Why the chancellor’s response to the Dasgupta Review must create real action
This post is by Paul Morling, principal economist at the RSPB.
In commissioning the Dasgupta Review in 2019 the Treasury demonstrated a clear recognition that solving the nature crisis is vital for the functioning of our economy at large. To speak in economic terms, nature is a macroeconomic consideration and the review itself concludes that addressing the crisis is foundational to sustainable economic prosperity. In short, if we don’t tackle the nature crisis, our real economy and our quality of life is going to suffer.
In recent weeks, the government has taken some major steps towards an economy that works for nature. They’ve done this by putting halting species decline onto the face of the Environment Bill with legally binding targets for nature’s recovery. These important decisions came in the wake of major new research into the global state of biodiversity. This research, from the Natural History Museum, in collaboration with the RSPB, reveals that the UK languishes at the bottom of the league table of both the G7 and EU countries for the amount of nature it has left.
We have now had significant new nature commitments from the prime minister, the environment secretary and the business secretary on overseas spending, green recovery measures and environmental policy. The one voice we have yet to hear from is that of the chancellor. Ahead of the G7 in Cornwall, the UK government will rightly champion its commitments to address the nature crisis through increased funding and the work of the Taskforce for Nature Disclosure (TFND). However, global leadership must start from action at home and it the Treasury that needs to lead.
The chancellor’s imminent response to the Dasgupta Review, represents a crucial opportunity for the Treasury to get behind efforts to reverse the ongoing depletion of nature and begin the process of restoration to achieve its 30×30 target. Below we set out four tests for that to happen:
1. Increase spending to achieve the legally binding targets
- Set a baseline of the UK’s natural environment to help determine whether the targets set out in the Environment Bill are achieved or not.
- Additional funding must be provided to overcome any barriers to private investment in nature.
2. Put nature at the heart of all spending decisions
- Champion public spending on the UK’s natural environment with a domestic green recovery and abroad through international aid and mandates with international financial institutions.
- Review the implement of the environmental guidance set out in the Green Book to ensure it is effectively adopted across all government decisions.
- Provide guidance to ensure all government procurement is subject to effective environmental impact assessments. The Treasury must ensure that public procurement vendors disclose biodiversity impacts along their value chains.
3. Leverage private financing with the right fiscal, planning and regulatory frameworks
- Private investment in nature restoration can be scaled up through the extension of net gain principles, or equivalent in planning and development.
- The regulatory framework for water companies should be revised to incentivise investment in natural flood risk management, water catchment restoration and the provision of other ecosystem services.
- Improve standards in carbon markets to help facilitate investment in nature based solutions.
4. Revise what economic success looks like
- Increase funding for the ONS (Office for National Statistics) natural capital team to accelerate the measurement of environmental stocks to sit alongside GDP (gross domestic product) with a natural wealth account. Measuring economic performance on national income alone, without any regard to the nature loss, has been a key driver of the nature crisis.
- Extend the Treasury’s fiscal framework to include analysis of the carbon and nature impacts of its spending. This should include creating an environmental equivalent of the OBR (Office for Budgetary Responsibility) to assess the environmental consequences of future budgets and spending reviews.
The Treasury had the wisdom and foresight to commission the Dasgupta Review. Now it must deliver and pass our tests. The G7 and G20 are opportunities for the Treasury to champion reforms to trade policy, agricultural support and overseas development aid to better promote nature. It needs to engage other national governments and international institutions in conversations around a just, nature rich and resilient recovery to protect people, create jobs, and promote investments in nature. Above all, the Treasury will reform its own culture and share with others the profound insights of the Dasgupta Review. This is a unique moment for the Treasury to lead and we look forward to supporting it as a new, and powerful, voice for nature.
Read the RSPB and partners’ response to the Dasgupta Review and full set of recommendations for action.