Harnessing natural capital in the rural economy

A Green Future: Our 25 Year Plan to Improve the Environment sets out a strategy to deliver on its aim to become “the first generation to leave the natural environment in England in a better state than we found it”.

Natural capital tops the list of goals detailed in the plan, signifying a commitment to this approach to protecting and enhancing the environment.

It is a subject that is gaining traction outside of policy too, with both the Office for National Statistics having published its assessment of the UK Natural Capital, and the World Bank releasing its own report, in recent months.

Natural capital is all about harnessing the value of our environment, estimated to be at least £761 billion in the UK.

The Government’s focus on the environment is welcome in rural areas. However, the challenge for farmers and landowners is how to benefit from the ‘intangible services’ provided by the land that they manage.

Payments for ecosystem services is one mechanism for delivering this, and involves landowners entering into long term contracts under which they will be paid to deliver the environmental outcomes that Government and others want and need.

This differs from existing agri-environment schemes, such as Countryside Stewardship, as the payments are based on measurable environment outcomes, rather than income foregone.

We are already seeing such contracts being put in place. For example, we have acted for landowners and developers to facilitate biodiversity offsetting; providing sites for replacement habitat to offset the habitat loss caused by development.

We have also worked with farmers who are working with water companies in sensitive areas to reduce their use of metaldehyde slug pellets to reduce the cost of processing water.

We cannot ignore the benefits to physical and mental health that being in nature can provide. The ONS values the ‘cultural services’ nature provides through encouraging recreation at being worth more than £300 billion.

Farmers and landowners already provide considerable public access to the countryside, and we anticipate this trend increasing and a market developing to pay for the intangible, but powerful, benefits that this provides.

Those who ignore or sideline natural capital could be doing so at their cost as, ultimately, we all need to be ready to change the way we value environmental assets in order to benefit from delivering the ecosystem services that government and others want and need.

Rhydian Scurlock-Jones is head of rural at Savills Telford