Natural Capital (England and Wales)

Lord Goldsmith of Richmond Park Excerpts

Monday 21st October 2013 Commons Chamber

[Zac Goldsmith (Richmond Park) (Con)]

I thank the Backbench Business Committee for finding time for a debate on this very important issue, and I congratulate the hon. Member for Brent North (Barry Gardiner) and my hon. Friend the Member for Beverley and Holderness (Mr Stuart) on having secured these valuable couple of hours. It is a real pleasure to follow the speakers who have already contributed, and I agreed with so much of what was said that I have been radically cutting back on the points I wish to make in order to avoid boring the House to death. I will, however, make a few general remarks.

The conservationist John Aspinall died a few years ago. Before he died, he wrote a letter in which he said:

“Nature is the bank upon which all cheques are drawn.”

It is a simple and utterly unarguable observation. Everything we have is ultimately provided by the natural world— by ecosystems—but in modern society, with all its extraordinary cleverness and genius, we have never bothered developing the tools for valuing the very thing on which we all depend.

We are nothing without the natural world, yet concern for nature is seen, at a stretch, as a luxury add-on. That thinking permeates across the board. How many times have we heard our Chancellors caution that the economy must always be prioritised above the environment, as if somehow the two can be separated—as if we can flourish economically without that annoying thing called the environment? It is an extraordinary flaw in modern thinking.

That flaw is, perhaps, understandable for our recent ancestors. They may have seen the world as simply too big to pollute—they may have thought the oceans were so deep that it did not matter how much we threw in them, and that there was so much forest that it did not matter how much of it we cut down. There is an explanation for the madness of previous generations, therefore, but not of today’s. With 15 of the world’s biggest fisheries collapsed or on the brink of collapse, with the world forest map visibly shrinking every year, with fresh water shortages affecting well over 100 countries, and with human trash clogging up our oceans—visible now even from satellite—it is obvious even to a child that we are going to hit a wall.

Reconciling the market with the environment is a prerequisite for our survival as a species. It is our defining challenge. This slightly nerdy debate we are having about valuing natural capital is a central part of that.

In practical terms, valuing natural capital is about putting a value on the free services provided by the environment, and not just valuing nature after it has been cashed in. My right hon. Friend the Member for Meriden (Mrs Spelman) gave an excellent speech on the value of pollinators to British agriculture, in which she said that the cost would be £400 million a year were they to stop doing their valuable work. The benefits that wetlands provide to water quality are estimated at about £1.5 billion per year. Other examples of natural capital include the value of natural flood plains in terms of flood defences. The UK national ecosystem assessment in 2011 calculated that if the UK’s ecosystems were properly protected and enhanced, they could add an extra £30 billion to the UK economy. The assessment also warned that:

“Neglect and the loss of ecosystem services may cost as much as £20 billion to the economy per year”.

Even now, at this early stage, we can see practical examples of what happens when natural systems are valued. We have heard about some examples, but I wish to give a couple more. Old flood defences on the Humber estuary have been re-engineered to allow controlled flooding in order to prevent further flooding of towns and land downstream. The scheme has created 440 hectares of valuable new wetland habitat and provides about £400,000 each year in flood protection benefits. That is a straightforward example of what valuing natural capital means. In Cornwall, South West Water has found that paying farmers to reduce the amount of pollutants from their land entering rivers provides benefits that, I am told, are 65 times more than the initial cost. So the farmers benefit, the environment benefits and the water companies benefit—this really is win, win, win.

I wish to mention one other example from slightly further afield—since we are talking about the world and not just this country, I am sure that I will be allowed to do so. Vietnam has had a policy on payment for forest services since 2008, through which hydro plants, water companies and tourism companies must pay for the use of forest services. So, for example, more than $2 million is paid each year for the protection of the 276,000 hectares of forest in the Quang Nam province, of which 85% goes directly to local residents. The hydro companies protect their capital investments, because the trees prevent siltation and erosion, which ultimately shortens the life of their investment; the water companies have steady supplies of clean water; tourism flourishes; and local people have jobs and security. Again, everyone wins; the policy is a beautiful example of what this slightly abstract thing we are discussing means on the ground.

I want to acknowledge the work of Dieter Helm and the independent natural capital committee, and of my right hon. Friend the Member for Meriden, who showed real, direct commitment in her time in office and has, without doubt, moved this issue on profoundly. However, this thinking needs to become much more mainstream in government and much more embedded in the decision-making process. We can all agree that we have a long way to go on that. To see that, we need only consider the Government’s impact assessment for the first 31 marine conservation zones, which calculated the costs to industry—about £1,000 per year—but failed to quantify the wider benefits of improving the health of the ecosystems. It did not look at how the zones added to the value of tourism and the fact that a healthy marine environment creates seafood. Those things were left out of the calculations.

Unless the work of the NCC begins to have a real impact on decisions made across government, it can only ever be an abstract or academic exercise. I am not yet convinced that the key Departments have properly bought in to this. Only a few weeks ago, a number of senior civil servants from the Department for Business, Innovation and Skills appeared before the Environmental Audit Committee. I asked them at the end of our session, while things were still being collected and recorded, whether any of them had met up with anyone from the NCC. Not only had they not done so, but I think we can safely assume from the response we got that they did not even know what the NCC was. Would it not be wonderful if next time we debated this issue—I mean this as no disrespect to the great Minister we have on the Front Bench today—the Benches were packed and we were talking directly to the Chancellor? That would be a whole new ball game.

On paper, I think that the UK is providing real leadership —that is not in doubt—and I know that other countries are watching our progress. My one request to the Minister is to persuade us, and anyone watching this debate, that the Government as a whole really are ready for the challenge and really have incorporated this thinking across all the Departments.