The degradation of England's ecosystems can be halted if "concerted action" is taken to understand the value of natural capital and link it to economic decision making, say government advisors
In its first report, the natural capital committee (NCC) calls for the creation of clear metrics to measure the value of ecosystems services and a risk register of natural capital assets. These are needed to better enable the government and organisations to ensure the environment is considered when taking strategic decisions.
The NCC argues that without an economic value, the natural environment has “often been assumed to be of zero value”, resulting in unsustainable consumption of resources and considerable damage to ecosystems.
However, the report states that the decline in England’s natural capital over the last 50 years can be reversed if a clear way of valuing assets is developed, and if the value of those assets is monitored and incorporated into growth strategies.
“Our economic prosperity and the wise use of our natural resources are not mutually exclusive. In fact, the latter is a precondition of the former, in the short, medium and long-term. Economic growth must be sustainable – otherwise it will not be sustained,” said Dieter Helm, chair of the NCC.
The report concludes that “natural capital accounts” are needed both at the national and at the individual company level to ensure that the environment is being considered, and to mitigate risks to economic growth and supply chains.
The committee calls on businesses to help develop best practice guidance on how to account for the natural environment: “Managers in the private as well as public sectors have a particularly important role to play in pioneering corporate natural capital accounting,” it states.
Meanwhile, the government must develop economic indicators that consider the depreciation of natural capital and review how cost-benefit analysis is being implemented with respect to the natural environment, says the report.
“Natural capital is enormously important to the economy and yet it is largely omitted from national economic indicators as well as from most corporate and government policy decisions,” states the NCC. “The consequence is that resources are not being allocated efficiently within the economy and opportunities for significant gains in wellbeing and future growth are being lost.”
Over the next 12 months, the committee aims to develop a risk register so it can advise on those natural assets that are being used unsustainably. It will also help develop metrics to measure the value of natural capital and work with accountancy bodies to create principles of natural capital accounting.
The NCC is an independent advisory body created following a government commitment in its 2011 natural environment white paper, in which it pledged to “improve the quality of the natural environment across England”.
