Stacking of nature market credits

Description

The Nature Markets Framework, published in March 2023, sets out the principles required to ensure environmental integrity while combining multiple ecosystem service revenue streams from a single intervention (stacking). Defra is yet to develop policy on whether to increase the number of circumstances where stacking is allowed in UK nature markets. There lacks a sound evidence base, and it is unclear what stacking model would be most effective at delivering Defra's environmental and private finance ambitions as well as the effect on costs to developers within our compliance markets (biodiversity net gain and nutrient neutrality). This research will seek to provide Defra with an understanding of the empirical theory and evidence on stacking and is expected to provide insight into the impact of different stacking models on economic, environmental, and wider social outcomes. The research should provide specific consideration to ecosystem service measurement challenges, additionality issues, the interaction between voluntary and compliance market schemes, and variations in nature market rules.