Natural capital: Urgent action needed from next Government, report finds

England's 'natural capital' is in long-term decline and must be addressed immediately, according to the third and final State of Natural Capital report from the Natural Capital Committee (NCC).

Like the fiscal deficit, successive governments have allowed a large natural capital debt to build up, argues the NCC

Like the fiscal deficit, successive governments have allowed a large natural capital debt to build up, argues the NCC

The NCC, which advises the Government on the state of natural capital - the elements of the natural environment that provide valuable goods and services such as clean air, clean water, food and recreation - says action is now urgently needed to reverse a 'structural deterioration' across the country.

Like the fiscal deficit, successive governments have reportedly allowed a large natural capital debt to build up, endangering economic growth as well as public and environmental wellbeing, the Committee's latest State of Natural Capital report says.

With more people expected to be added to England's population over the next 25 years than in any previous similar time period, the NCC argues argues that the forthcoming Government needs to embrace a 'holistic, 25-year plan' to tackle the growing natural capital crisis, with environmental investment and financing at its core.

In the report's opening remarks, NCC chair Dieter Helm said: "There is now a great opportunity to improve the wellbeing and prosperity of both urban and rural populations and restore some of the natural capital that has been lost.

"This will enhance prospects for long-term sustainable growth and therefore bequeath to the next generation a set of properly maintained and enhanced natural assets. A future government has this opportunity."

Investment target areas

- Urban greenspaces can provide enormous recreation values, benefiting millions of people in towns and cities. They also offer significant potential for improvements in physical and mental health which in turn will reduce health expenditures and improve labour productivity. Reduced health treatment costs could save £2.1bn.

- Urban air quality is the top environmental risk factor for premature deaths in Europe. It causes an estimated 40,000 premature deaths a year and reduces productivity, which together costs the economy at least £20bn per annum.

- Restoring commercial fish stocks, particularly white fish (such as cod) and shellfish, which remain 'considerably below optimal levels'. Investing in measures to restore certain stocks of shellfish could deliver benefit cost ratios in excess of 6:1. 

Where the financing will come from

Alongside Government funding, the report sets out a range of different funding options and levers available in order to secure improvements in natural capital, including:

- Capital maintenance payments from public, not for profit and private sector asset owners;

- Rents from non-renewable resources (e.g. oil or shale gas);

- Greater use of economic instruments (e.g. taxes and charges);

- Reforming and eliminating perverse subsidies.

Commenting on the new NCC report, Aldersgate Group chair Peter Young said: "Conventional accounting systems help measure and safeguard the capital base upon which a business relies. It is only logical that these principles be applied to measure and safeguard the natural environment.

"The Aldersgate Group membership includes businesses willing to embrace corporate accounting for natural capital to contribute to the restoration of some of our most important natural assets, upon which we all have some dependency."

Read more on natural capital here.

Download the full report now

Brad Allen


| natural capital | population


Water | Energy efficiency & low-carbon
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