OPEN Fellowship awarded to investigate how risk impacts high-integrity carbon and nature markets
Caitlin Hafferty, Postdoctoral Researcher at the Environmental Change Institute, has recently been awarded an Oxford Policy Engagement Network (OPEN) Fellowship to explore the role of risk and uncertainty in shaping high-integrity nature markets in the UK. The project – conducted in partnership with the Green Finance and Capability Team at the Department for Energy Security and Net Zero (DESNZ) and the Green Finance Division at the Department for the Environment, Food, and Rural Affairs (Defra) – aims to contribute evidence-led advice for the Nature Markets Framework, which sets out the government’s vision and approach for scaling up private investment in nature recovery and sustainable farming.
With the UK’s Environmental Improvement Plan (EIP) aiming to meet net-zero and nature recovery targets, the government is seeking to close the “nature-finance” by unlocking private investment through voluntary carbon and nature markets. The Nature Markets Framework (NMF) and Green Finance Strategy (GFS) support this by promoting high-integrity markets that ensure environmental improvement, transparency, and avoidance of greenwashing. High-integrity strategies are also increasingly focused on social safeguards and delivering genuine community benefits. However, a key challenge remains understanding the barriers to businesses’ participation in these markets. Addressing this challenge is particularly important because recent studies indicate tensions between investor demands for certainty and the delivery of socio-economic benefits and community participation, which can introduce new risks for already risk-averse investors. This dynamic can also influence the type of ecological interventions prioritised, often favouring simpler, more market-friendly options like tree planting over more complex and integrated solutions.
The project, titled How does risk and uncertainty shape policy on high-integrity carbon and nature markets in the UK?, will run from January to July 2025. It is part of broader research on Risky Nature Recovery, funded by the LCNR. The aim is to generate novel insights into how risk and uncertainty influence investor perceptions of and participation in high-integrity carbon and nature markets, to provide evidence on how policy, guidance, and regulatory interventions can help. The social science-driven, transdisciplinary and collaborative research will be conducted by working closely with policy partners to co-design throughout the process, helping decision-makers access and make use of the evidence to shape policy in the UK and internationally. The Fellowship also aims to foster new collaborations between relevant projects at the LCNR and Agile Initiative, drawing on cutting edge analysis conducted between these projects in a mutually enriching way, to ultimately contribute to collective forward-thinking on integrated and socially inclusive approaches for financing and governing nature recovery.
For more information, or any questions, please contact Caitlin: Caitlin.hafferty@ouce.ox.ac.uk
