CONSOLE case study on Carbon Market
Know more about Hiilipörssi, a Finnish initiative on Carbon Market that restores ditched peatlands
Carbon Market (Hiilipörssi) is a Finnish online donation service designed to reduce carbon emissions an increase carbon storage by restoring ditched peatlands. It is targeted to consumers and companies who want to decrease their carbon footprint.
The landowner offers the drained peatland that can be restored to its natural state as a carbon stock. Investments and donations, from private persons and companies provide capital that enables restoring actions. The landowner commits to leave the peatland untouched and transform it as a private protection before the restorations begins.
The Carbon Market, launched in May 2018, is a value chain contract solution that aims to reduce greenhouse gas emissions and to increase carbon storage by restoring ditched peatlands to their natural state.
The contract solutions have also collective elements, since many of peatlands have several owners. The owners of the peatland assign a drained peatland to be restored and to leave it untouched. Until now, some 700 hectares are agreed to be restored from 10 landowners (private individuals and foundations), and negotiations with five landowners are ongoing. The restoration is financed by selling shares on the Carbon Market.
In practice this means that participating people and companies give money to the Carbon Market. Investors/donors receive the carbon stock certificate, stating the amount of restored peatland and carbon stock. The price for the donors is always the same : 800€ per hectare.
By the end of 2019, there were some 2,900 investments from 2,500 people, for a total sum of 820,000€. Companies have also been interested to collaborate with Carbon Market, and a kind of compensation product is being developed for them. Currently, there is more money than suitable peatlands to be restored.
Objectives of this case studies:
- Increasing carbon storage
- Safeguarding biodiversity
- Safeguarding water quality
Peatlands cover almost one third of Finland’s land area and they are one of the largest carbon stock in Finland. From 1960s to 1990s, more than half of the (original) mires were drained for forestry purpose (Southern Finland 80%, Northern Finland 40%). However, in many cases ditching efforts did not result in growth increase of forests, since the peatland areas were not fertile enough for timber production purpose. Draining of pristine mires was given up in 2001, and recent forestry related emphasis has been on ditch clearing and associated supplementary draining. Draining alters the hydrology of mires which may destroy mire vegetation and lead to biodiversity loss, cessation of peat accumulation and increased carbon emissions. So far, restoration projects for peatlands have concentrated almost entirely on protected areas on state land. Carbon Market is one of the first instruments that funds restoration of private peatlands.
The Carbon Market was founded by the Finnish Association for Nature Conservation in 2018. The initial development efforts of the Carbon Market were founded by the Kone Foundation. The aim has been to develop a new, inspiring way to mitigate climate change and to raise funds for nature conversation. The main idea is an online donation service designed to reduce carbon emissions and increase carbon storage by restoring ditched peatlands that are unsuitable for forestry use.
Through buying shares from Carbon Market, one can directly invest in the sequestration of carbon dioxide from the atmosphere into peatlands. The investor will receive the carbon stock certificate, stating the amount of restored peatland and the carbon stock. The landowner allows the experts of the Carbon Market to make the restoration plan for the ditched peatland, and the Centers for Economic Development, Transport and the Environment (ELY Centers) give permission for the restoration work. Assigning the peatland for restoration doesn’t mean a change in the ownership of the peatland but landowner has to transform it into a private protected area, which ensure the contract is binding and permanent. It is possible to get public support for protection if it is considered to be very valuable.
For more information download this CONSOLE case study
Know more about the Console project
This project has benefited from a funding program under the European Union's framework program for research and innovation "Horizon 2020" under grant agreement n°817949.