How do we value nature was the topic of debate at a recent Prospect roundtable. The discussion was sparked by a paper written by the leading economist, Professor Dieter Helm, who chairs the Natural Capital Committee. The committee, an independent advisory body set up in 2012, advises the government on the state of England’s natural capital including forests, rivers, land, minerals and oceans.
When the committee ends its three-year tenure in January 2015, it plans to separate out and account for England’s natural assets. It will identify risks and ensure we preserve an aggregate level of natural capital "so we leave the place in a better state than it was found,” says Helm.
The debate examined the definitions of natural capital, which ranges from non-renewable resources such as oil, gas and coal to renewable natural assets such as wildlife. Participants also considered how we might account for and value nature; how to implement maintenance or offset measures to safeguard aggregate natural capital and what legal and policy frameworks should be introduced to make our use of natural capital more efficient.
The event also saw the announcement of a new lobbying effort by an alliance of green organisations. Wildlife charities The Royal Society for the Protection of Birds (RSPB) and The Wildlife Trusts want the government to introduce a “Nature Bill,” which would introduce targets for biodiversity and the protection of scientifically important sites for the year 2040. RSPB parliamentary programme manager Richard Benwell said: “This is one of the really big open doors where a government can say ‘we’re not just going to sort out your economic debt for the next few years, we’re going to sort out the ecological debt too.”
Among the group of 18 specialists from universities, the investment community and NGOs, there was widespread agreement that law could play a role in protecting renewable natural assets. The challenge will be to safeguard these assets before they fall below what Professor Helm called “a critical threshold.” For example, the collapse of the cod stocks on the Canadian Grand Banks would constitute such a threshold in the case of fish.
Claire Nouvian, President of sustainable oceans NGO the Bloom Association, explained that deep sea trawling, which is still permitted off the Scottish coast, is having a devastating effect on deep sea reefs that are over 5,000 years old. “Corals that began forming around the time the Egyptians built the pyramids are being destroyed in a matter of seconds,” said Nouvian. Such endangered assets, she argued, need a price tag urgently to prevent them being misused.
Back on dry land, Nick von Westenholz, chief executive of the Crop Protection Association, said some 75 per cent of UK land is used for agriculture, which creates an opportunity to target those small groups that hold property rights to do their bit to preserve nature. He managed to take it in good humour when Professor Helm pointed out that agriculture contributes about the same to the UK economy as the illegal drugs and prostitution industries (about 0.7 per cent of GDP).
James Cameron, chairman of Climate Change Capital, emphasised the importance of law, intergenerational politics and investment as key components to preserving our aggregate natural capital over the long term. “The current generation of politics needs to stop neglecting ecological debt if the UK is to leave natural capital in a better state for the next generation,” he said.
James Skinner of the New Economics Foundation, said that there is much we do not know about the complexities of nature. Because of this, valuing natural assets is a huge task. “How are we going to value the humble worm, for example?” he asked. “Agriculture may only account for 0.7 per cent of GDP in the UK, but if we don’t have food we die.”
Professor Helm argued that unlike climate negotiations, which require co-ordinated international responses, unilateral efforts by countries to preserve natural capital would be more effective as the issues are much more localised. Horacio Sanchez-Caballero, Director of the Group of Producing Countries from the Southern Cone (Argentina, Brazil, Paraguay and Uruguay) said: “systems are connected beyond frontiers so what is done in one place can have repercussions in other countries.” The panellists agreed that international law and trade regulations have an important part to play in cross-border nature preservation.
Professor Helm concluded that we need to begin visualising what a natural capital balance sheet would look like, that we must embrace data to help solve the problem and that there are important choices to be made over economic development and the preservation of our natural environment. “If you put a railway over the Chilterns rather than underneath you are saying the railway is worth more… we are planning to build perhaps 100-200,000 houses a year. It matters where they go. Either we face up to these choices and decisions, or things will keep on being done extremely badly,” he said.
The discussion was supported by the University of Oxford’s Smith School of Enterprise and Environment, Climate Change Capital and the Crop Protection Association.