessary stage in the Peatland Code project proposal prior to eligibility. The Peatland Code requires evidence that scoping work has been undertaken to identify/protect/improve access to heritage, as well as demonstrate “proactive engagement with relevant parties”, with time given for “adequate responses” and feedback from these parties.[1]
[1] IUCN, Peatland Code v2.0, 2023. https://www.iucn-uk-peatlandprogramme.org/sites/default/files/2023-03/Peatland%20Code%20V2%20-%20FINAL%20-%20WEB_2.pdf
A degraded peatland will conjure up different images for different people. Within the guidance documents, the term ‘degraded’ is used in reference to ecologically and hydrologically damaged peatland ecosystems. These ecosystems are no longer healthy, mostly because of a combination of the following activities: (i) they have had drainage channels dug into them to dry out the surface layers and support the growth of vegetation more appropriate for grazing animals or as part of the practice of cutting peat for use as a fuel; (ii) they have been grazed by too high a density of animals such that the vegetation has been unable to regrow at the rate required to maintain a surface cover of plants; (iii) they have experienced a combination of the activities above, leading to an erosion of surface layers. Degraded peatlands emit carbon dioxide due to the decomposition of the exposed peat.
This gives name to a common error in accounting in which one value is counted more than once. In the case of carbon offsetting, double counting refers to the situation in which different parties claim carbon credits from the same carbon removal/avoidance project.
This means that a project meets the criteria for funds to be granted (e.g., from Peatland ACTION) or for successful registration and accreditation (e.g., with the Peatland Code). For further information, see the FAQ.
These are values which aim to assign a volume of emissions (e.g., measured in tonnes) to a particular activity, following a standard relationship. For example, if X hectares of peatland in Lewis are drained, they will emit XX tonnes [factor defining the relationship between a human activity and resulting emissions/pollutants] of CO2 [emissions]. Emission factors are becoming more accurate (in representing real volumes of emissions) over time as more information becomes available through research. They also vary according to the type of ecosystem and activity. Some standard emission factors for peatlands can be found here. If you would like to learn more about emission factors, here is a useful article.
This comprises strategies for coordinating, acquiring, managing, monitoring and controlling financial assets of a project throughout its lifespan. Good financial governance is needed to guarantee financial viability and long-term profitability of a project. Financial governance of peatland carbon credits implies, for example, covering costs and risks of restoration and maintenance works over the contractual period of up to 100 years and closely examining the carbon market trends to sell carbon credit units at the most profitable rates.
This is made when contracts outlast the generation signing up to a contractual agreement and continue to hold accountable future generations, as is likely to be the case with restoration projects registered with the Peatland Code.
Insetting is when a landowner uses carbon credits generated from their own registered projects to report on their own (net) carbon emissions, generally toward ‘net-zero’ goals and/or to demonstrate corporate social responsibility and sustainability to their customers/consumers.
The term used to refer to the need of our societies/economies to transition away from fossil fuel dependency towards renewable energy generation in a just manner, promoting equality instead of further marginalisation.
This is a document developed by land managers, which describes the steps that will be taken to restore a peatland, along with additional helpful information. If you are developing a management plan for a project registered with the Peatland Code, there is specific information that must be included in the document, e.g., a map, a statement of project objectives, and other factors listed on page 10 of the Peatland Code Version 2.0 report.
This is a document outlining the type and timing of data collection that will be carried out to monitor change in peatland condition over time as restoration activities are carried out. If your peatland restoration project is registered with the Peatland Code, there are specific monitoring requirements, as detailed on page 10-11 of the Peatland Code Version 2.0 report.
This is the current political catch-phrase to highlight the economic value intrinsic to nature (e.g., plants, animals, air, water, soils), manifesting in the form of natural resources (e.g., wood) and ecosystem services (e.g., capturing of carbon through photosynthesis). The Scottish Government is trying to monitor its natural capital by keeping stock of what it has and how to manage it sustainably. See https://nationalperformance.gov.scot/natural-capital.
These are the pathways identified by governments, and organisations, to reach national zero carbon emissions some time in the foreseeable future (Scotland by 2045). Zero carbon emissions are not only reached by avoiding emissions (e.g., insulating homes or preventing further peatland erosion), but also by capturing and offsetting emissions (e.g., planting trees, revitalising landscapes).
An offset represents a reduction or removal of CO2 or other greenhouse gas (GHG) emissions in one place to compensate for emissions produced elsewhere. One carbon offset unit represents the reduction or removal of one tonne of CO2 or its equivalent volume of another GHG (with the same impact on global warming). These units can be certified by governments and/or independent certification bodies and sold on either voluntary or compliance carbon markets.
Peat is a soil type rich in organic matter, created in locations where microbial decomposition of dead plants is slowed down or not possible due to waterlogged, anaerobic conditions (most decomposing organisms need oxygen to function).
Peatland ACTION is the “national programme offering funding to improve the condition of degraded peatlands across Scotland” which launched in 2012.[1] In 2020, Peatland ACTION was given £250m by the Scottish Government with the objective to restore 250,000 hectares across Scotland by 2030.[2] The programme is delivered in partnership with NatureScot, the Cairngorms National Park Authority, Loch Lomond & the Trossachs National Park Authority, Scottish Water, and Forestry and Land Scotland. Much more information about Peatland ACTION can be found here, including an introductory video and further videos demonstrating aspects of Peatland ACTION’s collaborative work.
[1] “Peatland ACTION – What We Do | NatureScot.” 2023. https://www.nature.scot/climate-change/nature-based-solutions/peatland-action-project/peatland-action-what-we-do.
[2] “Funding to Restore Scotland’s Iconic Peatlands,” Scottish Government. http://www.gov.scot/news/funding-to-restore-scotlands-iconic-peatlands/.
The Peatland Code (the Code) is a voluntary standard for projects in the UK which aim to sell the ‘natural capital’ benefits (i.e., quantifiable products and services provided by ecosystems) of peatland restoration, e.g., avoided CO2 emissions. The Code provides assurances to buyers that the natural capital benefits being sold, associated with a restored peatland, are real, quantifiable, additional and permanent. It is a similar scheme to that of the Woodland Carbon Code, which provides a standard for measuring and assuring the natural capital opportunities from newly planted woodlands. Essentially, registration and verification of your peatland restoration project under the Code enables you to sell what are commonly known as ‘carbon credits’ to a buyer, otherwise referred to as a ‘third party’. The third parties buying these carbon units can range from individuals to large multinational companies looking to offset their emissions to meet their corporate ‘green’ pledges (often involving a commitment to reaching net zero carbon emissions by a specified future date).
Peatland credits are a form of ‘avoided emissions’, and are measured in tCO2e, or ‘tonnes of CO2 equivalent’. According to the Peatland Code v.2.0 (p. 2), the greenhouse gas (GHG) emissions used in the calculation of emission factors for peatland credits include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), dissolved organic carbon (DOC) and particulate organic carbon (POC). Emissions are measured in ‘tonnes of CO2 equivalent’ as it is a metric measure used to make GHGs comparable, by accounting for their different Global Warming Potentials (GWP). The emission factors are subject to regular revisions as research regarding the emission of the different GHGs in different landscape conditions is ongoing. CO2 accounting relies on the most advanced measures at this point.
One PCU is equivalent to one tonne of avoided CO2 emissions equivalent (tCO2e) resulting from the restoration of peatland environments. In five to ten yearly blocks, an independent verifier visits the restored peatland to declare how many PIUs have transformed into PCUs.
The Peatland Code provides a number of assurances to carbon buyers that the climate benefits being sold are real, quantifiable, additional, and permanent. ‘Permanence’ here refers to the Peatland Code guarantee that the carbon credits which buyers purchase will remain valid and legitimate ‘permanently’, which effectively means over the full project timescale. (Note that the permanence of the removal cannot necessarily be guaranteed or policed in practice and is subject to the impacts of environmental change, whether resulting from anthropogenic or natural causes.)
The ‘promise to deliver’ a PCU at a given point in the future. The landowner will be awarded all the PIUs up front after project registration (minus a minimum 15% reserved as a risk buffer), which represent an estimate of the total avoided emissions in tonnes of CO2 equivalent (tCO2e) resulting from peatland restoration. The PIU is a tradeable carbon credit and can be sold on carbon markets. It has a lower value than a PCU because it is a ‘promised’ unit and thus of higher risk for buyers.
POBAS is a NatureScot-led initiative testing new approaches to farming and crofting that support farmers to have more positive impacts on the environment – “to deliver environmental outcomes” – through their farming practices. You can read more about the scheme here. There are various pilot schemes across Scotland, including one in Barvas, Lewis on the Arnol common grazings. The outcomes of these pilots will help to shape future agri-environment schemes in Scotland, likely to be implemented from 2024.
When existing CO2 is extracted from the atmosphere through natural (i.e., photosynthesis) or technological processes, those GHG can be described as ‘removed’ emissions. A healthy peatland can generate ‘removed emissions’ through supporting the growth of vegetation. This vegetation, adapted to growing in waterlogged conditions, absorbs CO2 from the atmosphere via photosynthesis; that carbon (locked into the organic matter of the plants) is then stored in the waterlogged environment over time. This process is also described as carbon sequestration, which is an important ecosystem service provided by peatlands in a near-natural or ‘intact’ condition.
There are various important methods and processes used to restore damaged, drained peatlands. Here are some videos, produced by Peatland ACTION, and brief descriptions, which explain each of the following processes:
– Ditch blocking – blocking drainage channels to prevent water flowing off a peatland
– Reprofiling – altering the topography of a peatland to prevent water from flowing off or creating erosive pooling, and providing a more conducive environment in which revegetation can occur
– Sediment traps/erosion barriers – created to slow down and reduce the flow of water off a peatland, and to create opportunities for vegetation to establish; traps/barriers are created using geotextiles (permeable fabrics added to the ground surface)
– Rewetting – often carried out via bunding (creating physical barriers to water flow) to raise the water table on a site
– Revegetating – supporting the re-establishment and growth of vegetation on a peatland that is adapted to the waterlogged conditions, e.g., Sphagnum moss; depending on the condition of the peatland prior to restoration, vegetation that is not adapted to waterlogged conditions, e.g., certain scrubs, and could be drying out peatlands further, may need to be removed.
Resumption allows the landlord of tenanted croft land or common grazings to apply to the Scottish Land Court for consent to remove part or all of it from crofting tenure and to be outwith the control of the Crofting Acts.
ROI measures the performance of projects to evaluate the efficiency or profitability of an investment. “ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost.” (Investopedia)
Revenue-sharing agreements lay out the details of how future profits of a project will be shared/divided/distributed among all stakeholders that are involved in the initiative that the agreement covers.
A risk buffer is an easily accessible/deployable (often referred to as ‘liquid’) amount of money that is not invested but saved to cover potential unexpected losses to a project. The IUCN, through the Peatland Code, reserve 15% of the total PIUs from a registered project to be used in the event of an unexpected regression of the peatland’s condition.
A measure of the number of animals that can be fed on a given amount of pasturage. In common grazings, the size of a member’s soumings may also refer to how much ‘stake’ they have in the land, and therefore how much compensation they are due if development or resumption occurs, removing their grazing land/pasturage.
Sphagnum moss, also referred to as the ‘bog-builder’, is the most important plant in Scotland’s peatland ecosystems because of its ability to grow in and support waterlogged conditions. Waterlogged, and thus anaerobic conditions, slow the decomposition of dead organic matter, leading to its accumulation in the form of peat. In ‘near-natural’ peatlands, Sphagnum and other peatland plants absorb CO2 from the atmosphere and turn it into organic matter, which can then be stored belowground as peat for millennia, if undisturbed.
The assets (e.g., land) that are unable to earn their original/potential economic return as they have suffered devaluation through mismanagement or other causes. These devalued assets can become liabilities, i.e., entities that lead to the loss of money for their owner over time.
The official record of Peatland Code projects, their validation/verification status, any validated/verified units and the owners of each unit. Access to the Registry can be found here.
We define the ‘uneven geography of restoration’ as a risk intrinsic to a profit-oriented model of restoration based on calculating emission factors and the cost-effectiveness of different restoration techniques. This incentive structure could result in projects which display a ‘patchy’ or ‘selective’ restoration, with a prioritisation for actively eroding areas, rather than the restoration of larger-scale peatland landscapes. There also exists a ‘diminishing return’ on restoration interventions because the volume of GHG emissions avoided reduces as the condition of the peatland improves, i.e., the change in emission factor (and thus associated carbon units for sale) between a peatland being in an ‘actively eroding’ to a ‘drained’ condition is greater than when restoration leads to a change in condition from ‘modified’ to ‘near-natural’. This incentive structure has two effects: firstly, it leads to unjust socio-economic outcomes, as those landowners who historically damaged their peatland the most can expect the greatest benefit from Peatland Code registration, whilst those who maintained and managed the land in relatively good condition are unrewarded. Secondly, the incentive structure could result in ‘half-finished’ restoration projects; or peatlands not being restored to healthy and near-natural states (where they begin to accumulate new peat and sequester carbon), but rather maintained in a ‘drained’ or ‘modified’ condition for the full project timescale, as diminishing returns are experienced the further one restores peatland. This is counter-intuitive to restoration which prioritises carbon storage and ecosystem health.
Voluntary carbon markets “refer to voluntary compensation or offsetting undertaken by corporate entities, the social sector, or individuals looking to compensate their carbon footprint, without any legal mandate.”[1]
[1] Group, World Bank. 2016. “Carbon Credits and Additionality: Past, Present, and Future,” https://doi.org/10.1596/K8835.