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Economics is interested in how people use their limited resources to meet their needs and wants. In this way, it is also relevant to other disciplines also interested in how choices are made, and to support decision-making.

So economists have developed some methods to account for the non-market goods and services we all enjoy. These methods are sometimes misinterpreted as putting a price on the environment, selling it off, commodifying it, etc., when really the main aim is to understand some of the reasons why and how the environment is valuable to people. A better understanding of this can help people make decisions that place more of the due emphasis on the environment, facilitating policies and actions based on a more accurate indication of its value. Otherwise, there are many examples where the value of the environment is only realised when it’s gone – and then it’s too late.

To address these issues and to improve understanding of economic valuation, the Valuing Nature Network brought together over 100 volunteers from those who collate and analyse economic value evidence, those who use it and those who work in other disciplines who provide direct input economic valuation or use the results.

The resulting 12-page paper, Demystifying Economic Valuation, covers the main issues, questions, and principles surrounding economic valuation and is designed as an overview for those new to economic valuation.

The paper is the first of the Valuing Nature “Demystifying….” Series, and was funded as part of the Valuing Nature Programme, which aims to improve understanding of the value of nature both in economic and non-economic terms, and improve the use of these valuations in decision making.

If you are not a member of the Valuing Nature Network, you can sign up here: http://valuing-nature.net/network

Interest in Natural Capital Accounting is increasing in the private sector, fuelled by the anticipated publication of the Natural Capital Protocol in July 2016. The ‘corporate natural capital accounting’ (CNCA) framework, developed in the UK[1], is akin to a financial balance sheet for natural capital assets, comparing the asset value to the cost of maintaining this value. It is particularly suited for land managing organisations.

 

This year, the method has since been applied for the first time at a large scale, by Forest Enterprise England to the public forest estate (around 254,000 hectares; approximately 1% of England) and the Duchy of Cornwall to its rural estate (around 55,000 hectares). This work has built on the organisations’ existing financial accounting and property management systems. It has provided valuable experience about the use of the method, and insights for the organisations involved that have improved strategic thinking.

 

For Forest Enterprise England the account has been the first application of the CNCA framework to an organisation’s entire estate. The full value of the public forest estate is transparently and coherently reported in the account, which combines financial data with analysis of the estates’ wider value to society.

 

Simon Hodgson, chief executive of Forest Enterprise England, commented “The government has made a long term commitment to keeping the public forest estate in public ownership and so it is important that we understand the full benefit of England’s national woods and forests to society and that we manage for the long term to increase its natural capital and deliver greater public benefit.

 

The CNCA approach enables us to understand and communicate the value of the public forest estate to government and society and to understand how the decisions we make about managing the estate impact on its value over the long term.”

 

For the Duchy of Cornwall, the account has developed the links between the Duchy’s detailed asset register of its tenanted land to published evidence on the value of natural capital assets, including outputs from the UK National Ecosystem Assessment.

 

Andrew Phillips, rural finance director for the Duchy, noted “We have gained a new perspective by comparing natural capital values to the rents and maintenance costs already captured in our financial accounts. These comparisons help organise environmental priorities across different parts of the estate – such as highlighting the wide range of values associated with management of Dartmoor, and for understanding the relative importance of stores, emissions and sequestration of carbon in different parts of the estate.”

 

An event discussing this work is being hosted by ICAEW and in partnership with eftec, Forestry Commission and the Duchy of Cornwall on: 26 April 2016; 15:00 – 19:00 at Chartered Accountants Hall, Moorgate, in the City of London.

 

There is no cost to book on to this event.

 

Click HERE to register and for further information.

 

[1] The corporate natural capital accounting (CNCA) framework was developed in 2014 for England’s Natural Capital Committee, by eftec, PwC and RSPB.

We have been working with several Local Nature Partnerships over the last year or so in two specific areas:

  1. to identify the value of the natural environment in social, environmental and economic terms;and
  2. to make the case to businesses and other organisations for investment in the natural environment within their area.

This natural capital analysis fits with the objective of the Local Nature Partnerships which is to make sure that the value of the natural environment, and the value of the services it provides to the economy and the people who live there, is taken into account in local decisions, for example about planning and development.

This fits within the National Planning Policy Framework which outlines the requirements on local authorities to conserve natural capital. Section 11 of the framework relates to “Conserving and enhancing the natural environment”. This acts as a de facto ‘national guideline’ on how/when the planning system should operate in the context of accounting for natural capital.

In terms of more specific guidelines as to how to value natural capital, there is government guidance for policy and decision makers on using an ecosystems approach and valuing ecosystem services, including:

  1. a) Defra (2015) What nature can do for you. A practical introduction to making the most of natural services, assets and resources in policy and decision making
  2. b) Defra (2007) An introductory guide to valuing ecosystem services
  3. c) Other sources on valuing natural capital (ecosystem services)

In terms of Government requirements on local authorities for the natural environment beyond the NPPF:

  • The Natural Environment and Rural Communities Act 2006 requires all public bodies to consider biodiversity conservation;
  • Some habitats and species are protected under the Habitats Directive through the Conservation of Habitats and Species Regulations 2010 in England; the Birds Directive, through the Conservation of Habitats and Species Regulations 2010, and the Wildlife and Countryside Act 1981 (as amended); and
  • The Town and Country Planning Regulations 2011 require an Environmental Impact Assessment (EIA) to be undertaken in which impacts on natural capital will need to be assessed (Schedule 2 of the Regulations sets out ‘exclusion thresholds’ below which EIA does not need to be considered).

While there is no statutory requirement on local authorities to account for the natural environment in a particular way, the above guidance makes it clear that the natural environment should be given consideration. And the guidance available, including those outlined above, illustrate that there is no lack of available methods.

Our work is trying to make it easier for LNPs and local authorities to use these methods in practice. For some examples of this to date, see our case study write-ups. More will follow soon!

Electioneering is in full swing and this year’s campaign has a very different feel to it. Unfortunately it’s not good news for the environment.

Thinking back to 2010, the environmental message was a key part of the election campaign. The manifestos had whole chapters dedicated to the environment, climate change and green economy. The Conservatives made a bold pledge to be the greenest government ever and even had a green tree as their logo!

Politicians work to represent the interests and concerns of the people and back in 2010 things were very different. Firstly, the fallout from the 2008 economic crisis hadn’t really hit home. Secondly, there was heightened public awareness of environmental damage stemming from the explosion of media coverage following the Stern review on climate change. The politicians responded and the environment was catapulted to the forefront of the campaigns.

The election results saw the Green party’s first MP and the Coalition government publish the first White Paper on the natural environment in over 20 years.

Back to 2015 and there is practically no mention of environmental issues in the campaigns. Aside from a cringe worthy reference to sustainable development by Natalie Bennett (Green party) in the 7 party TV debate, the environment has just a page or two in the manifestos and the Tory tree has been obscured by a Union Jack (but yes, the tree is still there!). More on the manifestos to follow on Cow Burps.

Given the current economic climate it’s not surprising that today’s main political messages are around security of jobs, incomes, houses and healthcare. The treatment of the environment across the two campaigns highlights the reactive nature of the political game. But are the politicians really reacting to the needs of the voters? The environment is lost in the current campaigning maybe because it’s seen to directly compete against jobs, incomes, houses and healthcare. But what about the view that these are compliments – that investing in the environment delivers these things? That message still seems a harder sell.

Pitcairn Waters Protected!

Great news that the UK is contributing to establishing a global network of highly protected marine reserves with the designation of Pitcairn Marine Reserve. Cowburps has previously highlighted the opportunity to protect the rich waters in the UK’s exclusive economic zone around Pitcairn Island. The Pitcairn Islands Marine Reserve spans 834,334 square kilometres (322,138 square miles), making it the world’s largest highly protected marine reserve.

On top of the phenomenal biodiversity, two things are notable about this designation. Firstly, boundary includes a small zone to allow sustainable levels of fishing by local residents to continue. Secondly, the planned role for technologies, specifically, satellite monitoring to detect illegal fishing within the designated waters.

This demonstrates the mix of skills needed to develop successful marine protection: from local consultation to support sustainable local fishing, through to new information technologies that allow cost-effective enforcement. These skills include a small, but necessary, chunk of environmental economics – to show what’s really cost-effective and where the costs and benefits of protection are spread.

For example, the costs of the innovative monitoring regime at Pitcairn should really be regarded as part of the baseline for any use of the site. This is because without monitoring, property rights are really just theoretical, and so there can be no way of securing benefits from any activity (either exploiting minerals or fishing, or benefits from conservation).

Related posts from us:

https://cowburps.wordpress.com/2013/10/24/protect-pitcairn-more-than-just-money/

https://cowburps.wordpress.com/2013/11/27/economics-role-in-protecting-uk-waters/

Related reading:

Pew Trust press release

The Guardian article on the news

The last but not the least, we always wanted to work with artists to bring a different dimension to our work for the environment and the economy. As part of that, we’ve sponsored photographer Rhiannon Adam who is on a ‘journey of a life time’ (BBC supported) to Pitcairn. You can follow her adventure and photographs here.

Biodiversity Offsets Blog

For your consideration:

The recently started Biodiversity Offsets Blog aims to provide an interdisciplinary platform for the information and exchange on Biodiversity Offsets and the Mitigation Hierarchy.

The goal is to mainstream and facilitate the discussion on Biodiversity Offsets. The focus lies on biodiversity offsets as such (not market based instruments or other more general topics). The formerly widespread information shall be brought together to make it easily accessible for a maximum of people and thereby to unite the societal debate with academic findings and practical insights. This includes joining different perspectives (biodiversity offsets are not restricted to the interest of business).
The Biodiversity Offsets Blog combines general information (including an updated list of experts, literature, websites etc.) with frequent blog posts on new articles, scientific papers, political news, offset examples on the ground and so on.
As the platform shall bring people and their expertise together, all those who are interested are encouraged to share their knowledge, views, questions or concerns and help to build a broad information base. Find out more on www.biodiversityoffsets.net.

Once again Seattle, Washington is flexing its large, environmental muscle – one that not only seems to be superior in terms of size, but also seems to have the enviable ability to trigger movement and action in both the local and state governments.

In Seattle, it is now illegal to throw away food with rubbish (it has already been illegal, for several years, to throw away recyclable items with rubbish). This comes as a pumped-up version of mandates for composting that already exist in places such as San Francisco, Vancouver, and Vermont. The difference, however, is that Seattle homeowners failing to comply will be penalised directly, after being warned once – a warning displayed publicly with a large, red tag around the offender’s rubbish bin. These red tags also double as a public education campaign about the new law on recycling and composting.

While the establishment of this policy is something to be admired in and of its own right, the sentiment behind it sheds light on an exemplary dedication to the larger environmental goals of the people of Washington. This (comparatively) strict law did not come into place as a strong, last-ditch effort to fix some overwhelming problem. On the contrary, it was established to help the city increase its recycling and composting rate to 60%, only four percentages points higher than its current level, and was a result of the fact that the state’s recycling rate slipped to 49% in 2013 from 50% in 2012 – even though this 49% is still among the highest recycling rates in the US. This new law therefore symbolises just how committed Seattle is to its environmental and ecological responsibility. The people of Seattle and Washington are willing to push strong, novel policies in reaction to small (environmental) steps backward and/or in order to increase, even by relatively small amounts, their already exemplary environmental practices and lifestyles.

Excuse my implied pessimism for the rest of us, but this ambition to be ‘better even when already one of the best’ seems a refreshing deviation from the environmental attitude of setting discouragingly low goals and coasting once a level of ‘good enough’ has been achieved (restricting the growth of many an environmental muscle).

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