The latest issue of the Green Alliance’s publication Inside Track, “The Great Acceleration: What should the UK do to protect natural systems” opened with a powerful infographic illustrating the link between human activity and the structure and functioning of the Earth System. The Great Acceleration refers to the massive increase in nearly every sphere of human activity since 1950: population; transport (particularly international travel); resource use (with rural to urban migration driving consumption); communication and so on, from low or virtually non-existent bases. Across the globe, natural ecosystems have been converted to human-dominated landscapes (1) as we pushing back nature and sublimate it to our wants. The rate and scale of the change, is unprecedented, leading Professor Will Steffen to observe, “for the first time in human history, our own planetary life support system is being destabilised at a rapid rate and at a global scale.”
Each graph is startling, together the visual impact is even greater. While there is the possibility of a legally-binding and universal climate agreement in Paris, the graphs remind us that carbon is one facet of a complex system. Climate change is a massive, global challenge, but one that is simple to articulate: reduce aggregate emissions by switching to low carbon energy to limit global warming to two degrees. For the natural environment locality matters: managing impacts on soil, water, air, nutrient cycles and biodiversity requires managing competing interests across sectors, and state boundaries.
Nature is the foundation of our production system, vital to our present well-being, and future prosperity. Of the proposed 17 Sustainable Development Goals, more than half are directly linked to the conservation of natural resources. Yet nature’s services are often missing from financial and economic analysis because they are delivered for free, and mistakenly assumed to have no value. Ignoring these ‘externalities’ actually leads to outcomes that are less economically efficient, and short-sighted.
Discussing, his latest book, “Natural Capital – Valuing the Planet”, Dieter Helm, chair of the Natural Capital Committee (the independent advisory body advising the Government on the sustainable use of England’s natural capital), referred to the Brundtland Commission‘s definition of sustainable development that,”seeks to meet the needs and aspirations of the present without compromising the ability to meet those of the future“, as an anchor for the concept of maintaining our aggregate natural capital assets.
Our balance sheet is not being maintained, the 2011 National Ecosystem Assessment found that over 30% of the services provided by our natural environment are in decline. In the same week, I heard Helm speak, the shortlist for the Prix Pictet, the global award in photography and sustainability, and Douglas Coupland’s piece, “Trashed” (pictured left) on beauty, toxicity, and the deadly contents of our cleaning cupboard provided visual reminders of the consequence of our actions. Images of dystopia often provoke a woeful, “what can be done”?
Refreshingly, Helm offers an answer. Helm divides the assets given to us by nature, into two categories: those that are renewable, provided for free, in perpetuity, if maintained above a certain threshold, such as fish stocks; and those that are effectively non-renewable, such as fossil fuels. The categorisation prioritises efforts on renewables that are struggling to regenerate, in the face of overfishing, for example. If non-renewables are consumed, then the economic rents should be reinvested in a sovereign wealth fund to provide other forms of natural capital for future generations, and so maintain the aggregate. Norway’s sovereign wealth fund, established in 1996, has assets of around $900bn, owned by a population of 5.5 million. In contrast, future UK generations will receive little benefit from the one-off, windfall boon of North Sea Oil.
Compensation payments for damage, central to property rights elsewhere, to pay for restoration, or replacement would reveal the true cost of controversial developments. The use of green taxes and removal of perverse subsidies to price externalities, to ensure the polluter pays will change the incentives industry works towards. A carbon tax is readily understood, so why not an equivalent for nitrates or pesticides? With a £9bn contribution to economic output, of which £3bn is direct subsidy, and additional subsidies, such as fuel, Helm “struggles to think of how [fiscal support for agriculture] could be worse”. Helm is not criticising farmers, but the perverse incentives they work towards.
The aggregate natural capital approach offers growth, and improved economic efficiency without straining the public purse. Policy makers, politicians, and businesses are well-versed in the costs of environmental measures, however a natural capital fund from economic rents, compensation payments, green taxes and the removal of perverse subsidies would dwarf amounts currently spent on nature. Amber Rudd, secretary of state for energy, writing in the Sunday Times (09.08.15), set out the government’s shale gas policy, alongside commitments to create a shale sovereign wealth fund and compensation payments for communities around shale developments. Will we see the framework rippling through to other areas of government policy, particularly when environmental investments involve costs and benefits across departmental boundaries?
- MEA (Millennium Ecosystem Assessment) (2005) Ecosystems and human well-being:synthesis (Island Press, Washington, DC)
- Hibbard K. A., Crutzen P. J., Lambin E. F., Liverman D., Mantua N. J., McNeill J. R., Messerli B., Steffen W. (2006) in Integrated history and future of people on Earth, Decadal interactions of humans and the environment, eds Costanza R., Graumlich L., Steffen W. (MIT Press, Boston, MA), pp 341–375, Dahlem Workshop Report 96.