The budget: a conspiracy of silence on nature

(c) Cormorant perched along London skyline, rspb-images.com

Today's Nature's Advocates blog is written by Jenna Coull, the RSPB's Principal Economist, in response to the UK Government's Spring Budget 2024.

Introduction   

Yet again we receive a government budget that does little to address the nature crisis. Despite the hottest year on record, and a State of Nature report which puts the UK in the bottom 10% of countries globally for biodiversity health, neither the climate nor nature crises got a mention by the Chancellor in Parliament on budget day.    

Rather than laying the foundations for future economic prosperity by investing in nature’s recovery, the Spring Budget is short-termism and ignores the fact that investment today will reduce the costs of inaction later. The Institute of Fiscal Studies (IFS) warned of a ‘conspiracy of silence’ over difficult future tax and spending decisions. 

Nature’s value must be at the heart of economics

The Dasgupta review of the economics of biodiversity emphasised that protecting and investing in nature is vital to sustain our economy in the long term. As a signatory of the UN Convention on Biological Diversity the UK is committed to halt the loss of nature and protect 30% of land and sea by 2030. At the RSPB, we want to see our economy transition to one that is nature positive and net-zero, where people work together to deliver nature recovery and improved wellbeing for all.

We had four asks for the Spring Budget to move forward this agenda. These were: a plan setting out public funding in nature to address the finance gap; reform of the fiscal framework to encourage investment in nature; supporting the development of emerging nature markets; and new policies to boost green energy growth. There were some announcements on the latter, but not much beyond that.

Horrible fiscal bind

Undoubtedly, the UK is in a difficult fiscal position; the IFS previously called it a ‘horrible fiscal bind’. High inflation, low growth and significant levels of public debt had put pressure on the public purse. This combined with other budgetary pressures on defence and healthcare, and the set of fiscal rules chosen by the government, meant ahead of this budget there was very little fiscal room for manoeuvre.

What the budget offered for nature 

There were some increases in funding for green energy growth in this budget (such as the £1bn for the green industries growth accelerator and £1bn auction for renewable energy projects). But it falls significantly short of the £26bn recommendation from a recent LSE report on green infrastructure investment - and offered no new specific funding for nature projects.    

There were some changes to tax duties including the Fuel duty, Energy Profits Level, Air Passenger Duty, and Landfill taxes, but with no significant fiscal reforms proposed. 

A small win for nature was the extension of agricultural property relief to environmental land management agreements - an issue RSPB engaged with Treasury on. While limited, it brings the tax schemes for environmental land management schemes on par with farmed land, hopefully incentivising their uptake. 

Time to invest in nature 

Our most pressing ask was for a substantial increase in both public and private investment in nature. This requires a detailed plan of how this investment will combine to address the nature crisis head on.  

So far government has a Green Finance Strategy that sets a target of £1bn additional private investment into nature’s recovery by 2030 but has not set any public sector investment targets.   Nor is it clear how the private investment target will be reached.  

In our previous blogs we have discussed the finance gap for nature, the gap between environmental policy and the funding committed to it. There is some debate around what the total amount is - the GFI estimate it is £6 billion a year for the next 10 years – but it is sizable. 

The cost will only increase  

The longer the inaction on the nature crisis, the more costly it will become to fix it. Last year, BloombergNEF estimated that $166 billion a year was spent on restoring the planet’s most fragile ecosystems, but this needs to jump to $1 trillion by 2030.      

In 2006 Nicholas Stern, author of the Stern Review and ex chief economist for the World Bank, noted that ‘the benefits for strong and early action (on climate change) far outweigh the economic costs of not acting’.   Yet humans are biased towards the present, placing greater value on a £1 today than in the future.  This Spring budget is a fine example of this. 

Conclusion 

This budget had little wriggle room to address the nature crisis and get the UK on track to meet its 2030 UN nature targets.  While the fiscal position was limited, better choices could have been made for nature. Ultimately, we need a new fiscal framework which gives government the space to invest in nature for years to come.