Should nature restoration projects be able to stack multiple revenue streams from ecosystem services? Full impact accounting as a clear way forward

“Private Finance” is increasingly positioned as being a solution to problems around nature degradation and combating climate change in the United Kingdom (UK). Payments for ecosystem services, when made by the private sector, are seen as an integral part of this shift in thinking. Stacking payments for different ecosystem services, that is, allowing land managers to sell multiple “products” from the same piece of land to one or more buyers, may help to facilitate greater uptake of nature restoration activities and nature-based solutions. However, this approach brings with it inherent financial, biological, and political risks to market integrity. The purpose of this policy analysis is to address some of these market risks by proposing two solutions to enabling the stacking of ecosystem service payments. Our methods are as follows: we conceptualize a market for ecosystem services in the UK, and describe how a functioning market should operate. We then analyse UK policy for managing market risk and provide examples of this in practice. We describe two potential solutions to enable stacking, and as a result of our analysis argue for full accounting on the demand side of the market as the optimal solution. We conclude by discussing the implications and supporting policy for this solution.