A new report based on insights from experts in transport, energy, water, and finance shows how environmental decline leads to economic loss, and shows how we can rethink value.
Natural Capital is Critical Infrastructure: Putting Natural Capital at the Heart of UK Growth and Resilience has been published by The Institute of Sustainable Environmental Professionals, in collaboration with the professional services firm, Jacobs.
According to this analysis – which includes input from professionals in road, rail, energy, infrastructure and finance – loss or degradation of natural capital can impact essential services, damage national finances, and even pose a threat to security. This means deforestation, declining fisheries, polluting water bodies, biodiversity loss, change of land use, and mineral depletion isn’t just bad for nature, it is detrimental for our economy, too.
‘There is a crucial relationship between the UK’s economic growth agenda and natural capital. Despite growing evidence demonstrating that nature and biodiversity loss pose significant risks to society and the economy, and that investment in nature restoration can generate jobs and economic output, there remains a shortfall in policy integration,’ said Sarah Mukherjee MBE, CEO of The Institute of Sustainable Environmental Professionals.
‘There are 13 sectors that currently fall under the category of critical national infrastructure, such as food, water, energy, health, transport, and communications, and while not a sector in its own right, natural capital directly underpins the functioning and resilience of each of these existing sectors,’ she continued. ‘To futureproof the economy and provide resilience against the increasing impacts of climate change, natural capital should be recognised as critical infrastructure and integrated more effectively into the UK economy and fiscal policies.’
The report lays out some impressive numbers in terms of estimated and perceived monetary value of nature. The Office for National Statistics, for example, suggests the UK ecosystem is worth £1.8 trillion. Worryingly, environmental deterioration could lead to a loss of between six and 12% of GDP, as per the Green Finance Institute. In comparison, the 2008 financial crisis wiped off 5%, while Covid-19 is thought to have cost around 11% in 2020.
In order to reduce the risk of economic and environmental fallout, a number of recommendations and priority policy actions have been proposed. These are:
- Relevant government bodies should formally recognise natural capital as a critical national infrastructure alongside its essential role in supporting the Critical National Infrastructure (CNI) sectors and the UK Government’s growth agenda.
- Create a Strategic Nature Network (SNN) and designate it as a Government Major and Nationally Significant Infrastructure Project, creating opportunities for economic growth and targeted investment in nature recovery.
- Recognise the SNN in National Policy Statements and Spatial Development Strategies and promote the uptake of natural capital approaches to deliver a consistent reporting requirement.
- Explicitly recognise the economic importance of natural capital in delivering the Environmental Improvement Plan and embed environmental net gain in decision making, including mandating nature-related financial disclosures for CNI sectors and public bodies. This will help the UK Government to deliver its nature restoration targets.
- Establish a dedicated Natural Infrastructure Investment Fund for nature restoration projects that connect the SNN, to create early-stage investment that provides private sector confidence and targets nature recovery in the most nationally critical locations.
- Develop guidance and training on natural capital and asset management approaches for public bodies and companies across all CNI sectors to enable decision makers to reach balanced and sustainable investment decisions.
‘Incorporating nature-based solutions is a key part of our Greener Railway Strategy. Nature can be an important ally when managing the rail infrastructure,’ said Neil Strong, Biodiversity Strategy Manager at Network Rail. ‘Natural flood management schemes can help to reduce the risk of embankments being washed away during storm events. Similarly, hedgerows provide connected habitat for biodiversity enhancement, they help create an impenetrable barrier to trespassers and they take up carbon – doing all this whilst looking great.’
‘The economy is embedded in and dependent on nature,’ said Stephen Elderkin, Director of Environmental Sustainability at National Highways. ‘Whether for materials, or ecosystem services such as flood management, carbon storage, air to breathe or food to eat, the health of the natural environment is the critical foundation on which a prosperous society is built. A strategic, resilient national nature network is critical national infrastructure. I welcome the ISEPs recommendations for a Strategic Nature Network and encourage all to join Rebuilding Nature in its construction.’
Image: Axinte / Unsplash
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