Is the government’s response to the Dasgupta Review a watershed moment?

This post is by Paul Morling, principal economist at the RSPB, and James Fotherby of Green Alliance.

It is difficult not to see the government’s response to the Dasgupta Review, published this week, as a significant moment. In accepting two of the most fundamental arguments of the review: that nature is what ultimately sustains our economies and that reversing biodiversity loss is foundational to achieving a nature positive economy, the government has taken the first bold steps towards tackling the nature crisis.  

Whilst the response may represent a transformational step change in government and Treasury thinking, it is still a far cry from the marked ambition of the Dasgupta Review and the transformational changes necessary to reverse ecological decline. The chancellor has also remained resolutely silent on the economics of biodiversity. Driving urgent transformational change at the heart of Treasury requires leadership and that is lacking. Before the response was published, we set out four tests for the government on this, here are our reflections on whether they have been met.

1. Increase spending to achieve the legally binding targets  
As the government mentions in its response, it has proposed an amendment to the Environment Bill to require a new target on species abundance in England for 2030. This is a welcome target but will be difficult to meet for two reasons. First, our recommendation to set a baseline of the UK’s natural environment is outstanding. The government currently has a panoply of targets and spatial designations for nature and a fragmented public funding system. Without a baseline to measure progress against we have little prospect of an integrated, coherent approach to nature’s recovery. Second, the response outlined no significant new funding to deliver the envisaged ambitions and outcomes. Sadly, little can be achieved without adequate finance. Measures in place to redirect private investment towards nature positive outcomes will help but government still has a critical role to play.  As the response notes, new ambition for protected areas is as much about quality as quantity, and restoration and enhancement need financial resources.

2. Put nature at the heart of all spending decisions
The response offers welcome new ambition in relation to the Treasury’s ‘green book’, impact assessments, overseas development assistance and new tools to assess and drive improvements in the alignment of national expenditure and revenue with climate and other environmental goals. The challenge here will be to move from guidance to effective implementation in policy and future fiscal statements.  The autumn spending review presents the ideal opportunity to integrate environmental impacts and ensure green recovery prescriptions support nature positive outcomes. 

3. Leverage private finance with fiscal, planning and regulatory frameworks
The response announced new ambition on embedding environmental principles through stronger regulation across the economy; for example, in free trade agreements, corporate and financial institutions, and capital and carbon markets. One major new regulatory improvement is the extension of the biodiversity net gain principle to new nationally significant infrastructure projects (NSIPs) through an amendment to the Environment Bill. This is positive, as developers, planners and land managers would be mandated to leave biodiversity in a better state than before, but the amendment does not cover other major infrastructure projects granted outside of the NSIP process (such as HS2 and major housing developments). The amendment must be extended so that the biodiversity net gain principle applies to all major infrastructure projects.

4. Revise what economic success looks like  
One of the most radical elements of the Dasgupta Review is recognition that GDP (gross domestic product) is, by itself, a “wholly unsuitable” for measuring sustainable economic growth. The government’s acknowledgement of this in its response should be celebrated, and the announcement of further funding for the Office for National Statistics to improve its natural capital estimates should be welcomed. Here, the challenge will be to maximise the policy relevance of this new understanding of environmental ‘stocks’ in macroeconomic planning and future spending decisions.  The 2030 Nature Compact, through which G7 leaders have committed to halt and reverse biodiversity loss by 2030, should also have material impact at national levels in mainstreaming biodiversity into all government, corporate and financial decision making.

Further action is needed to implement the Dasgupta Review
The government’s response to the Dasgupta Review could well represent a watershed moment leading to transformational change. With little time remaining, however, before the UK stands up on the global stage at the biodiversity summit in Kunming (COP15) and the Glasgow climate summit (COP26) towards the end of this year, it is crucial that action goes further and faster to fully integrate and embed the Dasgupta Review across the whole of government. This is especially true since many of the welcome new initiatives mentioned in the response are only at development stage. Achieving meaningful change must start with a rapid change in mindset, from undertaking exploratory analysis to implementing measures that influence decisions for the better.

The autumn spending review will be the government’s first big chance, following this response, to put its money where its mouth is and address what is lacking. We want to see:

  • commitment to a baseline measure of the environment;
  • new funding to achieve new environmental ambitions;
  • covid recovery investment that includes meaningful green measures;
  • measures in the spending review that are mapped against carbon and environmental impacts.

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