New research from Dr Caitlin Hafferty at the Environmental Change Institute is helping the UK government better understand how to build fair and trustworthy carbon and nature markets.
As the UK looks to grow funding for climate action and nature recovery, Dr Hafferty’s study explores how concerns about risk and uncertainty are affecting the way businesses, investors, and communities engage with voluntary carbon and nature markets (VCNMs).
Led by Dr Hafferty during her secondment to the Department for Energy Security and Net Zero (DESNZ), the study investigates how investors, businesses, and communities perceive the challenges—and how government policy can better support market development.
This independent ongoing project is informing the UK Government’s consultation on Voluntary Carbon and Nature Markets (VCNMs), launched in April by DESNZ, the Department for Environment, Food, and Rural Affairs (DEFRA), and The Treasury.
Despite ambitious goals to reduce emissions and restore biodiversity, researchers highlight tensions between the conditions needed for investment and “high integrity” goals, particularly when investment certainty appears to conflict with community engagement and ecological integrity.
Dr Hafferty explained:
For example, while market mechanisms often require simplicity and certainty on return, this can clash with the complex reality of community engagement, collaborative and place-based land management, and ecological monitoring and verification which are inherently multi-faceted, dynamic, and unpredictable.
“We’re seeing tension between the need to attract finance, particularly through an emphasis on market-based mechanisms, and the processes needed to ensure genuine and long-term social and environmental outcomes. This research aims to help policymakers better understand those tensions—and respond with clear, supportive interventions.”
The study, funded through an Oxford Policy Engagement Network (OPEN) Fellowship, is part of wider ongoing work at the ECI’s Leverhulme Centre for Nature Recovery at the University of Oxford. It contributes to ongoing efforts to shape the collaborative, multi-dimensional governance of climate and nature-based solutions that genuinely deliver for people and planet, while navigating the mounting need to scale investment.
Find out more about the study and also via Dr Hafferty’s LinkedIn.