David Hill
Economic Growth and the
Natural Environment
COST
PRICE
VALUE
PROTECTION-CONSERVATION
Value is in the eye of the
beholder !
What £74 million buys
Crayon drawing
66,000 acres of Scottish Highlands
UK must go green to stimulate growth, says Chris
Huhne. The Guardian 3 May 2012
“There is a facile view that our green commitments to
tackling climate change, avoiding air and water pollution,
protecting natural habitats are an obstacle to growth. The
message of the commodity markets is surely
different…… If we want sustainable growth, we do not
have a choice. We must go green."
Growth and/or the natural environment
Expenditure
Impact
Capital
Gross Value Added uplift
Programme
Jobs created or protected
Active labour market targets
Health targets
Regeneration targets
...or cost benefit analysist...or cost benefit analysi
Costs
Benefits
Capital investment
Goods produced
Employment costs
Water filtered
Opportunity cost
Flood risk reduced
Landscape protected
Biodiversity protected
Back in 1997
• Costanza published an estimate of the value of the
global flow of ecosystem services at $33 trillion per
year(1)
• Toman criticised this as ‘a significant underestimate
of infinity’ (2)
1) Costanza, R. (1997). "The value of the world's ecosystem services and natural capital."
2) Toman, M. (1998). "Why not to calculate the value of the world’s ecosystem services and
natural capital." Ecological Economics 25(1): 57-60.
TEEB
• "In a global study we will initiate the process of analyzing the global
economic benefit of biological diversity, the costs of the loss of
biodiversity and the failure to take protective measures versus the
costs of effective conservation.“
• Answer : $14 trillion; 7% global GDP by 2050
OECD Report 2012 - Outlook to 2050
Brazil
India
Per capita
Per capita
GDP NOT
GDP
accounting for accounting for
loss of natural loss of natural
capital
capital
34%
3%
120%
9%
Making
Space
for
Nature
–
Lawton
Report
2010
2011
Introducing Ecosystem Approach :
Making nature’s benefits visible to decision makers
Provisioning services
Cultural services
Fresh water
Cultural heritage
Food (eg crops, fruit, fish, etc)
Recreation and tourism
Fibre and fuel (eg timber, wool, etc)
Aesthetic value
Genetic resources (used for crop/stock breeding and biotechnology)
Spiritual and religious value
Biochemicals, natural medicines, pharmaceuticals
Inspiration of art, folklore, architecture, etc
Ornamental resources (eg shells, flowers, etc)
Social relations (eg fishing, grazing, cropping communities)
Regulatory services
Supporting services
Air quality regulation
Soil formation
Climate regulation (local temp. /precipitation, GHG sequestration, etc)
Primary production
Water regulation (timing/scale of run-off, flooding, etc)
Nutrient cycling (water recirculation in landscape)
Natural hazard regulation (ie storm protection)
Water recycling
Pest regulation
Photosynthesis (production of atmospheric oxygen)
Disease regulation
Provision of habitat
Erosion regulation
Water purification and waste treatment
Pollination
Thanks to Mark Everad from EA for this slide
What you don’t
consider you may lose!
Think Global – Act Local – NEWP 2011
Reconnecting nature
New Nature Improvement Areas (NIAs), transforming rural and urban areas
and providing bigger, connected sites for wildlife to live in and adapt to climate
change. With a £7.5 million fund for 12 initial NIAs to demonstrate just what
can be done. Professor Sir John Lawton has agreed to chair the panel to
allocate funding.
Biodiversity offsetting – new way for developers to ensure we don’t lose
wildlife sites and make them better by making and improving other sites.
New Local Nature Partnerships to strengthen joined-up action across local
agencies and organisations, with a £1 million available this year.
Phasing out peat – working with the horticulture industry to phase out peat
use, which will help to protect and restore our peatlands, which are valuable
carbon sinks, habitats and part of our ecological network.
Green Infrastructure
Urban run-off pollution
• The cost of environmental damage from polluted urban wash-off has
been estimated at £150 - £250 million(1).
• SUDS systems, such as sand and soil based filters(2) and detention
pools(3,4) filter water effectively.
• Green roofs(5) and urban trees(6) retain rainwater reducing peak run
off.
• Increasing groundwater infiltration reduces the number combined
sewer overflow(1).
1)
2)
3)
4)
5)
6)
ENVIRONMENT AGENCY 2007. Response to Royal Commission on Environmental Pollution consultation ‘Urban Environment’.
http://www.rcep.org.uk/reports/26-urban/documents/urb-env-summary.pdf
HATT, BE, FLETCHER, TD & DELETIC, A 2008. Hydraulic and Pollutant Removal Performance of Fine Media Stormwater Filtration Systems. Environ. Sci.
Technol, 42, 2535-2541.
HEAL, KV, HEPBURN, DA, LUNN, RJ & TYSON, J 2006. Sediment management in sustainable urban drainage system ponds. Water Science and Technology, 53,
219-228.
NAPIER, F, JEFFERIES, C, HEAL, KV, FOGG, P, ARCY, BJ & CLARKE, R 2009. Evidence of traffic-related pollutant control in soil-based Sustainable Urban
Drainage Systems (SUDS). Water science and technology: a journal of the International Association on Water Pollution Research, 60, 221.
MENTENS, J, RAES, D & HERMY, M 2006. Green roofs as a tool for solving the rainwater runoff problem in the urbanized 21st century? Landscape and Urban
Planning, 77, 217-226.
XIAO, Q, MCPHERSON, EG, SIMPSON, JR & USTIN, SL 1998. Rainfall interception by Sacramento's urban forest. Journal of Arboriculture, 24, 235-244.
A New York example
• Aim: to reduce combined
sewer outflows into the
harbour
• Method: using street trees,
swales, bio-infiltration, blue
and green roofs to capture first
inch of rainfall on 10% of the
city(1).
• This will save $1.5 billion
dollars over a grey only
approach (1) .
1)
NYC ENVIRONMENTAL PROTECTION 2010. NYC Green Infrastructure Plan: A
sustainable strategy for clean waterways.
Health and greenspace
New
Greenspace
Increased
activity
Reduced illhealth
NHS
savings
• £2 – 3 billion per annum in spent by the NHS on diseases caused by
inactivity1
• There is some evidence that access to greenspace increases
sustainable exercise levels
• But valuation requires evidenced and quantified logic chain
• We are a long way from being able to value greenspace in these
terms
1) Brown, C and Grant, M (2005) Biodiversity and human health: What role for nature in Healthy Urban Planning? Built
Environment 31 (4) 326 - 388
Environmental markets
• Internationally there is mounting interest in
environmental markets from credit buyers, regulators,
investors, environmental community
• Emerging recognition of natural resource stewardship
and restoration as a dynamic area for investment
• Transforming biodiversity from a risk and liability problem
into viable profit-generating business opportunity
Carol, Fox & Bayon (2008) Conservation & Biodiversity Banking.
MARKET SIZE
Estimates for emerging biodiversity
and ecosystem service markets
(derived from Ecosystem
Marketplace) are presented in the
table in the slide drawn from the
TEEB report looking at potential
global growth to 2020 and 2050
compared to present day.
The TEEB report for business
concludes that new markets for
biodiversity and ecosystem services
are emerging and if scaled up, these
markets could represent major
business opportunities and a
significant part of the solution to the
ecosystem and biodiversity finance
challenge.
Value = $5 - 10bn p.a
Policy signals drive markets : Natural Environment
White Paper (1)
• A healthy, properly functioning natural environment is
foundation of sustained economic growth
• We must value the economic and social benefits of a
healthy natural environment whilst continuing to
recognise nature’s intrinsic value
• Markets, business and government must better reflect
the value of nature
Natural Environment White Paper (2)
• There are £m-multi opportunities available from markets
that protect nature’s services
• Expanding markets and schemes for payments by
beneficiaries to providers of ecosystem services
• An Ecosystem Markets taskforce to expand trade in
green goods and market for sustainable natural services
• Announcing introduction of a biodiversity offsetting
scheme within the planning system
Ecosystem Markets Taskforce
As our understanding
of the value of natural
capital grows (e.g. UK
NEA/TEEB), there is a
natural progression
to reviewing the
scope for new
approaches to
‘capture’ value
The challenge is to
harness these values
so they can also
become real
commercial values
Available estimates
point to a significant
potential for longterm growth in
emerging markets in
biodiversity and
ecosystem services
Strong link to broader
work on green
economy and role
that environmental
markets could play
Environmental Markets Exchange
Environmental Markets Exchange
Localism Act and National Planning Policy
Framework
• Localism Act:
– Duty to Co-operate and changes to local plans
– Neighbourhood Plans
•
•
•
•
– National Planning Policy Framework:
Policies to protect and enhance natural environment
Local Green Space Designation
Ecological Networks
Strategic approach to Green Infrastructure
• Major infrastructure planning
Neighbourhood Plans
Neighbourhood Plans
• 130 Frontrunner projects are piloting new approach. We’re engaging
in around 16 of these to learn early lessons.
• NE will be statutory consultee - the Government estimate 380 such
plans will be prepared each year from 2012.
• ‘Single Voice’ - joint advice from Environment Agency, Forestry
Commission and Natural England