Treasury mulls natural capital

26th November 2014


Related Topics

Related tags

  • Ecosystems ,
  • Biodiversity ,
  • Natural resources

Author

Shane Coffey

Measurement of natural capital could be included in official public sector guidance on appraising costs and benefits of projects and policies.

Speaking to the environmentalist at the Natural Capital Initiative conference in November, Defra chief economist Ulrike Hotopp said that meetings with the Treasury on including natural capital in its Green Book, which is currently being updated, had been “very constructive”.

“We’ve suggested text to put in the Green Book. They were a bit sceptical at first, but now they’ve completely taken it on board,” she said.

The guidance will help public sector professionals identify the ecosystems to consider when assessing the impacts of projects, and assist them to calculate the cost any loss of the services the ecosystem provides, such as flood mitigation and erosion prevention, she said.

Awareness of ecosystem services across government departments is not yet high. Analysis carried out for Defra by consultancy Eftec found that, although 80% of impact assessments treat economic impacts rigorously, 50% treat environmental impacts with low rigour or not at all. Full quantification and monetary valuation of impacts were scarce, the study found.

A 2012 supplement to the Green Book included ecosystem services, but, although this appears to have increased the number of environmental impacts covered, there was no detailed assessment of 70% of them.

Of the findings, Phil Cryle, a consultant at Eftec, said the main reason for the lack of effective assessment of environment impacts lay with the way professionals mainly use the guidance. “Often they apply it only when a problem arises rather than as a matter of course,” he said.

Mark Everard, visiting research fellow at the University of the West of England, said: “The updated Green Book will need to make a substantive change in articulating why this matters for a non-green audience and a provide pragmatic tool to help them do it or it won’t make any difference.”

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