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Autumn 2017 Budget

Have you noticed how reports that want to be seen to be greener than they perhaps are use green font for headings? For example in the Autumn 2017 Budget for the UK.

A budget that lumps housing and environment in the summary table does not give me much hope but I skimmed on cause curiosity never killed a cow…

Some interesting numbers about money:

  • per capita GDP predicted to go down
  • additional £3 billion for Brexit (doubt much, if any, will be about the environment)
  • Defra resource budget is £1.6 billion now (compared to £27.5 billion for defence, I can’t not add) and goes down to £1.5 billion over the next two years

Air quality – not enough but at least it has its own budget line. The same cannot be said of other environmental improvements.

Environmental tax – pages 37 and 38 are of interest: in case you don’t like what you read there, read on later on page 38 – alcohol duty is frozen – unless you are a fan of white cider! Let me be fairer: further work on reducing plastic waste is on the horizon and that’s a great development building on the success of the plastic bag tax.

Flood defence and energy investments are mentioned on page 52 as part of productivity. Good to protect people and property from flooding but not if we continue to build a huge amount of houses and reforms to planning permission system that are covered by the budget don’t mention the environmental impacts of house building or potential conflicts between various guidance documents at the local level (a point the Climate Change Committee recommended in their review of the National Adaptation Plan back in July but government rejected).

Unlikely to be intended but the support for long term investment could encourage pension funds investing in natural capital. “Hope is the bread of the poor” a Turkish proverb says.

It would have been good to see some mention of natural capital – at least in the context of local growth policies, given the natural capital pioneers, and given the Conservative Party’s commitment in their manifesto to the 25 Year Environment Plan.

There are commitments to R&D, and to ‘big data’ from previous years in the form of making more of the vast geospatial data the UK holds. These will make producing evidence easier, but will such evidence be used in decision making…. “Hope is the cake of the poor”…

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GE 2017 

Labour, LibDems, and Greens are along the same end of the scale – admittedly a longish scale. In fact, I have not read the manifestos, but from leaders’ debates and other coverage, it seems Plyd Cymru and SNP also share similar views. Having said that this is an extrapolation as coverage of environmental issues in the debates has been next to nothing which I find shameful!

Conservatives and UKIP are towards the other end of the same scale but there seems to be a larger gap between these two parties than there is between the other three.

So, another election, another read of the manifestos…now I’d better stock up the butter cups for a long night on the 8th June!

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#GE2017 UKIP

UKIP logo

UK Independence Party

You can click on the title above to go to the page where you can see the Manifesto. The costings are presented in the last two pages of the manifesto document. The summary below shows quotations from the manifesto (in italics with page numbers reported) and some commentary.  The titles are mostly as they appear in the manifesto, unless statements are grouped.

Brexit and the Environment

One of the six Brexit tests in the UKIP manifesto is vaguely environmental:

“3 THE MARITIME TEST: The UK’s full maritime sovereignty must be restored and we must have control of our maritime exclusive economic zone, which stretches 200 miles off the coast or to the half-way point between the UK and neighbouring countries. There must be no constraints on our fishing fleet other than those decided upon by the UK parliament.” p.7

I say ‘vaguely’ because it is strongly implied the control over the maritime zone would prioritise the financial gain from fisheries (“rebuild the once flourishing fishing industry” p.8) rather than protection of the fish population. However, this is an implication, not an explicit statement.

Boosting the fishing industry comes up as a means in the chapter on Creating Coastal Enterprise Zones, too – even though the chapter is about generally coastal towns and tourism resorts rather than a new planning zone for enterprise as the title may lead one to think.

The reference to control of maritime exclusive economic zone could be read as ‘UK maritime waters for UK fishing fleet alone’. However, on page 9, the manifesto pledges to “Introduce a time-limited, paid licence fee option for selected foreign vessels to fish within the UK’s territorial waters, while the UK fishing industry re-establishes itself.”

Sound National Finances, a Lower Cost of Living

UKIP will remove VAT from domestic energy bills and scrap the green levies currently added to our bills to subsidise renewable energy schemes. Together, these measures will cut typical household energy bills by £170 a year.” p.10. There is no mention in the manifesto if alternative support will be provided for renewable energy, though preference is clearly for low cost fossil fuels in the Energy Security chapter.

Solving Britain’s Housing Shortage

UKIP is the only party being realistic about what can be done to increase the housing supply and putting forward a viable solution: a bold policy to roll out high quality, low cost factory built modular (FBM) homes, affordable on the national average wage of £26,000.

Factory-built homes should not be confused with the pre-fabs of the past. They are built to last, to high design standards, and are energy efficient, with running costs up to 30per cent less than traditional homes.” p.16

Trade Not Aid

UKIP pledges to cut the 0.7 % of GDP aid budget and close down the Department for International Development. However,

“[They] will continue to fund projects that make a real difference: clean water programmes, childhood inoculations, medical assistance, and disaster and emergency relief….

We will continue to fund projects that make a real difference: clean water programmes, childhood inoculations, medical assistance, and disaster and emergency relief….

We will not engage in unethical trade practices that harm or inhibit their trade, traditional lifestyles, or natural resources” p.48

Transport

“Electrically propelled vehicles are now a serious option for many families but the charging infrastructure is not keeping pace. UKIP will support the installation of rapid charging stations in towns and cities, and encourage off street parking and charging provision in all new housing and industrial developments through the local planning process….

A scrappage scheme giving diesel car owners up to £2,000 to get rid of their vehicles has also been   introduced, and UKIP supports this; however, we will combine it with an incentive scheme encouraging drivers to exchange their vehicles for electric or hybrid models. UKIP will prevent diesel drivers from being penalised through higher taxes, parking fees, or emissions’ zone charging…. UKIP will continue to support the expansion of smaller regional airports. p.51

Protecting Our Environment

This section starts with reference to Brexit not putting environment, farming and fisheries at risk. The key points are summarised below (from pages 52 – 53):

  • The Water Framework Directive led to serious flooding in many parts of the country by preventing river dredging. Repealing this directive will spare homeowners the misery of flooding and exorbitant insurance premiums.
  • UKIP will promote evidence-based environmental schemes, and safeguard protection for Britain’s wildlife, nature reserves, areas of outstanding natural beauty, countryside, and coastlines in a new Environmental Protection Act, prioritising policies to protect our precious countryside for future generations.
  • Major infrastructure projects will be required to give much more respect to irreplaceable natural habitats.
  • UKIP will amend planning legislation to promote inclusion of trees and open space into new developments. We will also require new developments to use permeable or porous surfacing materials for single-storey, ground level domestic car parking and front gardens, so rainwater can drain.
  • We will investigate the practicality of introducing a deposit scheme on plastic drinks bottles to encourage recycling.

2015 pledges that are repeated include the following:

  • Prioritise brownfield rather than greenfield or agricultural land for new housing
  • Support farming and wildlife though grant schemes prioritising the preservation of natural habitats
  • Match fund grants made by local authorities for rural capital projects which enhance the local environment or help recovery from environmental disasters
  • Protect dolphins by banning the use of pair trawling for sea bass Offer local referenda to overturn unpopular development

Food Production and Animal Welfare

“We will introduce a UK Single Farm Payment (SFP) that operates in a similar way to the present EU system. The major difference will be that UKIP’s SFP will be more ethical. It will end EU discrimination in favour of larger, intensive farms, and support smaller enterprises. Subsidies will be capped at £120,000 per year and, to make sure payments reach farmers, not just wealthy landowners, we will pay only those who actually farm the land. Organic farms will be paid 25 per cent more, and additional support will be given to hill farmers. There will be no set-aside, cropping or rotation restrictions.” p.55

Expected environmental impacts of these changes to the agri-environment scheme are not mentioned in the manifesto.

Our Future Energy Security

“Every political party except UKIP has thrown its weight behind the 2008 Climate Change Act. Set to cost us an eye-watering £319 billion by 2030, this Act has no basis in science, and its aim of cutting greenhouse gases by 80 per cent by 2050 is unachievable. It is a textbook exercise in legislative folly, brought about by nothing more than a competitive cross party ‘dash for green.’

While our major global competitors in the USA, China and India are switching to low-cost fossil fuels, this Act forces us to close perfectly good coal-fired power stations to meet unattainable targets for renewable capacity. If we carry on like this, the lights are likely to go out.

UKIP will repeal the 2008 Climate Change Act and support a diverse energy market based on coal, nuclear, shale gas, conventional gas, oil, solar and hydro, as well as other renewables when they can be delivered at competitive prices. We will also withdraw from the Paris climate agreement and the EU Emissions Trading Scheme, to enhance our industrial competitiveness.” p.56

The manifesto, sadly, does not offer any evidence to support the claim that the Climate Change Act has no basis in science.

UKIP will allow fracking to ensure fuel security, though the manifesto states the party “will not, however, allow drilling for shale in our national parks or other areas of outstanding natural beauty.”

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Busy, busy, busy

We’ve been silent here but we’ve been busy. Busy with the daily tasks and busy with thinking about what the future will hold for us all, given Brexit and other world events.

As part of this latter busyness we were at the UK Network for Environmental Economists (UKNEE) and Natural Capital Initiative (NCI) organised an event on 7th February 2017. We wanted a forum to talk about risks and opportunities waiting for the future of evidence based policy.

115 people registered for the seminar, most within the first few days of announcement. This is the biggest turnout for the evening seminars either organisation has ever hosted. The participants were economists, environmental scientists and others working for private companies, public agencies and NGOs covering a wide variety of sectors including water, agriculture and insurance.

The UK has a proud tradition of evidence-based policy making, including for the environment. While there has never been a time evidence influenced all decisions, the pressure on this tradition has been rapidly increasing. Changing policy priorities and the role of public sector in and alongside the markets, and cuts to research budgets cause this pressure. Brexit brings added uncertainty.

We – the communities the UKNEE and the NCI represent – will be stronger if we produce policy options, not only evidence; if we cooperate and if we speak out.

See here for the seminar report and ideas for further actions and events.

Also see here for a larger event organised by ENDS on Brexit.

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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

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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.

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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!

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