Natural Capital (England and Wales)

Neil Carmichael Excerpts

Monday 21st October 2013 Commons Chamber

[Joan Walley]

There is agreement on this on all sides of the House. If policy decisions from the Treasury lock us in to investment for many years to come, we will be prevented from including the true value of natural capital in how those decisions are reached. Parliament has to find a way of having shared responsibility reflected in the Chamber. I hope the commitment, which I am sure we will hear from the Minister when he comes to reply, will be reflected in the Treasury, and that the Secretary of State for Environment, Food and Rural Affairs understands that the debate is about the economy not just in rural areas, but in each and every part of regeneration policy.

[Neil Carmichael (Stroud) (Con)]

I am a member of the Environmental Audit Committee, of which the hon. Lady is the Chair. Does she agree on the importance of incorporating this discussion in the debate on green finance, on which we will be doing a report shortly? Does she also agree that it is pivotal that we link up with the Treasury, DEFRA and all other Departments, because this needs to be a joined-up process?

[Joan Walley]

I absolutely agree. Certainly on green finance, this needs to be embedded at the heart of not just the Treasury, but the Department for Business, Innovation and Skills. When the right hon. Member for Meriden, who was instrumental in setting up the NCC, gave evidence before our Committee, she absolutely understood the importance of the Treasury and Cabinet Office taking on this agenda. I do not know how closely she is watching how the Government are following through on her work, but it is vital that the Minister picks up those responsibilities, which were put on the drawing board when the NCC was established, and follows up on all of this.

The green book, which is under review, provides a good starting point for the cost-benefit analysis, but it does not include natural capital within its cost-benefit guidance, and it is important that capital stocks, including natural capital, be included in the review as potential constraints alongside the social cost-benefit analysis. What discussions has the Minister had with the Treasury on that? I know that the Woodland Trust, in particular, shares our view.

The NCC contains many recommendations. As GLOBE said, one of the key questions is: what should the Government be doing? I would like them to commit to incorporating the value of natural capital in international accounting and policy-making processes by 2020 at the very latest. Will the Minister comment? In that regard, the work of the Office for National Statistics is critical, and certainly my Select Committee will be taking evidence on that and looking to see what progress is being made.

It is not just about what we do nationally, however; it is about what happens internationally, as we heard just now. The Government need to take up the NCC’s report at the international level. I think of the work on the sustainable development goals, which, as we heard from the hon. Member for Beverley and Holderness, followed the Rio+20 conference in Brazil last summer. Securing appropriate recognition of natural capital accounting within the United Nations is important. As we have heard, so far the post-2015 high-level panel has emphasised the importance of the sustainable management of natural resource assets with regard to poverty eradication. It is important, however, that the Government go one step further. As the Government take the sustainable development goals further, will the Minister ensure that all capital accounting, including of the natural environment, is addressed as a specific goal?

Progress at the UN can be made only if we make corresponding progress nationally, and here I wish to flag up the role of business, because this is not just about what the Government do; as many Members have said, it is about what business does as well, and many businesses accept that the global economy is entering a new era.

The Prince’s Charities “Accounting for Sustainability” report was prepared in the run-up to the Rio conference and made a positive impact on the discussions that took place there the summer before last. In it, His Royal Highness the Prince of Wales said:

“There was a time when we could say that there was either a complete lack of knowledge, or at least room for doubt, about the consequences for our planet of our actions. That time has gone. We now know all too clearly what we are actually doing and that we need to do something about it urgently. Better accounting must be part of that process.”

In that report, and in the report that we are debating this evening, the business case is made for the integration of environmental and social information. Chief finance officers across industry are recognising that ethical breaches can collapse a company in no time. Work already under way by leading companies is reinforcing the natural capital committee’s recommendation for more work with leading companies’ accounting bodies, landowners and managers to develop and test guidance on best practice in corporate natural accounting. Will the Minister tell us how the Department for Business, Innovation and Skills is dealing with those issues?

From the perspective of the Environmental Audit Committee, given our current inquiry into fossil fuel subsidies, it is pertinent that the Government should pay particular attention to the NCC’s recommendation for a review of the extent to which natural capital is being effectively priced and, in particular, for an examination of the scope for reducing perverse subsidies. What dialogue is the Minister having with the Department of Energy and Climate Change on that issue?

The ways in which the Government take up the initial recommendations will depend entirely on the pressure that exists at local level. Whatever the Government do will go further if there is support for their actions locally. I commend a recent report from the Royal Society for the Protection of Birds that was launched here in Parliament last week. It sought to find out how connected to nature the children of the UK were, in an innovative three-year research project to establish a clear definition of connection to nature and, more importantly, a method for measuring it. The research highlights a wide range of benefits for children, society and the environment.

We all accept that nature is in trouble. Indeed, we had a debate in Westminster Hall last week on wildlife crime. The hon. Member for Richmond Park (Zac Goldsmith) pointed out that the more we understand about wildlife, the better we can value and protect it. So it matters a great deal if we, as a nation, do not understand how much trouble nature is in. With 60% of our species in decline, the protection of wildlife must begin at home, in our childhood. The research study examined a representative sample of young people. In it, the desirable score relating to being in touch with nature was 1.5, but that score was achieved by only 21% of children. There were big differences between boys and girls, between different parts of the country and, in particular, between urban and rural areas.

I happen to think that this matter needs to be addressed by the Government. We urgently need to amend our education legislation to make the teaching of sustainable development a duty. Many people agree with me on that, including educationists and practitioners who run field centres. The national curriculum can no longer overlook an understanding of the natural world. If the Government were to take on board that sentiment, it would chime with the direction of travel of the natural capital committee’s recommendations, and I ask the Minister to consider this possibility and to take up the matter with Ministers in the Department for Education.

Finally, there is a need for a long-term policy framework that supports and incentivises organisations, including financial institutions, to value and report on natural capital. Arguably, however, the committee’s report is a statement of intent rather than a clearly defined route map. At this stage, it is much more about generalities and intentions than about clear recommendations. As the committee moves on from its first report, it needs to be much more direct and much more forward, and it needs to build on its clear set of principles by making specific recommendations—advice on offsetting, for example.

When the Government come to review the natural capital committee in 2014, I hope that they will take some of those issues on board. The natural environment White Paper sets out an ambitious vision for nature and our natural capital assets. Genuinely embedding the value of natural capital into the fabric of economic decision-making is crucial to achieving that vision. The Government must now build on the work of the natural capital committee.