The third Natural Capital Committee Report: essential reading for anyone who is or aspires to be in the Treasury

There are two main reasons for saving nature...

...a moral belief that the millions of species with which we share this planet have a right to exist

...knowledge that nature provides essential things humans need: food, water, shelter, energy and inspiration.

The strength of support for the former is perhaps best reflected in membership of wildlife NGOs.

The strength of support for the latter has, up until fairly recently, been found within a fairly niche school of environmental economics.  But this has, in recent years, changed driven in part by the birth of the Natural Capital Committee.

Yesterday, the Natural Capital Committee – which reports to the Economic Affairs Committee - published its third report.

Now, regular readers of this blog will know that I am fan of this Committee (so much so that we seconded one of economists to work a ley component of this report), but I think that the latest report is the most impressive and important.  Previous reports outlined trends in the state of our natural assets and established a framework for analysis.  This one goes further and proposes nine recommendations for the future management of the UK’s natural capital.

You should have a read (here) - even if only the summary.  It's very good!

What excites me about the report is its ambition.  It goes well beyond recommending protecting what we currently have to calls for restoring what has been lost. And for doing so within a generation.  Not only does the report  demonstrate how habitat restoration will enhance our wellbeing and prosperity, it also demonstrates that ambitious plans to restore our woodlands, peatlands and coast also makes good economic sense.  I am sure that many of these messages will be reinforced in Tony Juniper's new book, What Nature Does for Britain (out next month).

The NCC report recommends the creation of a new, ambitious 25 year plan, based on a joint government, business and civil society strategy, to restore the 'nation’s natural capital stock'.  Many of the building blocks required to embed natural environment thinking within government decision making are included in the report.  A key recommendation is to include natural capital impacts explicitly within the National Infrastructure Plan.  It also says that decisions should be subject to a ‘mitigation’ hierarchy, so that build infrastructure minimises its impacts on the natural world. 

And, amazingly given these tough economic times, it calls for an explicit natural capital investment programme to be included in the plan.  This is essential as we know that public spending will decrease over the next parliament and that there is already a significant shortfall between ambitions for nature and available resources.

There are seven recommendations in the resourcing section and they are worth quoting as these must be the areas for fertile policy debate (my words in italics)...

i) Capital maintenance payments from public, not for profit and private sector asset owners ie those that look after the natural environment should be rewarded

ii) Rents from non-renewable resources (eg oil or shale gas)

iii) Compensation payments from developers ie those that damage the environment should pay for it

iv) Greater use of economic instruments (eg taxes and charges on things that damage the environment like pesticides, fertilizers or peat extraction)

v) Reforming and eliminating perverse subsidies (especially Pillar I of the Common Agriculture Policy)

vi) Potential new and innovative sources (eg plastic bag charge, crowd funding schemes, Payment for Ecosystem Services)

vii) Taking advantage of match funding opportunities (eg the EU Life Programme)

My worry is that this agenda is not yet seriously being considered by the Treasury or indeed its Shadow.  At least six of the seven recommendations above will require active Treasury engagement and without it, we may be dependent on the good will of progressive business, landowners or NGOs to make progress in this agenda.

So, I am delighted that the excellent Natural Capital Committee has decided to prepare advice for the incoming administration after the election.  Yet, I also hope that the chairman, Professor Dieter Helm, engages with the treasury teams of the each of the parties before the election.  They need to start factor natural capital resourcing into their investment programmes now.

In terms of ambition, and in terms of the need to now be focusing our efforts on actions, I see many parallels between the Committee’s recommendations and what we are proposing in our Nature and Wellbeing Bill.  Both want to put nature at the heart of decision making, both recognise the need for bold political leadership and both are focused squarely on enhancing nature, not simply stopping the rot. 

The NCC shows that we need bold, brave political action to start repaying the UK’s ecological debt. The Committee has set out the building blocks for businesses, communities and government to work together to restore nature. The profound thing about this is that the mechanisms of economics have illuminated a truth that has always been there – our natural world is too important to squander.

I’d like to congratulate the Committee members, secretariat and support staff for their efforts in enhancing our collective understanding of natural capital and beginning to develop the practical means of shifting our balance from deficit to credit.

We shall continue our positive engagement with the Committee or its successor body and will continue to do whatever it takes to put nature at the heart of government decision making.