| On Topic
Natural capital was the guiding principle for
both of these documents and as such, having a
sound understanding of these principles will be
essential if we are to understand how the rural
sector will be supported and regulated in a
post-Brexit world.
Natural capital - the current position explained
Since its inception in 2011, the Natural
Capital Committee has reported annually on
the state of the UK’s natural capital. The
underlying and salutary messages are that it is
in long-term decline and that this decline is
threatening our economic prosperity and
opportunities for growth.
This is an issue for everyone, not just the
agricultural industry. In addition to providing
fundamental support functions for our life-
giving ecosystems, natural capital is an integral
part of almost any industry that you can think
of, providing key resources from water to raw
materials. Of course, the benefits of retaining
and protecting our natural capital extend
beyond the economic - from emotional welfare
to cultural character. These benefits are well
understood and researched and can be valued
and quantified. For example:
• better health and wellbeing;
• educational opportunities;
• recreation and tourism;
• sustainable supply chains;
• better carbon retention and sequestration;
• better catchment management and natural
flood protection;
• better soils;
• enhanced and more accessible
landscapes; and
• greater biodiversity.
It’s easy to take nature’s riches for granted,
but the values for natural capital are significant.
In 2018, the Office of National Statistics
estimated the value of the UK’s natural capital
at some £761 billion. These figures have been
calculated based on capitalised annual flows of
services.
A practical assessment
One of the issues around natural capital is
undoubtedly the over-complication of the
assessment of the baseline position, combined
with a lack of practical market opportunities that
exist to transform highly valuable assets in
relation to natural capital into viable revenue
streams.
Unsurprisingly, most landowners and
manage rs have a fundamental understanding
of natural capital values. In fact, in many
instances land management decisions and
policy is unconsciously guided by this
understanding.
The CLA has sought to promote a Land
Management Contract through which farmers
and landowners would be paid for the provision
of the Ecosystem Services with defined
measures and outcomes based on science,
evidence and societal needs.
In light of current thinking, this
understanding needs to be more focused and
qualified. Landowners and managers need to
review their assets and look at them through a
new lens focused on highlighting the emerging
opportunities. It will be critically important to
understand what assets are present and their
relative values and potential opportunities.
Knowledge is the key
One of the characteristics of the natural
capital field is the vast range of academic
research and the wide variety of emerging tools
and methodologies that are now coming
forward to support a wider comprehension of
this area. These provide levels of academic
rigour and understanding that will help in the
development of structures and opportunities for
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economic investment. For example, it is now
possible to calculate with some rigour how
changes in land management within a river
catchment will reduce flows and thereby
flooding risk.
While the range of guidance and tools is too
extensive to cover here in anything other than
cursory detail, there are some key resources
that provide useful guidance and support.
Natural Capital Committee:
How to do it – a Natural Capital workbook
https://www.gov.uk/government/groups/natural-
capital-committee
Ecosystem Knowledge Network
Toolkit assessor:
https://ecosystemsknowledge.net/
Royal Institution of Chartered Surveyors
Challenges for international professional
practice: from market value to natural value
Value of Natural Capital – the need for
chartered surveyors
http://www.rics.org/uk/about-
rics/professional-groups/rics-rural-professional-
group_91/
Key issues in market development
One of the key challenges we face is the
current lack of simple pathways to market.
There is much evidence that has been recorded
in favour of the natural environment such as:
our woodlands actively sequesting carbon;
grasslands and wetlands reducing flood risk
and improving water quality; access to our
natural environment providing benefits to our
health and wellbeing; and our urban trees
improving air quality and providing essential
shade and shelter. However, evidence to
support and reflect the financial returns of these
benefits is still in its infancy.
In December 2016, Defra published its
review of 16 payments for ecosystem services
pilot projects that it supported between 2012
and 2015. In September 2016, Green Alliance
and the National Trust launched a proposal for
a Natural Infrastructure Scheme, an area-based
market in avoided costs, delivering
environmental improvements by bringing
together groups of land managers to sell
ecosystem services to groups of beneficiaries.
The Defra best practice guide on payments
for ecosystem services is a helpful introduction
to what the approach is and how it might be
applied in the UK. A copy can be downloaded
from the Ecosystems Knowledge Network
website linked above.
However, as landowners, managers and
stakeholders we need to get onto the front foot.
In the first instance, we need to review, map,
document and value our natural capital assets
and consider how they fit within the wider
network of green infrastructure. We then need
to consider who needs what we have, and work
together with both private sector and public
sector partners to develop market
opportunities.
Natural capital is here to stay and is gaining
ground and credibility. It is guiding government
thinking and they currently see Brexit providing
a great opportunity to embed their
environmental objectives into British Law as
well as shaping new agricultural and land
management policies and a new framework for
environmental protection.
Enhancing natural capital makes good
practical economic sense and our challenge is
now to develop programmes and structures
that start to properly reflect the real value that
the provision of these public goods provides to
society as a whole.
Author:
John Lockhart is Chairman of
Lockhart Garratt environmental
planning and forestry consultancy
(www.lockhart-garratt.co.uk). John
specialises in a range of areas
including strategic woodland
management, environmental
planning and development and
green infrastructure. John can be
contacted on 01536 408840 or by
emailing [email protected]
August 2018 | Farming Monthly | 11