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Can environmental credits deliver nature recovery?

  • by JW

How can the benefits nature provides to society be quantified in predominantly economic terms?

How can the Natural Capital Approach be used in English conservation policy and how can it translate to local policy contexts?


It’s clear we need to help nature ‘recover’ – and at every level of government there’s a determination to make that happen:

Nature recovery at East Devon – Vision Group for Sidmouth (March 2022)

Creating a nature recovery network for East Devon and the UK – Vision Group for Sidmouth (October 2020)

There has been quite a debate over the notion of ‘natural capital’ – and whether you can indeed put a monetary value on ‘natural services’:

From a seemingly innocuous starting point of trying to account for our impacts on nature economically, a passionate debate in the environmental movement has emerged. This tension is most apparent where monetary units are sometimes assigned in the natural capital approach. Adversaries claim the approach risks commodifying and privatising nature by incorporating economic or market logic into conservation, whereas proponents argue that it provides the environment a hearing on equal terms.

What is the ‘natural capital approach’ – and will it really be effective in reducing our impact on nature? – Vision Group for Sidmouth

This time last year, the draft Environment Bill suggested various mechanisms to make this possible – including Local Nature Recovery Strategies (LNRS) and a new metric:

The government’s new metric for biodiversity will have to be urgently improved if it is going to be fit for purpose, academics and conservationists have warned. The biodiversity net gain (BNG) metric, published by Natural England in July, outlines how new roads, houses and other building projects must achieve no net loss of biodiversity, or achieve a 10% net gain elsewhere if nature is damaged on site.

Nature recovery, biodiversity net gain and the Environment Bill – Vision Group for Sidmouth

Here’s a useful overview, together with research, from the Common-Wealth think tank from April this year:

The Natural Capital Approach: Rethinking England’s Local Nature Recovery Strategies

The last 10 years have seen English nature continue to strain under the pressures of development and the climate and environmental crises.[1] In response, politicians have increasingly sought policy solutions to reverse nature’s decline. Ranging from renowned biologist John Lawton’s vision of green networks for a thriving “ecological England”, [2] to the creation of the “Natural Capital Committee” on environmental economics, the UK has overseen a patchwork of advisory, regulatory, and conceptual attempts at strategising national level conservation.

These efforts have sought to acknowledge the fundamental links between nature and society, wildness and wellbeing, biosphere and economy, and as the climate crisis has intensified – and the UK has missed its international biodiversity targets [3] – the need for a joined-up approach has been underlined. In this context, the UK’s exit from the EU presented a unique opportunity to rethink England’s environmental governance regime, and achieve what the UK Government has labelled a “Green Brexit.” [4]

The result, in November 2021, was the passing of the Environment Act. [5] Chapter Three Part Six of the Act concerns “Nature and biodiversity” and introduces landmark statutory changes which will significantly change how nature recovery is strategised, reported on, and integrated into public policy in England. At the heart of these changes are statutory responsibilities for local authorities to achieve and monitor nature recovery, and the requirement to produce “Local Nature Recovery Strategies” (LNRSs): spatial documents (organised geographic information about a location or area, such as maps) to guide and prioritise local conservation.

The issue of nature recovery today is more urgent than ever. Nature recovery has frequently been defined as the creation of resilient ecological networks which enable nature to thrive under a variety of pressures, including climate change. [8] Nature recovery is also understood as embedded in multidimensional relationships with society, which are valued and experienced in diverse ways. [9] Over the last 50 years, however, 41% of species have declined in the face of development pressures. [10] The proportion of England’s Sites of Special Scientific Interest classed as ecologically recovering has declined year-on-year since 2016, and the amount in favourable condition is now lower than it was in 2006. [11] These statistics come despite ambitious environmental policy commitments, most notably the 2018 25 Year Environment Plan (25YEP), which aims to improve the environment within a generation. [12] Addressing this, LNRSs are intended to help local authorities identify local biodiversity priorities and delivery mechanisms through which to achieve them. [13] LNRSs comprise two products: a Statement of Biodiversity Priorities and a Local Habitat Map, which are to be reported on every five years to central government. [14] Once established, this system will contribute part of the governance infrastructure supporting the 25YEP, principally by underpinning a “Nature Recovery Network” across England.

Despite its bold ambitions, the 25YEP is currently missing its self-imposed targets, and has come under criticism for its methodology. [15] This methodology, the natural capital approach (NCAP) to conservation, seeks to quantify the benefits nature provides to society in predominantly economic terms. The NCAP attempts to capture “externalities” often missed by economic decision making, and enable cost-benefit analyses in conservation. [16] The 25YEP represents the first systematic use of the NCAP by DEFRA, and the NCAP has become the language of conservation in government. [17]

However, the UK Government’s ex-advisory body on natural capital, the Natural Capital Committee, has criticised DEFRA’s understanding of the NCAP, questioning indicators selected for monitoring outcomes, its choice of objectives, and the absence of local-national policy links. [18] These perceived shortcomings of the 25YEP, its NCAP methodology and local implementation prompt several questions, which this briefing intends to answer: how is the NCAP used in English conservation policy? How does the NCAP translate to local policy contexts? And is the 25YEP unimplementable? Given the urgency of the biodiversity and climate crises, such questions remain crucially important, to help shape the government‘s response to the crisis.

The Natural Capital Approach: Rethinking England’s Local Nature Recovery Strategies

This week, the University of Exeter announces a possible practical way forward:

The market facilitates the sale of multiple environmental services such as nutrient mitigation and biodiversity gain

Exeter’s environmental expertise makes Bristol Avon Catchment Market a world-first

Nature-based projects that help the environment will be incentivised through an innovative new online market.

“We’re taking some ideas from academic research and applying them to the real world to solve an important social problem,” Dr Lindsay explained. “When a house builder, for example, builds new houses this increases pollution in the rivers, but having landowners such as farmers undertake projects on their land such as developing wetlands, planting woodlands or converting farmland into meadows can offset this pollution. Our settlement mechanism matches together organisations and landholders in the optimum way, allowing houses to be built and the environment to be protected by deciding how much organisations have to pay the landholders to fairly divide up the benefits from this trading.”

Research news – Exeter’s environmental expertise makes Bristol Avon Catchment Market a world-first – University of Exeter